Document:

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                                                                     EXHIBIT 4.2

                            Form of Rights Agreement

                          Dated as of [________], 2004,

                                 By and Between

                             REYNOLDS AMERICAN INC.

                                       and

                              THE BANK OF NEW YORK,
                                 as Rights Agent
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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                               <C>
1.    Certain Definitions...................................................        1

2.    Appointment of Rights Agent...........................................        6

3.    Issue of Right Certificates...........................................        7

4.    Form of Right Certificates............................................        8

5.    Countersignature and Registration.....................................        9

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

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

8.    Cancellation and Destruction of Right Certificates....................       11

9.    Company Covenants Concerning Securities and Rights....................       12

10.   Record Date...........................................................       13

11.   Adjustment of Purchase Price, Number and Kind of Securities or
      Number of Rights......................................................       14

12.   Certificate of Adjusted Purchase Price or Number of Securities........       23

13.   Consolidation, Merger or Sale or Transfer of Assets or Earning
      Power.................................................................       23

14.   Fractional Rights and Fractional Securities...........................       26

15.   Rights of Action......................................................       27

16.   Agreement of Rights Holders...........................................       28

17.   Right Certificate Holder Not Deemed a Stockholder.....................       28

18.   Concerning the Rights Agent...........................................       29

19.   Merger or Consolidation or Change of Name of Rights Agent.............       29

20.   Duties of Rights Agent................................................       30

21.   Change of Rights Agent................................................       32

22.   Issuance of New Right Certificates....................................       32

23.   Redemption............................................................       33

24.   Exchange..............................................................       34

25.   Notice of Certain Events..............................................       35

26.   Notices...............................................................       36

27.   Supplements and Amendments............................................       36

28.   Successors; Certain Covenants.........................................       37

29.   Benefits of This Agreement............................................       37

30.   Governing Law.........................................................       37

31.   Severability..........................................................       37
</TABLE>
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<TABLE>
<S>                                                                               <C>
32.   Descriptive Headings, Etc.............................................       38

33.   Determinations and Actions by the Board...............................       38

34.   Counterparts..........................................................       38

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

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

Exhibit C...................................................................      C-1
</TABLE>

                                      (ii)
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                                RIGHTS AGREEMENT

      This RIGHTS AGREEMENT, dated as of [________], 2004 (this "Agreement"), is
made and entered into by and between Reynolds American INC., a North Carolina
corporation (the "COMPANY"), and The Bank of New York, as Rights Agent (the
"RIGHTS AGENT").

                                    RECITALS

      WHEREAS, on ______________, 2003, the Board of Directors of the Company
authorized and declared a dividend distribution of one right (a "RIGHT") for
each share of Common Stock, par value $0.01 per share, of the Company (a "COMMON
SHARE") outstanding as of the Close of Business (as hereinafter defined) on
[________], 2004 (the "RECORD DATE"), each 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 Right (subject to adjustment
as provided herein) with respect to each 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.

      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 who or which, together with all
            Affiliates and Associates of such Person, shall at any time after
            the Effective Time be the Beneficial Owner of a percentage equal to
            or greater than the Applicable Percentage of the then-outstanding
            Common Shares, but shall not include (i) the Company, (ii) any
            Related Person, or (iii) any PLC Company; provided, however, that
            (a) if the Board determines in good faith that a Person who would
            otherwise be an "Acquiring Person" became, together with its
            Affiliates and Associates, the Beneficial Owner of a number of
            Common Shares such that the Person would otherwise qualify as an
            "Acquiring Person" inadvertently (including without limitation
            because (x) such Person was unaware that it Beneficially Owned a
            number of Common Shares that would otherwise cause such Person to be
            an "Acquiring Person" or (y) such Person was aware of the extent of
            its Beneficial Ownership of Common Shares but had no actual
            knowledge of the consequences of such Beneficial Ownership under
            this Agreement) and without any intention of changing or influencing
            control of the Company, then such Person shall not be deemed to be
            or have become an "Acquiring Person" for any purposes of this
            Agreement unless and until such Person shall have failed to divest
            itself, as soon as practicable (as determined by the Board of
            Directors of the Company taking into account restrictions on trading
            in the Company's securities relating to possession of material
            nonpublic information), of Beneficial Ownership of a sufficient
            number of Common Shares so that such Person would no longer
<PAGE>
            otherwise qualify as an "Acquiring Person," provided, further,
            however, that such Person need not divest itself of such Beneficial
            Ownership if the Board of Directors of the Company determines that
            such divestiture is not necessary; and (b) no Person shall become an
            "Acquiring Person" solely as the result of reduction in the number
            of Common Shares outstanding, including without limitation a
            reduction in the number of Common Shares outstanding due to any
            acquisition of Common Shares by the Company which, by reducing the
            number of Common Shares outstanding, increases the proportionate
            number of Common Shares Beneficially Owned by such Person unless and
            until (X) such Person shall thereafter become the Beneficial Owner
            of any additional 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 (Y)
            any other Person who or which is the Beneficial Owner of Common
            Shares thereafter becomes an Affiliate or Associate of such Person.
            Notwithstanding the foregoing, the PLC Companies shall immediately
            cease to be excluded from the definition of Acquiring Person
            pursuant to clause (iii) above if (A) either a PLC Automatic
            Termination, a PLC Fiduciary Termination, a PLC Representation
            Termination or a PLC Wilful Breach shall have occurred; provided,
            however, that no PLC Company shall be deemed to be an Acquiring
            Person solely as a result of taking any action that would have been
            permitted under Section 4.03(b) of the Governance Agreement as in
            effect as of the date of such termination or breach.

      (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.

      Notwithstanding the foregoing, with respect to any PLC Company, the
Affiliates and Associates of such PLC Company shall not include (i) any Person
who beneficially owns less than 30% of the voting power of the equity securities
of PLC unless such Person is acting on behalf of a PLC Company or has any
agreement, arrangement or understanding (whether or not in writing) with any PLC
Company (or any of their Affiliates or Associates) with respect to acquiring,
holding, voting or disposing of any securities of the Company or (ii) any
employee benefit or stock ownership plan of PLC or of any of its Subsidiaries or
any entity holding Common Shares for or pursuant to the terms of any such plan.

      (c)   "APPLICABLE PERCENTAGE" means 15%; provided, however, that, with
            respect to the PLC Companies only, (i) in the event that a PLC
            Representation Termination shall have occurred such percentage shall
            be equal to the sum of (A) the percentage of outstanding Common
            Shares that are Beneficially Owned by the PLC Companies as of the
            date of the PLC Representation Termination and (B) the percentage of
            additional outstanding Common Shares over which the PLC Companies
            could have acquired Beneficial Ownership as of the date of the PLC
            Representation Termination (assuming that the provisions of Article
            IV of the Governance Agreement were in full force and effect as of
            such date) and (C) 1%,

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            (ii) in the event that a PLC Wilful Breach shall have occurred, such
            percentage shall be equal to the percentage of outstanding Common
            Shares over which the PLC Companies could have Beneficially Owned
            without breaching Article IV of the Governance Agreement (assuming
            that the provisions of Article IV of the Governance Agreement were
            in full force and effect as of such date), and (iii) in the event
            that a PLC Fiduciary Termination shall have occurred, such
            percentage shall be equal to 1% plus the greater of (A) 42% and (B)
            the sum of (y) the percentage of outstanding Common Shares that are
            Beneficially Owned by the PLC Companies as of the date of the PLC
            Fiduciary Termination and (z) the percentage of additional
            outstanding Common Shares over which the PLC Companies could have
            acquired Beneficial Ownership as of the date of the PLC Fiduciary
            Termination (assuming that the provisions of Article IV of the
            Governance Agreement were in full force and effect as of such date).

      (d)   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

                                       3
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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.

      (e)   "BUSINESS DAY" means any day other than a Saturday, Sunday or a day
            on which banking institutions in the State of 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.

      (f)   "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.

      (g)   "COMMON SHARES" when used with reference to the Company means the
            shares of Common Stock, par value $0.01 per share, of the Company;
            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.

      (h)   "COMPANY" means Reynolds American Inc., a North Carolina
            corporation.

      (i)   "DISTRIBUTION DATE" means the earlier of: (i) the Close of Business
            on the tenth calendar day following the Share Acquisition 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 Board of 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 a percentage equal to
            or greater than the Applicable Percentage of the then-outstanding
            Common Shares.

      (j)   "EFFECTIVE TIME" has the meaning set forth in the Business
            Combination Agreement, dated as of October 27, 2003, between Brown &
            Williamson Tobacco Corporation and R.J. Reynolds Tobacco Holdings,
            Inc., a Delaware corporation, as it may be amended from time to
            time.

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

      (l)   "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

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            Section 23, and (iii) the time at which all exercisable Rights are
            exchanged as provided in Section 24.

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

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

      (o)   "GOVERNANCE AGREEMENT" means the Governance Agreement, dated as of
            [________], 2004, among Brown & Williamson Tobacco Corporation, a
            Delaware corporation, PLC, and the Company, as it may be amended
            from time to time.

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

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

      (r)   "NASDAQ" means The Nasdaq Stock Market.

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

      (t)   "PLC" means British American Tobacco p.l.c., a public limited
            company incorporated under the laws of England and Wales.

      (u)   "PLC AUTOMATIC TERMINATION" means the termination of the Governance
            Agreement by PLC pursuant to Section 6.11(a)(i) thereof.

      (v)   "PLC COMPANIES" means PLC and each of its Subsidiaries (other than
            the Company and its Subsidiaries).

      (w)   "PLC FIDUCIARY TERMINATION" means the termination of the Governance
            Agreement by PLC pursuant to Section 6.11(b)(i) thereof.

      (x)   "PLC REPRESENTATION TERMINATION" means the termination of the
            Governance Agreement by PLC pursuant to Section 6.11(b)(ii) thereof.

      (y)   "PLC WILFUL BREACH" means any wilful, deliberate and material breach
            by any PLC Company of its obligations under Section 4.01 of the
            Governance Agreement (subject to any applicable exceptions set forth
            in Section 4.03 of the Governance Agreement).

      (z)   "PREFERRED SHARES" means shares of Series A Junior Participating
            Preferred Stock, par value $0.01 per share, of the Company having
            the rights and preferences set forth in the Articles of
            Incorporation of the Company attached as Exhibit A.

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

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

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

      (dd)  "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.

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

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

      (gg)  "RIGHTS AGENT" means The Bank of New York, 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.

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

      (ii)  "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.

      (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)

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      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.

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.

      (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 a Rights Agreement between Reynolds American Inc.
      and The Bank of New York, dated as of [________], 2004 (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 Reynolds American Inc. 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. Reynolds American Inc. 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

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      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), 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.

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

                                       8
<PAGE>
      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 of the Board,
      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

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      Certificate or Right Certificates to be transferred, split up, combined or
      exchanged at the principal office of the Rights Agent designated for such
      purpose. 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.

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,

                                       10
<PAGE>
            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

                                       11
<PAGE>
      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.

      (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

                                       12
<PAGE>
            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
      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

                                       13
<PAGE>
      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

                                       14
<PAGE>
                        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 stockholder), 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 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;

                                       15
<PAGE>
   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 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

                                       16
<PAGE>
   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 Board of
   Directors of the Company will use its 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 Board of 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 Board of Directors of the
   Company has 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 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 45 calendar days after
            such record date) to subscribe for or

                                       17
<PAGE>
            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 Board of 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 Board of 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

                                       18
<PAGE>
            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.

      (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 Board of 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 Board of 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

                                       19
<PAGE>
                  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 Board of
                  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.

                                       20
<PAGE>
      (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 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

                                       21
<PAGE>
            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
            Board of Directors of the Company determines 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 stockholders.

      (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 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

                                       22
<PAGE>
            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.

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

                                       23
<PAGE>
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 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

                                       24
<PAGE>
            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 stockholders 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

                                       25
<PAGE>
            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 prices in the over-the-counter market, as reported
      by Nasdaq or such other system then in use, or, if on any such date
      the Rights are not quoted by any such organization, the average of
      the closing bid and asked prices as furnished by a professional
      market maker making a market in the Rights selected by the Board of
      Directors of the Company.  If 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 Board of
      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

                                       26
<PAGE>
            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 Board of 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 Board of 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

                                       27
<PAGE>
      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;

      (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 Stockholder. 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

                                       28
<PAGE>
      contained herein or in any Right Certificate be construed to confer upon
      the holder of any Right Certificate, as such, any of the rights of a
      stockholder of the Company or any right to vote for the election of
      Directors or upon any matter submitted to stockholders at any meeting
      thereof, or to give or withhold consent to any corporate action, or to
      receive notice of meetings or other actions affecting stockholders (except
      as provided in 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.

      (b)   The Rights Agent will be protected and will incur no liability for
            or in respect of any action taken, suffered, or omitted by it in
            connection with its administration of this Agreement in reliance
            upon any 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.

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 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

                                       29
<PAGE>
      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, by all of which the Company and the holders of Right
      Certificates, by their acceptance thereof, will be bound:

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

      (b)   Whenever in the performance of its duties under this Agreement the
            Rights Agent deems it necessary or desirable that any fact or matter
            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 of the Board, 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; provided, however, that
            the Rights Agent shall not be responsible for any indirect, special,
            consequential or punitive damages.

      (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

                                       30
<PAGE>
            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 one of the Chairman of the Board, 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 in good faith in accordance with
            instructions of any such officer.

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

                                       31
<PAGE>
            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.

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 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 the State of New
      York (or of any other state of the United States so long as such
      corporation is authorized to do business as a banking institution in the
      State of New York), in good standing, having a principal office in the
      State of New York, 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.

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 Board of 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

                                       32
<PAGE>
      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 Board of 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 Board of Directors
      of the Company determines 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 Board of Directors of
      the Company may, at its 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 Board of Directors of the Company ordering the same,
      unless such action of the Board of 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 Board of 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 Board
            of Directors of the

                                       33
<PAGE>
            Company (based upon the fair market value of such other
            consideration, determined by the Board of 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 Board of 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 Board of Directors of the Company may, at its option, at
      any time after the later of the Share Acquisition Date and the
      Distribution 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 Board of Directors of the Company ordering the
      same, unless such action of the Board of 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 Board of Directors of the Company).
      Notwithstanding the foregoing, the Board of 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 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.

                                       34
<PAGE>
            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 Board
            of 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.

                                       35
<PAGE>
      (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, addressed (until another address is filed in
      writing with the Rights Agent) as follows:

                  Reynolds American Inc.
                  401 North Main Street
                  Winston-Salem, North Carolina 27102-2866
                  Attention:  _____________________

      (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:

                  The Bank of New York
                  _________________________________

                  _________________________________

                  Attention:  _____________________

      (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 sentence of
      this Section 27, the Company may in its sole and absolute discretion, and
      the Rights Agent will if the Company so directs, supplement or amend any
      provision of this Agreement in any respect without the approval of any
      holders of Rights or Common Shares; provided, however, that, without first
      obtaining the prior written consent of PLC, the Company shall not
      supplement or amend any provision of this Agreement (or adopt any
      successor or parallel agreement) if the effect of such amendment,
      supplement or adoption would be to impose limitations or restrictions on
      the number of Common Shares that may be held by any PLC Company (except to
      the extent set forth in this Agreement as the date hereof), including, but
      not limited to, decreasing the percentages in the proviso to the
      definition of "Applicable Percentage" or amending the last sentence of the
      definition of "Acquiring Person". From and after the time at which the
      Rights cease to be redeemable

                                       36
<PAGE>
      pursuant to Section 23, and subject to the last sentence of this Section
      27, the Company may, and the Rights Agent will if the Company so directs,
      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, however, 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 Board of 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
      Board of 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.

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, PLC 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 North Carolina 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; provided, however, that the rights,
      obligations and duties of the Rights Agent hereunder shall be governed
      and construed in accordance with the laws of the State of New York.

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

                                       37
<PAGE>
      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.

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 and
      Exhibits are to Articles, Sections and Exhibits of or to this Agreement.

33.   Determinations and Actions by the Board. 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 Board of 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 Board of Directors of
      the Company or to the Company, or as may be necessary or advisable in the
      administration of this Agreement, including without limitation the right
      and power to (i) interpret the provisions of this Agreement and (ii) make
      all determinations deemed necessary or advisable for the administration of
      this Agreement (including any determination as to whether particular
      Rights shall have become void). All such actions, calculations,
      interpretations and determinations which are done or made by the Board of
      Directors of the Company in good faith will be final, conclusive and
      binding on the Company, the Rights Agent, the holders of the Rights and
      all other parties.

34.   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.

                                       38
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.

                                         REYNOLDS AMERICAN INC.

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

                                         THE BANK OF NEW YORK

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

                                       39
<PAGE>
                                                                       EXHIBIT A

             [TERMS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
                   OF REYNOLDS AMERICAN INC. TO BE PROVIDED].

                                       A-1
<PAGE>
                                                                       EXHIBIT B

                            FORM OF RIGHT CERTIFICATE

Certificate No. R-____________                                 __________ Rights

NOT EXERCISABLE AFTER [________] 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

                             REYNOLDS AMERICAN INC.

      This certifies that [________], or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions, and conditions of the Rights
Agreement, dated as of [________], 2004 (the "RIGHTS AGREEMENT"), between
Reynolds American Inc., a North Carolina corporation (the "COMPANY"), and The
Bank of New York (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, par value
$0.01 per share (the "PREFERRED SHARES"), of the Company, at a purchase price of
$[________] 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.

      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

                                      B-1
<PAGE>
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 Board of Directors of the Company has 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.

                                      B-2
<PAGE>
      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 stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate 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 ________, ____.

ATTEST:                                  REYNOLDS AMERICAN INC.

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

Countersigned:

THE BANK OF NEW YORK

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

                                      B-3
<PAGE>
                 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>
                                   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>
                          FORM OF ELECTION TO PURCHASE

                      (To be executed if holder desires to
                         exercise the Right Certificate)

To Reynolds American Inc.:

      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>
                                   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>
                                                                       EXHIBIT C

                  SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK

      On [________], 200[_], the Board of Directors of Reynolds American Inc.
adopted a rights plan and declared a dividend of one preferred share purchase
right for each outstanding share of Reynolds American Inc.'s Common Stock, par
value $0.01 per share. The dividend is payable on [________], 200[_] to our
stockholders of record on that date. The terms of the rights and the rights plan
are set forth in a Rights Agreement, dated as of [________], 2004, by and
between Reynolds American Inc. and The Bank of New York, as rights agent.

      Our Board adopted the rights plan to protect our stockholders from
coercive takeover practices or takeover bids that are inconsistent with their
best interests. In general terms, the rights plan imposes a significant penalty
upon any person or group that acquires 15% or more of our outstanding common
stock without the prior approval of our Board. A person or group that acquires a
percentage of our common stock in excess of that threshold is called an
"acquiring person." British American Tobacco p.l.c. will not be deemed to be an
acquiring person unless certain contingencies occur. Any rights held by an
acquiring person are void and may not be exercised.

      This summary of rights provides a general description of the rights plan.
Because it is only a summary, this description should be read together with the
entire rights plan, which we incorporate in this summary by reference. We have
filed the rights plan with the Securities and Exchange Commission as an exhibit
to our registration statement on Form 8-A. Upon written request, we will provide
a copy of the rights plan free of charge to any stockholder.

      THE RIGHTS. Our Board of Directors authorized the issuance of one right
per each outstanding share of our common stock on [________]. If the rights
become exercisable prior to a flip-in event or a flip-over event, each right
would allow its holder to purchase from us one one-hundredth of a share of our
Series A Junior Participating Preferred Stock for a purchase price of
$[________]. Each fractional share of preferred stock would give the stockholder
approximately the same dividend, voting and liquidation rights as does one share
of our common stock. Prior to exercise, however, a right does not give its
holder any dividend, voting or liquidation rights.

      EXERCISABILITY. The rights will not be exercisable until the earlier of:

-     10 days after a public announcement by Reynolds American Inc. that a
      person or group has become an acquiring person; and

-     10 business days (or a later date determined by our Board) after a person
      or group begins a tender or exchange offer that, if completed, would
      result in that person or group becoming an acquiring person.

We refer to the date that the rights become exercisable as the "DISTRIBUTION
DATE." Until the distribution date, our common stock certificates will also
evidence the rights and will contain a

                                      C-1
<PAGE>
notation to that effect. Any transfer of shares of common stock prior to the
distribution date will constitute a transfer of the associated rights. After the
distribution date, the rights will separate from the common stock and be
evidenced by rights certificates, which we will mail to all holders of rights
that have not become void.

      FLIP-IN EVENT. After the distribution date, if a person or group already
is or becomes an acquiring person, rights will no longer be exercisable for
fractional shares of our Series A Junior Participating Preferred Stock. Instead,
all holders of rights, except the acquiring person, may exercise their rights
upon payment of the purchase price to purchase shares of our common stock (or
other securities or assets as determined by the Board) with a market value of
two times the purchase price.

      FLIP-OVER EVENT. After the distribution date, if a flip-in event has
already occurred and Reynolds American Inc. is acquired in a merger or similar
transaction, rights will no longer be exercisable for fractional shares of our
Series A Junior Participating Preferred Stock. Instead, all holders of rights
except the acquiring person may exercise their rights upon payment of the
purchase price, to purchase shares of the acquiring corporation with a market
value of two times the purchase price of the rights.

      Rights may be exercised to purchase our preferred shares only after the
distribution date occurs and prior to the occurrence of a flip-in event as
described above. A distribution date resulting from the commencement of a tender
offer or exchange offer described in the second bullet point above could precede
the occurrence of a flip-in event, in which case the rights could be exercised
to purchase our preferred shares. A distribution date resulting from any
occurrence described in the first bullet point above would necessarily follow
the occurrence of a flip-in event, in which case the rights could be exercised
to purchase shares of common stock or other securities as described above.

      EXPIRATION. The rights will expire on [________] unless earlier redeemed
or exchanged.

      REDEMPTION. Our Board may redeem all (but not less than all) of the rights
for a redemption price of $0.01 per right at any time before the later of the
distribution date and the date of the first public announcement or disclosure by
Reynolds American Inc. that a person or group has become an acquiring person.
Once the rights are redeemed, the right to exercise rights will terminate, and
the only right of the holders of rights will be to receive the redemption price.
The redemption price will be adjusted if we declare a stock split or issue a
stock dividend on our common stock.

      EXCHANGE. After the later of the distribution date and the date of the
first public announcement by Reynolds American Inc. that a person or group has
become an acquiring person, but before an acquiring person owns 50% or more of
our outstanding common stock, our Board may exchange each right (other than
rights that have become void) for one share of common stock or an equivalent
security.

      ANTI-DILUTION PROVISIONS. Our Board may adjust the purchase price of the
preferred shares, the number of preferred shares issuable and the number of
outstanding rights to prevent dilution that may occur as a result of certain
events, including among others, a stock dividend, a

                                      C-2
<PAGE>
stock split or a reclassification of the preferred shares or our common stock.
No adjustments to the purchase price of less than 1% will be made.

      AMENDMENTS. Before the time rights cease to be redeemable, subject to
certain limitations on the ability to adopt amendments that affect PLC, our
Board may amend or supplement the rights plan without the consent of the holders
of the rights, except that no amendment may decrease the redemption price below
$0.01 per right. At any time thereafter, our Board may amend or supplement the
rights plan only to cure an ambiguity, to alter time period provisions, to
correct inconsistent provisions or to make any additional changes to the rights
plan, but only to the extent that those changes do not impair or adversely
affect any rights holder and do not result in the rights again becoming
redeemable.

                                      * * *

                                      C-3<PAGE>

                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement, (the "Agreement") by and between Presidion
Solutions, Inc. a Florida corporation, its subsidiaries and affiliates
(collectively the "Company") and Craig A. Vanderburg ("Employee") is hereby
entered into and effective as of February 12, 2003. This Agreement hereby
supersedes any other employment agreements or understandings, written or oral,
between the Company and Employee.

1.       Employment and Duties.

         (a) Employee shall be employed as the Company's President and Chief
Executive Officer and in such other executive capacity as the Board of Directors
may decide. Employee's duties may be changed and modified by the Company's Board
of Directors. Employee accepts this employment upon the terms and conditions
herein contained and, subject to paragraph 1(c), agrees to devote his full-time,
attention and efforts to promote and further the business of the Company.

         (b) Employee shall faithfully adhere to, execute and fulfill all
policies established by the Company.

         (c) Except pursuant to the written approval of the Board of Directors,
Employee shall not, during the term of his employment, be engaged in any other
business activity pursued for gain, profit or pecuniary advantage. The foregoing
limitations shall not be construed as prohibiting Employee from making personal
investments in such form or manner as will neither require Employee's services
in the operations or affairs of the enterprises in which such investments are
made, nor violate the terms of paragraph 5.

2.       Compensation, Benefits and Executive Perquisites. For all services
rendered by Employee, the Company shall compensate Employee as follows:

         (a) Minimum Base Salary. The Minimum Base Salary payable to Employee
shall be $300,000 per year, payable on a regular basis in accordance with the
Company's standard payroll procedure. On at least an annual basis, the Board of
Directors of the Company will review Employee's performance and make any
increase to such base salary if, in its discretion, any such increase is
warranted.

         (b) Bonus Plan. Employee shall be eligible for any incentive bonus plan
developed for the Company's key employees.

<PAGE>

         (c) Benefits and Perquisites. Employee shall be entitled to receive
benefits and perquisites from the Company in such form and to such extent as
specified below:

                  (i) participation for Employee and Employee's dependent family
         members under health, hospitalization, disability, dental, life and
         other insurance plans that the Company may have in effect from time to
         time, with benefits provided to Employee to be at least equal to such
         benefits provided to similarly situated Company executives.

                  (ii) paid vacation as determined by the Board of Directors for
         its executive officers, but not less than four (4) weeks in each
         calendar year (prorated for any calendar year in which employment is
         less than a full year). Vacation days shall be taken at such time as
         the parties mutually agree, acting reasonably, giving regard to the
         performance of the essential duties of the Employee. Employee shall
         also be entitled to all paid holidays given to the Company's executive
         officers.

                  (iii) reimbursement for all costs and charges for the use of a
         cellular telephone of the Employee's choice.

                  (iv) $1,500 per month for the use of an automobile of
         Employee's choice. This reimbursement shall include Employee's expense
         to lease or purchase the vehicle, obtain insurance, and maintain and
         operate the vehicle (i.e. gasoline, oil and regular maintenance).

                  (v) reimbursement in an amount not to exceed $1,000 per month
         for the dues and fees of a club of Employee's choice. Reimbursement for
         food, beverage and entertainment at such club must qualify as a
         business expense and be submitted under Section 2(c) (vi) of this
         Agreement.

                  (vi) reimbursement for all business travel and other
         out-of-pocket expenses reasonably incurred by Employee in the
         performance of the services pursuant to this Agreement. All
         reimbursable expenses shall be appropriately documented in reasonable
         detail and submitted in a format and manner consistent with the
         Company's expense reporting policy.

3.       Place of Performance. The principal place of performance of Employee's
duties shall be at the Company's corporate headquarters in Troy, Michigan.
Employee understands and agrees that he may be required to spend substantial
time at other locations where the Company has facilities, but in no event shall
the Employee be required to spend more than 180 days in any calendar year
performing his duties away from the Company's Michigan headquarters.

<PAGE>

4.       Term and Termination. The term of this Agreement shall begin on the
date hereof and continue for five (5) years. (the "Term"). This Agreement and
Employee's employment may be terminated in any one of the following ways:

         (a) Death. Upon the death of Employee, the Company shall pay the
Minimum Base Salary in effect at the date of death, Benefits and Perquisites
required by this Agreement to Employee's heirs or estate, to be paid when and as
if they would have been paid but for the Employee's death, for the full
remaining Term of this Agreement.

         (b) Disability. Upon the Disability of Employee, the Company shall pay
the Minimum Base Salary in effect at the date of disability, Benefits and
Perquisites required by this Agreement to Employee, his trustee or conservator,
to be paid when and as if they would have been paid but for the Employee's
Disability, for the full remaining Term of this Agreement. For purposes of this
Agreement only, "Disability" shall mean that the Employee, as a result of a
physical or mental illness or injury, cannot perform in the usual manner enough
of the substantial and material duties to be able to successfully continue in
such capacity. Employee shall submit to all reasonable requests for physical and
mental examinations by physicians of Company's choosing. The Company shall have
the sole discretion of determining whether Employee is disabled for purposes of
this Agreement.

         (c) Change of Control. In the event of a Change of Control, Employee
shall have the option to terminate this Agreement. In such case, the provisions
of Section 4(e) of this Agreement shall apply as if the Company had terminated
this Agreement Without Good Cause. A Change of Control means, and shall be
deemed to have occurred upon the occurrence of, any one of the following events:

                  (i) The acquisition in one or more transactions, other than
from the Company, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
number of Company Voting Securities in excess of 30% of the Company Voting
Securities unless such acquisition has been approved by the Board;

                  (ii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, unless, following such reorganization,
merger or consolidation, all or substantially all of the individuals and
entities who were the respective beneficial owners of the Outstanding Common
Stock and Company Voting Securities immediately prior to such reorganization,
merger or consolidation, following such reorganization, merger or consolidation
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding

<PAGE>

shares of Common Stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from such reorganization,
merger or consolidation in substantially the same proportion as their ownership
of the Outstanding Common Stock and Company Voting Securities immediately prior
to such reorganization, merger or consolidation, as the case may be; or

                  (iii) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) a sale or other
disposition of all or substantially all the assets of the Company.

         (d) By the Company for Good Cause. The Company may terminate this
Agreement at any time for "Good Cause", which shall be limited to: (i) fraud or
intentional misconduct in the performance of Employee's duties which are
materially injurious to the Company, (ii) the appropriation of a business
opportunity of Company (iii) the misappropriation of Company funds or property,
or (iv) the conviction, guilty plea, or plea of no contest to any felony which
results in the incarceration of the Employee. In the event this Agreement is
terminated by the Company for Good Cause, Company will have no further
obligations to make payments or provide benefits under this Agreement.

         (e) By the Company Without Good Cause. If the Company terminates
Employee without Good Cause, the Company shall pay the Minimum Base Salary in
effect at the date of termination, Benefits and Perquisites required by this
Agreement to Employee (or his heirs or estate upon his death), to be paid when
and as if they would have been paid but for the Employee's termination, for the
full remaining Term of this Agreement.

         (f) By Employee for Good Cause. Employee may, at his option, after
complying with this Section 4(f), terminate this Agreement in the event of a
material breach of the terms of this Agreement by the Company. Employee shall be
required to give written notice to the Company setting forth with particularity
the nature of the material breach. The Company shall have thirty (30) days
following its receipt of Employee's written notice in which to cure its breach
before Employee's termination of this Agreement shall be effective. In the event
Employee's termination shall be effective under this Section 4(f), the Company
shall pay the Minimum Base Salary in effect at the date of termination, Benefits
and Perquisites required by this Agreement to Employee (or his heirs or estate
upon his death), to be paid when and as if they would have been paid but for the
Employee's termination, for the full remaining Term of this Agreement. If
Employee terminates this Agreement without good cause (e.g., other than in
accordance with this Section 4(f)), he shall not be entitled to receive any
further compensation or benefits under the terms hereof.

<PAGE>

5.       Non Competition and Proprietary Information.

         (a) Non Competition. Employee will not, during the period of Employee's
employment with the Company, and for a period of one (1) year immediately
following the termination of Employee's employment under this Agreement, for any
reason whatsoever, directly or indirectly, for Employee or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:

                  (i) engaged, as an officer, director, shareholder, owner,
partner, joint venturer, or in any other capacity, whether as an employee,
independent contractor, consultant or adviser, or as a sales representative, in
any business offering any services or products in competition with the Company
within the States of Florida or Michigan. (the "Territory");

                  (ii) call upon any person within the Territory who is an
employee of the Company in a managerial capacity for the purpose or with the
intent of enticing such employee away from employment with the Company;

                  (iii) call upon any person or entity which is, or which has
been, within one (1) year prior to that time, a customer of the Company within
the Territory for the purpose of soliciting or selling products or services in
competition with Company; or

                  (iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of a competitor, which candidate was, to
Employee's knowledge, either called upon by the Company or for which the Company
made an acquisition analysis, for the purpose of acquiring such entity.

         (b) Proprietary Information. Company is engaged in a highly competitive
profession and relies substantially upon maintaining the confidentiality of its
Proprietary Information for the purpose of establishing and maintaining certain
competitive advantages. This Proprietary Information includes, but is not
limited to: names, addresses and contacts of clients and prospective clients,
all information concerning Company's computer programs, software, processes,
manuals, instructions, methods, management, financial affairs, purchasing,
sales, marketing and business plans. As a condition of employment, Employee is
obligated not to disclose or to use, except in his work for Company, any
Proprietary Information. This obligation exists both during and after Employee's
employment and for so long as the information remains confidential.

6.       Return of Company Property. All records, business plans, financial
statements, manuals, memoranda, lists and other property delivered to or
compiled by Employee by or on behalf of the Company, or its representatives,
vendors or customers which pertain to the business of the Company shall be and
remain the property of the Company, as the case may be, and be subject at all

<PAGE>

times to its direction and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company held by Employee shall be
delivered promptly to the Company without request upon termination of Employee's
employment.

7.       Complete Agreement. Employee has no oral representations,
understandings or agreements with the Company or any of its officers, directors
or representatives covering the subject matter of this Agreement. This written
Agreement is the final, complete and exclusive statement and expression of the
agreement between the parties and of all the terms of this Agreement, and it
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This Agreement may not be later
modified except by a further writing signed by a duly authorized officer of the
Company and Employee, and no term of this Agreement may be waived except by a
writing signed by the party waving the benefit of such term.

8.       Severability, Headings. If any portion of this Agreement is held
invalid or in operative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is possible, effect shall be given to the
intent manifested by the portion held invalid or inoperative. The paragraph
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of the Agreement or
of any part hereof.

9.       Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Michigan.

PRESIDION SOLUTIONS, INC.                            EMPLOYEE

/S/ James E. Baiers                                  /S/ Craig A. Vanderburg
---------------------------                          ---------------------------
James E. Baiers, EVP/Secretary                       Craig A. Vanderburg

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