Document:

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                                                                     Exhibit 4.3

                           ORION POWER HOLDINGS, INC.

                                       and

                        LASALLE BANK NATIONAL ASSOCIATION

                                 as Rights Agent

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

                                Rights Agreement

                          Dated as of November 1, 2000
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                                          Table of Contents
<TABLE>
<CAPTION>
Section                                                                                           Page
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<S>                                                                                               <C>
Section 1.     Certain Definitions..........................................................         1
Section 2.     Appointment of Rights Agent..................................................         6
Section 3.     Issue of Rights Certificates.................................................         7
Section 4.     Form of Rights Certificates..................................................         9
Section 5.     Countersignature and Registration............................................        10
Section 6.     Transfer, Split Up, Combination and Exchange of Rights Certificates;
               Mutilated, Destroyed, Lost or Stolen Rights Certificates.....................        10
Section 7.     Exercise of Rights; Purchase Price; Expiration Date of Rights................        11
Section 8.     Cancellation and Destruction of Rights Certificates..........................        13
Section 9.     Reservation and Availability of Capital Stock................................        13
Section 10.    Preferred Stock Record Date..................................................        13
Section 11.    Adjustment of Purchase Price, Number and Kind of Shares or Number of
               Rights.......................................................................        13
Section 12.    Certificate of Adjusted Purchase Price or Number of Shares...................        13
Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power.........        13
Section 14.    Fractional Rights and Fractional Shares......................................        13
Section 15.    Rights of Action.............................................................        13
Section 16.    Agreement of Rights Holders..................................................        13
Section 17.    Rights Certificate Holder Not Deemed a Stockholder...........................        13
Section 18.    Concerning the Rights Agent..................................................        13
Section 19.    Merger or Consolidation or Change of Name of Rights Agent....................        13
Section 20.    Duties of Rights Agent.......................................................        13
Section 21.    Change of Rights Agent.......................................................        13
Section 22.    Issuance of New Rights Certificates..........................................        13
Section 23.    Redemption and Termination...................................................        13
Section 24.    Exchange.....................................................................        13
Section 25.    Notice of Certain Events.....................................................        13
Section 26.    Notices......................................................................        13
Section 27.    Supplements and Amendments...................................................        13
Section 28.    Successors...................................................................        13
Section 29.    Determinations and Actions by the Board of Directors, etc....................        13
Section 30.    Benefits of This Agreement...................................................        13
Section 31.    Severability.................................................................        13
Section 32.    Governing Law................................................................        13
Section 33.    Counterparts.................................................................        13
Section 34.    Descriptive Headings.........................................................        13

Exhibit A      Certificate of Designation, Preferences and Rights
Exhibit B      Form of Rights Certificate
</TABLE>

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                                RIGHTS AGREEMENT

        RIGHTS AGREEMENT, dated as of November 1, 2000 (the "Agreement"),
between Orion Power Holdings, Inc., a Delaware corporation (the "Company"), and
LaSalle Bank National Association (the "Rights Agent").

                               W I T N E S S E T H
                               -------------------

        WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution of one Right for each share of common stock,
par value $.01 per share, of the Company (the "Common Stock") outstanding at the
close of business on November 12, 2000 (the "Record Date"), and has authorized
the issuance of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(p) hereof) for each share of Common Stock of the
Company issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (as defined below), each
Right initially representing the right to purchase one one-hundredth (1/100th)
of a share of Series A Junior Participating Preferred Stock (the "Preferred
Stock") of the Company having the rights, powers and preferences set forth in
the form of Certificate of Designation, Preferences and Rights attached hereto
as Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(each, a "Right" and collectively, the "Rights");

        WHEREAS, the Company desires to appoint the Rights Agent to act as
provided herein, and the Rights Agent is willing to so act;

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

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

         (a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be, following the
consummation of the initial public offering of Common Stock, the Beneficial
Owner of 10% or more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan or compensation arrangement of the Company or of any
Subsidiary of the Company, (iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan, (v)
any Person who has reported or is required to report such ownership on Schedule
13G under the Securities Exchange Act of 1934, as amended and in effect on the
date of this Agreement (the "Exchange Act") (or any comparable or successor
report), or (vi) any Person who, together with such Person's Affiliates and
Associates, Beneficially Owns 10% or more of the then outstanding shares of
Common Stock upon the consummation of the initial public offering of the Common
Stock of the
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Company, unless and until such Person acquires beneficial ownership of
additional shares of Common Stock (other than as a result of purchases of Common
Stock by the Company) representing five percent (5%) or more of the shares of
Common Stock then outstanding. Notwithstanding the foregoing (1) Constellation
Enterprises, Inc., together with all of its Affiliates and Associates, which
Beneficially Owns 10% or more of the shares of Common Stock of the Company
outstanding on the date hereof but which is excluded from the definition of
"Acquiring Person" by virtue of clause (vi) above may sell, transfer or
otherwise dispose of all of the shares of Common Stock of the Company owned by
it, together with all of the shares of Common Stock owned by its Affiliates and
Associates, in a single transaction to another Person, together with all
Affiliates and Associates of such other Person and, following completion of such
sale, transfer or other disposition, such other Person shall not be an
"Acquiring Person" for purposes of this Agreement, provided that such other
Person does not thereafter acquire beneficial ownership of additional shares of
Common Stock representing five percent (5%) or more of the shares of Common
Stock then outstanding and (2) Goldman Sachs Group, Inc., together with all of
its Affiliates and Associates, which Beneficially Owns 10% or more of the shares
of Common Stock of the Company outstanding on the date hereof but which is
excluded from the definition of "Acquiring Person" by virtue of clause (vi)
above may sell, transfer or otherwise dispose of up to 18,205,899 shares of
Common Stock of the Company owned by it (subject to adjustment to reflect stock
splits, stock dividends or similar events), including shares of Common Stock of
its Affiliates and Associates, in a single transaction to another Person,
together with all Affiliates and Associates of such other Person and, following
completion of such sale, transfer or other disposition, such other Person shall
not be an "Acquiring Person" for purposes of this Agreement, provided that such
other Person does not thereafter acquire beneficial ownership of additional
shares of Common Stock representing five percent (5%) or more of the shares of
Common Stock then outstanding; provided further, however, that the shares to be
sold pursuant to subparagraphs (1) and (2) above may not be sold to the same
Person or Affiliates or Associates of such Person. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" solely as the result of
an acquisition of Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by a Person to 10% or more of the Common Stock of the Company then
outstanding as determined above; provided, however, that if a Person becomes the
Beneficial Owner of 10% or more of the Common Stock of the Company then
outstanding (as determined above) solely by reason of purchases of Common Stock
by the Company and shall, after such purchases by the Company, become the
Beneficial Owner of any additional shares of Common Stock by any means
whatsoever, then such Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, (i) if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement, (ii) if a Person becomes
the Beneficial Owner of 10% or more of the Common Stock then outstanding solely
as a result of such Person's entering

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into an agreement, arrangement or understanding (including an irrevocable proxy
or consent) whereby such Person obtains the right to vote such Common Stock and
prior to the time such agreement, arrangement or understanding is entered into
the Board of Directors has approved either (x) a merger, consolidation or
similar transaction to which such Person or an Affiliate of such Person is a
party or (y) such agreement, arrangement or understanding with such Person, then
such Person shall not be deemed to be an "Acquiring Person" for the purposes of
this Agreement, and (iii) Ordinary Course Broker Dealer Shares shall not be
included in determining whether any Person is an Acquiring Person.

        (b)    "Act" shall have the meaning set forth in Section 9(c) hereof.

        (c)    "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.

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

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

                      (i) which such Person or any of such Person's Affiliates
               or Associates, directly or indirectly, has the right to acquire
               (whether such right is exercisable immediately or only after the
               passage of time) pursuant to any agreement, arrangement or
               understanding (whether or not in writing) or upon the exercise of
               conversion rights, exchange rights, rights, warrants or options,
               or otherwise; provided, however, that a Person shall not be
               deemed the "Beneficial Owner" of, or to "beneficially own," (A)
               securities tendered pursuant to a tender or exchange offer made
               by such Person or any of such Person's Affiliates or Associates
               until such tendered securities are accepted for purchase or
               exchange, or (B) securities issuable upon exercise of Rights at
               any time prior to the occurrence of a Triggering Event, or (C)
               securities issuable upon exercise of Rights from and after the
               occurrence of a Triggering Event which Rights were acquired by
               such Person or any of such Person's Affiliates or Associates
               prior to the Distribution Date or pursuant to Section 3(a) or
               Section 22 hereof (the "Original Rights") or pursuant to Section
               11(i) hereof in connection with an adjustment made with respect
               to any Original Rights;

                      (ii) which such Person or any of such Person's Affiliates
               or Associates, directly or indirectly, has the right to vote or
               dispose of or has "beneficial ownership" of (as determined
               pursuant to Rule 13d-3 of the General Rules and Regulations under
               the Exchange Act), including pursuant to any agreement,
               arrangement or understanding, whether or not in writing;
               provided, however, that a Person shall not be deemed the
               "Beneficial Owner" of, or to "beneficially own," any security
               under this subparagraph (ii) as a result of an agreement,
               arrangement

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               or understanding to vote such security if such agreement,
               arrangement or understanding: (A) arises solely from a revocable
               proxy given in response to a public proxy or consent solicitation
               made pursuant to, and in accordance with, the applicable
               provisions of the General Rules and Regulations under the
               Exchange Act, and (B) is not also then reportable by such Person
               on Schedule 13D under the Exchange Act (or any comparable or
               successor report); or

                      (iii) which are beneficially owned, directly or
               indirectly, by any other Person (or any Affiliate or Associate
               thereof) with which such Person (or any of such Person's
               Affiliates or Associates) has any agreement, arrangement or
               understanding (whether or not in writing), for the purpose of
               acquiring, holding, voting (except pursuant to a revocable proxy
               as described in the proviso to subparagraph (ii) of this
               paragraph (e)) or disposing of any voting securities of the
               Company;

provided, however, that nothing in this paragraph (e) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," (1) any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition, or (2) any Ordinary
Course Broker Dealer Shares.

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

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

        (h)    "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.

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

        (j)    "Current Market Price" shall have the meaning set forth in
Section 11(d)(i) hereof.

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

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

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        (m)    "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.

        (n)    "Exchange Act" shall have the meaning set forth in Section 1(a)
hereof.

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

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

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

        (r)    "Ordinary Course Broker Dealer Shares" shall mean shares, the
beneficial ownership of which is acquired in the ordinary course of the
activities of a broker or dealer registered under Section 15 of the Exchange Act
or any Affiliate thereof, and not with the purpose nor with the effect of
changing or influencing the control of the Company, nor in connection with nor
as a participant in any transaction having such purpose or effect, including,
but not limited to, the acquisition of beneficial ownership of such securities
as a result of any market-making or underwriting activities (including any
shares acquired for the investment account of a broker or dealer in connection
with such underwriting activities), or the purchase for or exercise of
investment or voting discretion authority over any of its customer accounts (as
part of asset management activities or otherwise), or the acquisition in good
faith of such shares in connection with a debt previously contracted.

        (s)    "Person" shall mean any individual, firm, corporation,
partnership, limited liability entity, or other entity.

        (t)    "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company, and, to
the extent that there are not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock of the Company designated for such
purpose containing terms substantially similar to the terms of the Series A
Junior Participating Preferred Stock.

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

        (v)    "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.

        (w)    "Qualifying Offer" shall have the meaning set forth in Section
11(a)(ii)(A) hereof.

        (x)    "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.

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

        (z)    "Rights" shall have the meaning set forth in the WHEREAS clause
at the beginning of the Agreement.

        (aa)   "Rights Agent" shall have the meaning set forth in the parties
clause at the beginning of this Agreement.

        (bb)   "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.

        (cc)   "Rights Dividend Declaration Date" shall mean November 1, 2000.

        (dd)   "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.

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

        (ff)   "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.

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

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

        (ii)   "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by such Person.

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

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

        (ll)   "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.

        Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in

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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, upon ten (10) days prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such co-Rights Agent.

        Section 3.    Issue of Rights Certificates.

        (a)    Until the earliest of (i) the close of business on the tenth day
after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date), or (ii) the close of business on the tenth business day (or such
later date as the Board of Directors shall determine) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan or compensation arrangement of the
Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 10% or more of the shares
of Common Stock then outstanding (the earliest of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company); provided, however,
that if a tender or exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a result of such
tender or exchange offer. As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.

        (b)    On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock

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outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the Expiration
Date, the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.

        (c)    Rights shall be issued in respect of all shares of Common Stock
which are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or in certain circumstances provided in Section 22 hereof, after
the Distribution Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights, and shall bear a legend
reading substantially as follows:

                      This certificate also evidences and entitles the holder
               hereof to certain Rights as set forth in the Rights Agreement
               between Orion Power Holdings, Inc. (the "Company") and LaSalle
               Bank National Association (the "Rights Agent"), dated as of
               November 1, 2000, as amended from time to time (the "Rights
               Agreement"), the terms of which are hereby incorporated herein by
               reference and a copy of which is on file at the principal office
               of the Company. Under certain circumstances, as set forth in the
               Rights Agreement, such Rights will be evidenced by separate
               certificates and will no longer be evidenced by this certificate.
               The Company or the Rights Agent will mail to the holder of this
               certificate a copy of the Rights Agreement, as in effect on the
               date of mailing, without charge promptly after receipt of a
               written request therefor. Under certain circumstances set forth
               in the Rights Agreement, Rights issued to, or held by, any Person
               who is, was or becomes an Acquiring Person or any Affiliate or
               Associate thereof (as such terms are defined in the Rights
               Agreement), whether currently held by or on behalf of such Person
               or by any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. In the event
that the Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights associated with such
shares of Common Stock shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the shares of

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Common Stock which are no longer outstanding. The failure to print the foregoing
legend on any such Common Stock certificate or any other defect therein shall
not affect in any manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.

        Section 4.    Form of Rights Certificates.

        (a)    The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or quotation system on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-hundredths
(1/100ths) of a share of Preferred Stock as shall be set forth therein at the
price set forth therein (such exercise price per one one-hundredth (1/100th) of
a share, the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.

        (b)    Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of an agreement, plan, arrangement or understanding which has
as a primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:

                      The Rights represented by this Rights Certificate are or
               were beneficially owned by a Person who was or became an
               Acquiring Person or an Affiliate or Associate of an Acquiring
               Person (as such terms are defined in the Rights Agreement).
               Accordingly, this Rights Certificate and the Rights represented
               hereby may become null and void in the circumstances specified in
               Section 7(e) of such Agreement.

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The failure to print the foregoing legend on any such Right Certificate or any
defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.

        Section 5.    Countersignature and Registration.

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

        (b)    Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.

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

        (a)    Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates (other than Rights Certificates representing
Rights that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths (1/100ths) of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates

                                       10
<PAGE>   13
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the Person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.

        (b)    Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

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

        (a)    Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths (1/100ths) of a share (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i) the
close of business on November 12, 2010 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof, (iii)
the time at which such Rights are exchanged pursuant to Section 24 hereof or
(iv) the consummation of a transaction contemplated by Section 13(d) hereof (the
earliest of (i), (ii), (iii) and (iv) being herein referred to as the
"Expiration Date").

        (b)    The Purchase Price for each one one-hundredth (1/100th) of a
share of Preferred Stock pursuant to the exercise of a Right shall initially be
500% of the initial public offering price of the Common Stock set forth on the
cover page of the Company's prospectus, and shall be

                                       11
<PAGE>   14
subject to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in accordance with paragraph (c) below.

        (c)    Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth (1/100th) of a share of Preferred Stock (or other
shares, securities, cash or other assets, as the case may be) to be purchased as
set forth below and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-hundredths (1/100ths) of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of one
one-hundredths (1/100ths) of a share of Preferred Stock as are to be purchased
(in which case certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check or bank draft payable
to the order of the Company. In the event that the Company is obligated to issue
other securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.

        (d)    In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.

        (e)    Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Triggering Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or

                                       12
<PAGE>   15
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company
shall use reasonable efforts to insure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any of its respective
Affiliates, Associates or transferees hereunder.

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

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

        Section 9.    Reservation and Availability of Capital Stock.

        (a)    The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury), the number

                                       13
<PAGE>   16
of shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in this Agreement
including Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights.

        (b)    So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange or automated quotation system, the Company shall use its
reasonable efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
or automated quotation system upon official notice of issuance upon such
exercise.

        (c)    The Company shall use its best reasonable efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Securities Act of
1933, as amended (the "Act"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the Expiration Date. The
Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.

        (d)    The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredths (1/100ths) of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.

        (e)    The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the

                                       14
<PAGE>   17
issuance or delivery of the Rights Certificates and of any certificates for a
number of one one-hundredths (1/100ths) of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one one-hundredths
(1/100ths) of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one
one-hundredths (1/100ths) of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.

        Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths (1/100ths) of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

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

         (a)   (i) In the event the Company shall at any time after the date of
               this Agreement (A) declare a dividend on the Preferred Stock
               payable in shares of Preferred Stock, (B) subdivide the
               outstanding Preferred Stock, (C) combine the outstanding
               Preferred Stock into a smaller number of shares, or (D) issue any
               shares of its capital stock in a reclassification of the
               Preferred Stock (including,

                                       15
<PAGE>   18
               without limitation, any such reclassification in connection with
               a consolidation or merger in which the Company is the continuing
               or surviving corporation), except as otherwise provided in this
               Section 11(a) and Section 7(e) hereof, the Purchase Price in
               effect at the time of the record date for such dividend or of the
               effective date of such subdivision, combination or
               reclassification, and the number and kind of shares of Preferred
               Stock or capital stock, as the case may be, issuable on such
               date, shall be proportionately adjusted so that the holder of any
               Right exercised after such time shall be entitled to receive,
               upon payment of the Purchase Price then in effect, the aggregate
               number and kind of shares of Preferred Stock or capital stock, as
               the case may be, which, if such Right had been exercised
               immediately prior to such date and at a time when the Preferred
               Stock transfer books of the Company were open, he or she would
               have owned upon such exercise and been entitled to receive by
               virtue of such dividend, subdivision, combination or
               reclassification. If an event occurs which would require an
               adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
               hereof, the adjustment provided for in this Section 11(a)(i)
               shall be in addition to, and shall be made prior to, any
               adjustment required pursuant to Section 11(a)(ii) hereof.

               (ii) In the event that any Person (other than the Company, any
               Subsidiary of the Company, any employee benefit plan or
               compensation arrangement of the Company or of any Subsidiary of
               the Company, or any Person or entity organized, appointed or
               established by the Company for or pursuant to the terms of any
               such plan), alone or together with its Affiliates and Associates,
               shall, at any time after the Rights Dividend Declaration Date,
               become an Acquiring Person, unless the event causing the Person
               to become an Acquiring Person is (1) a transaction set forth in
               Section 13(a) hereof or (2) an acquisition of shares of Common
               Stock pursuant to a tender offer or an exchange offer for all
               outstanding shares of Common Stock at a price and on terms
               determined by at least a majority of the members of the Board of
               Directors who are not officers of the Company and who are not
               representatives, nominees, Affiliates or Associates of an
               Acquiring Person, after receiving advice from one or more
               nationally recognized investment banking firms, to be (a) at a
               price which is fair to stockholders (taking into account all
               factors which such members of the Board of Directors deem
               relevant including, without limitation, prices which could
               reasonably be achieved if the Company or its assets were sold on
               an orderly basis designed to realize maximum value) and (b)
               otherwise in the best interests of the Company and its
               stockholders (a "Qualifying Offer"), then, promptly following the
               occurrence of any such event described above, proper provision
               shall be made so that each holder of a Right (except as provided
               below and in Section 7(e) and Section 24 hereof) shall thereafter
               have the right to receive, upon exercise thereof at the then
               current Purchase Price in accordance with the terms of this
               Agreement, in lieu of a number of one one-hundredths (1/100ths)
               of a share of Preferred Stock, such number of shares of Common
               Stock of the Company as shall equal the result

                                       16
<PAGE>   19
               obtained by (x) multiplying the then current Purchase Price by
               the then number of one one-hundredths (1/100ths) of a share of
               Preferred Stock for which a Right was exercisable immediately
               prior to the first occurrence of a Section 11(a)(ii) Event, and
               (y) dividing that product (which, following such first
               occurrence, shall thereafter be referred to as the "Purchase
               Price" for each Right and for all purposes of this Agreement) by
               50% of the Current Market Price (determined pursuant to Section
               11(d) hereof) per share of Common Stock on the date of such first
               occurrence (such number of shares, the "Adjustment Shares").

               (iii) In the event that the number of shares of Common Stock
               which are treasury shares or authorized by the Company's
               Certificate of Incorporation but not outstanding or reserved for
               issuance for purposes other than upon exercise of the Rights are
               not sufficient to permit the exercise in full of the Rights in
               accordance with the foregoing subparagraph (ii) of this Section
               11(a), the Company shall to the extent permitted by applicable
               law and any material agreements then in effect to which the
               Company is a party (A) determine the value of the Adjustment
               Shares issuable upon the exercise of a Right (the "Current
               Value"), and (B) with respect to each Right (subject to Section
               7(e) hereof), make adequate provision to substitute for the
               Adjustment Shares, upon the exercise of a Right and payment of
               the applicable Purchase Price, (1) cash, (2) a reduction in the
               Purchase Price, (3) Common Stock or other equity securities of
               the Company (including, without limitation, shares, or units of
               shares, of preferred stock, such as the Preferred Stock, which
               the Board has deemed to have essentially the same value or
               economic rights as shares of Common Stock (such shares of
               preferred stock being referred to as "Common Stock
               Equivalents")), (4) debt securities of the Company, (5) other
               assets, or (6) any combination of the foregoing, having an
               aggregate value equal to the Current Value (less the amount of
               any reduction in the Purchase Price), where such aggregate value
               has been conclusively determined by the Board based upon the
               advice of a nationally recognized investment banking firm
               selected by the Board; provided, however, that if the Company
               shall not have made adequate provision to deliver value pursuant
               to clause (B) above within thirty (30) days following the later
               of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
               the date on which the Company's right of redemption pursuant to
               Section 23(a) expires (the later of (x) and (y) being referred to
               herein as the "Section 11(a)(ii) Trigger Date"), then the Company
               shall be obligated to deliver, upon the surrender for exercise of
               a Right and without requiring payment of the Purchase Price,
               shares of Common Stock (to the extent available) and then, if
               necessary, cash, which shares and/or cash have an aggregate value
               equal to the Spread. For purposes of the preceding sentence, the
               term "Spread" shall mean the excess of (i) the Current Value over
               (ii) the Purchase Price. If the Board determines in good faith
               that it is likely that sufficient additional shares of Common
               Stock could be authorized for issuance upon exercise in full of
               the Rights, the thirty (30) day period set forth above may be
               extended to the extent

                                       17
<PAGE>   20
               necessary, but not more than ninety (90) days after the Section
               11(a)(ii) Trigger Date, in order that the Company may seek
               shareholder approval for the authorization of such additional
               shares (such thirty (30) day period, as it may be extended, is
               herein called the "Substitution Period"). To the extent that
               action is to be taken pursuant to the first and/or third
               sentences of this Section 11(a) (iii), the Company (1) shall
               provide, subject to Section 7(e) hereof, that such action shall
               apply uniformly to all outstanding Rights, and (2) may suspend
               the exercisability of the Rights until the expiration of the
               Substitution Period in order to seek such shareholder approval
               for such authorization of additional shares and/or to decide the
               appropriate form of distribution to be made pursuant to such
               first sentence and to determine the value thereof. In the event
               of any such suspension, the Company shall issue a public
               announcement stating that the exercisability of the Rights has
               been temporarily suspended, as well as a public announcement at
               such time as the suspension is no longer in effect. For purposes
               of this Section 11(a)(iii), the value of each Adjustment Share
               shall be the Current Market Price per share of the Common Stock
               on the Section 11(a)(ii) Trigger Date and the per share or per
               unit value of any Common Stock Equivalent shall be deemed to
               equal the Current Market Price per share of the Common Stock on
               such date. The Board of Directors of the Company may, but shall
               not be required to, establish procedures to allocate the right to
               receive shares of Common Stock upon the exercise of the Rights
               among holders of Rights pursuant to this Section 11(a)(iii).

        (b)    In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or Equivalent Preferred Stock
to be offered for subscription or purchase (or into the maximum number of shares
into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a

                                       18
<PAGE>   21
form other than cash, the value of such consideration shall be as conclusively
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.

        (c)    In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date, less the
fair market value (as conclusively determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such Current Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.

         (d)   (i) For the purpose of any computation hereunder, other than
               computations made pursuant to Section 11(a)(iii) hereof, the
               "Current Market Price" per share of Common Stock on any date
               shall be deemed to be the average of the daily closing prices per
               share of such Common Stock for the thirty (30) consecutive
               Trading Days immediately prior to such date, and for purposes of
               computations made pursuant to Section 11(a)(iii) hereof, the
               Current Market Price per share of Common Stock on any date shall
               be deemed to be the average of the daily closing prices per share
               of such Common Stock for the ten (10) consecutive Trading Days
               immediately following such date; provided, however, that in the
               event that the Current Market Price per share of the Common Stock
               is determined during a period following the announcement by the
               issuer of such Common Stock of (A) a dividend or distribution on
               such Common Stock payable in shares of such Common Stock or
               securities convertible into shares of such Common Stock (other
               than the Rights), or (B) any subdivision, combination or
               reclassification of such

                                       19
<PAGE>   22
               Common Stock, and the ex-dividend date for such dividend or
               distribution, or the record date for such subdivision,
               combination or reclassification shall not have occurred prior to
               the commencement of the requisite thirty (30) Trading Day or ten
               (10) Trading Day period, as set forth above, then, and in each
               such case, the Current Market Price shall be properly adjusted to
               take into account ex-dividend trading. The closing price for each
               day shall be the last sale price, regular way, or, in case no
               such sale takes place on such day, the average of the closing bid
               and asked prices, regular way, in either case as reported in the
               principal consolidated transaction reporting system with respect
               to securities listed or admitted to trading on the New York Stock
               Exchange or, if the shares of Common Stock are not listed or
               admitted to trading on the New York Stock Exchange, as reported
               in the principal consolidated transaction reporting system with
               respect to securities listed on the principal national securities
               exchange on which the shares of Common Stock are listed or
               admitted to trading or, if the shares of Common Stock are not
               listed or admitted to trading on any national securities
               exchange, the last quoted price or, if not so quoted, the average
               of the high bid and low asked prices in the over-the-counter
               market, as reported by the National Association of Securities
               Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
               system then in use, or, if on any such date the shares of Common
               Stock are not quoted by any such organization, the average of the
               closing bid and asked prices as furnished by a professional
               market maker making a market in the Common Stock selected by the
               Board. If on any such date no market maker is making a market in
               the Common Stock, the fair value of such shares on such date as
               conclusively determined in good faith by the Board shall be used.
               The term "Trading Day" shall mean a day on which the principal
               national securities exchange on which the shares of Common Stock
               are listed or admitted to trading is open for the transaction of
               business or, if the shares of Common Stock are not listed or
               admitted to trading on any national securities exchange, a
               Business Day. If the Common Stock is not publicly held or not so
               listed or traded, Current Market Price per share shall mean the
               fair value per share as determined in good faith by the Board,
               whose determination shall be described in a statement filed with
               the Rights Agent and shall be conclusive for all purposes.

               (ii) For the purpose of any computation hereunder, the Current
               Market Price per share of Preferred Stock shall be determined in
               the same manner as set forth above for the Common Stock in clause
               (i) of this Section 11(d) (other than the last sentence thereof).
               If the Current Market Price per share of Preferred Stock cannot
               be determined in the manner provided above or if the Preferred
               Stock is not publicly held or listed or traded in a manner
               described in clause (i) of this Section 11(d), the Current Market
               Price per share of Preferred Stock shall be conclusively deemed
               to be an amount equal to 100 (as such number may be appropriately
               adjusted for such events as stock splits, stock dividends and
               recapitalizations with respect to the Common Stock occurring
               after the date of this Agreement)

                                       20
<PAGE>   23
               multiplied by the Current Market Price per share of the Common
               Stock. If neither the Common Stock nor the Preferred Stock is
               publicly held or so listed or traded, Current Market Price per
               share of the Preferred Stock shall mean the fair value per share
               as determined in good faith by the Board, whose determination
               shall be described in a statement filed with the Rights Agent and
               shall be conclusive for all purposes.

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

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

        (g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
(1/100ths) of a share of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.

        (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths
(1/100ths) of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
(1/100ths) of a share covered by a Right immediately prior to this adjustment,
by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.

                                       21
<PAGE>   24
        (i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-hundredths (1/100ths) of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-hundredths (1/100ths) of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.

        (j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths (1/100ths) of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredths (1/100ths) of a share and the number of one one-hundredths
(1/100ths) of a share which were expressed in the initial Rights Certificates
issued hereunder.

        (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of one
one-hundredths (1/100ths) of a share of Preferred Stock issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one one-hundredths
(1/100ths) of a share of Preferred Stock at such adjusted Purchase Price.

        (l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may

                                       22
<PAGE>   25
elect to defer until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one one-hundredths
(1/100ths) of a share of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the number of
one one-hundredths (1/100ths) of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.

        (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the Current Market Price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.

        (n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.

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

                                       23
<PAGE>   26
        (p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.

        Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.

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

        (a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that: (i) each holder
of a Right, except

                                       24
<PAGE>   27
as provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, preemptive rights, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths (1/100ths) of a share
of Preferred Stock for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such one one-hundredths (1/100ths) of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (2) 50% of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock
of such Principal Party on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13 Event.

        (b)    "Principal Party" shall mean:

                      (i) in the case of any transaction described in clause (x)
               or (y) of the first sentence of Section 13(a), the Person that is
               the issuer of any securities into which shares of Common Stock of
               the Company are converted in such merger or consolidation, and if
               no securities are so issued, the Person that is the other party
               to such merger or consolidation; and

                      (ii) in the case of any transaction described in clause
               (z) of the first sentence of Section 13(a), the Person that is
               the party receiving the greatest portion of the assets or earning
               power transferred pursuant to such transaction or transactions;

provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another

                                       25
<PAGE>   28
Person the Common Stock of which is and has been so registered, "Principal
Party" shall refer to such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stocks
of two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value; and (3) in case such Person is, or is owned
directly or indirectly by, a partnership or joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.

        (c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the Principal Party to assume and perform the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will:

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

                      (ii) use its best efforts to qualify or register the
               Rights and the securities purchasable upon exercise of the Rights
               under the "blue sky laws" of such jurisdictions as may be
               necessary or appropriate; and

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

The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).

                                       26
<PAGE>   29
        (d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a Qualifying Offer (or a
wholly owned subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such Qualifying Offer and (iii) the form of consideration
being offered to the remaining holders of shares of Common Stock pursuant to
such transaction is the same as the form of consideration paid pursuant to such
Qualifying Offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.

        Section 14.   Fractional Rights and Fractional Shares.

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

        (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth (1/100th) of a share of Preferred 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 (1/100th) of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one one-hundredth
(1/100th) of a share of Preferred Stock, the

                                       27
<PAGE>   30
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth (1/100th) of a share
of Preferred Stock. For purposes of this Section 14(b), the current market value
of one one-hundredth (1/100th) of a share of Preferred Stock shall be one
one-hundredth (1/100th) of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately
prior to the date of such exercise.

        (c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.

        (d) The holder of a Right by the acceptance of the Rights expressly
waives his or her right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.

        Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such 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 shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.

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

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

                                       28
<PAGE>   31
        (b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;

        (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and

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

        Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths (1/100ths) of a share of Preferred Stock or any other securities
of the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Sections 24 or 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.

        Section 18.   Concerning the Rights Agent.

        (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the

                                       29
<PAGE>   32
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 gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.

        (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 Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.

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

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

        (b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates 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.

                                       30
<PAGE>   33
        Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of 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 shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

        (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Market Price) be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.

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

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

        (e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11,
Section 13 or Section 24 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 adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and nonassessable.

                                       31
<PAGE>   34
        (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 the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Secretary, any Assistant Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for these instructions.

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

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

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

        (k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.

        Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class

                                       32
<PAGE>   35
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (A) a corporation organized and doing
business under the laws of the United States or of the State of New York (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of New York), in good
standing, which is authorized under such laws to exercise corporate trust powers
or stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $100,000,000 or (B) a subsidiary of a
corporation described in clause (A) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

        Section 22. Issuance of New Rights Certificates. 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 Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights

                                       33
<PAGE>   36
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

        Section 23.  Redemption and Termination.

        (a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof,
of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.

        (b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent 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 for each Right so
held. Promptly after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.

        Section 24.  Exchange.

        (a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock at an exchange ratio of one share

                                       34
<PAGE>   37
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of fifty per cent (50%) or more of the Common Stock
then outstanding.

        (b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 7(e) hereof) held by each holder of Rights.

        (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or Equivalent Preferred Stock,
as such term is defined in paragraph (b) of Section 11 hereof) for shares of
Common Stock exchangeable for Rights, at the initial rate of one one-hundredth
(1/100th) of a share of Preferred Stock (or Equivalent Preferred Stock) for each
share of Common Stock, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Stock pursuant to the terms thereof, so that the
fraction of a share of Preferred Stock delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.

        (d) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.

        (e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, there shall be
paid to the registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be

                                       35
<PAGE>   38
issuable, an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection (e),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.

        Section 25.  Notice of Certain Events.

        (a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one transaction or a series of related transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.

        (b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.

                                       36
<PAGE>   39
        Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

        Orion Power Holdings, Inc.
        7 East Redwood Street, 10th Floor
        Baltimore, Maryland  21202
        Attention: Chief Legal Officer

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

        LaSalle Bank National Association
        135 South LaSalle Street
        Chicago, Illinois  60603
        Attention:  Corporate Trust Administration

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.

        Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the provisions of this Section 27, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date and subject to the
provisions of this Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable,
or (B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights (other than an Acquiring Person and its Affiliates and
Associates). Upon the delivery of a certificate from an

                                       37
<PAGE>   40
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.

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

        Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board or any Director to any liability to
the holders of the Rights.

        Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).

        Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the

                                       38
<PAGE>   41
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such determination by the Board
of Directors. Without limiting the foregoing, if any provision requiring a
specific group of the Board of Directors to act is held by any court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
such determination shall be made by the Board of Directors of the Company in
accordance with applicable law and the Company's Certificate of Incorporation
and bylaws.

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

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

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

                                       39
<PAGE>   42
        IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.

Attest:                                ORION POWER HOLDINGS, INC.

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

Attest:                                LASALLE BANK NATIONAL ASSOCIATION,
                                       as Rights Agent

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

                                       40
<PAGE>   43
                                                                       Exhibit A

                       FORM OF CERTIFICATE OF DESIGNATION,
                    PREFERENCES AND RIGHTS OF SERIES A JUNIOR
                          PARTICIPATING PREFERRED STOCK

                                       of

                           ORION POWER HOLDINGS, INC.

        The undersigned officer of Orion Power Holdings, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions of Section 103
thereof, DOES HEREBY CERTIFY:

        That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation, as amended, of the said Corporation, said
Board of Directors at a meeting convened and held on _________, 2000, adopted
the following resolution creating a series of 2,000,000 shares of Preferred
Stock designated as Series A Junior Participating Preferred Stock:

        RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of Article
FOURTH of its Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:

        Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 2,000,000.

        Section 2. Dividends and Distributions.

               (A) The holders of shares of Series A Junior Participating
        Preferred Stock shall be entitled to receive, when, as and if declared
        by the Board of Directors out of funds legally available for the
        purpose, quarterly dividends payable in cash on the last day of March,
        June, September and December in each year (each such date being referred
        to herein as a "Quarterly Dividend Payment Date"), commencing on the
        first Quarterly Dividend Payment Date after the first issuance of a
        share or fraction of a share of Series A Junior Participating Preferred
        Stock, in an amount per share (rounded to the nearest cent) equal to the
        greater of (a) $______ or (b) subject to the provision for adjustment
        hereinafter set forth, 100 times the aggregate per share amount of all
        cash dividends, and 100 times the aggregate per share amount (payable in
        kind) of all non-cash dividends or

                                      A-1
<PAGE>   44
        other distributions other than a dividend payable in shares of Common
        Stock or a subdivision of the outstanding shares of Common Stock (by
        reclassification or otherwise), declared on the Common Stock, par value
        $.01 per share, of the Corporation (the "Common Stock") since the
        immediately preceding Quarterly Dividend Payment Date, or, with respect
        to the first Quarterly Dividend Payment Date, since the first issuance
        of any share or fraction of a share of Series A Junior Participating
        Preferred Stock. In the event the Corporation shall at any time after
        November 1, 2000 (the "Rights Declaration Date") (i) declare any
        dividend on Common Stock payable in shares of Common Stock, (ii)
        subdivide the outstanding Common Stock, or (iii) combine the outstanding
        Common Stock into a smaller number of shares, then in each such case the
        amount to which holders of shares of Series A Junior Participating
        Preferred Stock were entitled immediately prior to such event under
        clause (b) of the preceding sentence shall be adjusted by multiplying
        such amount by a fraction the numerator of which is the number of shares
        of Common Stock outstanding immediately after such event and the
        denominator of which is the number of shares of Common Stock that were
        outstanding immediately prior to such event.

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

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

                                      A-2
<PAGE>   45
        payment of a dividend or distribution declared thereon, which record
        date shall be no more than 30 days prior to the date fixed for the
        payment thereof.

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

               (A) Subject to the provision for adjustment hereinafter set
        forth, each share of Series A Junior Participating Preferred Stock shall
        entitle the holder thereof to 100 votes on all matters submitted to a
        vote of the stockholders of the Corporation. In the event the
        Corporation shall at any time after the Rights Declaration Date (i)
        declare any dividend on Common Stock payable in shares of Common Stock,
        (ii) subdivide the outstanding Common Stock, or (iii) combine the
        outstanding Common Stock into a smaller number of shares, then in each
        such case the number of votes per share to which holders of shares of
        Series A Junior Participating Preferred Stock were entitled immediately
        prior to such event shall be adjusted by multiplying such number by a
        fraction the numerator of which is the number of shares of Common Stock
        outstanding immediately after such event and the denominator of which is
        the number of shares of Common Stock that were outstanding immediately
        prior to such event.

               (B) Except as otherwise provided herein or by law, the holders of
        shares of Series A Junior Participating Preferred Stock and the holders
        of shares of Common Stock shall vote together as one class on all
        matters submitted to a vote of stockholders of the Corporation.

               (C) (i) If at any time dividends on any Series A Junior
               Participating Preferred Stock shall be in arrears in an amount
               equal to six (6) quarterly dividends thereon, the occurrence of
               such contingency shall mark the beginning of a period (herein
               called a "default period") which shall extend until such time
               when all accrued and unpaid dividends for all previous quarterly
               dividend periods and for the current quarterly dividend period on
               all shares of Series A Junior Participating Preferred Stock then
               outstanding shall have been declared and paid or set apart for
               payment. During each default period, all holders of Preferred
               Stock (including holders of the Series A Junior Participating
               Preferred Stock) with dividends in arrears in an amount equal to
               six (6) quarterly dividends thereon, voting as a class,
               irrespective of series, shall have the right to elect two (2)
               Directors.

                   (ii) During any default period, such voting right of the
               holders of Series A Junior Participating Preferred Stock may be
               exercised initially at a special meeting called pursuant to
               subparagraph (iii) of this Section 3(C) or at any annual meeting
               of stockholders, and thereafter at annual meetings of
               stockholders, provided that such voting right shall not be
               exercised unless the holders of not less than ten percent (10%)
               in number of shares of Preferred Stock outstanding shall

                                      A-3
<PAGE>   46
               be present in person or by proxy. The absence of a quorum of the
               holders of Common Stock shall not affect the exercise by the
               holders of Preferred Stock of such voting right. At any meeting
               at which the holders of Preferred Stock shall exercise such
               voting right initially during an existing default period, they
               shall have the right, voting as a class, to elect Directors to
               fill such vacancies, if any, in the Board of Directors as may
               then exist up to two (2) Directors or, if such right is exercised
               at an annual meeting, to elect two (2) Directors. If the number
               which may be so elected at any special meeting does not amount to
               the required number, the holders of the Preferred Stock shall
               have the right to make such increase in the number of Directors
               as shall be necessary to permit the election by them of the
               required number. After the holders of the Preferred Stock shall
               have exercised their right to elect Directors in any default
               period and during the continuance of such period, the number of
               Directors shall not be increased or decreased except by vote of
               the holders of Preferred Stock as herein provided or pursuant to
               the rights of any equity securities ranking senior to or pari
               passu with the Series A Junior Participating Preferred Stock.

                      (iii) Unless the holders of Preferred Stock shall, during
               an existing default period, have previously exercised their right
               to elect Directors, the Board of Directors may order, or any
               stockholder or stockholders owning in the aggregate not less than
               ten percent (10%) of the total number of shares of Preferred
               Stock outstanding, irrespective of series, may request, the
               calling of a special meeting of the holders of Preferred Stock,
               which meeting shall thereupon be called by the President, a
               Vice-President or the Secretary of the Corporation. Notice of
               such meeting and of any annual meeting at which holders of
               Preferred Stock are entitled to vote pursuant to this Paragraph
               (C)(iii) shall be given to each holder of record of Preferred
               Stock by mailing a copy of such notice to such holder at such
               holder's last address as the same appears on the books of the
               Corporation. Such meeting shall be called for a time not earlier
               than 10 days and not later than 60 days after such order or
               request or in default of the calling of such meeting within 60
               days after such order or request, such meeting may be called on
               similar notice by any stockholder or stockholders owning in the
               aggregate not less than ten percent (10%) of the total number of
               shares of Preferred Stock outstanding. Notwithstanding the
               provisions of this Paragraph (C)(iii), no such special meeting
               shall be called during the period within 60 days immediately
               preceding the date fixed for the next annual meeting of the
               stockholders.

                      (iv) In any default period, the holders of Common Stock,
               and other classes of stock of the Corporation if applicable,
               shall continue to be entitled to elect the whole number of
               Directors until the holders of Preferred Stock shall have
               exercised their right to elect two (2) Directors voting as a
               class, after the exercise of which right (x) the Directors so
               elected by the holders of Preferred

                                      A-4
<PAGE>   47
               Stock shall continue in office until their successors shall have
               been elected by such holders or until the expiration of the
               default period, and (y) any vacancy in the Board of Directors may
               (except as provided in Paragraph (C)(ii) of this Section 3) be
               filled by vote of a majority of the remaining Directors
               theretofore elected by the holders of the class of stock which
               elected the Director whose office shall have become vacant.
               References in this Paragraph (C) to Directors elected by the
               holders of a particular class of stock shall include Directors
               elected by such Directors to fill vacancies as provided in clause
               (y) of the foregoing sentence.

                      (v) Immediately upon the expiration of a default period,
               (x) the right of the holders of Preferred Stock as a class to
               elect Directors shall cease, (y) the term of any Directors
               elected by the holders of Preferred Stock as a class shall
               terminate, and (z) the number of Directors shall be such number
               as may be provided for in the certificate of incorporation or
               by-laws irrespective of any increase made pursuant to the
               provisions of Paragraph (C)(ii) of this Section 3 (such number
               being subject, however, to change thereafter in any manner
               provided by law or in the certificate of incorporation or
               by-laws). Any vacancies in the Board of Directors effected by the
               provisions of clauses (y) and (z) in the preceding sentence may
               be filled by a majority of the remaining Directors.

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

        Section 4.    Certain Restrictions.

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

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

                      (ii) declare or pay dividends on or make any other
               distributions on any shares of stock ranking on a parity (either
               as to dividends or upon liquidation, dissolution or winding up)
               with the Series A Junior Participating Preferred Stock, except
               dividends paid ratably on the Series A Junior Participating
               Preferred Stock

                                      A-5
<PAGE>   48
               and all such parity stock on which dividends are payable or in
               arrears in proportion to the total amounts to which the holders
               of all such shares are then entitled;

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

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

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

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

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

                                      A-6
<PAGE>   49
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by (ii)
100 (as appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series A
Junior Participating Preferred Stock and Common Stock, respectively, holders of
Series A Junior Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with respect
to such Preferred Stock and Common Stock, on a per share basis, respectively.

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

               (C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

        Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A

                                      A-7
<PAGE>   50
Junior Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

        Section 8. No Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable. However, the Company may purchase
shares of Series A Junior Participating Preferred Stock in the open market
pursuant to an offer to a holder or holders of Series A Junior Participating
Preferred Stock.

        Section 9. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Junior Participating Preferred Stock, voting separately as a class.

        Section 10. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.

                                      A-8
<PAGE>   51
        IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this ______ day
of November, 2000.

                                            ORION POWER HOLDINGS, INC.

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

                                      A-9
<PAGE>   52
                                                                       Exhibit B

                          [FORM OF RIGHTS CERTIFICATE]

Certificate No. R-                                               ________ Rights

NOT EXERCISABLE AFTER NOVEMBER 12, 2010 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](1)

                               Rights Certificate

                           ORION POWER HOLDINGS, INC.

        This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of November 1, 2000 (the "Rights Agreement"), between Orion
Power Holdings, Inc., a Delaware corporation (the "Company"), and LaSalle Bank
National Association (the "Rights Agent"), to purchase from the Company at any
time prior to 5:00 P.M. (New York time) on November 12, 2010 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-hundredth (1/100th) of a fully paid, non-assessable share
of Series A Junior Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $______ per one one-hundredth (1/100th) of a
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of November 1, 2000 based on the Preferred Stock as constituted at such
date. The Company reserves the right to require prior to
--------

(1)     The portion of the legend in brackets shall be inserted only if
        applicable and shall replace the preceding sentence.

                                      B-1
<PAGE>   53
the occurrence of a Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued.

        Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.

        As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events.

        This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.

        This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths (1/100ths) of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.

        Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date. In addition, the Rights may be exchanged, in whole or in part,
for shares of the Common Stock, or shares of preferred stock of the Company
having essentially

                                      B-2
<PAGE>   54
the same value or economic rights as such shares. Immediately upon the action of
the Board of Directors of the Company authorizing any such exchange, and without
any further action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only enable holders
to receive the shares issuable upon such exchange.

        No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth (1/100th) of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.

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

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

                                      B-3
<PAGE>   55
        WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.

Dated as of            ,
            -----------  ----

ATTEST:                                     ORION POWER HOLDINGS, INC.

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

Countersigned:

LASALLE BANK NATIONAL ASSOCIATION,
As Rights Agent

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

                                      B-4
<PAGE>   56
                  [FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]

                               FORM OF ASSIGNMENT

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

                          (To be executed by the registered holder if such
                         holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED __________________________________________________ hereby
sells, assigns and transfers unto ______________________________________________
                                   (Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________ Attorney,

to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.

Dated:  ________________, ____

                                            ______________________________
                                            Signature

Signature Guaranteed:

                                      B-5
<PAGE>   57
                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:  ________________, ____

                                            ______________________________
                                            Signature

Signature Guaranteed:

                                      B-6
<PAGE>   58
                                     NOTICE

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

                          FORM OF ELECTION TO PURCHASE

                      (To be executed if holder desires to
                       exercise Rights represented by the
                              Rights Certificate.)

To:  ORION POWER HOLDINGS, INC.

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

Please insert social security
or other identifying number

________________________________________________
        (Please print name and address)

________________________________________________

                                      B-7
<PAGE>   59
        If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

________________________________________________
                (Please print name and address)

________________________________________________

Dated:  ________________, ____

                                            _______________________________
                                            Signature

Signature Guaranteed:

                                      B-8
<PAGE>   60
                                   CERTIFICATE

        The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated:  ________________, ____

                                            __________________________________
                                            Signature

Signature Guaranteed:

                                      B-9
<PAGE>   61
                                               NOTICE

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

                                      B-10<PAGE>   1
                                                                   Exhibit 10.27

                                    AGREEMENT

      Agreement, dated as of November 13, 2000, between Orion Power Holdings,
Inc., a Delaware corporation (the "Company"), and the parties listed in Appendix
A hereto (collectively, the "Goldman Shareholders").

                                   WITNESSETH:

      WHEREAS, the Company is engaged in the acquisition, development, ownership
and operation of electric power generation facilities throughout the United
States;

      WHEREAS, the Goldman Shareholders currently own a majority of the
outstanding shares of the Company's voting securities and, upon completion of
the Company's initial public offering of its common stock, will own a
substantial percentage of the outstanding voting securities of the Company;

      WHEREAS, the Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), prohibits the Company from taking any action
while the Goldman Shareholders own a specified percentage of the Company's
outstanding voting securities or exercise a Controlling Influence (as defined
below) with respect to the Company, if such action would cause the Goldman
Shareholders or Goldman, Sachs & Co. and its Affiliates (together with the
Goldman Shareholders, the "Goldman Sachs Entities") to be subject to material
regulatory or other restrictions under either (a) the Public Utility Holding
Company Act of 1935, as amended ("PUHCA") or the rules and regulations of the
Securities and Exchange Commission thereunder or (b) the Federal Power Act, as
amended (the "FPA") or the rules and regulations of the Federal Energy
Regulatory Commission thereunder, as more fully described in Article Tenth of
the Certificate of Incorporation; and

      WHEREAS, the Company and the Goldman Shareholders wish to set forth their
agreement regarding when the Company and the Goldman Shareholders would attempt
to structure a potential acquisition by the Company of voting securities of a
Person or an action by the Company that would otherwise be prohibited under the
Certificate of Incorporation without the prior written consent of the Goldman
Shareholders;

      NOW, THEREFORE, in consideration of these premises and for other valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Company and the Goldman Shareholders do hereby agree as follows:

      Section 1.  Definitions:  The following terms, when used herein, shall
have the meanings specified below:

      (a) "Affiliate" shall mean, when used with respect to a specified Person,
another Person that directly or indirectly controls or is controlled by or is
under common control with the Person specified. For this purpose, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting shares, by contract or otherwise.
<PAGE>   2
      (b) "Controlling Influence" shall mean a "controlling influence" (within
the meaning of PUHCA) that would cause any of the Goldman Sachs Entities to be
deemed any of an "affiliate," a "subsidiary company" or a "holding company"
under PUHCA or subject to regulation under PUHCA.

      (c) "Person" shall mean any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
other entity.

       (d) "Statutory Threshold" shall having the meaning set forth in Article
Tenth of the Certificate of Incorporation.

      Section 2. Agreement. The Company and the Goldman Shareholders agree that
when the Goldman Sachs Entities are no longer a controlling shareholder of the
Company (including without limitation through the exercise of a Controlling
Influence) but still own a percentage of the outstanding voting stock of the
Company that is not less than the Statutory Threshold, if the Company wishes to
purchase voting securities of a Person or take any other action that has been
duly approved by the Board of Directors but is prohibited by the Certificate of
Incorporation without the prior written consent of the Goldman Sachs Entities,
then, upon the request of the Company to the Goldman Sachs Entities, the Company
and the Goldman Sachs Entities will attempt in good faith (i) to structure any
such proposed acquisition of securities or proposed action in a manner which
avoids the imposition of material regulatory or other restrictions on the
Company or any of the Goldman Sachs Entities or (ii) if such structure is not
feasible, to restructure the Goldman Sachs Entities' then existing ownership of
the Company's voting securities in a manner which avoids the imposition of
material regulatory or other restrictions on the Company or any of the Goldman
Sachs Entities. Any structure developed pursuant to clause (i) or (ii) of the
preceding sentence must be reasonably satisfactory to the Goldman Sachs
Entities.

      Section 3.  Notices.  (a)   Notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed or sent by telecopy as follows:

            (i)   if to the Company, to: Thad Miller, General Counsel, Orion
                  Power Holdings, Inc., 7 East Redwood Street, 10th Floor,
                  Baltimore, MD 21202; and

            (ii)  if to any of the Goldman Sachs Entities, to: Goldman, Sachs
                  & Co., 85 Broad Street, New York York 10004, attention:
                  David J. Greenwald.

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy to such party as provided in this Section 3.

      Section 4. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any party that are contained

                                       2
<PAGE>   3
in this Agreement shall bind and inure to the benefit of its successors and
assigns. The Goldman Shareholders may not assign their rights and obligations
under this Agreement to any Person without the prior written consent of the
Company; provided that the Goldman Shareholders shall be permitted to assign
their rights and obligations under this Agreement to any of their respective
Affiliates.

      Section 5.  GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO CONFLICT OF LAW PROVISIONS.

      Section 6. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.

      Section 7.  Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract.

      Section 8.  Headings.  Section headings used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.

                                       3
<PAGE>   4
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.

<TABLE>
<S>                                     <C>
                                        ORION POWER HOLDINGS, INC.
                                        By:__________________________
                                           Name:
                                           Title:

GS CAPITAL PARTNERS II, L.P.            GS CAPITAL PARTNERS II OFFSHORE, L.P.
By:  GS Advisors, L.L.C.                By:  GS Advisors II, L.L.C.
       Its General Partner                     Its General Partner

By:__________________________           By:__________________________

GS CAPITAL PARTNERS III, L.P.           GS CAPITAL PARTNERS III OFFSHORE, L.P.
By:  GS Advisors III, L.L.C.            By:  GS Advisors III, L.L.C.
       Its General Partner                     Its General Partner

By:__________________________           By:__________________________

                                        GOLDMAN SACHS & CO. VERWALTUNGS GmbH

                                        By:__________________________

                                        AND

                                        By:__________________________
</TABLE>

                                       4
<PAGE>   5
<TABLE>
<S>                                   <C>
STONE STREET FUND 1998, L.P.          BRIDGE STREET FUND 1998, L.P.
By:   Stone Street 1998, L.L.C.       By:   Stone Street 1998, L.L.C.
        Its General Partner                   Its General Partner

By:__________________________         By:__________________________

STONE STREET FUND 2000, L.P.          BRIDGE STREET SPECIAL OPPORTUNITIES FUND
By:   Stone Street 2000, L.L.C.       2000, L.P.
        Its General Partner           By:   Bridge Street Special
                                            Opportunities 2000, L.L.C.
                                            Its General Partner
By:__________________________

                                      By:__________________________
</TABLE>

                                       5
<PAGE>   6
                                   APPENDIX A

GS Capital Partners II, L.P.
GS Capital Partners II Offshore, L.P.
Goldman, Sachs & Co. Verwaltungs (as nominee for GS Capital Partners II
(Germany), CLP)
GS Capital Partners III, L.P.
GS Capital Partners III, Offshore
Goldman, Sachs & Co. Verwaltungs (as nominee for GS Capital Partners III
(Germany), CLP)
Bridge Street Fund 1998, L.P.
Bridge Street Special Opportunities Fund 2000, L.P.
Stone Street Fund 1998, L.P.
Stone Street Fund 2000, L.P.

                                       6

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