Document:

Exhibit 4.03

                                RIGHTS AGREEMENT

                                   dated as of

                                  April 4, 1997

                                     between

                                 FX ENERGY, INC.

                                       and

                            FIDELITY TRANSFER CORP.,
                                 as Rights Agent

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I  CERTAIN DEFINITIONS................................................1

         1.1 Certain Definitions..............................................1
         1.2 Determinations...................................................7

ARTICLE II  THE RIGHTS........................................................7

         2.1 Legend on Common Share Certificates..............................7
         2.2 Initial Exercise Price; Exercise of Rights; Detachment
             of Rights........................................................7
         2.3 Adjustments to Exercise Price; Number of Rights..................9
         2.4 Date on Which Exercise is Effective.............................12
         2.5 Execution, Authentication, Delivery and Dating of
             Rights Certificates.............................................12
         2.6 Registration, Registration of Transfer and Exchange.............12
         2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates.......13
         2.8 Persons Deemed Owners...........................................13
         2.9 Delivery and Cancellation of Certificates.......................13
         2.10 Agreement of Rights Holders....................................14

ARTICLE III  ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS.................................................................14

         3.1 Flip-over Transaction or Event..................................14
         3.2 Flip-in Event...................................................15
         3.3 Obligations of the Company......................................16

ARTICLE IV  THE RIGHTS AGENT.................................................16

         4.1 General.........................................................16
         4.2 Merger or Consolidation or Change of Name of Rights Agent.......17
         4.3 Duties of Rights Agent..........................................17
         4.4 Change of Rights Agent..........................................19

ARTICLE: V  REDEMPTION.......................................................19

         5.1 Redemption......................................................19
         5.2 By the Board of Directors.......................................19
         5.3 Rights Termination..............................................19

ARTICLE VI  MISCELLANEOUS....................................................20

         6.1 Expiration......................................................20
         6.2 Issuance of New Rights Certificate..............................20
         6.3 Supplements and Amendments......................................20
         6.4 Fractional Rights...............................................20
         6.5 Fractional Shares...............................................21
         6.6 Rights of Action................................................21
         6.7 Holder of Rights Not Deemed a Stockholder.......................21
         6.8 Notice of Proposed Actions......................................22
         6.9 Notices.........................................................22
         6.10 Costs of Enforcement...........................................22
         6.11 Successors.....................................................23
         6.12 Benefits of this Agreement.....................................23
         6.13 Descriptive Heading............................................23
         6.14 Governing Law..................................................23
         6.15 Counterparts...................................................23
         6.16 Severability...................................................23
         6.17 Effective Date.................................................23
         6.18 Determinations and Actions by the Board of Directors...........23

                                       i
<PAGE>

                                RIGHTS AGREEMENT

         THIS RIGHTS AGREEMENT (this "Agreement"), dated as of the 4th day of
April, 1997, is entered into by and between FX ENERGY, INC., a Nevada
corporation (the "Company"), and FIDELITY TRANSFER CORP., a Utah corporation
authorized to conduct business in the state of Utah (the "Rights Agent").

         WHEREAS, in order to preserve stockholder value, the Board of Directors
of the Company has determined that it is advisable for the Company to adopt a
stockholder rights plan (the "Rights Plan") to protect the Company and its
stockholders from abusive acquisition tactics;

         WHEREAS, in order to implement the Rights Plan, the Board of Directors
of the Company has authorized and declared a dividend distribution of one right
("Right") effective 5:00 p.m. (Mountain time) on April 4, 1997 (the "Record
Date") for each Common Share (as hereinafter defined) outstanding at the close
of business (as hereinafter defined) on the Record Date; and has authorized the
issuance of one Right in respect of each Common Share issued after the Record
Date and until the earliest to occur of the Separation Date, the Expiration Date
or the Redemption Date (as such terms are hereinafter defined);

         WHEREAS, each Right entitles the holder thereof, after the Separation
Date, to purchase securities of the Company (or in certain cases, of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein; and

         WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing to so act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein.

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

                                    ARTICLE I
                               CERTAIN DEFINITIONS

         1.1 Certain Definitions.

         For purposes of this Agreement, the following terms have the following
meanings:

                  (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 twenty percent (20%) or more of the Voting
         Shares of the Company then outstanding, but shall not include the
         Company, any Subsidiary of the Company or any employee benefit plan of
         the Company or any Subsidiary of the Company, or any Person or entity
         organized, appointed, or established by the Company or such Subsidiary
         of the Company for or pursuant to the terms of any such employee
         benefit plan. Notwithstanding the foregoing, no Person shall become an
         Acquiring Person solely as the result of a reduction in the number of
         Voting Shares outstanding due to an acquisition of Voting Shares by the
         Company which increases the proportionate number of such Voting Shares
         Beneficially Owned by such Person to twenty percent (20%) or more
         unless and until that Person shall purchase or otherwise become (as a
         result of actions by such Person or its Affiliates or Associates) the
         Beneficial Owner of any additional Voting Shares of the Company.

                  (b) "Affiliate" of, or a person "affiliated" with, a specified
         Person shall mean a Person that directly, or indirectly through one or
         more intermediaries, controls, or is controlled by, or is under common
         control with, such specified Person.

                  (c) "Associate", used to indicate a relationship with a
         specified Person, shall mean:

                           (i) any corporation, partnership or other
                  organization of which such specified Person is an officer or
                  partner;

                                       1
<PAGE>

                           (ii) any trust or other estate in which such
                  specified Person has a substantial beneficial interest or as
                  to which such specified Person serves as trustee or in a
                  similar fiduciary capacity;

                           (iii) any relative or spouse of such specified Person
                  or any person of the opposite sex to whom such specified
                  Person is married or with whom such specified Person is living
                  in a conjugal relationship outside marriage, or any relative
                  of such spouse or other person, who has the same home as such
                  specified Person or who is a director or officer of the
                  Company or an Affiliate of the Company;

                           (iv) any Person who is a director, officer, partner
                  or trustee of such specified Person or of any corporation,
                  partnership or other organization (other than the Company or
                  any wholly-owned Subsidiary of the Company) which is an
                  Affiliate or Associate of such specified Person; and

                           (v) any corporation of which such specified Person
                  beneficially owns, directly or indirectly, voting securities
                  carrying more than 10 percent of the rights attaching to all
                  voting securities of such corporation for the time being
                  outstanding.

                  (d) A Person shall be deemed the "Beneficial Owner", and to
         have "Beneficial Ownership", of and to "Beneficially Own" any
         securities:

                           (i) as to which such Person or any of such Person's
                  Affiliates or Associates is or may be deemed to be the
                  beneficial owner pursuant to Rule 13d-3 or 13d-5 under the
                  Exchange Act (or pursuant to any comparable or successor laws
                  or regulations or, if such Rules shall be rescinded and there
                  shall be no comparable or successor laws or regulations,
                  pursuant to Rule 13d-3 or 13d-5 as in effect on the date of
                  this Agreement); and

                           (ii) as to which such Person or any of such Person's
                  Affiliates or Associates has the right to become Beneficial
                  Owner (whether such right is exercisable immediately or only
                  after the passage of time or only after the occurrence of
                  changes in market prices) pursuant to any contract, agreement,
                  arrangement or understanding, or upon the exercise of any
                  rights (other than the Rights), whether conversion rights,
                  exchange rights, warrants or options, or otherwise;

                  Provided, however, that a Person shall not be deemed the
         "Beneficial Owner", or to have "Beneficial Ownership", of or to
         "Beneficially Own", any security:

                           (i) tendered pursuant to a tender or exchange offer
                  or Takeover Bid made by such Person or any of such Person's
                  Affiliates or Associates until the earliest of such tendered
                  security being accepted for payment or exchange or being taken
                  up and paid for; or

                           (ii) as to which such Person's Affiliates or
                  Associates have or shares the voting power or has the power to
                  direct the voting pursuant to a revocable proxy given in
                  response to a public proxy solicitation made pursuant to and
                  in accordance with, the applicable rules and regulations under
                  the Securities Exchange Act of 1934, as amended, except if
                  such power (or the arrangement relating thereto) is then
                  reportable under Item 6 of Schedule 13D under the Securities
                  Exchange Act of 1934, as amended (or any similar provision of
                  a comparable or successor report).

                  For purposes of this Agreement, in determining the percentage
         of the outstanding Voting Shares with respect to which a Person is the
         Beneficial Owner, all Voting Shares as to which such Person is deemed
         the Beneficial Owner shall be deemed outstanding.

                  (e) "Board of Directors" shall mean, as applicable, the Board
         of Directors of the Company and/or any of its Subsidiaries.

                                       2
<PAGE>

                  (f) "Business Day" shall mean any day other than a Saturday,
         Sunday or a day on which banking institutions in the state of Utah are
         authorized or obligated by law or executive order to close.

                  (g) "Close of Business" on any given date shall mean the time
         on such date (or, if such date is not a Business Day, the time on the
         next succeeding Business Day) at which the office of the transfer agent
         for the Common Shares of the Company in Salt Lake City, Utah (or, after
         the Separation Date, the offices of the Rights Agent, if different from
         such transfer agent) is closed to the public.

                  (h) "Common Shares", when used with reference to the Company,
         shall mean the shares of common stock, par value $0.001 per share (as
         such par value may be changed from time to time), of the Company.
         "Common Shares", when used with reference to any Person other than the
         Company, shall mean the shares of capital stock (or equity interest)
         with the most significant voting or decision-making power with respect
         to management or control of such other Person or, if such other Person
         is a Subsidiary of another Person, the Person or Persons which
         ultimately controls such first-mentioned Person.

                  (i) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (j) "Exercise Price" shall mean, as of any date, the price at
         which a holder may purchase the securities issuable upon exercise of
         one whole Right. Until adjustment thereof in accordance with the terms
         hereof, the Exercise Price shall equal One Hundred Dollars ($100.00),
         payable in lawful money of the United States of America.

                  (k) "Expiration Date" shall mean the close of business on the
         tenth-year anniversary of the date hereof.

                  (l) "Flip-in Event" shall mean a transaction in which any
         Person shall become an Acquiring Person; provided, however, that the
         term "Flip-in Event" shall not include any transaction or event that
         constitutes a "Flip-over Transaction or Event."

                  (m) "Flip-over Entity" shall mean:

                           (i) in the case of any transaction described in
                  clause (A) of the first sentence of Section l.l(n) hereof: (A)
                  the Person that is the issuer of the securities into which
                  Common Shares of the Company are converted in such merger or
                  consolidation, or, if there is more than one such issuer, that
                  issuer the Common Shares of which have the greatest Market
                  Price, or (B) if no securities are so issued, (x) the Person
                  that is the other party to the merger or consolidation and
                  that survives such merger or consolidation, or, if there is
                  more than one such Person, that Person the Common Shares of
                  which have the greatest Market Price, or (y) if the Person
                  that is the other party to the merger or consolidation does
                  not survive the merger or consolidation, the Person that does
                  survive the merger or consolidation (including the Company if
                  it survives); and

                           (ii) in the case of any transaction described in
                  clause (B) of the first sentence of Section l.l(n) hereof, the
                  Person that is the party receiving the greatest portion of the
                  assets or earning power transferred pursuant to such
                  transaction or transactions, or, if each Person that is a
                  party to such transaction or transactions receives the same
                  portion of the assets or earning power so transferred or if
                  the Person receiving the greatest portion of the assets or
                  earning power cannot be determined, whichever of such Persons
                  is the issuer of Common Shares having the greatest Market
                  Price of shares outstanding; provided, however, that, in any
                  such case, if the Common Shares of such Person are not at such
                  time and have not been continuously over the preceding
                  12-month period registered under Section 12 of the Exchange
                  Act and such Person is a direct or indirect Subsidiary of
                  another Person the Common Shares of which are and have been so
                  registered, the term "Flip-over Entity" shall refer to such
                  other Person, or if such Person is a Subsidiary, directly or
                  indirectly, of more than one Person, the Common Shares of all
                  of which are and have been so registered, the term "Flip-over
                  Entity" shall refer to whichever of such Persons is the issuer
                  of the Common Shares having the greatest Market Price of the
                  shares outstanding.

                                       3
<PAGE>

                  (n) "Flip-over Transaction or Event" shall mean (A) a
         transaction in which, directly or indirectly, the Company shall
         consolidate with, merge with or into, or enter into an arrangement
         with, any other Person (other than a wholly-owned Subsidiary of the
         Company), or any other Person (other than a wholly-owned Subsidiary of
         the Company) shall consolidate with, merge with or into, or enter into
         an arrangement with the Company, and, in connection therewith, all or
         part of the outstanding Common Shares of the Company shall be changed
         in any way, reclassified or converted into or exchanged for shares or
         other securities or cash or any other property, or (B) a transaction or
         series of transactions in which, directly or indirectly, the Company
         shall sell or otherwise transfer (or one or more of its Subsidiaries
         shall sell or otherwise transfer) assets:

                           (i) aggregating more than fifty percent (50%) of the
                  assets (measured by either book value or Market Price,
                  whichever results in the greater percentage); or

                           (ii) which generated during the Company's last
                  completed fiscal year or is expected to generate in the
                  Company's then current fiscal year more than fifty percent
                  (50%) of the operating income or cash flow 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) or to two or more such Persons which are
                  affiliated or otherwise acting jointly or in concert.

                  (o) "Market Price" of any securities (including the Rights) on
         any date of determination shall mean the average of the daily closing
         prices per share (or right) of such securities (determined as described
         below) on each of the 20 consecutive Trading Days through and including
         the Trading Day immediately preceding such date; provided, however,
         that if an event of a type analogous to any of the events described in
         Section 2.3 hereof shall have caused the closing prices used to
         determine the Market Price on any Trading Days not to be fully
         comparable with the closing price on such date of determination, each
         such closing price so used shall be appropriately adjusted in a manner
         analogous to the applicable adjustment provided for in Section 2.3
         hereof in order to make it fully comparable with the closing price on
         such date of determination. The closing price per share of any
         securities on any date shall be (i) the last sale price, regular way,
         or, in case no such sale takes place on such date, the average of the
         closing bid and asked prices, regular way, for each share of such
         securities as reported in the principal consolidated transaction
         reporting system with respect to securities listed or admitted to
         trading on any national securities exchange, (ii) if the securities are
         not listed or admitted to trading on any national securities exchange,
         the closing board lot sale price, (iii) if for any reason none of such
         prices is available on such day or the securities are not listed or
         admitted to trading on any national securities exchange, the average of
         the high bid and low asked prices for each share of such securities in
         the over-the-counter market, as reported by the Nasdaq Stock Market of
         the National Association of Securities Dealers, Inc. ("Nasdaq"), or
         such other system then in use, or (iv) if on any such date the
         securities 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 securities selected in good faith by the
         Board of Directors of the Company; provided, however, that if on any
         such date the securities are not traded in the over the-counter market,
         the closing price per share of such securities on such date shall mean
         the fair value per share of securities on such date as determined in
         good faith by the Board of Directors of the Company, after consultation
         with a nationally recognized investment banking firm with respect to
         the fair value per share of such securities.

                  (p) "Offer" shall mean a written proposal delivered to the
         Company by any Person or Persons who (x) Beneficially Own in the
         aggregate one percent (1%) or less of the outstanding Common Shares of
         the Company and have not within the twelve month period preceding the
         delivery of such written proposal Beneficially Owned in the aggregate
         in excess of one percent (1%) of the outstanding Common Shares of the
         Company and (y) within said 12 month period have not disclosed, or
         caused the disclosure of, any intention which would result in the
         acquisition or influence of control of the Company (any such persons
         meeting the conditions specified in clauses x and y, an "Offeror"), and
         which proposal:

                           (i) provides for acquisition of all of the
                  outstanding Voting Shares held by any Person other than the
                  Offeror and its Affiliates for cash at the same specified
                  price;

                                       4
<PAGE>

                           (ii) is, in the opinion of a nationally recognized
                  investment banking firm retained by the Offeror, fair to the
                  holders of Voting Shares other than the Offeror and its
                  Affiliates and is at a price which is not less than the book
                  value;

                           (iii) states that such offer shall remain open for at
                  least 90 days and shall include all Voting Shares outstanding
                  as of the date of the proposal or issued thereafter pursuant
                  to contracts in effect at the date of the proposal and that
                  the Offeror has obtained written financing commitments from
                  recognized financing sources, and/or has on hand, cash or cash
                  equivalents, for the full amount of all financing necessary to
                  consummate the offer; and

                           (iv) requests the Company to call a special meeting
                  of the holders of Voting Shares for the purpose of voting on a
                  resolution requesting the Board of Directors to accept such
                  offer and contains a written agreement of the Offeror to pay
                  (or share with any other Offeror) at least one-half of the
                  Company's costs of preparing and mailing proxy material for
                  its own solicitation.

                  (q) "Offer to Acquire" shall include:

                           (i) an offer to purchase, or a solicitation of an
                  offer to sell Voting Shares; and

                           (ii) an acceptance of an offer to sell Voting Shares,
                  whether or not such offer to sell has been solicited; or

         any combination thereof, and the Person accepting an offer to sell
         shall be deemed to be making an offer to acquire to the Person that
         made the offer to sell.

                  (r) "Offeror's Securities" means Voting Shares Beneficially
         Owned on the date of an Offer to Acquire by any Person who makes a
         Takeover Bid or by any Person acting jointly or in concert with such
         Person.

                  (s) "Person" shall mean any individual, firm, partnership,
         association, group (as such term is used in Rule 13d-5 under the
         Exchange Act as in effect on the date of this Agreement), corporation,
         trust, business trust or other entity and shall include any successor
         (by merger or otherwise) of such entity.

                  (t) "Preferred Shares" shall mean the currently authorized but
         unissued shares of Series A Preferred Stock, par value $0.001 per
         share, of the Company, having the rights and preferences set forth in
         the form of Designation of Rights, Privileges, and Preferences attached
         hereto as Exhibit A.

                  (u) "Redemption Date" means the date of the action of the
         Board of Directors of the Company ordering the redemption of the Rights
         Pursuant to Section 5.2 hereof.

                  (v) "Redemption Price" means a price of $0.01 per Right,
         subject to adjustment as set forth in Article 5 hereof.

                  (w) "Right" means the right to purchase one one-hundredth of a
         Preferred Share at the Exercise Price, subject to adjustment, or the
         right to purchase, exchange or receive other securities or assets of
         the Company or another issuer as set forth herein.

                  (x) "Right Certificate" means a certificate evidencing a Right
         or Rights, substantially in the form of Exhibit B hereto.

                                       5
<PAGE>

                  (y) "Rights Redemption Committee" means a committee of the
         Board of Directors, designated as the "Rights Redemption Committee."
         consisting of at least three Continuing Directors, at least a majority
         of whom are not employees of the Company. For the purpose of this
         definition, the term "continuing director" means any duly constituted
         director of the Company who was a director prior to the time the
         Interested Stockholder, as defined in this Agreement, became such, and
         any other director whose election or appointment as a director was
         recommended for approval by a majority of the Continuing Directors. For
         the purposes of this definition, the term "employee" means any person
         who, at the time of action by such committee,. is or who has been
         during the preceding 12 months a full-time employee of the Company. In
         the event of the failure or refusal of the Board of Directors to duly
         appoint a Rights Redemption Committee, then the persons constituting
         the Audit Committee of the Board of Directors shall also constitute the
         Rights Redemption Committee.

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

                  (aa) "Separation Date" shall mean the close of business on the
         earliest of (i) the tenth day (or such later day as is determined by
         unanimous vote of the Board of Directors and publicly announced) after
         the Stock Acquisition Date (provided, however, that if prior to the
         date which would otherwise be the Separation Date, the Acquiring Person
         whose becoming such shall have caused the Stock Acquisition Date to
         occur, shall cease to be an Acquiring Person and shall be the
         Beneficial Owner of not more than 5% of the Common Stock of the
         Company, as indicated in a public announcement or public filing by such
         Person, then for purposes of this Section l.l(z), the Stock Acquisition
         Date shall be deemed not to have occurred), or (ii) the tenth day after
         the date of the commencement of, or first public announcement of the
         intent of any Person (other than the Company or any Subsidiary of the
         Company, or any Person or entity organized, appointed or established by
         the Company or such Subsidiary of the Company for or pursuant to any
         tender or exchange offer plan) to commence, a tender or exchange offer
         or Takeover Bid to acquire (when added to any Voting Shares as to which
         such Person is the Beneficial Owner immediately prior to such tender or
         exchange offer or Takeover Bid) Beneficial Ownership of twenty percent
         (20%) or more of the outstanding Voting Shares (provided that, if the
         foregoing results in the Separation Date being prior to the Record
         Date, the Separation Date shall be the Record Date and provided further
         that, if any tender or exchange offer or Takeover Bid referred to in
         clause (ii) of this Section l.l(z) expires, is canceled, terminated or
         otherwise withdrawn prior to the date which would otherwise be the
         Separation Date, such offer shall be deemed, for purposes of this
         Section l.l(z), never to have been made), or (iii) such later date as
         may be fixed by the Board of Directors from time to time by notice to
         the Rights Agent and publicly announced by the Company.

                  (bb) "Stock Acquisition Date" shall mean the first date of
         public announcement or filing by the Company or an Acquiring Person
         that an Acquiring Person has become such, whether or not the term
         "Acquiring Person" is used in fact in such announcement.

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

                  (dd) "Takeover Bid" means an Offer to Acquire Voting Shares,
         where the Voting Shares subject to the Offer to Acquire together with
         the Offeror's Securities, constitute in the aggregate twenty percent
         (20%) or more of the outstanding Voting Shares at the date of the Offer
         to Acquire.

                  (ee) "Trading Day", when used with respect to any securities,
         shall mean a day on which the principal securities exchange on which
         such securities are listed or admitted to trading is open for the
         transaction of business or, if the securities are not listed or
         admitted to trading on any securities exchange, a Business Day.

                                       6
<PAGE>

                  (ff) "Voting Shares" shall mean (i) for purposes of
         determining the number of outstanding Voting Shares of the Company,
         only the Common Shares of the Company and any other shares of capital
         stock of the Company entitled to vote generally in the election of
         directors; and (ii) for purposes of determining the number or
         percentage of Voting Shares Beneficially Owned by any Person, all of
         the following shares Beneficially Owned by such Person: (x) Common
         Shares of the Company and (y) shares of the capital stock of the
         Company entitled to vote generally in the election of directors.

         1.2 Determinations.

         Any determination required to be made by the Board of Directors of the
Company for purposes of applying the definitions contained in this Article 1
shall be made by the Board of Directors in its good faith judgment, which
determination shall be conclusive and binding on the the Rights Redemption
Committee, the Rights Agent, and the holders of the Rights.

                                   ARTICLE II
                                   THE RIGHTS

         2.1 Legend on Common Share Certificates.

         Certificates for the Common Shares issued after the Record Date but
prior to the close of business on the Separation Date shall evidence one Right
for each Common Share represented thereby and shall have impressed on, printed
on, written on or otherwise affixed to them, the following legend:

         Until the Separation Date (as defined in the Rights Agreement referred
         to below), this certificate also evidences and entitles the holder
         thereof to certain Rights as set forth in a Rights Agreement, dated as
         of the 4th day of April, 1997 (the "Rights Agreement"), between FX
         Energy, Inc. (the "Company"), and Fidelity Transfer Corp., as Rights
         Agent, the terms of which are hereby incorporated herein by reference
         and a copy of which is on file at the principal executive office of the
         Company. Under certain circumstances, as set forth in the Rights
         Agreement, such Rights may be redeemed by the Company, may expire, may
         become void (if, in certain cases, they are "Beneficially Owned" by an
         "Acquiring Person", as such terms are defined in the Rights Agreement,
         or a transferee thereof) or may be evidenced by separate certificates
         and may no longer be evidenced by this certificate. The Company will
         mail or arrange for the mailing of a copy of the Rights Agreement to
         the holder of this certificate without charge within five days after
         the receipt of a written request therefor.

Certificates representing Common Shares of the Company that are issued and
outstanding at the Record Date shall evidence one Right for each Common Share
evidenced thereby notwithstanding the absence of the foregoing legend.

         2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.

                  (a) Subject to adjustment as herein set forth, each Right will
         entitle the holder thereof, after the Separation Date, to purchase,
         subject to adjustment from time to time as provided herein, one
         one-hundredth (1/100) of a Preferred Share at the Exercise Price.

                  (b) Until the Separation Date:

                           (i) no Right may be exercised; and

                           (ii) each Right will be evidenced by the certificate
                  for the associated Common Share and will be transferable only
                  together with, and will be transferred by a transfer of, such
                  associated Common Share. Notwithstanding any other provision
                  of this Agreement, any Rights held by the Company or any of
                  its Subsidiaries shall be void.

                                       7
<PAGE>

                  (c) After the Separation Date and prior to the Expiration
         Date, the Rights, unless earlier redeemed in accordance with the
         provisions of Article 5 hereof, (i) may be exercised and (ii) will be
         transferable independent of Common Shares. Promptly following the
         Separation Date, the Rights Agent will mail to each holder of record of
         Common Shares as of the Separation Date, at such holder's address as
         shown by the records of the Transfer Agent and Registrar of the
         Company's Common Stock (the Company hereby agreeing to cause such
         Transfer Agent and Registrar, if different from the Rights Agent, to
         furnish copies of such records to the Rights Agent for this purpose)
         (x) a Rights Certificate appropriately completed, representing the
         number of Rights held by such holder at the Separation Date and having
         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 law or with any rule or regulation
         made pursuant thereto or with any rule or regulation of any stock
         exchange or quotation system on which the Rights may from time to time
         be listed or traded, or to conform to usage, and (y) a disclosure
         statement describing the Rights.

                  (d) Rights may be exercised on any Business Day after the
         Separation Date and prior to the Expiration Date by submitting to the
         Rights Agent the Rights Certificate evidencing such Rights with an
         Election to Exercise (an "Election to Exercise") substantially in the
         form attached to the Rights Certificate duly completed, accompanied by
         payment in cash or by certified check or money order payable to the
         order of the Company, of a sum equal to the Exercise Price multiplied
         by the number of Rights being exercised and a sum sufficient to cover
         any transfer tax or charge which may be payable in respect of any
         transfer involved in the transfer or delivery of Rights Certificates or
         the issuance or delivery of certificates for whole or fractional
         Preferred Shares in a name other than that of the holder of the Rights
         being exercised.

                  (e) Upon receipt of a Rights Certificate, with an Election to
         Exercise accompanied by payment as set forth in Section 2.2(d) above,
         the Rights Agent will thereupon promptly:

                           (i) requisition from any transfer agent of the
                  capital stock of the Company certificates for the number of
                  whole or fractional Preferred Shares to be purchased (the
                  Company hereby irrevocably authorizing and directing such
                  transfer agent to comply with all such requisitions);

                           (ii) as provided in Section 6.5(b) hereof, at the
                  election of the Company, cause depository receipts to be
                  issued in lieu of fractional shares;

                           (iii) when appropriate, requisition from the Company
                  the amount of cash to be paid in lieu of issuance of
                  fractional shares in accordance with Section 6.5(b) hereof;

                           (iv) when appropriate, requisition from the Company
                  the amount of cash or other consideration to be paid in lieu
                  of capital stock as determined pursuant to the terms hereof;
                  and

                           (v) after receipt of such certificates, depository
                  receipts and/or cash or other consideration, deliver the same
                  to or upon the order of the registered holder of such Rights
                  Certificate, registered (in the case of certificates or
                  depository receipts) in such name or names as may be
                  designated by such holder.

                  (f) In case the holder of any Rights shall exercise less than
         all the Rights evidenced by such holder's Rights Certificate, a new
         Rights Certificate evidencing the Rights remaining unexercised will be
         issued by the Rights Agent to such holder or to such holder's duly
         authorized assigns.

                  (g) The Company covenants and agrees that it will:

                           (i) cause to be reserved and kept available out of
                  its authorized and unissued shares of Preferred Stock and
                  shares of Common Stock, respectively, or out of authorized and
                  issued Preferred Shares and shares of Common Stock,
                  respectively, held in its treasury, such number of Preferred
                  Shares and shares of Common Stock, respectively, as will from
                  time to time be sufficient to permit the exercise in full of
                  all outstanding Rights;

                                       8
<PAGE>

                           (ii) not effect any amendment to the Designation of
                  Rights, Privileges, and Preferences for the Preferred Shares
                  or any amendment to the articles of incorporation of the
                  Company, which would materially and adversely affect the
                  rights, privileges or powers of the Preferred Shares
                  (regardless of whether there are then any holders of Preferred
                  Shares), without the prior approval of the holders of
                  two-thirds or more of the then outstanding Preferred Shares
                  and the prior written consent of the holders of two-thirds or
                  more of the then outstanding Rights that are not Beneficially
                  Owned by any Acquiring Person. (For purposes of the taking of
                  any action by the holders of Rights, the Board of Directors of
                  the Company may establish a record date and may call and hold
                  a meeting of such holders or seek their consent to action by
                  the requisite number thereof in writing substantially in
                  accordance with the procedure applicable to action to be taken
                  by the holders of Preferred Shares and in accordance with
                  applicable law);

                           (iii) take all such action as may be necessary and
                  within its power to ensure that all Preferred Shares delivered
                  upon exercise of Rights shall, at the time of delivery of the
                  certificates for such Preferred Shares (subject to payment of
                  the Exercise Price), be duly and validly authorized, executed,
                  issued and delivered, and fully paid and nonassessable;

                           (iv) take all such action as may be necessary and
                  within its power to comply with any applicable requirements of
                  the Securities Act or the Exchange Act or the rules and
                  regulations thereunder and any other applicable law, rule or
                  regulation, in connection with the issuance and delivery of
                  the Rights Certificates and the issuance of any Preferred
                  Shares upon exercise of Rights;

                           (v) use its best efforts to cause all Preferred
                  Shares issued upon exercise of Rights to be listed on a
                  national securities exchange upon issuance; and

                           (vi) pay when due and payable any and all federal and
                  state transfer taxes (but not any income taxes of the holder
                  or exercising holder or any liability of the Company to
                  withhold tax) and charges which may be payable in respect of
                  the original issuance or delivery of the Rights Certificates;
                  provided that, the Company shall not be required to pay any
                  transfer tax or charge which may be payable in respect of any
                  transfer involved in the transfer or delivery of Rights
                  Certificates or the issuance or delivery of certificates for
                  shares in a name other than that of the holder of the Rights
                  being transferred or exercised.

         2.3 Adjustments to Exercise Price; Number of Rights.

                  (a) In the event the Company shall at any time after the
         Record Date and prior to the Expiration Date:

                           (i) declare or pay a dividend on the Common Shares
                  payable in Common Shares (or other capital stock or securities
                  exchangeable for or convertible into or giving a right to
                  acquire Common Shares or other capital stock) other than
                  pursuant to any optional stock dividend program:

                           (ii) subdivide or split the then outstanding Common
                  Shares into a greater number of Common Shares;

                           (iii) combine or consolidate the then outstanding
                  Common Shares into a smaller number of Common Shares or effect
                  a reverse split of the outstanding Common Shares; or

                           (iv) issue any Common Shares (or other capital stock
                  or securities exchangeable for or convertible into or giving a
                  right to acquire Common Shares or other capital stock) in
                  respect of, in lieu of or in exchange for, existing Common
                  Shares in a reclassification or recapitalization;

                                       9
<PAGE>

         then, and in each such event, the Exercise Price and the number of
         Rights outstanding, or, if the payment or effective date therefor shall
         occur after the Separation Date, the Preferred Shares purchasable upon
         exercise of Rights, shall be adjusted in the manner set forth below. If
         the Exercise Price and number of Rights outstanding are to be adjusted,
         (x) the Exercise Price in effect after such adjustment will be equal to
         the Exercise Price in effect immediately prior to such adjustment
         divided by the number of Common Shares (or other capital stock) (the
         "Expansion Factor") that a holder of one Common Share immediately prior
         to such dividend, subdivision, combination or issuance would hold
         thereafter as a result thereof, and (y) each Right held prior to such
         adjustment will become that number of Rights equal to the Expansion
         Factor, and the adjusted number of Rights will be deemed to be
         distributed among the Common Shares with respect to which the original
         Rights were associated (if they remain outstanding) and the shares
         issued in respect of such dividend, subdivision, combination or
         issuance, so that each such Common Share (or other capital stock) will
         have exactly one Right associated with it. If the Preferred Shares
         purchasable upon exercise of Rights are split, subdivided, or combined,
         or if any dividend (whether of cash or securities) is declared with
         respect thereto, the Preferred Shares purchasable upon exercise of each
         Right after such event will be automatically adjusted to be that number
         of the Preferred Shares that a holder of the Preferred Shares
         purchasable upon exercise of one Right (regardless of whether a Right
         shall then be exercisable) immediately prior to such split,
         subdivision, combination, or dividend would hold thereafter as a result
         thereof. If after the Record Date and prior to the Expiration Date, the
         Company shall issue any shares of capital stock other than Common
         Shares in a transaction of a type described in the first sentence of
         this Section 2.3(a), shares of such capital stock shall be treated
         herein as nearly equivalent to Common Shares as may be practicable and
         appropriate under the circumstances, and the Company and the Rights
         Agent agree to amend this Agreement in order to effect such treatment,
         and the Company will not consolidate with, merge with or into, or enter
         into an arrangement with, any other Person unless such Person agrees to
         be bound by the terms of an amendment effecting such treatment

                  In the event the Company shall at any time after the Record
         Date and prior to the Separation Date issue any Common Shares otherwise
         than in a transaction referred to in the preceding paragraph, each such
         Common Share so issued shall automatically have one new Right
         associated with it, which Right shall be evidenced by the certificate
         representing such Share.

                  (b) In the event the Company shall at any time after the
         Record Date and prior to the Separation Date fix a record date for the
         making of a distribution to all holders of Common Shares of rights or
         warrants entitling them to subscribe for or purchase Common Shares (or
         securities convertible into or exchangeable for or carrying a right to
         purchase or subscribe for Common Shares) at a price per Common Share
         (or, if a security convertible into or exchangeable for or carrying a
         right to purchase or subscribe for Common Shares), having a conversion,
         exchange or exercise price (including the price required to be paid to
         purchase such convertible or exchangeable security or right per share)
         less than the Market Price per Common Share on such record date, the
         Exercise Price shall be adjusted. The Exercise Price in effect after
         such record date will equal the Exercise Price in effect immediately
         prior to such record date multiplied by a fraction, of which the
         numerator shall be the number of Common Shares outstanding on such
         record date plus the number of Common Shares which the aggregate
         offering price of the total number of Common Shares so to be offered
         (and/or the aggregate initial conversion, exchange or exercise price of
         the convertible or exchangeable securities or rights so to be offered
         (including the price required to be paid to purchase such convertible
         or exchangeable securities or rights)) would purchase at such Market
         Price and of which the denominator shall be the number of Common Shares
         outstanding on such record date plus the number of additional Common
         Shares to be offered for subscription or purchase (or into which the
         convertible or exchangeable securities or rights so to be offered are
         initially convertible, exchangeable or exercisable). 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. For purposes of this Agreement, the granting of the right to
         purchase Common Shares (whether from treasury shares or otherwise)
         pursuant to any dividend or interest reinvestment plan and/or any
         Common Share purchase plan providing for the reinvestment of dividends
         or interest payable on securities of the Company and/or the investment
         of periodic optional payments and/or employee benefit or similar plans
         (so long as such right to purchase is in no case evidenced by the
         delivery of rights or warrants) shall not be deemed to constitute an
         issue of rights or warrants by the Company; provided, however, that, in
         the case of any dividend or interest reinvestment plan, the right to
         purchase Common Shares is at a price per share of not less than 90
         percent of the current market price per share (determined as provided
         in such plans) of the Common Shares.

                                       10
<PAGE>

                  (c) In the event the Company shall at any time after the
         Record Date and prior to the Separation Date fix a record date for the
         making of a distribution to all holders of Common Shares of evidences
         of indebtedness or assets (other than a regular periodic cash dividend
         or a dividend paid in Common Shares) or rights or warrants (excluding
         those referred to in Section 2.3(b)), the Exercise Price shall be
         adjusted. The Exercise Price in effect after such record date will
         equal the Exercise Price in effect immediately prior to such record
         date less the fair market value (as determined in good faith by the
         Board of Directors of the Company) of the portion of the assets,
         evidences of indebtedness, rights or warrants so to be distributed
         applicable to the securities purchasable upon exercise of one Right.

                  (d) Each adjustment made pursuant to this Section 2.3 shall be
         made as of:

                           (i) the record date for the applicable dividend or
                  distribution, in the case of an adjustment made pursuant to
                  subsection (b) or (c) above; and

                           (ii) the payment or effective date for the applicable
                  dividend, subdivision, change, combination or issuance, in the
                  case of an adjustment made pursuant to subsection (a) above.

                  (e) In the event the Company shall at any time after the
         Record Date and prior to the Separation Date issue any shares of
         capital stock (other than Common Shares), or rights or warrants to
         subscribe for or purchase any such capital stock, or securities
         convertible into or exchangeable for any such capital stock, in a
         transaction referred to in clause (a)(i) or (a)(iv) above, if the Board
         of Directors acting in good faith determines that the adjustments
         contemplated by clauses (a), (b) and (c) above in connection with such
         transaction will not appropriately protect the interests of the holders
         of Rights, the Company may determine what other adjustments to the
         Exercise Price, number of Rights and/or Preferred Shares purchasable
         upon exercise of Rights would be appropriate and, notwithstanding
         clauses (a), (b) and (c) above, such adjustments, rather than the
         adjustments contemplated by clauses (a), (b) and (c) above, shall be
         made. The Company and the Rights Agent shall amend this Agreement as
         appropriate to provide for such adjustments.

                  (f) Each adjustment to the Exercise Price made pursuant to
         this Section 2.3 shall be calculated to the nearest cent. Whenever an
         adjustment to the Exercise Price is made pursuant to this Section 2.3,
         the Company shall

                           (i) promptly prepare a certificate setting forth such
                  adjustment and a brief statement of the facts accounting for
                  such adjustment; and

                           (ii) promptly file with the Rights Agent and with
                  each transfer agent for the Common Shares a copy of such
                  certificate; and

                           (iii) mail a brief summary thereof to each holder of
                  Rights.

                  (g) Irrespective of any adjustment or change in the securities
         purchasable upon exercise of the Rights, the Rights Certificates
         theretofore and thereafter issued may continue to express the
         securities so purchasable which were expressed in the initial Rights
         Certificates issued hereunder.

         2.4 Date on Which Exercise is Effective.

         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 such Preferred Shares represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered for exercise and payment of the
Exercise Price for such Rights (and any applicable transfer taxes and other
governmental charges payable by the exercising holder hereunder) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Share transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such Preferred Shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the Preferred Share transfer books of the Company are open.

                                       11
<PAGE>

         2.5 Execution, Authentication, Delivery and Dating of Rights
Certificates.

                  (a) The Rights Certificates shall be executed on behalf of the
         Company by its Chairman of the Board, President or one of its Executive
         Vice Presidents, attested by its Secretary or one of its Assistant
         Secretaries. The signature of any of these officers on the Rights
         Certificate may be manual or facsimile. Rights Certificates bearing the
         manual or facsimile signatures of individuals who were at any time the
         proper officers of the Company shall bind the Company, notwithstanding
         that such individuals or any of them have ceased to hold such offices
         prior to the countersignature and delivery of such Rights Certificates.

         Promptly after the Company learns of the Separation Date, the Company
         will notify the Rights Agent of such Separation Date and will deliver
         Rights Certificates executed by the Company to the Rights Agent for
         countersignature and the Rights Agent shall countersign (manually or by
         facsimile signature in a manner satisfactory to the Company) and
         deliver such Rights Certificates to the holders of the Rights pursuant
         to Section 2.2(c) hereof. No Rights Certificate shall be valid for any
         purpose until countersigned by the Rights Agent as aforesaid.

                  (b) Each Rights Certificate shall be dated the date of
         countersignature thereof.

         2.6 Registration, Registration of Transfer and Exchange.

                  (a) The Company will cause to be kept a register (the "Rights
         Register") in which, subject to such reasonable regulations as it may
         prescribe, the Company will provide for the registration and transfer
         of Rights. The Rights Agent is hereby appointed "Rights Registrar" for
         the purpose of maintaining the Rights Register for the Company and
         registering Rights and transfers of Rights as herein provided. In the
         event that the Rights Agent shall cease to be the Rights Registrar, the
         Rights Agent will have the right to examine the Rights Register at all
         reasonable times.

         After the Separation Date and prior to the Expiration Date, upon
         surrender for registration of transfer or exchange of any Rights
         Certificate, and subject to the provisions of Section 2.6(c) below, the
         Company will execute, and the Rights Agent will countersign and
         deliver, in the name of the holder or the designated transferee or
         transferees, as required pursuant to the holder's instructions, one or
         more new Rights Certificates evidencing the same aggregate number of
         Rights as did the Rights Certificates so surrendered.

                  (b) All Rights issued upon any registration of transfer or
         exchange of Rights Certificates shall be the valid obligations of the
         Company, and such Rights shall be entitled to the same benefits under
         this Agreement as the Rights surrendered upon such registration of
         transfer or exchange.

                  (c) Every Rights Certificate surrendered for registration of
         transfer or exchange shall be duly endorsed, or be accompanied by a
         written instrument of transfer in form satisfactory to the Company or
         the Rights Agent, as the case may be, duly executed by the holder
         thereof or such holder's attorney duly authorized in writing. As a
         condition to the issuance of any new Rights Certificate under this
         Section 2.6, the Company may require the payment of a sum sufficient to
         cover any tax or other governmental charge that may be imposed in
         relation thereto.

         2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates.

                  (a) If any mutilated Rights Certificates is surrendered to the
         Rights Agent prior to the Expiration Date, the Company shall execute
         and the Rights Agent shall countersign and deliver in exchange therefor
         a new Rights Certificate evidencing the same number of Rights as did
         the Rights Certificate so surrendered.

                                       12
<PAGE>

                  (b) If there shall be delivered to the Company and the Rights
         Agent prior to the Expiration Date (i) evidence to their satisfaction
         of the destruction, loss or theft of any Rights Certificate and (ii)
         such security or indemnity as may be required by them to save each of
         them and any of their agents harmless, then, in the absence of notice
         to the Company or the Rights Agent that such Rights Certificate has
         been acquired by a bona fide purchaser, the Company shall execute and
         upon its request the Rights Agent shall countersign and deliver, in
         lieu of any such destroyed, lost or stolen Rights Certificate, a new
         Rights Certificate evidencing the same number of Rights as did the
         Rights Certificate so destroyed, lost or stolen .

                  (c) As a condition to the issuance of any new Rights
         Certificate under this Section 2.7, the Company may require the payment
         of a sum sufficient to cover any tax or other governmental charge that
         may be imposed in relation thereto and any other expenses (including
         the fees and expenses of the Rights Agent) connected therewith.

                  (d) Every new Rights Certificate issued pursuant to this
         Section 2.7 in lieu of any destroyed, lost or stolen Rights
         Certificates shall evidence an original additional contractual
         obligation of the Company, whether or not the destroyed, lost or stolen
         Rights certificate shall be at any time enforceable by anyone, and
         shall be entitled to all the benefits of this Agreement equally and
         proportionately with any and all other Rights duly issued hereunder.

         2.8 Persons Deemed Owners.

         Prior to due presentment of a Rights Certificate (or, prior to the
Separation Date, the associated Common Share certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name such Rights Certificate
(or, prior to the Separation Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Date, the associated Common Shares).

         2.9 Delivery and Cancellation of Certificates.

         All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly canceled by the Rights Agent. The Company may at any time deliver to
the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
canceled by the Rights Agent. No Rights Certificate shall be countersigned in
lieu of or in exchange for any Rights Certificates canceled as provided in this
Section 2.9, except as expressly permitted by this Agreement. The Rights Agent
shall destroy all canceled Rights Certificates and deliver a certificate of
destruction to the Company.

         2.10 Agreement of Rights Holders.

         Every holder of Rights by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of Rights that:

                  (a) prior to the Separation Date, each Right will be
         transferable only together with, and will be transferred by a transfer
         of, the associated Common Share;

                  (b) after the Separation Date, the Rights Certificates will be
         transferable only on the Rights Register as provided herein;

                                       13
<PAGE>

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

                  (d) without the approval of any holder of Rights and upon the
         sole authority of the Board of Directors of the Company acting in good
         faith, this Agreement may be supplemented or amended from time to time
         pursuant to Section 6.3, Section 2.3 (e) or the last sentence of the
         first paragraph of Section 2.3(a) hereof.

                                   ARTICLE III
                     ADJUSTMENTS TO THE RIGHTS IN THE EVENT
                             OF CERTAIN TRANSACTIONS

         3.1 Flip-over Transaction or Event.

                  (a) Subject to Section 3.3 hereof, in the event that prior to
         the Expiration Date the Company enters into, consummates or permits to
         occur any Flip-over Transaction or Event, the Company shall take such
         action as shall be necessary to ensure, and shall not enter into,
         consummate or permit to occur such Flip-over Transaction or Event until
         it shall have entered into a supplemental agreement with the principal
         Person engaging in such Flip-over Transaction or Event (the "Flip-over
         Entity", as such term is more specifically defined in Section 1.1(m)
         hereof) for the benefit of the holders of the Rights, providing, that
         upon consummation of the Flip-over Transaction or Event:

                           (i) each Right shall thereafter constitute the right
                  to purchase from the Flip-over Entity, upon exercise thereof
                  in accordance with the terms hereof, that number of Common
                  Shares of such Flip-over Entity having an aggregate Market
                  Price on the date of consummation or occurrence of such
                  Flip-over Transaction or Event equal to twice the Exercise
                  Price for an amount in cash equal to the Exercise Price (such
                  right to be appropriately adjusted in a manner analogous to
                  the applicable adjustment to the Rights provided for in
                  Section 2.3 in the event that after such date of consummation
                  or occurrence an event of a type analogous to any of the
                  events described in Section 2.3 shall have occurred with
                  respect to such Common Shares);

                           (ii) the Flip-over Entity shall thereafter be liable
                  for, and shall assume, by virtue of such Flip-over Transaction
                  or Event and such supplemental agreement, all the obligations
                  and duties of the Company pursuant to this Agreement;

                           (iii) the term "Company" for all purposes of this
                  Rights Agreement shall thereafter be deemed to refer to such
                  Flip-over Entity;

                           (iv) such Flip-over Entity shall take such steps
                  (including, but not limited to, the reservation of a
                  sufficient number of its Common Shares, in the same manner
                  applicable to the reservation of Preferred Shares provided by
                  Section 2.2(g)(i) hereof) in connection with the consummation
                  of such Flip-over Transaction or Event as may be necessary to
                  assure that the provisions hereof shall thereafter be
                  applicable;

                           (v) confirming that all rights of first refusal or
                  preemptive rights in respect of the issuance of Common Shares
                  of the Flip-over Entity upon exercise of outstanding Rights
                  have been waived and that such transaction shall not result in
                  a default by the Flip-over Entity under this Rights Agreement;
                  and

                                       14
<PAGE>

                           (vi) providing that, as soon as practicable after the
                  date of such Flip-over Transaction or Event, the Flip-over
                  Entity will:

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

                                    (B) use its best efforts to list (or
                           continue the listing of) the Rights and the
                           securities purchasable upon exercise of the Rights on
                           a national securities exchange or to meet the
                           eligibility requirements for quotation on the Nasdaq
                           Stock Market; and

                                    (C) deliver to holders of the Rights
                           historical financial statements for the Flip-over
                           Entity which comply in all respects with the
                           requirements for registration on Form 10 (or any
                           successor form) under the Exchange Act.

         3.2 Flip-in Event.

                  (a) Subject to Section 3.3, in the event that prior to the
         Expiration Date a Flip-in Event shall occur, the Company shall take
         such action as shall be necessary to ensure and provide, within five
         (5) Business Days or such longer period as may be required to satisfy
         the requirements of the Securities Act and the Exchange Act that,
         except as provided below, such Right shall thereafter constitute the
         right to purchase from the Company, upon exercise thereof in accordance
         with the terms hereof, that number of Common Shares of the Company
         having an aggregate Market Price on the date of consummation or
         occurrence of such Flip-in Event equal to the Exercise Price for an
         amount in cash equal to one-half (1/2) the Exercise Price (such right
         to be appropriately adjusted in a manner analogous to the applicable
         adjustment provided for in Section 2.3 in the event that after such
         date of consummation or occurrence an event of a type analogous to any
         of the events described in Section 2.3 shall have occurred with respect
         to such Common Shares).

                  (b) Notwithstanding the foregoing, upon the occurrence of any
         Flip-in Event, any Rights that are or were Beneficially Owned on or
         after the earlier of the Separation Date or the Stock Acquisition Date
         by (i) an Acquiring Person or (ii) a transferee, direct or indirect, of
         an Acquiring Person (or any Affiliate or Associate of an Acquiring
         Person) in a transfer, whether or not for consideration, that the Board
         of Directors of the Company acting in good faith has determined is part
         of a plan, arrangement or scheme of an Acquiring Person (or any
         Affiliate or Associate of an Acquiring Person) that has the purpose or
         effect of avoiding clause (i) of this Section 3.2(b), shall become void
         and any holder of such Rights (including transferees) shall thereafter
         have no right to exercise such Rights under any provision of this
         Agreement;

                  (c) Any Rights Certificate issued pursuant to Section 2.2 that
         represents Rights Beneficially Owned by an Acquiring Person and any
         Rights Certificate issued at any time upon the transfer of any Rights
         to an Acquiring Person or any Affiliate or Associate thereof or to any
         nominee of any such Acquiring Person, Affiliate or Associate, and any
         Rights Certificate issued upon transfer, exchange, replacement or
         adjustment of any other Rights Certificate referred to in this
         sentence, shall contain the following legend:

                  The Rights represented by this Rights Certificate were issued
         to a person who was an Acquiring Person or an Affiliate or an Associate
         of an Acquiring Person (as such terms are defined in the Rights
         Agreement). This Rights Certificate and the Rights represented hereby
         may become void in the circumstances specified in Section 3.2(b) of the
         Rights Agreement.

                                       15
<PAGE>

                  Provided that, the Rights Agent shall not be under any
         responsibility to ascertain the existence of facts that would require
         the imposition of such legend but shall be required to impose such
         legend only if instructed to do so by the Company, or if a holder fails
         to certify upon transfer or exchange in the space provided on the
         Rights Certificate that such holder is not an Acquiring Person or an
         Affiliate or Associate thereof; provided further, however, that the
         absence of such legend on any Rights Certificate shall not be deemed
         dispositive of whether the holder thereof is an Acquiring Person.

         3.3 Obligations of the Company.

                  (a) The Company shall not enter into or engage in any
         transaction of the kind referred to in this Article III if at the time
         of such transaction there are any rights, warrants or securities
         outstanding or any other arrangements, agreements or instruments which
         would eliminate or otherwise diminish in any respect the benefits
         intended to be afforded by this Rights Agreement to the holders of
         Rights upon consummation of such transaction. The provisions of this
         Article III shall apply to successive mergers or consolidations or
         sales or other transfers.

                  (b) In the event that there shall not be sufficient Common
         Shares authorized to permit the exercise in full of the Rights in
         accordance with Section 3.2(a), holders of Rights will receive upon
         exercise Common Shares of the Company to the extent available and then
         cash, property or other securities of the Company (which may be
         accompanied by a reduction in the Exercise Price), in proportions
         determined by the Company, so that the aggregate value received is
         equal to the Exercise Price.

                                   ARTICLE IV
                                THE RIGHTS AGENT

         4.1 General.

                  (a) The Company hereby appoints the Rights Agent to act as
         agent for the Company and the holders of Rights 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. In the event the Company
         appoints such Co-Rights Agents, the respective duties of the Rights
         Agents and Co-Rights Agents shall be as the Company may determine. 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, which
         right to indemnification will survive the termination of this
         Agreement.

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

                                       16
<PAGE>

         4.2 Merger or Consolidation or Change of Name of Rights Agent.

                  (a) Any corporation into which the Rights Agent or any
         successor Rights Agent may be merged or amalgamated or with which it
         may be consolidated or any corporation resulting from any merger, or
         consolidation to which the Rights Agent or any successor Rights Agent
         is a party, or any corporation succeeding to the stockholder services
         business of the Rights Agent or any successor Rights Agent, will be the
         successor to the Rights Agent under this Agreement without the
         execution or filing of any paper or any further act on the part of any
         of the parties hereto; provided that, such corporation would be
         eligible for appointment as a successor Rights Agent under the
         provisions of Section 4.4 hereof. In case at the time such successor
         Rights Agent succeeds to the agency created by this Agreement, any of
         the Rights Certificates have been countersigned but not delivered, any
         such successor Rights Agent may adopt the countersignature of the
         predecessor Rights Agent and deliver such Rights Certificates so
         countersigned; and in case at that time any of the Rights Certificates
         have not been countersigned, any successor Rights Agent may countersign
         such Rights Certificate either in the name of the predecessor Rights
         Agent or in the name of the successor Rights Agent; and in all such
         cases such Rights Certificate will have full force provided in the
         Rights Certificates and in this Agreement.

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

         4.3 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 Rights 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 will
         be full and complete authorization and protection to the Rights Agent
         as to any action taken or omitted by it in good faith and in accordance
         with such opinion.

                  (b) Whenever in the performance of its duties under this
         Agreement the Rights Agent deems it necessary or desirable that any
         fact or matter be proved or established by the Company prior to taking
         or suffering any action hereunder, such fact or matter (unless other
         evidence in respect thereof be herein specifically prescribed) may be
         deemed to be conclusively proved and established by a certificate
         signed by a person believed by the Rights Agent to be the Chairman of
         the Board, the President or any Executive Vice President or Vice
         President and by the Treasurer or any Assistant Treasurer or the
         Secretary or any Assistant Secretary of the Company and delivered to
         the Rights Agent; and such certificate will be full authorization to
         the Rights Agent for any action taken or suffered in good faith by it
         under the provisions of this Agreement in reliance upon such
         certificate.

                  (c) The Rights Agent will be liable hereunder only for its own
         negligence, bad faith or willful misconduct.

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

                                       17
<PAGE>

                  (e) The Rights Agent will not be under any responsibility in
         respect of the validity of this Agreement or the execution and delivery
         hereof (except the due authorization, execution and delivery hereof by
         the Rights Agent) or in respect of the validity or execution of any
         Common Share certificate, Preferred Share certificate or Rights
         Certificate (except its countersignature thereof); nor will it be
         responsible for any breach by the Company of any covenant or condition
         contained in this Agreement or in any Rights Certificate; nor will it
         be responsible for any change in the exercisability of the Rights
         (including the Rights becoming void pursuant to Section 3.2(b) hereof
         or any adjustment required under the provisions of Section 2.3 hereof)
         or responsible for the manner, method or amount of any such adjustment
         or the ascertaining of the existence of facts that would require any
         such adjustments (except with respect to the exercise of Rights after
         receipt of the certificate contemplated by Section 2.3 describing any
         such adjustment); nor will it by any act hereunder be deemed to make
         any representation or warranty as to the authorization of any Preferred
         Shares or Common Shares to be issued pursuant to this Agreement or any
         Rights or as to whether any Preferred Shares or Common Shares will,
         when issued, be duly and validly authorized, executed, issued and
         delivered and fully paid and nonassessable.

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

                  (g) The Rights Agent is hereby authorized and directed to
         accept instructions with respect to the performance of its duties
         hereunder from any person believed by the Rights Agent to be the
         Chairman of the Board, the President, any Executive Vice President or
         Vice President or the Secretary or any Assistant Secretary or the
         Treasurer or any Assistant Treasurer of the Company, and to apply to
         such persons 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 person.

                  (h) The Rights Agent and any stockholder, director, officer or
         employee of the Rights Agent may buy, sell or deal in Preferred Shares,
         Common Shares, Rights or other securities of the Company or become
         pecuniarily interested in any transaction in which the Company may be
         interested, or contract with or lend money to the Company or otherwise
         act as fully and freely as though it were not Rights Agent under this
         Agreement, subject to the terms, covenants, conditions, and
         restrictions of 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 will not be answerable or accountable for any act, default,
         neglect or misconduct of any such attorneys or agents or for any loss
         to the Company resulting from any such act, default, neglect or
         misconduct provided reasonable care was exercised in the selection and
         continued employment thereof.

                                       18
<PAGE>

         4.4 Change of Rights Agent.

         The Rights Agent may resign and be discharged from its duties under
this Agreement upon 90 days' notice (or such lesser notice as is acceptable to
the Company) in writing mailed to the Company and to each transfer agent of
Common Shares by registered or certified mail, and to the holders of the Rights
in accordance with Section 6.9. The Company may remove the Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent and to each transfer agent
of the Common Shares by registered or certified mail and to the holders of the
Rights in accordance with Section 6.9. If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of 30 days after 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 any Rights (which holder shall, with such
notice, submit such holder's Rights Certificate for inspection by the Company),
then the holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation incorporated
under the laws of any state or the United States that is authorized to carry on
in the state of Utah the business of a transfer agent registered in accordance
with the requirements of section 17A of the Securities Exchange Act or 1934 and,
if the duties hereunder are deemed to so require, a trust company. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed but the predecessor Rights Agent 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 will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4 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.

                                   ARTICLE: V
                                   REDEMPTION

         5.1 Redemption.

         The Rights may be redeemed solely by action of the Rights Redemption
Committee pursuant to Section 5.2 hereof and in no other manner.

         5.2 By the Rights Redemption Committee.

         Subject to any limitations contained in the Company's articles of
incorporation, the Rights Redemption Committee of the Company may, at its
option, at any time prior to the earlier of (i) the Expiration Date or (ii) the
close of business on the tenth day after the Stock Acquisition Date (or such
later date as may be determined by the majority vote of the Rights Redemption
Committee from time to time) by notice to the Rights Agent and public
announcement by the Company, redeem all, but not less than all, the
then-outstanding Rights at the Redemption Price, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof, and the Company may, at its option, pay the Redemption Price in
Common Shares (based on the current Market Price of the Common Shares at the
time of redemption), cash or any other form of consideration deemed appropriate
by the Rights Redemption Committee.

                                       19
<PAGE>

         5.3 Rights Termination.

         Immediately upon the action of the Rights Redemption Committee of the
Company ordering the redemption of the Rights pursuant to Section 5.2 hereof,
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 Rights Redemption Committee ordering the
redemption of the Rights pursuant to Section 5.2 hereof, 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 Separation Date, on the registry books of the transfer agent
for the Common Stock of the Company, if different. 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 any Rights at any time in any
manner other than that specifically set forth in this Article 5, and other than
in connection with the purchase of Common Shares of the Company prior to the
Separation Date.

                                   ARTICLE VI
                                  MISCELLANEOUS

         6.1 Expiration.

         No Person shall have any right pursuant to this Agreement or in respect
of any Right after the Expiration Date, except the Rights Agent as specified in
Section 4.1(a) of this Agreement.

         6.2 Issuance of New Rights Certificate.

         Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the number or kind or class of
shares purchasable upon exercise of Rights made in accordance with the
provisions of this Agreement.

         6.3 Supplements and Amendments.

         The Board of Directors of the Company may from time to time supplement
or amend this Agreement without the approval of any holders of Rights:

                  (a) to make any changes, except for a supplement or amendment
         which would change the Expiration Date or the Exercise Price, which the
         Board of Directors acting in good faith may deem necessary or
         desirable; provided that, no such supplement or amendment made on or
         after the Stock Acquisition Date shall materially adversely affect the
         interests of the holders of Rights generally; and provided further
         that, no such supplement or amendment shall be made to the provisions
         of Article IV except with the written concurrence of the Rights Agent
         to such supplement or amendment; or

                  (b) in order to cure any ambiguity or to correct or supplement
         any provision contained herein which may be inconsistent with any other
         provisions herein or otherwise defective.

         6.4 Fractional Rights.

                  (a) The Company shall not be required to issue fractions of
         Rights or Right Certificates evidencing fractional Rights.

                                       20
<PAGE>

                  (b) In lieu of fractional Rights, the registered holders of
         the Rights Certificates with regard to which such fractional Rights
         would otherwise be issuable shall be paid in cash an amount equal to
         the same fraction of the current market price of a whole Right. For the
         purposes of this Section 6.4, the current market price of a whole Right
         shall be the closing price of the Rights for the Trading Day
         immediately prior to the date on which such fractional Rights would
         have been otherwise issuable. The closing price of the Rights for any
         day shall be determined in the same manner set forth in Section 1.1
         (o).

         6.5 Fractional Shares.

                  (a) The Company shall not be required to issue fractions of
         Preferred Shares (other than fractions which are integral multiples of
         one one-hundredth of a share) or fractions of a share of Common Stock
         upon exercise of the Rights or to distribute certificates which
         evidence fractional shares of Preferred Stock (other than fractions
         which are integral multiples of one one-hundredth of a share) or
         fractional shares of Common Stock. Nothing contained herein, however,
         shall be deemed to prevent any holder of Rights from aggregating the
         number of Rights exercised in any single transaction in such a manner
         that the aggregate number of Rights exercised in a single transaction
         may be convertible into an integral number of shares (or, in the case
         of Preferred Stock, an integral multiple of one one-hundredth of a
         share). A holder of fractional share certificates of Preferred Stock
         shall have all such rights, privileges and preferences as he, she or it
         may be entitled to pursuant to the Nevada Revised Statutes.

                  (b) In lieu of issuing fractions (other than fractions which
         are integral multiples of one one-hundredth of a share) of Preferred
         Shares, the Company may, at its election, issue depository receipts
         evidencing fractions of Preferred Shares pursuant to an appropriate
         agreement between the Company and a depository selected by it; provided
         that, such agreement shall provide that the holders of such depository
         receipts shall have all of the rights, privileges and preferences to
         which they would be entitled as owners of Preferred Shares pursuant to
         the Nevada Revised Statutes. With respect to fractional Preferred
         Shares that are not integral multiples of one one-hundredth of a
         Preferred Share, if the Company does not issue such fractional
         Preferred Shares or depository receipts in lieu thereof, there shall be
         paid to the holders of record of Right Certificates at the time such
         Right Certificates are exercised as herein provided an amount in cash
         equal to the same fraction of the Market Price of a Preferred Share.

                  (c) The holder of a Right by the acceptance of a Right
         expressly waives his right to receive any fractional Preferred Shares
         (other than fractions which are integral multiples of one one-hundredth
         of a Preferred Share) upon exercise of a Right.

         6.6 Rights of Action.

         Subject to the terms of this Agreement, rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent
are vested in the respective holders of the Rights and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.

                                       21
<PAGE>

         6.7 Holder of Rights Not Deemed a Stockholder.

         No holder, as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Shares or any
other securities which may at any time be issuable on the exercise of such
Rights, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights, 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 6.8 hereof),
or to receive dividends or subscription rights or otherwise, until such Rights
shall have been exercised in accordance with the provisions hereof.

         6.8 Notice of Proposed Actions.

         In case the Company shall propose after the Separation Date and prior
to the Expiration Date

                  (a) to effect or permit (in cases where the Company's
         permission is required) any Flip-in Event or Flip-over Transaction or
         Event; or

                  (b) to effect the liquidation, dissolution or winding up of
         the Company or the sale of all or substantially all of the Company's
         assets;

then in each such case, the Company shall give to each holder of a Right, in
accordance with Section 6.9 hereof, a notice of such proposed action, which
shall specify the date on which such Flip-in Event or Flip-over Transaction or
Event, liquidation, dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of the taking of
such proposed action.

         6.9 Notices.

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

                  FX Energy, Inc.
                  3006 South Highland Drive, Suite 206
                  Salt Lake City, Utah  84106
                  Attention:  Secretary

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

                  Fidelity Transfer Corp.
                  P.O. Box 53
                  Salt Lake City, Utah  84115
                  Attention:  President

         Notices or demands authorized or required by this Agreement to be given
or made by the Company or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or prior to the Separation
Date, on the registry books of the Transfer Agent and Registrar of the Company's
capital stock, if different from 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.

                                       22
<PAGE>

         6.10 Costs of Enforcement.

         The Company agrees that if the Company or any other Person the
securities of which are purchasable upon exercise of Rights fails to fulfill any
of its obligations pursuant to this Agreement, then the Company or such Person
will reimburse the holder of any Rights for the costs and expenses (including
legal fees) incurred by such holder in actions to enforce his rights pursuant to
any Rights or this Agreement.

         6.11 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.

         6.12 Benefits of this Agreement.

         Nothing in this Agreement shall be construed to give any Person other
than the Company, the Rights Agent and the holders of the Rights 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
holders of the Rights.

         6.13 Descriptive Heading.

         Descriptive headings appear herein for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

         6.14 Governing Law.

         This Agreement and each Right issued hereunder shall be deemed to be a
contract made under the internal laws of the state of Nevada and for all
purposes shall be governed by and construed in accordance with the internal
laws, including the corporate laws, of such state applicable to contracts to be
made and performed entirely within such state without giving effect to conflicts
of laws principles thereof.

         6.15 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.

         6.16 Severability.

         If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
enforceable, such term or provision shall be ineffective as to such jurisdiction
to the extent of such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining terms and provisions hereof or the
application of such term or provision to circumstances other than those as to
which it is held invalid or unenforceable.

         6.17 Effective Date.

         This Agreement shall be effective as of April 4, 1997.

                                       23
<PAGE>

         6.18 Determinations and Actions by the Board of Directors.

         Subject to any limitations contained in the Company's articles of
incorporation, the Board shall have the exclusive power and authority to
administer and amend this Agreement and to exercise all rights and powers
specifically granted to the Board or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not to
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including for purposes of clause (ii) below,
all omissions with respect to the foregoing) which are done or made by the
Board, in good faith, shall (i) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights Certificates and all other parties,
and (ii) not subject the Board to any liability to the holders of the Rights
Certificates.

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

                                      FX ENERGY, INC.

                                      By:
                                         ---------------------------------------
                                         David N. Pierce
                                         President and Chief Executive Officer

                                      Fidelity Transfer Corp.

                                      By:
                                         ---------------------------------------
                                         Linda Kenner
                                         President

                                       24Exhibit 10.26

                        FRONTIER OIL EXPLORATION COMPANY

                        1995 STOCK OPTION AND AWARD PLAN

         Frontier Oil Exploration Company, a Nevada corporation (the "Company"),
hereby adopts this "Frontier Oil Exploration Company 1995 Stock Option and Award
Plan" (the "Plan"), effective as of the 31st day of August, 1995, under which
options to acquire stock of the Company or bonus stock may be granted from time
to time to employees, including officers and directors, of the Company or its
subsidiaries. In addition, at the discretion of the board of directors or other
administrator of this Plan, options to acquire stock of the Company or bonus
stock may from time to time be granted under this Plan to other individuals who
contribute to the success of the Company or its subsidiaries but who are not
employees of the Company, all on the terms and conditions set forth herein

         1. Purpose of the Plan. The Plan is intended to aid the Company in
maintaining and developing a management team, attracting qualified officers and
employees capable of assisting in the future success of the Company, and
rewarding those individuals who have contributed to the success of the Company.
It is designed to aid the Company in retaining the services of executives and
employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain employees of
the Company, to use their best efforts to promote the success of the Company's
business, and to provide them with an opportunity to obtain or increase a
proprietary interest in the Company. It is also designed to permit the Company
to reward those individuals who are not employees of the Company but who are
perceived by management as having contributed to the success of the Company or
who are important to the continued business and operations of the Company. The
above aims will be effectuated through the granting of options ("Options") to
purchase shares of common stock of the Company, par value $0.001 per share (the
"Stock"), or the granting of awards of bonus stock ("Stock Awards"), all subject
to the terms and conditions of this Plan. It is intended that the Options issued
pursuant to this Plan include, when designated as such at the time of grant,
options which qualify as Incentive Stock Options ("Incentive Options") within
the meaning of section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any amendment or successor provision of like tenor. If the Company
has a class of securities registered under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), it is intended that this Plan will comply with
the applicable provisions of Rule 16b-3 ("Rule 16b-3") promulgated under the
Exchange Act or any amendment or successor rule of like tenor.

         2. Shareholder Approval. The Plan shall become effective immediately on
adoption by the board of directors of the Company (the "Board"). However, any
rights granted under the Plan shall be conditioned on the approval of the Plan
by the Company's shareholders in the manner set forth below:

                  (a) Within twelve months after the Plan has been adopted by
         the Board, the Plan shall be submitted for approval by those
         shareholders of the Company who are entitled to vote on such matters at
         a duly held shareholders' meeting or approved by the unanimous written
         consent of the holders of the issued and outstanding Stock of the
         Company. If the Plan is presented at a shareholders' meeting, it shall
         be approved by the affirmative vote of the holders of a majority of the
         issued and outstanding Stock in attendance, in person or by proxy, at
         such meeting. Notwithstanding the foregoing, the Plan may be approved
         by the shareholders in any other manner not inconsistent with the
         Company's articles of incorporation and bylaws, the applicable
         provisions of state corporate laws, and the applicable provisions of
         the Code and regulations adopted thereunder.

                                      -1-
<PAGE>

                  (b) In the event the Plan is so approved, the secretary of the
         Company shall, as soon as practicable following the date of final
         approval, prepare and attach to this Plan certified copies of all
         relevant resolutions adopted by the shareholders and the Board. On such
         approval, all Options previously granted under this Plan shall remain
         in full force and effect, subject to the terms of this Plan, and shall
         be deemed to have been granted as of the date of the action taken by
         the Board or other administrator of this Plan in awarding such Options,
         provided that, to the extent that the reporting requirements of Rule
         16a-3 promulgated under the Exchange Act or Rule 16b-3 is applicable to
         such grant, the Option shall be deemed to have been granted as of the
         date of approval by the shareholders.

                  (c) In the event the Plan is not approved by the shareholders
         on or before the date that is twelve months subsequent to the adoption
         of this Plan by the Board, all Options previously granted under the
         Plan shall remain in full force and effect, subject to the terms of
         this Plan, and shall be deemed to have been granted as of the date of
         the action taken by the Board or other administrator of this Plan in
         awarding such Options, provided that, to the extent that the reporting
         requirements of Rule 16a-3 promulgated under the Exchange Act or Rule
         16b-3 are applicable to such grant, the Option shall be deemed to have
         been granted as of the date that is one year subsequent to the date of
         this Plan and any Options granted thereafter shall be deemed to be
         granted as of the date of the grant under the terms of this Plan. As a
         result of the failure to obtain shareholder approval within the time
         specified, none of the Options issued under this Plan will qualify as
         Incentive Options and none of the Options deemed issued prior to
         shareholder approval will qualify for the exemption provided in Rule
         16b-3.

         3. Administration of the Plan. Administration of the Plan shall be
determined by the Board. Subject to compliance with applicable provisions of the
governing law, the Board may delegate administration of the Plan or specific
administrative duties with respect to the Plan, on such terms and to such
committees of the Board as it deems proper. Any Option or Stock Award approved
by the Board shall be approved by a majority vote of those members of the Board
in attendance at a meeting at which a quorum is present. Any Option or Stock
Award approved by a committee designated by the Board shall be approved as
specified by the Board at the time of delegation. The interpretation and
construction of the terms of the Plan by the Board or a duly authorized
committee shall be final and binding on all participants in the Plan absent a
showing of demonstrable error. No member of the Board or duly authorized
committee shall be liable for any action taken or determination made in good
faith with respect to the Plan.

         Transactions under this Plan involving officers, directors, and
beneficial owners of more than 10% of any class of equity security registered
pursuant to section 12 of the Exchange Act are intended to comply with all
applicable conditions of Rule 16b-3. To the extent any provisions of the Plan,
or any action taken by an administrator fails to so comply, it shall be deemed
null and void to the extent permitted by law and deemed advisable by the Board
or the duly authorized committee.

         4. Shares of Stock Subject to the Plan. A total of 500,000 shares of
Stock may be subject to, or issued pursuant to, Options or Stock Awards granted
under the terms of this Plan. To the extent permitted for plans qualifying under
Rule 16b-3, (i) any shares subject to an Option or Stock Award under the Plan,
which Option or Stock Award for any reason expires or is forfeited, terminated,
or surrendered unexercised as to such shares, shall be added back to the total
number of shares reserved for issuance under the terms of this Plan, and (ii) if
any right to acquire Stock granted under the Plan is exercised by the delivery
of shares of Stock or the relinquishment of rights to shares of Stock, only the
net shares of Stock issued (the shares of Stock issued less the shares of Stock
surrendered) shall count against the total number of shares reserved for
issuance under the terms of this Plan.

                                      -2-
<PAGE>

         5. Reservation of Stock on Granting of Option. At the time of granting
any Option under the terms of this Plan, there will be reserved for issuance on
the exercise of the Option the number of shares of Stock of the Company subject
to such Option. The Company may reserve either authorized but unissued shares or
issued shares that have been reacquired by the Company.

         6. Eligibility. Options or Stock Awards under the Plan may be granted
to employees, including officers and directors, of the Company or its
subsidiaries, as may be existing from time to time, and to other individuals who
are not employees of the Company as may be deemed in the best interest of the
Company by the Board or a duly authorized committee. Such Options or Stock
Awards shall be in the amounts, and shall have the rights and be subject to the
restrictions, as may be determined by the Board or a duly authorized committee
at the time of grant, all as may be within the general provisions of this Plan.

         7. Term of Options and Certain Limitations on Right to Exercise.

                  (a) Each Option shall have the term established by the Board
         or duly authorized committee at the time the Option is granted but in
         no event may an Option have a term in excess of ten years.

                  (b) The term of the Option, once it is granted, may be reduced
         only as provided for in this Plan or under the written provisions of
         the Option.

                  (c) Unless otherwise specifically provided by the written
         provisions of the Option, no holder or his or her legal representative,
         legatee, or distributee will be, or shall be deemed to be, a holder of
         any shares subject to an Option unless and until the holder exercises
         his or her right to acquire all or a portion of the Stock subject to
         the Option and delivers the required consideration to the Company in
         accordance with the terms of this Plan and then only to the extent of
         the number of shares of Stock acquired. Except as specifically provided
         in this Plan or as otherwise specifically provided by the written
         provisions of the Option, no adjustment to the exercise price or the
         number of shares of Stock subject to the Option shall be made for
         dividends or other rights for which the record date is prior to the
         date the Stock subject to the Option is acquired by the holder.

                  (d) Options under the Plan shall vest and become exercisable
         at such time or times and on such terms as the Board or a duly
         authorized committee may determine at the time of the grant of the
         Option.

                  (e) Options granted under the Plan shall contain such other
         provisions, including, without limitation, further restrictions on the
         vesting and exercise of the Option, as the Board or a duly authorized
         committee shall deem advisable.

                  (f) In no event may an Option be exercised after the
         expiration of its term.

         8. Exercise Price. The exercise price of each Option issued under the
Plan shall be determined by the Board or a duly authorized committee on the date
of grant.

         9. Payment of Exercise Price. The exercise of any Option shall be
contingent on receipt by the Company of cash, certified bank check to its order,
or other consideration acceptable to the Company; provided that, at the
discretion of the Board or a duly authorized committee, the written provisions

                                      -3-
<PAGE>

of the Option may provide that payment can be made in whole or in part in shares
of Stock of the Company or by the surrender of Options to acquire Stock from the
Company, which Stock or Options shall be valued at their then fair market value
as determined by the Board or a duly authorized committee; provided however,
that if, at the time of grant of an Option, the Company is subject to the
provisions of section 16(b) of the Exchange Act, such Stock and/or Options
surrendered must have been owned by the optionee for more than six months. Any
consideration approved by the Board or a duly authorized committee that calls
for the payment of the exercise price over a period of more than one year shall
provide for interest, which shall not be included as part of the exercise price,
that is equal to or exceeds the imputed interest provided for in section 483 of
the Code or any amendment or successor section of like tenor.

         10. Withholding. If the grant of a Stock Award or the grant or exercise
of an Option pursuant to this Plan is subject to withholding or other trust fund
payment requirements of the Code or applicable state or local laws, such
requirements may, at the discretion of the Board or a duly authorized committee
at the time of the grant of the Stock Award or Option and to the extent
permitted by the terms of the Option or Stock Award and the then governing
provisions of the Code and the Exchange Act, be met (i) by the holder of the
Option or Stock Award either delivering shares of Stock or canceling Options or
other rights to acquire Stock from the Company with a fair market value equal to
such requirements and, if the Company is then subject to the provisions of
section 16(b) of the Exchange Act, which have been held for more than six
months; (ii) by the Company withholding shares of Stock subject to the Option or
Stock Award with a fair market value equal to such requirements; or (iii) by the
Company making such withholding or other trust fund payment and the Option
holder or award recipient reimbursing the Company such amount paid within 10
days after written demand therefor from the Company.

         11. Incentive Options--Additional Provisions. In addition to the other
restrictions and provisions of this Plan, any Option granted hereunder that is
intended to be an Incentive Option shall meet the following further
requirements:

                  (a) The exercise price of an Incentive Option shall not be
         less than the fair market value of the Stock on the date of grant as
         determined by the Board or a duly authorized committee based on the
         closing price for the Stock over the five-day trading period
         immediately prior to the date of grant or any other basis permitted by
         the applicable provisions of the Code.

                  (b) No Incentive Option may be granted under the Plan to any
         individual that owns (either of record or beneficially) Stock
         possessing more than 10% of the combined voting power of the Company or
         any parent or subsidiary corporation unless both the exercise price is
         at least 110% of the fair market value of the Stock on the date the
         Option is granted and the Incentive Option by its terms is not
         exercisable more than five years after the date it is granted.

                  (c) Incentive Options may be granted only to employees of the
         Company or its subsidiaries and only in connection with that employee's
         employment by the Company or the subsidiary. Notwithstanding the above,
         directors and other individuals who have contributed to the success of
         the Company or its subsidiaries may be granted Incentive Options under
         the Plan, subject to, and to the extent permitted by, applicable
         provisions of the Code and regulations promulgated thereunder, as they
         may be amended from time to time.

                                      -4-
<PAGE>

                  (d) The aggregate fair market value (determined as of the date
         the Incentive Option is granted) of the shares of Stock with respect to
         which Incentive Options are exercisable for the first time by any
         individual during any calendar year under the Plan (and all other plans
         of the Company and its subsidiaries) may not exceed $100,000.

                  (e) No Incentive Option shall be transferable other than by
         will or the laws of descent and distribution and shall be exercisable,
         during the lifetime of the optionee, only by the optionee to whom the
         Incentive Option is granted.

                  (f) No individual acquiring shares of Stock pursuant to any
         Incentive Option granted under this Plan shall sell, transfer, or
         otherwise convey the Stock until after the date that is both two years
         after the date the Incentive Option was granted and one year after the
         date the Stock was acquired pursuant to the exercise of the Incentive
         Option. If any individual makes a disqualifying disposition, he or she
         shall notify the Company within 30 days of such transaction.

                  (g) No Incentive Option may be exercised unless the holder
         was, within three months of such exercise, and had been since the date
         the Incentive Option was granted, an eligible employee of the Company
         as specified in the applicable provisions of the Code, unless the
         employment was terminated as a result of the death or disability (as
         defined in the Code and the regulations promulgated thereunder as they
         may be amended from time to time) of the employee or the employee dies
         within three months of the termination. In the event of termination as
         a result of disability, the holder shall have a one year period
         following termination in which to exercise the Incentive Option. In the
         event of death of the holder, the Incentive Option must be exercised
         within six months after the issuance of letters testamentary or
         administration or the appointment of an administrator, executor, or
         personal representative, but not later than one year after the date of
         termination of employment. An authorized absence or leave approved by
         the Board or a duly authorized committee for a period of 90 days or
         less shall not be considered an interruption of employment for any
         purpose under the Plan.

                  (h) All Incentive Options shall be deemed to contain such
         other limitations and restrictions as are necessary to conform the
         Incentive Option to the requirements for "incentive stock options" as
         defined in section 422 of the Code, or any amendment or successor
         statute of like tenor.

All of the foregoing restrictions and limitations are based on the governing
provisions of the Code as of the date of adoption of this Plan. If at any time
the Code is amended to permit the qualification of an Option as an incentive
stock option without one or more of the foregoing restrictions or limitations or
the terms of such restrictions or limitations are modified, the Board or a duly
authorized committee may grant Incentive Options, and may modify outstanding
Incentive Options in accordance with such changes, all to the extent that such
action by the Board or duly authorized committee does not disqualify the Options
from treatment as incentive stock options under the provisions of the Code as
may be amended from time to time.

         12. Awards to Directors and Officers. To the extent the Company has a
class of securities registered under the Exchange Act, Options and Stock Awards
granted under the Plan to directors and officers (as defined in Rule 16a-1
promulgated under the Exchange Act or any amendment or successor rule of like
tenor) intended to qualify for the exemption from section 16(b) of the Exchange
Act provided in Rule 16b-3 shall be subject to the following requirements, in
addition to the other restrictions and limitations set forth in this Plan:

                                      -5-
<PAGE>

                  (a) The selection of any director or officer, the number of
         shares of Stock subject to an Option or Stock Award granted to such
         director or officer, and the terms of the Option shall be determined by
         the Board or a duly authorized committee, composed of two or more
         directors of the Company, all of whom are disinterested persons (as
         defined in Rule 16b-3).

                  (b) With respect to any award, the exercise price may not be
         less than the minimum required by applicable state law.

                  (c) Approval of the Plan by the shareholders of the Company
         shall have been solicited substantially in accordance with the rules
         and regulations in effect under section 14(a) of the Exchange Act or
         any amendment or successor statute in effect at the time of the
         approval or, if the Company is not subject to section 14(a) of the
         Exchange Act at the time of shareholder approval, such information as
         would have been required concerning the Plan under section 14(a) is
         provided to the shareholders at the first annual meeting of
         shareholders subsequent to the Company becoming subject to such rules.

                  (d) An Option or, if exercised, the Stock acquired on
         exercise, may not be transferred prior to the date that is more than
         six months subsequent to the date of the grant of the Option.

                  (e) The Stock received on the granting of a Stock Award may
         not be transferred prior to the date that is more than six months
         subsequent to the date of the Stock Award.

                  (f) An Option may not be transferred other than by will or by
         the laws of descent and distribution or pursuant to a qualified
         domestic relations order as defined in the Code or Title 1 of the
         Employee Retirement Income Security Act. The designation of a
         beneficiary by an officer or director does not constitute a transfer.

                  (g) Any cash settlement of Options or Stock Awards,
         withholding of shares of Stock or Options or other rights to acquire
         Stock to satisfy the tax withholding obligations of the Company under
         the Code, or surrender or withholding of shares of Stock of Options or
         other rights to acquire Stock to pay the exercise price of the Option,
         shall be made in accordance with the requirements of Rule 16b-3 or any
         amendment or successor rule of like tenor.

All of the foregoing restrictions and limitations are based on the governing
provisions of the Exchange Act and the rules and regulations promulgated
thereunder as of the date of adoption of this Plan. If at any time the governing
provisions are amended to permit an Option to be granted or exercised or a Stock
Award to be granted pursuant to Rule 16b-3 or any amendment or successor rule of
like tenor without one or more of the foregoing restrictions or limitations, or
the terms of such restrictions or limitations are modified, the Board or a duly
authorized committee may award Options or Stock Awards to directors and
officers, and may modify outstanding Options or Stock Awards, in accordance with
such changes, all to the extent that such action by the Board or a duly
authorized committee does not disqualify the Options or Stock Awards from
exemption under the provisions of Rule 16b-3 or any amendment or successor rule
of similar tenor.

         13. Stock Appreciation Rights and Other Tandem Rights. The Board or a
duly authorized committee, at the time of granting any award under the terms of
this Plan, shall have the authority to grant stock appreciation rights or other

                                      -6-
<PAGE>

tandem rights with respect to all or some of the shares of Stock covered by such
award pursuant to which the holder shall have the right to surrender all or part
of such award and thereby exercise the tandem rights; provided, however, that
the holder shall not have such right to surrender and obtain payment during the
first six months of the term of the award, except in the event of death or
disability of holder during such six-month period. Any payment under the terms
of the tandem rights may be made by the Company, at the discretion of the Board
or a duly authorized committee as set forth in the written award, in Stock (at
its fair market value on the date of the notice of exercise, as determined by
the Board or committee) or in cash, or partly in Stock and partly in cash, as
the Company may determine. Any stock appreciation rights or other tandem rights
granted under the terms of this section may be exercised only when, and only to
the extent that, the holder is entitled to exercise all or a portion of the
underlying award. The terms of any stock appreciation or other rights granted
shall, within the provisions of this Plan, be established by the Board or
committee at the time of grant, and any rights created thereby can only be
transferred in connection with the transfer of the underlying award. Stock
appreciation rights may only be exercised at a time when the fair market value
of the Stock subject to the award exceeds the exercise price of the award.

         14. Stock Awards. The Board or a duly authorized committee may grant
Stock Awards to individuals eligible to participate in this Plan, to the
individuals, in the amount, and subject to the provisions determined by the
Board or a duly authorized committee. The Board or a duly authorized committee
shall notify in writing each person selected to receive a Stock Award hereunder
as soon as practicable after he or she has been so selected and shall inform
such person of the number of shares he or she is entitled to receive, the
approximate date on which such shares will be issued, and the Forfeiture
Restrictions applicable to such shares. (For purposes hereof, the term
"Forfeiture Restrictions" shall mean any prohibitions against sale or other
transfer of shares of Stock granted under the Plan and the obligation of the
holder to forfeit his or her ownership of or right to such shares and to
surrender such shares to the Company on the occurrence of certain conditions.)
The Board or a duly authorized committee may, at its discretion, require the
payment in cash to the Company by the award recipient of the par value of the
Stock. The shares of Stock issued pursuant to a Stock Award shall not be sold,
exchanged, transferred, pledged, hypothecated, or otherwise disposed of during
such period or periods of time which the Board or a duly authorized committee
shall establish at the time of the grant of the Stock Award. If a Stock Award is
made to an employee of the Company or its subsidiaries, the employee shall be
obligated, for no consideration other than the amount, if any, of the par value
paid in cash for such shares, to forfeit and surrender such shares as he or
shall have received under the Plan which are then subject to Forfeiture
Restrictions to the Company if he or she is no longer an employee of the Company
or its subsidiaries for any reason; provided that, in the event of termination
of the employee's employment by reason of death or total and permanent
disability, the committee in its sole discretion may cancel the Forfeiture
Restrictions. Certificates representing shares subject to Forfeiture
Restrictions shall be appropriately legended as determined by the Board or a
duly authorized committee to reflect the Forfeiture Restrictions, and the
Forfeiture Restrictions shall be binding on any transferee of the shares.

        15. Assignment. At the time of grant of an Option, the Board or duly
authorized Committee, in its sole discretion, may impose restrictions on the
transferability of such an Option and provide that such Option shall not be
transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the Code and
that, except as permitted by the foregoing, such Options granted under the Plan

                                      -7-
<PAGE>

and the rights and privileges thereby conferred shall not be transferred,
assigned, pledged, or hypothecated in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment, or similar
process. On any attempt to transfer, assign, pledge, hypothecate, or otherwise
dispose of the Option, or of any right or privilege conferred thereby, contrary
to the provisions thereof, or on the levy of any attachment or similar process
on such rights and privileges, the Option and such rights and privileges shall
immediately become null and void.

         16. Additional Terms and Provisions of Awards. The Board or duly
authorized committee shall have the right to impose additional limitations on
individual awards under the Plan. For example, and without limiting the
authority of the Board or a duly authorized committee, an individual award may
be conditioned on continued employment for a specified period or may be voided
based on the award holder's gross negligence in the performance of his or her
duties, substantial failure to meet written standards established by the Company
for the performance of his or her duties, criminal misconduct, or willful or
gross misconduct in the performance of his or her duties. In addition, the Board
or a duly authorized committee may establish additional rights in the holders of
individual awards at the time of grant. For example, and without limiting the
authority of the Board or a duly authorized committee, an individual award may
include the right to immediate payment of the value inherent in the award on the
occurrence of certain events such as a change in control of the Company, all on
the terms and conditions set forth in the award at the time of grant. The Board
or a duly authorized committee may, at the time of the grant of the Option or
Stock Award, establish any other terms, restrictions, or provisions on the
exercise of an Option or the holding of Stock subject to the Stock Award as it
deems appropriate. All such terms, restrictions, and provisions must be set
forth in writing at the time of grant in order to be effective.

         17. Dilution or Other Adjustment. In the event that the number of
shares of Stock of the Company from time to time issued and outstanding is
increased pursuant to a stock split or a stock dividend, the number of shares of
Stock then covered by each outstanding Option granted hereunder shall be
increased proportionately, with no increase in the total purchase price of the
shares then so covered, and the number of shares of Stock subject to the Plan
shall be increased by the same proportion. Shares awarded under the terms of a
Stock Award shall be entitled to the same rights as other issued and outstanding
shares of Stock, whether or not then subject to Forfeiture Restrictions,
although any additional shares of Stock issued to the holder of a Stock Award
shall be subject to the same Forfeiture Restrictions as the Stock Award. In the
event that the number of shares of Stock of the Company from time to time issued
and outstanding is reduced by a combination or consolidation of shares, the
number of shares of Stock then covered by each outstanding Option granted
hereunder shall be reduced proportionately, with no reduction in the total
purchase price of the shares then so covered, and the number of shares of Stock
subject to the Plan shall be reduced by the same proportion. Shares awarded
under a Stock Award shall be treated as other issued and outstanding shares of
Stock, whether or not then subject to Forfeiture Restrictions. In the event that
the Company should transfer assets to another corporation and distribute the
stock of such other corporation without the surrender of Stock of the Company,
and if such distribution is not taxable as a dividend and no gain or loss is
recognized by reason of section 355 of the Code or any amendment or successor
statute of like tenor, then the total purchase price of the Stock then covered
by each outstanding Option shall be reduced by an amount that bears the same
ratio to the total purchase price then in effect as the market value of the
stock distributed in respect of a share of the Stock of the Company, immediately
following the distribution, bears to the aggregate of the market value at such
time of a share of the Stock of the Company plus the stock distributed in
respect thereof. Shares issued under a Stock Award shall be treated as issued
and outstanding whether or not subject to Forfeiture Restrictions, although any
stock of the other corporation to be distributed with respect to the shares
awarded under the Stock Award shall be subject to the Forfeiture Restrictions
then applicable to such shares and may be held by the Company or otherwise
subject to restrictions on transfer until the expiration of the Forfeiture

                                      -8-
<PAGE>

Restrictions. In the event that the Company distributes the stock of a
subsidiary to its shareholders, makes a distribution of a major portion of its
assets, or otherwise distributes significant portion of the value of its issued
and outstanding Stock to its shareholders, the number of shares then subject to
each outstanding Option and the Plan, or the exercise price of each outstanding
Option, may be adjusted in the reasonable discretion of the Board or a duly
authorized committee. Shares awarded under a Stock Award shall be treated as
issued and outstanding, whether or not subject to Forfeiture Restrictions,
although any Stock, assets, or other rights distributed shall be subject to the
Forfeiture Restrictions governing the shares awarded under the Stock Award and,
at the discretion of the Board or a duly authorized committee, may be held by
the Company or otherwise subject to restrictions on transfer by the Company
until the expiration of such Forfeiture Restrictions. All such adjustments shall
be made by the Board or duly authorized committee, whose determination upon the
same, absent demonstrable error, shall be final and binding on all participants
under the Plan. No fractional shares shall be issued, and any fractional shares
resulting from the computations pursuant to this section shall be eliminated
from the respective Option or Stock Award. No adjustment shall be made for cash
dividends, for the issuance of additional shares of Stock for consideration
approved by the Board, or for the issuance to stockholders of rights to
subscribe for additional Stock or other securities.

         18. Options or Stock Awards to Foreign Nationals. The Board or a duly
authorized committee may, in order to fulfill the purposes of this Plan and
without amending the Plan, grant Options or Stock Awards to foreign nationals or
individuals residing in foreign countries that contain provisions, restrictions,
and limitations different from those set forth in this Plan and the Options or
Stock Awards made to United States residents in order to recognize differences
among the countries in law, tax policy, and custom. Such grants shall be made in
an attempt to provide such individuals with essentially the same benefits as
contemplated by a grant to United States residents under the terms of this Plan.

         19. Listing and Registration of Shares. Unless otherwise expressly
provided on the granting of an award under this Plan, the Company shall have no
obligation to register any securities issued pursuant to this Plan or issuable
on the exercise of Options granted hereunder. Each award shall be subject to the
requirement that if at any time the Board shall determine, in its sole
discretion, that it is necessary or desirable to list, register, or qualify the
shares covered thereby on any securities exchange or under any state or federal
law, or obtain the consent or approval of any governmental agency or regulatory
body as a condition of, or in connection with, the granting of such award or the
issuance or purchase of shares thereunder, such award may not be made or
exercised in whole or in part unless and until such listing, registration,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Board or a duly authorized Committee..

         20. Expiration and Termination of the Plan. The Plan may be abandoned
or terminated at any time by the Board or a duly authorized committee except
with respect to any Options or Stock Awards then outstanding under the Plan. The
Plan shall otherwise terminate on the earlier of the date that is: (i) ten years
after the date the Plan is adopted by the Board; or (ii) ten years after the
date the Plan is approved by the shareholders of the Company.

         21. Form of Awards. Awards granted under the Plan shall be represented
by a written agreement which shall be executed by the Company and which shall
contain such terms and conditions as may be determined by the Board or a duly
authorized committee and permitted under the terms of this Plan. Option
agreements evidencing Incentive Options shall contain such terms and conditions,
among others, as may be necessary in the opinion of the Board or a duly
authorized committee to qualify them as incentive stock options under section
422 of the Code or any amendment or successor statute of like tenor.

         22. No Right of Employment. Nothing contained in this Plan or any
Option or Stock Award shall be construed as conferring on a director, officer,
or employee any right to continue or remain as a director, officer, or employee
of the Company or its subsidiaries.

                                      -9-
<PAGE>

         23. Amendment of the Plan. The Board or a duly authorized committee may
modify and amend the Plan in any respect; provided, however, that to the extent
such amendment or modification would cause the Plan to no longer comply with the
applicable provisions of the Code with respect to Incentive Options or with the
Exchange Act with respect to Options or Stock Awards granted to officers or
directors under Rule 16b-3, such amendment or modification shall also be
approved by the shareholders of the Company. If the Company has a class of
securities registered under the Exchange Act, this Plan may not be amended more
than once during any six month period, other than to comport with changes in the
Code or the Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder. Subject to the foregoing and, if the Company is subject
to the provisions of 16(b) of the Exchange Act, the limitations of Rule 16b-3
promulgated under the Exchange Act or any amendment or successor rule of like
tenor,

         Subject only to the foregoing prohibition against amending this Plan
more than once during any six month period, the Plan shall be deemed to be
automatically amended as is necessary (i) with respect to the issuance of
Incentive Options, to maintain the Plan in compliance with the provisions of
section 422 of the Code, and regulations promulgated thereunder from time to
time, or any amendment or successor statute thereto, and (ii) with respect to
Options or Stock Awards granted to officers and directors of the Company, to
maintain the Plan in compliance with the provisions of Rule 16b-3 promulgated
under the Exchange Act or any amendment or successor rule of like tenor.

                                                 ATTEST:

                                                   /s/ Andrew W. Pierce
                                                 -------------------------------
                                                  Andrew W. Pierce, Secretary

                             SECRETARY'S CERTIFICATE

         The undersigned, the duly constituted and elected secretary of Frontier
Oil Exploration Company, hereby certifies that a duly constituted meeting of the
shareholders held on July 22, 1996, pursuant to notice and at which a quorum was
present in accordance with the requirements of law and the Company's articles of
incorporation and bylaws, the foregoing Frontier Oil Exploration Company 1995
Stock Option and Award Plan was approved by the affirmative vote of the holders
of a majority of the shares of Common Stock in attendance, in person or by
proxy, at such meeting.

         DATED this  day of _____________, 1996.

                                                  /s/ Andrew W. Pierce
                                                 -------------------------------
                                                  Andrew W. Pierce, Secretary

                                      -10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]