RIGHTS  AGREEMENT  dated  as of May 16,
                           1996,   between   ASHLAND   INC.,   a   Kentucky
                           corporation  (the  "Company"),  and HARRIS TRUST
                           AND   SAVINGS   BANK,   an   Illinois    banking
                           corporation,   as  Rights   Agent  (the  "Rights
                           Agent").

          The Board of Directors of the Company has authorized and declared
a dividend of one Right (as  hereinafter  defined) for each share of Common
Stock,  par value $1.00 per share,  of the  Company  (the  "Common  Stock")
outstanding  at the Close of Business (as  hereinafter  defined) on May 16,
1996 (the "Record Date"),  and has authorized the issuance of one Right (as
such number may  hereafter be adjusted  pursuant to the  provisions of this
Rights  Agreement)  with  respect to each share of Common  Stock that shall
become  outstanding  between  the  Record  Date  and  the  earliest  of the
Distribution  Date,  the Redemption  Date or the  Expiration  Date (as such
terms are  hereinafter  defined);  PROVIDED,  HOWEVER,  that  Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date
or the  Expiration  Date in accordance  with the  provisions of Section 23.
Each Right shall initially  represent the right to purchase  one-thousandth
(1/1,000) of a share of Series A Participating  Cumulative Preferred Stock,
without par value,  of the Company  (the  "Preferred  Shares"),  having the
powers,  rights and  preferences  set forth in the  Articles  of  Amendment
attached as Exhibit A.

          Accordingly,  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  Rights
Agreement, the following terms have the meanings indicated:

          "ACQUIRING  PERSON" shall mean any Person who or which,  alone or
together with all Affiliates  and  Associates of such Person,  shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding but
shall not include (a) the  Company,  any  Subsidiary  of the  Company,  any
employee benefit plan of the Company or of any of its Subsidiaries,  or any
Person  holding  Common  Shares  for or  pursuant  to the terms of any such
employee  benefit  plan or

<PAGE>
(b) any such Person who has become and is such a  Beneficial  Owner  solely
because  (i)  of  a  change  in  the  aggregate  number  of  Common  Shares
outstanding  since the last date on which such Person  acquired  Beneficial
Ownership  of any  Common  Shares  or  (ii)  it  acquired  such  Beneficial
Ownership  in the good faith  belief  that such  acquisition  would not (A)
cause such  Beneficial  Ownership  to exceed 15% of the Common  Shares then
outstanding  and  such  Person  relied  in  good  faith  in  computing  the
percentage  of its  Beneficial  Ownership  on  publicly  filed  reports  or
documents  of the  Company  which  are  inaccurate  or  out-of-date  or (B)
otherwise  cause a  Distribution  Date or the  adjustment  provided  for in
Section  11(a)  to  occur.  Notwithstanding  clause  (b)(ii)  of the  prior
sentence,  if any Person that is not an Acquiring Person due to such clause
(b)(ii) does not reduce its  percentage of  Beneficial  Ownership of Common
Shares to 15% or less by the Close of  Business on the fifth  Business  Day
after notice from the Company (the date of notice being the first day) that
such  Person's  Beneficial  Ownership of Common Shares so exceeds 15%, such
Person  shall,  at the end of such  five  Business  Day  period,  become an
Acquiring  Person (and such clause  (b)(ii)  shall no longer  apply to such
Person).  For purposes of this definition,  the  determination  whether any
Person acted in "good faith" shall be conclusively  determined by the Board
of Directors of the Company.

          "AFFILIATE"  and  "ASSOCIATE",  when used with  reference  to any
Person,  shall have the respective  meanings ascribed to such terms in Rule
12b-2 of the General  Rules and  Regulations  under the Exchange Act, as in
effect on the date of this Rights Agreement.

          A Person shall be deemed the "BENEFICIAL  OWNER" of, and shall be
deemed to  "BENEFICIALLY  OWN",  and  shall be  deemed to have  "BENEFICIAL
OWNERSHIP" of, any securities:

               (a) which such Person or any of such Person's  Affiliates or
          Associates is deemed to "beneficially  own" within the meaning of
          Rule  13d-3  of the  General  Rules  and  Regulations  under  the
          Exchange Act, as in effect on the date of this Rights Agreement;

               (b) which  such  Person  or any of such Person's  Affiliates
         or Associates has (i) the right to acquire  (whether such right is
         exercisable  immediately  or  only  after  the  passage  of  time)
         pursuant to any agreement,  arrangement or understanding  (written
         or oral),  or upon the  exercise of  conversion  rights,  exchange
         rights

<PAGE>
          (other than the Company's  rights under  Section  11(b)(1)),
          rights  (other  than  the  Rights),   warrants  or  options,   or
          otherwise;  PROVIDED,  HOWEVER, that a Person shall not be deemed
          the  Beneficial  Owner of,  or to  beneficially  own,  or to have
          Beneficial Ownership of, securities tendered pursuant to a tender
          or  exchange  offer made by or on behalf of such Person or any of
          such  Person's  Affiliates  or  Associates  until  such  tendered
          securities are accepted for purchase or exchange  thereunder,  or
          (ii) the right to vote pursuant to any agreement,  arrangement or
          understanding (written or oral); PROVIDED, HOWEVER, that a Person
          shall not be deemed the Beneficial  Owner of, or to  beneficially
          own, or to have Beneficial  Ownership of, any security if (A) the
          agreement, arrangement or understanding (written or oral) to vote
          such  security  arises  solely from a revocable  proxy or consent
          given to such  Person in  response  to a public  proxy or consent
          solicitation  made  pursuant  to,  and in  accordance  with,  the
          applicable  rules and regulations  under the Exchange Act and (B)
          the  beneficial  ownership  of such  security  is not  also  then
          reportable  on  Schedule  13D  under  the  Exchange  Act  (or any
          comparable or successor report); or

                  (c) which are beneficially owned, directly or indirectly,
         by any other Person with which such Person or any of such Person's
         Affiliates  or  Associates  has  any  agreement,   arrangement  or
         understanding  (written  or oral) for the  purpose  of  acquiring,
         holding,  voting (except  pursuant to a revocable proxy or consent
         as described in clause (b)(ii) of this definition) or disposing of
         any securities of the Company.

Notwithstanding  the foregoing,  nothing contained in this definition shall
cause  a  Person  ordinarily  engaged  in  business  as an  underwriter  of
securities to be the "Beneficial Owner" of, or to "beneficially own", or to
have "Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment  underwriting  pursuant to an  underwriting  agreement  with the
Company.

          "ARTICLES OF  AMENDMENT"  shall mean the Articles of Amendment of
the Second Restated  Articles of Incorporation  of the Company  designating
and establishing the Series A Participating  Cumulative Preferred Stock and
setting  forth the  preferences,  limitations  and relative  rights of such

<PAGE>
series of Preferred  Stock of the  Company,  a copy of which is attached as
Exhibit A.

          "BOOK VALUE", when used with reference to Common Shares issued by
any Person,  shall mean the amount of equity of such Person  applicable  to
each Common Share,  determined (a) in accordance  with  generally  accepted
accounting  principles in effect on the date as of which such Book Value is
to be  determined,  (b)  using  all  the  consolidated  assets  and all the
consolidated  liabilities  of such Person on the date as of which such Book
Value is to be  determined,  except that no value shall be included in such
assets for goodwill  arising from  consummation of a business  combination,
and (c) after giving effect to (i) the exercise of all rights,  options and
warrants to purchase such Common  Shares  (other than the Rights),  and the
conversion of all securities  convertible  into such Common  Shares,  at an
exercise or conversion  price,  per Common  Share,  which is less than such
Book Value before giving effect to such exercise or conversion  (whether or
not  exercisability  or  convertibility is conditioned upon occurrence of a
future event),  (ii) all dividends and other  distributions  on the capital
stock of such Person declared prior to the date as of which such Book Value
is to be determined  and to be paid or made after such date,  and (iii) any
other  agreement,  arrangement  or  understanding  (written  or  oral),  or
transaction  or other  action prior to the date as of which such Book Value
is to be determined which would have the effect of thereafter reducing such
Book Value.

          "BUSINESS  COMBINATION"  shall  have  the  meaning  set  forth in
Section 11(c)(i).

          "BUSINESS  DAY"  shall  mean  each  Monday,  Tuesday,  Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
Borough of Manhattan,  the City of New York, are authorized or obligated by
law or executive order to close.

          "CLOSE OF BUSINESS"  on any given date shall mean 5:00 p.m.,  New
York City time, on such date; PROVIDED,  HOWEVER, that, if such date is not
a Business  Day,  "Close of Business"  shall mean 5:00 p.m.,  New York City
time, on the next succeeding Business Day.

          "COMMON SHARES", when used with reference to the Company prior to
a  Business  Combination,  shall  mean the  shares of  Common  Stock of the
Company or any other shares of
<PAGE>
capital  stock  of the  Company  into  which  the  Common  Stock  shall  be
reclassified or changed.  "Common Shares",  when used with reference to any
Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of
any class or series,  or units of equity  interests in such Person (if such
Person is not a corporation) of any class or series,  the terms of which do
not limit (as a maximum  amount and not merely in  proportional  terms) the
amount of dividends  or income  payable or  distributable  on such class or
series or the amount of assets  distributable  on such class or series upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person  and do not  provide  that  such  class  or  series  is  subject  to
redemption at the option of such Person,  or any shares of capital stock or
units of equity interests into which the foregoing shall be reclassified or
changed;  PROVIDED,  HOWEVER, that, if at any time there shall be more than
one such  class or series of  capital  stock or  equity  interests  of such
Person,  "Common  Shares" of such Person shall include all such classes and
series  substantially  in the  proportion  of the total number of shares or
other units of each such class or series outstanding at such time.

          "COMMON   STOCK"   shall  have  the  meaning  set  forth  in  the
introductory paragraph of this Rights Agreement.

          "COMPANY" shall have the meaning set forth in the heading of this
Rights  Agreement;   PROVIDED,   HOWEVER,  that  if  there  is  a  Business
Combination,  "Company"  shall  have  the  meaning  set  forth  in  Section
11(c)(iii).

          The term  "CONTROL"  with  respect to any  Person  shall mean the
power to direct the  management  and policies of such  Person,  directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant
to or  in  connection  with  an  agreement,  arrangement  or  understanding
(written  or oral)  with one or more  other  Persons  by or  through  stock
ownership,   agency  or  otherwise;   and  the  terms   "controlling"   and
"controlled" shall have meanings correlative to the foregoing.

          "DISTRIBUTION  DATE"  shall have the meaning set forth in Section
3(b).
<PAGE>

          "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
in effect on the date in question, unless otherwise specifically provided.

          "EXCHANGE  CONSIDERATION"  shall  have the  meaning  set forth in
Section 11(b)(i).

          "EXPIRATION  DATE"  shall have the  meaning  set forth in Section
7(a).

          "MAJOR  PART",  when used  with  reference  to the  assets of the
Company and its Subsidiaries as of any date, shall mean assets (a) having a
fair market value aggregating 50% or more of the total fair market value of
all the assets of the Company and its Subsidiaries (taken as a whole) as of
the date in  question,  (b)  accounting  for 50% or more of the total value
(net of depreciation and amortization) of all the assets of the Company and
its Subsidiaries  (taken as a whole) as would be shown on a consolidated or
combined  balance sheet of the Company and its  Subsidiaries as of the date
in question,  prepared in accordance  with  generally  accepted  accounting
principles  then in effect,  or (c) accounting for 50% or more of the total
amount of earnings before interest, taxes, depreciation and amortization or
of the revenues of the Company and its  Subsidiaries  (taken as a whole) as
would be shown on, or derived from, a consolidated or combined statement of
income or operations of the Company and its  Subsidiaries for the period of
12 months ending on the last day of the Company's monthly accounting period
next preceding the date in question,  prepared in accordance with generally
accepted accounting principles then in effect.

          "MARKET VALUE",  when used with reference to Common Shares on any
date,  shall be deemed to be the average of the daily closing  prices,  per
share,  of such Common Shares for the period which is the shorter of (a) 30
consecutive  Trading Days immediately  prior to the date in question or (b)
the  number of  consecutive  Trading  Days  beginning  on the  Trading  Day
immediately  after the date of the first public  announcement  of the event
requiring a determination of the Market Value and ending on the Trading Day
immediately  prior to the record  date of such  event;  PROVIDED,  HOWEVER,
that,  in the event that the Market  Value of such  Common  Shares is to be
determined in whole or in part during a period  following the  announcement
by the issuer of such Common Shares of any action of the type  described in
Section  12(a) that would require an adjustment  thereunder,  then,  and in

<PAGE>
each  such  case,   the  Market  Value  of  such  Common  Shares  shall  be
appropriately  adjusted  to reflect the effect of such action on the market
price of such Common  Shares.  The closing price for each Trading Day shall
be the closing  price  quoted on the  principal  United  States  securities
exchange registered under the Exchange Act (or any recognized foreign stock
exchange) on which such  securities are listed,  or, if such securities are
not listed on any such  exchange,  the average of the closing bid and asked
quotations  with  respect  to a share of such  securities  on any  National
Association of Securities  Dealers,  Inc.  quotations system, or if no such
quotations are  available,  the average of the closing bid and asked prices
as  furnished  by a  professional  market  maker  making a  market  in such
securities  selected by the Board of Directors  of the  Company.  If on any
such Trading Day no market maker is making a market in such securities, the
closing price of such  securities on such Trading Day shall be deemed to be
the fair value of such  securities 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,  the holders of Rights and all other  Persons);  PROVIDED,  HOWEVER,
that for the  purpose of  determining  the closing  price of the  Preferred
Shares for any Trading  Day on which there is no such market  maker for the
Preferred  Shares the closing  price on such Trading Day shall be deemed to
be the Formula  Number (as defined in the Articles of Amendment)  times the
closing price of the Common Shares of the Company on such Trading Day.

          "PERSON"  shall  mean an  individual,  corporation,  partnership,
limited   liability   company,   joint   venture,    association,    trust,
unincorporated organization or other entity.

          "PREFERRED  SHARES"  shall  have  the  meaning  set  forth in the
introductory  paragraph  of this Rights  Agreement.  Any  reference in this
Rights  Agreement  to  Preferred  Shares  shall be  deemed to  include  any
authorized  fraction of a  Preferred  Share,  unless the context  otherwise
requires.

          "PRINCIPAL  PARTY" shall mean the Surviving  Person in a Business
Combination;  PROVIDED, HOWEVER, that, if such Surviving Person is a direct
or indirect  Subsidiary of any other Person,  "Principal  Party" shall mean
the Person which is the ultimate parent of such Surviving  Person and which
is

<PAGE>
not itself a Subsidiary of another Person. In the event ultimate control
of such  Surviving  Person  is shared  by two or more  Persons,  "Principal
Party" shall mean that Person that is immediately controlled by such two or
more Persons.

          "PURCHASE  PRICE" with respect to each Right shall mean $140,  as
such  amount may from time to time be  adjusted  as  provided  herein.  All
references herein to the Purchase Price shall mean the Purchase Price as in
effect at the time in question.

          "RECORD   DATE"   shall  have  the   meaning  set  forth  in  the
introductory paragraph of this Rights Agreement.

          "REDEMPTION  DATE"  shall have the  meaning  set forth in Section
24(a).

          "REDEMPTION PRICE" with respect to each Right shall mean $.01, as
such amount may from time to time be adjusted in  accordance  with  Section
12. All references herein to the Redemption Price shall mean the Redemption
Price as in effect at the time in question.

          "REGISTERED COMMON SHARES" shall mean Common Shares which are, as
of  the  date  of  consummation  of  a  Business   Combination,   and  have
continuously  been  for the 12  months  immediately  preceding  such  date,
registered under Section 12 of the Exchange Act.

          "RIGHT  CERTIFICATE" shall mean a certificate  evidencing a Right
or Rights in substantially the form attached as Exhibit B.

          "RIGHTS" shall mean the rights to purchase  Preferred  Shares (or
other securities) as provided in this Rights Agreement.

          "SECURITIES  ACT" shall mean the  Securities  Act of 1933,  as in
effect on the date in question, unless otherwise specifically provided.

          "SUBSIDIARY"  shall  mean a Person,  at least a  majority  of the
total   outstanding   voting   power   (being  the  power  under   ordinary
circumstances  (and not merely upon the happening of a contingency) to vote
in  the  election  of  directors  of  such  Person  (if  such  Person  is a
corporation) or to participate in the management and control of such Person
(if such  Person  is not a  corporation))  of which is

<PAGE>
owned,  directly or  indirectly,  by another Person or by one or more other
Subsidiaries  of such other  Person or by such other Person and one or more
other Subsidiaries of such other Person.

          "SURVIVING  PERSON"  shall  mean  (a)  the  Person  which  is the
continuing  or  surviving  Person  in a  consolidation  or  merger or share
exchange specified in Section  11(c)(i)(A) or 11(c)(i)(B) or (b) the Person
to which the Major Part of the assets of the Company  and its  Subsidiaries
is sold, leased,  exchanged or otherwise  transferred or disposed of in one
or more transactions specified in Section 11(c)(i)(C);  PROVIDED,  HOWEVER,
that,  if the Major Part of the assets of the Company and its  Subsidiaries
is sold, leased,  exchanged or otherwise  transferred or disposed of in one
or more  transactions  specified  in Section  11(c)(i)(C)  to more than one
Person,  the  "Surviving  Person" in such case  shall mean the Person  that
acquired  assets of the Company and/or its  Subsidiaries  with the greatest
fair market value in such transaction or transactions.

          "TRADING  DAY" shall mean a day on which the  principal  national
securities exchange (or principal recognized foreign stock exchange, as the
case may be) on which any  securities  or  Rights,  as the case may be, are
listed or admitted to trading is open for the  transaction  of business or,
if the  securities  or Rights in  question  are not listed or  admitted  to
trading on any national  securities  exchange (or recognized  foreign stock
exchange, as the case may be), a Business Day.

          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 one or more
co-Rights  Agents as it may deem  necessary or desirable upon notice to the
Rights  Agent  (the  term  "Rights  Agent"  being  used  herein  to  refer,
collectively, to the Rights Agent together with any such co-Rights Agents).
In the  event  the  Company  appoints  one or more  co-Rights  Agents,  the
respective duties of the Rights Agent and any co-Rights Agents shall be set
forth in an amendment to this Rights Agreement.

          SECTION 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES.  (a) One Right
shall be associated with each Common Share  outstanding on the Record Date,
each  additional

<PAGE>
Common Share that shall become outstanding  between the Record Date and the
earliest of the  Distribution  Date, the Redemption  Date or the Expiration
Date and each  additional  Common  Share with which Rights are issued after
the  Distribution  Date but prior to the earlier of the Redemption  Date or
the Expiration Date as provided in Section 23; PROVIDED,  HOWEVER, that, if
the number of  outstanding  Rights are  combined  into a smaller  number of
outstanding  Rights pursuant to Section 12(a),  the appropriate  fractional
Right  determined  pursuant to such Section shall  thereafter be associated
with each such Common Share.

          (b) Until the earlier of (i) such time as the Company learns that
a Person has become an  Acquiring  Person or (ii) the Close of  Business on
such date,  if any, as may be  designated  by the Board of Directors of the
Company  following the  commencement  of, or first public  disclosure of an
intent to commence,  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 of its  Subsidiaries,  or any Person  holding  Common
Shares for or pursuant to the terms of any such employee  benefit plan) for
outstanding  Common Shares, if upon consummation of such tender or exchange
offer such  Person  could be the  Beneficial  Owner of more than 15% of the
outstanding  Common  Shares  (the Close of  Business on the earlier of such
dates being the "Distribution  Date"),  (x) the Rights will be evidenced by
the   certificates  or  other  evidences  of  ownership  of  Common  Shares
registered  in the names of the holders  thereof and not by separate  Right
Certificates  and (y) the  Rights,  including  the right to  receive  Right
Certificates,  will be transferable only in connection with the transfer of
Common Shares.  As soon as  practicable  after the  Distribution  Date, the
Rights  Agent will send,  by  first-class,  postage-prepaid  mail,  to each
record holder of Common Shares as of the Distribution  Date, at the address
of such holder  shown on the records of the  Company,  a Right  Certificate
evidencing  one whole  Right for each  Common  Share (or for the  number of
Common  Shares with which one whole Right is then  associated if the number
of Rights per Common Share held by such record  holder has been adjusted in
accordance  with the  proviso  in  Section  3(a)).  If the number of Rights
associated  with each Common Share has been adjusted in accordance with the
proviso  in  Section  3(a),  at the  time  of  distribution  of  the  Right
Certificates  the Company may make any necessary and  appropriate  rounding
adjustments so that Right  Certificates  representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional  Right in


<PAGE>
accordance with Section 15(a). As of and after the  Distribution  Date, the
Rights will be evidenced solely by such Right Certificates.

          (c) Until the earliest of the  Distribution  Date, the Redemption
Date or the Expiration Date, the Rights associated with Common Shares shall
be evidenced by the evidence of ownership of such Common Shares alone,  the
registered  holders  of the  Common  Shares  shall  also be the  registered
holders of the  associated  Rights,  and the transfer of any Common  Shares
shall also  constitute  the  transfer  of the Rights  associated  with such
Common Shares.

          (d)  Certificates  issued for Common Shares after the Record Date
(including,  without  limitation,  upon transfer or exchange of outstanding
Common  Shares),  but prior to the earliest of the  Distribution  Date, the
Redemption Date or the Expiration  Date,  shall have printed on, written on
or otherwise affixed to or attached to them the following legend:

                    This certificate also evidences and entitles the holder
               hereof to certain Rights as set forth in a Rights  Agreement
               dated as of May 16, 1996,  as it may be amended from time to
               time (the "Rights  Agreement"),  between  Ashland Inc.  (the
               "Company")  and Harris  Trust and  Savings  Bank,  as Rights
               Agent (the  "Rights  Agent"),  the terms of which are hereby
               incorporated  herein by reference  and a copy of which is on
               file at the  principal  executive  offices  of the  Company.
               Under  certain  circumstances,  as set  forth in the  Rights
               Agreement,   such  Rights  will  be  evidenced  by  separate
               certificates  and  will  no  longer  be  evidenced  by  this
               certificate.  The  Rights  Agent  will mail to the holder of
               this  certificate  a copy of the  Rights  Agreement  without
               charge after receipt of a written request  therefor.  Rights
               beneficially  owned by Acquiring Persons or their Affiliates
               or  Associates  (as such  terms are  defined  in the  Rights
               Agreement) and by any  subsequent  holder of such Rights are
               null and void and nontransferable.

          Notwithstanding  this  paragraph  (d),  neither the omission of a
legend nor the  existence of a legend  which  refers to a rights  agreement
other than the Rights Agreement shall affect the enforceability of any part
of this Rights Agreement or the rights of any holder of Rights.

<PAGE>

          SECTION  4. FORM OF RIGHT  CERTIFICATES.  The Right  Certificates
(and the form of election to purchase and form of  assignment to be printed
on the reverse side thereof) shall be in  substantially  the form set forth
as Exhibit B 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
Rights  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 Sections 7,
11 and 23, the Right  Certificates,  whenever issued,  shall be dated as of
the Distribution  Date, and on their face shall entitle the holders thereof
to purchase  such number of Preferred  Shares as shall be set forth therein
for the Purchase Price set forth therein,  subject to adjustment  from time
to time as herein provided.

          SECTION 5. EXECUTION,  COUNTERSIGNATURE AND REGISTRATION. (a) The
Right  Certificates  shall be  executed  on  behalf of the  Company  by the
Chairman of the Board,  the Chief  Executive  Officer,  the President,  the
Chief Operating Officer,  the Chief Financial  Officer,  the Treasurer or a
Vice President  (whether  preceded by any additional title) of the Company,
either  manually or by facsimile  signature,  and have affixed  thereto the
Company's  seal or a  facsimile  thereof  which  shall be  attested  by the
Secretary or an Assistant  Secretary of the Company,  either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights  Agent and shall not be valid or  obligatory  for any purpose
unless so countersigned.  In case any officer of the Company who shall have
signed any of the Right  Certificates  shall cease to be such an officer of
the Company  before  countersignature  by the Rights Agent and issuance and
delivery  by the  Company,  such Right  Certificates  may  nevertheless  be
countersigned  by the Rights Agent and issued and  delivered by the Company
with the same force and  effect as though the person who signed  such Right
Certificates  had not ceased to be such an officer of the Company;  and any
Right Certificate may be signed on behalf of the Company by any person who,
at the  actual  date of  execution  of such Right  Certificate,  shall be a
proper officer of the Company to sign such Right  Certificate,  although at
the date of execution of this Rights Agreement any such person was not such
an officer of the Company.


<PAGE>
          (b) Following the  Distribution  Date, the Rights Agent will keep
or cause to be kept, at its principal  office in Chicago,  Illinois,  books
for registration and transfer of the Right  Certificates  issued hereunder.
Such books shall show the names and addresses of the respective  holders of
the Right Certificates, the number of Rights evidenced by each of the Right
Certificates,  the certificate number of each of the Right Certificates and
the date of each of the Right Certificates.

          SECTION 6. TRANSFER, SPLIT-UP,  COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES;  MUTILATED,  DESTROYED,  LOST OR STOLEN  RIGHT  CERTIFICATES;
UNCERTIFICATED  RIGHTS.  (a) Subject to the provisions of Sections 7(e) and
15, at any time after the  Distribution  Date, and at or prior to the Close
of Business on the earlier of the Redemption  Date or the Expiration  Date,
any Right Certificate or Right  Certificates may be transferred,  split-up,
combined or exchanged for another Right  Certificate or Right  Certificates
representing,  in the  aggregate,  the same  number  of Rights as the Right
Certificate  or  Right  Certificates  surrendered  then  represented.   Any
registered holder desiring to transfer,  split-up,  combine or exchange any
Right  Certificate  shall make such  request in  writing  delivered  to the
Rights  Agent  and  shall   surrender  the  Right   Certificate   or  Right
Certificates  to be  transferred,  split- up,  combined or exchanged at the
principal office of the Rights Agent;  PROVIDED,  HOWEVER, that neither the
Rights  Agent  nor the  Company  shall  be  obligated  to take  any  action
whatsoever   with  respect  to  the  transfer  of  any  Right   Certificate
surrendered  for transfer until the registered  holder shall have completed
and signed the  certification  contained in the form of  assignment  on the
reverse  side of such  Right  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 Sections
7(e) and 15, countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company  may  require  payment  of a sum  sufficient  to  cover  any tax or
governmental  charge that may be imposed in  connection  with any transfer,
split-up, combination or exchange of Right Certificates.

          (b) Upon  receipt by the Company or the Rights  Agent of evidence
reasonably  satisfactory  to  them  of  the  loss,  theft,  destruction  or
mutilation  of a valid Right

<PAGE>
Certificate,  and, in case of loss,  theft or destruction,  of indemnity or
security  reasonably  satisfactory to them, and, at the Company's  request,
reimbursement  to the  Company  and  the  Rights  Agent  of all  reasonable
expenses  incidental  thereto,  and upon  surrender to the Rights Agent and
cancelation of the Right Certificate if mutilated,  the Company will make a
new Right  Certificate of like tenor and deliver such new Right Certificate
to the Rights Agent for  countersignature  and  delivery to the  registered
owner in lieu of the  Right  Certificate  so  lost,  stolen,  destroyed  or
mutilated.

          (c)  Notwithstanding  any other provision hereof, the Company and
the  Rights   Agent  may  amend  this  Rights   Agreement  to  provide  for
uncertificated  Rights in  addition to or in place of Rights  evidenced  by
Right Certificates.

          SECTION 7.  EXERCISE OF RIGHTS;  EXPIRATION  DATE OF RIGHTS.  (a)
Subject to Section 7(e) and except as otherwise  provided herein (including
Section 11), each Right shall entitle the registered  holder thereof,  upon
exercise thereof as provided herein, to purchase for the Purchase Price, at
any time after the Distribution  Date and at or prior to the earlier of (i)
the Close of  Business on the 10th  anniversary  of the date of this Rights
Agreement (the Close of Business on such date being the "Expiration  Date")
or (ii) the Redemption Date, one-thousandth (1/1,000) of a Preferred Share,
subject to adjustment from time to time as provided in Sections 11 and 12.

          (b) The registered  holder of any Right  Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the  Distribution  Date, upon surrender of the
Right  Certificate,  with the form of  election  to purchase on the reverse
side thereof duly executed,  to the Rights Agent at the principal office of
the  Rights  Agent in  Chicago,  Illinois,  together  with  payment  of the
Purchase Price for each one-thousandth (1/1,000) of a Preferred Share as to
which the  Rights  are  exercised,  at or prior to the  earlier  of (i) the
Expiration Date or (ii) the Redemption Date.

          (c) Upon receipt of a Right Certificate  representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the  Purchase  Price for the  Preferred  Shares to be  purchased
together  with an amount equal to any  applicable  transfer  tax, in lawful
money of the United  States of America, in
<PAGE>
cash  or  by  certified  check or  money order  payable to the order of the
Company,   the  Rights  Agent  shall  thereupon  (i)  either  (A)  promptly
requisition  from any  transfer  agent  of the  Preferred  Shares  (or make
available,  if the Rights Agent is the transfer agent) certificates for the
number  of  Preferred  Shares  to  be  purchased  and  the  Company  hereby
irrevocably  authorizes its transfer agent to comply with all such requests
or (B) if the Company  shall have elected to deposit the  Preferred  Shares
with  a  depositary   agent  under  a  depositary   arrangement,   promptly
requisition from the depositary agent depositary receipts  representing the
number of thousandths  (1/1,000s) of a Preferred  Share to be purchased (in
which case  certificates for the Preferred Shares to be 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 all
such requests, (ii) when appropriate, promptly requisition from the Company
the amount of cash to be paid in lieu of issuance of  fractional  shares in
accordance   with  Section  15,  (iii)   promptly  after  receipt  of  such
certificates or depositary  receipts,  cause the same to be delivered to or
upon  the  order  of the  registered  holder  of  such  Right  Certificate,
registered  in such name or names as may be  designated  by such holder and
(iv) when appropriate,  after receipt promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate.

          (d) In case the registered  holder of any Right Certificate shall
exercise  fewer  than  all  the  Rights  evidenced  thereby,  a  new  Right
Certificate   evidencing   Rights   equivalent  to  the  Rights   remaining
unexercised shall be countersigned by the Rights Agent and delivered to the
registered  holder  of such  Right  Certificate  or to his duly  authorized
assigns, subject to the provisions of Section 15.

          (e)  Notwithstanding  anything  in this Rights  Agreement  to the
contrary,  any  Rights  that  are  at any  time  beneficially  owned  by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person shall
be null and void and  nontransferable,  and any  holder  of any such  Right
(including  any purported  transferee or subsequent  holder) shall not have
any right to exercise or transfer any such Right.

          (f)  Notwithstanding  anything  in this Rights  Agreement  to the
contrary,  neither the Rights  Agent nor the Company  shall be obligated to
undertake  any  action  with  respect to a  registered  holder of any Right
Certificates
<PAGE>
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 Right  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.

          (g) The Company may temporarily suspend, for a period of time not
to exceed 90 calendar days after the Distribution  Date, the exercisability
of the Rights in order to prepare and file a registration  statement  under
the Securities  Act, on an appropriate  form, with respect to the Preferred
Shares purchasable upon exercise of the Rights and permit such registration
statement to become effective;  PROVIDED,  HOWEVER, that no such suspension
shall remain  effective  after,  and the Rights  shall  without any further
action by the Company or any other Person  become  exercisable  immediately
upon,  the  effectiveness  of such  registration  statement.  Upon any such
suspension,  the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a further public  announcement  at such time as the suspension is no longer
in effect. Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the blue sky or securities laws of such  jurisdiction  shall not have
been  obtained or the exercise of the Rights  shall not be permitted  under
applicable law.

          SECTION 8. CANCELATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right  Certificates  surrendered  or presented for the purpose of exercise,
transfer,   split-up,   combination  or  exchange  shall,   and  any  Right
Certificate  representing  Rights  that  have  become  null  and  void  and
nontransferable  pursuant to Section 7(e)  surrendered or presented for any
purpose shall,  if surrendered or presented to the Company or to any of its
agents,  be delivered to the Rights  Agent for  cancelation  or in canceled
form,  or, if  surrendered  or  presented  to the  Rights  Agent,  shall be
canceled by it, and no Right  Certificates  shall be issued in lieu thereof
except as expressly  permitted by this Rights Agreement.  The Company shall
deliver to the Rights Agent for cancelation and retirement,  and the Rights
Agent  shall so cancel  and  retire,  any Right  Certificate  purchased  or
acquired by the Company.  The Rights Agent shall deliver all
<PAGE>
canceled Right  Certificates  to the Company so that the Company is able to
maintain  such  certificates  for such period of time as may be required by
law, or shall, at the written request of the Company, destroy such canceled
Right  Certificates,  and in such  case  shall  deliver  a  certificate  of
destruction thereof to the Company.

          SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.  (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued  Preferred  Shares,  free from
preemptive  rights or any  right of first  refusal,  a number of  Preferred
Shares  sufficient to permit the exercise pursuant to Section 7 or exchange
pursuant to Section 11 in full of all outstanding Rights.

          (b) In the event that there  shall not be  sufficient  authorized
but unissued  Preferred Shares to permit the exercise or exchange of Rights
in  accordance  with Section 11, the Company  covenants  and agrees that it
will  take all such  action as may be  necessary  to  authorize  additional
Preferred  Shares for  issuance  upon the  exercise  or  exchange of Rights
pursuant to Section 11; PROVIDED, HOWEVER, that if the Company is unable to
cause the authorization of additional  Preferred  Shares,  then the Company
shall,  or in lieu of seeking any such  authorization,  the Company may, to
the extent  necessary and permitted by applicable law and any agreements or
instruments  in  effect  prior  to the  Distribution  Date to which it is a
party,  (i) upon surrender of a Right, pay cash equal to the Purchase Price
in lieu of issuing Preferred Shares and requiring  payment  therefor,  (ii)
upon due  exercise  of a Right and payment of the  Purchase  Price for each
Preferred  Share  as  to  which  such  Right  is  exercised,  issue  equity
securities  having a value equal to the value of the Preferred Shares which
otherwise  would have been  issuable  pursuant to Section  11,  which value
shall be  determined  by a nationally  recognized  investment  banking firm
selected  by the  Board of  Directors  of the  Company  or  (iii)  upon due
exercise of a Right and payment of the  Purchase  Price for each  Preferred
Share as to which such Right is  exercised,  distribute  a  combination  of
Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred  Shares which otherwise
would have been  issuable  pursuant  to Section  11,  which  value shall be
determined by a nationally  recognized  investment banking firm selected by
the Board of  Directors  of the  Company.  To the extent  that any legal or
contractual
<PAGE>
restrictions  (pursuant to agreements or instruments in effect prior to the
Distribution Date to which it is party) prevent the Company from paying the
full amount payable in accordance with the foregoing sentence,  the Company
shall pay to holders of the Rights as to which such payments are being made
all  amounts  which  are not then  restricted  on a pro rata  basis as such
payments become  permissible  under such legal or contractual  restrictions
until such payments have been paid in full.

          (c) The Company  covenants  and agrees that it will take all such
action as may be necessary to ensure that all  Preferred  Shares  delivered
upon exercise or exchange of Rights  shall,  at the time of delivery of the
certificates  for such Preferred Shares (subject to payment of the Purchase
Price),  be duly and  validly  authorized  and  issued  and fully  paid and
nonassessable shares.

          (d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any  national  securities  exchange,
the Company covenants and agrees to use its best efforts to cause, from and
after such time as the  Rights  become  exercisable  or  exchangeable,  all
Preferred Shares reserved for such issuance to be listed on such securities
exchange upon official notice of issuance upon such exercise or exchange.

          (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
Right  Certificates  or of any  Preferred  Shares or Common Shares or other
securities  upon the exercise or exchange of the Rights.  The Company shall
not,  however,  be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than,  or in respect of the issuance or delivery of  certificates  or other
evidences of ownership of the  Preferred  Shares or Common  Shares or other
securities,  as the  case  may  be,  in a name  other  than  that  of,  the
registered  holder of the Right Certificate  evidencing Rights  surrendered
for exercise or exchange or to issue or deliver any  certificates  or other
evidences  of  ownership  of  Preferred  Shares or  Common  Shares or other
securities, as the case may be, upon the exercise or exchange of any Rights
until any such tax shall have been paid (any such tax being  payable by the
holder of such Right  Certificate at the time of surrender) or until it has
been
<PAGE>
established to the Company's satisfaction that no such tax is due.

          SECTION 10.  PREFERRED  SHARES RECORD DATE.  Each Person in whose
name any certificate or other evidence of ownership of Preferred  Shares or
Common  Shares or other  securities is issued upon the exercise or exchange
of Rights  shall for all  purposes  be deemed to have  become the holder of
record of the Preferred Shares or Common Shares or other securities, as the
case may be, represented thereby on, and such certificate or other evidence
of  ownership  shall be dated,  the date upon  which the Right  Certificate
evidencing  such Rights was duly  surrendered  and payment of any  Purchase
Price (and any  applicable  transfer  taxes) was made;  PROVIDED,  HOWEVER,
that,  if the date of such  surrender  and payment is a date upon which the
transfer books of the Company for the Preferred  Shares or Common Shares or
other  securities,  as the case may be, are closed,  such  Person  shall be
deemed to have become the record holder of such Preferred  Shares or Common
Shares or other securities, as the case may be, on, and such certificate or
other  evidence  of  ownership  shall be dated as of,  the next  succeeding
Business Day on which the transfer  books of the Company for the  Preferred
Shares or Common Shares or other securities, as the case may be, are open.

          SECTION 11.  ADJUSTMENTS  IN RIGHTS  AFTER THERE IS AN  ACQUIRING
PERSON;  EXCHANGE OF RIGHTS FOR SHARES;  BUSINESS COMBINATIONS.  (a) Upon a
Person becoming an Acquiring Person, proper provision shall be made so that
each  holder  of a  Right,  except  as  provided  in  Section  7(e),  shall
thereafter have a right to receive,  upon exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number of
thousandths  (1/1,000s)  of a  Preferred  Share as shall  equal the  result
obtained by multiplying the Purchase Price by a fraction,  the numerator of
which is the number of  thousandths  (1/1,000s)  of a  Preferred  Share for
which a Right is then  exercisable  and the  denominator of which is 50% of
the Market Value of the Common Shares on the date on which a Person becomes
an  Acquiring  Person.  As soon as  practicable  after a Person  becomes an
Acquiring  Person  (provided the Company shall not have elected to make the
exchange  permitted by Section  11(b)(i) for all outstanding  Rights),  the
Company covenants and agrees to use its best efforts to:

                  (i) prepare and file a registration  statement  under the
         Securities  Act,  on an  appropriate  form,  with

<PAGE>
         respect  to the Preferred Shares purchasable upon exercise of the
         Rights;

                  (ii) cause such registration statement to become effective
         as soon as practicable after such filing;

                  (iii)  cause  such   registration   statement  to  remain
         effective (with a prospectus at all times meeting the requirements
         of the Securities Act) until the Expiration Date; and

                  (iv) qualify or register the Preferred Shares purchasable
         upon exercise of the Rights under the blue sky or securities  laws
         of such jurisdictions as may be necessary or appropriate.

          (b)(i) The Board of  Directors of the Company may, at its option,
at any  time  after a  Person  becomes  an  Acquiring  Person,  mandatorily
exchange all or part of the then outstanding and exercisable  Rights (which
shall  not  include  Rights  that  shall  have  become  null  and  void and
nontransferable   pursuant  to  the   provisions   of  Section   7(e))  for
consideration per Right consisting of either (x) one-half of the securities
that  would be  issuable  at such  time upon the  exercise  of one Right in
accordance with Section 11(a) or, if applicable,  Section 9(b)(ii) or (iii)
or, (y) if applicable,  the cash consideration specified in Section 9(b)(i)
(the  consideration  issuable per Right  pursuant to this Section  11(b)(i)
being the "Exchange Consideration").  The Board of Directors of the Company
may, at its option,  issue, in substitution  for Preferred  Shares,  Common
Shares in an amount per  Preferred  Share equal to the  Formula  Number (as
defined in the Articles of  Amendment) if there are  sufficient  authorized
but unissued Common Shares. If the Board of Directors of the Company elects
to  exchange  all or part of the  Rights  for  the  Exchange  Consideration
pursuant to this Section 11(b)(i) prior to the physical distribution of the
Rights   Certificates,   the   Corporation   may  distribute  the  Exchange
Consideration in lieu of distributing Right Certificates, in which case for
purposes of this Rights Agreement holders of Rights shall be deemed to have
simultaneously  received and surrendered for exchange Right Certificates on
the date of such distribution.

          (ii) Any action of the Board of Directors of the Company ordering
the  exchange  of  any  Rights  pursuant  to  Section   11(b)(i)  shall  be
irrevocable and, immediately upon the taking of such action and without any
further action and

<PAGE>
without  any  notice,  the right to  exercise  any such Right  pursuant  to
Section 11(a) shall terminate and the only right  thereafter of a holder of
such Right shall be to receive the Exchange  Consideration  in exchange for
each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or  issued,  to  exercise  any such  Right  pursuant  to
Section 11(c)(i). The Company shall promptly give public notice of any such
exchange;  PROVIDED,  HOWEVER,  that the failure to give, or any defect in,
such notice  shall not affect the  validity of such  exchange.  The Company
promptly  shall mail a notice of any such  exchange  to all holders of such
Rights at their last  addresses as they appear upon the  registry  books of
the Rights Agent or, prior to the Distribution  Date, on the registry books
of the transfer agent for the Common Shares.  Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice of exchange will state the method by
which the  exchange of the Rights for the  Exchange  Consideration  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 shall have become
null and void and  nontransferable  pursuant to the  provisions  of Section
7(e)) held by each holder of Rights.

          (c)(i) In the event that, following a Distribution Date, directly
or indirectly,  any transactions specified in the following clause (A), (B)
or (C) of this  Section  11(c)  (each such  transaction  being a  "Business
Combination") shall be consummated:

                  (A) the Company shall  consolidate  with,  merge with and
         into, or enter into a share exchange with any Acquiring  Person or
         any Affiliate or Associate of an Acquiring Person;

                  (B) any Acquiring Person or any Affiliate or Associate of
         an  Acquiring  Person  shall  merge  with and into or enter into a
         share  exchange  with the  Company  and, in  connection  with such
         merger or share  exchange,  all or part of the Common Shares shall
         be changed into or exchanged for capital stock or other securities
         of  the  Company  or of  any  Acquiring  Person  or  Affiliate  or
         Associate of an Acquiring Person or cash or any other property; or
<PAGE>

                  (C) the Company shall sell, lease,  exchange or otherwise
         transfer or dispose of (or one or more of its  Subsidiaries  shall
         sell, lease, exchange or otherwise transfer or dispose of), in one
         or more transactions,  the Major Part of the assets of the Company
         and its Subsidiaries (taken as a whole) to any Acquiring Person
         or any Affiliate or Associate of an Acquiring Person;

then, in each such case, proper provision shall be made so that each holder
of a Right,  except as provided in Section 7(e),  shall thereafter have the
right to  receive,  upon the  exercise  thereof for the  Purchase  Price in
accordance  with  the  terms  of  this  Rights  Agreement,  the  securities
specified below (or, at such holder's option,  the securities  specified in
Section 11(a)):

         (x) if the  Principal  Party  in  such  Business  Combination  has
         Registered Common Shares outstanding,  each Right shall thereafter
         represent the right to receive,  upon the exercise thereof for the
         Purchase  Price  in  accordance  with  the  terms  of this  Rights
         Agreement,  such  number  of  Registered  Common  Shares  of  such
         Principal  Party,  free and clear of all  liens,  encumbrances  or
         other  adverse  claims,  as shall have an  aggregate  Market Value
         equal to the result  obtained by multiplying the Purchase Price by
         two; or

         (y) if the Principal  Party involved in such Business  Combination
         does not have  Registered  Common Shares  outstanding,  each Right
         shall thereafter represent the right to receive, upon the exercise
         thereof for the  Purchase  Price in  accordance  with the terms of
         this Rights Agreement, at the election of the holder of such Right
         at the time of the exercise thereof, any of:

                  (1) such number of Common Shares of the Surviving  Person
         in such Business Combination as shall have an aggregate Book Value
         immediately after giving effect to such Business Combination equal
         to the result obtained by multiplying the Purchase Price by two;

                  (2) such number of Common Shares of the  Principal  Party
         in such Business  Combination  (if the Principal Party is not also
         the Surviving  Person in such Business  Combination) as shall have
         an aggregate  Book Value  immediately  after giving effect to such
         Business  Combination  equal to the result obtained by multiplying
         the Purchase Price by two; or
<PAGE>

                  (3) if the Principal  Party in such Business  Combination
         is an Affiliate of one or more Persons which has Registered Common
         Shares  outstanding,  such number of  Registered  Common Shares of
         whichever of such Affiliates of the Principal Party has Registered
         Common Shares with the greatest aggregate Market Value on the date
         of  consummation  of such  Business  Combination  as shall have an
         aggregate  Market Value on the date of such  Business  Combination
         equal to the result  obtained by multiplying the Purchase Price by
         two.

          (ii) The Company shall not  consummate  any Business  Combination
unless each issuer of Common Shares for which Rights may be  exercised,  as
set forth in this Section 11(c),  shall have sufficient  authorized  Common
Shares that have not been issued or reserved for issuance (and which shall,
when issued upon exercise thereof in accordance with this Rights Agreement,
be validly  issued,  fully paid and  nonassessable  and free of  preemptive
rights, rights of first refusal or any other restrictions or limitations on
the  transfer or  ownership  thereof) to permit the exercise in full of the
Rights in accordance with this Section 11(c) and unless prior thereto:

                  (A) a registration  statement under the Securities Act on
         an  appropriate  form,  with  respect to the Rights and the Common
         Shares of such  issuer  purchasable  upon  exercise of the Rights,
         shall be effective under the Securities Act; and

                  (B) the Company and each such issuer shall have:

                           (1) executed and delivered to the Rights Agent a
                  supplemental  agreement  providing for the  assumption by
                  such issuer of the  obligations set forth in this Section
                  11(c)  (including  the obligation of such issuer to issue
                  Common  Shares upon the exercise of Rights in  accordance
                  with  the  terms  set  forth  in  Sections  11(c)(i)  and
                  11(c)(iii))  and further  providing that such issuer,  at
                  its own expense, will use its best efforts to:

                                    (x)  cause  a  registration   statement
                           under the Securities Act on an appropriate form,
                           with respect to the Rights and the Common Shares
                           of such issuer  purchasable upon exercise of the
                           Rights,  to remain  effective
<PAGE>
                           (with a prospectus  at  all  times  meeting  the
                           requirements  of the Securities Act)  until  the
                           Expiration Date;

                                    (y) qualify or register  the Rights and
                           the  Common  Shares of such  issuer  purchasable
                           upon  exercise of the Rights  under the blue sky
                           or securities laws of such  jurisdictions as may
                           be necessary or appropriate; and

                                    (z)  list  the  Rights  and the  Common
                           Shares of such issuer  purchasable upon exercise
                           of  the  Rights  on  each  national   securities
                           exchange on which the Common  Shares were listed
                           prior  to  the   consummation  of  the  Business
                           Combination  or, if the Common  Shares  were not
                           listed on a national  securities  exchange prior
                           to the consummation of the Business Combination,
                           on a national securities exchange;

                           (2)  furnished  to the  Rights  Agent a  written
                  opinion  of   independent   counsel   stating  that  such
                  supplemental   agreement   is  a   valid,   binding   and
                  enforceable agreement of such issuer; and

                           (3) filed with the Rights Agent a certificate of
                  a nationally  recognized firm of independent  accountants
                  setting  forth the number of Common Shares of such issuer
                  which may be  purchased  upon the  exercise of each Right
                  after the consummation of such Business Combination.

          (iii) After consummation of any Business  Combination and subject
to the  provisions of Section  11(c)(ii),  (A) each issuer of Common Shares
for which Rights may be exercised as set forth in this Section  11(c) shall
be liable for, and shall assume,  by virtue of such  Business  Combination,
all the  obligations  and duties of the  Company  pursuant  to this  Rights
Agreement,  (B) the term "Company"  shall  thereafter be deemed to refer to
such issuer,  (C) each such issuer shall take such steps in connection with
such  consummation as may be necessary to assure that the provisions hereof
(including the provisions of Sections 11(a) and 11(c)) shall  thereafter be
applicable,  as nearly as  reasonably  may be, in  relation  to its  Common
Shares  thereafter  deliverable upon the exercise of the Rights and (D) the
number of Common  Shares of each such
<PAGE>
issuer thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly  equivalent
as  practicable  to the provisions of Sections 11 and 12 and the provisions
of Section 7, 9 and 10 with respect to the Preferred Shares shall apply, as
nearly as reasonably may be, on like terms to any such Common Shares.

          SECTION 12.  CERTAIN  ADJUSTMENTS.  (a) To preserve the actual or
potential  economic  value of the Rights,  if at any time after the date of
this Rights Agreement there shall be any change in the Common Shares or the
Preferred  Shares,  whether  by reason of share  dividends,  share  splits,
recapitalizations,  mergers,  consolidations,  combinations or exchanges of
securities, split-ups, split-offs,  spin-offs,  liquidations, other similar
changes in  capitalization,  any distribution or issuance of cash,  assets,
evidences of indebtedness or  subscription  rights,  options or warrants to
holders of Common  Shares or  Preferred  Shares,  as the case may be (other
than  distribution  of the Rights or regular  quarterly cash  dividends) or
otherwise,  then,  in each such event the Board of Directors of the Company
shall make such  appropriate  adjustments in the number of Preferred Shares
(or the number and kind of other securities) issuable upon exercise of each
Right,  the Purchase Price and Redemption  Price in effect at such time and
the  number of Rights  outstanding  at such time  (including  the number of
Rights or fractional  Rights  associated  with each Common Share) such that
following  such  adjustment  such  event  shall not have had the  effect of
reducing or limiting  the benefits the holders of the Rights would have had
absent such event.

          (b) If, as a result of an  adjustment  made  pursuant  to Section
12(a), the holder of any Right  thereafter  exercised shall become entitled
to receive any  securities  other than  Preferred  Shares,  thereafter  the
number of such securities so receivable upon exercise of any Right shall be
subject to adjustment  from time to time in a manner and on terms as nearly
equivalent as  practicable  to the provisions of Sections 11 and 12 and the
provisions  of Sections 7, 9 and 10 with  respect to the  Preferred  Shares
shall  apply,  as nearly as  reasonably  may be, on like  terms to any such
other securities.

          (c) All Rights originally issued by the Company subsequent to any
adjustment  made to the  amount of  Preferred  Shares  or other  securities
relating to a Right shall
<PAGE>
evidence the right to purchase, for the Purchase Price, the adjusted number
and  kind of  securities  purchasable  from  time to  time  hereunder  upon
exercise  of the  Rights,  all  subject to further  adjustment  as provided
herein.

          (d)  Irrespective  of any  adjustment  or change in the  Purchase
Price  or the  number  of  Preferred  Shares  or  number  or kind of  other
securities issuable upon the exercise of the Rights, the Right Certificates
theretofore  and thereafter  issued may continue to express the terms which
were expressed in the initial Right Certificates issued hereunder.

          (e) In any case in which action taken  pursuant to Section  12(a)
requires  that an  adjustment  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  issuing to the  holder of any Right  exercised  after such
record date the Preferred Shares and/or other securities,  if any, issuable
upon such  exercise  over and  above  the  Preferred  Shares  and/or  other
securities,  if any,  issuable  before  giving  effect to such  adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due bill
or other appropriate  instrument  evidencing such holder's right to receive
such additional  securities upon the occurrence of the event requiring such
adjustment.

          SECTION 13. CERTIFICATE OF ADJUSTMENT.  Whenever an adjustment is
made as  provided  in  Section  11 or 12, 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  Shares a copy
of such  certificate and (c) mail a brief summary thereof to each holder of
a Right  Certificate  (or,  prior to the  Distribution  Date, of the Common
Shares) in  accordance  with  Section  25. The Rights  Agent shall be fully
protected in relying on any such certificate and on any adjustment  therein
contained.

          SECTION 14. ADDITIONAL  COVENANTS.  (a) Notwithstanding any other
provision  of  this  Rights  Agreement,  no  adjustment  to the  number  of
Preferred  Shares (or fractions of a share) or other securities for which a
Right is exercisable or the number of Rights outstanding or associated with
each Common  Share or any similar or other  adjustment  shall be made or be
effective if such adjustment  would have the effect of reducing or limiting
the  benefits  the  holders
<PAGE>
of the Rights  would have had absent such  adjustment,  including,  without
limitation, the benefits under Sections 11 and 12, unless the terms of this
Rights Agreement are amended so as to preserve such benefits.

          (b) The Company covenants and agrees that, after the Distribution
Date,  except as  permitted  by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce
or  otherwise  limit the  benefits the holders of the Rights would have had
absent such action,  including,  without  limitation,  the  benefits  under
Sections 11 and 12. Any action taken by the Company during any period after
any Person becomes an Acquiring Person but prior to the  Distribution  Date
shall be null and void unless such action could be taken under this Section
14(b)  from  and  after  the  Distribution  Date.  The  Company  shall  not
consummate  any  Business  Combination  if any issuer of Common  Shares for
which Rights may be exercised after such Business Combination in accordance
with  Section  11(c) shall have taken any action that  reduces or otherwise
limits the  benefits  the holders of the Rights  would have had absent such
action, including,  without limitation,  the benefits under Sections 11 and
12.

          SECTION 15.  FRACTIONAL  RIGHTS AND  FRACTIONAL  SHARES.  (a) The
Company may,  but shall not be required  to,  issue  fractions of Rights or
distribute Right Certificates which evidence  fractional Rights. In lieu of
such fractional  Rights,  the Company may pay to the registered  holders of
the Right  Certificates  with regard to which such fractional  Rights would
otherwise  be issuable an amount in cash equal to the same  fraction of the
current market value of a whole Right.  For purposes of this Section 15(a),
the current market value of a whole Right shall be the closing price of the
Rights (as  determined  pursuant to the second and third  sentences  of the
definition  of Market  Value  contained  in Section 1) for the  Trading Day
immediately  prior to the date on which such  fractional  Rights would have
been otherwise issuable.

          (b)  The  Company  may,  but  shall  not be  required  to,  issue
fractions  of Preferred  Shares upon  exercise or exchange of the Rights or
distribute certificates which evidence fractional Preferred Shares. In lieu
of  fractional  Preferred  Shares,  the  Company may elect to (i) utilize a
depository  arrangement as provided by the terms of the
<PAGE>
Preferred  Shares or (ii) in the case of a fraction  of a  Preferred  Share
(other than  one-thousandth  (1/1,000) of a Preferred Share or any integral
multiple  thereof),  pay to the registered holders of Right Certificates at
the time such  Rights are  exercised  or  exchanged  as herein  provided an
amount in cash equal to the same  fraction of the current  market  value of
one Preferred  Share,  if any are  outstanding  and publicly traded (or the
Formula  Number  times the current  market value of one Common Share if the
Preferred Shares are not outstanding and publicly traded).  For purposes of
this  Section  15(b),  the current  market  value of a Preferred  Share (or
Common  Share) shall be the closing  price of a Preferred  Share (or Common
Share) (as  determined  pursuant to the second and third  sentences  of the
definition  of Market  Value  contained  in Section 1) for the  Trading Day
immediately prior to the date of such exercise or exchange. If, as a result
of an adjustment  made pursuant to Section  12(a),  the holder of any Right
thereafter  exercised shall become entitled to receive any securities other
than Preferred Shares, the provisions of this Section 15(b) shall apply, as
nearly as reasonably may be, on like terms to such other securities.

          (c)  The  Company  may,  but  shall  not be  required  to,  issue
fractions  of Common  Shares upon  exchange  of Rights  pursuant to Section
11(b), or to distribute  certificates or other evidences of ownership which
evidence  fractional  Common  Shares.  In lieu of  such  fractional  Common
Shares,  the  Company  may  pay  to the  registered  holders  of the  Right
Certificates  with  regard to which such  fractional  Common  Shares  would
otherwise  be issuable an amount in cash equal to the same  fraction of the
current  Market  Value of one Common Share as of the date on which a Person
became an Acquiring Person.

          (d)  The  holders  of  Rights  by the  acceptance  of  the  Right
Certificates  (or,  prior to the  Distribution  Date, of the Common Shares)
expressly  waives  the  right  to  receive  any  fractional  Rights  or any
fractional  shares  upon  exercise  of a Right  except as  provided in this
Section 15.

          SECTION 16. RIGHTS OF ACTION. (a) All rights of action in respect
of this Rights Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders  of the  Common  Shares);  and any  registered  holder of any Right
Certificate  (or, prior to the  Distribution  Date, of the Common  Shares),
without the consent of the Rights Agent
<PAGE>
or of  the  holder  of  any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of the Common Shares) may, in his own behalf and for his
own benefit,  enforce,  and may institute and maintain any suit,  action or
proceeding against the Company to enforce,  or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner  provided in such Right  Certificate  and in this Rights  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 Rights  Agreement
and shall be entitled to specific  performance  of the  obligations  of any
Person under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Rights Agreement.

          (b) Any holder of Rights who prevails in an action to enforce the
provisions  of this  Rights  Agreement  shall be  entitled  to recover  the
reasonable costs and expenses,  including attorneys' fees, incurred in such
action.

          SECTION  17.   TRANSFER   AND   OWNERSHIP  OF  RIGHTS  AND  RIGHT
CERTIFICATES.  (a)  Prior to the  Distribution  Date,  the  Rights  will be
transferable  only in connection with the transfer of the Common Shares and
the  Rights  associated  with the  Common  Shares  shall  be  automatically
transferred upon the transfer of the Common Shares.

          (b) After the Distribution  Date, the Right  Certificates will be
transferable,  subject to Section 7(e),  only on the registry  books of the
Rights Agent if  surrendered  at the principal  office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer.

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

<PAGE>
          SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder,  as such,  of any Right  Certificate  shall be  entitled to vote or
receive  dividends  or be  deemed,  for  any  purpose,  the  holder  of the
Preferred Shares or of any other securities of the Company which may at any
time be  issuable on the  exercise  or  exchange of the Rights  represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,  as such, any
of  the  rights  of  a  shareholder  of  the  Company,  including,  without
limitation,  any right to vote for the  election of  directors  or upon any
matter  submitted to  shareholders  at any meeting  thereof,  or to give or
withhold consent to any corporate  action, or to receive notice of meetings
or other actions affecting  shareholders,  or to receive dividends or other
distributions  or  subscription  rights,  or otherwise,  until the Right or
Rights  evidenced by such Right  Certificate  shall have been  exercised or
exchanged in accordance with the provisions hereof.

          SECTION 19.  CONCERNING THE RIGHTS AGENT.  (a) The Company agrees
to pay  to the  Rights  Agent  reasonable  compensation  for  all  services
rendered by it hereunder from time to time and its reasonable  expenses and
counsel fees and other  disbursements  incurred in the  administration  and
execution of this Rights  Agreement and the exercise and performance of its
duties hereunder.

          (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 Rights Agreement in reliance
upon any Right Certificate or certificate or other evidence of ownership of
the Common  Shares or for other  securities  of the Company,  instrument of
assignment or transfer, power of attorney, endorsement,  affidavit, letter,
notice,  direction,  consent,  certificate,  statement,  or other  paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.

          SECTION 20.  MERGER OR  CONSOLIDATION  OR CHANGE 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 stock transfer or corporate
<PAGE>
trust business of the Rights Agent or any successor Rights Agent,  shall be
the successor to the Rights Agent under this Rights  Agreement  without the
execution  or filing of any paper or any  further act on the part of any of
the parties hereto;  PROVIDED that such  corporation  would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22.
In case,  at the time such  successor  Rights  Agent  shall  succeed to the
agency  created by this  Rights  Agreement,  any of the Right  Certificates
shall have been countersigned but not delivered,  any such successor Rights
Agent may adopt the  countersignature  of the predecessor  Rights Agent and
deliver such Right Certificates so countersigned; and, in case at that time
any of the  Right  Certificates  shall  not have  been  countersigned,  any
successor  Rights Agent may countersign such Right  Certificates  either in
the name of the  predecessor  Rights Agent or in the name of the  successor
Rights Agent; and in all such cases such Right  Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.

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

          SECTION 21. DUTIES OF RIGHTS AGENT.  The Rights Agent  undertakes
the  duties  and  obligations  imposed by this  Rights  Agreement  upon the
following terms and conditions, by all of which the Company and the holders
of Right  Certificates  (or, prior to the Distribution  Date, of the Common
Shares), by their acceptance thereof, shall be bound:

          (a) The Rights Agent may consult with legal counsel  satisfactory
to it (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,  suffered  or omitted by it in good
faith and in accordance with such opinion.

          (b) Whenever in the  performance  of its duties under this Rights
Agreement  the Rights Agent shall deem it
<PAGE>
necessary  or  desirable  that  any  fact  or  matter  (including,  without
limitation,  the identity of any Acquiring Person) be proved or established
by the Company  prior to taking,  refraining  from taking or suffering  any
action  hereunder,  such fact or matter  (unless other  evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and  established by a certificate  signed by any one of the Chairman
of the  Board,  the  Chief  Executive  Officer,  the  President,  the Chief
Operating  Officer,  the Chief Financial Officer, a Vice President (whether
preceded by any  additional  title),  the Treasurer or the 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 Rights  Agreement in reliance
upon such certificate.

          (c) The Rights Agent shall be liable  hereunder  only for its own
negligence, bad faith or wilful 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 Rights Agreement or
in the Right Certificates (except as to its countersignature thereof) or be
required to verify the same,  but all such  statements and recitals are and
shall be deemed to have been made by the Company only.

          (e) The Rights  Agent  shall not be under any  responsibility  in
respect of the  validity  of this Rights  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 Right  Certificate  (except its
countersignature  thereof);  nor shall it be responsible  for any breach by
the Company of any covenant or condition contained in this Rights Agreement
or in any  Right  Certificate;  nor shall it have any  responsibility  with
respect to any of exercise of Rights by an Acquiring  Person in whose hands
the Rights are null and void and  nontransferable  unless the Company shall
have given  actual  notice to the Rights  Agent of the identity of any such
Acquiring Person;  nor shall it be responsible for any adjustment  required
under the  provisions  of Section 11 or 12 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 Right  Certificates  after
actual notice of any such adjustment); nor shall it by
<PAGE>
any act  hereunder be deemed to make any  representation  or warranty as to
the  authorization  or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right  Certificate or
as to whether any Preferred  Shares or Common Shares 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 Rights Agreement.

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

          (h) The  Rights  Agent and any  shareholder,  director,  officer,
employee or affiliate  of the Rights Agent may buy,  sell or deal in any of
the  Rights  or other  securities  of the  Company  or  become  pecuniarily
interested in any  transaction in which the Company may be  interested,  or
contract  with or lend money to the Company or  otherwise  act as fully and
freely as though it were not the Rights Agent under this Rights  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 reasonable care was
exercised in the selection and continued employment thereof.

<PAGE>
          (j) The Company  agrees to indemnify and to hold the Rights Agent
harmless  against  any  loss,  liability,   damage  or  expense  (including
reasonable  fees and expenses of legal  counsel) which the Rights Agent may
incur  resulting  from its actions as Rights Agent  pursuant to this Rights
Agreement;   PROVIDED,   HOWEVER,  that  the  Rights  Agent  shall  not  be
indemnified  or held  harmless  with  respect to any such loss,  liability,
damage or expense  incurred by the Rights  Agent as a result of, or arising
out of,  its own  negligence,  bad faith or wilful  misconduct.  The Rights
Agent shall  notify the  Company,  by letter or by  facsimile  confirmed by
letter, of the assertion of any action,  proceeding,  suit or claim against
the Rights Agent,  promptly after the Rights Agent shall have notice of any
such assertion of an action, proceeding,  suit or claim or have been served
with the summons or other first legal process giving  information as to the
nature and basis of the  action,  proceeding,  suit or claim.  The  Company
shall not be liable with  respect to any such action,  proceeding,  suit or
claim to the  extent  that any  failure  of the  Rights  Agent so to notify
promptly the Company  prejudices  the rights of the Company with respect to
such  action,  proceeding,  suit or  claim.  The  Company  shall at its own
expense assume the defense of any such action,  proceeding,  suit or claim.
In the event that the Company  assumes such defense,  the Company shall not
thereafter  be liable for the fees and expenses of any  additional  counsel
retained by the Rights Agent,  so long as the Company shall retain  counsel
satisfactory  to the  Rights  Agent,  in  the  exercise  of its  reasonable
judgment,  to defend such action,  proceeding,  suit or claim. In the event
the Company  fails so to defend,  the Rights Agent agrees not to settle any
litigation in connection  with any action,  proceeding,  suit or claim with
respect to which it may seek  indemnification  from the Company without the
prior written consent of the Company.

          (k) The Rights  Agent shall be under no  obligation  to institute
any action,  suit or legal proceeding or to take any other action likely to
involve  expense  unless the Company or one or more  registered  holders of
Right  Certificates  shall  furnish  the  Rights  Agent with  security  and
indemnity  to its  satisfaction  for any  costs and  expenses  which may be
incurred.

          (l) The Rights  Agent  shall not be liable for failure to perform
any duties except as specifically set forth herein and no implied covenants
or obligations  shall be read into this Agreement against the Rights Agent,
whose
<PAGE>
duties and obligations  are  ministerial and shall be determined  solely by
the express provisions hereof.

          SECTION  22.  CHANGE OF RIGHTS  AGENT.  The  Rights  Agent or any
successor  Rights Agent may resign and be discharged  from its duties under
this Rights Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and to the holders of the Right  Certificates
(or, prior to the  Distribution  Date, of the Common Shares) by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days'  notice in writing,  mailed to the Rights  Agent or successor
Rights Agent,  as the case may be, and to each transfer agent of the Common
Shares and the Preferred Shares by registered or certified mail, and to the
holders of the Right  Certificates (or, prior to the Distribution  Date, of
the Common Shares) by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent.  If the Company shall fail to make
such  appointment  within a period of 30 days after  giving  notice of such
removal or after it has been  notified  in writing of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder
of a Right  Certificate (or, prior to the Distribution  Date, of the Common
Shares) who shall,  with such  notice,  submit his Right  Certificate  (or,
prior to the  Distribution  Date,  the  certificate  or other  evidence  of
ownership of his Common  Shares) for  inspection  by the Company,  then the
registered  holder of any Right  Certificate (or, prior to the Distribution
Date,  of  the  Common   Shares)  may  apply  to  any  court  of  competent
jurisdiction  for the  appointment  of a new Rights  Agent.  Any  successor
Rights Agent, whether appointed by the Company or by such a court, shall be
a  corporation  organized and doing  business  under the laws of the United
States or of any state of the United  States,  in good  standing,  having a
principal office in the United States,  which is authorized under such laws
to exercise  stock  transfer or  corporate  trust  powers and is subject to
supervision or  examination by Federal or state  authority and which has at
the time of its appointment as Rights Agent a combined  capital and surplus
of at least $50,000,000; PROVIDED that the principal transfer agent for the
Common Shares shall in any event be qualified to be the Rights Agent. 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  predeces-
<PAGE>
sor Rights Agent shall deliver and transfer to the  successor  Rights Agent
any property at the time held by it hereunder,  and execute and deliver any
further assurance,  conveyance,  act or deed necessary for the purpose. Not
later than the effective  date of any such  appointment,  the Company shall
file notice thereof in writing with the  predecessor  Rights Agent and each
transfer  agent of the Common Shares and the Preferred  Shares,  and mail a
notice  thereof  in  writing  to  the  registered   holders  of  the  Right
Certificates  (or, prior to the  Distribution  Date, of the Common Shares).
Failure to give any notice provided for in this Section 22, however, or any
defect therein shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the  appointment of the successor  Rights
Agent, as the case may be.

          SECTION 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES.
Notwithstanding  any of the  provisions of this Rights  Agreement or of the
Rights to the  contrary,  the Company  may, at its option,  issue new Right
Certificates evidencing Rights in such form as may be approved by its Board
of Directors to reflect any  adjustment or change made in  accordance  with
the provisions of this Rights  Agreement.  In addition,  in connection with
the issuance or sale of Common Shares following the  Distribution  Date and
prior to the earlier of the Redemption  Date and the  Expiration  Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or upon the  exercise,  conversion  or  exchange  of  securities,  notes or
debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or  appropriate  by the Board of Directors of the Company,  issue
Rights and  distribute  Right  Certificates  representing  the  appropriate
number of Rights  in  connection  with  such  issuance  or sale;  PROVIDED,
HOWEVER,  that (x) no such  Rights  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 would be issued,  and (y) no such
Rights shall be issued if, and to the extent that,  appropriate  adjustment
shall otherwise have been made in lieu of the issuance thereof.

          SECTION  24.  REDEMPTION  AND  TERMINATION.   (a)  The  Board  of
Directors  of the  Company  may,  at its  option,  at any time prior to the
earlier of (i) such time as a Person  becomes an Acquiring  Person and (ii)
the Expiration  Date,
<PAGE>
order the  redemption of all, but not fewer than all, the then  outstanding
Rights  at the  Redemption  Price  (the date of such  redemption  being the
"Redemption  Date"), and the Company, at its option, may pay the Redemption
Price either in cash or Common  Shares or other  securities  of the Company
deemed by the Board of  Directors  of the  Company,  in the exercise of its
sole  discretion,  to be at least  equivalent  in  value to the  Redemption
Price.

          (b) Immediately  upon the action of the Board of Directors of the
Company  ordering  the  redemption  of the Rights,  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.  Within 10 Business Days after the action
of the Board of Directors of the Company  ordering  the  redemption  of the
Rights,  the Company shall give notice of such redemption to the holders of
the then  outstanding  Rights by mailing such notice to all such holders at
their last  addresses as they appear upon the registry  books of the Rights
Agent or, prior to the  Distribution  Date,  on the  registry  books of the
transfer agent for the Common Shares.  Each such notice of redemption  will
state the method by which payment of the Redemption Price will be made. The
notice,  if mailed in the manner  herein  provided,  shall be  conclusively
presumed  to have  been duly  given,  whether  or not the  holder of Rights
receives such notice. In any case,  failure to give such notice by mail, or
any defect in the  notice,  to any  particular  holder of Rights  shall not
affect the sufficiency of the notice to other holders of Rights.

          SECTION 25.  NOTICES.  Subject to the  provisions  of Section 22,
notices or demands  authorized by this Agreement to be given or made by the
Rights  Agent or by the  holder of a Right  Certificate  (or,  prior to the
Distribution  Date,  of the Common  Shares) 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:

                  Ashland Inc.
                  P.O. Box 391
                  Ashland, KY 41114
                  Attention of General Counsel

Subject to the provisions of Section 22, any notice or demand authorized by
this Rights  Agreement  to be given or
<PAGE>
made by the Company or by the holder of a Right  Certificate  (or, prior to
the  Distribution  Date,  of the Common  Shares) 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:

                   Harris Trust and Savings Bank
                   311 West Monroe
                   P.O. Box 755
                   Chicago, IL 60606
                   Attention:  Tod C. Shafer

Notices or demands  authorized by this Rights Agreement to be given or made
by the  Company  or the Rights  Agent to any holder of a Right  Certificate
(or,  prior  to the  Distribution  Date,  of the  Common  Shares)  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 Rights Agent or, prior to the  Distribution  Date, on
the registry books of the transfer agent for the Common Shares.

          SECTION 26. SUPPLEMENTS AND AMENDMENTS.  At any time prior to the
Distribution  Date and subject to the last sentence of this Section 26, the
Company  may,  and the  Rights  Agent  shall  if the  Company  so  directs,
supplement  or amend any  provision  of this Rights  Agreement  (including,
without limitation,  the date on which the Distribution Date shall occur or
the time during  which the Rights may be  redeemed  pursuant to Section 24)
and the  Company  may amend any  provision  of the  Articles  of  Amendment
without  the  approval  of any  holder  of the  Rights.  From and after the
Distribution  Date and subject to applicable  law, the Company may, and the
Rights Agent shall if the Company so directs,  amend this Rights  Agreement
without the approval of any holders of Right  Certificates  (a) to cure any
ambiguity or to correct or supplement any provision  contained herein which
may be defective or  inconsistent  with any other  provision of this Rights
Agreement  or (b) to make any other  provisions  in regard  to  matters  or
questions  arising  hereunder  which  the  Company  may deem  necessary  or
desirable and which shall not adversely affect the interests of the holders
of Right  Certificates  (other than an Acquiring  Person or an Affiliate or
Associate of an Acquiring  Person).  Any  supplement  or amendment  adopted
during any period after any Person has become an Acquiring Person but prior
to the  Distribution  Date shall be null and void unless such
<PAGE>
supplement  or  amendment  could   have  been   adopted  under  the   prior
sentence from and after the Distribution  Date. Any supplement or amendment
to this Rights  Agreement  duly approved by the Company that does not amend
Sections  19, 20, 21 or 22 in a manner  adverse to the Rights  Agent  shall
become effective immediately upon execution by the Company,  whether or not
also executed by the Rights Agent. In addition, notwithstanding anything to
the contrary contained in this Rights Agreement, no supplement or amendment
to this Rights  Agreement  shall be made which (x)  reduces the  Redemption
Price (except as required by Section 12(a)), or (y) provides for an earlier
Expiration  Date or (z)  charges  the rights or duties of the Rights  Agent
without the consent of the Rights Agent.

          SECTION 27. SUCCESSORS.  All the covenants and provisions of this
Rights  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 28.  BENEFITS  OF RIGHTS  AGREEMENT;  DETERMINATIONS  AND
ACTIONS  BY THE  BOARD  OF  DIRECTORS,  ETC.  (a)  Nothing  in this  Rights
Agreement  shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior  to the  Distribution  Date,  of the  Common  Shares)  any  legal  or
equitable  right,  remedy or claim  under this Rights  Agreement;  but this
Rights  Agreement  shall  be for the  sole  and  exclusive  benefit  of the
Company,  the  Rights  Agent  and  the  registered  holders  of  the  Right
Certificates (and, prior to the Distribution Date, of the Common Shares).

          (b)  Except  as  explicitly  otherwise  provided  in this  Rights
Agreement,  the Board of Directors of the Company  shall have the exclusive
power and authority to administer this Rights 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 Rights Agreement, including, without limitation, the
right and power to (i)  interpret the  provisions of this Rights  Agreement
and (ii) make all  determinations  deemed  necessary or  advisable  for the
administration of this Rights Agreement (including,  without limitation,  a
determination  to redeem or not redeem  the Rights or to amend this  Rights
Agreement and whether there is an Acquiring Person).

<PAGE>
          (c) Nothing contained in this Rights Agreement shall be deemed to
be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary  duty.  Without  limiting the foregoing,  nothing
contained  herein  shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer, or to recommend
that holders of Common Shares reject any tender offer, or to take any other
action  (including,  without  limitation,  the  commencement,  prosecution,
defense or settlement of any litigation and the submission of additional or
alternative  offers or other  proposals)  with  respect to any tender offer
that the Board of Directors  believes is necessary  or  appropriate  in the
exercise of such fiduciary duty.

          SECTION 29.  SEVERABILITY.  If any term,  provision,  covenant or
restriction  of this  Rights  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
Rights  Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.

          SECTION 30.  GOVERNING LAW. This Rights  Agreement and each Right
Certificate  issued  hereunder  shall be deemed to be a contract made under
the law of the  Commonwealth  of  Kentucky  and for all  purposes  shall be
governed  by and  construed  in  accordance  with  the  law of  such  State
applicable  to  contracts  to be made and  performed  entirely  within such
State.

          SECTION 31.  COUNTERPARTS;  EFFECTIVENESS.  This Rights Agreement
may be executed in any number of counterparts and each of such counterparts
shall  for  all  purposes  be  deemed  to  be an  original,  and  all  such
counterparts  shall together  constitute  but one and the same  instrument.
This Rights Agreement shall be effective as of the Close of Business on the
date hereof.

          SECTION 32.  DESCRIPTIVE  HEADINGS.  Descriptive  headings of the
several Sections of this Rights Agreement are inserted for convenience only
and shall not control or
<PAGE>

affect the meaning or  construction  of any of the provisions of this Rights
Agreement.

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

                                   ASHLAND INC.,

                                     by   /s/  Paul W. Chellgren
                                     ------------------------------
                                   Name:  Paul W. Chellgren
                                   Title: President, Chief Operating Officer

                                   HARRIS TRUST AND SAVINGS BANK,
                                     as Rights Agent,

                                     by   /s/  Tod C. Shafer
                                     ------------------------------
                                   Name:  Tod C. Shafer
                                   Title: Vice President


<PAGE>
EXHIBIT A

                              ARTICLES OF AMENDMENT

                                       TO

                    SECOND RESTATED ARTICLES OF INCORPORATION

                                       OF

                                  ASHLAND INC.

                                 AMENDMENT NO. 5

Pursuant to the provisions of Section  271B.10-060 of the Kentucky Business
Corporation Act, the undersigned  corporation adopts the following articles
of amendment to set forth the preferences,  limitations and relative rights
of a series of shares of its Cumulative Preferred Stock, without par value,
under Article IV of its Second Restated Articles of Incorporation.


     FIRST: The name of the Corporation is Ashland Inc.

     SECOND: The text of the amendment  determining the terms of the series
of shares of the Cumulative Preferred Stock is as follows:

     I.  DESIGNATION  AND NUMBER OF SHARES.  This series of the  Cumulative
Preferred Stock shall be designated as "Series A  Participating  Cumulative
Preferred  Stock" (the  "Series A Preferred  Stock").  The number of shares
initially  issuable  as the  Series A  Preferred  Stock  shall be  500,000;
provided, however, that, if more than a total of 500,000 shares of Series A
Preferred  Stock  shall  be  issuable  upon the  exercise  of  Rights  (the
"Rights") issued pursuant to the Rights Agreement dated as of May 16, 1996,
between the  Corporation and Harris Trust and Savings Bank, as Rights Agent
(the  "Rights  Agreement"),  the  Board of  Directors  of the  Corporation,
pursuant to Section  271B.10-060 of the Kentucky Business  Corporation Act,
shall direct by resolution or resolutions that Articles of Amendment of the
Articles of Incorporation of the Corporation be properly executed and filed
with the  Secretary of State of Kentucky  providing for the total number of
shares  issuable as Series A Preferred Stock to be increased (to the extent
that the Articles of  Incorporation  then permit) to the largest  number of
whole  shares  (rounded  up to the  nearest  whole  number)  issuable  upon
exercise of such Rights.

     II. DIVIDENDS OR DISTRIBUTIONS.  (a) Subject to the prior and superior
rights of the holders of shares of any other series of  Preferred  Stock or
other class of capital stock of the Corporation  ranking prior and superior
to the shares of Series A Preferred  Stock with respect to  dividends,  the
holders of shares of the Series A  Preferred  Stock  shall be  entitled  to
receive,  when,  as and if declared by the Board of  Directors,  out of the
assets  of  the  Corporation  legally  available  therefor,  (i)  quarterly
dividends  payable in cash on the last day of each  fiscal  quarter in each
year,  or such other  dates as the Board of  Directors  of the  Corporation
shall  approve  (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 a fraction of a share of Series
A Preferred  Stock,  in the amount of $.01 per whole share  (rounded to the
nearest cent), less the amount of all cash dividends declared on the Series
A  Preferred  Stock  pursuant  to  the  following  clause  (ii)  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  Preferred  Stock  (the total of
which  shall  not,  in any  event,  be less than  zero) and (ii)  dividends
payable in cash on the payment date for each cash dividend  declared on the
Common  Stock in an amount per whole share  (rounded  to the nearest  cent)
equal to the Formula Number (as  hereinafter  defined) then in effect times
the cash  dividends  then to be paid on each  share  of  Common  Stock.  In
addition,   if  the  Corporation   shall  pay  any  dividend  or  make  any
distribution  on the Common Stock  payable in assets,  securities  or other
forms of non-cash  consideration  (other than  dividends  or  distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall  simultaneously pay or make on each outstanding whole share of Series
A  Preferred  Stock a dividend  or  distribution  in like kind equal to the
Formula Number then in effect times such dividend or  distribution  on each
share of the Common Stock.  As used herein,  the "Formula  Number" shall be
1,000;  PROVIDED,  HOWEVER,  that,  if at any time after May 16, 1996,  the
Corporation  shall (x)  declare or pay any  dividend  on the  Common  Stock
payable in shares of Common  Stock or make any  distribution  on the Common
Stock in  shares  of  Common  Stock,  (y)  subdivide  (by a stock  split or
otherwise) the  outstanding  shares of Common Stock into a larger number of
shares of Common Stock or (z) combine (by a

<PAGE>
reverse stock split or otherwise)  the  outstanding  shares of Common Stock
into a smaller number of shares of Common Stock,  then, in each such event,
the Formula Number shall be adjusted to a number  determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction,
the  numerator  of which is the  number of shares of Common  Stock that are
outstanding  immediately  after such event and the  denominator of which is
the number of shares of Common Stock that are outstanding immediately prior
to such event (and  rounding the result to the nearest whole  number);  and
PROVIDED FURTHER,  that, if at any time after May 16, 1996, the Corporation
shall issue any shares of its capital  stock in a merger,  share  exchange,
reclassification,  or change  of the  outstanding  shares of Common  Stock,
then,  in each  such  event,  the  Formula  Number  shall be  appropriately
adjusted to reflect such merger, share exchange, reclassification or change
so  that  each  share  of  Preferred  Stock  continues  to be the  economic
equivalent  of a Formula  Number of  shares of Common  Stock  prior to such
merger, share exchange, reclassification or change.

     (b) The  Corporation  shall declare a dividend or  distribution on the
Series A Preferred Stock as provided in Section 2(a)  immediately  prior to
or at the same time it  declares a dividend or  distribution  on the Common
Stock  (other  than a dividend or  distribution  solely in shares of Common
Stock);  PROVIDED,  HOWEVER, that, in the event no dividend or distribution
(other than a dividend or  distribution  in shares of Common  Stock)  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 $.01 per share on the Series A Preferred  Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders  of  shares of  Series A  Preferred  Stock  entitled  to  receive a
dividend or distribution  declared thereon,  which record date shall be the
same as the record date for any  corresponding  dividend or distribution on
the Common Stock.

     (c) Dividends  shall begin to accrue and be cumulative on  outstanding
shares of Series A Preferred  Stock from and after the  Quarterly  Dividend
Payment Date next  preceding  the date of original  issue of such shares of
Series A Preferred Stock; PROVIDED,  HOWEVER, that dividends on such shares
that are originally  issued after the record date for the  determination of
holders  of  shares of  Series A  Preferred  Stock  entitled  to  receive a
quarterly  dividend  and on or  prior  to  the  next  succeeding  Quarterly
Dividend  Payment  Date shall  begin to accrue and be  cumulative  from and
after such Quarterly Dividend Payment Date.  Notwithstanding the foregoing,
dividends on shares of Series A Preferred Stock that are originally  issued
prior to the  record  date for the  determination  of  holders of shares of
Series A Preferred  Stock  entitled to receive a quarterly  dividend on the
first Quarterly  Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal  quarter next  preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest.  Dividends paid on the shares of Series A 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 and entitled to receive
such dividends.

     (d) So  long  as any  shares  of the  Series  A  Preferred  Stock  are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock,
unless,  in each  case,  the  dividend  required  by this  Section  2 to be
declared on the Series A Preferred Stock shall have been declared and paid.

     (e) The holders of the shares of Series A Preferred Stock shall not be
entitled  to  receive  any  dividends  or other  distributions,  except  as
provided herein.

     III. VOTING RIGHTS.  The holders of shares of Series A Preferred Stock
shall have the following voting rights:

     (a) Each  holder of Series A  Preferred  Stock  shall be entitled to a
number of votes equal to the Formula Number then in effect,  for each share
of Series A Preferred  Stock held of record on each matter on which holders
of the  Common  Stock  or  shareholders  generally  are  entitled  to vote,
multiplied by the maximum number of votes per share which any holder of the
Common  Stock or  shareholders  generally  then have with  respect  to such
matter (assuming any holding period or other  requirement to vote a greater
number of shares is satisfied).

     (b) Except as  otherwise  provided  herein or by  applicable  law, the
holders of shares of Series A Preferred

<PAGE>
Stock  and  the  holders  of  shares of Common Stock shall vote together as
one voting group for the election of  directors of the  Corporation  and on
all other matters submitted to a vote of shareholders of the Corporation.

     (c) If, at the time of any  annual  meeting  of  shareholders  for the
election of directors,  the equivalent of six quarterly  dividends (whether
or not  consecutive)  payable on any share or shares of Series A  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
Preferred  Stock,  voting  separately as a voting group to the exclusion of
the  holders  of  Common  Stock,  shall  be  entitled  at said  meeting  of
shareholders  (and at each  subsequent  annual  meeting  of  shareholders),
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,  the holders of any Series A Preferred Stock being entitled to
cast a number of votes per share of Series A  Preferred  Stock equal to the
Formula  Number.  Until the  default  in  payments  of all  dividends  that
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 of Series A Preferred  Stock
at the time  entitled to cast such  number of votes as are  required by law
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 only
by the vote of such holders. If and when such default shall cease to exist,
the  holders of the  Series A  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 said special
voting rights shall forthwith terminate to the extent permitted by law, 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
Preferred Stock in this Section 3.

     (d) Except as provided  herein,  in Section 11 or by  applicable  law,
holders of Series A 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  authorizing
or taking any corporate action.

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

                  (i)  declare  or  pay   dividends   on,  make  any  other
         distributions  on, or redeem or purchase or otherwise  acquire for
         consideration  any shares of stock  ranking  junior  (either as to
         dividends or upon  liquidation,  dissolution or winding up) to the
         Series A 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 Preferred  Stock,  except dividends paid ratably
         on the Series A Preferred Stock and all such parity stock on which
         dividends  are  payable or in arrears in  proportion  to the total
         amounts to which the holders of all such shares are then entitled;

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

                  (iv) purchase or otherwise  acquire for consideration any
         shares of Series A Preferred Stock, or any shares of stock ranking
         on  a  parity  with  the  Series  A  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

<PAGE>
         and  other  relative  rights  and  preferences  of the  respective
         series and classes,  shall  determine  in  good faith will  result
         in fair and equitable treatment among  the  respective  series  or
         classes.

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

     V. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, no distribution shall
be made (a) to the holders of shares of stock ranking  junior (either as to
dividends or upon  liquidation,  dissolution or winding up) to the Series A
Preferred Stock,  unless,  prior thereto, the holders of shares of Series A
Preferred  Stock  shall have  received  an amount  equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such  payment,  plus an amount equal to the greater of (i) $.01 per
whole  share or (ii) an  aggregate  amount per share  equal to the  Formula
Number then in effect  times the  aggregate  amount to be  distributed  per
share to holders of Common Stock or (b) to the holders of stock  ranking on
a parity  (either  as to  dividends  or upon  liquidation,  dissolution  or
winding up) with the Series A Preferred Stock,  except  distributions  made
ratably on the Series A Preferred  Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.

     VI.  CONSOLIDATION,  MERGER,  ETC. In case the Corporation shall enter
into  any  consolidation,  merger,  share  exchange,  combination  or other
transaction  in which  the  shares of Common  Stock  are  exchanged  for or
changed into other stock or securities,  cash or any other property,  then,
in any such case, the then  outstanding  shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per
share equal to the Formula Number then in effect times the aggregate amount
of stock, securities,  cash or any other property (payable in kind), as the
case may be,  into  which  or for  which  each  share  of  Common  Stock is
exchanged or changed. In the event both this Section 6 and Section 2 appear
to apply to a transaction, this Section 6 will control.

     VII.  NO  REDEMPTION;  NO  SINKING  FUND.  (a) The  shares of Series A
Preferred Stock shall not be subject to redemption by the Corporation or at
the option of any holder of Series A Preferred  Stock;  provided,  however,
that the Corporation may purchase or otherwise acquire  outstanding  shares
of Series A Preferred Stock in the open market or by offer to any holder or
holders of shares of Series A Preferred Stock.

     (b) The shares of Series A Preferred  Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.

         VIII.  Ranking.  The Series A Preferred  Stock shall rank junior to all
other  series  of  Preferred  Stock  of the  Corporation,  unless  the  Board of
Directors  shall  specifically   determine   otherwise  in  fixing  the  powers,
preferences  and relative,  participating,  optional and other special rights of
the shares of such series and the  qualifications,  limitations and restrictions
thereof.

     IX. FRACTIONAL  SHARES. The Series A Preferred Stock shall be issuable
upon  exercise of the Rights  issued  pursuant to the Rights  Agreement  in
whole shares or in any fraction of a share that is one-thousandth (1/1,000)
of a share or any integral  multiple of such  fraction  which shall entitle
the holder,  in proportion to such holder's  fractional  shares, to receive
dividends,  exercise voting rights,  participate in distributions  and have
the benefit of all other rights of holders of Series A Preferred  Stock. In
lieu of fractional shares, the Corporation,  prior to the first issuance of
a share or a fraction of a share of Series A Preferred Stock, may elect (a)
to make a cash payment as provided in the Rights Agreement for fractions of
a share  other than  one-thousandth  (1/1,000)  of a share or any  integral
multiple  thereof  or (b) to  issue  depository  receipts  evidencing  such
authorized  fraction of a share of Series A Preferred  Stock pursuant to an
appropriate  agreement between the Corporation and a depository selected by
the  Corporation;  PROVIDED  that such  agreement  shall  provide  that the
holders of such depository  receipts shall have all the rights,  privileges
and  preferences  to which  they are  entitled  as  holders of the Series A
Preferred Stock.

<PAGE>

     X. REACQUIRED SHARES. Any shares of Series A 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  cancelation  become authorized but unissued shares
of Preferred Stock, without par value, of the Corporation,  undesignated as
to series,  and may  thereafter be reissued as part of a new series of such
Preferred Stock as permitted by law.

     XI.  AMENDMENT.   None  of  the  powers,   preferences  and  relative,
participating,  optional and other special rights of the Series A Preferred
Stock as  provided  herein or in the  Articles  of  Incorporation  shall be
amended in any manner that would  alter or change the powers,  preferences,
rights or  privileges  of the holders of Series A Preferred  Stock so as to
affect such holders  adversely  without the affirmative vote of the holders
of at least 66-2/3% of the outstanding  shares of Series A Preferred Stock,
voting  as a  separate  voting  group;  PROVIDED,  HOWEVER,  that  no  such
amendment  approved by the holders of at least  66-2/3% of the  outstanding
shares of Series A Preferred  Stock shall be deemed to apply to the powers,
preferences,  rights  or  privileges  of any  holder  of shares of Series A
Preferred Stock  originally  issued upon exercise of a Right after the time
of such approval without the approval of such holder.

     THIRD:  This  amendment  was duly adopted by the Board of Directors of
the Corporation  without  shareholder  action on May 16, 1996.  Shareholder
action was not required.


     IN WITNESS  WHEREOF,  the  undersigned  has executed these Articles of
Amendment as of this 16th day of May, 1996.

                                     ASHLAND INC.

                                  by
                                     ----------------------------------



<PAGE>
COMMONWEALTH OF KENTUCKY)
COUNTY OF GREENUP       )


     The foregoing  instrument was acknowledged  before me this 16th day of
May, 1996, by , of ASHLAND INC., a Kentucky  corporation,  on behalf of the
corporation.

                                      ----------------------------------
                                              Notary Public

Prepared by Thomas L. Feazell
1000 Ashland Drive
Russell, Kentucky 41114


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



<PAGE>
EXHIBIT B

                              [Form of Right Certificate]

Certificate No. [R]-

                  ___________         Rights

                  NOT  EXERCISABLE  AFTER  MAY 16,  2006,  OR  EARLIER,  IF
                  REDEEMED OR  MANDATORILY  EXCHANGED 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.   RIGHTS   BENEFICIALLY  OWNED  BY  AN
                  ACQUIRING  PERSON  OR AN  AFFILIATE  OR  ASSOCIATE  OF AN
                  ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
                  AGREEMENT)  AND BY ANY  SUBSEQUENT  HOLDER OF SUCH RIGHTS
                  ARE NULL AND VOID AND NONTRANSFERABLE.

                                Right Certificate

                                  ASHLAND INC.

     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 May 16,  1996  (the
"Rights  Agreement"),  between  Ashland Inc., a Kentucky  corporation  (the
"Company"),  and  Harris  Trust  and  Savings  Bank,  an  Illinois  banking
corporation,  as Rights  Agent  (the  "Rights  Agent"),  unless  the Rights
evidenced  hereby  shall  have  been  previously  redeemed  or  mandatorily
exchanged  by the Company,  to purchase  from the Company at any time after
the  Distribution  Date (as defined in the Rights  Agreement)  and prior to
5:00 p.m.,  New York City time, on the 10th  anniversary of the date of the
Rights  Agreement (the "Expiration  Date"),  at the principal office of the
Rights Agent,  or its  successors as Rights  Agent,  in Chicago,  Illinois,
one-thousandth  (1/1,000) of a fully paid,  nonassessable share of Series A
Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), at a purchase price per one-thousandth  (1/1,000)
of a share  equal to $140 (the  "Purchase  Price"),  payable in cash,  upon
presentation and surrender of this
<PAGE>


                                                                        2

Right Certificate with the Form of Election to Purchase duly executed.

     The  Purchase  Price and the  number  and kind of shares  which may be
purchased upon exercise of each Right evidenced by this Right  Certificate,
as set forth  above,  are the  Purchase  Price and the  number  and kind of
shares which may be so  purchased  as of May 16,  1996.  As provided in the
Rights  Agreement,  the  Purchase  Price and the  number and kind of shares
which may be purchased  upon the  exercise of each Right  evidenced by this
Right  Certificate  are subject to  modification  and  adjustment  upon the
happening of certain events.

     If the  Rights  evidenced  by this Right  Certificate  are at any time
beneficially  owned by an Acquiring  Person or an Affiliate or Associate of
an  Acquiring  Person (as such terms are defined in the Rights  Agreement),
such Rights  shall be null and void and  nontransferable  and the holder of
any such Right  (including any purported  transferee or subsequent  holder)
shall not have any right to exercise or transfer any such Right.

     This Right  Certificate  is subject to all 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
reference to the Rights  Agreement is hereby made for a full description of
the  rights,  limitations  of rights,  obligations,  duties and  immunities
hereunder  of the Rights  Agent,  the  Company and the holders of the Right
Certificates.   Copies  of  the  Rights   Agreement  are  on  file  at  the
above-mentioned  office of the Rights Agent and are also available from the
Company upon written request.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the principal  stock transfer or corporate trust office of the
Rights  Agent,  may be exchanged  for another  Right  Certificate  or Right
Certificates of like tenor and date evidencing  Rights entitling the holder
to  purchase  a like  aggregate  number  and kind of shares  as the  Rights
evidenced by the Right Certificate or Right Certificates  surrendered shall
have entitled such holder to purchase.  If this Right  Certificate shall be
exercised in part,  the holder shall be entitled to receive upon  surrender
hereof another Right  Certificate or Right  Certificates  for the number of
whole Rights not exercised.


<PAGE>

                                                                       3


     Subject  to  the  provisions  of  the  Rights  Agreement,  the  Rights
evidenced by this Right  Certificate  may be redeemed by the Company at its
option at a  redemption  price (in cash or shares of Common  Stock or other
securities  of the Company  deemed by the Board of Directors to be at least
equivalent  in value) of $.01 per Right  (which  amount shall be subject to
adjustment  as provided in the Rights  Agreement)  at any time prior to the
earlier of (a) such time as a Person  becomes an  Acquiring  Person and (b)
the Expiration Date.

     The Company  may,  but shall not be required  to,  issue  fractions of
Preferred  Shares or distribute  certificates  which evidence  fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing  fractional shares, the Company may elect to make a cash
payment as provided in the Rights  Agreement for fractions of a share other
than  one-thousandth  (1/1,000) of a share or any integral multiple thereof
or to issue certificates or to utilize a depositary arrangement as provided
in the terms of the Rights Agreement and the Preferred Shares.

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


<PAGE>
                                                                        4


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

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

Dated as of:

                                 ASHLAND INC.,

                                   by
                                   -----------------------------------------
                                       Name:
                                       Title:

Attest:

- -------------------------
Name:
Title:

Countersigned:

HARRIS TRUST AND SAVINGS BANK,
as Rights Agent,

  by
    ---------------------
      Authorized Officer


<PAGE>


                                                                           5

                       [On Reverse Side of Right Certificate]

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

                      (To be executed by the registered holder if
                      such holder desires to exercise the Rights
                      represented by this Right Certificate.)

To the Rights Agent:

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

Please insert social security
or other identifying number

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

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


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

<PAGE>
                                                                         6

Please insert social security
or other identifying number

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

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

Dated:____________,____

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


Signature Guaranteed:

                             FORM OF ASSIGNMENT

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

     FOR  VALUE  RECEIVED ________________________________   hereby  sells,
assigns and transfers unto

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

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

Dated:  ____________, ____

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

Signature Guaranteed:

     The undersigned hereby certifies that (a) the Rights evidenced by this
Right  Certificate  are not being sold,  assigned or  transferred  by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or


<PAGE>


                                                                        7

Associate thereof (as such terms are defined in the Rights Agreement),  (b)
this Rights Certificate is not being sold, assigned or transferred to or on
behalf of any such Acquiring Person,  Affiliate or Associate, and (c) after
inquiry and to the best knowledge of the  undersigned,  the undersigned did
not acquire the Rights evidenced by this Right  Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate  thereof (as
such terms are defined in the Rights Agreement).



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

                                   NOTICE
                                   ------

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