Document:

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                                                                    EXHIBIT 4.1

                      AMENDED AND RESTATED RIGHTS AGREEMENT

                          DATED AS OF AUGUST 28, 2000

                                 BY AND BETWEEN

                            THE J. M. SMUCKER COMPANY

                                       AND

                      COMPUTERSHARE INVESTOR SERVICES, LLC,
                   SUCCESSOR TO HARRIS TRUST AND SAVINGS BANK,
                                 AS RIGHTS AGENT

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                                TABLE OF CONTENTS

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

Exhibit A....................................................................................................       A-1

Exhibit B....................................................................................................       B-1

Exhibit C....................................................................................................       C-1

</TABLE>

                                       (i)

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                      AMENDED AND RESTATED RIGHTS AGREEMENT

         This Amended and Restated Rights Agreement, dated as of August 28, 2000
(this "Agreement"), is made and entered into by and between The J. M. Smucker
Company, an Ohio corporation (the "Company"), and Computershare Investor
Services, LLC, successor to Harris Trust and Savings Bank, as rights agent (the
"Rights Agent").

                                    RECITALS

         A. The Company and the Rights Agent, as successor to Harris Trust and
Savings Bank, an Illinois banking corporation (the "Original Rights Agent") are
parties to a Rights Agreement, dated as of April 22, 1999 (the "Original Rights
Agreement"), and on April 22, 1999, the Directors of the Company authorized and
declared a dividend distribution of one class A right (a "Class A Right") for
each class A common share, without par value, of the Company (a "Class A Common
Share") and one class B right (a "Class B Right") for each class B common share,
without par value, of the Company (a "Class B Common Share") outstanding as of
the Close of Business (as hereinafter defined) on May 14, 1999 (the "Record
Date"), each Class A Right and Class B Right initially representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Class A Right (subject to adjustment as provided
herein) with respect to each Class A Common Share and one Class B Right (subject
to adjustment as provided herein) with respect to each Class B Common Share
issued or delivered by the Company (whether originally issued or delivered from
the Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date (as hereinafter defined) and the Expiration Date (as
hereinafter defined) or as provided in Section 22.

         B. On August 15, 2000, the shareholders of the Company approved the
adoption of a Merger Agreement, dated as of July 3, 2000 (the "Merger
Agreement"), by and between the Company and JMS-Ohio, Inc., an Ohio corporation
and a wholly owned subsidiary of the Company ("Sub"), pursuant to which Sub will
merge with and into the Company and each Class A Common Share and Class B Common
Share (other than those exchanged for cash as provided by the Merger Agreement)
were converted into one Common Share (as defined herein).

         C. In connection with the Merger (as defined in the Merger Agreement),
the Directors of the Company determined that it is necessary, desirable and in
the best interest of the shareholders of the Company to amend and restate the
Original Rights Agreement on the terms and conditions set forth herein.

         D. Notwithstanding anything in this Agreement to the contrary, this
Agreement will not be effective until immediately prior to the Effective Time
(as defined in the Merger Agreement) of the Merger.

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                                    AGREEMENT

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

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

         (a) "ACQUIRING PERSON" means any Person (other than the Company or any
Related Person or any Exempted Person) who or which, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 10% or more
of the then-outstanding Common Shares; PROVIDED, HOWEVER, that a Person will not
be deemed to have become an Acquiring Person solely as a result of a reduction
in the number of Common Shares outstanding unless and until such time as (i)
such Person or any Affiliate or Associate of such Person thereafter becomes the
Beneficial Owner of additional Common Shares representing 1% or more of the
then-outstanding Common Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by the Company in which all holders
of Common Shares are treated equally, or (ii) any other Person who is the
Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of
such Person. Notwithstanding the foregoing, if the Directors of the Company
determine in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person" as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.

         (b) "AFFILIATE" and "ASSOCIATE" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement, PROVIDED HOWEVER,
that a Person will not be deemed to be the Affiliate or Associate of another
Person solely because either or both Persons are or were Directors of the
Company.

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

                  (i) the beneficial ownership of which such Person or any of
         such Person's Affiliates or Associates, directly or indirectly, has the
         right to acquire (whether such right is exercisable immediately or only
         after the passage of time) pursuant to any agreement, arrangement or
         understanding (whether or not in writing), or upon the exercise of
         conversion rights, exchange rights, warrants, options or other rights
         (in each case, other than upon exercise or exchange of the Rights);
         PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial
         Owner of, or to Beneficially Own, securities tendered pursuant to a
         tender or exchange offer made by or on behalf of such Person or any of
         such Person's Affiliates or Associates until such tendered securities
         are accepted for purchase or exchange; or

                  (ii) which such Person or any of such Person's Affiliates or
         Associates, directly or indirectly, has or shares the right to vote or
         dispose of, including pursuant to any agreement, arrangement or
         understanding (whether or not in writing); or

                  (iii) of which any other Person is the Beneficial Owner, if
         such Person or any of such Person's Affiliates or Associates has any
         agreement, arrangement or understanding (whether or not in writing)
         with such other Person (or any of such other Person's Affiliates or
         Associates) with respect to acquiring, holding, voting or disposing of
         any securities of the Company;

PROVIDED, HOWEVER, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy 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 of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing agency," as defined in
Section 3(a)(23) of the Exchange Act; PROVIDED FURTHER, HOWEVER, that nothing in
this paragraph (c) will cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to Beneficially Own, any securities
acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Directors of the Company may determine in
any specific case.

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         (d) "BUSINESS DAY" means any day other than a Saturday, Sunday or a day
on which banking institutions in the State of Ohio, Illinois or New York (or
such other state in which the principal office of the Rights Agent is located)
are authorized or obligated by law or executive order to close.

         (e) "CLASS A COMMON SHARE" has the meaning set forth in the Recitals to
this Agreement.

         (f) "CLASS B COMMON SHARE" has the meaning set forth in the Recitals to
this Agreement.

         (g) "CLASS A RIGHT" has the meaning set forth in the Recitals to this
Agreement.

         (h) "CLASS B RIGHT" has the meaning set forth in the Recitals to this
Agreement.

         (i) "CLOSE OF BUSINESS" on any given date means 5:00 P.M., Eastern
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it means 5:00 P.M., Eastern time, on the next succeeding Business Day.

         (j) "COMMON SHARES" when used with reference to the Company means the
common shares, without par value, PROVIDED, HOWEVER, that, if the Company is the
continuing or surviving corporation in a transaction described in Section
13(a)(ii), "Common Shares" when used with reference to the Company means shares
of the capital stock or units of the equity interests with the greatest
aggregate voting power of the Company. "Common Shares" when used with reference
to any corporation or other legal entity other than the Company, including an
Issuer, means shares of the capital stock or units of the equity interests with
the greatest aggregate voting power of such corporation or other legal entity.

         (k) "COMPANY" means The J. M. Smucker Company, an Ohio corporation.

         (l) "DISTRIBUTION DATE" means the earlier of: (i) the Close of Business
on the tenth calendar day following the Share Acquisition Date (or, if the tenth
calendar day following the Share Acquisition Date occurs before the Record Date,
the Close of Business on the Record Date), or (ii) the Close of Business on the
tenth Business Day (or, unless the Distribution Date shall have previously
occurred, such later date as may be specified by the Directors of the Company)
after the commencement of a tender or exchange offer by any Person (other than
the Company or any Related Person), if upon the consummation thereof such Person
would be the Beneficial Owner of 10% or more of the then-outstanding Common
Shares.

         (m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         (n) "EXEMPTED PERSON" means any Smucker Family Member.

         (o) "EXPIRATION DATE" means the earliest of (i) the Close of Business
on the Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23, and (iii) the time at which all exercisable Rights are
exchanged as provided in Section 24.

         (p) "FINAL EXPIRATION DATE" means the tenth anniversary of the Record
Date.

         (q) "FLIP-IN EVENT" means any event described in clauses (A), (B) or
(C) of Section 11(a)(ii).

         (r) "FLIP-OVER EVENT" means any event described in clauses (i), (ii) or
(iii) of Section 13(a).

         (s) "ISSUER" has the meaning set forth in Section 13(b).

         (t) "MERGER AGREEMENT" has the meaning set forth in the Recitals to
this Agreement.

         (u) "NASDAQ" means The NASDAQ Stock Market.

         (v) "ORIGINAL RIGHTS AGENT" has the meaning set forth in the Recitals
to this Agreement.

         (w) "ORIGINAL RIGHTS AGREEMENT" has the meaning set forth in the
Recitals to this Agreement.

         (x) "PERSON" means any individual, firm, corporation or other legal
entity, and includes any successor (by merger or otherwise) of such entity.

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         (y) "PREFERRED SHARES" means shares of Series A Junior Participating
Preferred Stock, without par value, of the Company having the rights and
preferences set forth in the form of Certificate of Adoption of Amendment to
Amended Articles of Incorporation attached as EXHIBIT A.

         (z) "PURCHASE PRICE" means initially $90.00 per one one-hundredth of a
Preferred Share, subject to adjustment from time to time as provided in this
Agreement.

         (aa) "RECORD DATE" has the meaning set forth in the Recitals to this
Agreement.

         (bb) "REDEMPTION PRICE" means $.01 per Right, subject to adjustment by
resolution of the Directors of the Company to reflect any stock split, stock
dividend or similar transaction occurring after the Record Date.

         (cc) "RELATED PERSON" means (i) any Subsidiary of the Company or (ii)
any employee benefit or stock ownership plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares for or pursuant to the terms
of any such plan.

         (dd) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.

         (ee) "RIGHT CERTIFICATES" means the certificates evidencing the Rights
in substantially the form attached as Exhibit B.

         (ff) "RIGHTS AGENT" means Computershare Investor Services, LLC,
successor to Harris Trust and Savings Bank, unless and until a successor Rights
Agent has become such pursuant to the terms of this Agreement, and thereafter,
"Rights Agent" means such successor Rights Agent.

         (gg) "SECURITIES ACT" means the Securities Act of 1933, as amended.

         (hh) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company (by press release, filing made with the Securities
and Exchange Commission or otherwise) that an Acquiring Person has become such.

         (ii) "SMUCKER FAMILY MEMBER" means (i) any of the individuals, trusts,
foundations, partnerships or other entities listed on Schedule I, (ii) any trust
created by (or on behalf of) and for the benefit of any individual listed on
Schedule I, or (iii) the dependents of any individual listed on Schedule I that
share the same household with such individual.

         (jj) "SUBSIDIARY" when used with reference to any Person means any
corporation or other legal entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by such Person; PROVIDED, HOWEVER, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any corporation or
other legal entity of which at least 20% of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly, by such
Person.

         (kk) "TRADING DAY" means any day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day.

         (ll) "TRIGGERING EVENT" means any Flip-in Event or Flip-over Event.

         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, will also be, prior to the Distribution Date, the
holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and hereby
certifies that it complies with the requirements of the New York Stock Exchange
governing transfer agents and registrars. The Company may from time to time act
as Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions which may be taken by the Rights Agent pursuant to the
terms of this Agreement may be taken by any such Co-Rights Agent. To the extent
that any Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent will be entitled to all of the rights and protections of, and
subject to all of the applicable duties and obligations imposed upon, the Rights
Agent pursuant to the terms of this Agreement.

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<PAGE>   7

         3. Issue of Right Certificates. (a) Until the Distribution Date, (i)
the Rights will be evidenced by the certificates representing Common Shares
registered in the names of the record holders thereof (which certificates
representing Common Shares will also be deemed to be Right Certificates), (ii)
the Rights will be transferable only in connection with the transfer of the
underlying Common Shares, and (iii) the surrender for transfer of any
certificates evidencing Common Shares in respect of which Rights have been
issued will also constitute the transfer of the Rights associated with the
Common Shares evidenced by such certificates. On or as promptly as practicable
after the Record Date, the Company will send by first class, postage prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company
as of such date, a copy of a Summary of Rights to Purchase Preferred Stock in
substantially the form attached as EXHIBIT C.

         (b) Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on, printed on,
written on, or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is 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 transaction reporting system on
which the Common Shares may from time to time be listed or quoted, or to conform
to usage:

         This Certificate also evidences and entitles the holder hereof to
         certain Rights as set forth in an Amended and Restated Rights Agreement
         between The J. M. Smucker Company and Computershare Investor Services,
         LLC, successor to Harris Trust and Savings Bank, as Rights Agent, dated
         as of _________, 2000 (the "Rights Agreement"), the terms of which are
         hereby incorporated herein by reference and a copy of which is on file
         at the principal executive offices of The J. M. Smucker Company. The
         Rights are not exercisable prior to the occurrence of certain events
         specified in the Rights Agreement. Under certain circumstances, as set
         forth in the Rights Agreement, such Rights may be redeemed, may be
         exchanged, may expire, may be amended, or may be evidenced by separate
         certificates and no longer be evidenced by this Certificate. The J. M.
         Smucker Company will mail to the holder of this Certificate a copy of
         the Rights Agreement, as in effect on the date of mailing, without
         charge promptly after receipt of a written request therefor. Under
         certain circumstances as set forth in the Rights Agreement, Rights that
         are or were beneficially owned by an Acquiring Person or any Affiliate
         or Associate of an Acquiring Person (as such terms are defined in the
         Rights Agreement) may become null and void.

         (c) Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the transfer
of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate and any Right
Certificate issued pursuant to Section 6 or 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall be subject to and contain the following legend or such similar
legend as the Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage:

         The Rights represented by this Right Certificate are or were
         beneficially owned by a Person who was an Acquiring Person or an
         Affiliate or an Associate of an Acquiring Person (as such terms are
         defined in the Rights Agreement). This Right Certificate and the Rights
         represented hereby may become null and void in the circumstances
         specified in Section 11(a)(ii) or Section 13 of the Rights Agreement.

         (d) As promptly 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, at the
expense of the Company), by first class, insured, postage prepaid mail, to each
record holder of Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company, a Right
Certificate evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.

         (e) In the event that the Company purchases or otherwise acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares will be deemed canceled and retired so
that the Company will not be entitled to exercise any Rights associated with the
Common Shares so purchased or acquired.

                                        5

<PAGE>   8

         4. Form of Right Certificates. The Right Certificates (and the form of
election to purchase and the form of assignment to be printed on the reverse
thereof) will be substantially in the form attached as EXHIBIT B with such
changes and 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 transaction
reporting system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of Section 22, the Right
Certificates, whenever issued, on their face will entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as are set forth
therein at the Purchase Price set forth therein, but the Purchase Price, the
number and kind of securities issuable upon exercise of each Right and the
number of Rights outstanding will be subject to adjustment as provided herein.

         5. Countersignature and Registration. (a) The Right Certificates will
be executed on behalf of the Company by its Chairman, its President or any Vice
President, either manually or by facsimile signature, and will have affixed
thereto the Company's seal or a facsimile thereof which will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates will be manually countersigned by
the Rights Agent and will not be valid for any purpose unless so countersigned.
In case any officer of the Company who signed any of the Right Certificates
ceases 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, is a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such officer.

         (b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office of the Rights Agent designated for
such purpose and at such other offices 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 any transaction reporting system on
which the Rights may from time to time be listed or quoted, books for
registration and transfer of the Right Certificates issued hereunder. Such books
will show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

         6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen right Certificates. (a) Subject to the
provisions of Sections 7(d) and 14, at any time after the Close of Business on
the Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates representing exercisable Rights 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-hundredths
of a Preferred Share (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any such Right Certificate
or Rights Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon or as promptly as practicable thereafter, subject
to the provisions of Sections 7(d) and 14, the Company will prepare, execute and
deliver to the Rights Agent, and the Rights Agent will countersign and deliver,
a Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.

         (b) Upon receipt by the Company 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, if requested by the Company,
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 prepare, execute and
deliver a new Right Certificate of like tenor to the Rights Agent and the Rights
Agent will countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

                                        6

<PAGE>   9

         7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a)
The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date, upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment in cash, in
lawful money of the United States of America by certified check or bank draft
payable to the order of the Company, equal to the sum of (i) the exercise price
for the total number of securities as to which such surrendered Rights are
exercised and (ii) an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with the provisions
of Section 9(d).

         (b) Upon receipt of a Right Certificate representing exercisable Rights
with the form of election to purchase duly executed, accompanied by payment as
described above, the Rights Agent will promptly (i) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such
requests), or, if the Company elects to deposit Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (and the Company
hereby irrevocably authorizes and directs such depositary agent to comply with
all such requests), (ii) after receipt of such certificates (or depositary
receipts, as the case may be), 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, (iii) when appropriate,
requisition from the Company or any transfer agent therefor (or make available,
if the Rights Agent is the transfer agent) certificates representing the number
of equivalent common shares to be issued in lieu of the issuance of Common
Shares in accordance with the provisions of Section 11(a)(iii), (iv) when
appropriate, after receipt of such certificates, 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, (v) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of the issuance of fractional shares in accordance with the provisions of
Section 14 or in lieu of the issuance of Common Shares in accordance with the
provisions of Section 11(a)(iii), (vi) when appropriate, after receipt, deliver
such cash to or upon the order of the registered holder of such Right
Certificate, and (vii) when appropriate, deliver any due bill or other
instrument provided to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by Section 11(l).

         (c) In case the registered holder of any Right Certificate exercises
less than all the Rights evidenced thereby, the Company will prepare, execute
and deliver a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised and the Rights Agent will countersign and deliver such new
Right Certificate to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.

         (d) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company will be obligated to undertake any action with
respect to any purported transfer, split up, combination or exchange of any
Right Certificate pursuant to Section 6 or exercise of a Right Certificate as
set forth in this Section 7 unless the registered holder of such Right
Certificate has (i) completed and signed the certificate following the form of
assignment or the form of election to purchase, as applicable, set forth on the
reverse side of the Right Certificate surrendered for such transfer, split up,
combination, exchange or exercise and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company may reasonably request.

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

         9. Company Covenants Concerning Securities and Rights. The Company
covenants and agrees that:

                  (a) It will cause to be reserved and kept available out of its
         authorized and unissued Preferred Shares or any Preferred Shares held
         in its treasury, a number of Preferred Shares that will be sufficient
         to permit the exercise in full of all outstanding Rights in accordance
         with Section 7.

                                       7
<PAGE>   10

                  (b) So long as the Preferred Shares (and, following the
         occurrence of a Triggering Event, Common Shares and/or other
         securities) issuable upon the exercise of the Rights may be listed on a
         national securities exchange, or quoted on Nasdaq, it will endeavor to
         cause, from and after such time as the Rights become exercisable, all
         securities reserved for issuance upon the exercise of Rights to be
         listed on such exchange, or quoted on Nasdaq, upon official notice of
         issuance upon such exercise.

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

                  (d) It will pay when due and payable any and all federal and
         state transfer taxes and charges that may be payable in respect of the
         issuance or delivery of the Right Certificates and of any certificates
         representing securities issued upon the exercise of Rights; PROVIDED,
         HOWEVER, that the Company will not be required to pay any transfer tax
         or charge 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 representing securities
         issued upon the exercise of Rights 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 representing securities issued upon the exercise of
         any Rights until any such tax or charge has been paid (any such tax or
         charge being payable by the 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.

                  (e) It will use its best efforts (i) to file on an appropriate
         form, as soon as practicable following the later of the Share
         Acquisition Date and the Distribution Date, a registration statement
         under the Securities Act with respect to the securities issuable upon
         exercise of the Rights, (ii) to cause such registration statement to
         become effective as soon as practicable after such filing, and (iii) to
         cause such registration statement to remain effective (with a
         prospectus at all times meeting the requirements of the Securities Act)
         until the earlier of (A) the date as of which the Rights are no longer
         exercisable for such securities and (B) the Expiration Date. The
         Company will also take such action as may be appropriate under, or to
         ensure compliance with, the securities or "blue sky" laws of the
         various states in connection with the exercisability of the Rights. The
         Company may temporarily suspend, for a period of time after the date
         set forth in clause (i) of the first sentence of this Section 9(e), the
         exercisability of the Rights in order to prepare and file such
         registration statement and to permit it to become effective. Upon any
         such suspension, the Company will issue a public announcement stating
         that the exercisability of the Rights has been temporarily suspended,
         as well as a public announcement at such time as the suspension is no
         longer in effect. In addition, if the Company determines that a
         registration statement should be filed under the Securities Act or any
         state securities laws following the Distribution Date, the Company may
         temporarily suspend the exercisability of the Rights in each relevant
         jurisdiction until such time as a registration statement has been
         declared effective and, upon any such suspension, the Company will
         issue a public announcement stating that the exercisability of the
         Rights has been temporarily suspended, as well as a public announcement
         at such time as the suspension is no longer in effect. Notwithstanding
         anything in this Agreement to the contrary, the Rights will not be
         exercisable in any jurisdiction if the requisite registration or
         qualification in such jurisdiction has not been effected or the
         exercise of the Rights is not permitted under applicable law.

                  (f) Notwithstanding anything in this Agreement to the
         contrary, after the later of the Share Acquisition Date and the
         Distribution Date it will not 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 eliminate or otherwise diminish the
         benefits intended to be afforded by the Rights.

                  (g) In the event that the Company is obligated to issue other
         securities of the Company and/or pay cash pursuant to Section 11, 13,
         14 or 24 it will make all arrangements necessary so that such other
         securities and/or cash are available for distribution by the Rights
         Agent, if and when appropriate.

         10. Record Date. Each Person in whose name any certificate representing
Preferred Shares (or Common Shares and/or other securities, as the case may be)
is issued upon the exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the transfer books of the Company for
the Preferred Shares (or Common Shares and/or other securities, as the case may
be) are closed, such Person will be deemed to have become the record holder of
such

                                       8
<PAGE>   11

securities on, and such certificate will be dated, the next succeeding Business
Day on which the transfer books of the Company for the Preferred Shares (or
Common Shares and/or other securities, as the case may be) are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
will not be entitled to any rights of a holder of any security for which the
Rights are or may become exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions, or to exercise any
preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

         11. Adjustment of Purchase Price, Number and Kind of Securities or
Number of Rights. The Purchase Price, the number and kind of securities issuable
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 that the Company at any time after the Record Date
         (A) declares a dividend on the Preferred Shares payable in Preferred
         Shares, (B) subdivides the outstanding Preferred Shares, (C) combines
         the outstanding Preferred Shares into a smaller number of Preferred
         Shares, or (D) issues any shares of its capital stock in a
         reclassification of the Preferred Shares (including any such
         reclassification in connection with a consolidation or merger in which
         the Company is the continuing or surviving corporation), except as
         otherwise provided in this Section 11(a), the Purchase Price in effect
         at the time of the record date for such dividend or of the effective
         date of such subdivision, combination or reclassification and/or the
         number and/or kind of shares of capital stock issuable on such date
         upon exercise of a Right, will be proportionately adjusted so that the
         holder of any Right exercised after such time is entitled to receive
         upon payment of the Purchase Price then in effect 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
         transfer books of the Company for the Preferred Shares were open, the
         holder of such Right would have owned upon such exercise (and, in the
         case of a reclassification, would have retained after giving effect to
         such reclassification) and would have 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 issuable upon exercise of one Right. If an
         event occurs which would require an adjustment under both this Section
         11(a)(i) and Section 11(a)(ii) or Section 13, the adjustment provided
         for in this Section 11(a)(i) will be in addition to, and will be made
         prior to, any adjustment required pursuant to Section 11(a)(ii) or
         Section 13.

                           (ii) Subject to the provisions of Section 24, if:

                  (A) any Person becomes an Acquiring Person; or

                  (B) any Acquiring Person or any Affiliate or Associate of any
         Acquiring Person, directly or indirectly, (1) merges into the Company
         or otherwise combines with the Company and the Company is the
         continuing or surviving corporation of such merger or combination
         (other than in a transaction subject to Section 13), (2) merges or
         otherwise combines with any Subsidiary of the Company, (3) in one or
         more transactions (otherwise than in connection with the exercise,
         exchange or conversion of securities exercisable or exchangeable for or
         convertible into shares of any class of capital stock of the Company or
         any of its Subsidiaries) transfers cash, securities or any other
         property to the Company or any of its Subsidiaries in exchange (in
         whole or in part) for shares of any class of capital stock of the
         Company or any of its Subsidiaries or for securities exercisable or
         exchangeable for or convertible into shares of any class of capital
         stock of the Company or any of its Subsidiaries, or otherwise obtains
         from the Company or any of its Subsidiaries, with or without
         consideration, any additional shares of any class of capital stock of
         the Company or any of its Subsidiaries or securities exercisable or
         exchangeable for or convertible into shares of any class of capital
         stock of the Company or any of its Subsidiaries (otherwise than as part
         of a pro rata distribution to all holders of shares of any class of
         capital stock of the Company, or any of its Subsidiaries), (4) sells,
         purchases, leases, exchanges, mortgages, pledges, transfers or
         otherwise disposes (in one or more transactions) to, from, with or of,
         as the case may be, the Company or any of its Subsidiaries (otherwise
         than in a transaction subject to Section 13), any property, including
         securities, on terms and conditions less favorable to the Company than
         the Company would be able to obtain in an arm's-length transaction with
         an unaffiliated third party, (5) receives any compensation from the
         Company or any of its Subsidiaries other than compensation as a
         director or a regular full-time employee, in either case at rates
         consistent with the Company's (or its Subsidiaries') past practices, or
         (6) receives the benefit, directly or indirectly (except
         proportionately as a shareholder), of any loans, advances, guarantees,
         pledges or other financial assistance or any tax credits or other tax
         advantage provided by the Company or any of its Subsidiaries; or

                  (C) during such time as there is an Acquiring Person, there is
         any reclassification of securities of the Company (including any
         reverse stock split), or any recapitalization of the Company, or any
         merger or consolidation of the

                                       9
<PAGE>   12

         Company with any of its Subsidiaries, or any other transaction or
         series of transactions involving the Company or any of its Subsidiaries
         (whether or not with or into or otherwise involving an Acquiring
         Person), other than a transaction subject to Section 13, which has the
         effect, directly or indirectly, of increasing by more than 1% the
         proportionate share of the outstanding shares of any class of equity
         securities of the Company or any of its Subsidiaries, or of securities
         exercisable or exchangeable for or convertible into equity securities
         of the Company or any of its Subsidiaries, of which an Acquiring
         Person, or any Affiliate or Associate of any Acquiring Person, is the
         Beneficial Owner;

         then, and in each such case, from and after the latest of the
         Distribution Date, the Share Acquisition Date and the date of the
         occurrence of such Flip-in Event, proper provision will be made so that
         each holder of a Right, except as provided below, will thereafter have
         the right to receive, upon exercise thereof in accordance with the
         terms of this Agreement at an exercise price per Right equal to the
         product of the then-current Purchase Price multiplied by the number of
         one one-hundredths of a Preferred Share for which a Right was
         exercisable immediately prior to the date of the occurrence of such
         Flip-in Event (or, if any other Flip-in Event shall have previously
         occurred, the product of the then-current Purchase Price multiplied by
         the number of one one-hundredths of a Preferred Share for which a Right
         was exercisable immediately prior to the date of the first occurrence
         of a Flip-in Event), in lieu of Preferred Shares, such number of Common
         Shares as equals the result obtained by (x) multiplying the
         then-current Purchase Price by the number of one one-hundredths of a
         Preferred Share for which a Right was exercisable immediately prior to
         the date of the occurrence of such Flip-in Event (or, if any other
         Flip-in Event shall have previously occurred, multiplying the
         then-current Purchase Price by the number of one one-hundredths of a
         Preferred Share for which a Right was exercisable immediately prior to
         the date of the first occurrence of a Flip-in Event), and dividing that
         product by (y) 50% of the current per share market price of the Class A
         Common Shares (determined pursuant to Section 11(d)) on the date of the
         occurrence of such Flip-in Event. Notwithstanding anything in this
         Agreement to the contrary, from and after the first occurrence of a
         Flip-in Event, any Rights that are Beneficially Owned by (A) any
         Acquiring Person (or any Affiliate or Associate of any Acquiring
         Person), (B) a transferee of any Acquiring Person (or any such
         Affiliate or Associate) who becomes a transferee after the occurrence
         of a Flip-in Event, or (C) a transferee of any Acquiring Person (or any
         such Affiliate or Associate) who became a transferee prior to or
         concurrently with the occurrence of a Flip-in Event pursuant to either
         (1) a transfer from an 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 (2) a
         transfer which the Directors of the Company have determined is part of
         a plan, arrangement or understanding which has the purpose or effect of
         avoiding the provisions of this Section 11(a)(ii), and subsequent
         transferees of any of such Persons, will be void without any further
         action and any holder of such Rights will thereafter have no rights
         whatsoever with respect to such Rights under any provision of this
         Agreement. The Company will use all reasonable efforts to ensure that
         the provisions of this Section 11(a)(ii) are complied with, but will
         have no liability to any holder of Right Certificates or any 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. Upon the occurrence of a Flip-in Event, no Right
         Certificate that represents Rights that are or have become void
         pursuant to the provisions of this Section 11(a)(ii) will thereafter be
         issued pursuant to Section 3 or Section 6, and any Right Certificate
         delivered to the Rights Agent that represents Rights that are or have
         become void pursuant to the provisions of this Section 11(a)(ii) will
         be canceled. Upon the occurrence of a Flip-over Event, any Rights that
         shall not have been previously exercised pursuant to this Section
         11(a)(ii) shall thereafter be exercisable only pursuant to Section 13
         and not pursuant to this Section 11(a)(ii).

                  (iii) Upon the occurrence of a Flip-in Event, if there are not
         sufficient Common Shares authorized but unissued or issued but not
         outstanding to permit the issuance of all the Common Shares issuable in
         accordance with Section 11(a)(ii) upon the exercise of a Right, the
         Directors of the Company will use their best efforts promptly to
         authorize and, subject to the provisions of Section 9(e), make
         available for issuance additional Common Shares or other equity
         securities of the Company having equivalent voting rights and an
         equivalent value (as determined in good faith by the Directors of the
         Company) to the Common Shares (for purposes of this Section 11(a)(iii),
         "equivalent common shares"). In the event that equivalent common shares
         are so authorized, upon the exercise of a Right in accordance with the
         provisions of Section 7, the registered holder will be entitled to
         receive (A) Common Shares, to the extent any are available, and (B) a
         number of equivalent common shares, which the Directors of the Company
         have determined in good faith to have a value equivalent to the excess
         of (x) the aggregate current per share market value on the date of the
         occurrence of the most recent Flip-in Event of all the Common Shares
         issuable in accordance with Section 11(a)(ii) upon the exercise of a
         Right (the "Exercise Value") over (y) the aggregate current per share
         market value on the date of the occurrence of the most recent Flip-in
         Event of any Common Shares available for issuance upon the exercise of
         such Right; PROVIDED, HOWEVER, that if at any time after 90 calendar
         days after the latest of the Share Acquisition Date, the Distribution
         Date and the date of the occurrence of the most recent Flip-in Event,
         there are not sufficient Common Shares and/or equivalent common shares
         available for issuance upon the exercise of a Right, then the

                                       10
<PAGE>   13

         Company will be obligated to deliver, upon the surrender of such Right
         and without requiring payment of the Purchase Price, Common Shares (to
         the extent available), equivalent common shares (to the extent
         available) and then cash (to the extent permitted by applicable law and
         any agreements or instruments to which the Company is a party in effect
         immediately prior to the Share Acquisition Date), which securities and
         cash have an aggregate value equal to the excess of (1) the Exercise
         Value over (2) the product of the then-current Purchase Price
         multiplied by the number of one one- hundredths of a Preferred Share
         for which a Right was exercisable immediately prior to the date of the
         occurrence of the most recent Flip-in Event (or, if any other Flip-in
         Event shall have previously occurred, the product of the then-current
         Purchase Price multiplied by the number of one one-hundredths of a
         Preferred Share for which a Right would have been exercisable
         immediately prior to the date of the occurrence of such Flip-in Event
         if no other Flip-in Event had previously occurred). To the extent that
         any legal or contractual restrictions prevent the Company from paying
         the full amount of cash payable in accordance with the foregoing
         sentence, the Company will pay to holders of the Rights as to which
         such payments are being made all amounts which are not then restricted
         on a pro rata basis and will continue to make payments on a pro rata
         basis as promptly as funds become available until the full amount due
         to each such Rights holder has been paid.

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

         (c) In the event that the Company fixes a record date for the making of
a distribution to all holders of Preferred Shares (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, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date will be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which is the current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d)) on such record date
or, if earlier, the date on which Preferred Shares begin to trade on an
ex-dividend or when issued basis for such distribution, less the fair market
value (as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent) of
the portion of the evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants applicable to
one Preferred Share, and the denominator of which is such current per share
market price of the Preferred Shares; 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 issuable upon exercise of one
Right. Such adjustments will be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price will again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

                                       11
<PAGE>   14
         (d) (i) For the purpose of any computation hereunder, the "current per
         share market price" of Common Shares on any date will be deemed to be
         the average of the daily closing prices per share of such Common
         Shares for the 30 consecutive Trading Days immediately prior to such
         date;  PROVIDED, HOWEVER, that in the event that the current per share
         market price of the Common Shares is determined during a period
         following the announcement by the issuer of such Common Shares of (A)
         a dividend or distribution on such Common Shares payable in such
         Common Shares or securities convertible into such Common Shares (other
         than the Rights) or (B) any subdivision, combination or
         reclassification of such Common Shares, 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 will be appropriately adjusted to take into account
         ex-dividend trading or to reflect the current per share market price
         per Common Share equivalent. The closing price for each day will be
         the last sale price, regular way, or, in case no such sale takes place
         on such day, the average of the closing bid and asked prices, regular
         way, in either case as reported in the principal consolidated
         transaction reporting system with respect to securities listed or
         admitted to trading on the New York Stock Exchange or, if the Common
         Shares 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 Common Shares are listed or
         admitted to trading or, if the Common Shares are not listed or
         admitted to trading on any national securities exchange, 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 Common
         Shares are not quoted by any such organization, the average of the
         closing bid and asked prices as furnished by a professional market
         maker making a market in the Common Shares selected by the Directors
         of the Company. If the Common Shares are not publicly held or not so
         listed or traded, or are not the subject of available bid and asked
         quotes, "current per share market price" will mean the fair value per
         share as determined in good faith by the Directors of the Company,
         whose determination will be described in a statement filed with the
         Rights Agent.

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

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

         (f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised becomes entitled to receive any
securities of the Company other than Preferred Shares, thereafter the number
and/or kind of such other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Shares (and the Purchase Price
in respect thereof) contained in this Section 11, and the provisions of Sections
7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the Purchase Price
in respect thereof) will apply on like terms to any such other securities (and
the Purchase Price in respect thereof).

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

         (h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price pursuant to Section
11(b) or Section 11(c), each Right outstanding immediately prior to the making
of such adjustment will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one

                                       12
<PAGE>   15

one-hundredths of a Preferred Share issuable upon exercise of a Right
immediately prior to such adjustment of the Purchase Price by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

         (i) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one- hundredths of a Preferred Share issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights will become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
will make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. 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, will be at least 10 calendar 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 will, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to the provisions of Section 14, the additional Rights to which such
holders are entitled as a result of such adjustment, or, at the option of the
Company, will cause to be distributed to such holders of record in substitution
and replacement for the 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 are entitled
after such adjustment. Right Certificates so to be distributed will be issued,
executed, and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and will be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.

         (j) Without respect to any adjustment or change in the Purchase Price
and/or the number and/or kind of securities issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number and kind of securities which were
expressed in the initial Right Certificate issued hereunder.

         (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares or below the then par value, if any, of any other securities of
the Company issuable upon exercise of the Rights, the Company will 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
Preferred Shares or such other securities, as the case may be, at such adjusted
Purchase Price.

         (l) In any case in which this Section 11 otherwise requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Preferred Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Preferred Shares or
other 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 delivers to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
Preferred Shares or other securities upon the occurrence of the event requiring
such adjustment.

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

         (n) Notwithstanding anything in this Agreement to the contrary, in the
event that the Company at any time after the Record Date prior to the
Distribution Date (i) pays a dividend on the outstanding Common Shares payable
in Common Shares, (ii) subdivides the outstanding Common Shares, (iii) combines
the outstanding Common Shares into a smaller number of shares, or (iv) issues
any shares of its capital stock in a reclassification of the outstanding Common
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the

                                       13
<PAGE>   16

Distribution Date, will be proportionately adjusted so that the number of Rights
thereafter associated with each Common Share following any such event equals the
result obtained by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction the numerator of which is
the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which is the total number of
Common Shares outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11(n) will be made successively
whenever such a dividend is paid or such a subdivision, combination or
reclassification is effected.

         12. Certificate of Adjusted Purchase Price or Number of Securities.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will 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 Preferred Shares and the
Common Shares a copy of such certificate, and (c) if such adjustment is made
after the Distribution Date, mail a brief summary of such adjustment to each
holder of a Right Certificate in accordance with Section 26. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be obligated or responsible for
calculating any adjustment nor shall it be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.

         13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that:

                  (i) at any time after a Person has become an Acquiring Person,
         the Company consolidates with, or merges with or into, any other Person
         and the Company is not the continuing or surviving corporation of such
         consolidation or merger; or

                  (ii) at any time after a Person has become an Acquiring
         Person, any Person consolidates with the Company, or merges with or
         into the Company, and the Company is the continuing or surviving
         corporation of such merger or consolidation and, in connection with
         such merger or consolidation, all or part of the Common Shares is
         changed into or exchanged for stock or other securities of any other
         Person or cash or any other property; or

                  (iii) at any time after a Person has become an Acquiring
         Person, the Company, directly or indirectly, sells or otherwise
         transfers (or one or more of its Subsidiaries sells or otherwise
         transfers), in one or more transactions, assets or earning power
         (including without limitation securities creating any obligation on the
         part of the Company and/or any of its Subsidiaries) representing in the
         aggregate more than 50% of the assets or earning power of the Company
         and its Subsidiaries (taken as a whole) to any Person or Persons other
         than the Company or one or more of its wholly owned Subsidiaries; then,
         and in each such case, proper provision will be made so that from and
         after the latest of the Share Acquisition Date, the Distribution Date
         and the date of the occurrence of such Flip-over Event (A) each holder
         of a Right thereafter has the right to receive, upon the exercise
         thereof in accordance with the terms of this Agreement at an exercise
         price per Right equal to the product of the then-current Purchase Price
         multiplied by the number of one one-hundredths of a Preferred Share for
         which a Right was exercisable immediately prior to the Share
         Acquisition Date, such number of duly authorized, validly issued, fully
         paid, nonassessable and freely tradeable Common Shares of the Issuer,
         free and clear of any liens, encumbrances and other adverse claims and
         not subject to any rights of call or first refusal, as equals the
         result obtained by (x) multiplying the then-current Purchase Price by
         the number of one one-hundredths of a Preferred Share for which a Right
         is exercisable immediately prior to the Share Acquisition Date and
         dividing that product by (y) 50% of the current per share market price
         of the Common Shares of the Issuer (determined pursuant to Section
         11(d)), on the date of the occurrence of such Flip-over Event; (B) the
         Issuer will thereafter be liable for, and will assume, by virtue of the
         occurrence of such Flip-over Event, all the obligations and duties of
         the Company pursuant to this Agreement; (C) the term "Company" will
         thereafter be deemed to refer to the Issuer; and (D) the Issuer will
         take such steps (including without limitation the reservation of a
         sufficient number of its Common Shares to permit the exercise of all
         outstanding Rights) in connection with such consummation as may be
         necessary to assure that the provisions hereof are thereafter
         applicable, as nearly as reasonably may be possible, in relation to its
         Common Shares thereafter deliverable upon the exercise of the Rights.

         (b) For purposes of this Section 13, "Issuer" means (i) in the case of
any Flip-over Event described in Sections 13(a)(i) or (ii) above, the Person
that is the continuing, surviving, resulting or acquiring Person (including the
Company as the continuing or surviving corporation of a transaction described in
Section 13(a)(ii) above), and (ii) in the case of any Flip-over Event described
in Section 13(a)(iii) above, the Person that is the party receiving the greatest
portion of the assets or earning power (including without limitation securities
creating any obligation on the part of the Company and/or any of its
Subsidiaries) transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that, in any such case, (A) if (1) no class of equity
security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the

                                       14
<PAGE>   17

preceding 12-month period, registered pursuant to Section 12 of the Exchange
Act, and (2) such Person is a Subsidiary, directly or indirectly, of another
Person, a class of equity security of which is and has been so registered, the
term "Issuer" means such other Person; and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, a class of equity
security of two or more of which are and have been so registered, the term
"Issuer" means whichever of such Persons is the issuer of the equity security
having the greatest aggregate market value. Notwithstanding the foregoing, if
the Issuer in any of the Flip-over Events listed above is not a corporation or
other legal entity having outstanding equity securities, then, and in each such
case, (x) if the Issuer is directly or indirectly wholly owned by a corporation
or other legal entity having outstanding equity securities, then all references
to Common Shares of the Issuer will be deemed to be references to the Common
Shares of the corporation or other legal entity having outstanding equity
securities which ultimately controls the Issuer, and (y) if there is no such
corporation or other legal entity having outstanding equity securities, (I)
proper provision will be made so that the Issuer creates or otherwise makes
available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a kind or kinds of security or securities having a fair
market value at least equal to the economic value of the Common Shares which
each holder of a Right would have been entitled to receive if the Issuer had
been a corporation or other legal entity having outstanding equity securities;
and (II) all other provisions of this Agreement will apply to the issuer of such
securities as if such securities were Common Shares.

         (c) The Company will not consummate any Flip-over Event if, (i) at the
time of or immediately after such Flip-over Event, there are or would be any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements in effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to, simultaneously
with or immediately after such Flip-over Event, the shareholders of the Person
who constitutes, or would constitute, the Issuer for purposes of Section 13(a)
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 the
organization of the Issuer would preclude or limit the exercisability of the
Rights. In addition, the Company will not consummate any Flip-over Event unless
the Issuer has a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior to such consummation the Company and the
Issuer have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) of this Section 13
and further providing that as promptly as practicable after the consummation of
any Flip-over Event, the Issuer will:

                  (A) prepare and file a registration statement under the
         Securities Act with respect to the Rights and the securities issuable
         upon exercise of the Rights on an appropriate form, and use its best
         efforts to cause such registration statement to (1) become effective as
         soon as practicable after such filing and (2) remain effective (with a
         prospectus at all times meeting the requirements of the Securities Act)
         until the Expiration Date;

                  (B) take all such action as may be appropriate under, or to
         ensure compliance with, the securities or "blue sky" laws of the
         various states in connection with the exercisability of the Rights; and

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

         (d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be
exercisable in the manner provided in Section 13(a).

         14. Fractional Rights and Fractional Securities. (a) The Company will
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, the Company
will pay as promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be
issuable, an amount in cash equal to the same fraction of the current market
value of one Right. For the purposes of this Section 14(a), the current market
value of one Right is the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights otherwise would
have been issuable. The closing price for any day is 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

                                       15
<PAGE>   18

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
Directors of the Company. If the Rights are not publicly held or are not so
listed or traded, or are not the subject of available bid and asked quotes, the
current market value of one Right will mean the fair value thereof as determined
in good faith by the Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent.

         (b) The Company will not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement provides that the holders of such
depositary receipts have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company may
pay to any Person to whom or which such fractional Preferred Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of this Section 14(b),
the current market value of one Preferred Share is the closing price of the
Preferred Shares (as determined in the same manner as set forth for Common
Shares in the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise; PROVIDED, HOWEVER, that if the
closing price of the Preferred Shares cannot be so determined, the closing price
of the Preferred Shares for such Trading Day will be conclusively deemed to be
an amount equal to the closing price of the Common Shares (determined pursuant
to the second sentence of Section 11(d)(i)) for such Trading Day multiplied by
one hundred (as such number may be appropriately adjusted to reflect events such
as stock splits, stock dividends, recapitalizations or similar transactions
relating to the Common Shares occurring after the date of this Agreement);
PROVIDED FURTHER, HOWEVER, that if neither the Common Shares nor the Preferred
Shares are publicly held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked quotes, the
current market value of one Preferred Share will mean the fair value thereof as
determined in good faith by the Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent.

         (c) Following the occurrence of a Triggering Event, the Company will
not be required to issue fractions of Common Shares or other securities issuable
upon exercise or exchange of the Rights or to distribute certificates which
evidence any such fractional securities. In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of one such security. For purposes of this
Section 14(c), the current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the closing price thereof
(as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise or exchange; PROVIDED, HOWEVER, that if neither the Common
Shares nor any such other securities are publicly held or listed or admitted to
trading on any national securities exchange, or the subject of available bid and
asked quotes, the current market value of one Common Share or such other
security will mean the fair value thereof as determined in good faith by the
Directors of the Company, whose determination will mean the fair value thereof
as will be described in a statement filed with the Rights Agent.

         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, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the holder of any Common Shares), may in his own behalf
and for his own benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this 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 this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to this Agreement.

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

                  (a) Prior to the Distribution Date, the Rights are
         transferable only in connection with the transfer of the Common Shares;

                                       16
<PAGE>   19

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

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

                  (d) Such holder expressly waives any right to receive any
         fractional Rights and any fractional securities upon exercise or
         exchange of a Right, except as otherwise provided in Section 14.

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

         17. Right Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Right Certificate will be entitled to vote, receive dividends, or
be deemed for any purpose the holder of Preferred Shares or any other securities
of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of Directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions of this Agreement or
exchanged pursuant to the provisions of Section 24.

         18. Concerning the Rights Agent. (a) The Company will 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 will also indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, suit, action, proceeding or expense,
incurred without negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided for herein shall
survive the expiration of the Rights, the termination of this Agreement, and the
resignation or removal of the Rights Agent. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Company.

         (b) The Rights Agent may conclusively rely upon and will be protected
and will incur no liability for or in respect of any action taken, suffered, or
omitted by it in connection with its administration of this Agreement in
reliance upon any Right Certificate or certificate evidencing Preferred Shares
or Common Shares or 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. Notwithstanding anything in this
Agreement to the contrary, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage and regardless of the form of
the action.

         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 is a party, or any corporation succeeding to the corporate trust business
of the Rights Agent or any successor Rights Agent, will be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that

                                       17
<PAGE>   20

such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21. If at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been 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 will have the full force provided in the Right Certificates
and in this Agreement.

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

         20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions
(and no implied duties or obligations, except the duty of good faith, shall be
read into this Agreement against the Rights Agent), by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, will be
bound:

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

                  (b) Whenever in the performance of its duties under this
         Agreement the Rights Agent deems it necessary or desirable that any
         fact or matter 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 any one of the Chairman, the President, any Vice President,
         the Secretary or the Treasurer of the Company and delivered to the
         Rights Agent, and such certificate will 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 will be liable hereunder only for its own
         negligence, bad faith or willful misconduct.

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

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

                  (f) The Company 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 believed in good faith by the Rights Agent to
         be one of the Chairman, the President, any Vice President, the
         Secretary or the Treasurer of the Company, and to apply to such
         officers for advice or instructions in connection with its duties, and
         it will not be liable for any action taken or suffered to be taken by
         it

                                       18
<PAGE>   21

         in good faith in accordance with instructions of any such officer or
         for any delay in acting while waiting for such instructions.

                  (h) The Rights Agent and any shareholder, 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
         will preclude the Rights Agent from acting in any other capacity for
         the Company or for any other Person.

                  (i) The Rights Agent may execute and exercise any of the
         rights or powers hereby vested in it or perform any duty hereunder
         either itself or by or through its attorneys or agents, and the Rights
         Agent will not be answerable or accountable for any act, default,
         neglect or misconduct of any such attorneys or agents or for any loss
         to the Company resulting from any such act, default, neglect or
         misconduct, provided reasonable care was exercised in the selection and
         continued employment thereof. The Rights Agent will not be under any
         duty or responsibility to ensure compliance with any applicable federal
         or state securities laws in connection with the issuance, transfer or
         exchange of Right Certificates.

                  (j) If, with respect to any Right Certificate surrendered to
         the Rights Agent for exercise, transfer, split up, combination or
         exchange, either (i) the certificate attached to the form of assignment
         or form of election to purchase, as the case may be, has either not
         been completed or indicates an affirmative response to clause 1 or 2
         thereof, or (ii) any other actual or suspected irregularity exists, the
         Rights Agent will not take any further action with respect to such
         requested exercise, transfer, split up, combination or exchange without
         first consulting with the Company, and will thereafter take further
         action with respect thereto only in accordance with the Company's
         written instructions.

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

                  (l) The Rights Agent shall not be required to take notice or
         be deemed to have any notice of any fact, event or determination
         (including, without limitation, any dates or events defined in this
         Agreement or the designation of any Person as an Acquiring Person,
         Affiliate or Associate) under this Agreement unless and until the
         Rights Agent shall be specifically notified in writing by the Company
         of such fact, event or determination.

         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
calendar days' notice in writing mailed to the Company and to each transfer
agent of the Preferred Shares or the Common Shares by registered or certified
mail, and, at the expense of the Company, 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 calendar 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 Preferred Shares and the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company fails to
make such appointment within a period of 30 calendar 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 will, 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, will be a corporation or other legal entity organized and doing
business under the laws of the United States or of any state of the United
States so long as such corporation is authorized to do business as a banking
institution in such state, in good standing, 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 will be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent will 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will not affect
the legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.

                                       19
<PAGE>   22

         22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities issuable upon
exercise of the Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold pursuant to
the exercise, exchange or conversion of securities (other than Rights) issued
prior to the Distribution Date which are exercisable or exchangeable for, or
convertible into Common Shares, and (b) may, in any other case, if deemed
necessary, appropriate or desirable by the Directors of the Company, issue Right
Certificates representing an equivalent number of Rights as would have been
issued in respect of such Common Shares if they had been issued or sold prior to
the Distribution Date, as appropriately adjusted as provided herein as if they
had been so issued or sold; PROVIDED, HOWEVER, that (i) no such Right
Certificate will be issued if, and to the extent that, in its good faith
judgment the Directors of the Company determine that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or to
the Person to whom or which such Right Certificate otherwise would be issued and
(ii) no such Right Certificate will be issued if, and to the extent that,
appropriate adjustment otherwise has been made in lieu of the issuance thereof.

         23. Redemption. (a) Prior to the Expiration Date, the Directors of the
Company may, at their option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the Close
of Business on the later of (i) the Distribution Date and (ii) Share Acquisition
Date. Any such redemption will be effective immediately upon the action of the
Directors of the Company ordering the same, unless such action of the Directors
of the Company expressly provides that such redemption will be effective at a
subsequent time or upon the occurrence or nonoccurrence of one or more specified
events (in which case such redemption will be effective in accordance with the
provisions of such action of the Directors of the Company).

         (b) Immediately upon the effectiveness of the redemption of the Rights
as provided in Section 23(a), and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of the redemption of
the Rights as provided in Section 23(a), the Company will publicly announce such
redemption and, within 10 calendar days thereafter, will give notice of such
redemption to the holders of the then-outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Company; PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice will not affect the validity of the redemption of the
Rights. Any notice that is mailed in the manner herein provided will be deemed
given, whether or not the holder receives the notice. The notice of redemption
mailed to the holders of Rights will state the method by which the payment of
the Redemption Price will be made. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based upon the current per share market
price of the Common Shares (determined pursuant to Section 11(d)) at the time of
redemption), or any other form of consideration deemed appropriate by the
Directors of the Company (based upon the fair market value of such other
consideration, determined by the Directors of the Company in good faith) or any
combination thereof. The Company may, at its option, combine the payment of the
Redemption Price with any other payment being made concurrently to holders of
Common Shares and, to the extent that any such other payment is discretionary,
may reduce the amount thereof on account of the concurrent payment of the
Redemption Price. If legal or contractual restrictions prevent the Company from
paying the Redemption Price (in the form of consideration deemed appropriate by
the Directors) at the time of redemption, the Company will pay the Redemption
Price, without interest, promptly after such time as the Company ceases to be so
prevented from paying the Redemption Price.

         24. Exchange. (a) The Directors of the Company may, at their option, at
any time after the Share Acquisition Date, exchange all or part of the
then-outstanding and exercisable Rights (which will not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii)) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the Record Date (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Any such exchange will be effective immediately upon the
action of the Directors of the Company ordering the same, unless such action of
the Directors of the Company expressly provides that such exchange will be
effective at a subsequent time or upon the occurrence or nonoccurrence of one or
more specified events (in which case such exchange will be effective in
accordance with the provisions of such action of the Directors of the Company).
Notwithstanding the foregoing, the Directors of the Company will not be
empowered to effect such exchange at any time after any Person (other than the
Company or any Related Person), who or which, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
then-outstanding Common Shares.

         (b) Immediately upon the effectiveness of the exchange of any Rights as
provided in Section 24(a), and without any further action and without any
notice, the right to exercise such Rights will terminate and the only right with
respect to such Rights thereafter of the holder of such Rights will be to
receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. Promptly after the effectiveness
of the exchange of any Rights as

                                       20
<PAGE>   23

provided in Section 24(a), the Company will publicly announce such exchange and,
within 10 calendar days thereafter, will give notice of such exchange to all of
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent; PROVIDED, HOWEVER, that the failure to give,
or any defect in, such notice will not affect the validity of such exchange. Any
notice that is mailed in the manner herein provided will be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange will 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)) held by each holder of Rights.

         (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any Common Share exchangeable for a Right (i)
equivalent common shares (as such term is used in Section 11(a)(iii)), (ii)
cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as
determined in good faith by the Directors of the Company (whose determination
will be described in a statement filed with the Rights Agent), equal to the
current market value of one Common Share (determined pursuant to Section 11(d))
on the Trading Day immediately preceding the date of the effectiveness of the
exchange pursuant to this Section 24.

         25. Notice of Certain Events. (a) If, after the Distribution Date, the
Company proposes (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular periodic cash dividend), (ii) to offer to
the holders of Preferred Shares rights, options or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing more than 50% of the assets and earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons
other than the Company or one or more of its wholly owned Subsidiaries, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or reclassification of the Common Shares then,
in each such case, the Company will give to each holder of a Right Certificate,
to the extent feasible and in accordance with Section 26, a notice of such
proposed action, which specifies the record date for the purposes of such stock
dividend, distribution or offering of rights, options or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be so given, in
the case of any action covered by clause (i) or (ii) above, at least 10 calendar
days prior to the record date for determining holders of the Preferred Shares
for purposes of such action, and, in the case of any such other action, at least
10 calendar days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever is the earlier.

         (b) In case any Triggering Event occurs, then, in any such case, the
Company will as soon as practicable thereafter give to the Rights Agent and each
holder of a Right Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which specifies the event and the consequences of the
event to holders of Rights.

         26. Notices. (a) 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 will be sufficiently given or made if sent by first class
mail, postage prepaid, and the Rights Agent recommends that any notice or demand
authorized by this Agreement to be given or made by any holder of a Rights
Certificate or the Company on the Rights Agent shall be sent or given by
registered or certified mail, and shall be deemed given or made on receipt. The
holders of Rights Certificates and the Company agree to assume the risk of
giving notice or demand on the Rights Agent if given by any other means. Any
such notice or demand shall be addressed (until another address is filed in
writing with the Rights Agent) as follows:

                       The J. M. Smucker Company
                       Strawberry Lane
                       Orville, Ohio 44667-0280
                       Attention: Richard K. Smucker, President

         (b) 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 will be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:

                                       21
<PAGE>   24

                       Computershare Investor Services, LLC
                       2 North LaSalle
                       P.O. Box A3504 Chicago, Illinois 60690-3504
                       Attention: Shareholder Services

         (c) 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 (or,
if prior the Distribution Date, to the holder of any certificate evidencing
Common Shares) will be sufficiently given or made if sent by first class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.

         27. Supplements and Amendments. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last two
sentences of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs and at the
expense of the Company, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of Rights or Common Shares. From
and after the time at which the Rights cease to be redeemable pursuant to
Section 23, and subject to the last two sentences of this Section 27, the
Company may, and the Rights Agent will if the Company so directs and at the
expense of the Company, supplement or amend this Agreement without the approval
of any holders of Rights or Common Shares in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to supplement or amend the
provisions hereunder in any manner which the Company may deem desirable;
provided that no such supplement or amendment shall 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), and no such supplement or
amendment shall cause the Rights again to become redeemable or cause this
Agreement again to become supplementable or amendable otherwise than in
accordance with the provisions of this sentence. Without limiting the generality
or effect of the foregoing, this Agreement may be supplemented or amended to
provide for such voting powers for the Rights and such procedures for the
exercise thereof, if any, as the Directors of the Company may determine to be
appropriate. Upon the delivery of a certificate from an officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent will execute such supplement or
amendment; PROVIDED, HOWEVER, that the failure or refusal of the Rights Agent to
execute such supplement or amendment will not affect the validity of any
supplement or amendment adopted by the Directors of the Company, any of which
will be effective in accordance with the terms thereof. Notwithstanding anything
in this Agreement to the contrary, no supplement or amendment may be made which
decreases the stated Redemption Price to an amount less than $.01 per Right.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent under this
Agreement will be effective against the Rights Agent without the execution of
such supplement or amendment by the Rights Agent.

         28. Successors; Certain Covenants. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent will be
binding on and inure to the benefit of their respective successors and assigns
hereunder.

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

         30. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under the
internal substantive laws of the State of Ohio and for all purposes will be
governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and performed entirely within such
State, except as to the rights and obligations of the Rights Agent, which shall
be governed by and construed in accordance with the laws of the State of
Illinois.

         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 will remain in full force and
effect and will in no way be affected, impaired or invalidated; PROVIDED,
HOWEVER, that nothing contained in this Section 31 will affect the ability of
the Company under the provisions of Section 27 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.

                                       22
<PAGE>   25

         32. Descriptive Headings, Etc. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
Unless otherwise expressly provided, references herein to Articles, Sections,
Schedules and Exhibits are to Articles, Sections, Schedules and Exhibits of or
to this Agreement.

         33. Determinations and Actions By the Directors. For all purposes of
this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, will be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Directors of the Company will have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the 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 any determination as to whether
particular Rights shall have become void). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
any omission with respect to any of the foregoing) which are done or made by the
Directors of the Company in good faith will (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties and (y) not subject the Directors of the Company to any liability to any
Person, including without limitation the Rights Agent and the holders of the
Rights.

         34. Prior Agreement. This Agreement amends and restates the Original
Rights Agreement, which shall, without further action, be superceded as of the
time this Agreement becomes effective.

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

                                       23
<PAGE>   26

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

                                       THE J. M. SMUCKER COMPANY

                                       By: /s/ Steven J. Ellcessor
                                          -------------------------------------
                                          Name: Steven J. Ellcessor
                                          Title: Vice President, Finance and
                                          Administration,
                                          Secretary/Treasurer, and
                                          General Counsel

                                       COMPUTERSHARE INVESTOR SERVICES, LLC,
                                       SUCCESSOR TO HARRIS TRUST AND
                                       SAVINGS BANK, as Rights Agent

                                       By: /s/ Michael J. Lang
                                          -------------------------------------
                                          Name: Michael J. Lang
                                          Title: Vice President

                                       24
<PAGE>   27

                                                                       EXHIBIT A

                                     FORM OF
                             CERTIFICATE OF ADOPTION
                                  OF AMENDMENT
                               TO AMENDED ARTICLES
                                       OF
                                  INCORPORATION

                                       OF

                            THE J. M. SMUCKER COMPANY

         We, Richard K. Smucker, President, and Steven J. Ellcessor, Secretary,
of The J. M. Smucker Company, an Ohio corporation (the "Company"), do hereby
certify that pursuant to the authority conferred upon the Directors of the
Company (the "Directors") by the Articles of Incorporation of the Company, the
Directors at a meeting duly called and held on April 22, 1999 at which a quorum
was present and acting throughout, adopted the following resolution to amend the
Amended Articles of Incorporation of the Company pursuant to Section
1701.70(B)(1) of the Ohio Revised Code to create a series of Serial Preferred
Shares designated as Series A Junior Participating Preferred Shares:

         RESOLVED, that Article Third of the Amended Articles of Incorporation
of this Company be, and it hereby is, amended by adding after Division I of
Article Third of the Amended Articles of Incorporation a new Division I-A as set
forth below:

                                  DIVISION I-A

                 SERIES A JUNIOR PARTICIPATING PREFERRED SHARES

         SECTION 1. There is established hereby a series of Serial Preferred
Shares that shall be designated Series A Junior Participating Preferred Shares
(hereinafter sometimes called this "Series" or the "Series A Junior
Participating Preferred Shares") and that shall have the terms set forth in this
Division I-A.

         SECTION 2. The number of shares of this Series shall be 700,000.

         SECTION 3. (a) The holders of record of Series A Junior Participating
Preferred Shares shall be entitled to receive, when and as declared by the
Directors in accordance with the terms hereof, out of funds legally available
for the purpose, cumulative 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 Series A Junior
Participating Preferred Share or fraction of a Series A Junior Participating
Preferred Share in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $1.00 per share or (ii) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions (other than a dividend
payable in shares or Common Shares, or a subdivision of the outstanding Common
Shares (by reclassification or otherwise)), declared on the Common Shares since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
Series A Junior Participating Preferred Share or fraction of a Series A Junior
Participating Preferred Share. In the event the Company shall at any time
declare or pay any dividend on the Common Shares payable in Common Shares, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Shares (by reclassification or otherwise than by payment of a dividend
in Common Shares) into a greater or lesser number of shares of Common Shares,
then in each such case the amount to which holders of Series A Junior
Participating Preferred Shares were entitled immediately prior to such event
under clause (ii) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Shares outstanding immediately after such event and the denominator of
which is the number of shares of Common Shares that were outstanding immediately
prior to such event.

         (b) Dividends shall begin to accrue and be cumulative on outstanding
Series A Junior Participating Preferred Shares from the Quarterly Dividend
Payment Date next preceding the date of issue of such Series A Junior
Participating Preferred Shares, 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 issues 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

                                       A-1

<PAGE>   28

Preferred Shares 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. No dividends shall be paid
upon or declared and set apart for any Series A Junior Participating Preferred
Shares for any dividend period unless at the same time a dividend for the same
dividend period, ratably in proportion to the respective annual dividend rates
fixed therefor, shall be paid upon or declared and set apart for all Serial
Preferred Shares of all series then outstanding and entitled to receive such
dividend. The Directors may fix a record date for the determination of holders
of Series A Junior Participating Preferred Shares entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 40 days prior to the date fixed for the payment thereof.

         SECTION 4. The Series A Junior Participating Preferred Shares are not
redeemable.

         SECTION 5. (a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company
(hereinafter referred to as a "Liquidation"), no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
Liquidation) to the Series A Junior Participating Preferred Shares, unless,
prior thereto, the holders of Series A Junior Participating Preferred Shares
shall have received at least an amount per share equal to one hundred times the
then applicable Purchase Price as defined in the Rights Agreement, as the same
may be from time to time amended in accordance with its terms (which Purchase
Price is $90.00 as of April 22, 1999), subject to adjustment from time to time
as provided in the Rights Agreement, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, provided that the holders of shares of Series A Junior
Participating Preferred Shares shall be entitled to receive at least an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be distributed per share
to holders of Common Shares (the "Series A Junior Participating Preferred Shares
Liquidation Preference").

         (b) In the event, however, that the net assets of the Company are not
sufficient to pay in full the amount of the Series A Junior Participating
Preferred Shares Liquidation Preference and the liquidation preferences of all
other series of Serial Preferred Shares, if any, which rank on a parity with the
Series A Junior Participating Preferred Shares as to distribution of assets in
Liquidation, all shares of this Series and of such other series of Serial
Preferred Shares shall share ratably in the distribution of assets (or proceeds
thereof) in Liquidation in proportion to the full amounts to which they are
respectively entitled.

         (c) In the event the Company shall at any time declare or pay any
dividend on the Common Shares payable in consolidation of the outstanding Common
Shares (by reclassification or otherwise than by payment of a dividend in Common
Shares) into a greater or lesser number of shares of Common Shares, then in each
such case the amount to which holders of Series A Junior Participating Preferred
Shares were entitled immediately prior to such event pursuant to the proviso set
forth in paragraph (a) above, shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Shares
outstanding immediately after such event and the denominator of which is the
number of shares of Common Shares that were outstanding immediately prior to
such event.

         (d) The merger or consolidation of the Company into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all the property or business of the
Company, shall not be deemed to be a Liquidation for the purpose of this Section
5.

         SECTION 6. The Series A Junior Participating Preferred Shares shall not
be convertible into Common Shares.

         IN WITNESS WHEREOF, Richard K. Smucker, President, and Steven J.
Ellcessor, Secretary, of The J. M. Smucker Company, acting for and on behalf of
the Company, have hereunto subscribed their names this 7th day of June, 1999.

                                    /s/ RICHARD K. SMUCKER
                                    -----------------------
                                    Richard K. Smucker
                                    President

                                    /s/ STEVEN J. ELLCESSOR
                                    -----------------------
                                    Steven J. Ellcessor
                                    Secretary

                                       A-2

<PAGE>   29

                                                                       EXHIBIT B

                            FORM OF RIGHT CERTIFICATE

Certificate No. R- ______                                        _______ Rights

                  NOT EXERCISABLE AFTER MAY 14, 2009 (SUBJECT TO POSSIBLE
                  EXTENSION AT THE OPTION OF THE COMPANY) OR EARLIER IF
                  REDEEMED, EXCHANGED OR AMENDED. THE RIGHTS ARE SUBJECT TO
                  REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE
                  COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
                  CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
                  RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING
                  PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON
                  (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
                  TRANSFEREE THEREOF MAY BECOME NULL AND VOID.

                                RIGHT CERTIFICATE

                            THE J. M. SMUCKER COMPANY

         This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of April 22, 1999 (the "Rights Agreement"), between
The J. M. Smucker Company, an Ohio corporation (the "Company"), and
Computershare Investor Services, LLC, successor to Harris Trust and Savings
Bank, an Illinois banking corporation, 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. (Eastern time) on the
Expiration Date (as such term is defined in the Rights Agreement) at the
principal office or offices of the Rights Agent designated for such purpose, one
one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Company, at a purchase price of $90.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed. If this Right Certificate is exercised in part, the holder will be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised. The number of Rights
evidenced by this Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
the date of the Rights Agreement, based on the Preferred Shares as constituted
at such date.

                                       B-1

<PAGE>   30

         As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence 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 of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above- mentioned office of the Rights Agent and can
be obtained from the Company without charge upon written request therefor. Terms
used herein with initial capital letters and not defined herein are used herein
with the meanings ascribed thereto in the Rights Agreement.

         Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) 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 (a) a transfer from an 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 (b) a transfer
which the Directors of the Company have determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.

         This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.

         The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other securities, the Company may make a cash payment, as provided in the
Rights Agreement.

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

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

         WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________,____.

                                       B-2

<PAGE>   31

ATTEST:                                            THE J. M. SMUCKER COMPANY

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

Countersigned:

COMPUTERSHARE INVESTOR SERVICES, LLC,
SUCCESSOR TO HARRIS TRUST AND SAVINGS BANK,
as Rights Agent

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

                                       B-3

<PAGE>   32

                    FORM OF REVERSE SIDE OF RIGHT CERTIFICATE

                               FORM OF ASSIGNMENT

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

         FOR VALUE RECEIVED,_______ hereby sells, assigns and transfers unto

________________________________________________________________________________

________________________________________________________________________________
                  (Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________ attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.

Dated:_______,___

                                    ________________________________
                                    Signature

Signature Guaranteed:

                                       B-4

<PAGE>   33

                                  CERTIFICATE

         The undersigned hereby certifies by checking the appropriate boxes
that:

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

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

Dated: __________, ____

                                    ________________________________
                                    Signature

                                       B-5

<PAGE>   34

                          FORM OF ELECTION TO PURCHASE

                      (TO BE EXECUTED IF HOLDER DESIRES TO
                         EXERCISE THE RIGHT CERTIFICATE)

To The J. M. Smucker Company:

         The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and
delivered to:

Please insert social security
or other identifying number:____________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                         (Please print name and address)

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

Please insert social security
or other identifying number:____________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                         (Please print name and address)

Dated: __________, ____

                                    ________________________________
                                    Signature

Signature Guaranteed:

                                       B-6

<PAGE>   35

                                   CERTIFICATE

         The undersigned hereby certifies by checking the appropriate boxes
that:

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

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

Dated: __________, ____

                                    ________________________________
                                    Signature

                                     NOTICE

         SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.

         SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17Ad-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

                                       B-7

<PAGE>   36

                                                                       EXHIBIT C

                  SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK

         The Directors (the "Directors") of The J. M. Smucker Company (the
"Company") have declared a dividend distribution of one right (a "Right") for
each outstanding share of common stock, without par value (the "Common Shares"),
of the Company. The distribution was payable on May 14, 1999 (the "Record Date")
to the shareholders of record as of the close of business on the Record Date.
Each Right entitles the registered holder thereof to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Company at a price (the
"Purchase Price") of $90.00 per one one- hundredth of a Preferred Share, subject
to adjustment. The description and terms of the Rights are set forth in an
Amended and Restated Rights Agreement, dated as of __________, 2000 (the "Rights
Agreement"), between the Company and Computershare Investor Services, LLC,
successor to Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agent").

         Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing Common Shares until the earlier (the "Distribution
Date") of: (i) the close of business on the tenth calendar day following the
first date (the "Share Acquisition Date") of public announcement that a person
or group (other than a Related Person or an Exempted Person), together with its
affiliates and associates, has acquired beneficial ownership of 10% or more of
the outstanding Common Shares (any such person or group being hereinafter called
an "Acquiring Person") or (ii) the close of business on the tenth business day
(or such later date as may be specified by the Directors) following the
commencement of a tender offer or exchange offer by a person (other than the
Company or a Related Person), the consummation of which would result in
beneficial ownership by such person of beneficial ownership of 10% or more of
the outstanding Class A Common Shares. "Related Person" includes any subsidiary
of the Company or any employee benefit or stock ownership plan of the Company or
any of its subsidiaries. "Exempted Person" means any Smucker's Family Member (as
defined in the Rights Agreement).

         The Rights Agreement provides that, until the Distribution Date, the
Rights may be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
any certificate evidencing Common Shares of the Company issued upon transfer or
new issuance of the Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender for transfer of
any certificates evidencing Common Shares will also constitute the transfer of
the Rights associated with such certificates. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of Common Shares as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights. No Right is exercisable at any time prior to the
Distribution Date. The Rights will expire on the tenth anniversary of the Record
Date (the "Final Expiration Date") unless earlier redeemed, exchanged or amended
by the Company as described below. Until a Right is exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company, including
the right to vote or to receive dividends.

         The Purchase Price payable, and the number of the Preferred Shares or
other securities issuable, upon exercise of the Rights will be 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
Shares, (ii) upon the grant to holders of Preferred Shares of certain rights or
warrants to subscribe for or purchase the Preferred Shares at a price, or
securities convertible into the Preferred Shares with a conversion price, less
than the then-current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness,
cash (excluding regular periodic cash dividends), assets, stock (excluding
dividends payable in the Preferred Shares) or subscription rights or warrants
(other than those referred to above). The number of outstanding Rights and the
number of one one-hundredths of the Preferred Shares issuable upon exercise of
each Right will be subject to adjustment in the event of a stock dividend on the
Common Shares payable in Common Shares or a subdivision, combination or
reclassification of Common Shares occurring, in any such case, prior to the
Distribution Date.

         The Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled, in connection with the
declaration of a dividend on the Common Shares, to a preferential dividend
payment equal to the greater of (i) $1.00 per share and (ii) an amount equal to
100 times the related dividend declared per Common Share. Subject to customary
anti-dilution provisions, in the event of liquidation, the holders of Preferred
Shares will be entitled to a preferential liquidation payment equal to the
greater of (a) $100 per share and (b) an amount equal to 100 times the
liquidation payment made per Common Share. Because of the nature of the
Preferred Shares' dividend, voting and liquidation rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon exercise of a Right
should approximate the value of one Common Share.

                                       C-1

<PAGE>   37

         Rights will be exercisable to purchase Preferred Shares only after the
Distribution Date occurs and prior to the occurrence of a Flip-in Event as
described below. A Distribution Date resulting from the commencement of a tender
offer or exchange offer described in clause (ii) of the second paragraph of this
summary could precede the occurrence of a Flip-in Event and thus result in the
Rights being exercisable to purchase Preferred Shares. A Distribution Date
resulting from any occurrence described in clause (i) of the second paragraph of
this summary would necessarily follow the occurrence of a Flip-in Event and thus
result in the Rights being exercisable to purchase Common Shares or other
securities as described below.

         Under the Rights Agreement, in the event (a "Flip-in Event") that (i)
any person or group, together with its affiliates and associates, becomes an
Acquiring Person (ii) any Acquiring Person or any affiliate or associate thereof
merges into or combines with the Company and the Company is the surviving
corporation, (iii) any Acquiring Person or any affiliate or associate thereof
effects certain other transactions with the Company, or (iv) during such time as
there is an Acquiring Person the Company effects certain transactions, in each
case as described in the Rights Agreement, then, in each such case, proper
provision will be made so that from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip-in Event each holder of a Right, other than Rights that are or were owned
beneficially by an Acquiring Person (which, from and after the date of a Flip-in
Event, will be void), will have the right to receive, upon exercise thereof at
the then-current exercise price of the Right, that number of Common Shares (or,
under certain circumstances, an economically equivalent security or securities
of the Company) that at the time of such Flip-in Event have a market value of
two times the exercise price of the Right.

         In the event (a "Flip-over Event") that, at any time after a person has
become an Acquiring Person, (i) the Company merges with or into any person and
the Company is not the surviving corporation, (ii) any person merges with or
into the Company and the Company is the surviving corporation, but all or part
of the Common Shares are changed or exchanged for stock or other securities of
any other person or cash or any other property, or (iii) 50% or more of the
Company's assets or earning power, including securities creating obligations of
the Company, are sold, in each case as described in the Rights Agreement, then,
and in each such case, proper provision will be made so that from and after the
latest of the Share Acquisition Date, the Distribution Date and the date of the
occurrence of such Flip-over Event, each holder of a Right, other than Rights
which have become void, will thereafter have the right to receive, upon the
exercise thereof at the then-current exercise price of the Right, that number of
shares of common stock (or, under certain circumstances, an economically
equivalent security or securities) of such other person that at the time of such
Flip-over Event have a market value of two times the exercise price of the
Right.

         From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become void) will be
exercisable as described above, upon payment of the aggregate exercise price in
cash. In addition, at any time after the Share Acquisition Date and prior to the
acquisition by any person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Company may exchange the Rights
(other than any rights that have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to adjustment).

         With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company will not be required to issue fractional
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, which may, at the option of the Company, be
evidenced by depositary receipts) or fractional Common Shares or other
securities issuable upon the exercise of Rights. In lieu of issuing such
securities, the Company may make a cash payment, as provided in the Rights
Agreement.

         The Company may, at its option, redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment (the "Redemption
Price"), at any time prior to the close of business on the later of the
Distribution Date and the Share Acquisition Date. 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.

         The Rights Agreement may be amended by the Company without the approval
of any holders of Rights Certificates, including amendments that increase or
decrease the Purchase Price, that add other events requiring adjustment to the
Purchase Price payable and the number of the Preferred Shares or other
securities issuable upon the exercise of the Rights or that modify procedures
relating to the redemption of the Rights, except that no amendment may be made
that decreases the stated Redemption Price to an amount less than $0.01 per
Right.

The Directors will have the exclusive power and authority to administer the
Rights Agreement and to exercise all rights and powers specifically granted to
the Directors or to the Company therein, or as may be necessary or advisable in
the administration of the Rights Agreement, including without limitation the
right and power to interpret the provisions of the

                                       C-2

<PAGE>   38

Rights Agreement and to make all determinations deemed necessary or advisable
for the administration of the Rights Agreement (including any determination to
redeem or not redeem the Rights or to amend or not amend the Rights Agreement).
All such actions, calculations, interpretations and determinations (including
any omission with respect to any of the foregoing) which are done or made by the
Directors in good faith will be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties and will not
subject the Directors to any liability to any person, including without
limitation the Rights Agent and the holders of the Rights.

         A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.

         This summary description of the Rights is as of the Record Date, does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.

                                       C-3<PAGE>   1
                                                                    Exhibit 10.1
                              AMENDED AND RESTATED
                              --------------------
                              EMPLOYMENT AGREEMENT
                              --------------------

         This Amended and Restated Employment Agreement (this
"Agreement") is made as of the 1st day of June, 2000, between RPM, INC., an
Ohio corporation (the "Company"), and Thomas C. Sullivan ("Executive"). WHEREAS,
Executive is currently Chairman of the Board and Chief Executive Officer of the
Company; and WHEREAS, Executive and the Company entered into a certain
Employment Agreement, originally dated as of July 22, 1981, as amended (the
"Existing Agreement"), to ensure Executive's continued employment with the
Company; and

         WHEREAS, the Board of Directors of the Company recognizes the
importance of Executive's continuing contribution to the future growth and
success of the Company and desires to assure the Company and its shareholders of
Executive's continued employment in an executive capacity and to compensate him
therefor; and

         WHEREAS, Executive is desirous of committing himself to
continue to serve the Company on the terms herein provided.

         NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, the parties
hereto agree as follows:

         1. TERM OF EMPLOYMENT. The Company hereby agrees to continue
to employ Executive, and Executive hereby agrees to continue to serve the
Company, on the terms and conditions set forth herein for the period commencing
as of the date hereof and expiring on December 31, 2002 (the "Employment
Period"). In the event of a Change in Control, the Employment Period shall
automatically be extended for a period of three years beginning on the

<PAGE>   2

date of the Change in Control and ending on the third anniversary of the
date of such Change in Control. In any case, the Employment Period may be
terminated earlier under the terms and conditions set forth herein.

         2. POSITION AND DUTIES. Executive shall serve as Chairman of
the Board and Chief Executive Officer reporting to the Board of Directors of the
Company and shall have responsibility for the general management and operation
of the Company and shall have such other powers and duties as may from time to
time be assigned by the Board of Directors of the Company; provided, however,
that such duties are consistent with his present duties and his position with
the Company. Executive shall devote substantially all his working time and
efforts to the continued success of the business and affairs of the Company.

         3. PLACE OF EMPLOYMENT. In connection with his employment by
the Company, Executive shall not be required to relocate or move from his
existing principal residence in Bay Village, Ohio, and shall not be required to
perform services which would make the continuance of his principal residence in
Bay Village, Ohio, unreasonably difficult or inconvenient for him. The Company
shall give Executive at least six months' advance notice of any proposed
relocation of its Medina, Ohio offices to a location more than 50 miles from
Medina, Ohio and, if Executive in his sole discretion chooses to relocate his
principal residence, the Company shall promptly pay (or reimburse him for) all
reasonable relocation expenses (consistent with the Company's past practice for
similarly situated senior executive officers) incurred by him relating to a
change of his principal residence in connection with any such relocation of the
Company's offices from Medina, Ohio.

         4.    COMPENSATION.

         (a) BASE SALARY. During the Employment Period, Executive shall
receive a base salary at the rate of not less than Eight Hundred Seventy
Thousand Dollars ($870,000) per annum

                                        2

<PAGE>   3

("Base Salary"), payable in substantially equal monthly installments at the
end of each month during the Employment Period hereunder. It is contemplated
that annually in the first quarter of each fiscal year of the Company the
Compensation Committee of the Board of Directors (the "Compensation Committee")
will review Executive's Base Salary and other compensation during the Employment
Period and, at the discretion of the Compensation Committee, it may increase his
Base Salary and other compensation, effective as of June 1 of such fiscal year,
based upon his performance, then generally prevailing industry salary scales,
the Company's results of operations, and other relevant factors. Any increase in
Base Salary or other compensation shall in no way limit or reduce any other
obligation of the Company hereunder and, once established at an increased
specified rate, Executive's Base Salary hereunder shall not be reduced without
his written consent.

         (b) INCENTIVE COMPENSATION. In addition to his Base Salary,
Executive shall be entitled to receive such annual cash incentive compensation
("Incentive Compensation") during the Employment Period as the Compensation
Committee may determine in its sole discretion based upon the Company's results
of operation and other relevant factors. At the election of Executive, such
annual Incentive Compensation may be received by Executive as soon as possible,
but no later than 90 days after the close of the Company's fiscal year for which
such Incentive Compensation is granted, or the payment may be deferred provided
Executive gives written notice no later than May 31 of the current fiscal year
to the Chairman of the Compensation Committee that he elects to defer payment,
which notice shall also state the date(s) on which he desires to be paid.

         (c) EXPENSES. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by him (in accordance with his past practice) in performing services
hereunder, provided that Executive properly accounts

                                        3

<PAGE>   4

therefor in accordance with either Company policies or guidelines
established by the Internal Revenue Service if such are less burdensome.

         (d) PARTICIPATION IN BENEFIT PLANS. During the Employment
Period, Executive shall be entitled to continue to participate in or receive
benefits under the Benefit Plans, subject to and on a basis consistent with the
terms, conditions and overall administration of the Benefit Plans. Except with
respect to any benefits related to salary reductions authorized by Executive,
nothing paid or awarded to Executive under any Benefit Plan presently in effect
or made available in the future shall reduce or be deemed to be in lieu of
compensation to Executive pursuant to any other provision of this Section 4.

         (e) VACATIONS. During the Employment Period, Executive shall
be entitled to the same number of paid vacation days in each fiscal year
determined by the Company from time to time for its other senior executive
officers, but not less than four weeks in any fiscal year, to be taken at such
time or times as is desired by Executive after consultation with the Board of
Directors (or its designee) to avoid scheduling conflicts (prorated in any
fiscal year during which Executive is employed hereunder for less than the
entire such year in accordance with the number of days in such fiscal year
during which he is so employed). Executive also shall be entitled to all paid
holidays given by the Company to its other salaried employees.

         (f) OTHER BENEFITS. During the Employment Period, Executive
shall be entitled to continue to receive the fringe benefits appertaining to his
position with the Company in accordance with present practice, including the use
of the most recent model of a full-sized automobile. During the Employment
Period, Executive shall be entitled to the full-time use of his present office
and furniture at the Company's offices in Medina, Ohio, and shall be entitled to
the full-time use of a secretary paid by the Company.

                                        4

<PAGE>   5

         5.    TERMINATION OUTSIDE OF PROTECTED PERIOD.

         (a) EVENTS OF TERMINATION. At any time other than during the
Protected Period, the Employment Period shall terminate immediately upon the
occurrence of any of the following events: (i) expiration of the Employment
Period; (ii) the death of Executive; (iii) the expiration of 30 days after the
Company gives Executive written notice of its election to terminate the
Employment Period upon the Disability of Executive, if before the expiration of
such 30-day period Executive has not returned to the performance of his duties
hereunder on a full-time basis; (iv) the resignation of Executive; (v) the
Company's termination of the Employment Period for Cause; or (vi) the Company's
termination of the Employment Period at any time, without Cause, for any reason
or no reason.

         (b) COMPENSATION UPON TERMINATION. This Subsection 5(b)
sets forth the payments and benefits to which Executive is entitled under
any termination of employment pursuant to Subsection 5(a).

           (i) EXPIRATION OF EMPLOYMENT PERIOD. If Executive's
employment is terminated pursuant to Subsection 5(a)(i) upon expiration of
the Employment Period, Executive shall be entitled to no further payment of Base
Salary and shall no longer be entitled to participate in the Benefit Plans,
except as required by applicable law or as governed by the Benefit Plans in
which Executive participates immediately prior to such termination, but
Executive shall be entitled to receive any Incentive Compensation payable but
not yet paid under the terms of Section 4(b) for the period from June 1, 2002
through the Termination Date.

           (ii) DEATH; DISABILITY. During any period in which
Executive fails to perform his duties hereunder as a result of incapacity
due to physical or mental illness, Executive shall continue to receive his full
Base Salary only until his employment is terminated pursuant to

                                        5

<PAGE>   6

Subsection 5(a)(ii) or (iii). Upon termination of the Employment Period
under Subsection 5(a)(ii) or (iii), Executive shall no longer be entitled to
participate in the Benefit Plans, except as required by applicable law or as
governed by the Benefit Plans including the Group Long Term Disability Insurance
in which Executive participates immediately prior to such termination, but
Executive shall be entitled to receive his Earned Incentive Compensation, if
any, promptly after the Termination Date.

           (iii) RESIGNATION OR CAUSE. If Executive's employment
is terminated pursuant to Subsection 5(a)(iv) or (v), the Company shall pay
Executive his full Base Salary through the Termination Date at the rate in
effect at such time. The Company shall then have no further obligations to
Executive under this Agreement and Executive shall no longer be entitled to
participate in the Benefit Plans, except as required by applicable law.

           (iv) TERMINATION WITHOUT CAUSE. If Executive's
employment is terminated without Cause pursuant to Subsection 5(a)(vi),
then in lieu of any further salary payments to Executive for periods subsequent
to the Termination Date, the Company shall pay to Executive no later than 30
calendar days following such date, a lump sum amount equal to the sum of (A)
500% of Executive's Base Salary in effect as of such date and (B) the amount of
Executive's Earned Incentive Compensation. Executive also shall be entitled to
certain continuing benefits under the terms of Subsection 5(c). Notwithstanding
any other provision of this Subsection 5(b)(iv), Subsection 5(c) or this
Agreement, the Company shall have no obligation to make the lump-sum payment
referred to in this Subsection 5(b)(iv) or provide any continuing benefits or
payment referred to in Subsection 5(c) unless (X) Executive executes and
delivers to the Company a Release and Waiver of Claims and (Y) Executive
refrains from revoking, rescinding

                                        6

<PAGE>   7

or otherwise repudiating such Release and Waiver of Claims for all
applicable periods during which Executive may revoke it.

         (c) ADDITIONAL BENEFITS FOLLOWING TERMINATION UNDER SUBSECTION
5(a)(vi). This Subsection 5(c) sets forth the benefits to which Executive shall
be entitled, in addition to those set forth in Subsection 5(b)(iv), following a
termination of the Employment Period under Subsection 5(a)(vi). Executive shall
not be entitled to the benefit of any provision of this Subsection 5(c)
following a termination of the Employment Period under any other provision
hereof.

         (i) CONTINUING BENEFIT PLANS. For a period of five years following such
a Termination Date, Executive shall also be entitled to continue to participate,
on the same terms and conditions as active employees, in the Continuing Benefit
Plans in which Executive participated immediately prior to the Termination Date,
except that (A) Executive shall be entitled to Estate/Financial Planning
Benefits for a period of only six months following the Termination Date and (B)
if Executive's continued participation is not possible and Executive does not
continue to participate under the terms of any such Continuing Benefit Plan, the
Company shall instead pay to Executive, promptly upon presentation to the
Company of an invoice or receipt for payment, the amount Executive spends to
receive comparable coverage under such a comparable plan for such five-year
period. Notwithstanding the foregoing sentence, the Company's obligations to
Executive with respect to continued benefits under the Continuing Benefit Plans
shall be deemed satisfied to the extent of any such comparable benefits which
are provided to Executive by another employer. During such continuation period,
Executive shall be responsible for paying the normal employee share of the
applicable premiums for coverage under the Continuing Benefit Plans. The Company
shall have the right to modify,

                                        7

<PAGE>   8

amend or terminate the Continuing Benefit Plans (other than the
Estate/Financial Planning Benefits) following the Termination Date and
Executive's continued participation therein shall be subject to such
modification, amendment or termination if such modification, amendment or
termination applies generally to the then-current participants in such plan.
Upon completion of the five-year period following such a Termination Date, the
Company shall afford Executive the opportunity to continue Executive's coverage
under the Continuing Benefit Plans (other than the Estate/Financial Planning
Benefits), at Executive's expense, for an additional period under COBRA
Continuation Coverage, so long as Executive timely elects to receive COBRA
Continuation Coverage under the terms thereof and otherwise complies with the
conditions of continuation of benefits under COBRA Continuation Coverage.

           (ii) LIMITED BENEFIT PLANS. After such a Termination Date,
Executive shall no longer be entitled to participate as an active employee
in, or receive any additional or new benefits under, the Limited Benefit Plans,
except as set forth in this Subsection 5(c)(ii) and except for such benefits, if
any, available under such plans to former employees. After such a Termination
Date, Executive shall be entitled to the following additional benefits:

              (A) Continued coverage, for a period of five years
after the Termination Date, under the Split Dollar Life Insurance, with the
Company paying such expenses as it otherwise would have paid thereunder if
Executive had continued to be employed, all on the terms of the Split Dollar
Life Insurance;

              (B) A lump-sum payment to be paid under the
Supplemental Executive Retirement Plan equal to the cash value of the
benefits Executive would have received had he continued to participate in and
receive annual awards under the Restricted Stock Plan on a basis consistent with
his past practice for a period of five years after the Termination Date,

                                        8

<PAGE>   9

determined and payable in accordance with the terms of the Supplemental
Executive Retirement Plan and the Company's past practice; and

              (C) The lapse of all restrictions on transfer and forfeiture
provisions to which Executive's awards under the Restricted Stock Plan are
subject, so that any restricted shares previously awarded to Executive under
such plan shall be nonforfeitable and freely transferable thereafter, all on the
terms of the Restricted Stock Plan or the agreements thereunder.

         (d) NOTICE OF TERMINATION. Any termination by the Company
pursuant to Subsection 5(a)(iii), (v) or (vi) or by Executive pursuant to
Subsection 5(a)(iv) shall be communicated to the other party hereto by written
notice of termination, which shall state in reasonable detail the facts upon
which the termination has occurred.

         6.    TERMINATION DURING PROTECTED PERIOD.

         (a) EVENTS OF TERMINATION. During the Protected Period, the
Employment Period shall terminate immediately upon the occurrence of any of the
following events: (i) the death of Executive; (ii) the expiration of 30 days
after the Company gives Executive written notice of its election to terminate
the Employment Period upon the Disability of Executive, if before the expiration
of such 30-day period Executive has not returned to the performance of his
duties hereunder on a full-time basis; (iii) the resignation of Executive
without delivering Notice of Termination for Good Reason; (iv) the Company's
termination of the Employment Period for Cause; (v) the Company's termination of
the Employment Period at any time, without Cause, for any reason or no reason;
or (vi) Executive's termination of the Employment Period for Good Reason by
delivery of Notice of Termination for Good Reason to the Company during the
Protected Period indicating that an event constituting Good Reason has occurred,
provided that

                                       9

<PAGE>   10

Executive's failure to object in writing to an event alleged to constitute
Good Reason within six months of the date of occurrence of such event shall be
deemed a waiver of such event by Executive and Executive thereafter may not
terminate the Employment Period under this Subsection 6(a)(vi) based on such
event.

         (b) COMPENSATION UPON TERMINATION. This Subsection 6(b) sets forth the
payments and benefits to which Executive is entitled under any termination
of employment pursuant to Subsection 6(a).

             (i) DEATH; DISABILITY. During any period in which Executive fails
to perform his duties hereunder as a result of incapacity due to physical
or mental illness, Executive shall continue to receive his full Base Salary only
until his employment is terminated pursuant to Subsection 6(a)(i) or (ii). Upon
termination of the Employment Period under Subsection 6(a)(i) or (ii), Executive
shall no longer be entitled to participate in the Benefit Plans, except as
required by applicable law or as governed by the Benefit Plans including the
Group Long Term Disability Insurance in which Executive participates immediately
prior to such termination, but Executive shall be entitled to receive his Earned
Incentive Compensation, if any, promptly after the Termination Date.

             (ii) RESIGNATION OR CAUSE. If Executive's employment is terminated
pursuant to Subsection 6(a)(iii) or (iv), the Company shall pay Executive
his full Base Salary through the Termination Date at the rate in effect at such
time. The Company shall then have no further obligations to Executive under this
Agreement and Executive shall no longer be entitled to participate in the
Benefit Plans, except as required by applicable law.

             (iii) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. If Executive's
employment is terminated by the Company without Cause pursuant to
Subsection 6(a)(v) or by

                                       10

<PAGE>   11

Executive for Good Reason pursuant to Subsection 6(a)(vi), then in lieu of
any further salary payments to Executive for periods subsequent to the
Termination Date, the Company shall pay to Executive no later than 30 calendar
days following such date (subject to delay pursuant to Subsection 6(d)(ii)), a
lump sum amount (subject to reduction pursuant to Subsection 6(d)) equal to the
sum of (A) 500% of Executive's Base Salary in effect as of such date and (B) the
amount of Executive's Earned Incentive Compensation. Executive also shall be
entitled to certain continuing benefits under the terms of Subsection 6(c).
Notwithstanding any other provision of this Subsection 6(b)(iii), Subsection
6(c) or this Agreement, the Company shall have no obligation to make the
lump-sum payment referred to in this Subsection 6(b)(iii) or provide any
continuing benefits or payment referred to in Subsection 6(c) unless (X)
Executive executes and delivers to the Company a Release and Waiver of Claims
and (Y) Executive refrains from revoking, rescinding or otherwise repudiating
such Release and Waiver of Claims for all applicable periods during which
Executive may revoke it.

         (c) ADDITIONAL BENEFITS FOLLOWING TERMINATION UNDER
SUBSECTIONS 6(a)(v) or (vi). This Subsection 6(c) sets forth the benefits to
which Executive shall be entitled, in addition to those set forth in Subsection
6(b)(iii), following a termination of the Employment Period under Subsection
6(a)(v) or (vi). Executive shall not be entitled to the benefit of any provision
of this Subsection 6(c) following a termination of the Employment Period under
any other provision hereof.

             (i) CONTINUING BENEFIT PLANS. For a period of five years following
such a Termination Date, Executive shall also be entitled to continue to
participate, on the same terms and conditions as active employees, in the
Continuing Benefit Plans in which Executive participated immediately prior to
the Termination Date, except that (A) Executive shall be

                                       11

<PAGE>   12

entitled to Estate/Financial Planning Benefits for a period of only one
year following the Termination Date and (B) if Executive's continued
participation is not possible and Executive does not continue to participate
under the terms of any such Continuing Benefit Plan, the Company shall instead
pay to Executive, promptly upon presentation to the Company of an invoice or
receipt for payment, the amount Executive spends to receive comparable coverage
under such a comparable plan for such five-year period. Notwithstanding the
foregoing sentence, the Company's obligations to Executive with respect to
continued benefits under the Continuing Benefit Plans shall be deemed satisfied
to the extent of any such comparable benefits which are provided to Executive by
another employer. During such continuation period, Executive shall be
responsible for paying the normal employee share of the applicable premiums for
coverage under the Continuing Benefit Plans. The Company shall have the right to
modify, amend or terminate the Continuing Benefit Plans (other than the
Estate/Financial Planning Benefits) following the Termination Date and
Executive's continued participation therein shall be subject to such
modification, amendment or termination if such modification, amendment or
termination applies generally to the then-current participants in such plan.
Upon completion of the five-year period following such a Termination Date, the
Company shall afford Executive the opportunity to continue Executive's coverage
under the Continuing Benefit Plans (other than the Estate/Financial Planning
Benefits), at Executive's expense, for an additional period under COBRA
Continuation Coverage, so long as Executive timely elects to receive COBRA
Continuation Coverage under the terms thereof and otherwise complies with the
conditions of continuation of benefits under COBRA Continuation Coverage.

             (ii) LIMITED BENEFIT PLANS. After such a Termination Date,
Executive shall no longer be entitled to participate as an active employee
in, or receive any additional or

                                       12

<PAGE>   13

new benefits under, the Limited Benefit Plans, except as set forth in this
Subsection 6(c)(ii) and except for such benefits, if any, available under such
plans to former employees. After such a Termination Date, Executive shall be
entitled to the following additional benefits:

                  (A) The Company shall make a lump sum five-year premium
payment to the carrier equal to the premiums that the Company would have
paid under the Split Dollar Life Insurance if Executive had continued to be
employed for five years following the Termination Date, all on the terms of the
Split Dollar Life Insurance. In addition, immediately following such premium
payment, the Company shall execute such documents as necessary to cause the full
ownership of the Split Dollar Life Insurance policy related to Executive and all
of its values to transfer to Executive. The Company shall be responsible for the
payment of all costs imposed by the carrier to carry out such transfer;

                  (B) A lump-sum payment to be paid under the Supplemental
Executive Retirement Plan equal to the cash value of the benefits Executive
would have received had he continued to participate in and receive annual awards
under the Restricted Stock Plan on a basis consistent with his past practice for
a period of five years after the Termination Date, determined and payable in
accordance with the terms of the Supplemental Executive Retirement Plan and the
Company's past practice but subject to reduction pursuant to Subsection 6(d);
and

                  (C) The lapse of all restrictions on transfer and forfeiture
provisions to which Executive's awards under the Restricted Stock Plan are
subject, so that any restricted shares previously awarded to Executive under
such plan shall be nonforfeitable and freely transferable thereafter, all on the
terms of the Restricted Stock Plan or the agreements thereunder.

                                       13

<PAGE>   14

         (d) REDUCTION OF PAYMENT.

              (i) CONDITIONAL REDUCTION. Notwithstanding Subsections 6(b)(iii)
and 6(c)(ii)(B), if Executive is a Disqualified Individual and if any
portion of the Special Payment would be an Excess Parachute Payment but for the
application of this Subsection 6(d), then:

                  (A) if the After-Tax Payment Amount would be greater by
reducing the amount of the Lump-Sum Payment otherwise payable to Executive
to the minimum extent necessary (but in no event to less than zero) so that no
portion of the Special Payment, after such reduction, constitutes an Excess
Parachute Payment, then the Lump-Sum Payment shall be so reduced; and

                  (B) if the After-Tax Payment Amount would be greater without
the reduction referred to in Subsection 6(d)(i)(A), then there shall be no
reduction in the Lump-Sum Payment by application of this Subsection 6(d).

              (ii) METHOD OF DETERMINATION. If requested by Executive or the
Company, an accounting firm selected by Executive and reasonably acceptable
to the Company (the "Accounting Firm") shall determine whether any reduction in
the amount of the Lump-Sum Payment is required pursuant to this Subsection 6(d).
Executive shall direct the Accounting Firm to submit its determination and
detailed supporting calculations to both the Company and Executive within 30
calendar days after the Termination Date. The Company and Executive shall each
provide the Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or Executive, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the
Accounting Firm in connection with the preparation and issuance of the
determination and calculations. Any determination by the Accounting Firm as to
whether any reduction in the amount of the Lump-Sum Payment is required pursuant
to this Subsection 6(d) shall be binding upon the Company and Executive. The
fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated this Subsection 6(d) shall be borne
by the Company. The federal, state and local income or other tax returns filed
by Executive and the Company shall be prepared and filed on a basis consistent
with such determinations and calculations. The Company shall pay the Lump-

                                       14

<PAGE>   15

Sum Payment, as reduced or not reduced pursuant to the final determination
of the Accounting Firm, to Executive no later than the later of (A) the time
otherwise required hereunder or (B) five business days after receipt of such
determination.

         (e) NOTICE OF TERMINATION. Any termination by the Company
pursuant to Subsection 6(a)(ii), (iv) or (v) or by Executive pursuant to
Subsection 6(a)(iii) shall be communicated to the other party hereto by written
notice of termination, which shall state in reasonable detail the facts upon
which the termination has occurred. A termination pursuant to Subsection
6(a)(vi) shall be communicated by Notice of Termination for Good Reason.

         (f) NOTICE OF CHANGE IN CONTROL. The Company shall give
Executive written notice of the occurrence of any event constituting a Change in
Control as promptly as practical, and in no case later than 10 calendar days,
after the occurrence of such event.

         (g) DEEMED TERMINATION AFTER CHANGE IN CONTROL. Any
termination of the employment of Executive by the Company without Cause or the
removal of Executive as an elected officer or Director of the Company or a
Subsidiary following the commencement of any discussion with or communication
from a third party that ultimately results in a Change in Control shall be
deemed to be a termination or removal, respectively, of Executive after a Change
in Control for purposes of this Agreement. In the event Executive is entitled to
the benefits under this Agreement

                                       15

<PAGE>   16

as contemplated by the preceding sentence, then for purposes of Subsections
6(b)(iii), 6(c) and 6(d), the Termination Date shall be deemed to be the date of
the Change in Control if the employment of Executive was terminated before such
date.

         (h) SET-OFF. There shall be no right of set-off or
counterclaim against, or delay in, any payment by the Company to Executive of
the Lump-Sum Payment in respect of any claim against or debt or obligation of
Executive, whether arising hereunder or otherwise.

         (i) INTEREST ON OVERDUE PAYMENTS. Without limiting the rights
of Executive at law or in equity, if the Company fails to make the Lump-Sum
Payment on a timely basis, the Company shall pay interest on the amount thereof
at an annualized rate equal to the rate in effect, at the time such payment
should have been made, under the 401(k) Plan for loans to participants in such
plan.

         (j) OUTPLACEMENT ASSISTANCE. Promptly after a request in
writing from Executive following a termination of the Employment Period under
Subsection 6(a)(v) or (vi), the Company shall retain a professional outplacement
assistance service firm reasonably acceptable to Executive, at the Company's
expense, to provide outplacement assistance to Executive during the Protected
Period. Such services shall be appropriate to Executive's position with the
Company. Executive shall not be entitled to such services, however, following a
termination of the Employment Period under Subsection 6(a)(i), (ii), (iii) or
(iv).

         7. BINDING AGREEMENT; SUCCESSORS. This Agreement shall inure
to the benefit of and be binding upon Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to

                                       16

<PAGE>   17

Executive's devisee, legatee, or other designee or, if there be no
such designee, to Executive's estate. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the Company, including,
without limitation, any person acquiring directly or indirectly all or
substantially all of the assets of the Company, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
the "Company" for the purposes of this Agreement). The Company shall require any
such successor to assume and agree to perform this Agreement.

         8.    RESTRICTIVE COVENANTS.

         (a) NON-COMPETITION. During the Employment Period and for a
period of two years following the Termination Date, Executive shall not,
directly or indirectly, own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner or director with, or have any financial interest in, any
business which is in substantial competition with any business conducted by the
Company or by any group, division or Subsidiary of the Company, in any area
where such business is being conducted at the time of such termination.
Ownership of 5% or less of the voting stock of any corporation which is required
to file periodic reports with the Securities and Exchange Commission under the
Exchange Act shall not constitute a violation hereof.

         (b) NON-SOLICITATION. Executive shall not directly or
indirectly, at any time during the Employment Period and for two years
thereafter, solicit or induce or attempt to solicit or induce any employee,
sales representative or other representative, agent or consultant of the Company
or any group, division or Subsidiary of the Company (collectively, the "RPM
Group") to terminate his, her or its employment, representation or other
relationship with the RPM Group or in any way directly or indirectly interfere
with such a relationship.

                                       17

<PAGE>   18

         (c)   CONFIDENTIALITY.

              (i)   Executive shall keep in strict confidence, and shall not,
directly or indirectly, at any time during or after the Employment Period,
disclose, furnish, publish, disseminate, make available or, except in the course
of performing his duties of employment hereunder, use any Confidential
Information. Executive specifically acknowledges that all Confidential
Information, whether reduced to writing, maintained on any form of electronic
media, or maintained in the mind or memory of Executive and whether compiled by
the RPM Group, and/or Executive, derives independent economic value from not
being readily known to or ascertainable by proper means by others who can obtain
economic value from its disclosure or use, that reasonable efforts have been
made by the RPM Group to maintain the secrecy of such information, that such
information is the sole property of the RPM Group and that any disclosure or use
of such information by Executive during the Employment Period (except in the
course of performing his duties and obligations hereunder) or after the
termination of the Employment Period shall constitute a misappropriation of the
RPM Group's trade secrets.

              (ii)   Executive agrees that upon termination of the Employment
Period, for any reason, Executive shall return to the Company, in good
condition, all property of the RPM Group, including, without limitation, the
originals and all copies of any materials, whether in paper, electronic or other
media, that contain, reflect, summarize, describe, analyze or refer or relate to
any items of Confidential Information.

         9. NOTICE. All notices, requests and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) when hand delivered, (b) when dispatched by electronic facsimile
transmission (with receipt electronically confirmed), (c) one business day after
being sent by recognized overnight delivery service, or

                                       18

<PAGE>   19

(d) three business days after being sent by registered or certified mail,
return receipt requested, postage prepaid, and in each case addressed as follows
(or addressed as otherwise specified by notice under this Section):

                      If to Executive:

                      Thomas C. Sullivan
                      30946 Lake Road
                      Bay Village, Ohio 44140
                      Facsimile: Not applicable

                      If to the Company:

                      RPM, Inc.
                      P.O. Box 777
                      2628 Pearl Road
                      Medina, Ohio 44256
                      Facsimile: 330-225-6574

                      Attn: Secretary

         10.   WITHHOLDING. The Company may withhold from any amounts payable
under or in connection with this Agreement all federal, state, local and
other taxes as may be required to be withheld by the Company under applicable
law or governmental regulation or ruling.

         11. AMENDMENTS; WAIVERS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing, and is signed by Executive and by another
executive officer of the Company. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

         12. JURISDICTION. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the

                                       19

<PAGE>   20

conflict of law principles of such State. Executive and the Company each
agree that the state and federal courts located in the State of Ohio shall have
jurisdiction in any action, suit or proceeding against Executive or the Company
based on or arising out of this Agreement and each of Executive and the Company
hereby (a) submits to the personal jurisdiction of such courts, (b) consents to
service of process in connection with any such action, suit or proceeding and
(c) waives any other requirement (whether imposed by statute, rule of court or
otherwise) with respect to personal jurisdiction, venue or service of process.

         13. EQUITABLE RELIEF. Executive and the Company acknowledge
and agree that the covenants contained in Section 8 are of a special nature and
that any breach, violation or evasion by Executive of the terms of Section 8
will result in immediate and irreparable injury and harm to the Company, for
which there is no adequate remedy at law, and will cause damage to the Company
in amounts difficult to ascertain. Accordingly, the Company shall be entitled to
the remedy of injunction, as well as to all other legal or equitable remedies to
which the Company may be entitled (including, without limitation, the right to
seek monetary damages), for any breach, violation or evasion by Executive of the
terms of Section 8.

         14. VALIDITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect. In the event that any provision of Section 8 is found by
a court of competent jurisdiction to be invalid or unenforceable as against
public policy, such court shall exercise its discretion in reforming such
provision to the end that Executive shall be subject to such restrictions and
obligations as are reasonable under the circumstances and enforceable by the
Company.

                                       20
<PAGE>   21

         15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

         16. HEADINGS; DEFINITIONS. The headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Certain capitalized terms used in this
Agreement are defined on Schedule A attached hereto.

         17. NO ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, except as provided in
Section 7.

         18. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the employment of Executive and
supersedes any and all other agreements (including the Existing Agreement),
either oral or in writing, with respect to the employment of Executive.

         19. ENFORCEMENT COSTS. The Company is aware that upon the
occurrence of a Change in Control the Board of Directors or a shareholder of the
Company may then cause or attempt to cause the Company to refuse to comply with
its obligations under this Agreement, or may cause or attempt to cause the
Company to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take, or attempt to take, other action
to deny Executive the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Company that Executive not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action because the cost and expense thereof would substantially
detract from the benefits intended to be extended to Executive hereunder, nor be
bound to negotiate any settlement of his rights hereunder under threat of
incurring such expenses. Accordingly, if following a Change

                                       21

<PAGE>   22

in Control it should appear to Executive that the Company has failed to
comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action designed to
deny, diminish or recover from Executive the benefits intended to be provided to
Executive hereunder, and that Executive has complied with all of his obligations
under Section 8, the Company irrevocably authorizes Executive from time to time
to retain counsel of his choice at the expense of the Company as provided in
this Section 19 to represent Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any Director, officer, shareholder or other person affiliated with
the Company, in any jurisdiction. The Company's obligations under this Section
19 shall not be conditioned on Executive's success in the prosecution or defense
of any such litigation or other legal action. Notwithstanding any existing or
prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to Executive entering into an attorney-client
relationship with such counsel, and in that connection the Company and Executive
agree that a confidential relationship shall exist between Executive and such
counsel. The reasonable fees and expenses of counsel selected from time to time
by Executive as hereinabove provided shall be paid or reimbursed to Executive by
the Company on a regular, periodic basis upon presentation by Executive of a
statement or statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of $500,000.

                                       22

<PAGE>   23

         IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.

IN THE PRESENCE OF:                    RPM, INC.

                                           By:  /s/ James A. Karman
----------------------------                  ---------------------------------
                                              James A. Karman, Vice Chairman

                                           And: /s/ P. Kelly Tompkins
----------------------------                  ---------------------------------
                                              P. Kelly Tompkins, Secertary
                                                           The "Company"

                                                /s/ Thomas C. Sullivan
----------------------------                  ---------------------------------
                                              Thomas C. Sullivan
                                                         "Executive"

                                       23

<PAGE>   24

                                   SCHEDULE A

                               CERTAIN DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have
the following meanings:

     "401(k) Plan" means the RPM, Inc. 401(k) Plan and any successor plan or
     arrangement.

     "Affiliate" of a specified entity means an entity that directly, or
     indirectly through one or more intermediaries, controls, or is controlled
     by, or is under common control with, the entity specified.

     "After-Tax Payment Amount" means the difference of (a) the amount of the
     Special Payment, less (b) the amount of the Excise Tax, if any, imposed
     upon the Special Payment.

     "Average Incentive Compensation" means an amount equal to the average
     amount of the annual Incentive Compensation payable to Executive (without
     regard to any reduction thereof elected by Executive pursuant to any
     qualified or non-qualified salary reduction arrangement maintained by the
     Company, including, without limitation, the Deferred Compensation Plan) for
     the three most recent completed fiscal years (or for such shorter period
     during which Executive has been employed by the Company) preceding the
     Termination Date in which the Company paid Incentive Compensation to
     executive officers of the Company or in which the Company considered and
     declined to pay Incentive Compensation to executive officers of the
     Company.

     "Benefit Plans" means the Continuing Benefit Plans and the Limited Benefit
     Plans.

     "Cause" means a determination of the Board of Directors (without the
     participation of Executive) of the Company pursuant to the exercise of
     its business judgment, that either of the following events has
     occurred: (a) Executive has engaged in willful and intentional acts of
     dishonesty or gross neglect of duty or (b) Executive has breached
     Section 8.

     "Change in Control" shall mean the occurrence at any time of any of the
     following events:

              (a) The Company is merged or consolidated or
     reorganized into or with another corporation or other legal person or
     entity, and as a result of such merger, consolidation or reorganization
     less than a majority of the combined voting power of the
     then-outstanding securities of such corporation, person or entity
     immediately after such transaction are held in the aggregate by the
     holders of Voting Stock immediately prior to such transaction;

              (b) The Company sells or otherwise transfers all or
     substantially all of its assets to any other corporation or other legal
     person or entity, and less than a majority

                                      A-1

<PAGE>   25

     of the combined voting power of the then-outstanding securities of such
     corporation, person or entity immediately after such sale or transfer is
     held in the aggregate by the holders of Voting Stock immediately prior to
     such sale or transfer;

              (c) There is a report filed on Schedule 13D or
     Schedule TO (or any successor schedule, form or report), each as
     promulgated pursuant to the Exchange Act, disclosing that any person
     (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2)
     of the Exchange Act) has become the beneficial owner (as the term
     "beneficial owner" is defined under Rule l3d-3 or any successor rule or
     regulation promulgated under the Exchange Act) of securities
     representing 15% or more of the Voting Power;

              (d) The Company files a report or proxy statement
     with the Securities and Exchange Commission pursuant to the Exchange
     Act disclosing in response to Form 8-K or Schedule 14A (or any
     successor schedule, form or report or item therein) that a change in
     control of the Company has or may have occurred or will or may occur in
     the future pursuant to any then-existing contract or transaction; or

              (e) If during any period of two consecutive years,
     individuals, who at the beginning of any such period, constitute the
     Directors cease for any reason to constitute at least a majority
     thereof, unless the nomination for election by the Company's
     shareholders of each new Director was approved by a vote of at least
     two-thirds of the Directors then in office who were Directors at the
     beginning of any such period.

              Notwithstanding the foregoing provisions of
     paragraphs (c) and (d) of this definition, a "Change in Control" shall
     not be deemed to have occurred for purposes of this Agreement (i)
     solely because (A) the Company, (B) a Subsidiary, or (C) any
     Company-sponsored employee stock ownership plan or other employee
     benefit plan of the Company or any Subsidiary, or any entity holding
     shares of Voting Stock for or pursuant to the terms of any such plan,
     either files or becomes obligated to file a report or proxy statement
     under or in response to Schedule 13D, Schedule TO, Form 8-K or Schedule
     14A (or any successor schedule, form or report or item therein) under
     the Exchange Act, disclosing beneficial ownership by it of shares of
     Voting Stock or because the Company reports that a change in control of
     the Company has or may have occurred or will or may occur in the future
     by reason of such beneficial ownership, (ii) solely because any other
     person or entity either files or becomes obligated to file a report on
     Schedule 13D or Schedule TO (or any successor schedule, form or report)
     under the Exchange Act, disclosing beneficial ownership by it of shares
     of Voting Stock, but only if both (A) the transaction giving rise to
     such filing or obligation is approved in advance of consummation
     thereof by the Company's Board of Directors and (B) at least a majority
     of the Voting Power immediately after such transaction is held in the
     aggregate by the holders of Voting Stock immediately prior to such
     transaction, or (iii) solely because of a change in control of any
     Subsidiary.

     "COBRA Continuation Coverage" means the health care continuation
     requirements under the federal Consolidated Omnibus Budget
     Reconciliation Act, as amended, Part VI of

                                      A-2

<PAGE>   26

     Subtitle B of Title I of the Employee Retirement Income Security Act of
     1974, as amended, and Code Section 4980B(f), or any successor provisions
     thereto.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
     time.

     "Confidential Information" means trade secrets and confidential
     business and technical information of the RPM Group and its customers
     and vendors, without limitation as to when or how Executive may have
     acquired such information. Such Confidential Information shall include,
     without limitation, the RPM Group's manufacturing, selling and
     servicing methods and business techniques, training, service and
     business manuals, promotional materials, vendor and product
     information, product development plans, internal financial statements,
     sales and distribution information, business plans, marketing
     strategies, pricing policies, corporate alliances, business
     opportunities, the lists of actual and potential customers as well as
     other customer information, technology, know-how, processes, data,
     ideas, techniques, inventions (whether patentable or not), formulas,
     terms of compensation and performance levels of RPM Group employees,
     and other information concerning the RPM Group's actual or anticipated
     business, research or development, or which is received in confidence
     by or for the RPM Group from any other person and all other
     confidential information to the extent that such information is not
     intended by the RPM Group for public dissemination.

     "Continuing Benefit Plans" means only the following employee benefit
     plans and arrangements of the Company in effect on the date hereof, or
     any successor plan or arrangement in which Executive is eligible to
     participate immediately before the Termination Date:

         (a)   The RPM, Inc. Health and Welfare Plan (including medical, dental
              and prescription drug benefits); and

         (b)   Estate/Financial Planning Benefits.

     "Deferred Compensation Plan" means the RPM, Inc. Deferred Compensation
     Plan for Key Employees in which executive officers of the Company are
     eligible to participate and any such successor plan or arrangement.

     "Director" means a member of the Board of Directors of the Company.

     "Disability," when determined at any time other than during the
     Protected Period, means the inability of Executive for a continuous
     period in excess of 150 days to perform the essential functions of his
     position on an active full-time basis with or without reasonable
     accommodations by reason of a disability condition; a certificate from
     a physician acceptable to both the Company and Executive to the effect
     that Executive is or has been disabled and incapable of performing the
     essential functions of his position with or without reasonable
     accommodations as previously performed shall be conclusive of the fact
     that Executive is incapable of performing such services and is, or has
     been, disabled for the purposes of this Agreement. "Disability," when
     determined at any time during the

                                      A-3

<PAGE>   27

     Protected Period, means a "Total Disability" (as defined and determined
     under the Group Long Term Disability Insurance) that entitles Executive to
     receive the "Total Disability Benefit" under the Group Long Term Disability
     Insurance. Whether determined during or outside of the Protected Period,
     the Company and Executive acknowledge and agree that the essential
     functions of Executive's position are unique and critical to the Company
     and that a disability condition that causes Executive to be unable to
     perform the essential functions of his position under the circumstances
     described above will constitute an undue hardship on the Company.

     "Disqualified Individual" has the meaning set forth in Section 280G(c)
     of the Code (or any successor provision thereto).

     "Earned Incentive Compensation" means the sum of:

              (a) The amount of any Incentive Compensation payable
     but not yet paid for the fiscal year preceding the fiscal year in
     which the Termination Date occurs. If the Compensation Committee has
     determined such amount prior to the Termination Date, then such amount
     shall be the amount so determined by the Compensation Committee. If
     the Compensation Committee has not determined such amount prior to the
     Termination Date, then such amount shall equal the amount of the
     Average Incentive Compensation; and

              (b) An amount equal to the Average Incentive
     Compensation multiplied by a fraction, the numerator of which is the
     number of days in the current fiscal year of the Company that have
     expired before the Termination Date and the denominator of which is
     365.

     "Estate/Financial Planning Benefits" means those estate and financial
     planning services (a) in effect on the date hereof in which Executive
     is eligible to participate or (b) that the Company makes available at
     any time before the Termination Date to the executives and key
     management employees of the Company and in which Executive is then
     eligible to participate.

     "Excess Parachute Payment" has the meaning set forth in Section
     280G(b)(1) of the Code (or any successor provision thereto).

     "Exchange Act" means the Securities Exchange Act of 1934, as amended,
     and the rules and regulations thereunder, as such law, rules and
     regulations may be amended from time to time.

     "Excise Tax" means the excise tax imposed by Section 4999 of the Code
     (or any successor provision thereto) on the Special Payment by reason
     of such Special Payment being considered "contingent on a change in
     ownership or control" of the Company within the meaning of Section
     280G(b)(2) of the Code (or any successor provision thereto).

                                      A-4

<PAGE>   28

     "Good Reason" means a determination by Executive made in good faith
     that, upon or after the occurrence of a Change in Control, any of the
     following events has occurred without Executive's express written
     consent: (a) a significant reduction in the nature or scope of the
     title, authority or responsibilities of Executive from those held by
     Executive immediately prior to the Change in Control; (b) a reduction
     in Executive's Base Salary from the amount in effect on the date of the
     Change in Control; (c) a reduction in Executive's Incentive
     Compensation from the amount of Executive's Average Incentive
     Compensation, unless such reduction results solely from the Company's
     results of operations; (d) the failure by the Company to offer to
     Executive an economic value of benefits reasonably comparable to the
     economic value of benefits under the Benefit Plans in which Executive
     participates at the time of the Change in Control; or (e) a material
     breach by the Company of the terms of Section 3.

     "Group Long Term Disability Insurance" means the Group Long Term
     Disability Insurance sponsored by the Company and provided by the
     Continental Casualty Company, Chicago, Illinois, as currently in effect
     and as the same may be amended from time to time, and any successor
     long-term disability insurance sponsored by the Company in which the
     executives and key management employees of the Company are eligible to
     participate.

     "Limited Benefit Plans" means all the Company's employee benefit plans
     and arrangements in effect at any time and in which the executives and
     key management employees of the Company are eligible to participate,
     excluding the Continuing Benefit Plans, but including, without
     limitation, the following employee benefit plans and arrangements or
     any successor or new plan or arrangement made available in the future
     to the executives and key management employees of the Company and in
     which Executive is eligible to participate before the Termination Date:

         (a)   The 401(k) Plan;

         (b)   The RPM, Inc. Retirement Plan;

         (c)   The Supplemental Executive Retirement Plan;

         (d)   Stock option plans and other equity-based incentive plans,
               including the RPM, Inc. 1996 Stock Option Plan and the
               Restricted Stock Plan;

         (e)   The Split Dollar Life Insurance;

         (f)   The RPM, Inc. Incentive Compensation Plan;

         (g)   The Deferred Compensation Plan;

         (h)   The RPM, Inc. Employee Stock Purchase Plan;

         (i)   The Group Long Term Disability Insurance;

                                      A-5

<PAGE>   29

         (j)   RPM, Inc. Group Life Insurance;

         (k)   RPM, Inc. Group Accidental Death & Dismemberment Insurance;

         (l)   The RPM, Inc. Group Carve Out Plan (also known as GRIP);

         (m)   The RPM, Inc. Business Travel Insurance Plan;

         (n)   The fringe benefits appertaining to Executive's position with
               the Company referred to in Subsection 4(f), including the use of
               an automobile;

         (o)   Health Care Reimbursement Account; and

         (p)   Dependent Care Reimbursement Account.

     "Lump-Sum Payment" means, collectively, the lump-sum payments that may
     be payable to Executive pursuant to the first sentence of Subsection
     6(b)(iii) and pursuant to Subsection 6(c)(ii)(B).

     "Notice of Termination for Good Reason" means a written notice
     delivered by Executive in good faith to the Company under Subsection
     6(a)(vi) setting forth in reasonable detail the facts and circumstances
     that have occurred and that Executive claims in good faith to be an
     event constituting Good Reason.

     "Protected Period" means that period of time commencing on the date of
     a Change in Control and ending two years after such date.

     "Release and Waiver of Claims" means a written release and waiver by
     Executive, to the fullest extent allowable under applicable law and in
     form reasonably acceptable to the Company, of all claims, demands,
     suits, actions, causes of action, damages and rights against the
     Company and its Affiliates whatsoever which he may have had on account
     of the termination of his employment, including, without limitation,
     claims of discrimination, including on the basis of sex, race, age,
     national origin, religion, or handicapped status, and any and all
     claims, demands and causes of action for severance or other termination
     pay. Such Release and Waiver of Claims shall not, however, apply to the
     obligations of the Company arising under this Agreement, any
     indemnification agreement between Executive and the Company, any
     retirement plans, any stock option agreements, COBRA Continuation
     Coverage or rights of indemnification Executive may have under the
     Company's Articles of Incorporation, Code of Regulations or by statute.

     "Restricted Stock Plan" means the RPM, Inc. 1997 Restricted Stock Plan and
     any successor plan or arrangement thereto.

     "Special Payment" means, collectively, payments and distributions by
     the Company to or for the benefit of Executive, whether paid under
     Subsection 6(b)(iii), Subsection

                                      A-6

<PAGE>   30

     6(c)(ii)(B) or another provision hereof or paid or payable or distributed
     or distributable pursuant to or by reason of any other agreement, policy,
     plan, program or arrangement, including without limitation any stock
     option, stock appreciation right, restricted stock or similar right, or the
     lapse or termination of restrictions on any of the foregoing.

     "Split Dollar Life Insurance" means the Company's Split Dollar Life
     Insurance arrangements in effect on the date hereof or any successor
     arrangement that the Company makes available at any time before the
     Termination Date to the executives and key management employees of the
     Company and in which Executive is then eligible to participate.

     "Subsidiary" means a corporation, company or other entity (a) more than
     50 percent of whose outstanding shares or securities (representing the
     right to vote for the election of directors or other managing
     authority) are, or (b) which does not have outstanding shares or
     securities (as may be the case in a partnership, joint venture or
     unincorporated association), but more than 50 percent of whose
     ownership interest representing the right generally to make decisions
     for such other entity is, now or hereafter, owned or controlled,
     directly or indirectly, by the Company.

     "Supplemental Executive Retirement Plan" means the RPM, Inc. Benefit
     Restoration Plan in effect on the date hereof or any successor plan
     that the Company makes available at any time before the Termination
     Date to the executives and key management employees of the Company and
     in which Executive is then eligible to participate.

     "Termination Date" means the effective date of the termination of the
     Employment Period.

     "Voting Power" means, at any time, the total votes relating to the
     then-outstanding securities entitled to vote generally in the election
     of Directors.

     "Voting Stock" means, at any time, the then-outstanding securities
     entitled to vote generally in the election of Directors.

                                      A-7

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