<PAGE>


                                  ANCHOR GAMING

                                       and

                            THE CHASE MANHATTAN BANK,


                                 as Rights Agent


                                 Rights Agreement

                                October 17, 1997



<PAGE>

                               Table of Contents
<TABLE>
<CAPTION>
     Section
<S>                                                                          <C>
1.   Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .  1

2.   Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . .  5

3.   Issue of Rights Certificates. . . . . . . . . . . . . . . . . . . . . .  5

4.   Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . .  7

5.   Countersignature and Registration . . . . . . . . . . . . . . . . . . .  8

6.   Transfer, Split Up, Combination, and Exchange of
     Rights Certificates; Mutilated, Destroyed, Lost, or
     Stolen Rights Certificates. . . . . . . . . . . . . . . . . . . . . . .  9

7.   Exercise of Rights; Purchase Price;
     Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . 10

8.   Cancellation and Destruction of Rights Certificates . . . . . . . . . . 12

9.   Reservation and Availability of
     Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

10.  Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . 14

11.  Adjustment of Purchase Price, Number, and Kind of Shares or
     Number of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

12.  Certificate of Adjusted Purchase Price or Number of Shares. . . . . . . 26

13.  Consolidation, Merger, or Sale or Transfer of Assets or Earning Power . 26

14.  Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . 29

15.  Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

16.  Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . 31

17.  Rights Certificate Holder Not Deemed a Stockholder. . . . . . . . . . . 31

18.  Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . 32

<PAGE>

<S>                                                                          <C>
19.  Merger or Consolidation or Change of Name of Rights Agent . . . . . . . 32

20.  Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 33

21.  Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 35

22.  Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . 36

23.  Redemption and Termination. . . . . . . . . . . . . . . . . . . . . . . 37

24.  Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . 38

25.  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

26.  Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . . 40

27.  Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

28.  Determinations and Actions by the Board of Directors, Etc.. . . . . . . 41

29.  Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . . . 41

30   Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

31.  Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

32.  Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

33.  Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>

Exhibit A  --  Form of Certificate of Designation, Preferences, and Rights

Exhibit B  --  Form of Rights Certificate

Exhibit C  --  Form of Summary of Rights

<PAGE>

                                 RIGHTS AGREEMENT


     RIGHTS AGREEMENT, dated as of October 17, 1997 (the "AGREEMENT"), between
Anchor Gaming, a Nevada corporation (the "COMPANY"), and The Chase Manhattan
Bank, a bank chartered by the State of New York (the "RIGHTS AGENT").

                                    BACKGROUND

     On August 26, 1997 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board of
Directors of the Company authorized and declared a dividend distribution of one
Right for each share of common stock, par value $.01 per share, of the Company
(the "COMMON STOCK") outstanding at the Close of Business on October 20, 1997
(the "RECORD DATE"), and has authorized the issuance of one Right (as such
number may be adjusted pursuant to the provisions of SECTION 11(p)) for each
share of Common Stock of the Company issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and the Distribution
Date, each Right initially representing the right to purchase one one-thousandth
of a share of Series A Junior Participating Preferred Stock of the Company
having the rights, powers, and preferences set forth in the form of Certificate
of Designation, Preferences, and Rights attached to this Agreement as EXHIBIT A,
upon the terms and subject to the conditions set forth below (the "RIGHTS");

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth in this Agreement, 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" means any Person that, together with all
     Affiliates and Associates of such Person, is the Beneficial Owner of 15% or
     more of the shares of Common Stock then outstanding, but does not include
     (i) the Company; (ii) any Subsidiary of the Company; (iii) any employee
     benefit plan of the Company or of any Subsidiary of the Company; (iv) any
     Person organized, appointed, or established by the Company for or pursuant
     to the terms of any such plan; (v) Stanley E. Fulton ("FULTON"), any
     transferee or donee from Fulton after the Record Date in a transaction not
     involving a public offering of the Common Stock, or any heir or successor
     to Fulton upon his death, or any trust established by Fulton for charitable
     or estate planning purposes; (vi) any Person that has reported or is
     required to report such beneficial ownership (but less than 18%) on
     Schedule 13G (or any comparable or successor report) or on Schedule 13D
     under the Exchange Act (or any comparable or successor report) under the
     Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), which

                                      1
<PAGE>

     Schedule 13D does not state any intention to, or reserve the right to,
     control or influence the management or policies of the Company or engage in
     any of the actions specified in Item 4 of such Schedule 13D (other than the
     disposition of the Common Stock) and, within five (5) Business Days (as
     defined below) of being requested by the Company to advise it regarding the
     same, certifies to the Company that such Person acquired beneficial
     ownership of shares of Common Stock in excess of 14.9% inadvertently or
     without knowledge of the terms of the Rights and such certification is
     accepted as true by a Requisite Majority (as defined below) acting in good
     faith and that, together with all of such Person's Affiliates and
     Associates, thereafter does not acquire additional shares of Common Stock
     while the Beneficial Owner of 15% or more of the shares of Common Stock
     then outstanding; provided, however, that if the Person requested to so
     certify fails to do so within five Business Days, then such Person will
     become an Acquiring Person immediately after such five Business-Day Period;
     and (vii) any Person that becomes an Acquiring Person solely as a result of
     a reduction in the number of outstanding shares of Common Stock in a
     transaction that is approved by a Requisite Majority, provided that such
     Person will immediately be an Acquiring Person in the event such Person
     thereafter acquires any additional shares of Common Stock (other than as a
     result of a stock split or stock dividend) while the Beneficial Owner of
     15% or more of the shares of Common Stock then outstanding.

          (b)    "ADVERSE PERSON" means a Person (alone or together with any
     other Person) as to which the Board of Directors has, after consultation
     with such advisors and such other investigation as it considers necessary,
     made the following determinations:  (i) such Person or Persons any time
     after the Rights Dividend Declaration Date have become the Beneficial Owner
     of a substantial (but in no event less than 10% of the shares of Common
     Stock then outstanding) amount of Common Stock; and (ii) (A) such Person or
     Persons intend to cause the Company or its Affiliates to repurchase such
     Common Stock beneficially owned by such Person or Persons or to exert
     pressure against the Company to take any action or enter into any
     transaction or series of transactions with the intent or effect of
     providing such Person or Persons with short-term gains or profits under
     circumstances in which the Board of Directors of the Company determines
     that the long-term interests of the Company and its stockholders would not
     be served by taking such action or entering into such transaction or series
     of transactions; or (B) beneficial ownership of Common Stock by such Person
     or Persons is reasonably likely to have a material adverse effect on the
     business, competitive position, prospects, or financial condition of the
     Company and its Subsidiaries; provided, however, that Fulton will not be an
     Adverse Person under the terms of this Agreement.

          (c)    "AFFILIATE" and "ASSOCIATE" have the respective meanings
     ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
     under the Exchange Act as in effect on the date of this Agreement.

                                      2
<PAGE>

          (d)    A Person will be deemed the "BENEFICIAL OWNER" of, and will be
     deemed to "BENEFICIALLY OWN," any securities that:

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

                 (ii) such Person or any of such Person's Affiliates or 
          Associates, directly or indirectly, has the right to vote or 
          dispose of or has "beneficial ownership" of (as determined pursuant 
          to Rule 13d-3 of the General Rules and Regulations under the 
          Exchange Act), including pursuant to any agreement, arrangement, or 
          understanding, whether or not in writing; provided, however, that a 
          Person will not be deemed the "Beneficial Owner" of, or to 
          "beneficially own," any security under this SECTION 1(c)(ii) as a 
          result of an agreement, arrangement, or understanding to vote such 
          security if such agreement, arrangement, or understanding: (1) 
          arises solely from a revocable proxy given in response to a public 
          proxy or consent solicitation made pursuant to, and in accordance 
          with, the applicable provisions of the General Rules and 
          Regulations under the Exchange Act, and (2) is not also then 
          reportable by such Person on Schedule 13D under the Exchange Act 
          (or any comparable or successor report); or

                 (iii) are beneficially owned, directly or indirectly, by any 
          other Person (or any Affiliate or Associate of such Person) with 
          which such Person (or any of such Person's Affiliates or 
          Associates) has any agreement, arrangement, or understanding 
          (whether or not in writing), for the purpose of acquiring, holding, 
          voting (except pursuant to a revocable proxy as described in the 
          proviso in SECTION 1(c)(ii)), or disposing of any voting securities 
          of the Company;

                                      3
<PAGE>

     provided, however, that nothing in this SECTION 1(c) will cause a Person
     engaged in business as an underwriter of securities to be the "Beneficial
     Owner" of, or to "beneficially own," any securities acquired through such
     Person's participation in good faith in a bona fide firm commitment
     underwriting until the expiration of forty days after the date of such
     acquisition.

          (e)    "BUSINESS DAY" means any day other than a Saturday, Sunday, or
     a day on which banking institutions in the State of Nevada are authorized
     or obligated by law or executive order to close.

          (f)    "CLOSE OF BUSINESS" on any given date will mean 5:00 p.m., Las
     Vegas, Nevada time, on such date; provided, however, that if such date is
     not a Business Day it will mean 5:00 p.m., Las Vegas, Nevada time, on the
     next succeeding Business Day.

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

          (h)    "CONTINUING DIRECTOR" means (i) any member of the Board of
     Directors of the Company, while such Person is a member of the Board, who
     is not an Acquiring Person or Adverse Person, an Affiliate or Associate of
     an Acquiring Person or Adverse Person, or a representative or nominee of an
     Acquiring Person or Adverse Person or of any such Affiliate or Associate,
     and was a member of the Board prior to the date of this Agreement, or (ii)
     any Person who subsequently becomes a member of the Board, while such
     Person is a member of the Board, who is not an Acquiring Person or Adverse
     Person, an Affiliate or Associate of an Acquiring Person or Adverse Person,
     or a representative or nominee of an Acquiring Person or Adverse Person or
     of any such Affiliate or Associate, if such Person's nomination for
     election or election to the Board is recommended or approved by a majority
     of the Continuing Directors or a nominating committee of the Board
     consisting solely of Continuing Directors.

          (i)    "PERSON" means any individual, firm, corporation, partnership,
     or other public or private entity.

          (j)    "PREFERRED STOCK" mean shares of Series A Junior Participating
     Preferred Stock, par value $20.00 per share, of the Company, and, to the
     extent that there are not a sufficient number of shares of Series A Junior
     Participating Preferred Stock authorized to permit the full exercise of the
     Rights, any other series of Preferred Stock, par value $20.00 per share, of
     the Company 

                                      4
<PAGE>

     designated for such purpose containing terms substantially similar to 
     the terms of the Series A Junior Participating Preferred Stock.

          (k)    "REQUISITE MAJORITY" means, at any time, the affirmative vote
     of a majority of the Continuing Directors then in office.

          (l)    "SECTION 11(a)(ii) EVENT" means any event described in SECTION
     11(a)(ii) .

          (m)    "SECTION 13 EVENT" means any event described in clauses (x),
     (y), or (z) of SECTION 13(a).

          (n)    "STOCK ACQUISITION DATE" means the first date of public
     announcement (which, for purposes of this definition, will 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 an Acquiring Person.

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

          (p)    "TRIGGERING EVENT" means any Section 11(a)(ii) Event or any
     Section 13 Event.

     Section 2.  APPOINTMENT OF RIGHTS AGENT.  The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.

     Section 3.  ISSUE OF RIGHTS CERTIFICATES.

          (a)    Until the earlier of (i) the Close of Business on the tenth
     day after the Stock Acquisition Date (or, if the tenth day after the Stock
     Acquisition Date occurs before the Record Date, the Close of Business on
     the Record Date) involving an Acquiring Person that has become such in a
     transaction as to which a Requisite Majority has not made the determination
     specified in SECTION 11(a)(ii)(B); (ii) the Close of Business on the tenth
     Business Day (or such later date as the Board determines) after the date
     that a tender offer or exchange offer by any Person (other than the
     Company, any Subsidiary of the Company, any employee benefit plan of the
     Company or of any Subsidiary of the Company, or any Person or entity
     organized, appointed, or established by the Company for or pursuant to the
     terms of any such plan) is first published or sent or given 

                                      5
<PAGE>

     within the meaning of Rule 14d-2(a) of the General Rules and Regulations 
     under the Exchange Act, if upon consummation thereof, such Person would 
     be the Beneficial Owner of 15% or more of the shares of Common Stock 
     then outstanding; or (iii) the Close of Business on the tenth Business 
     Day after a Person has become an Adverse Person (the earlier of the 
     times referred to in CLAUSES (i), (ii), and (iii) being referred to as 
     the "DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to 
     the provisions of this SECTION 3(b)) by the certificates for the Common 
     Stock registered in the names of the holders of the Common Stock (which 
     certificates for Common Stock will be deemed also to be certificates for 
     Rights) and not by separate certificates, and (y) the Rights will be 
     transferable only in connection with the transfer of the underlying 
     shares of Common Stock (including a transfer to the Company). As soon as 
     practicable after the Distribution Date, the Rights Agent will send by 
     first-class, insured, postage prepaid mail, to each record holder of the 
     Common Stock as of the Distribution Date, at the address of such holder 
     shown on the records of the Company, one or more rights certificates, in 
     substantially the form of EXHIBIT B (the "RIGHTS CERTIFICATES"), 
     evidencing one Right for each share of Common Stock so held, subject to 
     adjustment as provided in this Agreement. In the event that an 
     adjustment in the number of Rights per share of Common Stock has been 
     made pursuant to SECTION 11(p), at the time of distribution of the 
     Rights Certificates, the Company will make the necessary and appropriate 
     rounding adjustments (in accordance with SECTION 14(a)) so that Rights 
     Certificates representing only whole numbers of Rights are distributed 
     and cash is paid in lieu of any fractional Rights. As of and after the 
     Distribution Date, the Rights will be evidenced solely by such Rights 
     Certificates.

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

          (c)    Rights will be issued in respect of all shares of Common Stock
     that are issued (whether originally issued or from the Company's treasury)
     after the Record Date but prior to the earlier of the Distribution Date or
     the Expiration Date. Certificates representing such shares of Common Stock
     will also be deemed to be certificates for Rights, and will bear the
     following legend:

                                      6
<PAGE>

          THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER TO
          CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN
          ANCHOR GAMING (THE "COMPANY") AND THE CHASE MANHATTAN BANK (THE
          "RIGHTS AGENT") DATED AS OF OCTOBER 17, 1997 (AS AMENDED FROM
          TIME TO TIME, THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE
          HEREBY INCORPORATED IN THIS CERTIFICATE BY REFERENCE AND A COPY
          OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. 
          UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
          AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES
          AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY
          WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS
          AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE
          PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST.  UNDER CERTAIN
          CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
          BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS, OR BECOMES AN
          ACQUIRING PERSON OR AN ADVERSE PERSON OR ANY AFFILIATE OR
          ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH
          TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
          HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
          MAY BECOME NULL AND VOID.

          With respect to such certificates containing the foregoing legend,
     until the earlier of (i) the Distribution Date or (ii) the Expiration Date,
     the Rights associated with the Common Stock represented by such
     certificates will be evidenced by such certificates alone and registered
     holders of Common Stock will also be the registered holders of the
     associated Rights, and the transfer of any of such certificates will also
     constitute the transfer of the Rights associated with the Common Stock
     represented by such certificates.

     Section 4.  FORM OF RIGHTS CERTIFICATES.

          (a)    The Rights Certificates (and the forms of election to purchase
     and of assignment to be printed on the reverse of the rights certificates)
     will each be substantially in the form set forth in EXHIBIT B and may have
     such marks of identification or designation and such legends, summaries, or
     endorsements as the Company may deem appropriate and as are not
     inconsistent with the provisions of this Agreement, or as may be required
     to comply with any applicable law or with any rule or regulation made
     pursuant thereto or with any rule or regulation of any stock exchange or
     quotation system on which the Rights may from time to time be listed, or to
     conform to usage. Subject to the provisions of SECTION 11 and SECTION 22,
     the Rights Certificates, whenever distributed, will be dated as of the
     Record Date and on their face will entitle the holders of such Rights
     Certificates to purchase such number of one one-thousandths of a share 

                                      7
<PAGE>

     of Preferred Stock as is set forth in such Rights Certificates at the 
     price set forth in such Rights Certificates (such exercise price per one 
     one-thousandth of a share, the "PURCHASE PRICE"), but the amount and 
     type of securities purchasable upon the exercise of each Right and the 
     Purchase Price will be subject to adjustment as provided in this 
     Agreement.

          (b)    Any Rights Certificate issued pursuant to SECTION 3(a) or
     SECTION 22 that represents Rights beneficially owned by (i) an Acquiring
     Person or an Adverse Person or any Associate or Affiliate of an Acquiring
     Person or an Adverse Person, (ii) a transferee from an Acquiring Person or
     an Adverse Person (or from any Associate or Affiliate of an Acquiring
     Person or an Adverse Person) that becomes a transferee after the Acquiring
     Person or an Adverse Person becomes an Acquiring Person or an Adverse
     Person, or (iii) a transferee from an Acquiring Person or an Adverse Person
     (or of any Associate or Affiliate of an Acquiring Person or an Adverse
     Person) that becomes a transferee prior to or concurrently with the
     Acquiring Person or an Adverse Person becoming an Acquiring Person or an
     Adverse Person and receives such Rights pursuant to either (A) a transfer
     (whether or not for consideration) from the Acquiring Person or Adverse
     Person to holders of equity interests in such Acquiring Person or Adverse
     Person or to any Person with whom such Acquiring Person or Adverse Person
     has any continuing agreement, arrangement, or understanding regarding the
     transferred Rights or (B) a transfer that the Board of Directors of the
     Company has determined is part of an agreement, plan, arrangement, or
     understanding that has as a substantial purpose or effect avoidance of
     SECTION 7(e), and any Rights Certificate issued pursuant to SECTION 6 or
     SECTION 11 upon transfer, exchange, replacement, or adjustment of any other
     Rights Certificate referred to in this SECTION 4(b), will contain (to the
     extent feasible) the following legend:

          THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
          BENEFICIALLY OWNED BY A PERSON WHO IS, WAS, OR BECAME AN
          ACQUIRING PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR
          ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH
          TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
          RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
          NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SUCH AGREEMENT.
          
     Section 5.  COUNTERSIGNATURE AND REGISTRATION.

          (a)    The Rights Certificates will be executed on behalf of the
     Company by its Chairman of the Board, its Chief Executive Officer, its
     Chief Operating Officer, its President, or any Vice President, either
     manually or by facsimile signature; will have affixed thereto the Company's
     seal or a facsimile thereof; and will be attested by the Secretary or an
     Assistant Secretary of the Company, 

                                      8
<PAGE>

     either manually or by facsimile signature. The Rights Certificates will 
     be countersigned by the Rights Agent, either manually or by facsimile 
     signature and will not be valid for any purpose unless so countersigned. 
     In case any officer of the Company who has signed any of the Rights 
     Certificates ceases to be such officer of the Company before 
     countersignature by the Rights Agent and issuance and delivery by the 
     Company, such Rights Certificates, nevertheless, may be countersigned by 
     the Rights Agent and issued and delivered by the Company with the same 
     force and effect as though the Person who signed such Rights 
     Certificates had not ceased to be such officer of the Company, and any 
     Rights Certificate may be signed on behalf of the Company by any Person 
     who, at the actual date of the execution of such Rights Certificate, is 
     a proper officer of the Company to sign such Rights Certificate, 
     although at the date of the execution of such Rights Certificate any 
     such Person was not such an officer.

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

     Section 6.  TRANSFER, SPLIT UP, COMBINATION, AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN RIGHTS CERTIFICATES. 

          (a)    Subject to the provisions of SECTION 4(b), SECTION 7(e), and
     SECTION 14, at any time after the Distribution Date, and at or prior to the
     Expiration Date, any Rights Certificate or Certificates may be transferred,
     split up, combined, or exchanged for another Rights Certificate or Rights
     Certificates, entitling the registered holder to purchase a like number of
     one one-thousandths of a share of Preferred Stock (or, following a
     Triggering Event, Common Stock, other securities, cash, or other property,
     as the case may be) as the Rights Certificate or Rights Certificates
     surrendered then entitled such holder (or former holder in the case of a
     transfer) to purchase. Any registered holder desiring to transfer, split
     up, combine, or exchange any Rights Certificate or Rights Certificates will
     make such request in writing delivered to the Rights Agent, and will
     surrender the Rights Certificate or Rights Certificates to be transferred,
     split up, combined, or exchanged at the principal office or offices of the
     Rights Agent designated for such purpose. Neither the Rights Agent nor the
     Company will be obligated to take any action whatsoever with respect to the
     transfer of any such surrendered Rights Certificate until the registered
     holder has completed and signed the certificate contained in the form of
     assignment on the reverse side of such Rights Certificate and has provided
     such additional evidence of the identity of the Beneficial Owner (or former
     Beneficial Owner) or Affiliates or Associates thereof as the Company
     requests in good faith. Thereupon, the Rights Agent will, 

                                      9
<PAGE>

     subject to SECTION 4(b), SECTION 7(e), and SECTION 14, countersign and 
     deliver to the Person entitled thereto a Rights Certificate or Rights 
     Certificates, as the case may be, as so requested. The Company may 
     require payment of a sum sufficient to cover any tax or governmental 
     charge that may be imposed in connection with any transfer, split up, 
     combination, or exchange of any Rights Certificate.

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

     Section 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. 

          (a)    Subject to SECTION 7(e), the registered holder of any Rights 
     Certificate may exercise the Rights evidenced thereby (except as 
     otherwise provided in this Agreement including, without limitation, the 
     restrictions on exercisability set forth in SECTION 9(c), SECTION 
     11(a)(iii), and SECTION 23(a)) in whole or in part at any time after the 
     Distribution Date upon surrender of the Rights Certificate, with the 
     form of election to purchase and the certificate on the reverse side of 
     the Rights Certificate duly executed, to the Rights Agent at the 
     principal office or offices of the Rights Agent designated for such 
     purpose, together with payment of the aggregate Purchase Price with 
     respect to the total number of one one-thousandths of a share (or other 
     securities, cash, or other property, as the case may be) as to which 
     such surrendered Rights are then exercisable, at or prior to the earlier 
     of (i) the Close of Business on October 20, 2007, (the "FINAL EXPIRATION 
     DATE"), or (ii) the time at which the Rights are redeemed as provided in 
     SECTION 23  (the earlier of the times referred to in CLAUSES (i) and 
     (ii) being referred to as the "EXPIRATION DATE")).

          (b)    The Purchase Price for each one one-thousandth of a share of
     Preferred Stock pursuant to the exercise of a Right will initially be
     $400.00; will be subject to adjustment from time to time as provided in
     SECTION 11, and SECTION 13(a); and will be payable in accordance with
     SECTION 7(c).

          (c)    Upon receipt of a Rights Certificate representing exercisable
     Rights, with the form of election to purchase and the certificate duly 
     executed, accompanied by payment, with respect to each Right so 
     exercised, of the Purchase Price per one one-thousandth of a share of 
     Preferred Stock (or other shares, securities, cash, or other property, 
     as the case may be) to be purchased 

                                      10
<PAGE>

     as set forth below and an amount equal to any applicable transfer tax, 
     the Rights Agent will, subject to SECTION 20(k), promptly (i) (A) 
     requisition from any transfer agent of the shares of Preferred Stock (or 
     make available, if the Rights Agent is the transfer agent for such 
     shares) certificates for the total number of one one-thousandths of a 
     share of Preferred Stock to be purchased, (the Company hereby 
     irrevocably authorizing its transfer agent to comply with all such 
     requests), or (B) if the Company has elected to deposit the total number 
     of shares of Preferred Stock issuable upon exercise of the Rights with a 
     depository agent, requisition from the depository agent depository 
     receipts representing such number of one one-thousandths of a share of 
     Preferred Stock as are to be purchased (in which case certificates for 
     the shares of Preferred Stock represented by such receipts will be 
     deposited by the transfer agent with the depository agent) and the 
     Company will direct the depository agent to comply with such request; 
     (ii) requisition from the Company the amount of cash, if any, to be paid 
     in lieu of fractional shares in accordance with SECTION 14; (iii) after 
     receipt of such certificates or depository receipts, cause such 
     certificates or depository receipts to be delivered to or upon the order 
     of the registered holder of such Rights Certificate, registered in such 
     name or names as may be designated by such holder; and (iv) after 
     receipt thereof, deliver such cash, if any, to or upon the order of the 
     registered holder of such Rights Certificate. The payment of the 
     Purchase Price (as such amount may be reduced pursuant to SECTION 
     11(a)(iii)) will be made in cash or by certified bank check or bank 
     draft payable to the order of the Company. In the event that the Company 
     is obligated to issue other securities (including Common Stock) of the 
     Company, pay cash, or distribute other property pursuant to SECTION 
     11(a), the Company will make all arrangements necessary so that such 
     other securities, cash, or other property are available for distribution 
     by the Rights Agent, if and when appropriate. The Company reserves the 
     right to require prior to the occurrence of a Triggering Event that, 
     upon any exercise of Rights, a number of Rights be exercised so that 
     only whole shares of Preferred Stock would be issued.

          (d)    In case the registered holder of any Rights Certificate
     exercises less than all the Rights evidenced thereby, a new Rights
     Certificate evidencing Rights equivalent to the Rights remaining
     unexercised will be issued by the Rights Agent and delivered to, or upon
     the order of, the registered holder of such Rights Certificate, registered
     in such name or names as may be designated by such holder, subject to the
     provisions of SECTION 14.

          (e)    Notwithstanding anything in this Agreement to the contrary,
     from and after the first occurrence of a Section 11(a)(ii) Event, any 
     Rights beneficially owned by any Person referred to in CLAUSES (i) 
     through (iii) below will become null and void without any further 
     action, and no holder of such Rights will have any rights whatsoever 
     with respect to such Rights, whether under any provision of this 
     Agreement or otherwise: (i) an Acquiring Person or an Adverse Person or 
     an Associate or Affiliate of an Acquiring Person or an Adverse Person, 
     (ii) a 

                                      11
<PAGE>

     transferee from an Acquiring Person or an Adverse Person (or from any 
     Associate or Affiliate of an Acquiring Person or Adverse Person) that 
     becomes a transferee after the Acquiring Person or an Adverse Person 
     becomes such, or (iii) a transferee from an Acquiring Person or an 
     Adverse Person (or of any such Associate or Affiliate) that becomes a 
     transferee prior to or concurrently with the Acquiring Person or Adverse 
     Person becoming such and that receives such Rights pursuant to either 
     (A) a transfer (whether or not for consideration) from the Acquiring 
     Person or the Adverse Person to holders of equity interests in such 
     Acquiring Person or Adverse Person or to any Person with whom the 
     Acquiring Person or Adverse Person has any continuing agreement, 
     arrangement, or understanding regarding the transferred Rights or (B) a 
     transfer that the Board of Directors of the Company has determined is 
     part of an agreement, plan, arrangement, or understanding that has as a 
     substantial purpose or effect the avoidance of this SECTION 7(e). The 
     Company will use reasonable efforts to insure that the provisions of 
     this SECTION 7(e) and SECTION 4(b) are complied with, but will have no 
     liability under this Agreement to any holder of Rights Certificates or 
     other Person as a result of its failure to make any determinations with 
     respect to an Acquiring Person, an Adverse Person, or any of their 
     Affiliates, Associates, or transferees.

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

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

                                      12
<PAGE>

     Section 9.  RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

          (a)    The Company covenants and agrees that it will cause to be
     reserved and kept available out of its authorized and unissued shares of 
     Preferred Stock (and, following the occurrence of a Triggering Event, 
     out of its authorized and unissued shares of Common Stock or other 
     securities or out of its authorized and issued shares held in its 
     treasury), the number of shares of Preferred Stock (and, following the 
     occurrence of a Triggering Event, Common Stock or other securities) that 
     (as provided in this Agreement including, without limitation, SECTION 
     11(a)(iii)), will be sufficient to permit the exercise in full of all 
     outstanding Rights.

          (b)    So long as the shares of Preferred Stock (and, following the
     occurrence of a Triggering Event, Common Stock or other securities)
     issuable and deliverable upon the exercise of the Rights may be listed on
     any national securities exchange or automated quotation system, the Company
     will use its reasonable efforts to cause, from and after such time as the
     Rights become exercisable, all shares reserved for such issuance to be
     listed on such exchange or automated quotation system upon official notice
     of issuance upon such exercise.

          (c)    The Company will use its best reasonable efforts to (i) file,
     as soon as practicable following the earliest date after the first 
     occurrence of a Section 11(a)(ii) Event on which the consideration to be 
     delivered by the Company upon exercise of the Rights has been determined 
     in accordance with SECTION 11(a)(iii), a registration statement under 
     the Securities Act of 1933, as amended (the "ACT"), with respect to the 
     securities purchasable upon exercise of the Rights on an appropriate 
     form, (ii) cause such registration statement to become effective as soon 
     as practicable after such filing, and (iii) cause such registration 
     statement to remain effective (with a prospectus at all times meeting 
     the requirements of the Act) until the earlier of (A) the date as of 
     which the Rights are no longer exercisable for such securities, and (B) 
     the date of the expiration of the Rights. The Company will also take 
     such action as may be appropriate under, or to ensure compliance with, 
     the securities or "blue sky" laws of the various states in connection 
     with the exercisability of the Rights. The Company may temporarily 
     suspend, for a period of time not to exceed ninety (90) days after the 
     date set forth in clause (i) of the first sentence of this SECTION 9(c), 
     the exercisability of the Rights in order to prepare and file such 
     registration statement and permit it to become effective. Upon any such 
     suspension, the Company will issue a public announcement stating that 
     the exercisability of the Rights has been temporarily suspended, as well 
     as a public announcement at such time as the suspension is no longer in 
     effect. In addition, if the Company determines that a registration 
     statement is required following the Distribution Date, the Company may 
     temporarily suspend the exercisability of the Rights until such time as 
     a registration statement has been declared effective. 

                                      13
<PAGE>

     Notwithstanding any provision of this Agreement to the contrary, the 
     Rights will not be exercisable in any jurisdiction if the requisite 
     qualification in such jurisdiction has not been obtained, the exercise 
     of such Rights is not permitted under applicable law, or a registration 
     statement has not been declared effective.

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

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

     Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock or other securities, as the case may be) is issued upon the
exercise of Rights will for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock or other
securities, as the case may be) represented thereby on, and such certificate
will be dated, the date upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of such surrender
and payment is a date upon which the Preferred Stock (or Common Stock or other
securities, as the case may be) transfer books of the Company are closed, such
Person will be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate will be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock or other
securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
will not be 

                                      15
<PAGE>

     entitled to any rights of a stockholder of the Company with respect to 
     shares for which the Rights is exercisable, including, without 
     limitation, the right to vote, to receive dividends or other 
     distributions, or to exercise any preemptive rights, and will not be 
     entitled to receive any notice of any proceedings of the Company, except 
     as provided in this Agreement.

     Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES, OR 
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered 
by each Right and the number of Rights outstanding are subject to adjustment 
from time to time as provided in this SECTION 11.

          (a)  (i)    In the event the Company at any time after the date of 
          this Agreement (A) declares a dividend on the Preferred Stock 
          payable in shares of Preferred Stock, (B) subdivides the 
          outstanding Preferred Stock, (C) combines the outstanding Preferred 
          Stock into a smaller number of shares, or (D) issues any shares of 
          its capital stock in a reclassification of the Preferred Stock 
          (including, without limitation, any such reclassification in 
          connection with a consolidation or merger in which the Company is 
          the continuing or surviving corporation), except as otherwise 
          provided in this SECTION 11(a) and SECTION 7(e), the Purchase Price 
          in effect at the time of the record date for such dividend or of 
          the effective date of such subdivision, combination, or 
          reclassification, and the number and kind of shares of Preferred 
          Stock or capital stock, as the case may be, issuable on such date, 
          will be proportionately adjusted so that the holder of any Right 
          exercised after such time will be entitled to receive, upon payment 
          of the Purchase Price then in effect, the aggregate number and kind 
          of shares of Preferred Stock or capital stock, as the case may be, 
          that, if such Right had been exercised immediately prior to such 
          date and at a time when the Preferred Stock transfer books of the 
          Company were open, such 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 
          that 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) will be in addition to, and will be made prior to, any 
          adjustment required pursuant to SECTION 11(a)(ii).

               (ii)   In the event that:

                      (A)    Any Acquiring Person or Adverse Person or any 
               Associate or Affiliate of any Acquiring Person or Adverse 
               Person, at any time after the Stock Acquisition Date, directly 
               or indirectly, (1) merges from, with, or into the Company or 
               otherwise combines with the Company and the Company is the 
               continuing or surviving Person of such merger or combination 
               and the Common Shares of the Company or other equity 
               securities of the Company remain 


                                       15
<PAGE>

               outstanding, (2) in one transaction or a series of 
               transactions, transfers any assets to the Company or to any of 
               the Company's Subsidiaries in exchange (in whole or in part) 
               for Common Stock, for shares of other equity securities of the 
               Company, or for securities exercisable for or convertible into 
               shares of equity securities of the Company (Common Stock or 
               otherwise) or otherwise obtains from the Company, with or 
               without consideration, any additional shares of such equity 
               securities or securities exercisable for or convertible into 
               shares of such equity securities (other than pursuant to a pro 
               rata distribution to all holders of Common Shares), (3) sells, 
               purchases, leases, exchanges, mortgages, pledges, transfers, 
               or otherwise acquires or disposes of assets in one transaction 
               or a series of transactions, to, from, or with (as the case 
               may be) the Company or any of the Company's Subsidiaries, on 
               terms or conditions less favorable in any respect than the 
               Company or such Subsidiary would be able to obtain in 
               arm's-length negotiation with an unaffiliated third party, 
               other than pursuant to a Section 13 Event, (4) sells, 
               purchases, leases, exchanges, mortgages, pledges, transfers, 
               or otherwise acquires or disposes of assets having an 
               aggregate  fair market value of more than $3,000,000 in one 
               transaction or a series of transactions to, from, or with (as 
               the case may be) the Company or any of the Company's 
               Subsidiaries (other than incidental to the lines of business, 
               if any, engaged in as of the date of this Agreement between 
               the Company or such Subsidiary, on the one hand, and such 
               Acquiring Person or Adverse Person or such Associate or 
               Affiliate, on the other), other than pursuant to a Section 13 
               Event, (5) receives any compensation from the Company or any 
               of the Company's Subsidiaries other than compensation for 
               full-time employment as a regular employee at rates in 
               accordance with the Company's (or such Subsidiaries') past 
               practices, or (6) receives the benefits, directly or 
               indirectly (except proportionately as a stockholder and as a 
               result of any requirement of law or governmental regulation), 
               of any loans, advances, guarantees, pledges, or other 
               financial assistance or any tax credits or other tax advantage 
               provided by the Company or any of the Company's Subsidiaries;

                      (B)    any Person, alone or together with its 
               Affiliates or Associates, at any time after the Rights 
               Dividend Declaration Date, becomes an Acquiring Person, unless 
               the event causing such Person to become an Acquiring Person is 
               a Section 13 Event, or is an acquisition of shares of Common 
               Stock pursuant to a tender offer or an exchange offer for all 
               outstanding shares of Common Stock at a price and on terms 
               determined by a Requisite Majority, 


                                       16
<PAGE>

               after receiving advice from one or more nationally recognized 
               investment banking firms selected by such Requisite Majority, 
               to be (1) fair to all stockholders, after taking into 
               consideration all factors that such Requisite Majority deems 
               relevant, including, without limitation, the long-term 
               prospects and value of the Company and the prices and terms 
               that such Requisite Majority believes, in good faith, could 
               reasonably be achieved if the Company or its assets were sold 
               on an orderly basis designed to realize maximum value; and (2) 
               otherwise in the best interests of the Company and its 
               stockholders;

                      (C)    during such time as there is an Acquiring Person 
               or Adverse Person, there is any reclassification of securities 
               (including any reverse stock split), recapitalization of the 
               Company, or any merger or consolidation of the Company into, 
               from, or with any of its Subsidiaries or any other transaction 
               or series of transactions involving the Company or any of its 
               Subsidiaries, other than a Section 13 Event, or series of such 
               events (whether or not with or into or otherwise involving and 
               Acquiring Person or Adverse Person) that has the effect, 
               directly or indirectly, of increasing by more than 1% the 
               proportionate share of the outstanding shares of any class of 
               equity securities (or securities convertible into such equity 
               securities) of the Company or any of its Subsidiaries that is 
               directly or indirectly beneficially owned by an Acquiring 
               Person or Adverse Person or any Associate or Affiliate of any 
               Acquiring Person or Adverse Person; or

                      (D)    the Board of Directors of the Company declares 
               any Person to be an Adverse Person;

     then, promptly following the first occurrence of a Section 11(a)(ii) 
     Event, proper provision will be made so that each holder of a Right 
     (except as provided below in this SECTION 11(a)(ii) and in SECTION 7(e)) 
     will thereafter have the right to receive, upon exercise of such Right 
     at the then current Purchase Price in accordance with the terms of this 
     Agreement, in lieu of a number of one one-thousandths of a share of 
     Preferred Stock, such number of shares of Common Stock of the Company as 
     equals the result obtained by (x) multiplying the then current Purchase 
     Price by the then number of one one-thousandths of a share of Preferred 
     Stock for which a Right was exercisable immediately prior to the first 
     occurrence of a Section 11(a)(ii) Event, and (y) dividing that product 
     (which, following such first occurrence, will thereafter be referred to 
     as the "PURCHASE PRICE" for each Right and for all purposes of this 
     Agreement) by 50% of the Current Market Price (determined pursuant to 
     SECTION 11(d)) per share of Common Stock on the date of such first 
     occurrence (such number of shares, the "ADJUSTMENT SHARES").


                                       17
<PAGE>

               (iii)  In the event that the number of shares of Common Stock 
               that 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 will (A) determine the value of 
               the Adjustment Shares issuable upon the exercise of a Right 
               (the "CURRENT VALUE"), and (B) with respect to each Right 
               (subject to SECTION 7(e)), make adequate provision to 
               substitute for the Adjustment Shares, upon the exercise of a 
               Right and payment of the applicable Purchase Price, (1) cash, 
               (2) a reduction in the Purchase Price, (3) Common Stock or 
               other equity securities of the Company (including, without 
               limitation, shares, or units of shares, of preferred stock, 
               such as the Preferred Stock, that a Requisite Majority has 
               deemed to have essentially the same value or economic rights 
               as shares of Common Stock (such securities being referred to 
               as "COMMON STOCK EQUIVALENTS")), (4) debt securities of the 
               Company, (5) other assets or property, or (6) any combination 
               of the foregoing, having an aggregate value equal to the 
               Current Value (less the amount of any reduction in the 
               Purchase Price), where such aggregate value has been 
               conclusively determined by a Requisite Majority based upon the 
               advice of a nationally recognized investment banking firm 
               selected by a Requisite Majority; provided, however, that if 
               the Company has not made adequate provision to deliver value 
               pursuant to CLAUSE (B) above within thirty (30) days following 
               the later of (x) the first occurrence of a Section 11(a)(ii) 
               Event and (y) the date on which the Company's right of 
               redemption pursuant to SECTION 23(a) expires (the later of (x) 
               and (y) being referred to as the "SECTION 11(a)(ii) TRIGGER 
               DATE"), then the Company will be obligated to deliver, upon 
               the surrender for exercise of a Right and without requiring 
               payment of the Purchase Price, shares of Common Stock (to the 
               extent available) and then, if necessary, cash, which shares 
               or cash have an aggregate value equal to the Spread. For 
               purposes of the preceding sentence, the term "SPREAD" means 
               the excess of (i) the Current Value over (ii) the Purchase 
               Price. If the Board determines in good faith that it is likely 
               that sufficient additional shares of Common Stock could be 
               authorized for issuance upon exercise in full of the Rights, 
               the thirty (30) day period set forth above may be extended to 
               the extent necessary, but not more than ninety (90) days after 
               the Section 11(a)(ii) Trigger Date, in order that the Company 
               may seek shareholder approval for the authorization of such 
               additional shares (such thirty (30) day period, as it may be 
               extended, being the "SUBSTITUTION PERIOD"). To the extent that 
               action is to be taken pursuant to the first or third sentences 
               of this SECTION 11(a)(iii), the Company (1) will provide, 
               subject to SECTION 7(e), that such action will apply uniformly 
               to all outstanding Rights, and (2) may suspend the 
               exercisability of the Rights until the expiration of the 
               Substitution Period in 


                                       18
<PAGE>

               order to seek such shareholder approval for such authorization 
               of additional shares or to determine the appropriate form of 
               distribution to be made pursuant to such first sentence and to 
               determine the value of such distribution. In the event of any 
               such suspension, the Company will issue a public announcement 
               stating that the exercisability of the Rights has been 
               temporarily suspended, as well as a public announcement at 
               such time as the suspension is no longer in effect. For 
               purposes of this SECTION 11(a)(iii), the value of each 
               Adjustment Share will be the Current Market Price per share of 
               the Common Stock on the Section 11(a)(ii) Trigger Date and the 
               per share or per unit value of any Common Stock Equivalent 
               will be deemed to equal the Current Market Price per share of 
               the Common Stock on such date.

               (b)    In case the Company fixes a record date for the 
          issuance of rights, options, or warrants to all holders of 
          Preferred Stock entitling them to subscribe for or purchase (for a 
          period expiring within forty-five (45) calendar days after such 
          record date) Preferred Stock (or securities having the same rights, 
          privileges, and preferences as the shares of Preferred Stock 
          ("EQUIVALENT PREFERRED STOCK")) or securities convertible into 
          Preferred Stock or Equivalent Preferred Stock at a price per share 
          of Preferred Stock or per share of Equivalent Preferred Stock (or 
          having a conversion price per share, if a security convertible into 
          Preferred Stock or Equivalent Preferred Stock) less than the 
          Current Market Price (as determined pursuant to SECTION 11(d)) per 
          share of Preferred Stock on such record date, the Purchase Price to 
          be in effect after such record date will be determined by 
          multiplying the Purchase Price in effect immediately prior to such 
          record date by a fraction, the numerator of which is the number of 
          shares of Preferred Stock outstanding on such record date, plus the 
          number of shares of Preferred Stock that the aggregate offering 
          price of the total number of shares of Preferred Stock or 
          Equivalent Preferred Stock so to be offered (or the aggregate 
          initial conversion price of the convertible securities so to be 
          offered) would purchase at such Current Market Price, and the 
          denominator of which is the number of shares of Preferred Stock 
          outstanding on such record date, plus the number of additional 
          shares of Preferred Stock or Equivalent Preferred Stock to be 
          offered for subscription or purchase (or into the maximum number of 
          shares into which the convertible securities so to be offered are 
          initially convertible). In the event that the number of shares of 
          Preferred Stock or Equivalent Preferred Stock issuable under the 
          terms of a convertible security, or the conversion or exercise 
          price of such convertible security, changes after the initial 
          issuance of such convertible security, an adjustment will be made 
          to the Purchase Price that conforms with the adjustment set forth 
          in this SECTION 11(b).  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 will be as 
          conclusively determined in good faith by a Requisite Majority, 
          whose determination will be described in a statement filed with the 
          Rights Agent and will be binding on the Rights Agent and the 
          holders of 


                                       19
<PAGE>

          the Rights. Shares of Preferred Stock owned by or held for the 
          account of the Company will be deemed not to be outstanding for the 
          purpose of any such computation. Such adjustment will 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 will be adjusted to be the Purchase Price that would 
          then be in effect if such record date had not been fixed.

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

               (d)  (i)    For the purpose of any computation under this 
               Agreement, other than computations made pursuant to SECTION 
               11(a)(iii), the "CURRENT MARKET PRICE" per share of Common 
               Stock on any date will be deemed to be the average of the 
               daily closing prices per share of such Common Stock for the 
               thirty (30) consecutive Trading Days (as defined below) 
               immediately prior to such date, and for purposes of 
               computations made pursuant to SECTION 11(a)(iii), the "CURRENT 
               MARKET PRICE" per share of Common Stock on any date will be 
               deemed to be the average of the daily closing prices per share 
               of such Common Stock for the ten (10) consecutive Trading Days 
               immediately following such date; provided, however, that in 
               the event that the Current Market Price per share of the 
               Common Stock is determined during a period following the 
               announcement by the issuer of such Common Stock of (A) a 
               dividend or distribution on such Common Stock payable in 
               shares of such Common Stock or securities convertible into 
               shares of such Common Stock (other than the 


                                       20
<PAGE>

               Rights), or (B) any subdivision, combination, or 
               reclassification of such Common Stock, and the ex-dividend 
               date for such dividend or distribution, or the record date for 
               such subdivision, combination, or reclassification has not 
               occurred prior to the commencement of the requisite thirty 
               (30) Trading Day or ten (10) Trading Day period, as set forth 
               above, then, and in each such case, the Current Market Price 
               will be properly adjusted to take into account ex-dividend 
               trading. The closing price for each day will be the last sale 
               price, regular way, or, in case no such sale takes place on 
               such day, the average of the closing bid and asked prices, 
               regular way, in either case as reported in the principal 
               consolidated transaction reporting system with respect to 
               securities listed or admitted to trading on the New York Stock 
               Exchange or, if the shares of Common Stock are not listed or 
               admitted to trading on the New York Stock Exchange, as 
               reported in the principal consolidated transaction reporting 
               system with respect to securities listed on the principal 
               national securities exchange on which the shares of Common 
               Stock are listed or admitted to trading or, if the shares of 
               Common Stock are not listed or admitted to trading on any 
               national securities exchange, the last quoted price or, if not 
               so quoted, the average of the high bid and low asked prices in 
               the over-the-counter market, as reported by NASDAQ or such 
               other system then in use, or, if on any such date the shares 
               of Common Stock are not quoted by any such organization, the 
               average of the closing bid and asked prices as furnished by a 
               professional market maker making a market in the Common Stock 
               selected by a Requisite Majority. If on any such date no 
               market maker is making a market in the Common Stock, the fair 
               value of such shares on such date as determined in good faith 
               by a Requisite Majority will be used. The term "TRADING DAY" 
               means a day on which the principal national securities 
               exchange on which the shares of Common Stock are listed or 
               admitted to trading is open for the transaction of business 
               or, if the shares of Common Stock are not listed or admitted 
               to trading on any national securities exchange, a Business 
               Day. If the Common Stock is not publicly held or not so listed 
               or traded, Current Market Price per share will mean the fair 
               value per share as determined in good faith by a Requisite 
               Majority, the determination of which will be described in a 
               statement filed with the Rights Agent and will be conclusive 
               for all purposes.

                    (ii)   For the purpose of any computation under this 
               Agreement, the "CURRENT MARKET PRICE" per share of Preferred 
               Stock will be determined in the same manner as set forth above 
               for the Common Stock in SECTION 11(d)(i) (other than the last 
               sentence thereof). If the Current Market Price per share of 
               Preferred Stock cannot be determined in the manner provided 
               above or if the Preferred Stock is not publicly held or listed 
               or traded in a manner described in SECTION 11(d)(i), the 
               Current Market Price per share of Preferred Stock will be 
               conclusively deemed to be an amount equal to one thousand 
               (1,000) (as such number may be 


                                       21
<PAGE>

               appropriately adjusted for such events as stock splits, stock 
               dividends, and recapitalizations with respect to the Common 
               Stock occurring after the date of this Agreement) multiplied 
               by the Current Market Price per share of the Common Stock. If 
               neither the Common Stock nor the Preferred Stock is publicly 
               held or so listed or traded, Current Market Price per share of 
               the Preferred Stock will mean the fair value per share as 
               determined in good faith by a Requisite Majority, whose 
               determination will be described in a statement filed with the 
               Rights Agent and will be conclusive for all purposes. For all 
               purposes of this Agreement, the Current Market Price of one 
               one-thousandth of a share of Preferred Stock will be equal to 
               the Current Market Price of one share of Preferred Stock 
               divided by one thousand (1,000).

               (e)    Anything in this Agreement to the contrary 
          notwithstanding, no adjustment in the Purchase Price will be 
          required unless such adjustment would require an increase or 
          decrease of at least one percent (1%) in the Purchase Price; 
          provided, however, that any adjustments that by reason of this 
          SECTION 11(e) are not required to be made will be carried forward 
          and taken into account in any subsequent adjustment.  All 
          calculations under this SECTION 11 will be made to the nearest cent 
          or to the nearest ten-thousandth of a share of Common Stock or 
          other share or one-millionth of a share of Preferred Stock, as the 
          case may be. Notwithstanding the first sentence of this SECTION 
          11(e), any adjustment required by this SECTION 11 will be made no 
          later than the earlier of (i) three (3) years from the date of the 
          transaction that mandates such adjustment or (ii) the Expiration 
          Date.

               (f)    If, as a result of an adjustment made pursuant to 
          SECTION 11(a)(ii) or SECTION 13(a), the holder of any Right 
          thereafter exercised becomes entitled to receive any shares of 
          capital stock other than Preferred Stock, then the number of such 
          other shares so receivable upon exercise of any Right and the 
          Purchase Price will be subject to adjustment from time to time in a 
          manner and on terms as nearly equivalent as practicable to the 
          provisions with respect to the Preferred Stock contained in 
          SECTIONS 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (m), and 
          (q) and the provisions of SECTIONS 7, 9, 10, 13, and 14 with 
          respect to the Preferred Stock will 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 under this Agreement 
          will evidence the right to purchase, at the adjusted Purchase 
          Price, the number of one one-thousandths of a share of Preferred 
          Stock purchasable from time to time under this Agreement upon 
          exercise of the Rights, all subject to further adjustment as 
          provided in this Agreement.

               (h)    Unless the Company has exercised its election as 
          provided in SECTION 11(i), upon each adjustment of the Purchase 
          Price as a result of the 


                                       22
<PAGE>

          calculations made in SECTIONS 11(b) and (c), each Right outstanding 
          immediately prior to the making of such adjustment will thereafter 
          evidence the right to purchase, at the adjusted Purchase Price, 
          that number of one one-thousandths of a share of Preferred Stock 
          (calculated to the nearest one-millionth) obtained by (i) 
          multiplying (x) the number of one one-thousandths of a share 
          covered by a Right immediately prior to this adjustment, by (y) the 
          Purchase Price in effect immediately prior to such adjustment of 
          the Purchase Price, and (ii) dividing the product so obtained by 
          the Purchase Price in effect immediately after such adjustment of 
          the Purchase Price.

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

               (j)    Irrespective of any adjustment or change in the 
          Purchase Price or the number of one one-thousandths of a share of 
          Preferred Stock issuable upon the exercise of the Rights, the 
          Rights Certificates theretofore and thereafter 


                                       23
<PAGE>

          issued may continue to express the Purchase Price per one 
          one-thousandth of a share and the number of one one-thousandths of 
          a share that were expressed in the initial Rights Certificates 
          issued under this Agreement.

               (k)    Before taking any action that would cause an adjustment 
          reducing the Purchase Price below the then stated value, if any, of 
          the number of one one-thousandths of a share of Preferred Stock 
          issuable upon exercise of the Rights, the Company will take any 
          corporate action that may, in the opinion of its counsel, be 
          necessary in order that the Company may validly and legally issue 
          such number of fully paid and nonassessable one one-thousandths of 
          a share of Preferred Stock at such adjusted Purchase Price.

               (l)    In any case in which this SECTION 11 requires 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-thousandths of a share of Preferred Stock and other capital 
          stock or securities of the Company, if any, issuable upon such 
          exercise over and above the number of one one-thousandths of a 
          share of Preferred Stock and other capital stock or securities of 
          the Company, if any, issuable upon such exercise on the basis of 
          the Purchase Price in effect prior to such adjustment; provided, 
          however, that the Company will deliver to such holder a due bill or 
          other appropriate instrument evidencing such holder's right to 
          receive such additional shares (fractional or otherwise) or 
          securities upon the occurrence of the event requiring such 
          adjustment.

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

               (n)    The Company covenants and agrees that it will not, at 
          any time after the Distribution Date, (i) consolidate with any 
          other Person (other than a Subsidiary of the Company in a 
          transaction that complies with SECTION 11(o)), (ii) merge with, 
          from, or into any other Person (other than a Subsidiary of the 
          Company in a transaction that complies with SECTION 11(o)), or 
          (iii) sell or transfer (or permit any Subsidiary to sell or 
          transfer), in one transaction, or a 


                                       24
<PAGE>

          series of related transactions, assets or earning power aggregating 
          more than 50% of the assets or earning power of the Company and its 
          Subsidiaries (taken as a whole) to any other Person or Persons 
          (other than the Company or any of its Subsidiaries in one or more 
          transactions each of which complies with SECTION 11(o)), if (x) at 
          the time of or immediately after such consolidation, merger, sale, 
          or transfer, there are any rights, warrants, or other instruments 
          or securities outstanding or agreements in effect that could 
          reasonably be expected to substantially diminish or otherwise 
          eliminate the benefits intended to be afforded by the Rights or (y) 
          prior to, simultaneously with, or immediately after, such 
          consolidation, merger, sale, or transfer, the stockholders of the 
          Person that constitutes, or would constitute, the "PRINCIPAL PARTY" 
          for purposes of SECTION 13(a) has received a distribution of Rights 
          previously owned by such Person or any of its Affiliates and 
          Associates.

               (o)    The Company covenants and agrees that, after the 
          Distribution Date, it will not, except as permitted by SECTION 23 
          or SECTION 26, 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.

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

               (q)    In the event that the Rights become exercisable 
          following a Section 11(a)(ii) Event, the Company, by action of a 
          Requisite Majority, may permit the Rights, subject to SECTION 7(e), 
          to be exercised for 50% of the shares of Common Stock (or cash or 
          other securities or assets to be substituted for the Adjustment 
          Shares pursuant to SECTION 11(a)(iii)) that would otherwise be 
          purchasable under SECTION 11(a) in consideration of the surrender 
          to the Company of the Rights so exercised and without other payment 
          of the Purchase 


                                       25
<PAGE>

          Price.  Rights exercised under this SECTION 11(q) will be deemed to 
          have been exercised in full and will be cancelled.

               (r)    The failure by the Board of Directors at any time to 
          determine a Person to be an Adverse Person following such Person 
          becoming a Beneficial Owner of 10% or more of the outstanding 
          Common Stock will not create any implication that such Person is 
          not or may not later be determined to be an Adverse Person.

          Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF 
     SHARES. Whenever an adjustment is made as provided in SECTION 11 or 
     SECTION 13, the Company will (a) promptly prepare a certificate setting 
     forth such adjustment and a brief statement of the facts accounting for 
     such adjustment, (b) promptly file with the Rights Agent, and with each 
     transfer agent for the Preferred Stock and the Common Stock, a copy of 
     such certificate, and (c) mail a brief summary thereof to each holder of 
     a Rights Certificate (or, if prior to the Distribution Date, to each 
     holder of a certificate representing shares of Common Stock) in 
     accordance with SECTION 25. The Rights Agent will be fully protected in 
     relying on any such certificate and on any adjustment contained in such 
     certificate.

          Section 13. CONSOLIDATION, MERGER, OR SALE OR TRANSFER OF ASSETS OR 
     EARNING POWER.

               (a)    In the event that, following the Stock Acquisition 
          Date, directly or indirectly, (x) the Company consolidates with, or 
          merges from, with, or into, any other Person (other than a 
          Subsidiary of the Company in a transaction that complies with 
          SECTION 11(o)), and the Company is not the continuing or surviving 
          Person of such consolidation or merger; (y) any Person (other than 
          a Subsidiary of the Company in a transaction that complies with 
          SECTION 11(o)) consolidates with, or merges from, with, or into, 
          the Company, and the Company is the continuing or surviving 
          corporation of such consolidation or merger and, in connection with 
          such consolidation or merger, all or part of the outstanding shares 
          of Common Stock of the Company is changed into or exchanged for 
          stock or other securities of any other Person or cash or any other 
          property; or (z) the Company sells or otherwise transfers (or one 
          or more of its Subsidiaries sells or otherwise transfers), in one 
          transaction or a series of related transactions, assets or earning 
          power aggregating more than 50% of the assets or earning power of 
          the Company and its Subsidiaries (taken as a whole) to any Person 
          or Persons (other than the Company or any Subsidiary of the Company 
          in one or more transactions each of which complies with SECTION 
          11(o)), then, and in each such case (except as contemplated by 
          SECTION 13(d)), proper provision will be made so that (i) each 
          holder of a Right, except as provided in SECTION 7(e) or SECTION 
          13(e), will thereafter have the right to receive, upon the exercise 
          of such Right at the then current Purchase Price in accordance with 
          the terms of this Agreement, such number of validly authorized and 
          issued, fully paid, 


                                       26
<PAGE>

          nonassessable, and freely tradable shares of Common Stock of the 
          Principal Party (as defined below), not subject to any liens, 
          encumbrances, preemptive rights, rights of first refusal, or other 
          adverse claims, as are equal to the result obtained by (1) 
          multiplying the then current Purchase Price by the number of one 
          one-thousandths of a share of Preferred Stock for which a Right is 
          exercisable immediately prior to the first occurrence of a Section 
          13 Event (or, if a Section 11(a)(ii) Event has occurred prior to 
          the first occurrence of a Section 13 Event, multiplying the number 
          of such one one-thousandths of a share for which a Right was 
          exercisable immediately prior to the first occurrence of a Section 
          11(a)(ii) Event by the Purchase Price in effect immediately prior 
          to such first occurrence), and dividing that product (which, 
          following the first occurrence of a Section 13 Event, will be 
          referred to as the "PURCHASE PRICE" for each Right and for all 
          purposes of this Agreement) by (2) 50% of the Current Market Price 
          (determined pursuant to SECTION 11(d)(i)) per share of the Common 
          Stock of such Principal Party on the date of consummation of such 
          Section 13 Event; (ii) such Principal Party will thereafter be 
          liable for, and will assume, by virtue of such Section 13 Event, 
          all the obligations and duties of the Company pursuant to this 
          Agreement; (iii) the term "COMPANY" will thereafter be deemed to 
          refer to such Principal Party, it being specifically intended that 
          the provisions of SECTION 11 will apply only to such Principal 
          Party following the first occurrence of a Section 13 Event; (iv) 
          such Principal Party will take such steps (including, but not 
          limited to, the reservation of a sufficient number of shares of its 
          Common Stock) in connection with the consummation of any such 
          transaction as may be necessary to assure that the provisions of 
          this Agreement will thereafter be applicable, as nearly as may be, 
          in relation to its shares of Common Stock thereafter deliverable 
          upon the exercise of the Rights; and (v) the provisions of SECTION 
          11(a)(ii) will be of no effect following the first occurrence of 
          any Section 13 Event.

               (b)    "PRINCIPAL PARTY" means

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

                      (ii)   in the case of any transaction described in 
               CLAUSE (z) of the first sentence of SECTION 13(a), the Person 
               that is the party receiving the greatest portion of the assets 
               or earning power transferred pursuant to such transaction or 
               transactions;

               provided, however, that in any such case, (1) if the Common 
               Stock of such Person is not at such time and has not been 
               continuously over the preceding twelve (12) month period 
               registered under Section 12 of the 


                                       27
<PAGE>

               Exchange Act, and such Person is a direct or indirect 
               Subsidiary of another Person the Common Stock of which is and 
               has been so registered, "PRINCIPAL PARTY" will refer to such 
               other Person; and (2) in case such Person is a Subsidiary, 
               directly or indirectly, of more than one Person, the Common 
               Stocks of two or more of which are and have been so 
               registered, "PRINCIPAL PARTY" will refer to whichever of such 
               Persons is the issuer of the Common Stock having the greatest 
               aggregate market value.

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

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

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

     The provisions of this SECTION 13 will similarly apply to successive 
     mergers, consolidations, and sales or other transfers. In the event that 
     a Section 13 Event occurs at any time after the occurrence of a Section 
     11(a)(ii) Event, the Rights that have not theretofore been exercised 
     will thereafter become exercisable in the manner described in SECTION 
     13(a).

               (d)  Notwithstanding anything in this Agreement to the 
          contrary, SECTION 13 will not be applicable to a transaction 
          described in CLAUSE (x) and (y) of the first sentence of SECTION 
          13(a) if (i) such transaction is consummated with a Person or 
          Persons that acquired shares of Common Stock of the Company 
          pursuant a tender offer or exchange offer for all outstanding 
          shares of Common Stock that complies with the provisions of SECTION 
          11(a)(ii)(B) (or a wholly owned subsidiary of any such Person or 
          Persons), (ii) the price per share of 


                                       28
<PAGE>

          Common Stock offered in such transaction is not less than the price 
          per share of Common Stock paid to all holders of shares of Common 
          Stock whose shares were purchased pursuant to such tender offer or 
          exchange offer, and (iii) the form of consideration being offered 
          to the remaining holders of shares of Common Stock pursuant to such 
          transaction is the same as the form of consideration paid pursuant 
          to such tender offer or exchange offer. Upon consummation of any 
          such transaction contemplated by this SECTION 13(d), all Rights 
          under this Agreement will expire.
     
          (e)  In the event that the Rights become exercisable under SECTION 
          13(a), the Company, by action of a Requisite Majority, may agree 
          with the Principal Party that the Principal Party may permit the 
          Rights to be exercised for 50% of the Common Shares of the 
          Principal Party that would otherwise be purchasable under SECTION 
          13(a), in consideration of the surrender to the Principal Party, as 
          the successor to the Company under SECTION 13(a)(ii), of the Rights 
          so exercised and without other payment of the Purchase Price.  
          Rights exercised under this SECTION 13(e) will be deemed to have 
          been exercised in full and cancelled.

          Section 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

               (a)    The Company will not be required to issue fractions of 
          Rights, except prior to the Distribution Date as provided in 
          SECTION 11(p), or to distribute Rights Certificates that evidence 
          fractional Rights. In lieu of such fractional Rights, there will be 
          paid to the registered holders of the Rights Certificates with 
          regard to which such fractional Rights would otherwise be issuable, 
          an amount in cash equal to the same fraction of the current market 
          value of a whole Right. For purposes of this SECTION 14(a), the 
          current market value of a whole Right will be the closing price of 
          the Rights for the Trading Day immediately prior to the date on 
          which such fractional Rights would have been otherwise issuable. 
          The closing price of the Rights for any day will be the last sale 
          price, regular way, or, in case no such sale takes place on such 
          day, the average of the closing bid and asked prices, regular way, 
          in either case as reported in the principal consolidated 
          transaction reporting system with respect to securities listed or 
          admitted to trading on the New York Stock Exchange or, if the 
          Rights are not listed or admitted to trading on the New York Stock 
          Exchange, as reported in the principal consolidated transaction 
          reporting system with respect to securities listed on the principal 
          national securities exchange on which the Rights are listed or 
          admitted to trading, or if the Rights are not listed or admitted to 
          trading on any national securities exchange, the last quoted price 
          or, if not so quoted, the average of the high bid and low asked 
          prices in the over-the-counter market, as reported by NASDAQ or 
          such other system then in use or, if on any such date the Rights 
          are not quoted by any such organization, the average of the closing 
          bid and asked prices as furnished by a professional market maker 
          making a market in the Rights selected by a Requisite Majority. If 
          on any such date no such market 


                                       29
<PAGE>

          maker is making a market in the Rights the fair value of the Rights 
          on such date as conclusively determined in good faith by a 
          Requisite Majority will be used.

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

               (c)    Following the occurrence of a Triggering Event, the 
          Company will not be required to issue fractions of shares of Common 
          Stock upon exercise of the Rights or to distribute certificates 
          that evidence fractional shares of Common Stock. In lieu of 
          fractional shares of Common Stock, the Company may pay to the 
          registered holders of Rights Certificates at the time such Rights 
          are exercised as provided in this Agreement an amount in cash equal 
          to the same fraction of the current market value of one share of 
          Common Stock. For purposes of this SECTION 14(c), the current 
          market value of one share of Common Stock will be the Current 
          Market Value of one share of Common Stock (as determined pursuant 
          to 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 right to receive any fractional Rights or any 
          fractional shares upon exercise of a Right, except as permitted by 
          this SECTION 14.

          Section 15.  RIGHTS OF ACTION. All rights of action in respect of 
     this Agreement are vested in the respective registered holders of the 
     Rights Certificates (and, prior to the Distribution Date, the registered 
     holders of the Common Stock); and any registered holder of any Rights 
     Certificate (or, prior to the Distribution Date, of the Common Stock), 
     without the consent of the Rights Agent or of the holder of any other 
     Rights Certificate (or, prior to the Distribution Date, of the Common 
     Stock), may, in its own behalf and for its own benefit, enforce, and may 
     institute and maintain any suit, action, or proceeding against the 
     Company to enforce, or otherwise act in respect of, its right to 
     exercise the Rights evidenced by such Rights Certificate in the manner 
     provided in such Rights Certificate and in this Agreement. Without 
     limiting the foregoing or any 


                                       30
<PAGE>

     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 this Agreement and 
     injunctive relief against actual or threatened violations of the 
     obligations under this Agreement of any Person subject to this Agreement.

          Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by 
     accepting the Rights consents and agrees with the Company and the Rights 
     Agent and with every other holder of a Right that:

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

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

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

               (d)    notwithstanding anything in this Agreement to the 
          contrary, neither the Company nor the Rights Agent will 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 will use its reasonable 
          best efforts to have any such order, decree, or ruling lifted or 
          otherwise overturned as soon as possible.

          Section 17.  RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No 
     holder, as such, of any Rights Certificate will be entitled to vote or 
     receive dividends or be deemed for any purpose the holder of the number 
     of one one-thousandths of a share of Preferred Stock or any other 
     securities of the Company that may at any time be 


                                       31
<PAGE>

     issuable on the exercise of the Rights represented thereby, nor will 
     anything contained in this Agreement or in any Rights Certificate be 
     construed to confer upon the holder of any Rights Certificate, as such, 
     any of the rights of a stockholder of the Company or any right to vote 
     for the election of directors or upon any matter submitted to 
     stockholders, or to give or withhold consent to any corporate action, or 
     to receive notice of meetings or other actions affecting stockholders 
     (except as provided in SECTION 24), or to receive dividends or 
     subscription rights, or otherwise, until the Right or Rights evidenced 
     by such Rights Certificate have been exercised in accordance with the 
     provisions of this Agreement.

          Section 18.  CONCERNING THE RIGHTS AGENT.

               (a)    The Company agrees to pay to the Rights Agent 
          reasonable compensation for all services rendered by it under this 
          Agreement and, from time to time, on demand of the Rights Agent, 
          its reasonable expenses and counsel fees and disbursements and 
          other disbursements incurred in the administration and execution of 
          this Agreement and the exercise and performance of its duties under 
          this Agreement. The Company also agrees to indemnify the Rights 
          Agent for, and to hold it harmless against, any loss, liability, or 
          expense, incurred without negligence, bad faith, or willful 
          misconduct on the part of the Rights Agent, for anything done or 
          omitted to be done by the Rights Agent in connection with the 
          acceptance and administration of this Agreement, including, without 
          limitation, the costs and expenses of defending against any claim 
          of liability.  In no case will the Rights Agent be liable for 
          special, indirect, incidental, or consequential loss or damages of 
          any kind whatsoever, even if the Rights Agent has been advised or 
          is otherwise aware of the likelihood of such loss or damage.

               (b)    The Rights Agent will be protected and will incur no 
          liability for or in respect of any action taken, suffered, or 
          omitted by it in connection with its administration of this 
          Agreement in reliance upon any Rights Certificate or certificate 
          for Common Stock or for other securities of the Company, instrument 
          of assignment or transfer, power of attorney, endorsement, 
          affidavit, letter, notice, direction, consent, certificate, 
          statement, or other paper or document believed by it to be genuine 
          and to be signed, executed, and, where necessary, verified or 
          acknowledged, by the proper Person or Persons.

          Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.

               (a)    Any Person into or with which the Rights Agent or any 
          successor Rights Agent may be merged or with which it may be 
          consolidated, or any Person resulting from any merger or 
          consolidation to which the Rights Agent or any successor Rights 
          Agent is a party, or any corporation succeeding to the corporate 
          trust or shareholder services business of the Rights Agent or any 
          successor Rights Agent, will be the successor to the Rights Agent 
          under this Agreement without the execution or filing of any paper 
          or any further act on the 


                                       32
<PAGE>

          part of any of the parties to this Agreement; provided, however, 
          that such corporation would be eligible for appointment as a 
          successor Rights Agent under the provisions of SECTION 21. In case 
          at the time such successor Rights Agent succeeds to the agency 
          created by this Agreement, any of the Rights Certificates have been 
          countersigned but not delivered, any such successor Rights Agent 
          may adopt the countersignature of a predecessor Rights Agent and 
          deliver such Rights Certificates so countersigned; and in case at 
          that time any of the Rights Certificates not have been 
          countersigned, any successor Rights Agent may countersign such 
          Rights Certificates either in the name of the predecessor or in the 
          name of the successor Rights Agent; and in all such cases such 
          Rights Certificates will have the full force provided in the Rights 
          Certificates and in this Agreement.

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

          Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the 
     duties and obligations imposed by this Agreement upon the following 
     terms and conditions, by all of which the Company and the holders of 
     Rights Certificates, by their acceptance of such Rights Certificates, 
     will be bound:

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

               (b)    Whenever in the performance of its duties under this 
          Agreement the Rights Agent deems it necessary or desirable that any 
          fact or matter (including, without limitation, the identity of any 
          Acquiring Person or Adverse Person and the determination of 
          "Current Market Price") be proved or established by the Company 
          prior to taking or suffering any action under this Agreement, such 
          fact or matter (unless other evidence in respect of such fact or 
          matter is specifically prescribed in this Agreement) may be deemed 
          to be conclusively proved and established by a certificate signed 
          by the Chairman of the Board, the Chief Executive Officer, the 
          Chief Operating Officer, the President, any Vice President, the 
          Treasurer, any Assistant Treasurer, the Secretary, or any Assistant 
          Secretary of the Company and delivered to the Rights Agent; and 
          such certificate will be full authorization to the Rights Agent for 


                                       33
<PAGE>

          any action taken or suffered in good faith by it under the 
          provisions of this Agreement in reliance upon such certificate.

               (c)    The Rights Agent will be liable under this Agreement 
          only for its own negligence, bad faith or willful misconduct.

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

               (e)     The Rights Agent will not be under any responsibility 
          in respect of the validity of this Agreement or the execution and 
          delivery of this Agreement (except the due execution of this 
          Agreement by the Rights Agent) or in respect of the validity or 
          execution of any Rights Certificate (except its countersignature); 
          nor will it be responsible for any breach by the Company of any 
          covenant or condition contained in this Agreement or in any Rights 
          Certificate; nor will it be responsible for any adjustment required 
          under the provisions of SECTION 11 or SECTION 13, or responsible 
          for the manner, method, or amount of any such adjustment or the 
          ascertaining of the existence of facts that would require any such 
          adjustment (except with respect to the exercise of Rights evidenced 
          by Rights Certificates after actual notice of any such adjustment); 
          nor will it by any act under this Agreement be deemed to make any 
          representation or warranty as to the authorization or reservation 
          of any shares of Common Stock or Preferred Stock to be issued 
          pursuant to this Agreement or any Rights Certificate or as to 
          whether any shares of Common Stock or Preferred Stock will, when so 
          issued, be validly authorized or issued, fully paid, or 
          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 
          under this Agreement from the Chairman of the Board, the Chief 
          Executive Officer, the Chief Operating Officer, the President, any 
          Vice President, the Secretary, any Assistant Secretary, the 
          Treasurer, or any Assistant Treasurer of the Company, and to apply 
          to such officers for advice or instructions in connection with its 
          duties, and it will not be liable for any action taken or suffered 
          to be taken by it in good faith in accordance with instructions of 
          any such officer.


                                       34
<PAGE>

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

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

               (j)    No provision of this Agreement will 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 under 
          this Agreement or in the exercise of its rights if there are 
          reasonable grounds for believing that repayment of such funds or 
          adequate indemnification against such risk or liability is not 
          reasonably assured to it.

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

          Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any 
     successor Rights Agent may resign and be discharged from its duties 
     under this Agreement upon thirty (30) days' notice in writing mailed to 
     the Company, and to each transfer agent of the Common Stock and 
     Preferred Stock, by registered or certified mail, and to the holders of 
     the Rights Certificates by first-class mail. The Company may remove the 
     Rights Agent or any successor Rights Agent upon thirty (30) days' notice 
     in writing, mailed to the Rights Agent or successor Rights Agent, as the 
     case may be, and to each transfer agent of the Common Stock and 
     Preferred Stock, by registered or certified mail, and to the holders of 
     the Rights Certificates by first-class mail. If the Rights Agent resigns 
     or is removed or otherwise becomes incapable of acting, the Company will 
     appoint a successor to the Rights Agent. If the Company fails to make 
     such appointment within a period of thirty (30) days after giving notice 
     of such removal or after it has been notified in writing of such 
     resignation or incapacity by the resigning or incapacitated Rights Agent 
     or by the holder of a Rights Certificate (who will, with such notice, 
     submit such holder's Rights Certificate for inspection by the Company), 
     then any registered holder of 


                                       35
<PAGE>

     any Rights Certificate may apply to any court of competent jurisdiction 
     for the appointment of a new Rights Agent. Any successor Rights Agent, 
     whether appointed by the Company or by such a court, will be a 
     corporation organized and doing business under the laws of the United 
     States or a State of the United States, in good standing, that is 
     authorized under such laws to exercise corporate trust powers and is 
     subject to supervision or examination by federal or state authority and 
     that has at the time of its appointment as Rights Agent a combined 
     capital and surplus of at least $100,000,000. After appointment, the 
     successor Rights Agent will 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, except that the predecessor 
     Rights Agent will deliver and transfer to the successor Rights Agent any 
     property at the time held by it under this Agreement 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 will file notice of such appointment in writing with the 
     predecessor Rights Agent and each transfer agent of the Common Stock and 
     the Preferred Stock, and mail a notice of such appointment in writing to 
     the registered holders of the Rights Certificates. Failure to give any 
     notice provided for in this SECTION 21, however, or any defect in such 
     notice, will not affect the legality or validity of the resignation or 
     removal of the Rights Agent or the appointment of the successor Rights 
     Agent, as the case may be.

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


                                       36
<PAGE>

          Section 23. REDEMPTION AND TERMINATION.

               (a)    The Company may, at its option, by action of its Board 
          of Directors at any time prior to the earlier of (i) the Close of 
          Business on the tenth day following the Stock Acquisition Date (or, 
          if the Stock Acquisition Date has occurred prior to the Record 
          Date, the Close of Business on the tenth day following the Record 
          Date), or (ii) the Final Expiration Date, redeem all but not less 
          than all the then outstanding Rights at a redemption price of $0.01 
          per Right, as such amount may be appropriately adjusted to reflect 
          any stock split, stock dividend, or similar transaction occurring 
          after the date of this Agreement (such redemption price being 
          referred to as the "REDEMPTION PRICE"); provided, however, there 
          must be at least two Continuing Directors then in office and such 
          authorization will require concurrence of a Requisite Majority if 
          the Board of Directors authorizes redemption of the Rights in 
          either of the following circumstances: (i) such authorization 
          occurs on or after the time any Person becomes an Acquiring Person 
          or an Adverse Person, or (ii) such authorization occurs on or after 
          the time of a change (resulting from a proxy or consent 
          solicitation) in a majority of the directors in office at the 
          commencement of such solicitation if any Person who is a 
          participant in such solicitation has stated (or, if on or after the 
          commencement of such solicitation, a majority of the Board of 
          Directors of the Company has determined in good faith) that such 
          Person (or any of its Affiliates or Associates) intends to take, 
          may consider taking, or reserves any right to take, any action that 
          would result in such Person becoming an Acquiring Person or that 
          would cause the occurrence of a Triggering Event; provided, 
          however, that if, following the occurrence of a Stock Acquisition 
          Date and following the expiration of the right of redemption under 
          this SECTION 23 but prior to any Triggering Event, (x) all 
          Acquiring Persons and Adverse Persons have transferred or otherwise 
          disposed of a number of Common Shares in one transaction or series 
          of transactions not directly or indirectly involving the Company or 
          any of its Subsidiaries that did not result in the occurrence of a 
          Triggering Event or the Company (with the approval of the Requisite 
          Majority) has issued additional equity securities, in either 
          instance such that each Acquiring Person and Adverse Person is 
          thereafter a Beneficial Owner of less that 10% of the outstanding 
          shares of Common Stock, and (y) there is no other Acquiring Person 
          or (in the good faith judgment of a Requisite Majority) Adverse 
          Person immediately following the occurrence of the event described 
          in CLAUSE (x), then the right of redemption will be reinstated and 
          thereafter be subject to the provisions of this SECTION 23. 
          Notwithstanding anything contained in this Agreement to the 
          contrary, the Rights will not be exercisable after the first 
          occurrence of a Section 11(a)(ii) Event except during the period 
          that the Company's right of redemption under this Agreement has 
          expired and not been reinstated. The Company may, at its option, 
          pay the Redemption Price, in cash, shares of Common Stock (based on 
          the Current Market Price as defined in SECTION 11(d)(i), of the 
          Common Stock at the time of redemption) or any other form of 
          consideration deemed appropriate by the Board of Directors.


                                       37
<PAGE>

               (b)    Immediately upon the action of the Board of Directors 
          of the Company ordering the redemption of the Rights, evidence of 
          which has been filed with the Rights Agent 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 will be to receive the Redemption Price for each Right so 
          held. Promptly after the action of the Board of Directors ordering 
          the redemption of the Rights, the Company will give notice of such 
          redemption to the Rights Agent and the holders of the then 
          outstanding Rights by mailing such notice to all such holders at 
          each holder's last address as it appears upon the registry books of 
          the Rights Agent or, prior to the Distribution Date, on the 
          registry books of the transfer agent for the Common Stock. Any 
          notice that is mailed in the manner in this Agreement provided will 
          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.

          Section 24. NOTICE OF CERTAIN EVENTS.

               (a)    In case the Company proposes, at any time after the 
          Distribution Date, (i) to pay any dividend payable in stock of any 
          class to the holders of Preferred Stock or to make any other 
          distribution to the holders of Preferred Stock (other than a 
          regular quarterly cash dividend out of earnings or retained 
          earnings of the Company); (ii) to offer to the holders of Preferred 
          Stock rights or warrants to subscribe for or to purchase any 
          additional shares of Preferred Stock or shares of stock of any 
          class or any other securities, rights, or options; (iii) to effect 
          any reclassification of its Preferred Stock (other than a 
          reclassification involving only the subdivision of outstanding 
          shares of Preferred Stock); (iv) to effect any consolidation or 
          merger from, into, or with any other Person (other than a 
          Subsidiary of the Company in a transaction that complies with 
          SECTION 11(o)), or to effect any sale or other transfer (or to 
          permit one or more of its Subsidiaries to effect any sale or other 
          transfer), in one transaction or a series of related transactions, 
          of more than 50% of the assets or earning power of the Company and 
          its Subsidiaries (taken as a whole) to any other Person or Persons 
          (other than the Company or any of its Subsidiaries in one or more 
          transactions each of 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 will give to each holder of a 
          Rights Certificate, to the extent feasible and in accordance with 
          SECTION 25, a notice of such proposed action, which will specify 
          the record date for the purposes of such stock dividend, 
          distribution of rights or warrants, or the date on which such 
          reclassification, consolidation, merger, sale, transfer, 
          liquidation, dissolution, or winding up is to take place and the 
          date of participation therein by the holders of the shares of 
          Preferred Stock, if any such date is to be fixed, and such notice 
          will be so given in the case of any action covered by CLAUSE (i) or 
          (ii) above at least twenty (20) days prior to the record date for 
          determining holders of the shares of Preferred Stock for purposes 


                                       38
<PAGE>

          of such action, and in the case of any such other action, at least 
          twenty (20) days prior to the date of the taking of such proposed 
          action or the date of participation in such proposed action by the 
          holders of the shares of Preferred Stock, whichever is the earlier.

               (b)    In case any of the events set forth in SECTION 
          11(a)(ii) occurs, then, in any such case, (i) the Company will as 
          soon as practicable give to each holder of a Rights Certificate, to 
          the extent feasible and in accordance with SECTION 25, a notice of 
          the occurrence of such event, which will specify the event and the 
          consequences of the event to holders of Rights under SECTION 
          11(a)(ii), and (ii) all references in SECTION 24(a) to Preferred 
          Stock will be deemed thereafter to refer to Common Stock or, if 
          appropriate, other securities.

          Section 25.  NOTICES. Notices or demands authorized by this 
     Agreement to be given or made by the Rights Agent or by the holder of 
     any Rights Certificate to or on the Company will 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:

                         Anchor Gaming
                         815 Pilot Road
                         Suite G
                         Las Vegas, Nevada  89119
                         Attention:  Chief Executive Officer

                         with a copy to:

                         Hughes & Luce, L.L.P.
                         1717 Main Street
                         Suite 2800
                         Dallas, Texas 75201
                         Attention:  Glen Hettinger

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

                         The Chase Manhattan Bank
                         450 W. 33rd Street
                         New York NY  10001
                         Attention: Eric Leason
                         GTS Controller's Office
                         15th Floor


                                       39
<PAGE>

          Notices or demands authorized by this Agreement to be given or made 
     by the Company or the Rights Agent to the holder of any Rights 
     Certificate (or, if prior to the Distribution Date, to the holder of 
     certificates representing shares of Common Stock) will 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 26. SUPPLEMENT AND AMENDMENTS. Prior to the Distribution 
     Date and subject to the penultimate sentence of this SECTION 26, the 
     Company and the Rights Agent will, if the Company so directs, supplement 
     or amend any provision of this Agreement without the approval of any 
     holders of certificates representing shares of Common Stock. From and 
     after the Distribution Date and subject to the penultimate sentence of 
     this SECTION 26, the Company and the Rights Agent will, if the Company 
     so directs, supplement or amend this Agreement without the approval of 
     any holders of Rights Certificates in order (i) to cure any ambiguity, 
     (ii) to correct or supplement any provision contained in this Agreement 
     that may be defective or inconsistent with any other provision in this 
     Agreement, (iii) to shorten or lengthen any time period under this 
     Agreement (which lengthening or shortening, following the first 
     occurrence of an event set forth in CLAUSES (i) and (ii) of the first 
     proviso to SECTION 23(a), will be effective only if there are at least 
     two Continuing Directors and will require the concurrence of a Requisite 
     Majority), or (iv) to change or supplement the provisions under this 
     Agreement in any manner that the Company may deem necessary or desirable 
     and that will not adversely affect the interests of the holders of 
     Rights Certificates (other than an Acquiring Person or an Adverse Person 
     or an Affiliate or Associate of an Acquiring Person or an Adverse 
     Person); provided, however, this Agreement may not be supplemented or 
     amended to lengthen, pursuant to CLAUSE (iii) of this sentence, (A) a 
     time period relating to when the Rights may be redeemed at such time as 
     the Rights are not then redeemable, or (B) any other time period unless 
     such lengthening is for the purpose of protecting, enhancing, or 
     clarifying the rights of, or the benefits to, the holders of Rights. 
     Upon the delivery of a certificate from an appropriate officer of the 
     Company that states that the proposed supplement or amendment is in 
     compliance with the terms of this SECTION 26, the Rights Agent will 
     execute such supplement or amendment. Notwithstanding anything contained 
     in this Agreement to the contrary after the occurrence of a Distribution 
     Date, no supplement or amendment will be made that changes the 
     Redemption Price, the Final Expiration Date, the Purchase Price or the 
     number of one one-thousandths of a share of Preferred Stock for which a 
     Right is exercisable. Prior to the Distribution Date, the interests of 
     the holders of Rights will be deemed coincident with the interests of 
     the holders of Common Stock.

          Section 27. SUCCESSORS. All the covenants and provisions of this 
     Agreement by or for the benefit of the Company or the Rights Agent will 
     bind and inure to the benefit of their respective successors and assigns 
     under this Agreement.


                                       40
<PAGE>

          Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, 
     ETC. For all purposes of this Agreement, any calculation of the number 
     of shares of Common Stock outstanding at any particular time, including 
     for purposes of determining the particular percentage of such 
     outstanding shares of Common Stock of which any Person is the Beneficial 
     Owner, will be made in accordance with the last sentence of Rule 
     13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange 
     Act as in effect on the date of this Agreement. The Board of Directors 
     of the Company (with, where specifically provided for in this Agreement, 
     the concurrence of the Continuing Directors) will have the exclusive 
     power and authority to administer this Agreement and to exercise all 
     rights and powers specifically granted to the Board (with, where 
     specifically provided for in this Agreement, the concurrence of the 
     Continuing Directors) or to the Company, or as may be necessary or 
     advisable in the administration of this Agreement, including, without 
     limitation, the right and power to (a) interpret the provisions of this 
     Agreement, and (b) make all determinations deemed necessary or advisable 
     for the administration of this Agreement (including, without limitation, 
     a determination to redeem or not redeem the Rights or to amend the 
     Agreement). All such actions, calculations, interpretations and 
     determinations (including, for purposes of CLAUSE (y) below, all 
     omissions with respect to the foregoing) that are done or made by the 
     Board (with, where specifically provided for in this Agreement, the 
     concurrence of the Continuing Directors) in good faith, will (x) be 
     final, conclusive, and binding on the Company, the Rights Agent, the 
     holders of the Rights, and all other Persons, and (y) not subject the 
     Board or the Continuing Directors to any liability to the holders of the 
     Rights.

          Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement 
     will be construed to give to any Person other than the Company, the 
     Rights Agent, and the registered holders of the Rights Certificates 
     (and, prior to the Distribution Date, registered holders of the Common 
     Stock) any legal or equitable right, remedy, or claim under this 
     Agreement; and this Agreement will be for the sole and exclusive benefit 
     of the Company, the Rights Agent, and the registered holders of the 
     Rights Certificates (and, prior to the Distribution Date, registered 
     holders of the Common Stock).

          Section 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 will remain in full force and effect and will in no way 
     be affected, impaired, or invalidated; provided, however, that 
     notwithstanding anything in this Agreement to the contrary, if any such 
     term, provision, covenant, or restriction is held by such court or 
     authority to be invalid, void, or unenforceable and the Board of 
     Directors of the Company determines in good faith 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 will be reinstated and will not expire until the Close of 
     Business on the tenth day following the date of such determination by 
     the Board of Directors. Without limiting the foregoing, if any provision 
     requiring a majority of the Board of Directors of the Company to be 
     Continuing Directors to act is held by any 


                                       41
<PAGE>

     court of competent jurisdiction or other authority to be invalid, void, 
     or unenforceable, such determination will then be made by the Board of 
     Directors of the Company in accordance with applicable law and the 
     Company's Certificate of Incorporation and By-Laws.

          Section 31. GOVERNING LAW. This Agreement, each Right, and each 
     Rights Certificate issued under this Agreement will be deemed to be a 
     contract made under the laws of the State of Nevada and for all purposes 
     will be governed by and construed in accordance with the laws of such 
     State applicable to contracts made and to be performed entirely within 
     such State.

          Section 32. COUNTERPARTS. This Agreement may be executed in any 
     number of counterparts and each of such counterparts will for all 
     purposes be deemed to be an original, and all such counterparts will 
     together constitute but one and the same instrument.

          Section 33. INTERPRETATION. Descriptive headings of the several 
     Sections of this Agreement are inserted for convenience only and will 
     not control or affect the meaning or construction of any of the 
     provisions of this Agreement. References in this Agreement to Sections 
     and Exhibits are references to the Sections of and Exhibits to this 
     Agreement unless the context requires otherwise.  In this Agreement, the 
     word "or" is not exclusive.

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

     Attest: /s/ T. J. MATTHEWS              ANCHOR GAMING
             -------------------

                                             By:   /s/ MIKE ROMBOLZ
                                                   ------------------
                                             Name: Mike Rombolz
                                                   ------------------
                                             Its:  
                                                   ------------------

     Attest: /s/ FLORENCE CURLEY             THE CHASE MANHATTAN BANK
             -------------------
                                             By:   /s/ ERIC LEASON
                                                   ------------------
                                             Name: Eric Leason
                                                   ------------------
                                             Its:  
                                                   ------------------

                                       42
<PAGE>

                                                                       Exhibit A
                                                             to Rights Agreement
                                       
                                       
                    CERTIFICATE OF DESIGNATION, PREFERENCES,
                         AND RIGHTS OF SERIES A JUNIOR
                         PARTICIPATING PREFERRED STOCK
                                          
                                       of
                                          
                                 ANCHOR GAMING

     Pursuant to Section  78.155 of the General Corporation Law of the State 
of Nevada

     The undersigned officers of Anchor Gaming (the "CORPORATION"), a 
corporation organized and existing under the General Corporation Law of the 
State of Nevada, in accordance with the provisions of Section  78.195 
thereof, DO HEREBY CERTIFY:

     That pursuant to the authority conferred upon the Board of Directors by 
the Restated Articles of Incorporation of such Corporation, such Board of 
Directors on August 26, 1997, adopted the resolutions set forth below 
creating a series of 50,000 shares of Preferred Stock designated as "Series A 
Junior Participating Preferred Stock":

     That no shares of Series A Junior Participating Preferred Stock have 
heretofore been issued.

     RESOLVED, that pursuant to the authority vested in the Board of 
Directors of this Corporation in accordance with the provisions of its 
Amended and Restated Certificate of Incorporation, a series of Preferred 
Stock of the Corporation be and it hereby is created, and that the 
designation and amount thereof and the voting powers, preferences, and 
relative, participating, optional, and other special rights of the shares of 
such series, and the qualifications, limitations, or restrictions thereof are 
as follows:

     (1)  DESIGNATION AND AMOUNT. The shares of such series will be 
designated as "Series A Junior Participating Preferred Stock" and the number 
of shares constituting such series will be 50,000.

     (2)  DIVIDENDS AND DISTRIBUTIONS.

          (a)    The holders of shares of Series A Junior Participating 
     Preferred Stock will be entitled to receive, when, as, and if declared 
     by the Board of Directors out of funds legally available for the 
     purpose, quarterly dividends payable in cash on the last day of March, 
     June, September, and December in each year (each such date being 
     referred to as a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the 
     first Quarterly Dividend Payment Date after the first 


                                     A-1
<PAGE>

     issuance of a share or fraction of a share of Series A Junior 
     Participating Preferred Stock, in an amount per share (rounded to the 
     nearest cent) equal to the greater of (i) $0.01 or (ii) subject to the 
     provision for adjustment set forth below, one thousand times the 
     aggregate per share amount of all cash dividends, and one thousand times 
     the aggregate per share amount (payable in kind) of all non-cash 
     dividends or other distributions other than a dividend payable in shares 
     of Common Stock or a subdivision of the outstanding shares of Common 
     Stock (by reclassification or otherwise), declared on the Common Stock, 
     par value $.01 per share, of the Corporation (the "COMMON STOCK") since 
     the immediately preceding quarterly Dividend Payment Date, or, with 
     respect to the first Quarterly Dividend Payment Date, since the first 
     issuance of any share or fraction of a share of Series A Junior 
     Participating Preferred Stock. In the event the Corporation at any time 
     after October 20, 1997 (the "RIGHTS DECLARATION DATE") (i) declares any 
     dividend on Common Stock payable in shares of Common Stock, (ii) 
     subdivides the outstanding Common Stock, or (iii) combines the 
     outstanding Common Stock into a smaller number of shares, then in each 
     such case the amount to which holders of shares of Series A Junior 
     Participating Preferred Stock were entitled immediately prior to such 
     event under CLAUSE (ii) of the preceding sentence will be adjusted by 
     multiplying such amount by a fraction the numerator of which is the 
     number of shares of Common Stock outstanding immediately after such 
     event and the denominator of which is the number of shares of Common 
     Stock that were outstanding immediately prior to such event. 

          (b)    The Corporation will declare a dividend or distribution on 
     the Series A Junior Participating Preferred Stock as provided in SECTION 
     2(a) above 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 has 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 on the Series A Junior Participating 
     Preferred Stock will nevertheless be payable on such subsequent 
     Quarterly Dividend Payment Date.  

          (c)    Dividends will begin to accrue and be cumulative on 
     outstanding shares of Series A Junior Participating Preferred Stock from 
     the Quarterly Dividend Payment Date next preceding the date of issue of 
     such shares of Series A Junior Participating 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 
     will begin to accrue from the date of issue of such shares, or unless 
     the date of issue is a Quarterly Dividend Payment Date or is a date 
     after the record date for the determination of holders of shares of 
     Series A Junior Participating Preferred Stock entitled to receive a 
     quarterly dividend and before such Quarterly Dividend Payment Date, in 
     either of which events such dividends will begin to accrue and be 
     cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid 
     dividends will not bear 


                                     A-2
<PAGE>

     interest. Dividends paid on the shares of Series A Junior Participating 
     Preferred Stock in an amount less than the total amount of such 
     dividends at the time accrued and payable on such shares will be 
     allocated pro rata on a share-by-share basis among all such shares at 
     the time outstanding. The Board of Directors may fix a record date for 
     the determination of holders of shares of Series A Junior Participating 
     Preferred Stock entitled to receive payment of a dividend or 
     distribution declared thereon, which record date will be no more than 30 
     days prior to the date fixed for the payment thereof.

     (3)  VOTING RIGHTS. 

          (a)    The holders of shares of Series A Junior Participating 
     Preferred Stock will have the following voting rights:

          Subject to the provision for adjustment set forth below, each share 
     of Series A Junior Participating Preferred Stock will entitled the 
     holder to a number of votes on all matters submitted to a vote of the 
     stockholders of the Corporation equal to one thousand times the number 
     of votes per share to which shares of Common Stock are entitled. In the 
     event the Corporation at any time after the Rights Declaration Date (i) 
     declares any dividend on Common Stock payable in shares of Common Stock, 
     (ii) subdivides the outstanding Common Stock, or (iii) combines the 
     outstanding Common Stock into a smaller number of shares, then in each 
     such case the number of votes per share to which holders of shares of 
     Series A Junior Participating Preferred Stock were entitled immediately 
     prior to such event will be adjusted by multiplying such number by a 
     fraction the numerator of which is the number of shares of Common Stock 
     outstanding immediately after such event and the denominator of which is 
     the number of shares of Common Stock that were outstanding immediately 
     prior to such event.

          (b)    Except as otherwise provided in this Agreement or by law, the
     holders of shares of Series A Junior Participating Preferred Stock and the
     holders of shares of Common Stock will vote together as one class on all
     matters submitted to a vote of stockholders of the Corporation.

          (c)  (i)    If at any time dividends on any Series A Junior 
     Participating Preferred Stock are in arrears in an amount equal to six 
     (6) quarterly dividends thereon, the occurrence of such contingency will 
     mark the beginning of a period (a "DEFAULT PERIOD") that will extend 
     until such time when all accrued and unpaid dividends for all previous 
     quarterly dividend periods and for the current quarterly dividend period 
     on all shares of Series A Junior Participating Preferred Stock then 
     outstanding have been declared and paid or set apart for payment. During 
     each default period, all holders of preferred stock of the Corporation 
     (the "PREFERRED STOCK") (including holders of the Series A Junior 
     Participating Preferred Stock) with dividends in arrears in an amount 
     equal to six (6) quarterly dividends 


                                     A-3
<PAGE>

     thereon, voting as a class, irrespective of series, will have the right 
     to elect two (2) Directors.

          (ii)   During any default period, such voting right of the holders 
     of Series A Junior Participating Preferred Stock may be exercised 
     initially at a special meeting called pursuant to SECTION 3(c)(iii) or 
     at any annual meeting of stockholders, and thereafter at annual meetings 
     of stockholders, provided that such voting right will not be exercised 
     unless the holders of ten percent (10%) in number of shares of Preferred 
     Stock outstanding are present in person or by proxy. The absence of a 
     quorum of the holders of Common Stock will not affect the exercise by 
     the holders of Preferred Stock of such voting right. At any meeting at 
     which the holders of Preferred Stock exercise such voting right 
     initially during an existing default period, they will have the right, 
     voting as a class, to elect Directors to fill such vacancies, if any, in 
     the Board of Directors as may then exist up to two (2) Directors or, if 
     such right is exercised at an annual meeting, to elect two (2) 
     Directors. If the number that may be so elected at any special meeting 
     does not amount to the required number, the holders of the Preferred 
     Stock will have the right to make such increase in the number of 
     Directors as is necessary to permit the election by them of the required 
     number. After the holders of the Preferred Stock have exercised their 
     right to elect Directors in any default period and during the 
     continuance of such period, the number of Directors will not be 
     increased or decreased except by vote of the holders of Preferred Stock 
     as provided herein or pursuant to the rights of any equity securities 
     ranking senior to or pari passu with the Series A Junior Participating 
     Preferred Stock.

          (iii)  Unless the holders of Preferred Stock, during an existing 
     default period, have previously exercised their right to elect 
     Directors, the Board of Directors may order, or any stockholder or 
     stockholders owning in the aggregate not less than ten percent (10%) of 
     the total number of shares of Preferred Stock outstanding, irrespective 
     of series, may request, the calling of a special meeting of the holders 
     of Preferred Stock, which meeting will thereupon be called by the Chief 
     Executive Officer, the Chief Operating Officer, the President, a 
     Vice-President, or the Secretary of the Corporation. Notice of such 
     meeting and of any annual meeting at which holders of Preferred Stock 
     are entitled to vote pursuant to this SECTION 3(c)(iii) will be given to 
     each holder of record of Preferred Stock by mailing a copy of such 
     notice such holder at such holder's last address as it appears on the 
     books of the Corporation. Such meeting will be called for a time not 
     earlier than 20 days and not later than 60 days after such order or 
     request or in default of the calling of such meeting within 60 days 
     after such order or request, such meeting may be called on similar 
     notice by any stockholder or stockholders owning in the aggregate not 
     less than ten percent (10%) of the total number of shares of Preferred 
     Stock 


                                     A-4
<PAGE>

     outstanding. Notwithstanding the provisions of this SECTION 3(c)(iii), 
     no such special meeting will be called during the period within 60 days 
     immediately preceding the date fixed for the next annual meeting of the 
     stockholders.

          (iv)   In any default period, the holders of Common Stock, and 
     other classes of stock of the Corporation if applicable, will continue 
     to be entitled to elect the whole number of Directors until the holders 
     of Preferred Stock have exercised their right to elect two (2) Directors 
     voting as a class, after the exercise of which right (x) the Directors 
     so elected by the holders of Preferred Stock will continue in office 
     until their successors have been elected by such holders or until the 
     expiration of the default period, and (y) any vacancy in the Board of 
     Directors may (except as provided in SECTION 3(c)(ii)) be filled by vote 
     of a majority of the remaining Directors theretofore elected by the 
     holders of the class of stock that elected the Director whose office has 
     become vacant. References in this SECTION 3(c) to Directors elected by 
     the holders of a particular class of stock will include Directors 
     elected by such Directors to fill vacancies as provided in clause (y) of 
     the foregoing sentence.

          (v)    Immediately upon the expiration of a default period, (x) the 
     right of the holders of Preferred Stock as a class to elect Directors 
     will cease, (y) the term of any Directors elected by the holders of 
     Preferred Stock as a class will terminate, and (z) the number of 
     Directors will be such number as may be provided for in the articles of 
     incorporation or by-laws irrespective of any increase made pursuant to 
     the provisions of SECTION 3(c)(ii) (such number being subject, however, 
     to change thereafter in any manner provided by law or in the articles of 
     incorporation or by-laws). Any vacancies in the Board of Directors 
     effected by the provisions of CLAUSES (y) and (z) in the preceding 
     sentence may be filled by a majority of the remaining Directors.

     Except as set forth herein, holders of Series A Junior Participating 
Preferred Stock will have no special voting rights and their consent will not 
be required (except to the extent they are entitled to vote with holders of 
Common Stock as set forth herein) for taking any corporate action.

     (4)  CERTAIN RESTRICTIONS.

          (a)    Whenever quarterly dividends or other dividends or 
     distributions payable on the Series A Junior Participating Preferred 
     Stock as provided in SECTION 2 are in arrears, thereafter and until all 
     accrued and unpaid dividends and distributions, whether or not declared, 
     on shares of Series A Junior Participating Preferred Stock outstanding 
     have been paid in full, the Corporation will not


                                     A-5
<PAGE>

               (i)    declare or pay dividends on, make any other 
          distributions on, or redeem or purchase or otherwise acquire for 
          consideration any shares of stock ranking junior (either as to 
          dividends or upon liquidation, dissolution, or winding up) to the 
          Series A Junior Participating 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 A Junior Participating Preferred Stock, except dividends 
          paid ratably on the Series A Junior Participating 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 on a parity (either as to 
          dividends or upon liquidation, dissolution, or winding up) with the 
          Series A Junior Participating Preferred Stock, provided that the 
          Corporation may at any time redeem, purchase, or otherwise acquire 
          shares of any such parity 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 A Junior 
          Participating Preferred Stock; or

               (iv)   purchase or otherwise acquire for consideration any 
          shares of Series A Junior Participating Preferred Stock, or any 
          shares of stock ranking on a parity with the Series A Junior 
          Participating 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, determines in good faith will result 
          in fair and equitable treatment among the respective series or 
          classes.

          (b)    The Corporation will 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.

     (5)  REACQUIRED SHARES.  Any shares of Series A Junior Participating 
Preferred Stock purchased or otherwise acquired by the Corporation in any 
manner whatsoever will be retired and cancelled promptly after the 
acquisition thereof. All such shares will upon their cancellation become 
authorized but unissued shares of Preferred Stock and may be reissued as part 
of a new series of Preferred Stock to be created by resolution 


                                     A-6
<PAGE>

or resolutions of the Board of Directors, subject to the conditions and 
restrictions on issuance set forth herein.

     (6)  LIQUIDATION, DISSOLUTION, OR WINDING UP.

          (a)    Upon any liquidation (voluntary or otherwise), dissolution, 
     or winding up of the Corporation, no distribution will be made to the 
     holders of shares of stock ranking junior (either as to dividends or 
     upon liquidation, dissolution, or winding up) to the Series A Junior 
     Participating Preferred Stock unless, prior thereto, the holders of 
     shares of Series A Junior Participating Preferred Stock have received an 
     amount equal to $400,000.00, plus an amount equal to accrued and unpaid 
     dividends and distributions thereon, whether or not declared, to the 
     date of such payment (the "SERIES A LIQUIDATION PREFERENCE"). Following 
     the payment of the full amount of the Series A Liquidation Preference, 
     no additional distributions will be made to the holders of shares of 
     Series A Junior Participating Preferred Stock unless, prior thereto, the 
     holders of shares of Common Stock have received an amount per share (the 
     "COMMON ADJUSTMENT") equal to the quotient obtained by dividing (i) the 
     Series A Liquidation Preference by (ii) 1,000 (as appropriately adjusted 
     as set forth in SECTION 6(c) to reflect such events as stock splits, 
     stock dividends, and recapitalizations with respect to the Common Stock) 
     (such number in CLAUSE (ii), the "ADJUSTMENT NUMBER"). Following the 
     payment of the full amount of the Series A Liquidation Preference and 
     the Common Adjustment in respect of all outstanding shares of Series A 
     Junior Participating Preferred Stock and Common Stock, respectively, 
     holders of Series A Junior Participating Preferred Stock and holders of 
     shares of Common Stock will receive their ratable and proportionate 
     share of the remaining assets to be distributed in the ratio of the 
     Adjustment Number to 1 with respect to such Preferred Stock and Common 
     Stock, on a per share basis, respectively.

          (b)    In the event, however, that there are not sufficient assets 
     available to permit payment in full of the Series A Liquidation 
     Preference and the liquidation preferences of all other series of 
     preferred stock, if any, that rank on a parity with the Series A Junior 
     Participating Preferred Stock, then such remaining assets will be 
     distributed ratably to the holders of such parity shares in proportion 
     to their respective liquidation preferences. In the event, however, that 
     there are not sufficient assets available to permit payment in full of 
     the Common Adjustment, then such remaining assets will be distributed 
     ratably to the holders of Common Stock.

          (c)    In the event the Corporation at any time after October 20, 
     1997 (i) declares any dividend on Common Stock payable in shares of 
     Common Stock, (ii) subdivides the outstanding Common Stock, or (iii) 
     combines the outstanding Common Stock into a smaller number of shares, 
     then in each such case the Adjustment Number in effect immediately prior 
     to such event will be adjusted by multiplying such Adjustment 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 


                                     A-7
<PAGE>

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

     (7)  CONSOLIDATION, MERGER, ETC.  In case the Corporation enters into 
any consolidation, merger, combination, or other transaction in which the 
shares of Common Stock are exchanged for or changed into other stock or 
securities, cash, and/or any other property, then in any such case the shares 
of Series A Junior Participating Preferred Stock will at the same time be 
similarly exchanged or changed in an amount per share (subject to the 
provision for adjustment set forth below) equal to one thousand 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 at any 
time after October 20, 1997 (i) declares any dividend on Common Stock payable 
in shares of Common Stock, (ii) subdivides the outstanding Common Stock, or 
(iii) combines the outstanding Common Stock into a smaller number of shares, 
then in each such case the amount set forth in the preceding sentence with 
respect to the exchange or change of shares of Series A Junior Participating 
Preferred Stock will 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.

     (8)  NO REDEMPTION.  The shares of Series A Junior Participating 
Preferred Stock will not be redeemable.

     (9)  AMENDMENT.  The Restated Articles of Incorporation of the 
Corporation will not be further amended in any manner that would materially 
alter or change the powers, preferences, or special rights of the Series A 
Junior Participating Preferred Stock so as to affect them adversely without 
the affirmative vote of the holders of a majority or more of the outstanding 
shares of Series A Junior Participating Preferred Stock, voting separately as 
a class.

     (10) FRACTIONAL SHARES.  Series A Junior Participating Preferred Stock 
may be issued in fractions of a share that entitle the holder, in proportion 
to such holders fractional shares, to exercise voting rights, receive 
dividends, participate in distributions, and to have the benefit of all other 
rights of holders of Series A Junior Participating Preferred Stock.


                                     A-8
<PAGE>

     IN WITNESS WHEREOF, we have executed and subscribed this Certificate and 
do affirm the foregoing as true under the penalties of perjury this __ day of 
October, 1997.
                                       
                                       ANCHOR GAMING
                                       
                                       
                                       By: ___________________________________
                                       Name: _________________________________
                                       Title: ________________________________
                                       
                                       
                                       
                                       
                                       By: ___________________________________
                                       Name: _________________________________
                                       Title: ________________________________
                                       
                                       
     The foregoing instrument was acknowledged before me by 
____________________ and ____________________ on the ___ day of October 1997, 
in the capacities indicated.

                                       _______________________________________
                                       (Notary)


                                     A-9
<PAGE>


                                                                      Exhibit B
                                                            to Rights Agreement
                                       
                          Form of Rights Certificate


                       Certificate No. R-________ Rights

     NOT EXERCISABLE AFTER OCTOBER 17, 2007 OR EARLIER IF REDEEMED BY THE 
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, 
AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER 
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN 
ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON OR ADVERSE 
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT 
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS 
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO IS, WAS, OR 
BECAME AN ACQUIRING PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE 
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS 
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED 
IN SUCH AGREEMENT.]
                                       
                               Rights Certificate
                                           
                                 ANCHOR GAMING

     This certifies that _____________, or registered assigns, is the 
registered owner of the number of Rights set forth above, each of which 
entitles the owner thereof, subject to the terms, provisions, and conditions 
of the Rights Agreement, dated as of October 17, 1997 (as amended from time 
to time, the "RIGHTS AGREEMENT"), between Anchor Gaming, a Nevada corporation 
(the "COMPANY"), and The Chase Manhattan Bank, (the "RIGHTS AGENT"), to 
purchase from the Company at any time prior to 5:00 p.m. (Las Vegas, Nevada 
time) on October 17, 2007 at the office or offices of the Rights Agent 
designated for such purpose, or its successors as Rights Agent, one 
one-thousandth of a fully paid, nonassessable share of Series A Junior 
Participating Preferred Stock (the "PREFERRED STOCK") of the Company, at a 
purchase price of $400.00 per one one-thousandth of a share (the "PURCHASE 
PRICE"), upon presentation and surrender of this Rights Certificate with the 
Form of Election to Purchase and related Certificate duly executed. The 
number of Rights evidenced by this Rights Certificate (and the number of 
shares that may be purchased upon exercise thereof) set forth above, and the 
Purchase Price per share set forth above, are the number and Purchase Price 
as of October 20, 1997 based on the Preferred Stock as constituted at such 
date. The Company reserves the right to require prior to the occurrence of a 


                                     B-1
<PAGE>

Triggering Event (as such term is defined in the Rights Agreement) that a 
number of Rights be exercised so that only whole shares of Preferred Stock 
will be issued.

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

     As provided in the Rights Agreement, the Purchase Price and the number 
and kind of shares of Preferred Stock or other securities, that may be 
purchased upon the exercise of the Rights evidenced by this Rights 
Certificate are subject to modification and adjustment upon the happening of 
certain events, including Triggering Events.

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

     This Rights Certificate, with or without other Rights Certificates, upon 
surrender at the principal office or offices of the Rights Agent designated 
for such purpose, may be exchanged for another Rights Certificate or Rights 
Certificates of like tenor and date evidencing Rights entitling the holder to 
purchase a like aggregate number of one one-thousandths of a share of 
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights 
Certificates surrendered have entitled such holder to purchase. If this 
Rights Certificate is exercised in part, the holder will be entitled to 
receive upon surrender of this Rights Certificate another Rights Certificate 
or Rights Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement, the Rights evidenced 
by this Certificate may be redeemed by the Company at its option at a 
redemption price of $0.01 per Right at any time prior to the earlier of the 
Close of Business on (i) the tenth day following the Stock Acquisition Date 
(as such time period may be extended 


                                     B-2
<PAGE>

pursuant to the Rights Agreement), and (ii) the Final Expiration Date. In 
addition, in certain circumstances the Rights may be exchanged, in whole or 
in part, for shares of the Common Stock, or shares of preferred stock of the 
Company having essentially the same value or economic rights as such shares. 
Immediately upon the action of the Board of Directors of the Company 
authorizing any such exchange, and without any further action or any notice, 
the Rights (other than Rights that are not subject to such exchange) will 
terminate and the Rights will only enable holders to receive the shares 
issuable upon such exchange. Under certain circumstances set forth in the 
Rights Agreement, the decision to redeem the Rights will require the 
concurrence of a majority of the Continuing Directors.

     No fractional shares of Preferred Stock will be issued upon the exercise 
of any Right or Rights evidenced hereby (other than fractions that are 
integral multiples of one one-thousandth of a share of Preferred Stock, which 
may, at the election of the Company, be evidenced by depository receipts), 
but in lieu thereof a cash payment will be made, as provided in the Rights 
Agreement.

     No holder of this Rights Certificate will be entitled to vote or receive 
dividends or be deemed for any purpose the holder of shares of Preferred 
Stock or of any other securities of the Company that may at any time be 
issuable on the exercise hereof, nor will anything contained in the Rights 
Agreement or herein be construed to confer upon the holder of this 
certificate, as such, any of the rights of a stockholder of the Company or 
any right to vote for the election of directors or upon any matter submitted 
to stockholders at any meeting thereof, or to give or withhold consent to any 
corporate action, or, to receive notice of meetings or other actions 
affecting stockholders (except as provided in the Rights Agreement), or to 
receive dividends or subscription rights, or otherwise, until the Right or 
Rights evidenced by this Rights Certificate have been exercised as provided 
in the Rights Agreement.

     This Rights Certificate will not be valid or obligatory for any purpose 
until it has 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:                                ANCHOR GAMING


___________________                    By: ___________________________________
                                       Title: ________________________________


                                     B-3
<PAGE>

Countersigned:

THE CHASE MANHATTAN BANK


By ___________________________________
                Authorized Signature


                                     B-4
<PAGE>
                                       
                 [Form of Reverse Side of Rights Certificate]

                              FORM OF ASSIGNMENT

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

     FOR VALUE RECEIVED hereby sells, assigns, and transfer unto

     (Please print name and address of transferee)

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

Dated:__________________, ____         _______________________________________
                                       Signature

Signature Guaranteed:
                                       
                                  Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:__________________, ____         _______________________________________
                                       Signature

Signature Guaranteed:


                                      B-5
<PAGE>

                                     NOTICE

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

To:  ANCHOR GAMING:

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

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

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

please insert social security
or other identifying number


(please print name and address)




Dated:__________________, ____         _______________________________________
                                       Signature

Signature Guaranteed:
                                       
                                  Certificate

The undersigned hereby certifies by checking the appropriate boxes that:

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


                                     B-6
<PAGE>

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

Dated:__________________, ____         _______________________________________
                                       Signature

Signature Guaranteed:


                                     B-7
<PAGE>

                                                                      Exhibit C
                                                            to Rights Agreement


                                       
              DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED


     On August 26, 1997, the Board of Directors of Anchor Gaming (the 
"COMPANY") adopted a Stockholder Rights Plan, providing that one right (a 
"RIGHT") will be attached to each share of common stock, par value $.01 per 
share,  of the Company (the "COMMON STOCK") as of October 20, 1997 (the 
"RECORD DATE").  Each Right entitles the registered holder to purchase from 
the Company a unit (a "UNIT") consisting of one one-thousandth of a share of 
Series A Junior Participating Preferred Stock, par value $20.00 per share 
(the "PREFERRED STOCK"), at a Purchase Price of $400.00 per Unit (the 
"PURCHASE PRICE"), subject to adjustment.  The description and terms of the 
Rights are set forth in the Rights Agreement (the "RIGHTS AGREEMENT"), dated 
as of October 17, 1997, between the Company and The Chase Manhattan Bank, as 
Rights Agent (the "RIGHTS AGENT").

     Initially, the Rights will be attached to all Common Stock certificates 
representing shares outstanding as of the Record Date, and no separate Rights 
Certificate will be distributed.  The Rights will separate from the Common 
Stock and a Distribution Date will occur upon the earlier of (i) 10 days 
following a public announcement that a person or group of affiliated or 
associated persons (an "ACQUIRING PERSON") has acquired, or obtained the 
right to acquire, beneficial ownership of 15% or more of the outstanding 
shares of Common Stock (the "STOCK ACQUISITION DATE"), (ii) 10 business days 
following the commencement of a tender offer or exchange offer that would 
result in a person or group beneficially owning 15% or more of such 
outstanding shares of Common Stock or (iii) 10 business days after the Board 
of Directors of the Company determines that any Person or Persons have become 
the Beneficial Owner of an amount of Common Stock that the Board of Directors 
determines to be substantial (which amount will in no event be less than 10% 
of the shares of Common Stock outstanding) and that (a) such Person or 
Persons intend to cause the Company to repurchase the Common Stock 
beneficially owned by such Person or Persons or to exert pressure against the 
Company to take any action or enter into any transaction or series of 
transactions with the intent or the effect of providing such Person or 
Persons with short-term gains or profits under circumstances in which the 
Board of Directors determines that the long-term interests of the Company and 
its stockholders would not be served by taking such action or entering into 
such transactions or series of transactions or (b) beneficial ownership by 
such Person or Persons is reasonably likely to have a material adverse effect 
on the business, competitive position, prospects, or financial condition of 
the Company and its subsidiaries (an "ADVERSE PERSON").  Until the 
Distribution Date, (i) the Rights will be evidenced by the Common Stock 
certificates and will be transferred with 


                                     C-1
<PAGE>

and only with such Common Stock certificates, (ii) new Common Stock 
certificates will contain a notation incorporating the Rights Agreement by 
reference; and (iii) the surrender for transfer of any certificates for 
Common Stock outstanding will also constitute the transfer of the Rights 
associated with the Common Stock represented by such certificate.

     The Rights Agreement provides that Stanley E. Fulton, and certain of his 
transferees, donees or successors, who together will be beneficial owners of 
more than 39.2% of the Common Stock of the Company outstanding on October 17, 
1997, are excluded from the definition of "Acquiring Person."  Mr. Fulton is 
also excluded from the definition of "Adverse Person."

     The Rights are not exercisable until the Distribution Date and will 
expire at the close of business on October 20, 2007, unless earlier redeemed 
by the Company as described below.

     As soon as practicable after the Distribution Date, Rights Certificates 
will be mailed to holders of record of the Common Stock as of the close of 
business on the Distribution Date and, thereafter, the separate Rights 
Certificates alone will represent the Rights.  Except as otherwise determined 
by the Board of Directors, only shares of Common Stock outstanding prior to 
the Distribution Date will be issued with Rights.

     In the event that (i) the Company is the surviving corporation in a 
merger or combination with any Acquiring Person or any Adverse Person, or any 
Associate or Affiliate of any Acquiring Person or Adverse Person, and its 
Common Stock remains outstanding, (ii) any Acquiring Person or any Adverse 
Person, or any Associate or Affiliate of any Acquiring Person or Adverse 
Person, engages in one or more "self-dealing" transactions as set forth in 
the Rights Agreement, (iii) an Acquiring Person becomes the beneficial owner 
of 15% or more of the then outstanding shares of Common Stock (unless such 
acquisition is made pursuant to a tender or exchange offer for all 
outstanding shares of the Company, at a price determined by a majority of the 
Continuing Directors of the Company who are not representatives, nominees, 
Affiliates, or Associates of an Acquiring Person to be fair and otherwise in 
the best interest of the Company and its stockholders), (iv) during such time 
as there is an Acquiring Person or Adverse Person an event occurs that 
results in such Acquiring Person's or Adverse Person's ownership interest 
being increased by more than 1% (E.G., a reverse stock split or 
recapitalization), or (v) the Board of Directors determines that a person is 
an Adverse Person, each holder of a Right will thereafter have the right to 
receive, upon exercise, Common Stock (or, in certain circumstances, cash, 
property, or other securities of the Company), having a value equal to two 
times the Exercise Price of the Right.  The Exercise Price is the Purchase 
Price times the number of shares of Common Stock associated with each Right 
(initially, one).  Notwithstanding any of the foregoing, following the 
occurrence of any of the events set forth in this paragraph (the "Flip-In 
Events"), all Rights that are, or (under certain circumstances specified in 
the Rights Agreement) were, beneficially owned by any Acquiring Person or any 
Adverse 


                                      C-2
<PAGE>

Person, or an Associate or Affiliate of any Acquiring Person or Adverse 
Person, will be null and void.  However, Rights are not exercisable following 
the occurrence of any of the Flip-In Events set forth above until such time 
as the Rights are no longer redeemable by the Company as set forth below.

     For example, at an exercise price of $400 per Right, each Right not 
owned by an Acquiring Person or an Adverse Person (or by certain related 
parties) following an event set forth in the preceding paragraph would 
entitle its holder to purchase Common Stock with a value of $800 (or other 
consideration, as noted above) for $400.  Assuming that the Common Stock had 
a per share value of $400 at such time, the holder of each valid Right would 
be entitled to purchase 2.0 shares of Common Stock for $400.  Alternatively, 
the Company could permit the holder to surrender each Right in exchange for 
stock or cash equivalent to one share of Common Stock (with a value of $400) 
without the payment of any consideration other than the surrender of the 
Right.

     In the event that following the Stock Acquisition Date, (i) the Company 
is acquired in a merger or consolidation in which the Company is not the 
surviving corporation (other than a merger that follows a tender offer that 
the Board of Directors has found to be fair to the stockholders of the 
Company, as described above) or (ii) 50% or more of the Company's assets or 
earning power is sold or transferred, each holder of a Right (except Rights 
which have previously been voided as set forth above) will thereafter have 
the right (a flip-over right) to receive, upon exercise of the Right, Common 
Stock of the acquiring company having a value equal to two times the Exercise 
Price of the Right.

     The Purchase Price payable, and the number of Units of Preferred Stock 
or other securities or property issuable, upon exercise of the Rights are 
subject to adjustment from time to time to prevent dilution (i) in the event 
of a stock dividend on, or a subdivision, combination or reclassification of, 
the Preferred Stock, (ii) if holders of the Preferred Stock are granted 
certain rights or warrants to subscribe for Preferred Stock or convertible 
securities at less than the current market price of the Preferred Stock, or 
(iii) upon the distribution to holders of the Preferred Stock of evidences of 
indebtedness or assets (excluding regular quarterly cash dividends) or of 
subscription rights or warrants (other than those referred to above).

     With certain exceptions, no adjustments in the Purchase Price will be 
required until cumulative adjustments amount to at least 1% of the Purchase 
Price.  No fractional Units will be issued and, in lieu thereof, an 
adjustment in cash will be made based on the market price of the Preferred 
Stock on the last trading date prior to the date of exercise.

     At any time until 10 days following the Stock Acquisition Date, the 
Company may redeem the Rights in whole, but not in part, at a price of $.01 
per Right. The ten day redemption period may be extended by the Board of 
Directors so long as the Rights are still redeemable.  Under certain 
circumstances, the decision to redeem will require the 


                                     C-3
<PAGE>

concurrence of a majority of the Continuing Directors referred to below.  
Immediately upon the action of the Board of Directors ordering redemption of 
the Rights, the Rights will terminate and the only right of the holders of 
Rights will be to receive the $.01 redemption price.

     The term "Continuing Director" means any member of the Board of 
Directors of the Company who was a member of the Board prior to the adoption 
of the Rights Plan and any person who is subsequently elected to the Board if 
such person is recommended or approved by a majority of the Continuing 
Directors, but will not include an Acquiring Person or any Adverse Person, or 
an Affiliate or Associate of an Acquiring Person or Adverse Person, or any 
representative of the foregoing entities.

     Until a Right is exercised, the holder thereof, as such, will have no 
rights as a stockholder of the Company, including, without limitation, the 
right to vote or to receive dividends.  While the distribution of the Rights 
will not be taxable to stockholders or to the Company, stockholders may, 
depending upon the circumstances, recognize taxable income in the event that 
the Rights become exercisable for Common Stock (or other consideration) of 
the Company as set forth above.

     Any of the provisions of the Rights Agreement may be amended by the 
Board of Directors of the Company prior to the Distribution Date.  After the 
Distribution Date, the provisions of the Rights Agreement may be amended by 
the Board (in certain circumstances, with the concurrence of the Continuing 
Directors) in order to cure any ambiguity, to make changes which do not 
adversely affect the interests of holders of Rights (excluding the interest 
of any Acquiring Person or any Adverse Person), or to shorten or lengthen any 
time period under the Rights Agreement; provided that no amendment to adjust 
the time period governing redemption will be made at such time as the Rights 
are not redeemable.

     The Rights have certain anti-takeover effects.  The Rights will cause 
substantial dilution to a person or group that attempts to acquire the 
Company in certain circumstances.  Accordingly, the existence of the Rights 
may deter certain acquirors from making takeover proposals or tender offers.  
However, the Rights are not intended to prevent a takeover, but rather are 
designed to enhance the ability of the Board of Directors to negotiate with 
an acquiror on behalf of all of the shareholders.

     [The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, which includes as Exhibit B the Form of Rights
Certificate, is attached as an exhibit and incorporated by reference.  The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.]*


---------------
*  This paragraph to be included only in the Form 8-A to be filed with 
   the Commission.


                                      C-4