Document:

<PAGE>   1
                                                                   Exhibit 10.21

                                    SUPPLEMENT NO. 1 dated as of July 19, 2001,
                                    to the Indemnity, Subrogation and
                                    Contribution Agreement dated as of September
                                    30, 1997, as amended and restated as of May
                                    31, 2000 (as the same may be amended,
                                    supplemented or otherwise modified from time
                                    to time, the "Indemnity, Subrogation and
                                    Contribution Agreement"), among PLIANT
                                    CORPORATION (f/k/a Huntsman Packaging
                                    Corporation), a Utah corporation (the
                                    "Borrower"), each Subsidiary of the Borrower
                                    listed on Schedule I thereto (the
                                    "Guarantors"), and BANKERS TRUST COMPANY, a
                                    New York banking corporation ("Bankers
                                    Trust"), as collateral agent (the
                                    "Collateral Agent") for the Secured Parties
                                    (as defined in the Credit Agreement referred
                                    to below).

         A. Reference is made to (a) the Credit Agreement dated as of September
30, 1997, as amended and restated as of May 31, 2000 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, Aspen Industrial, S.A. de C.V., a Mexico corporation, the lenders from
time to time party thereto (the "Lenders") and Bankers Trust, as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders, and (b)
the Guarantee Agreement dated as of September 30, 1997, as amended and restated
as of May 31, 2000 (the "Guarantee Agreement"), among the Borrower, the
Guarantors and the Administrative Agent.

         B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indemnity, Subrogation and
Contribution Agreement and the Credit Agreement.

         C. The Borrower and the Guarantors have entered into the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit. Pursuant to Section 5.12
of the Credit Agreement, each Subsidiary Loan Party that was not in existence or
not a Subsidiary Loan Party on the date of the Credit Agreement is required to
enter into the Guarantee Agreement as a Guarantor upon becoming a Subsidiary.
Section 12 of the Indemnity, Subrogation and Contribution Agreement provides
that additional Subsidiaries of the Borrower may become Guarantors under the
Indemnity, Subrogation and Contribution Agreement by execution and delivery of
an instrument in the form of this Supplement. Each of the undersigned
Subsidiaries of the Borrower (the "New Guarantors") is executing this Supplement
in accordance with the requirements of the Credit Agreement to become a
Guarantor under the Indemnity, Subrogation and Contribution Agreement in order
to induce the Lenders to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

Accordingly, the Collateral Agent and each of the New Guarantors agree as
follows:
<PAGE>   2
         SECTION 1. In accordance with Section 12 of the Indemnity, Subrogation
and Contribution Agreement, each of the New Guarantors by its signature below
becomes a Guarantor under the Indemnity, Subrogation and Contribution Agreement
with the same force and effect as if originally named therein as a Guarantor and
each of the New Guarantors hereby agrees to all the terms and provisions of the
Indemnity, Subrogation and Contribution Agreement applicable to it as a
Guarantor thereunder. Each reference to a "Guarantor" in the Indemnity,
Subrogation and Contribution Agreement shall be deemed to include each of the
New Guarantors. The Indemnity, Subrogation and Contribution Agreement is hereby
incorporated herein by reference.

         SECTION 2. Each of the New Guarantors represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.

         SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of each of the New Guarantors and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

         SECTION 4. Except as expressly supplemented hereby, the Indemnity,
Subrogation and Contribution Agreement shall remain in full force and effect.

         SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the validity,
legality and enforceability of the remaining provisions contained herein and in
the Indemnity, Subrogation and Contribution Agreement shall not in any way be
affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

         SECTION 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All communications and notices hereunder to each of the
New Guarantor shall be given to it at the address set forth under its signature.
<PAGE>   3
         SECTION 8. Each of the New Guarantors agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
<PAGE>   4
IN WITNESS WHEREOF, each of the New Guarantors and the Collateral Agent have
duly executed this Supplement to the Indemnity, Subrogation and Contribution
Agreement as of the day and year first above written.

                                        UNIPLAST HOLDINGS INC.,

                                        By    /s/ Larry Shepler
                                            ------------------------------------
                                        Name:     Larry Shepler
                                        Title:    Secretary
                                        Address:  c/o Pliant Corporation
                                                  1515 Woodfield Road, Suite 600
                                                  Schaumburg, Illinois 60173

                                        UNIPLAST U.S., INC.,

                                        By    /s/ Larry Shepler
                                            ------------------------------------
                                        Name:     Larry Shepler
                                        Title:    Secretary
                                        Address:  c/o Pliant Corporation
                                                  1515 Woodfield Road, Suite 600
                                                  Schaumburg, Illinois 60173

                                        TUREX, INC.,

                                        By    /s/ Larry Shepler
                                            ------------------------------------
                                        Name:     Larry Shepler
                                        Title:    Secretary
                                        Address:  c/o Pliant Corporation
                                                  1515 Woodfield Road, Suite 600
                                                  Schaumburg, Illinois 60173

                                        PIERSON INDUSTRIES, INC.,

                                        By    /s/ Larry Shepler
                                            ------------------------------------
                                        Name:     Larry Shepler
                                        Title:    Secretary
                                        Address:  c/o Pliant Corporation
                                                  1515 Woodfield Road, Suite 600
                                                  Schaumburg, Illinois 60173
<PAGE>   5
                                        UNIPLAST MIDWEST, INC.,

                                        By    /s/ Larry Shepler
                                            ------------------------------------
                                        Name:     Larry Shepler
                                        Title:    Secretary
                                        Address:  c/o Pliant Corporation
                                                  1515 Woodfield Road, Suite 600
                                                  Schaumburg, Illinois 60173

                                        BANKERS TRUST COMPANY,
                                        as Collateral Agent,

                                        By   /s/ Robert R. Telesca
                                           -------------------------------------
                                        Name: Robert R. Telesca
                                        Title: Vice President
                                        Address: One Bankers Trust Plaza
                                                 New York, New York 10006<PAGE>   1
                                                                     EXHIBIT 4.1

                                RIGHTS AGREEMENT

                                     BETWEEN

                        PIONEER NATURAL RESOURCES COMPANY

                                       AND

                   CONTINENTAL STOCK TRANSFER & TRUST COMPANY,

                                 AS RIGHTS AGENT

                            DATED AS OF JULY 20, 2001

<PAGE>   2

                                TABLE OF CONTENTS

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

EXHIBITS:

<TABLE>
<S>      <C>
A        Certificate of Designations of Series A Junior Participating Preferred Stock

B        Form of Right Certificate

C        Summary of Rights to Purchase Preferred Shares
</TABLE>

                                     - i -
<PAGE>   3

                                RIGHTS AGREEMENT

         This Rights Agreement dated as of July 20, 2001 (this "Agreement"), is
between Pioneer Natural Resources Company, a Delaware corporation (the
"Company"), and Continental Stock Transfer & Trust Company, as rights agent (the
"Rights Agent").

         WHEREAS, the board of directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for each
Common Share (as defined below) and Exchangeable Share (as defined below) of the
Company outstanding on July 31, 2001 (the "Record Date"), each Right
representing the right to purchase one one-thousandth of a Preferred Share (as
defined below), upon the terms and subject to the conditions herein set forth,
and has further authorized and directed the issuance of one Right with respect
to each share of Capital Stock (as defined below) of the Company that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
defined below).

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

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

         (a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Capital Stock of the Company then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan or employee stock ownership plan of the Company or any
Subsidiary of the Company or (iv) any entity holding Capital Stock for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no member
of the Southeastern Group shall be considered an "Acquiring Person" unless on
any date subsequent to the date hereof, the Southeastern Group or any of its
members shall become the Beneficial Owner of one or more additional shares of
Capital Stock in excess of the greater of (A) the lesser of (1) the percentage
of Capital Stock Beneficially Owned by the Southeastern Group on the date hereof
or (2) the lowest percentage of outstanding Capital Stock of the Company
Beneficially Owned by the Southeastern Group after the date hereof (as set forth
in or derived from any Schedule 13D or 13G filed by any member of the
Southeastern Group after the date hereof) or (B) 15% of the Capital Stock then
outstanding. Notwithstanding the foregoing, no Permitted Transferee shall be
considered an "Acquiring Person" unless at any time or on any date subsequent to
the time it acquires Capital Stock from the Southeastern Group as a Permitted
Transferee, the Permitted Transferee shall become the Beneficial Owner of one or
more additional shares of Capital Stock in excess of the greater of (A) the
lesser of (1) the percentage of Capital Stock Beneficially Owned by the
Permitted Transferee on the date that the Permitted Transferee acquires Capital
Stock from the Southeastern Group or (2) the lowest percentage of outstanding
Capital Stock of the Company Beneficially Owned by the Permitted Transferee
after the date thereof (as set forth in or derived from any Schedule 13D or 13G
filed by the Permitted Transferee after the date thereof) or (B) 15% of the
Capital Stock then outstanding. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of Capital Stock by
the Company which, by reducing the number of shares

                                     - 1 -
<PAGE>   4

outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Capital Stock of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 15% or
more of the Capital Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Capital Stock of the Company, then
such Person shall be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the board of directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this Section 1(a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of shares
of Capital Stock so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this Section 1(a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement.

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

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

                  (i) which such Person or any of such Person's Affiliates or
         Associates beneficially owns, directly or indirectly;

                  (ii) which such Person or any of such Person's Affiliates or
         Associates has (A) the right to acquire (whether such right is
         exercisable immediately or only after the passage of time) pursuant to
         any agreement, arrangement or understanding (other than customary
         agreements with and between underwriters and selling group members with
         respect to a bona fide public offering of securities), or upon the
         exercise of conversion rights, exchange rights, rights (other than
         these Rights), warrants or options, or otherwise; provided, however,
         that a Person shall 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 (B) the right to vote pursuant to any
         agreement, arrangement or understanding; provided, however, that a
         Person shall not be deemed the Beneficial Owner of, or to beneficially
         own, any security if the agreement, arrangement or understanding to
         vote such security (1) arises solely from a revocable proxy or consent
         given to such Person in response to a public proxy or consent
         solicitation made pursuant to, and in accordance with, the applicable
         rules and regulations promulgated under the Exchange Act and (2) is not
         also then reportable on Schedule 13D under the Exchange Act (or any
         comparable or successor report); or

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

                                     - 2 -
<PAGE>   5

         contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any
         securities of the Company.

         Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.

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

         (e) "Capital Stock" shall mean the Common Shares and the Exchangeable
Shares.

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

         (g) "Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $0.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.

         (h) "DGCL 203" shall have the meaning set forth in Section 1(j).

         (i) "Exchangeable Shares" means the Exchangeable Shares of Pioneer
Natural Resources (Canada) Ltd., an Alberta corporation and a wholly owned
indirect subsidiary of the Company ("Pioneer Canada").

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

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

         (l) "Permitted Transferee" means a Person who:

                  (i) acquires directly from the Southeastern Group in a bona
         fide purchase the beneficial ownership of exactly 100% of the Capital
         Stock Beneficially Owned by the Southeastern Group on the date of the
         purchase (the "SEG Shares");

                  (ii) is not a Beneficial Owner of any Capital Stock
         immediately prior to acquiring Beneficial Ownership of the SEG Shares;

                  (iii) does not acquire the Beneficial Ownership of any Capital
         Stock other than the SEG Shares on the date of acquisition of the SEG
         Shares; and

                                     - 3 -
<PAGE>   6

                  (iv) acquires the SEG Shares pursuant to a written, signed
         purchase agreement (the "Permitted Transferee Purchase Agreement") by
         and among such Person, the Southeastern Group, and the Company for the
         Southeastern Group to sell all (and not less than all) the SEG Shares
         to such Person at a price in excess of the Southeastern Group's then
         current internal evaluation of the Company's net asset value (as
         delivered by the Southeastern Group to the Company) and containing the
         following additional terms and conditions:

                           (1) the agreement and acknowledgement of such Person
                  with and for the benefit of the Company (enforceable by the
                  Company directly against such Person and the Southeastern
                  Group) that, upon completion of the transactions in the
                  purchase agreement,

                                    (a) neither the approval of the Permitted
                           Transferee Purchase Agreement or its form and
                           substance nor the execution and delivery of the
                           Permitted Transferee Purchase Agreement (or any other
                           agreement, instrument, document or consent related
                           thereto) shall constitute approval of the transaction
                           by which the Permitted Transferee acquires the SEG
                           Shares;

                                    (b) he, she or it, will be an "interested
                           stockholder" under Section 203 of the Delaware
                           General Corporation Law ("DGCL 203") and will be such
                           without the board of directors of the Company having
                           approved the transaction which resulted in the Person
                           becoming an interested stockholder; and

                                    (c) neither such Person nor any of his, hers
                           or its affiliates (as defined in the DGCL 203), for a
                           period of three years following consummation of the
                           transfer of beneficial ownership of the SEG Shares,
                           will engage, or attempt to engage, in any business
                           combination (as defined in DGCL 203) with the
                           Company; and

                           (2) the agreement of the Southeastern Group and such
                  Person with and for the benefit of the Company (enforceable by
                  the Company against the Southeastern Group and such Person)
                  that, for a period of 90 days after the date of such
                  agreement, the Company or any Person designated by the Company
                  shall have the option to submit an offer to purchase the SEG
                  Shares at a price and on terms established by the Company or
                  such designated Person; provided in either case that the price
                  is higher or the overall terms are superior than the price and
                  terms set forth in the Permitted Transferee Purchase
                  Agreement; and provided, further, that if such option is
                  exercised the Southeastern Group shall have the choice of
                  selling the SEG Shares pursuant to that offer or of
                  terminating the Permitted Transferee Purchase Agreement and
                  retaining the SEG Shares (in which case no Person shall
                  thereafter be able to become a Permitted Transferee).

         (m) "Permitted Transferee Purchase Agreement" shall have the meaning
set forth in Section 1(j).

                                     - 4 -
<PAGE>   7

         (n) "Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company, joint venture, association,
trust, unincorporated organization, group or other entity, and shall include any
successor (by merger or otherwise) of such entity.

         (o) "Preferred Shares" shall mean 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 form of Certificate of Designations
attached hereto as Exhibit A.

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

         (q) "SEG Shares" shall have the meaning set forth in Section 1(j).

         (r) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.

         (s) "Southeastern Group" shall mean, collectively, Southeastern Asset
Management Inc. and its Affiliates and Associates.

         (t) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.

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

         Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day
(or such later date as may be determined by action of the board of directors of
the Company prior to such time as any Person becomes an Acquiring Person) after
the date of commencement by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan or employee stock ownership plan of
the Company or of any Subsidiary of the Company, or any entity holding Capital
Stock for or pursuant to the terms of any such plan) of, or after the date of
the first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan or employee
stock ownership plan of the Company or of any Subsidiary of the Company, or any
entity holding Capital Stock for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of Capital Stock aggregating 15% or
more of the then outstanding Capital Stock (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares of the Company or Exchangeable Shares of
Pioneer Canada, as applicable, registered in the names of the holders thereof
(which certificates in each case shall also be deemed to be Right Certificates)
and not by separate Right Certificates,

                                     - 5 -
<PAGE>   8

and (y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Capital Stock. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Capital Stock as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company or
Pioneer Canada, as the case may be, a Right Certificate, in substantially the
form of Exhibit B hereto (a "Right Certificate"), evidencing one Right for each
share of Capital Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.

         (b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Capital Stock as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company or Pioneer Canada, as the case may be. With respect
to certificates for Capital Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for transfer of any
certificate for Capital Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares or Exchangeable Shares
represented thereby.

         (c) Certificates for Common Shares and Exchangeable Shares which become
outstanding (including reacquired Common Shares or Exchangeable Shares referred
to in Section 3(d)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:

                           This certificate also evidences and entitles the
         holder hereof to certain rights as set forth in a Rights Agreement
         dated as of July 20, 2001 (the "Rights Agreement"), between Pioneer
         Natural Resources Company (the "Company") and Continental Stock
         Transfer & Trust Company, the terms of which are hereby incorporated
         herein by reference and a copy of which is on file at the principal
         executive offices of the Company. Under certain circumstances, as set
         forth in the Rights Agreement, such Rights will be evidenced by
         separate certificates and will no longer be evidenced by this
         certificate. The Company will mail to the holder of this certificate a
         copy of the Rights Agreement without charge after receipt of a written
         request therefor. As described in the Rights Agreement, Rights issued
         to any Person who becomes an Acquiring Person (as defined in the Rights
         Agreement) become null and void.

         With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Shares or
Exchangeable Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares or
Exchangeable Shares represented thereby.

                                     - 6 -
<PAGE>   9

         (d) In the event that the Company purchases or acquires any Capital
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Capital Stock shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
shares of Capital Stock that are no longer outstanding.

         Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any applicable rule or regulation of any stock exchange on which
the Rights may from time to time be listed or to conform to usage. Subject to
the provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-thousandths of a Preferred
Share as shall be set forth therein at the price per one one-thousandths of a
Preferred Share set forth therein (the "Purchase Price"), but the number of such
one one-thousandths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.

         Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the individual 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 individual who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
individual was not such an officer.

         Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, certificate
numbers and the date of each of the Right Certificates.

         Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have

                                     - 7 -
<PAGE>   10

become void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) 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-thousandth of a Preferred
Share as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.

         Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.

         Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.(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 upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-thousandth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on July 31, 2011 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.

         (b) The Purchase Price for each one one-thousandth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $95.00, and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United States of America in
accordance with Section 7(c) below.

         (c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes any such transfer agent to comply with all
such requests, or (B) requisition from the

                                     - 8 -
<PAGE>   11

depositary agent depositary receipts representing such number of one
one-thousandths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate.

         (d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.

         (e) The Company covenants and agrees that 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, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights in
accordance with this Section 7.

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

         Section 9. Availability of Preferred Shares. The Company covenants and
agrees that it will take all such action as may be necessary to ensure that all
Preferred Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for any such Preferred Shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.

         The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon

                                     - 9 -
<PAGE>   12

the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.

         Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the Preferred Shares transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

         Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.

         (a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue 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 the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the consideration to be paid for one Preferred Share as is determined
from time to time by the board of directors of the Company.

                  (ii) Subject to Section 24 of this Agreement, in the event any
         Person becomes an Acquiring Person, each holder of a Right shall
         thereafter have a right to receive, upon exercise thereof at a price
         equal to the then current Purchase Price multiplied by the number of
         one one-thousandths of a Preferred Share for which a Right is then
         exercisable, in accordance with the terms of this Agreement and in lieu
         of Preferred Shares, such number of Common Shares of the Company as
         shall equal the result

                                     - 10 -
<PAGE>   13

         obtained by (x) multiplying the then current Purchase Price by the
         number of one one-thousandths of a Preferred Share for which a Right is
         then exercisable and dividing that product by (y) 50% of the then
         current per share market price of the Company's Common Shares
         (determined pursuant to Section 11(d) hereof) on the date of such
         event. In the event that any Person shall become an Acquiring Person
         and the Rights shall then be outstanding, the Company shall not take
         any action which would eliminate or diminish the benefits intended to
         be afforded by the Rights.

                           From and after the occurrence of such event, any
         Rights that are or were acquired or beneficially owned by any Acquiring
         Person (or any Associate or Affiliate of such Acquiring Person) shall
         be void and any holder of such Rights shall thereafter have no right to
         exercise such Rights under any provision of this Agreement. No Right
         Certificate shall be issued pursuant to Section 3 that represents
         Rights beneficially owned by an Acquiring Person whose Rights would be
         void pursuant to the preceding sentence or any Associate or Affiliate
         thereof; no Right Certificate shall be issued at any time upon the
         transfer of any Rights to an Acquiring Person whose Rights would be
         void pursuant to the preceding sentence or any Associate or Affiliate
         thereof or to any nominee of such Acquiring Person, Associate or
         Affiliate; and any Right Certificate delivered to the Rights Agent for
         transfer to an Acquiring Person whose Rights would be void pursuant to
         the preceding sentence shall be cancelled.

                  (iii) In the event that there shall not be sufficient Common
         Shares issued but not outstanding, or authorized but unissued, to
         permit the exercise in full of the Rights in accordance with the
         foregoing clause (ii), the Company shall take all such action as may be
         necessary to authorize additional Common Shares for issuance upon
         exercise of the Rights. In the event the Company shall, after good
         faith effort, be unable to take all such action as may be necessary to
         authorize such additional Common Shares, the Company shall substitute,
         for each Common Share that would otherwise be issuable upon exercise of
         a Right, a number of Preferred Shares or fraction thereof such that the
         current per share market price of one Preferred Share multiplied by
         such number or fraction is equal to the current per share market price
         of one Common Share as of the date of issuance of such Preferred Shares
         or fraction thereof.

         (b) In case the Company shall fix 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 purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("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 then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
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

                                     - 11 -
<PAGE>   14

market price and the denominator of which shall be 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
consideration to be paid for one Preferred Share as is determined from time to
time by the board of directors of the Company. In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the board of directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and holders of the Rights. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed and, in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.

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

         (d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as defined below) immediately prior to such date; provided, however, that, in
the event that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be appropriately adjusted to
reflect the current market

                                     - 12 -
<PAGE>   15

price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported 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 Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the board of directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.

                  (ii) For the purpose of any computation hereunder, the
         "current per share market price" of the Preferred Shares shall be
         determined in accordance with the method set forth in Section 11(d)(i).
         If the Preferred Shares are not publicly traded, the "current per share
         market price" of the Preferred Shares shall be conclusively deemed to
         be the current per share market price of the Common Shares as
         determined pursuant to Section 11(d)(i) hereof (appropriately adjusted
         to reflect any stock split, stock dividend or similar transaction
         occurring after the date hereof), multiplied by one thousand. If
         neither the Common Shares nor the Preferred Shares are publicly held or
         so listed or traded, "current per share market price" shall mean the
         fair value per share as determined in good faith by the board of
         directors of the Company, whose determination shall be described in a
         statement filed with the Rights Agent.

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

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

                                     - 13 -
<PAGE>   16

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

         (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) or (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a Preferred Share (calculated to the nearest one ten-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-thousandths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

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

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

                                     - 14 -
<PAGE>   17

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

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

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

         (n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on any Capital Stock payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of any Capital Stock (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-thousandths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one-thousandths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of shares of
Capital Stock outstanding immediately before such event and the denominator of
which is the number of shares of Capital Stock outstanding immediately after
such event, and (B) each share of Capital Stock outstanding immediately after
such event shall have issued with respect to it that number of Rights which each
share of Capital Stock outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.

         Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Capital Stock or the
Preferred Shares a copy of such certificate and (c) if such adjustment occurs at
any

                                     - 15 -
<PAGE>   18

time after the Distribution Date, mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof.

         Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Capital Stock shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares of the Company
thereafter deliverable upon the exercise of the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement so providing. The Company shall not enter into
any transaction of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers.

         Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would

                                     - 16 -
<PAGE>   19

have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the board of
directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the board of directors of the Company shall be used.

         (b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-thousandth
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-thousandth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-thousandth 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 shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For the purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.

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

         Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Capital Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Capital Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Capital Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies

                                     - 17 -
<PAGE>   20

available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.

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

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

         (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, duly endorsed or accompanied by a
proper instrument of transfer; and

         (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 Shares or Exchangeable Shares certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Shares or Exchangeable Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.

         Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any 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 hereof), 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 hereof.

         Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.

                                     - 18 -
<PAGE>   21

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

         Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.

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

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

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

         (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other

                                     - 19 -
<PAGE>   22

evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.

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

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

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

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

         (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, 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 shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.

         (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

                                     - 20 -
<PAGE>   23

Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.

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

         Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Capital Stock or Preferred 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 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 Capital Stock or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation 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 an 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 or (b) an Affiliate of a
corporation described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Capital Stock or Preferred 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, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

         Section 22. Issuance of New 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

                                     - 21 -
<PAGE>   24

Certificates evidencing Rights in such form as may be approved by the board of
directors of the Company to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.

         Section 23. Redemption. (a) The board of directors of the Company may,
at its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.001 per Right (with respect to each holder of Rights,
rounded up to the nearest cent for the aggregate Rights held by such holder),
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the board of directors of the Company may be made effective at such time, on
such basis and with such conditions as the board of directors of the Company in
its sole discretion may establish.

         (b) Immediately upon the action of the board of directors of the
Company ordering the redemption of the Rights pursuant to 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
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the board of directors of the Company
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Capital Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Capital Stock prior to the
Distribution Date.

         Section 24. Exchange. (a) The board of directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share for
each two Common Shares for which each Right is then exercisable pursuant to the
provisions of Section 11(a)(ii), appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the board of directors of the Company shall not
be empowered to effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan or
employee stock ownership plan of the Company or any such Subsidiary, or any
entity holding Capital Stock for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Capital Stock then outstanding.

                                     - 22 -
<PAGE>   25

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

         (c) In the event that there shall not be sufficient Common Shares
issued but not outstanding, or authorized but unissued, to permit any exchange
of Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.

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

         Section 25. Notice of Certain Events. (a) In case the Company shall, at
any time after the Distribution Date, propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares
rights 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 50% or more
of the assets or earning power of the Company and its

                                     - 23 -
<PAGE>   26

Subsidiaries (taken as a whole) to, any other Person, (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 consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
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 or Preferred Shares, or both, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action,
and, in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the Common Shares or Preferred Shares, or both, whichever shall be
the earlier.

         (b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

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

                  Pioneer Natural Resources Company
                  1400 Williams Square West
                  5205 North O'Connor Boulevard
                  Irving, Texas 75039-3746

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

                  Continental Stock Transfer & Trust Company
                  Attn: Compliance Department
                  2 Broadway, 19th Floor
                  New York, New York 10004

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

                                     - 24 -
<PAGE>   27

         Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that, from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without limiting
the foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) hereof to not less than the greater of (a) the
sum of .001% and the largest percentage of the outstanding Capital Stock then
known by the Company to be beneficially owned by any Person (other than the
Southeastern Group (unless and until such time as the Southeastern Group is the
Beneficial Owner of less than 15% of the Capital Stock then outstanding), the
Company, any Subsidiary of the Company, any employee benefit plan or employee
stock ownership plan of the Company or any Subsidiary of the Company, or any
entity holding Capital Stock for or pursuant to the terms of any such plan) and
(b) 10%.

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

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

         Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

         Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.

         Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

                                     - 25 -
<PAGE>   28

         Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                     - 26 -
<PAGE>   29

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

                                         PIONEER NATURAL RESOURCES COMPANY
Attest:

By: /s/ LARRY PAULSON                    By: /S/ MARK L. WITHROW
   ---------------------------------        ------------------------------------
Name: Larry Paulson                      Name:  Mark L. Withrow
     -------------------------------          ----------------------------------
Title: Vice President                    Title: Executive Vice President
      ------------------------------           ---------------------------------

                                         CONTINENTAL STOCK TRANSFER & TRUST
                                         COMPANY, as Rights Agent
Attest:

By: /s/ THOMAS JENNINGS                  By: /s/ ROGER T. BERNHAMMER
   ---------------------------------        ------------------------------------
Name: Thomas Jennings                    Name: Roger T. Bernhammer
     -------------------------------          ----------------------------------
Title: Asst. Vice President              Title: Vice President
      ------------------------------           ---------------------------------

                       [Signature Page - Rights Agreement]
<PAGE>   30

                                    EXHIBIT A

                                     FORM OF
                           CERTIFICATE OF DESIGNATIONS
                                       OF
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
                                       OF
                        PIONEER NATURAL RESOURCES COMPANY
        (PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW)

         Pioneer Natural Resources Company, a Delaware corporation (the
"Corporation"), hereby certifies that the following resolution was adopted by
the board of directors of the Corporation as required by Section 151 of the
Delaware General Corporation Law at a meeting duly called and held on June 21,
2001:

         RESOLVED, that pursuant to the authority granted to and vested in the
board of directors of the Corporation (hereinafter called the "Board of
Directors") in accordance with the provisions of the Amended and Restated
Certificate of Incorporation, the Board of Directors hereby creates a series of
preferred stock, par value $0.01 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:

         Series A Junior Participating Preferred Stock:

         1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 500,000. Subject to paragraph 1 of Article Fifth of the Amended
and Restated Certificate of Incorporation, such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.

         2. Dividends and Distributions.

         (a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, cumulative dividends
payable in cash quarterly on the first day of January, April, July and October
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock in an
amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00
or (ii) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of

                                      A-1
<PAGE>   31

all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

         (b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.

         (c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.

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

         (a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a

                                      A-2
<PAGE>   32

subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         (b) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law or by the resolution or resolutions providing for the issue of any series of
Preferred Stock, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.

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

         4. Certain Restrictions.

         (a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:

                  (i) declare or pay dividends, or make any other distributions,
         on any shares of stock ranking junior (either as to dividends or upon
         liquidation, dissolution or winding up) to the Series A Preferred
         Stock;

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

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

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

                                      A-3
<PAGE>   33

         Preferred Stock, except in accordance with a purchase offer made in
         writing or by publication (as determined by the Board of Directors) to
         all holders of such shares upon such terms as the Board of Directors,
         after consideration of the respective annual dividend rates and other
         relative rights and preferences of the respective series and classes,
         shall determine in good faith will result in fair and equitable
         treatment among the respective series or classes.

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

         5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Amended and
Restated Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

         6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (a)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $1,000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (b) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(a) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

         7. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash or any other property, or any

                                      A-4
<PAGE>   34

combination thereof, then in any such case each share of Series A Preferred
Stock shall at the same time be similarly exchanged or changed into an amount
per share, subject to the provision for adjustment hereinafter set forth, equal
to 1,000 times the aggregate amount of stock, securities, cash or any other
property (payable in kind), or any combination thereof, as the case may be, into
which or for which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         8. Redemption. The shares of Series A Preferred Stock shall not be
redeemable.

         9. Rank. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.

         10. Amendment. The Amended and Restated Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.

                                      A-5
<PAGE>   35

         IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Executive Vice President and attested by the
undersigned this ____ day of _______________, 2001.

                                     PIONEER NATURAL RESOURCES COMPANY

                                     By:
                                        ----------------------------------------
                                          Mark L. Withrow
                                          Executive Vice President

                                      A-6
<PAGE>   36

                                    EXHIBIT B

                                     FORM OF
                                RIGHT CERTIFICATE

Certificate No. R-_________                                         _____ Rights

NOT EXERCISABLE AFTER JULY 31, 2011, OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

                                RIGHT CERTIFICATE

                        PIONEER NATURAL RESOURCES COMPANY

         This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of July 20, 2001 (the "Rights
Agreement"), between Pioneer Natural Resources Company, a Delaware corporation
(the "Company"), and Continental Stock Transfer & Trust Company (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 p.m., New
York, New York time, on July 31, 2011, at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, one one-thousandth of
a fully paid non-assessable share of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the "Preferred Shares"), of the Company, at a
purchase price of $95.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
July 31, 2001, based on the Preferred Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of one
one-thousandths of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

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

         This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right

                                      B-1
<PAGE>   37

Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$0.001 per Right (with respect to each holder of Rights, rounded up to the
nearest cent for the aggregate Rights held by such holder) or (ii) may be
exchanged in whole or in part for Preferred Shares or shares of the Company's
common stock, par value $0.01 per share.

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

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

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

                                      B-2
<PAGE>   38

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

Dated as of                    , 20  .
            -------------------    --

ATTEST:                                  PIONEER NATURAL RESOURCES
                                         COMPANY

                 [SEAL]

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

Countersigned:

CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, as Rights Agent

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

                                      B-3
<PAGE>   39

                    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

________________________________________________________________________________

________________________________________________________________________________
                         (Please print name and address)

Signature Guaranteed:

The signature(s) should be guaranteed by an Eligible Guarantor Institution
(e.g., banks, stockbrokers, savings and loan associations and credit unions that
are members of approved signature guarantee medallion program) as defined in
Rule 17Ad-15 of the Rules and Regulations promulgated under the Securities
Exchange Act of 1934.

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

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

                                      B-4
<PAGE>   40

             Form of Reverse Side of Right Certificate -- continued

                          FORM OF ELECTION TO PURCHASE
              (To be executed if holder desires to exercise Rights
                      represented by the Right Certificate)

TO PIONEER NATURAL RESOURCES COMPANY

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

Please insert social security or other identifying number: _____________________

________________________________________________________________________________

________________________________________________________________________________
                         (Please print name and address)

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

Please insert social security or other identifying number:______________________

________________________________________________________________________________

________________________________________________________________________________
                                          (Please print name and address)

Dated: ____________________

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

Signature Guaranteed:

The signature(s) should be guaranteed by an Eligible Guarantor Institution
(e.g., banks, stockbrokers, savings and loan associations and credit unions that
are members of approved signature guarantee medallion program) as defined in
Rule 17Ad-15 of the Rules and Regulations promulgated under the Securities
Exchange Act of 1934.

                                      B-5
<PAGE>   41

             Form of Reverse Side of Right Certificate -- continued

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

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

                                     NOTICE

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

         In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

                                      B-6
<PAGE>   42

                                    EXHIBIT C

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

         On July 19, 2001, the board of directors of Pioneer Natural Resources
Company (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $0.01
per share (the "Common Shares"), of the Company and each outstanding
exchangeable shares of Pioneer Natural Resources (Canada) Ltd., an Alberta
corporation and a wholly-owned indirect subsidiary of the Company (the
"Exchangeable Shares" and together with the Common Shares, the "Capital Stock").
The dividend is payable on July 31, 2001 (the "Record Date") to the holders of
Capital Stock of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Shares"), of the Company at a price of $95.00 per one one-thousandth of a
Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement dated as of July 20,
2001 (the "Rights Agreement"), between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent").

         Until the earlier to occur of (i) the tenth business day following a
public announcement that (A) a person (other than Southeastern Asset Management,
Inc. or any of its affiliates or associates (the "Southeastern Group") or a
permitted transferee of the Southeastern Group) has acquired beneficial
ownership of 15% or more of the outstanding Capital Stock, or (B) the
Southeastern Group has become the beneficial owner of one Capital Stock in
excess of the greater of (1) the lesser of (a) the percentage of Capital Stock
beneficially owned by the Southeastern Group as of the date of the Rights
Agreement or (b) the lowest percentage of Capital Stock beneficially owned by
the Southeastern Group thereafter or (2) 15% of the outstanding Capital Stock
(in either case, an "Acquiring Person") or (ii) the tenth business day (subject
to extension) after a person commences, or announces its intention to commence,
a tender offer or exchange offer the consummation of which would result in any
person becoming the beneficial owner of the number of shares necessary to be an
Acquiring Person (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Share or
Exchangeable Share certificates outstanding as of the Record Date, by such
Common Share or Exchangeable Share certificates with a copy of this Summary of
Rights attached thereto. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Capital
Stock. Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Capital Stock certificates issued after the Record Date, upon
transfer or new issuance of Capital Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Capital Stock, outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Capital Stock
represented by such certificate.

         As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Capital Stock as of the

                                      C-1
<PAGE>   43

close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.

         The Rights are not exercisable until the Distribution Date. The Rights
will expire on July 31, 2011 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case, as described below.

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

         The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

         Preferred Shares purchasable upon exercise of the Rights are not
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 1,000 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $1,000 per share plus an amount
equal to accrued and unpaid dividends thereon but will be entitled to an
aggregate payment of 1,000 times the payment made per Common Share. Each
Preferred Share will have 1,000 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.

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

         In the event that, after a person or a group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold
or transferred (subject to certain exceptions), proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that any person

                                      C-2
<PAGE>   44

becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
exercise price of the Right.

         At any time after a person or group has become an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Capital Stock, the board of directors of the Company may exchange
the Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one Common Share for each
two Common Shares for which each Right is then exercisable pursuant to the
provisions of the Rights Agreement (subject to adjustment).

         With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% of
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.

         At any time prior to such time as a person or group becomes an
Acquiring Person, the board of directors of the Company may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right (with respect to each
holder of Rights, rounded up to the nearest cent for the aggregate Rights held
by such holder) (the "Redemption Price"). The redemption of the Rights may be
made effective at such time on such basis and with such conditions as the board
of directors of the Company in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.

         The terms of the Rights may be amended by the board of directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Capital Stock
then known to the Company to be beneficially owned by any person or group of
affiliated or associated persons (subject to certain exceptions) and (ii) 10%,
except that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.

         Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including the right to vote or to
receive dividends.

         A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Registration Statement on Form 8-A filed
July 24, 2001. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.

                                      C-3

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