<PAGE>   1
                                                                     EXHIBIT 4.1












                                ELCOR CORPORATION

                                       AND

                    CHASEMELLON SHAREHOLDER SERVICES, L.L.C.

                                  RIGHTS AGENT




                                RIGHTS AGREEMENT

                            DATED AS OF JULY 7, 1998





<PAGE>   2



                                TABLE OF CONTENTS

<TABLE>



<S>                                                                                                             <C>
Section 1. Certain Definitions....................................................................................1
Section 2. Appointment of Rights Agent............................................................................5
Section 3. Issue of Rights Certificates...........................................................................5
Section 4. Form of Rights Certificates............................................................................7
Section 5. Countersignature and Registration......................................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, 
Destroyed, Lost or Stolen Rights Certificates.....................................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..........................................9
Section 8. Cancellation and Destruction of Rights Certificates...................................................11
Section 9. Reservation and Availability of Capital Stock.........................................................12
Section 10. Preferred Stock Record Date..........................................................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights..........................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...........................................22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.................................22
Section 14. Fractional Rights and Fractional Shares..............................................................25
Section 15. Rights of Action.....................................................................................26
Section 16. Agreement of Rights Holders..........................................................................26
Section 17. Rights Certificate Holder Not Deemed a Stockholder...................................................27
Section 18. Concerning the Rights Agent..........................................................................27
Section 19. Merger or Consolidation or Change of Name of Rights Agent............................................28
Section 20. Duties of Rights Agent...............................................................................29
Section 21. Change of Rights Agent...............................................................................31
Section 22. Issuance of New Rights Certificates..................................................................31
Section 23. Redemption and Termination...........................................................................32
Section 24. Exchange.............................................................................................32
Section 25. Notice of Certain Events.............................................................................34
Section 26. Notices..............................................................................................35
Section 27. Supplements and Amendments...........................................................................35
Section 28. Successors...........................................................................................35
Section 29. Determinations and Actions by the Board of Directors, etc............................................35
Section 30. Benefits of this Agreement...........................................................................36
Section 31. Severability.........................................................................................36
Section 32. Governing Law........................................................................................36
Section 33. Counterparts.........................................................................................37
Section 34. Descriptive Headings.................................................................................37


Exhibit A - Certificate of Designation, Preferences and Rights
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights
</TABLE>


                                       i


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                                RIGHTS AGREEMENT


         RIGHTS AGREEMENT, dated as of July 7, 1998 (the "Agreement"), between
ELCOR CORPORATION, a Delaware corporation (the "Company"), and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C. (the "Rights Agent").

                               W I T N E S S E T H

         WHEREAS, on June 28, 1988, the Board of Directors of the Company
authorized the Rights Agreement, dated as of June 28, 1988, between the Company
and First RepublicBank Dallas, N.A., which was amended and restated as of
January 29, 1991 between the Company and NCNB Texas National Bank (the "1988
Agreement"), declared a dividend distribution of one Right (a "1988 Right") for
each share of common stock, par value $1.00 per share, of the Company (the
"Common Stock") outstanding at the close of business on July 8, 1988 (the "1988
Record Date"), and authorized the issuance of one 1988 Right for each share of
Common Stock of the Company issued between the Record Date and the Distribution
Date (as defined in the 1988 Agreement), each 1988 Right initially representing
the right to purchase one one-hundredth of a share of Series A Preferred Stock
of the Company having the rights, powers and preferences set forth in the
Certificate of Designation, Preferences and Rights of Series A Preferred Stock,
upon the terms and subject to the conditions set forth in the 1988 Agreement;
and

         WHEREAS, on May 26, 1998, the Board of Directors of the Company
determined it desirable and in the best interests of the Company and its
stockholders for the Company to adopt and enter into this Agreement providing
for the issuance of new Rights (as hereinafter defined) upon expiration of the
1988 Rights;

         WHEREAS, on May 26, 1998 (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 outstanding upon the
close of business on July 8, 1998 (the "Record Date"), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(p) hereof) for each share of Common Stock issued
(whether as an original issuance or from the Company's treasury) between the
Record Date and the Distribution Date (as hereinafter defined) and in certain
other circumstances provided herein, each Right initially representing the right
to purchase one one-hundredth of a share of Preferred Stock of the Company upon
the terms and subject to the conditions hereinafter set forth (the "Rights");

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

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


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                  (a) "Acquiring Person" shall mean any Person who or which,
         together with all Affiliates and Associates of such Person, shall be
         the Beneficial Owner of 15% or more of the shares of Common Stock then
         outstanding, but shall not include (i) the Company, (ii) any Subsidiary
         of the Company, (iii) any employee benefit plan 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, or (iv) any Person who becomes the Beneficial Owner of
         15% or more of the shares of Common Stock then outstanding as a result
         of a reduction in the number of shares of Common Stock outstanding due
         to the repurchase of shares of Common Stock by the Company unless and
         until such Person, after becoming aware that such Person has become the
         Beneficial Owner of 15% or more of the then outstanding shares of
         Common Stock, acquires beneficial ownership of additional shares of
         Common Stock representing 1% or more of the shares of Common Stock then
         outstanding. Notwithstanding the foregoing, if the Board of Directors
         of the Company determines in good faith that a Person who would
         otherwise be an "Acquiring Person," as defined pursuant to the
         foregoing provisions of this paragraph (a), has become such
         inadvertently, and such Person divests as promptly as practicable a
         sufficient number of shares of Common Stock so that such Person would
         no longer be an "Acquiring Person," as defined pursuant to the
         foregoing provisions of this paragraph (a), then such Person shall not
         be deemed to be an "Acquiring Person" for any purposes of this
         Agreement.

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

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

                           (i) which such Person or any of such Person's
                  Affiliates or Associates, 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 shall not be deemed the "Beneficial
                  Owner" of, or to "beneficially own," (A) any security solely
                  because such security has been tendered pursuant to a tender
                  or exchange offer made by such Person or any of such Person's
                  Affiliates or Associates until such tendered security is
                  accepted for purchase or exchange, or (B) securities issuable
                  upon exercise of Rights at any time prior to the occurrence of
                  a Triggering Event, or (C) securities issuable upon exercise
                  of Rights from and after the occurrence of a Triggering Event
                  which Rights were acquired by such Person or any of such
                  Person's Affiliates or Associates prior to the Distribution
                  Date or pursuant to Section 3(a) or Section 22 hereof (the
                  "Original Rights") or pursuant to Section 11(a)(i) hereof in
                  connection with an adjustment made with respect to any
                  Original Rights;



                                       2

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                           (ii) which 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 shall not be deemed
                  the "Beneficial Owner" of, or to "beneficially own," any
                  security under this subparagraph (ii) as a result of an
                  agreement, arrangement or understanding to vote such security
                  if such agreement, arrangement or understanding: (A) arises
                  solely from a revocable proxy 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 (B) is not
                  also then reportable by such Person on Schedule 13D under the
                  Exchange Act (or any comparable or successor report); or

                           (iii) which are beneficially owned, directly or
                  indirectly, by any other Person (or any Affiliate or Associate
                  thereof) 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 to subparagraph (ii) of this
                  paragraph (c)) or disposing of any such securities;

                           (iv) notwithstanding the foregoing, a Person
                  ordinarily engaged in business as an underwriter of securities
                  shall not be deemed the "Beneficial Owner" of, or to
                  "beneficially own", any securities acquired through such
                  Person's participation in good faith in a firm commitment
                  underwriting until the expiration of forty days after the date
                  of such acquisition and then only if such securities continue
                  to be owned by such Person at the expiration of such forty day
                  period; and

                           (v) notwithstanding the foregoing, no Person
                  specified in Rule 16a-1(a)(1)(i)-(vii) promulgated pursuant to
                  the Exchange Act nor any Affiliate or Associate of such Person
                  shall be the Beneficial Owner of any shares of Common Stock
                  held by such Person for the benefit of third parties or in
                  customer accounts in the ordinary course of business (or in
                  the case of an employee benefit plan specified in Rule
                  16a-1(a)(1)(vi) of shares of Common Stock allocated to plan
                  participants where participants have voting power) so long as
                  (a) the Board of Directors of the Company shall not have
                  determined that such shares were acquired by or are held by
                  such Person or any of its Affiliates or Associates with the
                  purpose or effect of changing or influencing control of the
                  Company or engaging in any arrangement subject to Rule
                  13d-3(b) under the Exchange Act, and (b) such shares, together
                  with all other shares of Common Stock beneficially owned by
                  such Person, its Affiliates and Associates, shall not exceed
                  20% of the shares of Common Stock then outstanding.




                                       3

<PAGE>   6


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

                  (e) "close of business" on any given date shall mean 5:00
         P.M., Dallas, Texas time, on such date; provided, however, that if such
         date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas time,
         on the next succeeding Business Day.

                  (f) "Common Stock" when used with reference to the Company
         shall mean the Common Stock, presently having a par value of $1.00 per
         share, of the Company or any other shares of capital stock of the
         Company into which such stock shall be reclassified or changed. "Common
         Stock" when used with reference to any other Person shall mean the
         capital stock of such Person with the greatest voting power, or the
         equity securities or other equity interest having power to control or
         direct the management of such Person.

                  (g) "Distribution Date" shall have the meaning ascribed
         thereto in Section 3(a) hereof.

                  (h) "Expiration Date" shall have the meaning ascribed thereto
         in Section 7(a) hereof.

                  (i) "Final Expiration Date" shall have the meaning ascribed
         thereto in Section 7(a) hereof.

                  (j) "Person" shall mean any individual, firm, corporation,
         partnership or other entity.

                  (k) "Preferred Stock" shall mean shares of Series A
         Participating Preferred Stock, no par value, of the Company, having the
         rights, powers and preferences set forth in the form of Certificate of
         Designation, Preferences and Rights attached hereto as Exhibit A
         ("Series A Participating"), and, to the extent that there are not a
         sufficient number of shares of Series A Participating authorized to
         permit the full exercise of the Rights, any other series of preferred
         stock of the Company designated for such purpose containing terms
         substantially similar to the terms of Series A Participating.

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

                  (m) "Purchase Price" shall have the meaning ascribed thereto
         in Section 7(b) hereof.

                  (n) "Redemption Price" shall have the meaning ascribed thereto
         in Section 23(a) hereof.



                                       4


<PAGE>   7


                  (o) "Rights Certificates" shall have the meaning ascribed
         thereto in Section 3(a) hereof.

                  (p) "Section 11(a)(ii) Event" shall mean any event described
         in Section 11(a)(ii) hereof.

                  (q) "Section 13 Event" shall mean any event described in
         clauses (x), (y) or (z) of Section 13(a) hereof occurring after the
         Stock Acquisition Date.

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

                  (s) "Subsidiary" shall mean, with reference to any Person, any
         corporation or other entity of which a majority of voting power of the
         voting equity securities or equity interests is beneficially owned,
         directly or indirectly, by such Person, or otherwise controlled by such
         Person.

                  (t) "Triggering Event" shall mean any Section 11(a)(ii) Event
         or any Section 13 Event.

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

         Section 3.   Issue of Rights Certificates.

                  (a) Until the earlier of (i) the close of business on the
         tenth day after the Stock Acquisition Date or (ii) the close of
         business on the tenth business day after the date that a tender 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 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 an Acquiring Person
         or such later date as may be determined by action of the Board of
         Directors prior to such time as any Person becomes an Acquiring Person
         (the earlier of (i) and (ii) being herein referred to as the
         "Distribution Date"), (x) the Rights will be evidenced (subject to the
         provisions of paragraph (b) of this Section 3) by the certificates for
         the Common Stock registered in the names of the holders of the Common
         Stock (which certificates for Common Stock shall be deemed also to be
         certificates for Rights) and not by separate certificates, and (y) the
         Rights will be transferable only in connection with the transfer of the
         underlying shares of Common Stock (including a transfer to the
         Company).



                                       5

<PAGE>   8


                  (b) As soon as practicable after the Rights Agent has been
         notified by the Company that the Distribution Date has occurred, the
         Rights Agent will send by first-class, insured, postage prepaid mail,
         to each record holder of the Common Stock as of the close of business
         on the Distribution Date, at the address of such holder shown on the
         records of the Company, one or more rights certificates, in
         substantially the form of Exhibit B hereto (the "Rights Certificates"),
         evidencing one Right for each share of Common Stock so held, subject to
         adjustment as provided herein. In the event that an adjustment in the
         number of Rights per share of Common Stock has been made pursuant to
         Section 11(p) hereof, at the time of distribution of the Right
         Certificates, the Company shall make the necessary and appropriate
         rounding adjustments (in accordance with Section 14(a) hereof) so that
         Rights Certificates representing only whole numbers of Rights are
         distributed and cash is paid in lieu of any fractional Rights. As of
         and after the Distribution Date, the Rights will be evidenced solely by
         such Rights Certificates.

                  (c) The Company will make available, as promptly as
         practicable following the Record Date, a copy of a Summary of Rights,
         in substantially the form attached hereto as Exhibit C (the "Summary of
         Rights"), to any holder of Rights who may so request from time to time.
         With respect to certificates for the Common Stock outstanding as of the
         Record Date or issued subsequent to the Record Date, until the
         Distribution Date, the Rights will be evidenced by such certificates
         for the Common Stock and the registered holders of the Common Stock
         shall also be the registered holders of the associated Rights. Until
         the earlier of the Distribution Date or the Expiration Date (as such
         term is defined in Section 7 hereof), the transfer of any certificates
         representing shares of Common Stock in respect of which Rights have
         been issued shall also constitute the transfer of the Rights associated
         with such shares of Common Stock.

                  (d) Rights shall be issued in respect of all shares of Common
         Stock which 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 shall also be deemed to be certificates for
         Rights, and shall bear a legend in substantially the following form:

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





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<PAGE>   9


                  becomes an Acquiring Person or any Affiliate or Associate
                  thereof (as such terms are defined in the Rights Agreement),
                  whether currently held by or on behalf of such Person or by
                  any subsequent holder, shall 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 shall be evidenced by such
         certificates alone and registered holders of Common Stock shall also be
         the registered holders of the associated Rights, and the transfer of
         any of such certificates shall 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 thereof) shall
         each be substantially in the form set forth in Exhibit B hereto and may
         have such marks of identification or designation and such legends,
         summaries or endorsements printed thereon as the Company may deem
         appropriate and as are not inconsistent with the provisions of this
         Agreement, or as may be required to comply with any applicable law or
         with any rule or regulation made pursuant thereto or with any rule or
         regulation of any stock exchange 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 hereof, the Rights Certificates, whenever
         distributed, on their face shall entitle the holders thereof to
         purchase such number of one one-hundredths of a share of Preferred
         Stock as shall be set forth therein at the price set forth therein
         (such exercise price per one one-hundredth of a share, the "Purchase
         Price"), but the amount and type of securities purchasable upon the
         exercise of each Right and the Purchase Price thereof shall be subject
         to adjustment as provided herein.

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




                                       7

<PAGE>   10



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

         Section 5.   Countersignature and Registration.

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

                  (b) Following the Distribution Date, the Rights Agent 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 hereunder. Such books shall show the names and
         addresses of the respective holders of the Rights Certificates, the
         number of Rights evidenced on its face by each of the Rights
         Certificates 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 hereof, at any time after the close of business on the
         Distribution Date, and at or prior to the close of business on the
         Expiration Date, any Rights Certificate or Certificates (other than
         Rights Certificates representing Rights that have been exchanged
         pursuant to Section 24 hereof) may be transferred, split up, combined
         or exchanged for another Rights Certificate or Certificates, entitling
         the registered holder to purchase a like number of one one-hundredths
         of a share of Preferred Stock (or, following a Triggering Event, Common
         Stock, other securities, cash or other assets, as the case may be) as
         the Rights 





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<PAGE>   11


         Certificate or 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 Certificates shall make such request in writing
         delivered to the Rights Agent, and shall surrender the Rights
         Certificate or Certificates to be transferred, split up, combined or
         exchanged at the principal office or offices of the Rights Agent
         designated for such purpose. Neither the Rights Agent nor the Company
         shall be obligated to take any action whatsoever with respect to the
         transfer of any such surrendered Rights Certificate until the
         registered holder shall have completed and signed the form of
         assignment and related certificate on the reverse side of such Rights
         Certificate and shall have provided such additional evidence of the
         identity of the Beneficial Owner (or former Beneficial Owner) or
         Affiliates or Associates thereof as the Company shall reasonably
         request. Thereupon the Rights Agent shall, subject to Section 4(b),
         Section 7(e), Section 14 and Section 24 hereof, countersign and deliver
         to the Person entitled thereto a Rights Certificate or Rights
         Certificates, as the case may be, as so requested. The Company may
         require payment of a sum sufficient to cover any tax or governmental
         charge that may be imposed in connection with any transfer, split up,
         combination or exchange of Rights Certificates.

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

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

                  (a) Subject to Section 7(e) hereof, the registered holder of
         any Rights Certificate may exercise the Rights evidenced thereby
         (except as otherwise provided herein including, without limitation, the
         restrictions on exercisability set forth in Section 9(c), Section
         11(a)(iii) and Section 23(a) hereof) in whole or in part at any time
         after the Distribution Date upon surrender of the Rights Certificate,
         with the form of election to purchase and related certificate on the
         reverse side thereof 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-hundredths of a share of
         Preferred Stock (or other securities, cash or other assets, as the case
         may be) as to which such surrendered Rights are then exercisable, at or
         prior to the earliest of (i) the close of business on the tenth
         anniversary of the Record Date (the "Final Expiration Date"), (ii) the
         time at which the Rights are redeemed as provided in Section 23 hereof,
         or (iii) the time at which the Rights are exchanged pursuant to Section
         24 hereof (the earliest of (i), (ii) and (iii) being herein referred to
         as the "Expiration Date").






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<PAGE>   12


                  (b) The Purchase Price for each one one-hundredth of a share
         of Preferred Stock pursuant to the exercise of a Right shall initially
         be $165.00, and shall be subject to adjustment from time to time as
         provided in Sections 11 and 13(a) hereof and shall be payable in
         accordance with paragraph (c) below.

                  (c) Upon receipt of a Rights Certificate representing
         exercisable Rights, with the form of election to purchase and the
         certificate duly executed, accompanied by payment, with respect to each
         Right so exercised, of the Purchase Price per one one-hundredth of a
         share of Preferred Stock (or other shares, securities, cash or other
         assets, as the case may be) to be purchased as set forth below and an
         amount equal to any applicable transfer tax required to be paid by the
         holder of such Rights Certificate pursuant to Section 9(e) hereof, the
         Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
         (i) (A) requisition from any transfer agent of the shares of Preferred
         Stock (or make available, if the Rights Agent is the transfer agent for
         such shares) certificates for the total number of one one-hundredths of
         a share of Preferred Stock to be purchased and the Company hereby
         irrevocably authorizes its transfer agent to comply with all such
         requests, or (B) if the Company shall have elected to deposit the total
         number of shares of Preferred Stock issuable upon exercise of the
         Rights hereunder with a depositary agent, requisition from the
         depositary agent depositary receipts representing such number of one
         one-hundredths of a share of Preferred Stock as are to be purchased (in
         which case certificates for the shares of Preferred Stock represented
         by such receipts shall be deposited by the transfer agent with the
         depositary agent) and the Company will direct the depositary 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 hereof, (iii) after receipt of such certificates or
         depositary receipts, cause the same to be delivered to or upon the
         order of the registered holder of such Rights Certificate, registered
         in such name or names as may be designated by such holder, and (iv)
         after receipt thereof, deliver such cash, if any, to or upon the order
         of the registered holder of such Rights Certificate. The payment of the
         Purchase Price (as such amount may be reduced pursuant to Section
         11(a)(iii) hereof) shall 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 and/or distribute other property pursuant to
         Section 11(a) hereof, the Company will make all arrangements necessary
         so that such other securities, cash and/or other property are available
         for distribution by the Rights Agent, if and when appropriate.

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





                                       10


<PAGE>   13


                  (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 (i) an Acquiring Person or an
         Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
         Acquiring Person (or of any such Associate or Affiliate) who becomes a
         transferee after the Acquiring Person becomes such, or (iii) a
         transferee of an Acquiring Person (or of any such Associate or
         Affiliate) who becomes a transferee prior to or concurrently with the
         Acquiring Person becoming such and receives such Rights pursuant to
         either (A) a transfer (whether or not for consideration) from the
         Acquiring Person to holders of equity interests in such Acquiring
         Person or to any Person with whom the Acquiring Person has any
         continuing agreement, arrangement or understanding regarding the
         transferred Rights or (B) a transfer which the Board of Directors of
         the Company has determined is part of a plan, arrangement or
         understanding which has as a primary purpose or effect the avoidance of
         this Section 7(e), shall become null and void without any further
         action and no holder of such Rights shall thereupon have any rights
         whatsoever with respect to such Rights, whether under any provision of
         this Agreement or otherwise from and after such occurrence. The Company
         shall use all reasonable efforts to insure that the provisions of this
         Section 7(e) and Section 4(b) hereof are complied with, but shall have
         no liability to any holder of Rights Certificates or other Person as a
         result of its failure to make any determinations with respect to an
         Acquiring Person or its Affiliates, Associates or transferees
         hereunder.

                  (f) Notwithstanding anything in this Agreement to the
         contrary, neither the Rights Agent nor the Company shall be obligated
         to undertake any action with respect to a registered holder upon the
         occurrence of any purported exercise as set forth in this Section 7
         unless such registered holder shall have (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 shall reasonably request.

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





                                       11

<PAGE>   14


         Section 9.   Reservation and Availability of Capital Stock.

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

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

                  (c) The Company shall use its best 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) hereof, or, if
         required by law, the Distribution Date, a registration statement under
         the Securities Act of 1933 (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 shall issue a public announcement stating
         that the exercisability of the Rights has been temporarily suspended,
         as well as a public announcement at such time as the suspension is no
         longer in effect. In addition, if the Company shall determine 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.
         Notwithstanding any provision of this Agreement to the contrary, the
         Rights shall not be exercisable in any 







                                       12


<PAGE>   15


         jurisdiction if the requisite qualification in such jurisdiction shall
         not have been obtained, the exercise thereof shall not be permitted
         under applicable law or a registration statement shall not have been
         declared effective.

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

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

         Section 10.  Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to 





                                       13

<PAGE>   16


exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

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

         The Purchase Price, number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

                           (a)(i) In the event the Company shall at any time
                  after the date of this Agreement (A) declare a dividend on the
                  Preferred Stock payable in shares of Preferred Stock, (B)
                  subdivide the outstanding Preferred Stock, (C) combine the
                  outstanding Preferred Stock into a smaller number of shares,
                  or (D) issue any shares of its capital stock in a
                  reclassification of the Preferred Stock (including any such
                  reclassification in connection with a consolidation or merger
                  in which the Company is the continuing or surviving
                  corporation), except as otherwise provided in this Section
                  11(a) and Section 7(e) hereof, the Purchase Price in effect at
                  the time of the record date for such dividend or of the
                  effective 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, shall be proportionately adjusted so that the
                  holder of any Right exercised after such time shall be
                  entitled to receive, upon payment of the Purchase Price then
                  in effect, the aggregate number and kind of shares of
                  Preferred Stock or capital stock, as the case may be, which,
                  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 which would require an adjustment under both this
                  Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
                  provided for in this Section 11(a)(i) shall be in addition to,
                  and shall be made prior to, any adjustment required pursuant
                  to Section 11(a)(ii) hereof.

                           (ii)   Subject to Section 24 of this Agreement, in 
                  the event any Person, alone or together with its Affiliates
                  and Associates, shall become an Acquiring Person, each holder
                  of a Right (except as provided below and in Section 7(e)
                  hereof) shall thereafter have the right to receive, upon
                  exercise thereof at the then current Purchase Price in
                  accordance with the terms of this Agreement, in lieu of a
                  number of one one-hundredths of a share of Preferred Stock,
                  such number of shares of Common Stock of the Company as shall
                  equal the result obtained by (x) multiplying the then current
                  Purchase Price by the then number of one one-hundredths of a
                  share of Preferred Stock for which a Right was exercisable
                  immediately prior to the first occurrence of a Section
                  11(a)(ii) Event, and (y) dividing that product (which,
                  following such first occurrence, shall thereafter be referred
                  to as the "Purchase Price" for each Right and for all purposes
                  of this Agreement) by 50% of the current market price
                  (determined pursuant to Section 



                                       14

<PAGE>   17

                  11(d) hereof) per share of Common Stock on the date of such
                  first occurrence (such number of shares, the "Adjustment
                  Shares").

                           (iii) In the event that the number of shares of
                  Common Stock which are authorized by the Company's certificate
                  of incorporation but not outstanding or reserved for issuance
                  for purposes other than upon exercise of the Rights are not
                  sufficient to permit the exercise in full of the Rights in
                  accordance with the foregoing subparagraph (ii) of this
                  Section 11(a), the Company shall: (A) determine the excess of
                  (1) the value of the Adjustment Shares issuable upon the
                  exercise of a Right (the "Current Value") over (2) the
                  Purchase Price (such excess, the "Spread"), and (B) with
                  respect to each Right (subject to Section 7(e) hereof), make
                  adequate provision to substitute for the Adjustment Shares,
                  upon exercise of the 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 which the Board of Directors of the
                  Company has deemed to have the same value as shares of Common
                  Stock (such shares of preferred stock referred to herein as
                  "Common Stock Equivalents")), (4) debt securities of the
                  Company, (5) other assets, or (6) any combination of the
                  foregoing, having an aggregate value equal to the Current
                  Value, where such aggregate value has been determined by the
                  Board of Directors of the Company based upon the advice of a
                  nationally recognized investment banking firm selected by the
                  Board of Directors of the Company; provided, however, if the
                  Company shall not have made adequate provision to substitute
                  for Adjustment Shares 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
                  herein as the "Section 11(a)(ii) Trigger Date"), then the
                  Company shall be obligated to deliver, upon the surrender for
                  exercise of a Right and without requiring payment of the
                  Purchase Price, shares of Common Stock (to the extent
                  available) and then, if necessary, cash, which shares and/or
                  cash have an aggregate value equal to the Spread. If the Board
                  of Directors of the Company shall determine in good faith that
                  it is likely that sufficient additional shares of Common Stock
                  could be authorized for issuance upon exercise in full of the
                  Rights, the 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 stockholder approval for the
                  authorization of such additional shares (such period, as it
                  may be extended, the "Substitution Period"). To the extent
                  that the Company determines that some action need be taken
                  pursuant to the first and/or second sentences of this Section
                  11(a)(iii), the Company (x) shall provide, subject to Section
                  7(e) hereof, that such action shall apply uniformly to all
                  outstanding Rights, and (y) may suspend the exercisability of
                  the Rights until the expiration of the Substitution Period in
                  order to seek stockholder approval for such authorization of
                  additional shares and/or to decide the appropriate form of
                  distribution to be made pursuant to such first sentence and to
                  determine the value 







                                       15


<PAGE>   18


                  thereof. In the event of any such suspension, the Company
                  shall issue a public announcement stating that the
                  exercisability of the Rights has been temporarily suspended,
                  as well as a public announcement at such time as the
                  suspension is no longer in effect. For purposes of this
                  Section 11(a)(iii), the value of each Adjustment Share shall
                  be the current market price (as determined pursuant to Section
                  11(d) hereof) per share of the Common Stock on the Section
                  11(a)(ii) Trigger Date and the per share or per unit value of
                  any "Common Stock Equivalent" shall be deemed to equal the
                  current market price per share of the Common Stock on such
                  date.

                  (b) In case the Company shall fix a record date for the
         issuance of rights, options or warrants to all holders of Preferred
         Stock entitling them to subscribe for or purchase (for a period
         expiring within forty-five (45) calendar days after such record date)
         Preferred Stock (or shares having the same rights, privileges and
         preferences as the shares of Preferred Stock ("equivalent preferred
         stock")) or securities convertible into Preferred Stock or equivalent
         preferred stock at a price per share of Preferred Stock or per share of
         equivalent preferred stock (or having a conversion price per share, if
         a security convertible into Preferred Stock or equivalent preferred
         stock) less than the current market price (as determined pursuant to
         Section 11(d) hereof) per share of Preferred Stock on such record date,
         the Purchase Price to be in effect after such date shall be determined
         by multiplying the Purchase Price in effect immediately prior to such
         record date by a fraction, the numerator of which shall be the number
         of shares of Preferred Stock outstanding on such record date, plus the
         number of shares of Preferred Stock which the aggregate offering price
         of the total number of shares of Preferred Stock and/or equivalent
         preferred stock so to be offered (and/or the aggregate initial
         conversion price of the convertible securities so to be offered) would
         purchase at such current market price, and the denominator of which
         shall be the number of shares of Preferred Stock outstanding on such
         record date, plus the number of additional shares of Preferred Stock
         and/or equivalent preferred stock to be offered for subscription or
         purchase (or into which the convertible securities so to be offered are
         initially convertible). In case such subscription price may be paid by
         delivery of consideration part or all of which may be in a form other
         than cash, the value of such consideration shall be as determined in
         good faith by the Board of Directors of the Company, whose
         determination shall be described in a statement filed with the Rights
         Agent and shall be binding on the Rights Agent and the holders of the
         Rights. Shares of Preferred Stock owned by or held for the account of
         the Company shall not be deemed outstanding for the purpose of any such
         computation. Such adjustment shall be made successively whenever such a
         record date is fixed, and in the event that such rights or warrants are
         not so issued, the Purchase Price shall be adjusted to be the Purchase
         Price which would then be in effect if such record date had not been
         fixed.

                  (c) In case the Company shall fix a record date for a
         distribution to all holders of Preferred Stock (including any such
         distribution made in connection with a consolidation or merger in which
         the Company is the continuing corporation) of evidences of
         indebtedness, cash (other than a regular quarterly cash dividend out of
         the 






                                       16


<PAGE>   19


         earnings or retained earnings of the Company), assets (other than a
         dividend payable in Preferred Stock, but including any dividend payable
         in stock other than Preferred Stock) or subscription rights or warrants
         (excluding those referred to in Section 11(b) hereof), the Purchase
         Price to be in effect after such record date shall be determined by
         multiplying the Purchase Price in effect immediately prior to such
         record date by a fraction, the numerator of which shall be the current
         market price (as determined pursuant to Section 11(d) hereof) per share
         of Preferred Stock on such record date, less the fair market value (as
         determined in good faith by the Board of Directors of the Company,
         whose determination shall 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 shall be such current market price (as determined pursuant to
         Section 11(d) hereof) per share of Preferred Stock. Such adjustments
         shall be made successively whenever such a record date is fixed, and in
         the event that such distribution is not so made, the Purchase Price
         shall be adjusted to be the Purchase Price which would have been in
         effect if such record date had not been fixed.

                           (d) (i) For the purpose of any computation hereunder,
                  other than computations made pursuant to Section 11(a)(iii)
                  hereof, the "current market price" per share of Common Stock
                  on any date shall be deemed to be the average of the daily
                  closing prices per share of such Common Stock for the thirty
                  (30) consecutive Trading Days (as such term is hereinafter
                  defined) immediately prior to such date, and for purposes of
                  computations made pursuant to Section 11(a)(iii) hereof, the
                  "current market price" per share of Common Stock on any date
                  shall be deemed to be the average of the daily closing prices
                  per share of such Common Stock for the ten (10) consecutive
                  Trading Days immediately following such date; provided,
                  however, that in the event that the current market price per
                  share of the Common Stock is determined during a period
                  following the announcement by the issuer of such Common Stock
                  of (A) a dividend or distribution on such Common Stock payable
                  in shares of such Common Stock or securities convertible into
                  shares of such Common Stock (other than the Rights), or (B)
                  any subdivision, combination or reclassification of such
                  Common Stock, and prior to the expiration of the requisite
                  thirty (30) Trading Day or ten (10) Trading Day period, as set
                  forth above, after the ex-dividend date for such dividend or
                  distribution, or the record date for such subdivision,
                  combination or reclassification, then, and in each such case,
                  the "current market price" shall be properly adjusted to take
                  into account ex-dividend trading so as to include the value of
                  the dividend. The closing price for each day shall be the last
                  sale price, regular way, or, in case no such sale takes place
                  on such day, the average of the closing bid and asked prices,
                  regular way, in either case as reported in the principal
                  consolidated transaction reporting system with respect to
                  securities listed or admitted to trading on the 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 






                                       17


<PAGE>   20


                  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 the National
                  Association of Securities Dealers, Inc. Automated Quotation
                  System ("NASDAQ") or such other system then in use, or, if on
                  any such date the shares of Common Stock are not quoted by any
                  such organization, the average of the closing bid and asked
                  prices as furnished by a professional market maker making a
                  market in the Common Stock selected by the Board of Directors
                  of the Company. 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 the Board of
                  Directors of the Company shall be used. The term "Trading Day"
                  shall mean 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 shall mean the
                  fair value per share as determined in good faith by the Board
                  of Directors of the Company, whose determination shall be
                  described in a statement filed with the Rights Agent and shall
                  be conclusive for all purposes.

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

                  (e) Anything herein to the contrary notwithstanding, no
         adjustment in the Purchase Price shall be required unless such
         adjustment would require an increase or decrease of at least one
         percent (1%) in the Purchase Price; provided, however, that any
         adjustments which by reason of this Section 11(e) are not required to
         be made shall be 





                                       18

<PAGE>   21


         carried forward and taken into account in any subsequent adjustment.
         All calculations under this Section 11 shall be made to the nearest
         cent or to the nearest ten-thousandth of a 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 shall be made no later than the
         earlier of (i) three (3) years from the date of the transaction which
         mandates such adjustment, or (ii) the Expiration Date.

                  (f) If as a result of an adjustment made pursuant to Section
         11(a) or Section 13(a) hereof, the holder of any Right thereafter
         exercised shall become entitled to receive any shares of capital stock
         other than Preferred Stock, thereafter the number of such other shares
         so receivable upon exercise of any Right and the Purchase Price thereof
         shall be subject to adjustment from time to time in a manner and on
         terms as nearly equivalent as practicable to the provisions with
         respect to the Preferred Stock contained in Sections 11(a), (b), (c),
         (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of
         Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock
         shall apply on like terms to any such other shares.

                  (g) All Rights originally issued by the Company subsequent to
         any adjustment made to the Purchase Price hereunder shall evidence the
         right to purchase, at the adjusted Purchase Price, the number of one
         one-hundredths of a share of Preferred Stock purchasable from time to
         time hereunder upon exercise of the Rights, all subject to further
         adjustment as provided herein.

                  (h) Unless the Company shall have exercised its election as
         provided in Section 11(i), upon each adjustment of the Purchase Price
         as a result of the calculations made in Sections 11(b) and (c), each
         Right outstanding immediately prior to the making of such adjustment
         shall thereafter evidence the right to purchase, at the adjusted
         Purchase Price, that number of one one-hundredths of a share of
         Preferred Stock (calculated to the nearest one-millionth) obtained by
         (i) multiplying (x) the number of one one-hundredths 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-hundredths of a share
         of Preferred Stock purchasable upon the exercise of a Right. Each of
         the Rights outstanding after the adjustment in the number of Rights
         shall be exercisable for the number of one one-hundredths of a share of
         Preferred Stock for which a Right was exercisable immediately prior to
         such adjustment. Each Right held of record prior to such adjustment of
         the number of Rights shall become that number of Rights (calculated to
         the nearest one 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 shall 






                                       19

<PAGE>   22


         make a public announcement of its election to adjust the number of
         Rights, indicating the record date for the adjustment, and, if known at
         the time, the amount of the adjustment to be made. This record date may
         be the date on which the Purchase Price is adjusted or any day
         thereafter, but, if the Rights Certificates have been issued, shall be
         at least ten (10) days later than the date of the public announcement.
         If Rights Certificates have been issued, upon each adjustment of the
         number of Rights pursuant to this Section 11(i), the Company shall, as
         promptly as practicable, cause to be distributed to holders of record
         of Rights Certificates on such record date Rights Certificates
         evidencing, subject to Section 14 hereof, the additional rights to
         which such holders shall be entitled as a result of such adjustment,
         or, at the option of the Company, shall cause to be distributed to such
         holders of record in substitution and replacement for the Rights
         Certificates held by such holders prior to the date of adjustment, and
         upon surrender thereof, if required by the Company, new Rights
         Certificates evidencing all the Rights to which such holders shall be
         entitled after such adjustment. Rights Certificates so to be
         distributed shall be issued, executed and countersigned in the manner
         provided for herein (and may bear, at the option of the Company, the
         adjusted Purchase Price) and shall be registered in the names of the
         holders of record of Rights Certificates on the record date specified
         in the public announcement.

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

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

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








                                       20

<PAGE>   23


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

                  (n) The Company covenants and agrees that it shall not, at any
         time after the Distribution Date, (i) consolidate with or merge with or
         into any other Person, or (ii) sell or transfer (or permit any
         Subsidiary to sell or transfer), in one transaction, or a series of
         related transactions, assets or earning power aggregating more than 50%
         of the assets or earning power of the Company and its Subsidiaries
         (taken as a whole) to any other Person or Persons, if (x) at the time
         of or immediately after such consolidation, merger or sale there are
         any rights, warrants or other instruments or securities outstanding or
         agreements in effect which would substantially diminish or otherwise
         eliminate the benefits intended to be afforded by the Rights or (y)
         prior to, simultaneously with or immediately after such consolidation,
         merger or sale, the shareholders of the Person who constitute, or would
         constitute, the "Principal Party" for purposes of Section 13(a) hereof
         shall have received a distribution of Rights previously owned by such
         Person or any of its Affiliates and Associates; provided, however, that
         this Section 11(n) shall not apply to any consolidation or merger with
         or into a Subsidiary of the Company or sale or transfer to the Company
         and/or any of its Subsidiaries if such transactions comply with Section
         11(o) hereof.

                  (o) The Company covenants and agrees that, after the earlier
         of the Distribution Date or the Stock Acquisition Date, it will not,
         except as permitted by Section 23 or Section 27 hereof, 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 shall at any time after
         the Rights Dividend Declaration Date and prior to the Distribution Date
         (i) declare a dividend on the outstanding shares of Common Stock
         payable in shares of Common Stock, (ii) subdivide the outstanding
         shares of Common Stock, or (iii) combine the outstanding shares of
         Common Stock into a smaller number of shares, the number of Rights
         associated with each share of Common Stock then outstanding, or issued
         or delivered thereafter but prior to the Distribution Date, shall be
         proportionately adjusted so that the number of Rights thereafter
         associated with each share of Common Stock following any such event
         shall equal the result obtained by multiplying the number of Rights
         associated with each share of Common Stock immediately prior to such
         event by a fraction the numerator of which shall be the total 







                                       21

<PAGE>   24


         number of shares of Common Stock outstanding immediately prior to the
         occurrence of the event and the denominator of which shall be the total
         number of shares of Common Stock outstanding immediately following the
         occurrence of such event.

        Section 12.  Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (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) if a
Distribution Date has occurred, mail a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.

         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 shall consolidate with, or
         merge with or into, any other Person, and the Company shall not be the
         continuing or surviving corporation of such consolidation or merger,
         (y) any Person shall consolidate with, or merge with or into, the
         Company, and the Company shall be the continuing or surviving
         corporation of such consolidation or merger and, in connection with
         such consolidation or merger, all or part of the outstanding shares of
         Common Stock shall be changed into or exchanged for stock or other
         securities of any other Person (or the Company) or cash or any other
         property, or (z) the Company shall sell or otherwise transfer (or one
         or more of its Subsidiaries shall sell or otherwise transfer), in one
         transaction or a series of related transactions, assets or earning
         power aggregating more than 50% of the assets or earning power of the
         Company and its Subsidiaries (taken as a whole) to any Person or
         Persons, then, and in each such case: (i) each holder of a Right,
         except as provided in Section 7(e) hereof, shall thereafter have the
         right to receive, upon the exercise thereof at the then current
         Purchase Price in accordance with the terms of this Agreement, such
         number of validly authorized and issued, fully paid, non-assessable and
         freely tradeable shares of Common Stock of the Principal Party (as such
         term is hereinafter defined), not subject to any liens, encumbrances,
         rights of first refusal or other adverse claims, as shall be equal to
         the result obtained by (1) multiplying the number of such one
         one-hundredths 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, shall 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) hereof) per share
         of the Common Stock of such Principal Party on the date of consummation
         of such Section 13 Event; (ii) such Principal Party shall thereafter be
         liable for, and shall assume, by virtue of such Section 13 Event, all
         the obligations and duties of the Company pursuant to this Agreement;
         (iii) the term "Company" shall thereafter be deemed to refer to such
         Principal Party; and (iv) such Principal Party shall 







                                       22

<PAGE>   25


         take such steps (including, but not limited to, the reservation of a
         sufficient number of shares of its Common Stock) in connection with the
         consummation of any such transaction as may be necessary to assure that
         the provisions hereof shall thereafter be applicable, as nearly as
         reasonably may be, in relation to its shares of Common Stock thereafter
         deliverable upon the exercise of the Rights, provided, however, that,
         upon the subsequent occurrence of any merger, consolidation, sale of
         all or substantially all assets, recapitalization, reclassification of
         shares, reorganization or other extraordinary transaction in respect of
         such Principal Party, each holder of a Right shall thereupon be
         entitled to receive, upon exercise of a Right and payment of the
         Purchase Price, such cash, shares, rights, warrants and other property
         which such holder would have been entitled to receive had such holder,
         at the time of such transaction, owned the shares of Common Stock of
         the Principal Party purchasable upon the exercise of a Right, and such
         Principal Party shall take such steps (including, but not limited to,
         reservation of shares of stock) as may be necessary to permit the
         subsequent exercise of the Rights in accordance with the terms hereof
         for such cash, shares, rights, warrants and other property; provided,
         however, that this Section 13(a) shall not apply to the transactions
         set forth in clauses (x), (y) and (z) above if (1) in the case of
         clauses (x) and (y), such other Person is a Subsidiary of the Company
         and the transaction complies with Section 11(o) hereof, and (2) in the
         case of clause (z), such Person is the Company and/or any Subsidiary of
         the Company and the transaction or transactions comply with Section
         11(o) hereof.

                  (b)      "Principal Party" shall mean

                           (i) in the case of any transaction described in
                  clause (x) or (y) of the first sentence of Section 13(a), (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, or, if there is more than one such
                  issuer, the issuer the Common Stock of which has the greatest
                  market value or (B) if no securities are so issued, (x) the
                  Person that is the other party to the merger or consolidation
                  and that survives said merger or consolidation, or, if there
                  is more than one such Person, the Person the Common Stock of
                  which has the greatest market value or (y) if the Person that
                  is the other party to the merger or consolidation does not
                  survive the merger or consolidation, the Person that does so
                  survive (including the Company if it survives); 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 or, if each Person that is a party to such
                  transaction or transactions receives the same portion of the
                  assets or earning power so transferred or if the Person
                  receiving the greatest portion of the assets or earning power
                  cannot be determined, whichever of such Persons is the issuer
                  of Common Stock having the greatest market value of shares
                  outstanding;






                                       23

<PAGE>   26


         provided, however, that in any such case, (1) if the Common Stock of
         such Person is not at such time and has not been continuously over the
         preceding twelve (12) month period registered under Section 12 of the
         Exchange Act, and such Person is a direct or indirect Subsidiary of
         another Person the Common Stock of which is and has been so registered,
         "Principal Party" shall refer to such other Person; 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" shall refer to whichever of such Persons
         is the issuer of the Common Stock having the greatest aggregate market
         value.

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

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

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

         The provisions of this Section 13 shall similarly apply to successive
         mergers or consolidations or sales or other transfers. Rights which
         have not been exercised prior to the occurrence of a Section 13 Event
         shall thereafter become exercisable in the manner described in Section
         13(a).

         Section 14.  Fractional Rights and Fractional Shares.

                  (a) The Company shall not be required to issue fractions of
         Rights, except prior to the Distribution Date as provided in Section
         11(p) hereof, or to distribute Rights Certificates which evidence
         fractional Rights. In lieu of such fractional Rights, there shall be
         paid to the registered holders of the Rights Certificates with regard
         to which such fractional Rights would otherwise be issuable, an amount
         in cash equal to the same fraction of the current market value of a
         whole Right. For purposes of this Section 14(a), the current market
         value of a whole Right shall be the closing price of the Rights for the






                                       24


<PAGE>   27



         Trading Day immediately prior to the date on which such fractional
         Rights would have been otherwise issuable. The closing price of the
         Rights for any day shall be the last sale price, regular way, or, in
         case no such sale takes place on such day, the average of the closing
         bid and asked prices, regular way, in either case as reported in the
         principal consolidated transaction reporting system with respect to
         securities listed or admitted to trading on the 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 the Board of Directors of the Company. If on any such date
         no such market maker is making a market in the Rights, the fair value
         of the Rights on such date as determined in good faith by the Board of
         Directors of the Company shall be used.

                  (b) The Company shall not be required to issue fractions of
         shares of Preferred Stock (other than fractions which are integral
         multiples of one one-hundredth of a share of Preferred Stock) upon
         exercise of the Rights or to distribute certificates which evidence
         fractional shares of Preferred Stock (other than fractions which are
         integral multiples of one one-hundredth of a share of Preferred Stock).
         In lieu of fractional shares of Preferred Stock that are not integral
         multiples of one one-hundredth 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 herein provided an amount in cash
         equal to the same fraction of the current market value of one
         one-hundredth of a share of Preferred Stock. For purposes of this
         Section 14(b), the current market value of one one-hundredth of a share
         of Preferred Stock shall be one one-hundredth of the closing price of a
         share of Preferred Stock (as determined pursuant to Section 11(d)(ii)
         hereof) for the Trading Day immediately prior to the date of such
         exercise.

                  (c) Following the occurrence of a Triggering Event, the
         Company shall not be required to issue fractions of shares of Common
         Stock upon exercise of the Rights or to distribute certificates which
         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 herein
         provided an amount in cash equal to the same fraction of the current
         market value of one (1) share of Common Stock. For purposes of this
         Section 14(c), the current market value of one share of Common Stock
         shall be the closing price of one share of Common Stock (as determined
         pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
         prior to the date of such exercise.

                  (d) The holder of a Right by the acceptance of such Right
         expressly waives such holder's right to receive any fractional Rights
         or any fractional shares (other than, in 






                                       25


<PAGE>   28


         the case of Preferred Stock, fractions which are integral multiples of
         one one-hundredth of a share of Preferred Stock) 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 such holder's behalf and for
such holder's benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Rights Certificate (or, prior
to the Distribution Date, certificates for Common Stock) in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.

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

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

                  (b) after the Distribution Date, the Rights Certificates are
         transferable only on the registry books of the Rights Agent if
         surrendered at the 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) hereof, the
         Company and the Rights Agent may deem and treat the person in whose
         name a Rights Certificate (or, prior to the Distribution Date, the
         associated Common Stock certificate) is registered as the absolute
         owner thereof and of the Rights evidenced thereby (notwithstanding any
         notations of ownership or writing on the Rights Certificates or the
         associated Common Stock certificate made by anyone other than the
         Company or the Rights Agent) for all purposes whatsoever, and neither
         the Company nor the Rights Agent, subject to the last sentence of
         Section 7(e) hereof, shall be required to be affected by any notice to
         the contrary; and

                  (d) notwithstanding anything in this Agreement to the
         contrary, neither the Company nor the Rights Agent shall have any
         liability to any holder of a Right or other Person as a result of its
         inability to perform any of its obligations under this Agreement 








                                       26

<PAGE>   29


         by reason of any preliminary or permanent injunction or other order,
         decree or ruling issued by a court of competent jurisdiction or by a
         governmental, regulatory or administrative agency or commission, or any
         statute, rule, regulation or executive order promulgated or enacted by
         any governmental authority, prohibiting or otherwise restraining
         performance of such obligation; provided, however, the Company must use
         its best efforts to have any such order, decree or ruling lifted or
         otherwise overturned as soon as possible.

         Section 17.  Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.

         Section 18.  Concerning the Rights Agent.

                  (a) The Company agrees to pay to the Rights Agent reasonable
         compensation for all services rendered by it hereunder and, from time
         to time, on demand of the Rights Agent, its reasonable expenses and
         counsel fees and disbursements and other disbursements incurred in the
         administration and execution of this Agreement and the exercise and
         performance of its duties hereunder. The Company also agrees to
         indemnify the Rights Agent for, and to hold it harmless against, any
         loss, liability, or expense, incurred without negligence, bad faith or
         willful misconduct on the part of the Rights Agent, for anything done
         or omitted by the Rights Agent in connection with the acceptance and
         administration of this Agreement, including the costs and expenses of
         defending against any claim of liability in the premises. Anything to
         the contrary notwithstanding, in no event shall the Rights Agent be
         liable for special, indirect, consequential or incidental loss or
         damage of any kind whatsoever (including but not limited to lost
         profits) even if the Rights Agent has been advised of the likelihood of
         such loss or damage.

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






                                       27


<PAGE>   30


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

                  (a) Any corporation into which the Rights Agent or any
         successor Rights Agent may be merged or with which it may be
         consolidated, or any corporation resulting from any merger or
         consolidation to which the Rights Agent or any successor Rights Agent
         shall be a party, or any corporation succeeding to the corporate trust
         business of the Rights Agent or any successor Rights Agent, shall be
         the successor to the Rights Agent under this Agreement without the
         execution or filing of any paper or any further act on the part of any
         of the parties hereto; provided, however, that such corporation would
         be eligible for appointment as a successor Rights Agent under the
         provisions of Section 21 hereof. In case at the time such successor
         Rights Agent shall succeed to the agency created by this Agreement, any
         of the Rights Certificates shall have been countersigned but not
         delivered, any such successor Rights Agent may adopt the
         countersignature of a predecessor Rights Agent and deliver such Rights
         Certificates so countersigned; and in case at that time any of the
         Rights Certificates shall not have been countersigned, any successor
         Rights Agent may countersign such Rights Certificates either in the
         name of the predecessor or in the name of the successor Rights Agent;
         and in all such cases such Rights Certificates shall have the full
         force provided in the Rights Certificates and in this Agreement.

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

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

                  (b) Whenever in the performance of its duties under this
         Agreement the Rights Agent shall deem it necessary or desirable that
         any fact or matter (including, without limitation, the identity of any
         Acquiring Person and the determination of "current market price") be
         proved or established by the Company prior to taking or suffering any
         action hereunder, such fact or matter (unless other evidence in respect
         thereof be herein specifically prescribed) may be deemed to be
         conclusively proved and established by a 







                                       28

<PAGE>   31


         certificate signed by the Chairman of the Board, the Vice Chairman, the
         President, any Vice President, the Treasurer, any Assistant Treasurer,
         the Secretary or any Assistant Secretary of the Company and delivered
         to the Rights Agent; and such certificate shall be full authorization
         to the Rights Agent for any action taken or suffered in good faith by
         it under the provisions of this Agreement in reliance upon such
         certificate.

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

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

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

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

                  (g) The Rights Agent is hereby authorized and directed to
         accept instructions with respect to the performance of its duties
         hereunder from the Chairman of the Board, the Vice Chairman, the
         President, any Vice President, the Secretary, any Assistant Secretary,
         the Treasurer or any Assistant Treasurer of the Company, and to apply
         to such officers for advice or instructions in connection with its
         duties, and it shall not be liable for any action taken or suffered to
         be taken by it in good faith in accordance with instructions of any
         such officer.







                                       29

<PAGE>   32


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

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

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

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

         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 shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 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 shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation or other legal
business entity organized and doing business under the laws of the 








                                       30

<PAGE>   33


United States or any State thereof which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an affiliate of a corporation or other legal business entity
described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates
or, if prior to the Distribution Date, to the registered holders of Common
Stock. Failure to give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

         Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights Certificates to the contrary,
the Company may, at its option, 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) shall, 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 hereinafter
but prior to the Distribution Date, 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 (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

         Section 23.  Redemption and Termination.

                  (a) The Board of Directors of the Company may, at its option,
         if authorized at any time prior to such time as any Person becomes an
         Acquiring Person, redeem all but not less than all the then outstanding
         Rights at a redemption price of $.01 per Right as such amount may be
         appropriately adjusted to reflect any stock split, stock dividend or
         similar transaction occurring after the date hereof (such redemption
         price being hereinafter referred to as the "Redemption Price"). The
         Company may, at its option, pay 







                                       31


<PAGE>   34


         the Redemption Price in cash, shares of Common Stock (based on the
         "current market price", as defined in Section 11(d)(i) hereof, of the
         Common Stock at the time of redemption) or any other form of
         consideration or any combination of any of the foregoing deemed
         appropriate by the Board of Directors of the Company.

                  (b) Immediately upon the action of the Board of Directors of
         the Company ordering the redemption of the Rights, evidence of which
         shall have been filed with the Rights Agent, and without any further
         action and without any notice, the right to exercise the Rights will
         terminate and the only right thereafter of the holders of Rights shall
         be to receive the Redemption Price for each Right so held. Promptly
         after the action of the Board of Directors ordering the redemption of
         the Rights, the Company shall give notice of such redemption to the
         Rights Agent and the holders of the then outstanding Rights by mailing
         such notice to all such holders at each holder's last address as it
         appears upon the registry books of the Rights Agent or, prior to the
         Distribution Date, on the registry books of the Transfer Agent for the
         Common Stock. Any notice which is mailed in the manner herein provided
         shall be deemed given, whether or not the holder receives the notice.
         Each such notice of redemption will state the method by which the
         payment of the Redemption Price will be made. Neither the Company nor
         any of its Affiliates or Associates may redeem, acquire or purchase for
         value any Rights at any time in any manner other than that specifically
         set forth in this Section 23 or in Section 24 hereof, and other than in
         connection with the purchase of shares of Common Stock prior to the
         Distribution Date.

         Section 24.  Exchange.

                  (a) The Board of Directors of the Company may, at its option,
         at any time after the first occurrence of a Section 11(a)(ii) Event,
         exchange all or part of the then outstanding and exercisable Rights
         (which shall not include Rights that have become void pursuant to the
         provisions of Section 7(e) hereof) for shares of Common Stock or common
         stock equivalents (as defined in Section 11(a)(iii) hereof), or any
         combination thereof, at an exchange ratio of one share of Common Stock
         per Right, appropriately adjusted to reflect any stock split, stock
         dividend or similar transaction occurring after the Record Date (such
         exchange ratio being hereinafter referred to as the "Exchange Ratio").
         Notwithstanding the foregoing, the Board of Directors shall not be
         empowered to effect such exchange at any time after any Person (other
         than the Company, any Subsidiary of the Company, any employee benefit
         plan of the Company or any such Subsidiary, or any entity holding
         Common Stock for or pursuant to the terms of any such plan), together
         with all Affiliates and Associates of such Person, becomes the
         Beneficial Owner of 50% or more of the Common Stock then outstanding.

                  (b) Immediately upon the action of the Board of Directors of
         the Company ordering the exchange of any Rights pursuant to subsection
         (a) of this Section 24 and without any further action and without any
         notice, the right to exercise such Rights shall terminate and the only
         right thereafter of a holder of such Rights shall be to receive that
         number of shares of Common Stock and/or common stock equivalents equal
         to the 







                                       32


<PAGE>   35


         number of such Rights held by such holder multiplied by the Exchange
         Ratio. The Company promptly shall mail a notice of any such exchange to
         all of the holders of such. Rights at their last addresses as they
         appear upon the registry books of the Rights Agent; provided, however,
         that the failure to give, or any defect in, such notice shall not
         affect the validity of such exchange. Any notice which is mailed in the
         manner herein provided shall be deemed given, whether or not the holder
         receives the notice. Each such notice of exchange will state the method
         by which the exchange of the shares of Common Stock for Rights will be
         effected and, in the event of any partial exchange, the number of
         Rights which will be exchanged. Any partial exchange shall be effected
         pro rata based on the number of Rights (other than Rights which have
         become void pursuant to the provisions of Section 7(e) hereof) held by
         each holder of Rights.

                  (c) In the event that the number of shares of Common Stock
         which are authorized by the Company's Certificate of Incorporation but
         not outstanding or reserved for issuance for purposes other than upon
         exercise of the Rights are not sufficient to permit any exchange of
         Rights as contemplated in accordance with this Section 24, the Company
         may, at its option, take all such action as may be necessary to
         authorize additional shares of Common Stock for issuance upon exchange
         of the Rights.

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

         Section 25.  Notice of Certain Events.

                  (a) In case the Company shall propose, at any time after the
         Distribution Date, (i) to pay any dividend payable in stock of any
         class to the holders of Preferred Stock or to make any other
         distribution to the holders of Preferred Stock (other than a regular
         quarterly cash dividend out of earnings or retained earnings of the
         Company), or (ii) to offer to the holders of Preferred Stock rights or
         warrants to subscribe for or to purchase any additional shares of
         Preferred Stock or shares of stock of any class or any other
         securities, rights or options, or (iii) to effect any reclassification
         of its Preferred Stock (other than a reclassification involving only
         the subdivision of outstanding shares of Preferred Stock), or (iv) to
         effect any consolidation or merger into or with any other Person (other
         than a Subsidiary of the Company in a transaction which complies with
         Section 11(o) hereof), or to effect any sale or other transfer (or to
         permit one or more of its Subsidiaries to effect any sale or other
         transfer), in one transaction or a series of related transactions, of
         more than 50% of the assets or earning power of the Company and its
         Subsidiaries (taken as a whole) to any other Person or Persons (other
         than the 









                                       33

<PAGE>   36


         Company and/or any of its Subsidiaries in one or more transactions each
         of which complies with Section 11(o) hereof), or (v) to effect the
         liquidation, dissolution or winding up of the Company, then, in each
         such case, the Company shall give to each holder of a Rights
         Certificate, to the extent feasible and in accordance with Section 26
         hereof, a notice of such proposed action, which shall specify the
         record date for the purposes of such stock dividend, distribution of
         rights or warrants, or the date on which such reclassification,
         consolidation, merger, sale, transfer, liquidation, dissolution, or
         winding up is to take place and the date of participation therein by
         the holders of the shares of Preferred Stock, if any such date is to be
         fixed, and such notice shall be so given in the case of any action
         covered by clause (i) or (ii) above at least twenty (20) days prior to
         the record date for determining holders of the shares of Preferred
         Stock for purposes of such action, and in the case of any such other
         action, at least twenty (20) days prior to the date of the taking of
         such proposed action or the date of participation therein by the
         holders of the shares of Preferred Stock whichever shall be the
         earlier.

                  (b) In case any of the events set forth in Section 11(a)(ii)
         or Section 13(a) hereof shall occur, then, in any such case, (i) the
         Company shall as soon as practicable thereafter give to each holder of
         a Rights Certificate, to the extent feasible and in accordance with
         Section 26 hereof, a notice of the occurrence of such event, which
         shall specify the event and the consequences of the event to holders of
         Rights under Section 11(a)(ii) hereof, and (ii) all references in the
         preceding paragraph to Preferred Stock shall be deemed thereafter to
         refer to Common Stock and/or, if appropriate, other securities issuable
         upon exercise of the Rights.

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

                                Elcor Corporation
                                Wellington Centre, Suite 1000
                                14643 Dallas Parkway
                                Dallas, Texas 75240-8871
                                Attention: Secretary

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

                                ChaseMellon Shareholder Services, L.L.C.
                                2323 Bryan Street, Suite 2300
                                Dallas, Texas 75201-2656
                                Attention: Barbara J. Robbins







                                       34

<PAGE>   37


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

         Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights.

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

         Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any recalculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and Regulations
under the Exchange Act as in effect on May 26, 1998. The Board of Directors of
the Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including 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) which are done or made by the Board
of Directors in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board of Directors to any liability to the holders of the
Rights.

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








                                       35


<PAGE>   38



         Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid, void or unenforceable language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the tenth day following the date of such determination by
the Board of Directors.

         SECTION 32. GOVERNING LAW. THIS AGREEMENT, EACH RIGHT AND EACH RIGHTS
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL 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 33. Counterparts.  This Agreement may be executed in any number
of counterparts and each of such counterparts shall be for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

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








                                       36

<PAGE>   39




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

Attest:                                ELCOR CORPORATION


By:                                    By:
   ------------------------------         ------------------------------------
   Name:  David G. Sisler                 Name:  Harold K. Work
   Title: Secretary                       Title: Chairman of the Board, Chief
                                                 Executive Officer and President

[Corporate Seal]




Attest:                                  CHASEMELLON SHAREHOLDER
                                         SERVICES, L.L.C.


By:                                      By:
   -------------------------------          ------------------------------------
   Name:                                    Name:
   Title: Assistant Secretary               Title:












                                       37

<PAGE>   40



                                                                       EXHIBIT A




               CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
                    OF SERIES A PARTICIPATING PREFERRED STOCK
                                       of
                                ELCOR CORPORATION
             Pursuant to Section 151 of the General Corporation Law
                            of the State of Delaware


         We, Harold K. Work, Chairman of the Board, Chief Executive Officer and
President, and David G. Sisler, Secretary, of Elcor Corporation, a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY
CERTIFY:

         That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on ___________, 1998, adopted the following resolution creating a
series of 240,000 shares of Preferred Stock designated as Series A Participating
Preferred Stock:

         RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
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:

         Section 1  Designation and Amount. The shares of such series shall be
designated as "Series A Participating Preferred Stock" and the number of shares
constituting such series shall be 240,000.

         Section 2. Dividends and Distributions.

                (A) Subject to the prior and superior rights of the holders of
         any shares of any series of Preferred Stock ranking prior and superior
         to the shares of Series A Participating Preferred Stock with respect to
         dividends, the holders of shares of Series A Participating Preferred
         Stock shall be entitled to receive, when, as and if declared by the
         Board of Directors out of funds legally available for the purpose,
         quarterly dividends payable in cash on February 15, May 15, August 15
         and November 15 in each year (each such date being referred to herein
         as a "Quarterly Dividend Payment Date"), commencing on the first
         Quarterly Dividend Payment Date after the first issuance of a share or
         fraction of a share of Series A Participating Preferred Stock, in an
         amount per share (rounded to the 







                                      A-1

<PAGE>   41


         nearest cent) equal to the greater of (a) $.05 or (b) subject to the
         provision for adjustment hereinafter set forth, 100 times the aggregate
         per share amount of all cash dividends, and 100 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
         $1.00 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 Participating Preferred
         Stock. In the event the Corporation shall at any time after July 8,
         1998 (the "Rights Declaration Date") (i) declare any dividend on Common
         Stock payable in shares of Common Stock, (ii) subdivide the outstanding
         Common Stock, or (iii) combine 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 Participating Preferred Stock were
         entitled immediately prior to such event under clause (b) of the
         preceding sentence shall be adjusted by multiplying such amount by a
         fraction the numerator of which is the number of shares of Common Stock
         outstanding immediately after such event and the denominator of which
         is the number of shares of Common Stock that were outstanding
         immediately prior to such event.

                  (B) The Corporation shall declare a dividend or distribution
         on the Series A Participating Preferred Stock as provided in paragraph
         (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 shall
         have been declared on the Common Stock during the period between any
         Quarterly Dividend Payment Date and the next subsequent Quarterly
         Dividend Payment Date, a dividend of $.05 per share on the Series A
         Participating Preferred Stock shall nevertheless be payable on such
         subsequent Quarterly Dividend Payment Date.

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






                                      A-2



<PAGE>   42


         declared thereon, which record date shall be no more than 30 days prior
         to the date fixed for the payment thereof.

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

                (A) Subject to the provision for adjustment hereinafter set
         forth, each share of Series A Participating Preferred Stock shall
         entitle the holder thereof to 100 votes on all matters submitted to a
         vote of the stockholders of the Corporation. In the event the
         Corporation shall at any time after the Rights Declaration Date (i)
         declare any dividend on Common Stock payable in shares of Common Stock,
         (ii) subdivide the outstanding Common Stock, or (iii) combine 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 Participating Preferred Stock were entitled immediately prior
         to such event shall be adjusted by multiplying such number by a
         fraction the numerator of which is the number of shares of Common Stock
         outstanding immediately after such event and the denominator of which
         is the number of shares of Common Stock that were outstanding
         immediately prior to such event.

                (B) Except as otherwise provided herein or by law, the holders
         of shares of Series A Participating Preferred Stock and the holders of
         shares of Common Stock shall vote together as one class on all matters
         submitted to a vote of stockholders of the Corporation.

                (C) If at the time of any annual meeting of stockholders for the
         election of directors, the equivalent of six quarterly dividends
         (whether or not consecutive) payable on any share or shares of Series A
         Participating Preferred Stock are in default, the number of directors
         constituting the Board of Directors of the Corporation shall be
         increased by two. In addition to voting together with the holders of
         Common Stock for the election of other directors of the Corporation,
         the holders of record of the Series A Participating Preferred Stock,
         voting separately as a class to the exclusion of the holders of Common
         Stock, shall be entitled at said meeting of stockholders (and at each
         subsequent annual meeting of stockholders), unless all dividends in
         arrears have been paid or declared and set apart for payment prior
         thereto, to vote for the election of two directors of the Corporation.
         Until the default in payments of all dividends which permitted the
         election of said directors shall cease to exist any director who shall
         have been so elected pursuant to the next preceding sentence may be
         removed at any time, either with or without cause, only by the
         affirmative vote of the holders of the shares at the time entitled to
         cast a majority of the votes entitled to be cast, for the election of
         any such director at a special meeting of such holders called for that
         purpose, and any vacancy thereby created may be filled by the vote of
         such holders. If and when such default shall cease to exist, the
         holders of the Series A Participating Preferred Stock shall be divested
         of the foregoing special voting rights, subject to revesting in the
         event of each and every subsequent like default in payments of
         dividends. Upon the termination of the foregoing special voting rights,
         the terms of office of all persons who may have been elected directors
         pursuant to 







                                      A-3


<PAGE>   43



         said special voting rights shall forthwith terminate, and the number of
         directors constituting the Board of Directors shall be reduced by two.
         The voting rights granted by this Section 3(C) shall be in addition to
         any other voting rights granted to the holders of the Series A
         Participating Preferred Stock in this Section 3.

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

         Section 4  Certain Restrictions.

                (A) Whenever quarterly dividends or other dividends or
         distributions payable on the Series A 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 Participating Preferred Stock outstanding shall have
         been paid in full, the Corporation shall not

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

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









                                      A-4

<PAGE>   44


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

         Section 5. Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.

         Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Participating Preferred Stock unless, prior thereto, the holders of shares of
Series A Participating Preferred Stock shall have received $100 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders
of shares of Series A Participating Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (2) to the holders of shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Participating Preferred Stock,
except distributions made ratably on the Series A Participating Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on the Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each such
case the aggregate amount to which holders of shares of Series A Participating
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

         Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set. forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the 








                                      A-5


<PAGE>   45


Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine 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 Participating Preferred Stock shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

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

         Section 9.  Ranking. The Series A Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.

         Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
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 Participating Preferred Stock, voting separately as a class.

         Section 11. Fractional Shares. Series A Participating Preferred Stock
may be issued in fractions of a share which shall 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 Participating Preferred Stock.

         IN WITNESS WHEREOF, Elcor Corporation has caused its corporate seal to
be hereunto affixed and this certificate to be signed by its Chairman of the
Board, Chief Executive Officer and President and the same to be attested by its
Secretary, this _____ day of ______________, 1998.


                                        ----------------------------------------
                                        Name:   Harold K. Work
                                        Title:  Chairman of the Board, Chief
                                                Executive Officer and President

[Corporate Seal]


Attest:



--------------------------------------
Name:  David G. Sisler
Title: Secretary








                                      A-6

<PAGE>   46



                                                                       EXHIBIT B


                          [Form of Rights Certificate]


Certificate No. R-                                               ________ Rights


                  NOT EXERCISABLE AFTER JULY 8, 2008 OR EARLIER IF REDEEMED BY
                  THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
                  OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
                  FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
                  RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
                  IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
                  OF SUCH RIGHTS SHALL BECOME NULL AND VOID. [THE RIGHTS
                  REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
                  BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
                  PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
                  SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
                  THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
                  BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
                  7(e) OF SUCH AGREEMENT.]*


                               Rights Certificate
                                ELCOR CORPORATION


         This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of July 7, 1998, and as may from
time to time be amended (the "Rights Agreement"), between Elcor Corporation, a
Delaware corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C. (the "Rights Agent"), to purchase from the Company at any time prior to
5:00 P.M. (Dallas, Texas time) on July 8, 2008 (the "Final Expiration Date"),
unless earlier redeemed or exchanged by the Company, at the office or offices of
the Rights Agent designated for such purpose, or its successors as Rights Agent,
one one-hundredth of a fully paid, non-assessable share of Series A
Participating Preferred Stock (the "Preferred Stock") of the Company, at a
purchase price of $165.00 per one one-hundredth of a share (the "Purchase
Price"), upon 




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




                                      B-1



<PAGE>   47



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 which 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 July 8, 1998,
based on the Preferred Stock as constituted at such date and may be adjusted in
accordance with the provisions of the Rights Agreement.

         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 Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, 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 Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.

         As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the 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 herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office at the
Rights Agent and are also available upon written request to the Company.

         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 evidencing Rights entitling the holder to purchase a
like an aggregate number of one one-hundredths of a share of Preferred Stock as
the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. Subject to Section 7(e)
of the Rights Agreement, the Rights evidenced by this Rights Certificate may be
transferred, in whole or in part, upon surrender of this Rights Certificate at
the principal office or offices of the Rights Agent designated for such purpose,
with the Form of Assignment and related Certificate duly executed. If the Rights
evidenced by this Rights Certificate shall be transferred or exercised in part,
the holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not
transferred or exercised.





                                      B-2



<PAGE>   48


         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to such time as any Person becomes an
Acquiring Person.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be exchanged by the Company at its option in whole or in
part for shares of the Company's Common Stock, par value $1.00 per share, at any
time following the occurrence of a Section 11(a)(ii) Event and prior to the time
any Person becomes the Beneficial Owner of 50% or more of the outstanding Common
Stock.

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

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

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

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

Dated as of                     ,          .
            --------------------  ---------


ATTEST:                                      ELCOR CORPORATION


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








                                      B-3


<PAGE>   49




Countersigned:




CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.


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












                                      B-4


<PAGE>   50




                  [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:


Signatures must be guaranteed by a member firm of a registered national stock
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States.










                                      B-5


<PAGE>   51




                                   Certificate


         The undersigned hereby certifies by checking the appropriate boxes
that:

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

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


Dated:                    ,      
      --------------------  -----


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

Signature Guaranteed:


Signatures must be guaranteed by a member firm of a registered national stock
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States.


                                     NOTICE


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











                                      B-6