Document:

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                                                                   Exhibit 10.13

                         Dated the 30th day of May 2000

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                                    L E A S E

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                                                 SIMON C.W. YUNG & CO.,
                                                    Solicitors &c.,
                                                    21st Floor, Hing
                                                 Yip Commercial Centre,
                                                     Nos.272-284 Des
                                                  Voeux Road Central,
                                                     HONG KONG SAR.

                              Ref. : CON/PKH/991727

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                                     Factory

THIS LEASE is made the 30th day of May 2000

BETWEEN the Lessor whose name address registered office and description are more
particularly described in the First Schedule hereto (hereinafter called "THE
LESSOR" which expression shall where the context so admits include the
person/company for the time being entitled to the reversion immediately
expectant upon the term hereby created) of the one part and the Lessee whose
name address registered office and description are more particularly described
in the First Schedule hereto (hereinafter called "THE LESSEE" which expression
shall where the context so admits include his successors in title) of the other
part.

WITNESSETH as follows :

1.      DEMISED PREMISES/TERM/RENT

1.01    The Lessor demises unto the Lessee All That the Demised Premises more
particularly described and set out in the Second Schedule hereto ("THE DEMISED
PREMISES") And Together with right to use two car parking spaces as designated
from time to time by the Lessor ("THE CAR PARKING SPACES") free of payment of
rent save and except the rates and management fees (if any) And Together with
the use in common with the Lessor and all others having the like right of the
entrance staircases passages landings and lavatories (if any) of the building of
which the Demised Premises form part more particularly described in the said
Second Schedule ("THE BUILDING") in so far as the same are necessary for the
proper use and enjoyment of the Demised Premises and the Car Parking Spaces (and
except in so far as the Lessor may from time to time restrict such use) and
together with the use in common with others of the lifts escalators and central
air-conditioning, if any, (whenever the same shall be operating) TO HOLD the
same unto the Lessee for the term of years as set out in the Third Schedule
hereto Subject to the payment of the rent ("THE RENT") and in manner more
particularly described and set out in the Third Schedule hereto And Subject to
and with the benefit of the Deed of Mutual Covenant and the Management Agreement
(if any) of the Building.

2.      LESSEE`S COVENANTS

2.01    The Lessee hereby covenants with the Lessor as follows :-

   (a)  TO PAY RENT

        To pay the Rent on the days and in manner described and set out in the
        said Third Schedule.

   (b)  TO PAY AIR-CONDITIONING AND OTHER CHARGES

        To pay or discharge all air-conditioning (if any), maintenance or
        management fee or charges in respect of the Demised Premises and the Car
        Parking Spaces duly and in accordance with the provisions of the Deed of
        Mutual Covenant and Management Agreement (if any) of the Building.

   (c)  TO PAY RATES TAXES, ETC.

        To pay and discharge all rates taxes assessments duties charges
        impositions and outgoings of an annual or recurring nature now or
        hereafter to be assessed imposed or charged by the

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        Government of Hong Kong or other lawful authority upon the Demised
        Premises and the Car Parking Spaces or upon the owner or occupier
        thereof (Government rent and Property Tax (if any) and outgoings of a
        capital or non-recurring nature only (if any) excepted) Provided That
        all charges and outgoings in relation to the Lessee`s own installations
        shall be borne by the Lessee solely.

   (d)  TO PAY GAS, WATER AND ELECTRICITY CHARGES

        To pay and discharge all charges for gas water electricity and telephone
        rental and other outgoings now or at any time hereafter consumed by the
        Lessee and chargeable in respect of the Demised Premises and to make all
        necessary deposits therefor.

   (e)  USER

        Not to use the Demised Premises for any purpose other than for the
        purpose and under the name as described and set out in the said Third
        Schedule and not to use the Car Parking Spaces for other purposes except
        for parking of vehicles belonged to the Lessee.

   (f)  NOT TO USE DEMISED PREMISES AS SLEEPING QUARTERS OR DOMESTIC PREMISES

        Not to use or permit or suffer the Demised Premises or any part thereof
        to be used as sleeping quarters or as domestic premises within the
        meaning of the Landlord and Tenant (Consolidation) Ordinance or similar
        legislation for the time being in force.

   (g)  NOT TO PERMIT ILLEGAL OR IMMORAL USE

        Not to use or permit or suffer the Demised Premises to be used for any
        illegal or immoral purpose or for any purpose which is in contravention
        of the covenants terms and conditions contained in the Government Lease
        or Conditions under which the Demised Premises are held from the
        Government and not to carry on any trade or business thereon which is
        now or may hereafter be declared to be an offensive trade under the
        Public Health & Urban Services Ordinance or any other Ordinances or
        Regulations and any enactment amending or substituting the same.

   (h)  TO KEEP INTERIOR ETC. IN REPAIR

        To keep all the interior of the Demised Premises including the flooring
        and interior plaster or other finishes or rendering to walls floors and
        ceilings and the Lessor`s fixtures therein including all doors windows
        installations/wiring/pipes/drains in the Demised Premises for the supply
        of water gas electricity and for sanitation (inclusive of basins sinks
        baths and sanitary conveniences) in good clean and tenantable repair and
        condition and properly preserved and painted and so to maintain the same
        at the expense of the Lessee and to deliver up the same to the Lessor at
        the expiration or sooner determination of the said term in like
        condition (fair wear and tear excepted).

   (i)  TO PROTECT INTERIOR FROM APPROACHING TYPHOONS

        To take all reasonable precautions to protect the interior of the
        Demised Premises against damage by storm or typhoon or the like.

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   (j)  TO REPAIR AND REPLACE ELECTRICAL WIRING ETC. WITHIN THE DEMISED PREMISES

        To repair or replace if so required by the appropriate supply company
        statutory undertaker or authority (as the case may be) under the terms
        of any Electricity Supply or similar Ordinance for the time being in
        force or any Orders in Council or Regulations made thereunder all
        electrical wiring installations and fittings within the Demised Premises
        from the Lessee`s meter or meters to and within the same.

   (k)  TO KEEP SANITARY AND WATER APPARATUS USED EXCLUSIVELY IN GOOD REPAIR

        To keep the sanitary and water apparatus used exclusively by the Lessee
        and his servants agents and licensees in good clean and tenantable
        repair and condition (fair wear and tear excepted) to the satisfaction
        of the Lessor and in accordance with the Regulations or by-laws of all
        Public Health and other Government Authorities concerned.

   (l)  TO PERMIT LESSOR TO ENTER AND VIEW TO REPAIR, ETC.

        To permit the Lessor and all persons authorised by him at all reasonable
        times upon prior appointment except in case of emergency to enter and :-

   (i)  view the state of repair of the Demised Premises, to take inventories of
        the fixtures therein, to carry out any works or repairs which may be
        required to be done, and during the last three months of the said term
        to show the Demised Premises to prospective tenants or purchasers
        Provided That the Lessor shall cause as little interference to the
        Lessee as reasonably possible; and

   (ii) carry out any works or repairs in respect of the Demised Premises in the
        Building Provided That in this connection the Lessor shall be
        responsible to make good all damage done to the Demised Premises.

   (m)  TO EXECUTE REPAIR ON RECEIPT OF NOTICE

        On receipt of any reasonable notice from the Lessor or his authorised
        representatives specifying any works or repairs which they require to be
        done and which are the responsibility of the Lessee within a reasonable
        times to put in hand and execute the same with all possible despatch and
        without any delay.

   (n)  NOT TO ERECT INSTALL OR ALTER PARTITIONING FIXTURES ETC. WITHOUT
        LESSOR`S CONSENT

        Not without the previous written consent of the Lessor (which consent
        shall not be unreasonably withheld) to erect install or alter any
        fixtures partitioning or other erection or installation in the Demised
        Premises or any part thereof.

   (o)  TO REMOVE ILLEGAL STRUCTURES

        To remove at the cost of the Lessee any structure erections partitions
        and other alterations put up by the Lessee at any time during the said
        term if required by the Building Authority or other competent Government
        Departments where the same were or have been put up by

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        the Lessee with or without the consent of the Lessor to make good all
        damage caused by such removal. The Lessor shall not be responsible to
        the Lessee for any loss suffered by the Lessee in any way as a result of
        such renewal.

   (p)  NOT TO CUT INJURE OR MAIM WALLS, ETC.

        Not to cut maim injure drill into mark or deface or permit or suffer to
        be cut maimed injured drilled into marked or defaced any doors windows
        walls beams structural members or any part of the fabric of the Demised
        Premises nor any of the plumbing or sanitary apparatus or installations
        included therein without the previous consent of the Lessor which
        consent shall not be unreasonably withheld.

   (q)  NOT TO DRIVE NAILS ETC. INTO CEILINGS WALLS OR FLOORS

        Not to drive or insert or permit or suffer to be driven or inserted any
        nails screws hooks brackets or similar articles into the ceilings walls
        or floors of the Demised Premises without the previous consent of the
        Lessor which shall not be unreasonably withheld nor without the like
        consent to lay or use any floor covering which may damage the existing
        flooring.

   (r)  NOT TO DISPLAY SIGNS EXCEPT NAME ETC. IN PLACES PROVIDED

        Not to affix or display or permit or suffer to be affixed or displayed
        outside the Demised Premises any signboard sign decoration or other
        device whether illuminated or not which may be visible from outside the
        Demised Premises save that :-

   (i)  the Lessee shall be entitled at his own expense in display his name
        exhibited in English and Chinese in such form or lettering or characters
        to be approved by the Lessor on the Directory Boards (if the same are
        provided in the Building).

   (ii) the Lessee shall be entitled at his own expense to have his name painted
        or affixed in plain lettering and characters to be approved by the
        Lessor on the Lessee`s entrance door or doors.

        If the Lessee carries on business under a name other than his own name,
        he shall notify the Lessor of the name under which his business is
        carried on and shall be entitled to have that name displayed painted or
        affixed as aforesaid but the Lessee shall not be entitled to change the
        business name without the previous written consent of the Lessor which
        the Lessor may give or withhold at his discretion and without prejudice
        to the foregoing, the Lessor may, in connection with any application for
        consent under this Clause, require the Lessee to produce such evidence
        as he may think fit to show that no breach of Clause 2(al) has taken
        place or is about to take place.

   (s)  NO HANGING IN COMMON PARTS

        Not to use or cause or permit the use of the corridors staircases or
        other common passages of the Building for the purpose of drying laundry
        or hanging or placing or storing any article or thing thereon or therein
        and not to permit the Lessee`s agents servants employees guests invitees
        to use the same for loitering or eating.

   (t)  NOT TO ENCUMBER OR OBSTRUCT PASSAGES AND COMMON AREAS, ETC.

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        Not to encumber or obstruct or permit to be encumbered or obstructed
        with any box packaging or other obstruction of any kind or nature any of
        the entrance staircases landings passages lifts lobbies or other parts
        of the Building in common use and not to leave rubbish or any other
        article or thing in any part of the Building not in the exclusive
        occupation of the Lessee.

   (u)  NOT TO LAY WIRING OR CABLES ETC. IN THE PUBLIC AREAS

        Not to lay install affix or attach any wiring cables or other articles
        or things in or upon any of the entrances staircases landings
        passageways lobbies or public area.

   (v)  NO SUPPORTS ETC. ERECTED ON EXTERIOR WALLS

        Not to install or affix or erect any supports or any iron brackets or
        venetian blinds or sun blinds of any description to or on any part of
        the exterior walls of the Building for any purpose including the
        installation of air-conditioners without prior written approval of the
        Lessor.

   (w)  NO OPENINGS ON EXTERIOR WALL

        Not to make any openings on any part of the exterior walls of the
        Building.

   (x)  NO SHELTERS ON FLAT ROOFS, ETC.

        Not to erect any shelters or coverings on any part of the flat-roofs or
        roof of the Building.

   (y)  NO WIRING FROM WINDOW

        Not to erect or hang any wire or aerial wiring from the windows or
        outside the exterior walls of the Building.

   (z)  NOT TO OVERLOAD

        Not to store or place any goods machinery or other things on or in any
        part of the Demised Premises which impose a loading exceeding 150 lbs.
        per square foot.

   (aa) COMPLYING WITH GOVERNMENT REGULATIONS

        All machinery placed on or affixed to the Demised Premises must be
        cushioned and the number of workers working or staying in the Demised
        Premises must be restricted in accordance with Government Regulations.

   (ab) NOT TO INSTALL FURNITURE, ETC. WITHOUT PRIOR GOVERNMENT PERMISSION

        Not to install any furnace boiler or other plant or equipment in the
        Demised Premises or use any fuel that might in any circumstances produce
        smoke without first obtaining permission in writing from the
        Commissioner of Labour Provided That such installation or user shall not
        amount to a breach of any covenants terms and conditions in the
        Government Lease or Conditions or the Deed of Mutual Covenant and the
        Management Agreement (if any) of the Building.

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   (ac) FIRE-FIGHTING EQUIPMENT

        All fire-fighting equipment (if any) installed in the Demised Premises
        shall be and remain the property of the Lessor and the Lessee shall take
        due care thereof and in particular the Lessee shall not allow such
        equipment to be moved to any other position. The Lessee shall further
        pay the annual charge or fees of all the fire-fighting equipment
        installed in the Demised Premises.

   (ad) TO ELIMINATE AND REDUCE VIBRATION AND DUMPING PRODUCED BY MACHINERIES

        The Lessee shall mount and equip his machinery particularly machinery
        with horizontal reciprocating action and every part thereof with
        anti-vibration absorbers and anti-dumping absorbers of such types and
        designs as first approved of in writing by the Lessor`s architect and
        shall comply with all directions or orders of the Lessor for eliminating
        and reducing vibrations and dumping produced by the operation and
        running of any of the machinery installed at the Demised Premises.

   (ae) NOT TO ALTER SMOKE LOBBY DOORS

        Not to alter the position of the smoke lobby doors or to make any
        additions to such doors.

   (af) NOT TO OVERLOAD LIFTS

        Not to overload the lifts in the Building in excess of their maximum
        capacity and to be responsible for any damage caused by any breach
        hereof.

   (ag) NOT TO PREPARE FOOD OR PERMIT ODOURS

        Not to prepare or permit or suffer to be prepared any food in the
        Demised Premises or to cause or permit any offensive or unusual odours
        to be produced upon permeate through or emanate from the Demised
        Premises.

   (ah) NOT TO PRODUCE MUSIC OR NOISE AUDIBLE OUTSIDE

        Not to produce or permit or suffer to be produced any music or noise
        (including sound produced by broadcasting or any apparatus or equipment
        capable of producing reproducing receiving or recording sound) so as to
        cause a nuisance to other users of the Building and where music is to be
        regularly played to install at the Lessee`s cost or expense and to the
        satisfaction of the Lessor adequate sound proving or insulation devices
        in the Demised Premises.

   (ai) NOT TO PERMIT ANY NUISANCE OR ANNOYANCE

        Not to do or permit or suffer to be done any act or thing which may be
        or become a nuisance or annoyance to the Lessor or to the tenants or
        occupiers of the other premises in the Building or in any adjoining or
        neighbouring building.

   (aj) NOT TO KEEP ITEMS OF COMBUSTIBLE OR HAZARDOUS GOODS

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        Not to keep or store or permit or suffer to be kept or stored in the
        Demised Premises any arms ammunition gun-powder salt-petre kerosene or
        other explosive or combustible substance or otherwise unlawful or
        dangerous or hazardous goods.

   (ak) NOT TO KEEP ANIMALS OR PETS AND TO PREVENT INFECTION

        Not to keep or permit or suffer to be kept any animals or pets inside
        the Demised Premises and to take all such steps and precautions to the
        satisfaction of the Lessor to prevent the Demised Premises or any part
        thereof from becoming infested by termites rates mice roaches or any
        other pests or vermin.

   (al) NOT TO ASSIGN UNDERLET, ETC.

        Not to assign underlet part with possession of or transfer the Demised
        Premises and/or the Car Parking Spaces or any part thereof or any
        interest therein nor permit or suffer any arrangement or transaction
        whereby any person who is not a party to this Lease obtains the use
        possession occupation or enjoyment of the Demised Premises and/or the
        Car Parking Spaces or any part thereof irrespective of whether any
        rental or other consideration is given therefor. The demise shall be
        personal to the Lessee named in this Lease and without in any way
        limiting the generality of the foregoing, the following acts and events
        shall, unless approved in writing be deemed to be breaches of this
        Clause :-

  (i)   in the case of a Lessee which is a partnership, the taking in of one or
        more new partners whether on the death or retirement of an existing
        partner or otherwise.

  (ii)  in the case of a Lessee who is an individual (including a sole surviving
        partner or a partnership Lessee) the death insanity or other disability
        of that individual to the intent that no right to use possess occupy or
        enjoy the Demised Premises or any part thereof shall vest in the
        executors administrators personal representatives next of kin trustee or
        committee of any such individual.

  (iii) in the case of a corporation any reconstruction amalgamation merger or
        voluntary liquidation or any change in shareholding or in the control of
        ultimate beneficial ownership.

   (iv) the giving by the Lessee of a Power of Attorney or similar authority
        whereby the donee of the power obtains the right to use possess occupy
        or enjoy the Demised Premises or any part thereof or does in fact use
        possess occupy or enjoy the same.

   (am) NOT TO BREACH GOVERNMENT LEASE OR CAUSE INSURANCE TO BE VOIDED OR
        PREMIUM INCREASED

        Not to do or permit or suffer to be done any act deed matter or thing
        whatsoever which amounts to a breach of any of the covenants terms and
        conditions under which the land on which the Building stands is held
        from the Government or whereby any insurance on the Building against
        loss or damage by fire and/or claims by third parties for the time being
        in force may be rendered void or voidable or whereby the premium thereon
        may be increased Provided That if as the result of any act deed matter
        or thing done permitted or suffered by the Lessee the premium on any
        such policy of insurance shall be increased the Lessor shall be entitled
        at his option either to terminate this demise or to continue the same
        upon payment by the Lessee of the additional premium and upon such other
        terms and conditions as the Lessor may at his discretion think fit to
        impose.

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   (an) TO COMPLY WITH DEED OF MUTUAL COVENANT AND ORDINANCES, ETC.

        To obey and comply with and to indemnify the Lessor against the breach
        of the Deed of Mutual Covenant and Management Agreement (if any) of the
        Building and all ordinances regulations by-laws rules and requirements
        of any Governmental or other competent authority relating to the conduct
        and carrying on of the Lessee`s business on the Demised Premises or to
        any other acts deeds matters or things done permitted suffered or
        omitted therein or thereon by the Lessee or any employee agent or
        licensee of the Lessee.

   (ao) TO MAKE GOOD DAMAGE TO BUILDING

        To make good at the expenses of the Lessee any portion of the Building
        which may be damaged through any omission act or default of the Lessee
        or of any of his servants visitors or through the escape of water fire
        smoke or fumes from or explosion in the Demised Premises.

   (ap) TO REIMBURSE LESSOR FOR WORK DONE

        To reimburse the Lessor for the costs of any work which the Lessee is
        liable to perform hereunder and has defaulted in performing the same
        including but not limited to all reasonable costs incurred by the Lessor
        in cleansing or clearing any of the drains pipes or sanitary or plumbing
        apparatus choked or stopped up owing to the careless or improper use or
        neglect by the Lessee or any employee agent or licensee of the Lessee.

   (aq) TO BE RESPONSIBLE FOR LOSS OR DAMAGE CAUSED BY INTERIOR DEFECTS

        To be wholly responsible for any loss damage or injury caused to any
        other person whom-soever directly or indirectly through the defective or
        damaged condition of any part of the interior of the Demised Premises
        save and except where such loss damage or injury arises through the
        breach or non-observance or non-performance by the Lessor of the
        Lessor`s covenants or through the neglect or lack of proper skill on the
        part of the Lessor or any employee contractor or agent of the Lessor and
        Subject as aforesaid to make good the same by payment or otherwise and
        to indemnify the Lessor against all actions proceedings claims and
        demands made upon the Lessor in respect of any such loss damage or
        injury and all costs and expenses incidental thereto.

   (ar) TO BE RESPONSIBLE FOR CONTRACTORS SERVANTS AGENTS AND LICENSEES

        To be responsible to the Lessor for the acts neglects and defaults of
        all contractors servants agents and licensees of the Lessee as if they
        were the acts neglects and defaults of the Lessee himself and for the
        purposes of this Lease "LICENSEE" shall include any person present in
        using or visiting the Demised Premises with the consent of the Lessee
        express or implied.

   (as) TO NOTIFY LESSOR OF ACCIDENTS AND DEFECTS IN FITTINGS AND FIXTURES

        To notify the Lessor of any accidents to or defects in the water pipes
        gas pipes electrical

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        wire or fittings or other facilities provided by the Lessor in the
        Demised Premises whether or not the Lessee is liable hereunder for the
        repair of the same upon the same coming to the knowledge of the Lessee.

   (at) TO REMOVE REFUSE TO A PLACE SPECIFIED BY LESSOR

        To remove each day from the Demised Premises all refuse and rubbish to
        such spot as shall be specified by the Lessor from time to time and
        subject to such reasonable rules and regulations as the Lessor may from
        time to time determine.

   (au) RE-INSTATE DEMISED PREMISES

        Unless the Lessor otherwise agrees in writing to re-instate and restore
        the Demised Premises to their original condition and to make good all
        damage caused or occasioned by the erection and removal of alterations
        partitions or other erections.

   (av) TO YIELD UP AT THE END OF THE TERM

        Quietly to yield up the Demised Premises together with all fixtures
        fittings and additions therein and thereto which the Lessor agrees to
        retain and the Car Parking Spaces at the expiration or sooner
        determination of this demise in good clean and tenantable repair and
        condition (fair wear and tear excepted).

3.      LESSOR`S COVENANTS

3.01    The Lessor hereby covenants with the Lessee as follows :-

   (a)  TO PAY GOVERNMENT RENT ETC.

        That the Lessor will pay the Government rent payable in respect of the
        Demised Premises and the Car Parking Spaces and the Property Tax (if
        any) payable in respect of the Demised Premises and any expenses of a
        capital or non-recurring nature Provided That all charges and outgoings
        in relation to the Lessee`s own installations shall be borne by the
        Lessee solely.

   (b)  THE LESSEE SHALL HAVE QUIET ENJOYMENT

        That the Lessee paying the Rent and management fees and maintenance
        charges hereby agreed to be paid on the days and in manner herein
        provided for payment of the same and observing and performing the
        covenants agreements stipulations and conditions herein contained and on
        the Lessee`s part to be observed and performed shall peaceably hold and
        enjoy the Demised Premises and the Car Parking Spaces during the said
        term without any interruption by the Lessor or any person lawfully
        claiming under or in trust for the Lessor.

   (c)  TO KEEP IN REPAIR THE OUTSIDE MAIN WALLS AND ROOF, ETC.

        To keep the outside main walls structure foundations and roof of the
        Building and the lift entrance hall corridor passages staircases and the
        convenience (if any) intended for the common use of the occupants at all
        times in complete repair (including drains gutters and external pipes)
        in accordance with the relevant provisions of the Deed of Mutual
        Covenant and/or the Management Agreement (if any).

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4.      It is hereby further expressly agreed and declared as follows :-

   (a)  OTHER PROVISIONS LESSOR`S RIGHT OF RE-ENTRY

        If the Rent and/or air-conditioning charges and/or management fees and
        maintenance charges and/or rates and/or other charges hereby covenanted
        to be paid or any part thereof shall be unpaid for seven days after the
        same shall become payable (whether legally or formally demanded or not)
        or if the Lessee shall fail or neglect to observe or perform any of the
        covenants agreements stipulations or conditions herein contained and on
        the Lessee`s part to be observed and performed or if the Lessee shall
        become bankrupt or being a corporation shall go into liquidation (save
        for the purposes of amalgamation or reconstruction) or if any petition
        shall be filed for winding up of the Lessee or if the Lessee otherwise
        becomes insolvent or makes any composition or arrangement with creditors
        or shall suffer any execution to be levied on the Demised Premises and
        the Car Parking Spaces or otherwise on the Lessee's goods then and in
        any such case it shall be lawful for the Lessor at any time thereafter
        to re-enter the Demised Premises and the Car Parking Spaces or any part
        thereof in the name of the whole whereupon this demise shall absolutely
        cease and determine but without prejudice to any right of action by the
        Lessor in respect of any outstanding breach or non-observance or
        non-performance of any of the covenants agreements stipulations and
        conditions herein contained and on the Lessee`s part to be observed and
        performed and to the Lessor's right to deduct all loss and damage
        thereby incurred from the deposit paid by the Lessee in accordance with
        Clause 5 hereof.

   (b)  WRITTEN NOTICE SUFFICIENT EXERCISE OF RIGHT

        A written notice served by the Lessor on the Lessee in manner
        hereinafter mentioned to the effect that the Lessor thereby exercises
        the power of re-entry herein contained shall be full and sufficient
        exercise of such power without actual entry on the part of the Lessor.

   (c)  ACCEPTANCE OF RENT NOT WAIVER OF BREACH OF COVENANT

        Acceptance of Rent (or management fees) by the Lessor shall not be
        deemed to operate as waiver by the Lessor of any right to proceed
        against the Lessee in respect of any breach non-observance or
        non-performance by the Lessee of any of the covenants agreements
        stipulations and conditions herein contained and on the Lessee`s part to
        be observed and performed.

   (d)  LESSOR NOT LIABLE FOR OVERFLOW OF WATER/LESSEE TO INDEMNIFY LESSOR
        AGAINST CERTAIN CLAIMS

        The Lessor shall not be under any liability to the Lessee or to any
        other person whomsoever in respect of any loss or damage to person or
        property sustained by the Lessee or any such other person caused by or
        through or in any way owing to the overflow of water from any where
        within the Building save and except where such loss or damage to person
        or property arises through the breach or non-observance or
        non-performance by the Lessor of the Lessor`s covenants or through the
        neglect or lack of proper skill on the part of the Lessor or any
        employee contractor or agent of the Lessor. Subject as aforesaid, the
        Lessee shall fully and effectually indemnify the Lessor from and against
        all claims and demands made against the Lessor by any person in respect
        of any loss damage or injury caused by or through or in any way owing to
        the overflow of water from the Demised Premises or to the neglect or

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        default of the Lessee his servants or agents or interior of the Demised
        Premises or any fixtures or fittings for the repair of which the Lessee
        is responsible hereunder and against all costs and expenses incurred by
        the Lessor in respect of any such claim or demand.

   (e)  NO ADVANCE PAYMENT OF RENT

        No advance payment of Rent has been paid to the Lessor except in
        pursuance to Clause 1 hereof.

   (f)  LESSOR NOT LIABLE FOR BREAKDOWN IN AIR-CONDITIONING OR LIFTS

        The Lessor shall not in any circumstances be liable to the Lessee for
        any defect in or failure or breakdown of electricity gas or water supply
        lifts services or air-conditioning system nor shall the Rent or
        management fees and maintenance charges abate or cease to be payable on
        account thereof.

   (g)  SUSPENSION OR ABATEMENT OF RENT IN CASE OF FIRE, ETC.

        If the Demised Premises and the Car Parking Spaces or the Building or
        any part thereof shall at any time during the demise rendered be
        inaccessible or so destroyed or damaged owing to fire water storm wind
        typhoon defective construction white ants earthquake subsidence of the
        ground or any calamity beyond the control of the Lessor as to render the
        Demised Premises and the Car Parking Spaces unfit for habitation and use
        and the policy or policies of insurance effected by the Lessor shall not
        have been vitiated or payment of the policy moneys refused in whole or
        in part in consequence of any act or default of the Lessee or if at any
        time during the continuance of this demise the Demised Premises and the
        Car Parking Spaces or the Building shall be condemned as a dangerous
        structure or a demolition order or closing order shall become operative
        in respect of the Demised Premises and the Car Parking Spaces or the
        Building then the Rent hereby reserved or a fair proportion thereof
        according to the nature and extent of the damage sustained or order made
        shall after the expiration of the then current month be suspended and
        ceased until the Demised Premises and the Car Parking Spaces or the
        Building shall again be rendered accessible or fit for habitation and
        use (as the case may be) Provided That should the Demised Premises and
        the Car Parking Spaces or the Building not have been reinstated in the
        meantime either the Lessor or the Lessee may at any time after three
        months from the occurrence of such damage or destruction or order give
        to the other of them notice in writing to determine this present demise
        and thereupon the same and everything herein contained shall determine
        as from the date of the occurrence of such destruction or damage or
        order of the Demised Premises and the Car Parking Spaces or of the
        Building becoming inaccessible but without prejudice to the rights and
        remedies of either party against the other in respect of any antecedent
        claim or breach of the covenants agreements stipulations terms and
        conditions herein contained or of the Lessor in respect of the Rent and
        management fees and other charges payable hereunder prior to the coming
        into effect of the suspension.

   (h)  FOR THE PURPOSE OF DISTRAINT RENT IN ARREARS IF NOT PAID IN ADVANCE ON
        DUE DATE

        For the purposes of Part III of the Landlord and Tenant (Consolidation)
        Ordinance Cap.7 and of these presents the Rent and management fees and
        other charges payable in respect of the Demised Premises and the Car
        Parking Spaces shall be and be deemed to be in arrears if

                                       12
<PAGE>   13

        not paid in advance at the times and in manner hereinbefore provided for
        payment thereof. All costs and expenses for and incidental to any
        distraint shall be paid by the Lessee and is recoverable from him as a
        debt on a full indemnity basis. For the purpose of distraint and these
        presents, any outstanding management fees payable in respect of the
        Demised Premises and the Car Parking Spaces shall be deemed to be
        arrears of rent.

   (i)  NO WAIVER BY LESSOR

        No condoning excusing or waiving by the Lessor of any default breach or
        non-observance or non-performance by the Lessee at any time or times of
        any of the Lessee`s obligations herein contained shall operate as a
        waiver of the Lessor's rights hereunder in respect of any continuing or
        subsequent default breach or non-performance or non-observance or so as
        to defeat or affect in any way the rights and remedies of the Lessor
        hereunder in respect of any such continuing or subsequent default or
        breach and no waiver by the Lessor shall be inferred from or implied by
        anything done or omitted by the Lessor unless expressed in writing and
        signed by the Lessor. Any consent given by the Lessor shall operate as a
        consent only for the particular matter to which it relates and in no way
        shall be considered as a waiver or release of any of the provisions
        hereof nor shall it be construed as dispensing with the necessity or
        obtaining the specific written consent of the Lessor in the future
        unless expressly so provided.

   (j)  LESSOR CAN EXHIBIT LETTING NOTICES DURING LAST THREE MONTHS OF TERM

        During the three months immediately preceding the expiration of the said
        term, the Lessor shall be at liberty to affix and maintain without
        interference upon any external part of the Demised Premises and/or the
        Car Parking Spaces a notice stating that the Demised Premises and/or the
        Car Parking Spaces are to be let and such other information in
        connection therewith as the Lessor shall reasonably require and the
        Lessor shall be at liberty with prior arrangement with the Lessee to
        show the Demised Premises to prospective tenants.

   (k)  LESSOR IS ENTITLED TO CHANGE THE NAME OF THE BUILDING

        The Lessor shall at any time during the said term be entitled to change
        the name of the Building on giving reasonable notice to the Lessee and
        in respect thereof the Lessor shall not be liable in damages to the
        Lessee or be made a party to any other proceedings or for costs of
        expenses of whatsoever nature incurred by the Lessee as a result of such
        change.

   (l)  NO WARRANTY AS TO USER

        The Lessor does not warrant that the Demised Premises and the Car
        Parking Spaces are suitable for any particular purpose.

   (m)  SERVICE OF NOTICE

        Any notice required to be served hereunder shall if to be served on the
        Lessee be sufficiently served if addressed to the Lessee and sent by
        prepaid post to or delivered at the Demised Premises or the Lessee`s
        registered office or last known place of business or residence in Hong
        Kong and if to be served on the Lessor shall be sufficiently served if
        addressed to the Lessor and sent by prepaid post to or delivered to the
        Lessor's registered

                                       13
<PAGE>   14

        office or address as shown in this Agreement.

   (n)  STAMP DUTY AND COSTS

        All the costs of and incidental to the preparation completion and
        registration of this Lease and the stamp duty, registration fee and
        other disbursements on this Lease shall be borne by the parties herein
        in equal shares.

5. (a)  LESSEE`S DEPOSIT

        The Lessee shall on the execution hereof deposit and maintain with the
        Lessor a deposit of the amount as set out in the Third Schedule hereto
        (HK$156,406.00 being part of the deposit deposited under a Tenancy
        Agreement in respect of the Demised Premises dated the 28th July 1997
        and made between the parties hereto shall be transferred to this Lease
        as a deposit and the balance thereof in the sum of HK$17,379.00 shall be
        refunded by the Lessor to the Lessee upon the signing hereof) to secure
        the due observance and performance by the Lessee of the covenants
        agreements stipulations and conditions herein contained and on the
        Lessee`s part to be observed and performed. The said deposit shall be
        retained by the Lessor throughout the said term free of any interest to
        the Lessee and in the event of any breach or non-observance or
        non-performance by the Lessee of any of the said covenants agreements
        stipulations or conditions aforesaid, the Lessor shall be entitled to
        terminate this demise and to forfeit the said deposit by way of
        liquidated damages without prejudice to the Lessor's right to claim
        against the Lessee for further damages suffered by the Lessor as a
        result of the Lessee`s breach of this Lease. Notwithstanding the
        foregoing, the Lessor may in any such event at his option elect nor to
        terminate this demise and forfeit the deposit but to deduct therefrom
        the amount of any monetary loss incurred by the Lessor in consequence of
        the breach non-observance or non-performance by the Lessee in which
        event the Lessee shall as a condition precedent to the continuation of
        the demise deposit with the Lessor the amount so deducted and if the
        Lessee shall fail so to do the Lessor shall forthwith be entitled to
        re-enter the Demised Premises and the Car Parking Spaces and to
        determine this demise and forfeit the deposit as hereinbefore provided.

   (b)  REPAYMENT OF DEPOSIT

        Subject as aforesaid, the said deposit shall be refunded to the Lessee
        by the Lessor without interest within thirty days after the expiration
        or sooner determination of this demise and the delivery of vacant
        possession to the Lessor or within thirty days of the settlement of the
        last outstanding claim by the Lessor against the Lessee in respect of
        any breach non-observance or non-performance of any of the covenants
        agreements stipulations or conditions herein contained and on the part
        of the Lessee to be observed and performed whichever is the later.

   (c)  TRANSFER OF DEPOSIT

        In the event that the Lessor shall assign its reversionary interest in
        the Demised Premises, the Lessee shall agree to the Lessor transferring
        the said deposit to the assignee and shall waive its right to recover
        the said deposit from the Lessor upon receipt of a written notice from
        the Lessor that such transfer has been effected.

6.      COOLING TOWERS

                                       14
<PAGE>   15

6.01    It is hereby agreed by and between the parties hereto that in the event
of any competent authorities of the Government of Hong Kong serving notice on
the Lessor or the Lessee ordering to remove the cooling tower(s) which was/were
erected by the Lessee at the external walls of the Building, the Lessee shall
forthwith remove the same at its own costs and expenses and at the like expenses
reinstate the external walls to the condition as at the date(s) of the said
cooling tower(s) was/were erected and the Lessee shall indemnify the Lessor for
all loss and damages which the Lessor has suffered or may suffer as a result of
such removal and reinstatement. The Lessor will in such event grant a licence to
the Lessee to use 2 areas of 11' x 11' each on the roof of the Building to
install 2-100 tons (RT) cooling tower(s) (weight 1500 kg. each) such areas shall
be designated by the Lessor Provided That subject to compliance by the Lessor
with Clause 6.02 :-

   (a)  the Lessee shall ensure that the installation of the said cooling towers
        shall not cause damage to the Building.

   (b)  the Lessee shall be responsible for all expenses for the repair and
        maintenance of the said cooling towers and the said areas to the
        satisfaction of the Lessor.

   (c)  such installation shall not be in breach of any ordinances or
        regulations of Hong Kong; and

   (d)  at the expiration or sooner determination of the demise the Lessee shall
        at its own cost and expense remove the said cooling towers and at like
        cost and expense reinstate the said areas to their original condition to
        the satisfaction of the Lessor.

6.02    The Lessor shall ensure that the Building is at all times constructed
and/or reinforced so as to be able safely to carry the said cooling towers and
to be in compliance with all loading requirements of any ordinances or
regulations of Hong Kong in relation to the installation of the cooling towers.

7.      LAWS

7.01    This Lease shall be construed and take effect in accordance with Hong
Kong Law.

8.      HEADING NOTES

8.01    The heading notes are intended for guidance only and do not form part of
this Lease nor shall any of the provisions in this Lease be construed or
interpreted by reference thereto or in any way affected or limited thereby.

                      THE FIRST SCHEDULE ABOVE REFERRED TO

LESSOR :                 JING WAH GARMENTS MANUFACTORY COMPANY LIMITED () whose
                         registered office is situate at 8th Floor, Jing Wah
                         Building, 10 Sam Chuk Street, San Po Kong, Kowloon,
                         Hong Kong.

LESSEE :                 TELCOM SEMICONDUCTOR HONG KONG LIMITED () whose
                         registered office is situate at Ground Floor, Jing Wah
                         Industrial Building, 10 Sam Chuk Street, Sanpokong,
                         Kowloon, Hong Kong.

                                       15
<PAGE>   16

                      THE SECOND SCHEDULE ABOVE REFERRED TO

DEMISED PREMISES :       ALL THOSE UNITS B and C on the GROUND FLOOR, the whole
                         of the FIRST FLOOR, the whole of the SECOND FLOOR, UNIT
                         A on the FIFTH FLOOR and UNIT A on the SEVENTH FLOOR of
                         NO.10 SAM CHUK STREET Kowloon Hong Kong erected on NEW
                         KOWLOON INLAND LOT NO.4437.

                   THE THIRD SCHEDULE ABOVE ABOVE REFERRED TO

TERM      :              For the term of FIVE YEARS commencing on the 11th day
                         of July 2000 and expiring on 10th day of July 2005
                         (both days inclusive).

RENT      :              HK$156,406.00 (apportionment of which is set out
                         hereunder) per calendar month (exclusive of rates)
                         payable in advance clear of all deductions on the 11th
                         day of each and every calendar month. The first payment
                         to be made on the 11th day of July 2000.

<TABLE>
<CAPTION>
                Premises                     Area                  Monthly Rent
                --------                     ----                  ------------
<S>                                       <C>                      <C>
           Unit B on Ground Floor         3,600 sq. ft.            HK$30,780.00
           Unit C on Ground Floor         50 sq. ft.               HK$ 4,050.00
           The whole of 1st Floor         10,000 sq. ft.           HK$40,500.00
           The whole of 2nd Floor         10,000 sq. ft.           HK$40,500.00
           Unit A on 5th Floor            5,769 sq. ft.            HK$23,364.00
           Unit A on 7th Floor            4,250 sq. ft.            HK$17,212.00
</TABLE>

USER       :             As factory use under the name of Lessee.

DEPOSIT    :             HK$156,406.00.

IN WITNESS the parties hereto have duly executed this Lease the day and year
first above written.

SEALED with the Common Seal of      )
the Lessor and SIGNED by            )       Chan Jing & Chan Kwok Wing, two of
                                    )       its directors
in the presence of :-               )

Herny T.T. Chiu
Solicitor Hong Kong SAR
Messrs. Simon C.W. Yung & Co.

SEALED with the Common Seal of      )
the Lessee and SIGNED by            )       Wang Shi Hsiong
                                    )       Vice President Asia Operations
                                    )
in the presence of :-               )

                                       16
<PAGE>   17

Louis Wong, Financial  Controller

               RECEIVED on the day and year first above written of and from the
Lessor being refund of balance of deposit in the sum of HK$17,379.00.

                                        ----------------------------------------
                                                      the Lessee

                                       17<PAGE>   1

                                                                     EXHIBIT 4.1

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

                                RIGHTS AGREEMENT

                                   DATED AS OF

                                 AUGUST 3, 2000

                                     BETWEEN

                               VISX, INCORPORATED
                             A DELAWARE CORPORATION

                                       AND

                               FLEET NATIONAL BANK
                         A NATIONAL BANKING ASSOCIATION,
                                 AS RIGHTS AGENT

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

<PAGE>   2

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

Section                                                                        Page
-------                                                                        ----
<S>                                                                            <C>
Certain Definitions...............................................................1
Appointment of Rights Agent.......................................................8
Issuance of Rights Certificates...................................................8
Form of Rights Certificates......................................................10
Countersignature and Registration................................................12
Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates....................................12
Exercise of Rights; Purchase Price; Expiration Date of Rights....................13
Cancellation and Destruction of Rights Certificates..............................16
Reservation and Availability of Capital Stock....................................16
Common Stock Record Date.........................................................18
Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights......18
Certificate of Adjusted Purchase Price or Number of Shares.......................27
Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power..28
Fractional Rights and Fractional Shares..........................................31
Rights of Action.................................................................32
Agreement of Rights Holders......................................................32
Rights Certificate Holder Not Deemed a Stockholder...............................33
</TABLE>

                                       i
<PAGE>   3

<TABLE>
<CAPTION>

<S>                                                                            <C>
Concerning the Rights Agent.....................................................34
Merger or Consolidation or Change of Name of Rights Agent.......................34
Duties of Rights Agent..........................................................35
Change of Rights Agent..........................................................37
Issuance of New Rights Certificates.............................................38
Redemption and Termination......................................................39
Notice of Certain Events........................................................42
Notices.........................................................................43
Supplements and Amendments......................................................44
Successors......................................................................45
Determinations and Actions by the Board of Directors, etc.......................45
Benefits of this Agreement......................................................45
Severability....................................................................46
Governing Law...................................................................46
Counterparts....................................................................46
Descriptive Headings............................................................47
</TABLE>

                                       ii

<PAGE>   4

                                    EXHIBITS

Exhibit A -    Form of Rights Certificate

Exhibit B -    Form of Summary Rights

                                      iii

<PAGE>   5

                                RIGHTS AGREEMENT

               RIGHTS AGREEMENT, dated as of August 3, 2000 (the "Agreement"),
between VISX, Incorporated, a Delaware corporation (the "Company"), and Fleet
National Bank, a national banking association (the "Rights Agent").

                               W I T N E S S E T H

               WHEREAS, on July 28, 2000 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (the "Board of Directors")
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of common stock, par value $0.01 per share, of the
Company (the "Common Stock") outstanding at the close of business on August 7,
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
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 hereinafter defined) each Right initially representing
the right to purchase one share of Common Stock upon the terms and subject to
the conditions hereinafter set forth (the "Rights");

               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 (x) any Person who or
which, together with all Affiliates and Associates of such Person, shall be 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 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, (iv) any Person who becomes the
Beneficial Owner of 10% or more of the shares of Common Stock then outstanding
as a result of a reduction in the number of shares of Common Stock outstanding
due to the repurchase of shares of Common Stock by the Company other than during
the

                                       1
<PAGE>   6

Special Period (as defined in Section 23(c) hereof) or at a time when the rights
are not redeemable, unless and until such Person, after becoming aware that such
Person has become the Beneficial Owner of 10% or more of the then outstanding
shares of Common Stock, acquires beneficial ownership of additional shares of
Common Stock representing 1% or more of the shares of Common Stock then
outstanding, (v) any Exempted Person, unless and until such Person is an
Exempted Person pursuant to clause (i) of the definition thereof and after the
date such Person initially is an Exempted Person, such Person acquires
beneficial ownership of additional shares of Common Stock representing 1% or
more of the shares of Common Stock then outstanding, (vi) any Passive
Institutional Investor, or (vii) any such 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 the Agreement (the "Exchange Act")
(or any comparable or successor report) or on Schedule 13D under the Exchange
Act (or any comparable or successor report) which Schedule 13D does not state
any intention to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified in Item 4 of
such schedule (other than the disposition of the Common Stock) and, within ten
(10) Business Days of being requested by the Company to advise it regarding the
same, certifies to the Company that such Person acquired shares of Common Stock
in excess of 9.9% inadvertently or without knowledge of the terms of the Rights
and who, together with all Affiliates and Associates, thereafter does not
acquire additional shares of Common Stock while the Beneficial Owner of 10% or
more of the shares of Common Stock then outstanding; that if the Person
requested to so certify fails to do so within ten (10) Business Days, then such
Person shall become an Acquiring Person immediately after such 10-Business-Day
period or (y) any Person who or which has entered into any agreement or
arrangement with the Company or any Subsidiary of the Company providing for an
Acquisition Transaction (as defined in Section 1(b) hereof).

                      (b) "Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company will no longer own
a majority of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the entity
into which the Company may be merged, consolidated or otherwise combined (based
solely on the shares of Common Stock received or retained by such stockholders,
in their capacity as stockholders of the Company, pursuant to such transaction),
(y) a purchase or other acquisition of all or a substantial portion of the
assets of the

                                       2
<PAGE>   7
Company and its Subsidiaries, or (z) a purchase or other acquisition of
securities representing 10% or more of the shares of Common Stock then
outstanding.

                      (c) "Act" shall mean the Securities Act of 1933.

                      (d) "Affected Transaction" shall have the meaning set
forth in Section 23(c) hereof.

                      (e) "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.

                      (f) 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, (B) securities issuable upon
        exercise of Rights at any time prior to the occurrence of a Triggering
        Event (as hereinafter defined), 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 (as hereinafter defined) 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

                                       3
<PAGE>   8

        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 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 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 (d)) or disposing of any voting
        securities of the Company; provided, however, that nothing in this
        paragraph (d) shall cause a Person engaged in business as an underwriter
        of securities to be the "Beneficial Owner" of, or to "beneficially own,"
        any securities acquired through such Person's participation in good
        faith in a firm commitment underwriting until the expiration of forty
        days after the date of such acquisition, and then only if such
        securities continue to be owned by such Person at such expiration of
        forty days and provided further, however, that any stockholder of the
        Company, with affiliate(s), associate(s) or other person(s) who may be
        deemed representatives of it serving as director(s) of the Company,
        shall not be deemed to beneficially own securities held by other Persons
        as a result of (i) persons affiliated or otherwise associated with such
        stockholder serving as directors or taking any action in connection
        therewith, (ii) discussing the status of its shares with the Company or
        other stockholders of the Company similarly situated or (iii) voting or
        acting in a manner similar to other stockholders similarly situated,
        absent a specific finding by the Board of Directors of an express
        agreement among such stockholders to act

                                       4
<PAGE>   9

        in concert with one another as stockholders so as to cause, in the good
        faith judgment of the Board of Directors, each such stockholder to be
        the Beneficial Owner of the shares held by the other stockholder(s).

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

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

                      (i) "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.

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

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

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

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

                      (n) "Exchange Act" shall mean the Securities and Exchange
Act of 1934.

                      (o) "Exempted Person" shall mean any Person who (i) is the
Beneficial Owner, on the date hereof, of securities representing 10% or more of
the shares of Common Stock outstanding on the date hereof, and such Person's
Affiliates and Associates (provided that any Person who, following the date
hereof,

                                       5
<PAGE>   10

fails to continue to be the Beneficial Owner of securities representing at least
10% of the shares of Common Stock outstanding at any time shall, as of such
date, no longer be deemed to be a "Exempted Person" pursuant to this clause(i))
or, (ii) becomes, after the date hereof, the Beneficial Owner of securities
representing 10% or more of the outstanding shares of Common Stock as a result
of a Qualified Offer.

                      (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) "Independent Advisor" shall have the meaning set forth
in Section 23(c) hereof.

                      (s) "Interest" shall have the meaning set forth in Section
23(c) hereof.

                      (t) "Passive Institutional Investor" shall mean an
institutional investor that, together with its Affiliates and Associates, is (A)
the Beneficial Owner of less than 15% of the shares of Common Stock then
outstanding and (B) such investor reports or is required to report such
ownership on Schedule 13G of the Exchange Act (or any comparable or successor
report) and is not permitted to, and does not, report such ownership on Schedule
13D under the Exchange Act (or any comparable or successor report); provided
that any such Person that, together with its Affiliates and Associates, (A)
becomes the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding or (B) becomes required to report, or reports, such ownership on
Schedule 13D of the Exchange Act (or any comparable or successor report) shall,
at such time, immediately cease to be a Passive Institutional Investor.

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

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

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

                                       6
<PAGE>   11
                      (x) "Qualified Offer" shall have the meaning set forth in
Section 11(a)(ii) hereof.

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

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

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

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

                      (aa) "Rights Dividend Declaration Date" shall have the
meaning set forth in the WHEREAS clause at the beginning of this Agreement.

                      (bb1.) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.

                      (cc1.) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.

                      (dd1.) "Special Period" shall have the meaning set forth
in Section 23(c) hereof.

                      (ee1.) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.

                      (ff1.) "Stock Acquisition Date" shall mean the earlier (i)
the first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed or amended pursuant to Section
13(d) under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such pursuant to clause (x) of the definition of
Acquiring Person other than pursuant to a Qualified Offer , and (ii) the date
that an Acquiring Person has become such pursuant to clause (y) of the
definition of Acquiring Person.

                                       7
<PAGE>   12

                      (gg1.) "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.

                      (hh1.) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.

                      (ii1.) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.

                      (jj1.) "Transaction" shall have the meaning set forth in
Section 23(c) hereof.

                      (kk1.) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.

                      (ll1.) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.

                      (mm1.) "Value Enhancement Procedures" shall have the
meaning set forth in Section 23(c) hereof.

               Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-rights agents as
it may deem necessary or desirable, upon 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.  Issuance of Rights Certificates.

                      (a) Until the earlier of (i) the close of business on the
tenth Business Day after the Stock Acquisition Date (or, if the tenth Business
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
provided, however, that no deferral of a Distribution Date by the Board of
Directors pursuant to this clause (ii) may be made at any time during the
Special Period) after the date of the commencement of a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of

                                       8
<PAGE>   13

the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, or
any successor provision thereto, if upon consummation thereof, such Person would
become an Acquiring Person, in either instance other than pursuant to a
Qualified Offer (the earlier 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). 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 right certificates, in substantially the
form of Exhibit A 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, 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) The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights") to
any holder of Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Common Stock 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 (as such term
is defined in Section 7(a) hereof), 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.

                                       9
<PAGE>   14

                      (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. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear the
following legend:

               This certificate also evidences and entitles the holder hereof to
        certain Rights as set forth in the Rights Agreement between VISX,
        Incorporated (the "Company") and the Rights Agent thereunder (the
        "Rights Agreement"), the terms of which are hereby incorporated herein
        by reference and a copy of which is on file at the principal offices of
        the Company. Under certain circumstances, as set forth in the Rights
        Agreement, such Rights will be evidenced by separate certificates and
        will no longer be evidenced by this certificate. The Company will mail
        to the holder of this certificate a copy of the Rights Agreement, 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.

               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 A 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

                                       10
<PAGE>   15

law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. 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 shares of Common Stock as shall be set forth therein at
the price set forth therein (such exercise price per 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), Section 11(i) 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 a 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 the Rights Agreement.

                                       11
<PAGE>   16

               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 may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of shares of Common Stock, other
securities, cash or other assets, as the case may be as the Rights Certificate
or Certificates surrendered then entitles 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 shall make
such request in writing delivered to the Rights Agent, and

                                       12
<PAGE>   17

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) and
Section 14 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, at any time after the
Distribution Date 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 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 shares (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 earlier of (i) 5:00 P.M., Santa Clara,

                                       13
<PAGE>   18

California time, on July 28, 2010, or such later date as may be established by
the Board of Directors prior to the expiration of the Rights (such date, as it
may be extended by the Board of Directors, the ("Final Expiration Date"), or
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof
(the earlier of (i) and (ii) being herein referred to as the "Expiration Date").

                      (b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $150, and shall be
subject to adjustment from time to time as provided in Section 11 and Section
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 share of Common 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 Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the total number
of shares of Common 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 Common Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common 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 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

                                       14
<PAGE>   19

securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.

                      (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 Section 11(a)(ii) 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
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 all 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 any other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.

                      (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

                                       15
<PAGE>   20

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
Common Stock and/or other securities or out of its authorized and issued shares
held in its treasury, the number of shares of 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 Common Stock and/or other
securities issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
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 upon official
notice of issuance upon such exercise.

                      (c) The Company shall use its best 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 Act, with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such

                                       16
<PAGE>   21

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 earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. 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 has
been rescinded. 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 shares of 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 issuance or delivery of the
Rights Certificates and of any certificates for shares of 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 the shares of 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 shares of Common Stock
and/or other securities, as the case may be, in a name other than that

                                       17
<PAGE>   22

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. Common Stock Record Date. Each person in whose name
any certificate for shares of 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 the shares of 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 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 on, and
such certificate shall be dated, the next succeeding Business Day on which the
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 Common Stock
        payable in shares of Common Stock, (B) subdivide the outstanding Common
        Stock, (C) combine the outstanding Common Stock into a smaller number of
        shares, or (D) issue any shares of its capital stock in a
        reclassification of the Common Stock (including any such
        reclassification in connection with a consolidation or merger in which
        the Company is the continuing or surviving corporation), except as
        otherwise provided in this Section 11(a) and Section 7(e)

                                       18
<PAGE>   23

        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 Common 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 Common
        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
        Common Stock transfer books of the Company were open, such holder would
        have owned upon such exercise and been entitled to receive by virtue of
        such dividend, subdivision, combination or reclassification. 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 any Person shall, at any
        time after the Rights Dividend Declaration Date, become an Acquiring
        Person, unless the event causing such Person to become an Acquiring
        Person is a transaction set forth in Section 13(a) hereof, or is 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 investment banking
        firms, to be (a) at a price which is fair to stockholders and not
        inadequate (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
        (provided, however, that no such determination shall be made during the
        Special Period) (a "Qualified Offer")

then, promptly following the occurrence of such event, proper provision shall be
made so that each holder of a Right (except as provided below and in Section
7(e)

                                       19
<PAGE>   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 shares of Common Stock for which a Right was
theretofore exercisable, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of shares of Common 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 authorized by the Company's Restated Certificate of
        Incorporation, but which are 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 (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 which the Board of Directors 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,
        where such aggregate value has been determined by the Board of Directors
        based upon the advice of a nationally recognized investment banking firm
        selected by the Board of Directors; 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

                                       20
<PAGE>   25

        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 of
        Directors 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 necessary, but not more than ninety
        (90) days after the Section 11(a)(ii) Trigger Date, in order that the
        Company may seek stockholder 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 stockholder
        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 Current Value of
        the Common Stock shall be the Current Market Price per share of the
        Common Stock on the Section 11(a)(ii) Trigger Date and the value of any
        Common Stock Equivalent shall be deemed to equal the Current Market
        Price per share of the Common Stock on such date.

                      (b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Common Stock or securities convertible
into Common Stock at a price per share of Common Stock (or having a conversion
price per share, if a security convertible into Common Stock) less than the
Current Market Price (as

                                       21
<PAGE>   26

determined pursuant to Section 11(d) hereof) per share of Common 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 Common Stock outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common 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
Common Stock outstanding on such record date, plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or 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 form other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Common 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 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 Common 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 Common Stock, but including
any dividend payable in stock other than Common Stock), or of 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 Common Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent) 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 Common Stock, and the denominator of which shall be
such

                                       22
<PAGE>   27

Current Market Price (as determined pursuant to Section 11(d) hereof) per
share of Common 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) 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 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 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

                                       23
<PAGE>   28

prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors. 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 determined in good faith by the Board of Directors 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 of Directors, 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, 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 Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Common 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 Common 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 Common
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 shares of

                                       24
<PAGE>   29

Common 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
shares of Common Stock (calculated to the nearest one-ten-thousandth) obtained
by (i) multiplying (x) the number of shares covered by a Right immediately prior
to this adjustment, by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price, and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.

                      (i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common 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 shares of Common 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

                                       25
<PAGE>   30

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 shares of Common Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares 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 shares of Common 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 shares of Common 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 elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of shares
of Common 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 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 shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of any shares of
Common Stock at less than the Current Market Price, (iii) issuance wholly for
cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or

                                       26
<PAGE>   31

warrants referred to in this Section 11, hereafter made by the Company to
holders of its Common 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, cash
flow 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 stockholders 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 or Section 26
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.

               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
Common Stock, a copy of such certificate and (c) if a Distribution Date has
occurred, mail a brief summary thereof to each holder of a Rights Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.

                                       27
<PAGE>   32

               Section 13.  Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow 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, cash flow or
earning power aggregating more than 50% of the assets, cash flow 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 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 tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, 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 shares of Common 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 shares 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

                                       28
<PAGE>   33

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, cash flow 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 Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (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.

                      (c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a

                                       29
<PAGE>   34

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 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; and

                             (ii) take such all such other action as may be
        necessary to enable the Principal Party to issue the securities
        purchasable upon exercise of the Rights, including but not limited to
        the registration or qualification of such securities under all requisite
        securities laws of jurisdictions of the various states and the listing
        of such securities on such exchanges and trading markets 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).

                      (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

                                       30
<PAGE>   35

with a Person or Persons who acquired shares of Common Stock pursuant to a
tender offer or exchange offer for all outstanding shares of Common Stock which
is a Qualified Offer as such term is defined in Section 11(a)(ii) hereof (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 tender offer or exchange 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 tender offer or exchange 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(i)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company shall pay 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. If on any such date no such
market maker is making a market in the Rights, the fair value of

                                       31
<PAGE>   36
the Rights on such date as determined in good faith by the Board of Directors
shall be used.

                      (b) 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 a
share of Common Stock. For purposes of this Section 14(b), the current market
value of a share of Common Stock shall be the closing price of one (1) 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.

                      (c) The holder of a Right by the acceptance of the Rights
expressly waives his 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 own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such 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:

                                       32
<PAGE>   37

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

                      (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 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 shares of Common 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

                                       33
<PAGE>   38

or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such 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 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.

               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, stock transfer or other 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;
but only if such corporation would be eligible

                                       34
<PAGE>   39

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.

               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 President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights

                                       35
<PAGE>   40

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 or Section 13 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
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or other securities
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.

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

                      (g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to

                                       36
<PAGE>   41

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.

                      (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 or 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, by registered or certified mail, and,
if such resignation occurs after the Distribution Date, to the registered
holders of the Rights

                                       37
<PAGE>   42

Certificates by first-class 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, by registered or certified mail, and, if such removal
occurs after the Distribution Date, 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
legal business entity organized and doing business under the laws of the United
States or of the State of New York or of any other state of the United States,
in good standing, having an office in the State of New York, which is authorized
under such laws to exercise corporate trust or stock transfer or shareholder
services powers and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
legal business entity 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, if
such appointment occurs after the Distribution Date, 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 the Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other

                                       38
<PAGE>   43

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, issue
Rights 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 may, at its option, at any time
prior to the earlier of (i) the close of business on the tenth Business 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
Business Day following the Record Date), or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.001 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
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

                                       39
<PAGE>   44

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.

                      (c) Notwithstanding the provisions of Section 23(a)
hereof, if, within 180 days of a public announcement by a third party of an
intent or proposal to engage (without the current and continuing concurrence of
the Board of Directors) in a transaction involving an acquisition of or business
combination with the Company or otherwise to become an Acquiring Person, there
is an election of Directors (whether at one or more stockholder meetings and/or
pursuant to written stockholder consent) resulting in a majority of the Board of
Directors being comprised of persons who were not nominated by the Board of
Directors in office immediately prior to such election, then following the
effectiveness of such election for a period of 180 days (the "Special Period")
the Rights, if otherwise then redeemable absent the provisions of this paragraph
(c), shall be redeemable upon either of the following conditions being
satisfied, but not otherwise:

               (A) by a vote of a majority of the Directors then in office,
provided that

               (I) before such vote, the Board of Directors shall have
implemented the Value Enhancement Procedures (as defined below) and

               (II) promptly after such vote, the Company publicly announces
such vote and

                      (a) the manner in which the Value Enhancement Procedures
were implemented,

                      (b) any material financial, business, personal or other
benefit or relationship (an "Interest") which each Director and each Affiliate
of such

                                       40
<PAGE>   45

Director (identifying each Director and Affiliate separately in relation
to each such Interest) has in connection with any suggested, proposed or pending
transaction with or involving the Company (a "Transaction"), or with any other
party or Affiliate of any other party to a Transaction, where such Transaction
would or might, or is intended to, be permitted or facilitated by redemption of
the Rights (an "Affected Transaction"), other than treatment as a shareholder on
a pro rata basis with other shareholders or pursuant to compensation
arrangements as a director or employee of the Company or a subsidiary which have
been previously disclosed by the Company,

                              (c) the individual vote of each Director on the
motion to redeem the Rights, and

                              (d) the statement of any Director who voted for or
against the motion to redeem the Rights and desires to have a statement included
in such announcement, or

               (B) if clause (A) is not applicable, by a vote of a majority of
the Directors then in office, provided that (I) if there is a challenge to the
Directors' action approving redemption and/or any related Affected Transaction
as a breach of the fiduciary duty of care or loyalty, the Directors, solely for
purposes of determining the effectiveness of such redemption pursuant to this
clause (B), are able to establish the entire fairness of such redemption and, if
applicable, such related Affected Transaction, and (II) the Company shall have
publicly announced the vote of the Board of Directors approving such redemption
and, if applicable, such related Affected Transaction, which announcement shall
set forth the information prescribed by clauses (A)(II)(b), (c) and (d) above.

 "Value Enhancement Procedures" shall mean:

               (1) the selection by the Board of Directors of an independent
financial advisor (the "Independent Advisor") from among financial advisors
which have national standing, have established expertise in advising on mergers,
acquisitions and related matters and have no Interest relating to an Affected
Transaction, and have not during the preceding year provided services to, been
engaged by or been a financing source for any other party to an Affected
Transaction or any Affiliate of any such party or of any Director (other than
the Company and its subsidiaries);

                                       41
<PAGE>   46

               (2) whether or not there is a then-pending Affected Transaction,
the receipt by the Board of Directors from its Independent Advisor of (a) such
advisor's view (expressed in such form and subject to such qualifications and
limitations as the Independent Advisor deems appropriate) regarding whether
redemption of the Rights will serve the best interests of the Company and its
shareholders or (b) such advisor's statement that it is unable to express such a
view, setting forth the reasons therefor;

               (3) if there is a then-pending Affected Transaction,

               (A) the establishment and implementation by the Board of
        Directors of a process and procedures approved by its Independent
        Advisor which the Board of Directors and such advisor conclude would be
        most likely to result in the best value reasonably available to
        shareholders (regardless of whether such Affected Transaction involves a
        "sale of control" or "break-up" of the Company for Delaware law
        purposes),

               (B) the Board of Directors (I) receiving the opinion of its
        Independent Advisor, in customary form and content for transactions of
        the type involved, that the Affected Transaction is fair to the
        Company's shareholders from a financial point of view and (II)
        determining, and the Independent Advisor confirming, that it has no
        reason to believe that a superior transaction is reasonably available
        for the benefit of the Company's shareholders, and

               (C) the execution of a definitive transaction agreement and other
        definitive documentation necessary to effect the Affected Transaction.

                      (d) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 and other
than in connection with the purchase or repurchase by any of them of Common
Stock prior to the Distribution Date.

        Section 24.  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 Common Stock or to make any other distribution to the holders of
Common 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 Common
Stock

                                       42
<PAGE>   47

rights or warrants to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Common Stock (other than
a reclassification involving only the subdivision of outstanding shares of
Common 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, cash flow 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 Common 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 Common 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 Common Stock whichever
shall be the earlier.

                      (b) In case a Section 11(a)(ii) Event shall occur, then,
in any such case, 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.

               Section 25. 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 by the Rights Agent with the Company) as follows:

                                       43
<PAGE>   48

               VISX, Incorporated
               3400 Central Expressway
               Santa Clara, California 95051-0703
               Telephone: (408) 733-2020
               Attention:  Corporate Secretary

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 by the Rights Agent with the Company) as follows:

               Fleet National Bank
               c/o EquiServe L.P.
               150 Royall Street
               Mail Stop: 45-02-62
               Canton, Massachusetts 02021
               Attn: Client 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 26. Supplements and Amendments. Prior to the
Distribution Date, 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, 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 any time period hereunder, pursuant to clause

                                       44
<PAGE>   49

(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. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 26, 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.
Notwithstanding anything herein to the contrary, no supplement or amendment
shall be made to this Agreement during the Special Period or at a time when the
Rights are not redeemable.

               Section 27. 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 28. 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 shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors 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, but not limited to, 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 Persons, and (y) not subject the Board of Directors to any liability to
the holders of the Rights.

               Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution

                                       45
<PAGE>   50

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

               Section 31. 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, except that the rights and
obligations of the Rights Agent shall be governed by the laws of the
Commonwealth of Massachusetts.

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

                                       46
<PAGE>   51

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

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

Attest:                                       VISX, INCORPORATED

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

Attest:                                       FLEET NATIONAL BANK

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

<PAGE>   52

                                                                       Exhibit A

                          [Form of Rights Certificate]

Certificate No. R-                                              ________ Rights

NOT EXERCISABLE AFTER _________ __, 2010 UNLESS EXTENDED PRIOR THERETO BY THE
BOARD OF DIRECTORS OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 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 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.]*
                               Rights Certificate

                               VISX, INCORPORATED

               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,

--------
*       The portion of the legend in brackets shall be inserted only if
        applicable and shall replace the preceding sentence.

                                       1
<PAGE>   53

dated as of ________ __, 2000_ (the "Rights Agreement"), between VISX,
INCORPORATED, a Delaware corporation (the "Company"), and
___________________________________, a _______________ banking corporation (the
"Rights Agent"), to purchase from the Company at any time prior to 5:00 P.M.
Santa Clara, California time) on July 28, 2010 (unless such date is extended
prior thereto by the Board of Directors) at the office or offices of the Rights
Agent designated for such purpose, or its successors as Rights Agent, one fully
paid, non-assessable share of Common Stock (the "Common Stock") of the Company,
at a purchase price of $150 per 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 July 28, 2000, based on the
Common Stock as constituted at such date.

               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 Common 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

                                       2
<PAGE>   54

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 shares of Common
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 $.001 per Right at any time prior to the earlier of the
close of business on (i) the tenth Business Day following the Stock Acquisition
Date (as such time period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. For 180 days following a change in control of
the Board of Directors, that has not been approved by the Board of Directors,
occurring within six months of an unsolicited third party acquisition or
business combination proposal, the new directors are entitled to redeem the
Rights (assuming the Rights would have otherwise been redeemable), including to
facilitate an acquisition or business combination transaction involving the
Company, but only (1) if they have followed certain procedures or (2) if such
procedures are not followed, and if their decision regarding redemption and/or
any acquisition or business combination is challenged as a breach of fiduciary
duty of care or loyalty, the directors (solely for purposes of determining the
effectiveness of such redemption) are able to establish the entire fairness of
such redemption, and, if applicable, such transaction.

               No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, 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 Common
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

                                       3
<PAGE>   55

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 consent to
or withhold consent from 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.

                                       4
<PAGE>   56

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

Dated as of _________ __, ____

ATTEST:                                     VISX, INCORPORATED

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

Countersigned:

FLEET NATIONAL BANK

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

                                       5
<PAGE>   57

                  [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:

                                   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:

<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.

<PAGE>   59

                          FORM OF ELECTION TO PURCHASE

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

To:  VISX, INCORPORATED:

               The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of Common
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)

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

               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:

<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 became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.

Dated:               ,
      --------------- -------                      -----------------------------
                                                   Signature

Signature Guaranteed:

                                     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.

<PAGE>   61

                                                                       Exhibit B
                          SUMMARY OF RIGHTS TO PURCHASE
                                  COMMON STOCK

               On July 28, 2000, the Board of Directors of VISX, Incorporated
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Company Common Stock to stockholders of record at the close
of business on August 7, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one share of Common Stock at a
Purchase Price of $150 per share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Fleet National Bank, a national
banking association, as Rights Agent.

               Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 10% or more of the
outstanding shares of Common Stock, other than as a result of repurchases of
stock by the Company or certain inadvertent actions by institutional or certain
other stockholders or the date a Person has entered into an agreement or
arrangement with the Company or any subsidiary of the Company providing for an
Acquisition Transaction (the "Stock Acquisition Date") or (ii) 10 business days
(or such later date as the Board shall determine, provided, however, that no
deferral of a Distribution Date by the Board of Directors pursuant to the terms
of the Rights Agreement described in this clause (ii) may be made at any time
during the Special Period (as defined below)) following the commencement of a
tender offer or exchange offer that would result in a person or group becoming
an Acquiring Person. An Acquisition Transaction is defined in the Rights
Agreement as (x) a merger, consolidation or similar transaction involving the
Company or any of its Subsidiaries as a result of which stockholders of the
Company will no longer own a majority of the outstanding shares of Common Stock
of the Company or a publicly traded entity which controls the Company or, if
appropriate, the entity into which the Company may be merged, consolidated or
otherwise combined (based solely on the shares of Common Stock received or
retained by such stockholders, in their capacity as stockholders of the Company,
pursuant to such

<PAGE>   62

transaction), (y) a purchase or other acquisition of all or a substantial
portion of the assets of the Company and its Subsidiaries, or (z) a purchase or
other acquisition of securities representing 10% or more of the shares of Common
Stock then outstanding. Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.

               The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. (Santa Clara, California time) on July 28, 2010, unless
such date is extended or the Rights are earlier redeemed or exchanged by the
Company as described below.

               As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.

               In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding shares of Common Stock which the
independent directors determine to be fair and not inadequate to and to
otherwise be in the best interests of the Company and its stockholders, after
receiving advice from one or more investment banking firms (a "Qualified
Offer"), each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. Notwithstanding any of the foregoing, following the occurrence of
the event set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.

               For example, at an exercise price of $150 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$[300] worth of Common Stock (or other consideration, as noted above) for $150.
Assuming that the

<PAGE>   63

Common Stock had a per share value of $25 at such time, the holder of each
valid Right would be entitled to purchase 12 shares of Common Stock (or other
consideration) for $150.

               In the event that, at any time following the Stock Acquisition
Date, (i) the Company engages in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than
with an entity which acquired the shares pursuant to a Qualified Offer), (ii)
the Company engages in a merger or other business combination transaction in
which the Company is the surviving corporation and the Common Stock of the
Company is changed or exchanged, or (iii) 50% or more of the Company's assets,
cash flow or earning power is sold or transferred, each holder of a Right
(except Rights which have previously been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."

               At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.001 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). For 180 days (the
"Special Period") following a change in control of the Board of Directors, that
has not been approved by the Board of Directors, occurring within six months of
an unsolicited third party acquisition or business combination proposal, the new
directors are entitled to redeem the Rights (assuming the Rights would have
otherwise been redeemable), including to facilitate an acquisition or business
combination transaction involving the Company, but only (1) if they have
followed certain procedures or (2) if such procedures are not followed, and if
their decision regarding redemption and/or any acquisition or business
combination is challenged as a breach of fiduciary duty of care or loyalty, the
directors (solely for purposes of determining the effectiveness of such
redemption) are able to establish the entire fairness of such redemption, and,
if applicable, such transaction. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.001 redemption
price.

               Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for

<PAGE>   64

common stock of the acquiring company or in the event of the redemption of the
Rights as set forth above.

               Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights, or to shorten or lengthen any time
period under the Rights Agreement. The foregoing notwithstanding, no amendment
may be made to the Rights Agreement during the Special Period or at a time when
the Rights are not redeemable.

               A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a [Registration Statement on Form
8-A]/[Current Report on Form 8-K] dated , 2000. A copy of the Rights Agreement
is available free of charge from the Rights Agent. This summary description of
the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.

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