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                                                                     EXHIBIT 4.2


                                   ----------

                               PACTIV CORPORATION

                                       AND

            FIRST CHICAGO TRUST COMPANY OF NEW YORK, AS RIGHTS AGENT


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                              QUALIFIED OFFER PLAN
                                RIGHTS AGREEMENT

                          DATED AS OF NOVEMBER 4, 1999


                                   ----------

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                                TABLE OF CONTENTS
<TABLE>
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                                                                                        PAGE
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<S>                                                                                     <C>
Section 1.    CERTAIN DEFINITIONS..........................................              1
SECTION 2.    APPOINTMENT OF RIGHTS AGENT..................................              8
SECTION 3.    ISSUE OF RIGHT CERTIFICATES..................................              8
SECTION 4.    FORM OF RIGHT CERTIFICATES...................................              9
SECTION 5.    COUNTERSIGNATURE AND REGISTRATION............................             10
SECTION 6.    TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
              CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
              CERTIFICATES.................................................              9
SECTION 7.    EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
              RIGHTS.......................................................             10
SECTION 8.    CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES...........             10
SECTION 9.    AVAILABILITY OF SHARES OF PREFERRED STOCK....................             11
SECTION 10.   PREFERRED STOCK RECORD DATE..................................             13
SECTION 11.   ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES AND NUMBER OF
              RIGHTS.......................................................             14
SECTION 12.   CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
              SHARES.......................................................             21
SECTION 13.   CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
              EARNING POWER................................................             21
SECTION 14.   FRACTIONAL RIGHTS AND FRACTIONAL SHARES......................             25
SECTION 15.   RIGHTS OF ACTION.............................................             26
SECTION 16.   AGREEMENT OF RIGHT HOLDERS...................................             26
SECTION 17.   RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER............             26
SECTION 18.   CONCERNING THE RIGHTS AGENT..................................             27
SECTION 19.   MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT....             27
SECTION 20.   DUTIES OF RIGHTS AGENT.......................................             28
SECTION 21.   CHANGE OF RIGHTS AGENT.......................................             30
SECTION 22.   ISSUANCE OF NEW RIGHT CERTIFICATES...........................             30
SECTION 23.   REDEMPTION...................................................             31
SECTION 24.   EXCHANGE.....................................................             31
SECTION 25.   NOTICE OF CERTAIN EVENTS.....................................             32
SECTION 26.   NOTICES......................................................             33
SECTION 27.   SUPPLEMENTS AND AMENDMENTS...................................             33
SECTION 28.   SUCCESSORS...................................................             34
SECTION 29.   BENEFITS OF THIS AGREEMENT...................................             34
SECTION 30.   DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.........             34
SECTION 31.   SEVERABILITY.................................................             35
SECTION 32.   GOVERNING LAW................................................             35
SECTION 33.   COUNTERPARTS.................................................             35
SECTION 34.   DESCRIPTIVE HEADINGS.........................................             35
</TABLE>


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QUALIFIED OFFER PLAN RIGHTS AGREEMENT

         Qualified Offer Plan Rights Agreement, dated as of November 4, 1999
("Agreement"), between Pactiv Corporation, a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent").

         The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding immediately
prior to the Distribution (as defined in the Distribution Agreement by and
between Tenneco (as hereinafter defined) and the Company) (the "Record Date"),
each Right representing the right to purchase one one-thousandth (subject to
adjustment) of a share of Preferred Stock (as hereinafter defined), upon the
terms and subject to the conditions herein set forth, and has further authorized
and directed the issuance of one Right (subject to adjustment as provided
herein) with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earlier of the Distribution Date and 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 Expiration Date in
accordance with Section 22.

         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 Agreement, the
following terms have the meaning indicated:

         (a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such term is
hereinafter defined) of 20% or more of the shares of Common Stock then
outstanding, but shall not include an Exempt Person (as such term is hereinafter
defined) or a Person who becomes the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding pursuant to a Qualified Offer (as such
term is hereinafter defined); provided, however, that (i) if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" became the Beneficial Owner of a number of
shares of Common Stock such that the Person would otherwise qualify as an
"Acquiring Person" inadvertently (including, without limitation, because (A)
such Person was unaware that it beneficially owned a percentage of Common Stock
that would otherwise cause such Person to be an "Acquiring Person" or (B) such
Person was aware of the extent of its Beneficial Ownership of Common Stock but
had no actual knowledge of the consequences of such Beneficial Ownership under
this Agreement) and without any intention of changing or influencing control of
the Company, then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement unless and until such
Person shall have failed to divest itself, as soon as practicable (as
determined, in good faith, by the Board of Directors of the Company), of
Beneficial Ownership of a sufficient number of shares of Common Stock so that
such Person would no longer otherwise qualify as an "Acquiring Person"; (ii) if,
as of the date hereof or prior to the first public announcement of the adoption
of this Agreement, any Person is or becomes the Beneficial Owner of 20% or more
of the shares of Common Stock outstanding, such Person shall not be deemed to be

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or to become an "Acquiring Person" unless and until such time as such Person
shall, after the first public announcement of the adoption of this Agreement,
become the Beneficial Owner of additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), unless, upon becoming the Beneficial Owner of such
additional shares of Common Stock, such Person is not then the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding; and (iii) no
Person shall become an "Acquiring Person" as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 20% or more of the shares of Common Stock
then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and shall thereafter become
the Beneficial Owner of any additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an "Acquiring
Person" unless upon becoming the Beneficial Owner of such additional shares of
Common Stock such Person does not beneficially own 20% or more of the shares of
Common Stock then outstanding. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as in effect on the date hereof.

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

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

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

                  (ii) which such Person or any of such Person's Affiliates or
         Associates has (A) the right to acquire (whether such right is
         exercisable immediately or only after the passage of time) pursuant to
         any agreement, arrangement or understanding (other than customary
         agreements with and between underwriters and selling group members with
         respect to a bona fide public offering of securities), or upon the
         exercise of conversion rights, exchange rights, rights, warrants or
         options, or otherwise; provided, however, that a Person shall not be
         deemed the Beneficial Owner of, or to beneficially own, (x) 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, (y) securities which
         such Person has a right to acquire upon the exercise of Rights at any
         time prior to the time that any Person becomes an Acquiring Person or
         (z) securities issuable upon the

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         exercise of Rights from and after the time that any Person becomes an
         Acquiring Person if such Rights were acquired by such Person or any of
         such Person's Affiliates or Associates prior to the Distribution Date
         or pursuant to Section 3(a) or Section 22 hereof ("Original Rights") or
         pursuant to Section 11(i) or Section 11(n) with respect to an
         adjustment to Original Rights; or (B) the right to vote pursuant to any
         agreement, arrangement or understanding; provided, however, that a
         Person shall not be deemed the Beneficial Owner of, or to beneficially
         own, any security by reason of such agreement, arrangement or
         understanding if the agreement, arrangement or understanding to vote
         such security (1) arises solely from a revocable proxy or consent given
         to such Person in response to a public proxy or consent solicitation
         made pursuant to, and in accordance with, the applicable rules and
         regulations promulgated under the Exchange Act and (2) is not also then
         reportable pursuant to Regulation 13D-G under the Exchange Act (or any
         comparable or successor regulation); or

                  (iii) which are beneficially owned, directly or indirectly, by
         any other Person and with respect to which such Person or any of such
         Person's Affiliates or Associates has any agreement, arrangement or
         understanding (other than customary agreements with and between
         underwriters and selling group members with respect to a bona fide
         public offering of securities) for the purpose of acquiring, holding,
         voting (except to the extent contemplated by the proviso to Section
         1(c)(ii)(B)) or disposing of such securities of the Company;

provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned" (as defined in this Section 1(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.

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

         (e) "Close of Business" on any given date shall mean 5:00 p.m., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next succeeding
Business Day.

         (f) "Common Stock" when used with reference to the Company shall mean
the Common Stock, presently par value $.01 per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the common stock (or, in the case of an unincorporated entity, the equivalent
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person. (g) "Common Stock Equivalents"
shall have the meaning set forth in Section 11(a)(iii) hereof.

         (g) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.

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         (h) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.

         (i) "Distribution Date" shall have the meaning set forth in Section 3
hereof.

         (j) "equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.

         (k) "Exempt Person" shall mean (i) the Company or any Subsidiary (as
such term is hereinafter defined) of the Company, in each case including,
without limitation, in its fiduciary capacity, or any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity or trustee
holding Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company and (ii) until
immediately following the Distribution, the corporation known as of the date
hereof as Tenneco Inc., a Delaware corporation ("Tenneco"), or any Subsidiary of
Tenneco.

         (l) "Exchange Ratio" shall have the meaning set forth in Section 24
hereof.

         (m) "Expiration Date" shall have the meaning set forth in Section 7
hereof.

         (n) "Flip-In Event" shall have the meaning set forth in Section
11(a)(ii) hereof.

         (o) "Final Expiration Date" shall have the meaning set forth in Section
7 hereof.

         (p) "NASDAQ" shall mean The Nasdaq Stock Market.

         (q) "New York Stock Exchange" shall mean the New York Stock Exchange,
Inc.

         (r) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, trust or other entity, and shall include any
successor (by merger or otherwise) to such entity.

         (s) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and
preferences set forth in the Form of Certificate of Designation attached to this
Agreement as Exhibit A.

         (t) "Qualified Offer" shall mean an all-cash tender offer for all
outstanding shares of Common Stock which meets all of the following
requirements:

                  (i) on or prior to the date such offer is commenced within the
         meaning of Rule 14d-2(a) of the General Rules and Regulations under
         the Exchange Act, such Person:

                           (A) has on hand cash or cash equivalents for the full
                  amount necessary to consummate such offer and has irrevocably
                  committed in writing to the Company to utilize such cash or
                  cash equivalents for purposes of such offer if consummated and
                  to set apart and maintain available such cash or cash
                  equivalents for such purposes until the offer is consummated
                  or withdrawn; or

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                           (B) has all financing in the full amount necessary to
                  consummate such offer and has:

                                    (1) entered into, and provided to the
                           Company certified copies of, definitive financing
                           agreements (including exhibits and related documents)
                           for funds for such offer which, when added to the
                           amount of cash and cash equivalents available,
                           committed in writing, set apart and maintained in the
                           same manner as described in clause (A) above, are in
                           an amount not less than the full amount necessary to
                           consummate such offer, which agreements are with one
                           or more responsible financial institutions or other
                           entities having the necessary financial capacity and
                           ability to provide such funds, and are subject only
                           to customary terms and conditions (which shall in no
                           event include conditions requiring access by such
                           financial institutions to non-public information to
                           be provided by the Company, conditions based on the
                           accuracy of any information concerning the Company,
                           or conditions requiring the Company to make any
                           representations, warranties or covenants in
                           connection with such financing), and

                                    (2) provided to the Company copies of all
                           written materials prepared by such Person for such
                           financial institutions in connection with entering
                           into such financing agreements; provided that, "the
                           full amount necessary to consummate such offer" in
                           either clause (A) or (B) above shall be an amount
                           sufficient to pay for all shares of Common Stock
                           outstanding on a fully diluted basis in cash pursuant
                           to the offer and the second-step transaction required
                           by clause (v) below and all related expenses;

                  (ii) after the consummation of such offer, such Person, alone
         or together with one or more direct or indirect wholly-owned
         Subsidiaries of such Person, owns (in fact) Common Stock representing
         eighty-five percent (85%) or more of the then outstanding Common Stock,
         excluding for purposes of determining the then outstanding Common Stock
         under this clause (ii) those shares of Common Stock beneficially owned
         (x) by persons who are directors and also officers of the Company and
         (y) employee stock plans of the Company in which employee participants
         do not have the right to determine confidentially whether shares of
         Common Stock held subject to the plan will be tendered in a tender or
         exchange offer;

                  (iii) such offer remains open for at least 60 Business Days;
         provided, however, that (x) if there is any increase in the price of
         such offer, such offer must remain open for at least an additional 20
         Business Days after the last such increase, (y) such offer must remain
         open for at least 20 Business Days after the date that any bona fide
         alternative offer is made which, in the opinion of one or more
         investment banking firms designated by the Company, provides for
         consideration per share in excess of that provided for in such offer,
         and (z) such offer must remain open for at least 20 Business Days after
         the date, if any, on which such Person reduces the per share price
         offered in accordance with clause (v)(y) below (provided, in the case
         of each of clauses (x), (y) and (z) above, in no event will such offer
         have been outstanding for less than 60 Business Days); provided
         further, however, that such offer need

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         not remain open, as a result of this clause (iii), beyond (1) the time
         which any other offer satisfying the criteria for a Qualified Offer is
         then required to be kept open under this clause (iii), or (2) the
         scheduled expiration date, as such date may be extended by public
         announcement on or prior to the then scheduled expiration date, of any
         other tender or exchange offer for Common Stock with respect to which
         the Board of Directors has agreed to redeem the Rights immediately
         prior to acceptance for payment of Common Stock thereunder (unless such
         other offer is terminated prior to its expiration without any Common
         Stock having been purchased thereunder);

                  (iv) such offer is accompanied by a written opinion, in
         customary form, of a nationally recognized investment banking firm
         which is addressed to the Company and the holders of Common Stock other
         than such Person and states that the price to be paid to holders
         pursuant to the offer is fair from a financial point of view to such
         holders and includes any written presentation of such firm showing the
         analysis and range of values underlying such conclusions and such
         written opinion and any such presentation is updated and provided to
         the Company within two Business Days prior to the date such offer is
         consummated;

                  (v) prior to or on the date that such offer is commenced
         within the meaning of Rule 14d-2(a) of the General Rules and
         Regulations under the Exchange Act, such Person makes an irrevocable
         written commitment to the Company and, with respect to clause (x) to
         its stockholders, (x) to consummate a transaction or transactions
         promptly upon the completion of such offer (and in no event later than
         five Business Days thereafter), whereby all Common Stock not purchased
         in such offer will be acquired at the same cash price per share paid in
         such offer, subject only to the condition that the Board of Directors
         shall have granted any approvals required to enable such Person to
         consummate such transaction or transactions following consummation of
         such offer without obtaining the vote of any other stockholder, (y)
         that such Person will not make any amendment to the original offer
         which reduces the per share price offered (other than a reduction to
         reflect any dividend declared by the Company, other than a regular
         quarterly dividend, after the commencement of such offer or any
         material change in the capital structure of the Company initiated by
         the Company after the commencement of such offer, whether by way of
         reclassification, recapitalization, reorganization, repurchase or
         otherwise), changes the form of consideration offered, or reduces the
         number of shares being sought or which is in any other respect
         materially adverse to the Company's stockholders, and (z) that neither
         such Person nor any of its Affiliates or Associates will make any offer
         for or purchase any equity securities of the Company for a period of
         one year after the commencement of the original offer if such original
         offer does not result in the tender of the number of shares of Common
         Stock required to be purchased pursuant to clause (ii) above, unless
         another tender offer by another party for all outstanding Common Stock
         is commenced that (a) constitutes a Qualified Offer (in which event,
         any new offer by such Person or of any Affiliates or Associates must be
         at a price no less than that provided for in such original offer) or
         (b) is approved by the Board of Directors of the Company (in which
         event, any new offer by such Person or of any of its Affiliates or
         Associates must be at a price no less than that provided for in such
         approved offer); and

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                  (vi) in addition to each of the requirements set forth above,
         such offer is not subject to any financing, funding or similar
         condition, nor any condition relating to completion of or satisfaction
         with any due diligence or similar investigation, and, subject to the
         foregoing, otherwise provides for usual and customary terms and
         conditions.

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

         (v) "Redemption Date" shall have the meaning set forth in Section 7
hereof.

         (w) "Redemption Price" shall have the meaning set forth in Section 23
hereof.

         (x) "Right Certificate" shall have the meaning set forth in Section 3
hereof.

         (y) "Securities Act" shall mean the Securities Act of 1933, as amended.

         (z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.

         (aa) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.

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

         (cc) "Subsidiary" of any Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person, and any corporation or other entity that is otherwise controlled by
such Person, and a "wholly-owned Subsidiary" of any Person shall mean any
corporation or other entity of which all the securities or other ownership
interests are beneficially owned by such Person.

         (dd) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.

         (ee) "Summary of Rights" shall have the meaning set forth in Section 3
hereof.

         (ff) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.

         Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date be the
holders of Common Stock) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable.

         Section 3. Issue of Right Certificates.


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         (a) Until the Close of Business on the earlier of (i) the tenth day
after the Stock Acquisition Date or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to such time
as any Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than an Exempt Person) of, or of the first public announcement
of the intention of such Person (other than an Exempt Person) to commence, a
tender or exchange offer (other than a Qualified Offer) the consummation of
which would result in any Person (other than an Exempt Person) becoming the
Beneficial Owner of shares of Common Stock aggregating 20% or more of the Common
Stock then outstanding (the earlier of such dates being herein referred to as
the "Distribution Date", provided, however, that if either of such dates occurs
after the date of this Agreement and on or prior to the Record Date, then the
Distribution Date shall be the Record Date), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Stock registered in the names of the holders thereof and not by separate
Right Certificates, and (y) the Rights will be transferable only in connection
with the transfer of Common Stock. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the Distribution Date
(other than any Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.

         (b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of Preferred
Stock, in substantially the form of Exhibit C hereto (the "Summary of Rights")
to each record holder of Common Stock as of the Record Date (other than any
Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with the Summary of Rights. Until
the Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby.

         (c) Rights shall be issued in respect of all shares of Common Stock
issued or disposed of (including, without limitation, upon disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earlier
of the Distribution Date and the Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the Distribution Date. Certificates issued
for Common Stock (including, without limitation, upon transfer of outstanding
Common Stock, disposition of Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but unissued shares) after the
Record Date but prior to the earlier of the Distribution Date and the Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:

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<PAGE>   11


         This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Qualified Offer Plan Rights Agreement between
Pactiv Corporation (the "Company") and First Chicago Trust Company of New York,
as Rights Agent, dated as of November 4, 1999 and as amended from time to time
(the "Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
the Company. Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances, as set forth in the
Rights Agreement, Rights owned by or transferred to any Person who is or becomes
an Acquiring Person (as defined in the Rights Agreement) and certain transferees
thereof will become null and void and will no longer be transferable.

         With respect to such certificates containing the foregoing legend,
until the Distribution Date the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate, except as otherwise
provided herein, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby. In the event that the Company
purchases or otherwise acquires any Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no longer
outstanding.

         Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.

         Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or interdealer quotation system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
this Agreement, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price per one one-thousandth of a share of
Preferred Stock set forth therein (the "Purchase Price"), but the number of such
one one-thousandths of a share of Preferred Stock and the Purchase Price shall
be subject to adjustment as provided herein.

         Section 5. Countersignature and Registration.

         (a) The Right Certificates shall be executed on behalf of the Company
by the Chairman and Chief Executive Officer of the Company, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof and shall be attested by the 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 for any purpose unless
countersigned. In

                                       9

<PAGE>   12

case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the Person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
Person was not such an officer.

         (b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

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

         (a) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a share of Preferred Stock
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or agency of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

         (b) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

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

                                       10

<PAGE>   13


         (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part 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
office or agency of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which the Rights are exercised, at any
time which is both after the Distribution Date and prior to the time (the
"Expiration Date") that is the earliest of (i) the Close of Business on November
4, 2009 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

         (b) The Purchase Price shall be initially $60.00 for each one
one-thousandth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-thousandths of a share of
Preferred Stock or other securities or property to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) of this Section 7.

         (c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of Preferred Stock to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock, or make available if the Rights Agent is the transfer agent
for the Preferred Stock, certificates for the number of shares of Preferred
Stock to be purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from a
depositary agent appointed by the Company depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock as
are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs any such depositary agent to
comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (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) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all of the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the exercisable
Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.


                                       11

<PAGE>   14

         (e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.

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

         Section 9. Availability of Shares of Preferred Stock.

         (a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
or any shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.

         (b) So long as the shares of Preferred Stock issuable upon the exercise
of Rights may be listed or admitted to trading on any national securities
exchange, or quoted on NASDAQ, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed or admitted to trading on such exchange, or
quoted on NASDAQ, upon official notice of issuance upon such exercise.

         (c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
shares of Preferred Stock upon the exercise of Rights, to register and qualify
such shares of Preferred Stock under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite

                                       12

<PAGE>   15

qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.

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

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

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

         Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights. The Purchase Price, the number of shares of Preferred Stock or
other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

                  (a) (i) In the event the Company shall at any time after the
         date of this Agreement (A) declare and pay a dividend on the Preferred
         Stock payable in shares of Preferred Stock, (B) subdivide the
         outstanding Preferred Stock, (C) combine the outstanding Preferred
         Stock into a smaller number of shares of Preferred Stock or (D) issue
         any shares of its capital stock in a reclassification of the Preferred
         Stock (including any such reclassification in connection with a
         consolidation or merger in which the Company is the continuing or
         surviving corporation), except as otherwise provided in this Section
         11(a), the number and kind of

                                       13

<PAGE>   16

         shares of capital stock issuable upon exercise of a Right as of the
         record date for such dividend or the effective date of such
         subdivision, combination or reclassification shall be proportionately
         adjusted so that the holder of any Right exercised after such time
         shall be entitled to receive the aggregate number and kind of shares of
         capital stock which, if such Right had been exercised immediately prior
         to such date and at a time when the Preferred Stock transfer books of
         the Company were open, the holder would have owned upon such exercise
         and been entitled to receive by virtue of such dividend, subdivision,
         combination or reclassification; provided, however, that in no event
         shall the consideration to be paid upon the exercise of one Right be
         less than the aggregate par value of the shares of capital stock of the
         Company issuable upon exercise of one Right.

                  (ii) Subject to Section 24 of this Agreement, in the event any
         Person becomes an Acquiring Person (the first occurrence of such event
         being referred to hereinafter as the "Flip-In Event"), then (A) the
         Purchase Price shall be adjusted to be the Purchase Price in effect
         immediately prior to the Flip-In Event multiplied by the number of one
         one- thousandths of a share of Preferred Stock for which a Right was
         exercisable immediately prior to such Flip-In Event, whether or not
         such Right was then exercisable, and (B) each holder of a Right, except
         as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii)
         hereof, shall thereafter have the right to receive, upon exercise
         thereof at a price equal to the Purchase Price (as so adjusted), in
         accordance with the terms of this Agreement and in lieu of shares of
         Preferred Stock, such number of shares of Common Stock as shall equal
         the result obtained by dividing the Purchase Price (as so adjusted) by
         50% of the current per share market price of the Common Stock
         (determined pursuant to Section 11(d) hereof) on the date of such
         Flip-In Event; provided, however, that the Purchase Price (as so
         adjusted) and the number of shares of Common Stock so receivable upon
         exercise of a Right shall, following the Flip-In Event, be subject to
         further adjustment as appropriate in accordance with Section 11(f)
         hereof. Notwithstanding anything in this Agreement to the contrary,
         however, from and after the Flip-In Event, any Rights that are
         beneficially owned by (x) any Acquiring Person (or any Affiliate or
         Associate of any Acquiring Person), (y) a transferee of any Acquiring
         Person (or any such Affiliate or Associate) who becomes a transferee
         after the Flip-In Event or (z) a transferee of any Acquiring Person (or
         any such Affiliate or Associate) who became a transferee prior to or
         concurrently with the Flip-In Event pursuant to either (I) a transfer
         from the Acquiring Person to holders of its equity securities or to any
         Person with whom it has any continuing agreement, arrangement or
         understanding regarding the transferred Rights or (II) a transfer which
         the Board of Directors has determined is part of a plan, arrangement or
         understanding which has the purpose or effect of avoiding the
         provisions of this paragraph, and subsequent transferees of such
         Persons, shall be void without any further action and any holder of
         such Rights shall thereafter have no rights whatsoever with respect to
         such Rights under any provision of this Agreement. The Company shall
         use all reasonable efforts to ensure that the provisions of this
         Section 11(a)(ii) are complied with, but shall have no liability to any
         holder of Right Certificates or other Person as a result of its failure
         to make any determinations with respect to an Acquiring Person or its
         Affiliates, Associates or transferees hereunder. From and after the
         Flip-In Event, no Right Certificate shall be issued pursuant to Section
         3 or Section 6 hereof that represents Rights that are or have become
         void pursuant to the provisions of this paragraph, and any Right
         Certificate delivered to the Rights Agent that represents Rights that
         are or have become

                                       14

<PAGE>   17



         void pursuant to the provisions of this paragraph shall be canceled.
         From and after the occurrence of an event specified in Section 13(a)
         hereof, any Rights that theretofore have not been exercised pursuant to
         this Section 11(a)(ii) shall thereafter be exercisable only in
         accordance with Section 13 and not pursuant to this Section 11(a)(ii).

                  (iii) The Company may at its option substitute for a share of
         Common Stock issuable upon the exercise of Rights in accordance with
         the foregoing subparagraph (ii) a number of shares of Preferred Stock
         or fraction thereof such that the current per share market price of one
         share of Preferred Stock multiplied by such number or fraction is equal
         to the current per share market price of one share of Common Stock. In
         the event that there shall not be sufficient shares of Common Stock
         issued but not outstanding or authorized but unissued to permit the
         exercise in full of the Rights in accordance with the foregoing
         subparagraph (ii), the Board of Directors shall, to the extent
         permitted by applicable law and any material agreements then in effect
         to which the Company is a party (A) determine the excess (such excess,
         the "Spread") of (1) the value of the shares of Common Stock issuable
         upon the exercise of a Right in accordance with the foregoing
         subparagraph (ii) (the "Current Value") over (2) the Purchase Price (as
         adjusted in accordance with the foregoing subparagraph (ii)), and (B)
         with respect to each Right (other than Rights which have become void
         pursuant to the foregoing subparagraph (ii)), make adequate provision
         to substitute for the shares of Common Stock issuable in accordance
         with the foregoing subparagraph (ii) upon exercise of the Right and
         payment of the Purchase Price (as adjusted in accordance therewith),
         (1) cash, (2) a reduction in such Purchase Price, (3) shares of
         Preferred Stock or other equity securities of the Company (including,
         without limitation, shares or fractions of shares of preferred stock
         which, by virtue of having dividend, voting and liquidation rights
         substantially comparable to those of the shares of Common Stock, are
         deemed in good faith by the Board of Directors to have substantially
         the same value as the shares of Common Stock (such shares of Preferred
         Stock and shares or fractions of shares of preferred stock are
         hereinafter referred to as "Common Stock Equivalents")), (4) debt
         securities of the Company, (5) other assets, or (6) any combination of
         the foregoing, having a value which, when added to the value of the
         shares of Common Stock issued upon exercise of such Right, shall have
         an aggregate value equal to the Current Value (less the amount of any
         reduction in such Purchase Price), where such aggregate value has been
         determined by the Board of Directors upon the advice of a nationally
         recognized investment banking firm selected in good faith by the Board
         of Directors; provided, however, that if the Company shall not make
         adequate provision to deliver value pursuant to clause (B) above within
         thirty (30) days following the Flip-In Event (the date of the Flip-In
         Event being the "Section 11(a)(ii) Trigger Date"), then the Company
         shall be obligated to deliver, to the extent permitted by applicable
         law and any material agreements then in effect to which the Company is
         a party, upon the surrender for exercise of a Right and without
         requiring payment of such Purchase Price, shares of Common Stock (to
         the extent available), and then, if necessary, such number or fractions
         of shares of Preferred Stock (to the extent available) and then, if
         necessary, cash, which shares and/or cash have an aggregate value equal
         to the Spread. If, upon the occurrence of the Flip- In Event, the Board
         of Directors shall determine in good faith that it is likely that
         sufficient additional shares of Common Stock could be authorized for
         issuance upon exercise in full of the Rights, then, if the Board of
         Directors so elects, the thirty (30) day period set forth above may be
         extended to the extent necessary, but not more than ninety (90) days
         after the

                                       15
<PAGE>   18



         Section 11(a)(ii) Trigger Date, in order that the Company may seek
         stockholder approval for the authorization of such additional shares
         (such thirty (30) day period, as it may be extended, is herein called
         the "Substitution Period"). To the extent that the Company determines
         that some action need be taken pursuant to the second and/or third
         sentence of this Section 11(a)(iii), the Company (x) shall provide,
         subject to Section 11(a)(ii) hereof and the last sentence of this
         Section 11(a)(iii) hereof, that such action shall apply uniformly to
         all outstanding Rights and (y) may suspend the exercisability of the
         Rights until the expiration of the Substitution Period in order to seek
         any authorization of additional shares and/or to decide the appropriate
         form of distribution to be made pursuant to such second sentence and to
         determine the value thereof. In the event of any such suspension, the
         Company shall issue a public announcement stating that the
         exercisability of the Rights has been temporarily suspended, as well as
         a public announcement at such time as the suspension is no longer in
         effect. For purposes of this Section 11(a)(iii), the value of the
         shares of Common Stock shall be the current per share market price (as
         determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii)
         Trigger Date and the per share or fractional value of any "Common Stock
         Equivalent" shall be deemed to equal the current per share market price
         of the Common Stock. The Board of Directors of the Company may, but
         shall not be required to, establish procedures to allocate the right to
         receive shares of Common Stock upon the exercise of the Rights among
         holders of Rights pursuant to this Section 11(a)(iii).

         (b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent preferred shares
(or having a conversion price per share, if a security convertible into shares
of Preferred Stock or equivalent preferred shares) less than the then current
per share market price of the Preferred Stock (determined pursuant to Section
11(d) hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of shares of Preferred Stock and
equivalent preferred shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock and
equivalent preferred shares outstanding on such record date plus the number of
additional shares of Preferred Stock and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and equivalent preferred
shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively

                                       16
<PAGE>   19





whenever such a record date is fixed; and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.

         (c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one share of Preferred
Stock, and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company to be issued upon exercise of one Right. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.

                  (d) (i) Except as otherwise provided herein, for the purpose
         of any computation hereunder, the "current per share market price" of
         any security (a "Security" for the purpose of this Section 11(d)(i)) on
         any date shall be deemed to be the average of the daily closing prices
         per share of such Security for the 30 consecutive Trading Days (as such
         term is hereinafter defined) immediately prior to such date; provided,
         however, that in the event that the current per share market price of
         the Security is determined during a period following the announcement
         by the issuer of such Security of (A) a dividend or distribution on
         such Security payable in shares of such Security or securities
         convertible into such shares, or (B) any subdivision, combination or
         reclassification of such Security, and prior to the expiration of 30
         Trading Days after the ex-dividend date for such dividend or
         distribution, or the record date for such subdivision, combination or
         reclassification, then, and in each such case, the current per share
         market price shall be appropriately adjusted to reflect the current
         market price per share equivalent of such Security. The closing price
         for each day shall be the last sale price, regular way, or, in case no
         such sale takes place on such day, the average of the closing bid and
         asked prices, regular way, in either case as reported by the principal
         consolidated transaction reporting system with respect to securities
         listed or admitted to trading on the New York Stock Exchange or, if the
         Security is not listed or admitted to trading on the New York Stock
         Exchange, as reported in the principal consolidated transaction
         reporting system with respect to securities listed on the principal
         national securities exchange on which the Security is listed or
         admitted to trading or, if the Security is not listed or admitted to
         trading on any national securities exchange, the last quoted price or,
         if not so quoted, the average of the high bid and low asked prices in
         the over-the-counter

                                       17
<PAGE>   20



         market, as reported by NASDAQ or such other system then in use, or, if
         on any such date the Security is not quoted by any such organization,
         the average of the closing bid and asked prices as furnished by a
         professional market maker making a market in the Security selected by
         the Board of Directors of the Company. The term "Trading Day" shall
         mean a day on which the principal national securities exchange on which
         the Security is listed or admitted to trading is open for the
         transaction of business or, if the Security is not listed or admitted
         to trading on any national securities exchange, a Business Day.

                  (ii) For the purpose of any computation hereunder, if the
         Preferred Stock is publicly traded, the "current per share market
         price" of the Preferred Stock shall be determined in accordance with
         the method set forth in Section 11(d)(i). If the Preferred Stock is not
         publicly traded but the Common Stock is publicly traded, the "current
         per share market price" of the Preferred Stock shall be conclusively
         deemed to be the current per share market price of the Common Stock as
         determined pursuant to Section 11(d)(i) multiplied by the then
         applicable Adjustment Number (as defined in and determined in
         accordance with the Certificate of Designation for the Preferred
         Stock). If neither the Common Stock nor the Preferred Stock is publicly
         traded, "current per share market price" shall mean the fair value per
         share as determined in good faith by the Board of Directors of the
         Company, whose determination shall be described in a statement filed
         with the Rights Agent.

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

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

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

         (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and

                                       18

<PAGE>   21
11(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one hundred-thousandth of a share of Preferred Stock)
obtained by (i) multiplying (x) the number of one one-thousandths of a share
purchasable upon the exercise of a Right immediately prior to such adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment.

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

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

         (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the fraction of
Preferred Stock or other shares of capital stock issuable upon exercise of a
Right, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such
shares at such adjusted Purchase Price.


                                       19
<PAGE>   22

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

         (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.

         (n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare and pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by
payment of a dividend payable in Common Stock) into a greater or lesser number
of shares of Common Stock, then, in each such case, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.

         (o) The Company agrees that, after the earlier of the Distribution Date
or the Stock Acquisition Date, it will not, except as permitted by Sections 23,
24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be afforded by the
Rights.

         Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Stock and the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof (if
so required under Section 25 hereof). The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment

                                       20

<PAGE>   23
therein contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.

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

         (a) In the event, directly or indirectly, at any time after the Flip-In
Event (i) the Company shall consolidate with or shall merge into any other
Person, (ii) any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more
wholly-owned Subsidiaries of the Company), then upon the first occurrence of
such event, proper provision shall be made so that: (A) each holder of a Right
(other than Rights which have become void pursuant to Section 11(a)(ii) hereof)
shall thereafter have the right to receive, upon the exercise thereof at the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock or Common Stock of the Company, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the
current per share market price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; provided, however, that the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof) and the number of shares of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof to reflect any events
occurring in respect of the Common Stock of such Principal Party after the
occurrence of such consolidation, merger, sale or transfer; (B) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" shall thereafter be
deemed to refer to such Principal Party; and (D) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price as provided in this Section 13(a), such cash,
shares, rights, warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such transaction, owned the
Common Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the

                                       21

<PAGE>   24
subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.

         (b)      "Principal Party" shall mean:

                  (i) in the case of any transaction described in (i) or (ii) of
         the first sentence of Section 13(a) hereof: (A) the Person that is the
         issuer of the securities into which the shares of Common Stock are
         converted in such merger or consolidation, or, if there is more than
         one such issuer, the issuer the shares of Common Stock of which have
         the greatest aggregate market value of shares outstanding, or (B) if no
         securities are so issued, (x) the Person that is the other party to the
         merger, if such Person survives said merger, or, if there is more than
         one such Person, the Person the shares of Common Stock of which have
         the greatest aggregate market value of shares outstanding or (y) if the
         Person that is the other party to the merger does not survive the
         merger, the Person that does survive the merger (including the Company
         if it survives) or (z) the Person resulting from the consolidation; and

                  (ii) in the case of any transaction described in (iii) of the
         first sentence of Section 13(a) hereof, the Person that is the party
         receiving the greatest portion of the assets or earning power
         transferred pursuant to such transaction or transactions, or, if each
         Person that is a party to such transaction or transactions receives the
         same portion of the assets or earning power so transferred or if the
         Person receiving the greatest portion of the assets or earning power
         cannot be determined, whichever of such Persons is the issuer of Common
         Stock having the greatest aggregate market value of shares outstanding;

provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding,
or (3) if such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.

         (c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Agreement as the same shall have
been assumed by the Principal Party pursuant to

                                       22

<PAGE>   25
Sections 13(a) and (b) hereof and providing that, as soon as practicable
after executing such agreement pursuant to this Section 13, the Principal Party
will:

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

                  (ii) use its best efforts, if the Common Stock of the
         Principal Party shall be listed or admitted to trading on the New York
         Stock Exchange or on another national securities exchange, to list or
         admit to trading (or continue the listing of) the Rights and the
         securities purchasable upon exercise of the Rights on the New York
         Stock Exchange or such securities exchange, or, if the Common Stock of
         the Principal Party shall not be listed or admitted to trading on the
         New York Stock Exchange or a national securities exchange, to cause the
         Rights and the securities receivable upon exercise of the Rights to be
         authorized for quotation on NASDAQ or on such other system then in use;

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

                  (iv) obtain waivers of any rights of first refusal or
         preemptive rights in respect of the Common Stock of the Principal Party
         subject to purchase upon exercise of outstanding Rights.

         (d) In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to this
Section 13), in connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of Common Stock or Common
Stock Equivalents of such Principal Party at less than the then current market
price per share thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock or Common Stock
Equivalents of such Principal Party at less than such then current market price,
or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.


                                       23
<PAGE>   26

          (e) The Company covenants and agrees that it shall not, at any time
after the Flip-In Event, enter into any transaction of the type described in
clauses (i) through (iii) of Section 13(a) hereof if (i) at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (ii)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(b) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (iii) the form or nature
of organization of the Principal Party would preclude or limit the
exercisability of the Rights.

          (f) The provisions of Sections 13(a), 13(b), 13(c), 13(d) and 13(e)
hereof shall not apply to a transaction which (i) is consummated following
completion of a Qualified Offer and (ii) complies with and is effected in
accordance with clause (v)(x) of Section 1(t) hereof.

          Section 14. Fractional Rights and Fractional Shares.

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

          (b) The Company shall not be required to issue fractions of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock) or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon the exercise
or exchange of Rights. Interests in fractions of Preferred Stock in integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary



                                       24
<PAGE>   27



selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Stock
represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-thousandth of a share
of Preferred Stock, the Company shall 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 a whole share of Preferred Stock (as determined in accordance with
Section 14(a) hereof) for the Trading Day immediately prior to the date of such
exercise or exchange.

          (c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock (as determined in
accordance with Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.

          (d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right (except as provided above).

          Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may 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 (or, prior to
the Distribution Date, such Common Stock) in the manner provided therein and in
this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.

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

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

          (b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer; and



                                       25
<PAGE>   28

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

          Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or 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 stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in this Agreement), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged in
accordance with the provisions hereof.

          Section 18. Concerning the Rights Agent.

          (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.

          (b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Stock or Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

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

          (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer or corporate trust powers of the Rights Agent or any


                                       26
<PAGE>   29

successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and 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 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 Agreement.

          Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

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

          (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman and Chief Executive Officer
and 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 Agreement in
reliance upon such certificate.

          (c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.

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



                                       27
<PAGE>   30

          (e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any change or
adjustment in the terms of the Rights provided for in Sections 3, 11, 13, 23 and
24, or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate furnished pursuant to Section
12, describing such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Preferred Stock or other securities will, when issued, be validly authorized
and issued, fully paid and nonassessable.

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

          (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Chairman and
Chief Executive Officer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.

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

          (i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights


                                       28
<PAGE>   31

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.

          (j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

          Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock or Preferred Stock by registered or certified mail, and, following
the Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or the laws of any state of the
United States or the District of Columbia, in good standing, having an office in
the State of Illinois, the State of New York or the State of New Jersey, which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and, following
the Distribution Date, mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.



                                       29
<PAGE>   32

          Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such forms
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Stock following the Distribution Date and
prior to the Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
Distribution Date, issue Rights Certificates representing the appropriate number
of Rights in connection with such issuance or sale.

          Section 23. Redemption.

          (a) The Board of Directors of the Company may, at any time prior to
the Flip-In Event, redeem all but not less than all the then outstanding Rights
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring in respect of the
Common Stock after the date hereof (the redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. The Redemption Price shall be
payable, at the option of the Company, in cash, shares of Common Stock, or such
other form of consideration as the Board of Directors shall determine.

          (b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption), 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. The Company shall
promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights (or such later time as the Board of
Directors may establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders of the then outstanding
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 Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption shall state the method by which the
payment of the Redemption Price will be made.

          Section 24. Exchange.

          (a) The Board of Directors of the Company may, at its option, at any
time after the Flip-In Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring in
respect of the Common Stock after



                                       30
<PAGE>   33

the date hereof (such amount per Right being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after an Acquiring Person
shall have become the Beneficial Owner of shares of Common Stock aggregating 50%
or more of the shares of Common Stock then outstanding. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.

          (b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
shall promptly mail a notice of any such exchange to all of the holders of the
Rights so exchanged at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.

          (c) The Company may at its option substitute, and, in the event that
there shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued to permit an exchange of Rights for Common Stock as
contemplated in accordance with this Section 24, the Company shall substitute to
the extent of such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of Preferred
Stock or fraction thereof (or equivalent preferred shares, as such term is
defined in Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one share of Preferred Stock
(or equivalent preferred share) multiplied by such number or fraction is equal
to the current per share market price of one share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange.

          Section 25. Notice of Certain Events.

          (a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or combination of
outstanding



                                       31
<PAGE>   34

Preferred Stock), (iv) to effect the liquidation, dissolution or winding up of
the Company, or (v) to pay any dividend on the Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common
Stock), then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Stock and/or Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.

          (b) In case any event described in Section 11(a)(ii) or Section 13
shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.

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

Pactiv Corporation
1900 West Field Court
Lake Forest, IL 60045
Attention: Corporate Secretary

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

First Chicago Trust Company of New York
P.O. Box 2500
Jersey City, New Jersey 07303-2500
Attention: Chairman and Chief Executive Officer

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



                                       32
<PAGE>   35

          Section 27. Supplements and Amendments. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights, provided that no such supplement or amendment
may (a) adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
(b) cause this Agreement again to become amendable other than in accordance with
this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment,
provided that any supplement or amendment that does not amend Sections 18, 19,
20 or 21 hereof 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.

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

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

          Section 30. Determinations and Actions by the Board of Directors.

          (a) The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise the rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including,
without limitation, a determination whether: to exchange the outstanding Rights
for Common Stock pursuant to Section 24; an offer is a Qualified Offer; to
redeem or not redeem the Rights; or to amend or not to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.



                                       33
<PAGE>   36

          (b) Nothing contained in this 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 Qualified Offer or any other tender offer or other
acquisition proposal, or to recommend that holders of Common Stock reject any
Qualified Offer or any other tender offer or other acquisition proposal, 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
Qualified Offer or any other tender offer or other acquisition proposal that the
Board of Directors believes is necessary or appropriate in the exercise of such
fiduciary duty.

          Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

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

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

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

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

PACTIV CORPORATION

By: /s/ Richard L. Wambold
   -----------------------------

Name:   Richard L. Wambold
Title:  Chief Executive Officer

FIRST CHICAGO TRUST COMPANY OF
NEW YORK, as Rights Agent

By: /s/ Charles D. Keryc
   -----------------------------

Name:   Charles D. Keryc
Title:  Managing Director


                                       34

<PAGE>   37


                                                                       EXHIBIT A

                                     FORM OF
                           CERTIFICATE OF DESIGNATION

                                       OF

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                               PACTIV CORPORATION

             PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
                            OF THE STATE OF DELAWARE

         PACTIV CORPORATION a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

         That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Restated Certificate of Incorporation of
the said Corporation, the said Board of Directors adopted the following
resolution creating a series of 750,000 shares of Preferred Stock designated as
"Series A Junior Participating Preferred Stock":

         RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of the Restated
Certificate of Incorporation, a series of Preferred Stock, par value $.01 per
share, of the Corporation be and hereby is created, and that the designation and
number of shares thereof and the voting and other powers, preferences and
relative, participating, optional or other rights of the shares of such series
and the qualifications, limitations and restrictions thereof are as follows:

         SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

         1.     Designation and Amount. There shall be a series of Preferred
Stock that shall be designated as "Series A Junior Participating Preferred
Stock," and the number of shares constituting such series shall be 750,000. Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the number of shares
of Series A Junior Participating Preferred Stock to less than the number of
shares then issued and outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.



                                       A-1

<PAGE>   38



         2.     Dividends and Distribution.

         (A) Subject to the prior and superior rights of the holders of any
shares of any class or series of stock of the Corporation ranking prior and
superior to the shares of Series A Junior Participating Preferred Stock with
respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the holders of shares of any class or series
of stock of the Corporation ranking junior to the Series A Junior Participating
Preferred Stock in respect thereof, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of January, April,
July and October, in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $25.00 or (b) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $.01 per share, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Junior Participating Preferred
Stock. The "Adjustment Number" shall initially be 1000. In the event the
Corporation shall at any time after November 4, 1999 (i) declare and pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

         (B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).

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


                                       A-2

<PAGE>   39



such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to the
date fixed for the payment thereof.

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

         (A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the stockholders of the Corporation.

         (B) Except as required by law, by Section 3(C) and by Section 10
hereof, holders of Series A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.

         (C) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Junior Participating
Preferred Stock are in default, the number of directors constituting the Board
of Directors of the Corporation shall be increased by two. In addition to voting
together with the holders of Common Stock for the election of other directors of
the Corporation, the holders of record of the Series A Junior Participating
Preferred Stock, voting separately as a class to the exclusion of the holders of
Common Stock, shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears on
the Series A Junior Participating Preferred Stock 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 Junior Participating Preferred
Stock being entitled to cast a number of votes per share of Series A Junior
Participating Preferred Stock as is specified in paragraph (A) of this Section
3. Until the default in payments of all dividends which permitted the election
of said directors shall cease to exist, any director who shall have been so
elected pursuant to the provisions of this Section 3(C) may be removed at any
time without cause only by the affirmative vote of the holders of the shares of
Series A Junior Participating Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Junior Participating
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate, and the number
of directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(C) shall be in addition to any other
voting rights granted to the holders of the Series A Junior Participating
Preferred Stock in this Section 3.

         4.     Certain Restrictions.

                                       A-3

<PAGE>   40





         (A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding 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 Junior
         Participating Preferred Stock;

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

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

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

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

         6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation,
dissolution or winding up of the Corporation, voluntary or otherwise, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred Stock shall have received
an amount per share (the "Series A Liquidation Preference") equal to the greater
of (i) $500.00 plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or


                                       A-4

<PAGE>   41



(ii) the Adjustment Number times the per share amount of all cash and other
property to be distributed in respect of the Common Stock upon such liquidation,
dissolution or winding up of the Corporation.

         (B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.

         (C) Neither the merger or consolidation of the Corporation into or with
another corporation nor the merger or consolidation of any other corporation
into or with the Corporation shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6.

         7. Consolidation, Merger, Etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the
outstanding shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.

         8. No Redemption. Shares of Series A Junior Participating Preferred
Stock shall not be subject to redemption by the Corporation.

         9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Preferred Stock as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or
winding up, unless the terms of any such series shall provide otherwise, and
shall rank senior to the Common Stock as to such matters.

         10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the outstanding
shares of Series A Junior Participating Preferred Stock, voting separately as a
class.

         11. Fractional Shares. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate this
day of            , 1999.



                                      A-5
<PAGE>   42


PACTIV CORPORATION


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



                                       A-6

<PAGE>   43



                                                                       EXHIBIT B

                            FORM OF RIGHT CERTIFICATE

Certificate No. R-
                           Rights

    NOT EXERCISABLE AFTER NOVEMBER 4, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE
    OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
    EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
    CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (AS DEFINED BELOW),
    RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
    PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
    WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                RIGHT CERTIFICATE

                               PACTIV CORPORATION

         This certifies that                   or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Qualified Offer Plan Rights Agreement, dated as of November 4, 1999, as the same
may be amended from time to time (the "Rights Agreement"), between Pactiv
Corporation, a Delaware corporation (the "Company"), and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m., New York City time, on November 4,
2009 at the office or agency of the Rights Agent designated for such purpose, or
of its successor as Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par value
$.01 per share (the "Preferred Stock"), of the Company at a purchase price of
$60.00 per one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of one one-thousandths of a share of
Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
November 4, 1999, based on the Preferred Stock as constituted at such date. As
provided in the Rights Agreement, the Purchase Price, the number of one
one-thousandths of a share of Preferred Stock (or other securities or property)
which may be purchased upon the exercise of the Rights and the number of Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.

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


                                       B-1

<PAGE>   44



at the principal executive offices of the Company and the above-mentioned office
or agency of the Rights Agent. The Company will mail to the holder of this Right
Certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.

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

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for shares of the
Company's Common Stock, par value $.01 per share, or shares of Preferred Stock.

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

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

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




                                       B-2

<PAGE>   45



WITNESS the facsimile signature of the Chairman and Chief Executive Officer and
the Secretary of the Company and its corporate seal.

Dated as of               , 1999


PACTIV CORPORATION


By:
   --------------------------
    Chief Executive Officer

ATTEST:


----------------------------------
Secretary


Countersigned:

FIRST CHICAGO TRUST COMPANY OF
NEW YORK, as Rights Agent

By:
   --------------------------------------

Name:
Its:


                                       B-3

<PAGE>   46




                    FORM OF REVERSE SIDE OF RIGHT CERTIFICATE

                               FORM OF ASSIGNMENT
                (TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
                HOLDER DESIRES TO TRANSFER THE RIGHT CERTIFICATE)

    FOR VALUE RECEIVED           hereby sells, assigns and transfers unto

                  (Please print name and address of transferee)

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

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


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

Signature Guaranteed:

   Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.

                                (To be completed)

   The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being assigned to an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).


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



                                       B-4

<PAGE>   47



             FORM OF REVERSE SIDE OF RIGHT CERTIFICATE - (CONTINUED)

                          FORM OF ELECTION TO PURCHASE
                  (TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE
                  RIGHTS REPRESENTED BY THE RIGHTS CERTIFICATE)

To Pactiv Corporation:

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


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


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


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

Please insert social security or other identifying number


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


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



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


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

        (Signature must conform to holder specified on Right Certificate)

Signature Guaranteed:

    Signature must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.

                                (To be completed)


                                       B-5

<PAGE>   48



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


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




                                       B-6

<PAGE>   49





                                     NOTICE

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

        In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored.



                                       B-7

<PAGE>   50




                                                                       EXHIBIT C


    UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (AS
    DEFINED BELOW), RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
    BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
    TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE
    TRANSFERABLE.

                          SUMMARY OF RIGHTS TO PURCHASE
                          SHARES OF PREFERRED STOCK OF
                               PACTIV CORPORATION

         The Board of Directors of Pactiv Corporation (the "Company") has
declared a dividend of one preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $.01 per share, of the Company (the
"Common Stock"). The dividend is payable immediately prior to the Distribution
(as defined in the Distribution Agreement by and between Tenneco Inc. and the
Company) (the "Record Date") to the shareowners of record as of such time. Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $.01 per share, of the Company (the "Preferred Stock") at a price of
$60.00 per one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Qualified Offer Plan Rights Agreement dated as of November 4, 1999,
as the same may be amended from time to time (the "Rights Agreement"), between
the Company and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent"). The Rights will expire on November 4, 2009 (the "Final
Expiration Date"), unless the Final Expiration Date is advanced or extended or
unless the Rights are earlier redeemed or exchanged by the Company, in either
case as described below.

         In connection with the adoption of the Rights Agreement, the Board of
Directors also adopted a "TIDE" (Three-year Independent Director Evaluation)
mechanism. Under the TIDE mechanism, an independent Board committee will review,
on an ongoing basis, the Rights Agreement and developments in rights plans
generally, and, if it deems appropriate, recommend modification or termination
of the Rights Agreement. This independent committee will report to Pactiv's
Board at least every three years as to whether the Rights Agreement continues to
be in the best interests of Pactiv's shareowners.

         The Rights are not exercisable until the "Distribution Date." Under the
Rights Agreement, a "Distribution Date" occurs upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons has become an "Acquiring Person" or (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated or associated persons becomes
an Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 20% or more of
the outstanding shares of Common Stock. Except in certain situations, a person
or group of affiliated or associated persons becomes an "Acquiring Person" upon
acquiring beneficial ownership of 20% or more of the outstanding shares of
Common Stock. Until the


                                       C-1

<PAGE>   51



Distribution Date, the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of the Record Date, by such Common
Stock certificate together with a copy of this Summary of Rights.

         The Rights will not become exercisable in connection with a "Qualified
Offer," which is an all-cash tender offer for all outstanding Common Stock that
is fully financed, remains open for a period of at least 60 business days,
results in the offeror owning at least 85% of the Common Stock after
consummation of the offer, assures a prompt second-step acquisition of shares
not purchased in the initial offer at the same price as the initial offer and
meets certain other requirements.

         The Rights Agreement provides that, until the Distribution Date (or
earlier expiration of the Rights), the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.

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

         The number of outstanding Rights is subject to adjustment in the event
of a stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.

         Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled, when, as and
if declared, to a minimum preferential quarterly dividend payment of the greater
of (a) $25.00 per share, and (b) an amount equal to 1000 times the dividend
declared per share of Common Stock. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Preferred Stock will be entitled
to a minimum preferential payment of the greater of (a) $500.00 per share (plus
any accrued but unpaid dividends), and (b) an amount equal to 1000 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
1000 votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which outstanding shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be entitled
to receive 1000


                                       C-2

<PAGE>   52



times the amount received per share of Common Stock. These rights are protected
by customary antidilution provisions.

         Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.

         In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.

         In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive upon the exercise of a Right that number of
shares of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent) that at the time of such transaction have
a market value of two times the exercise price of the Right.

         At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which will have become
void), in whole or in part, for shares of Common Stock or Preferred Stock (or a
series of the Company's preferred stock having equivalent rights, preferences
and privileges), at an exchange ratio of one share of Common Stock, or a
fractional share of Preferred Stock (or other preferred stock) equivalent in
value thereto, per Right.

         With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of
the Preferred Stock or the Common Stock.

         At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price") payable, at the
option of the Company, in cash, shares of Common Stock or such other form of
consideration as the Board of Directors of the Company shall determine. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.


                                       C-3

<PAGE>   53



         For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights Agreement in any manner.
After the Rights are no longer redeemable, the Company may, except with respect
to the Redemption Price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights.

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

         A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 10. A copy
of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, as the same may
be amended from time to time, which is hereby incorporated herein by reference.



                                       C-4