Document:

HARLEY-DAVIDSON, INC.

                                       and

                               FIRSTAR BANK, N. A.

                                  Rights Agent

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

                                RIGHTS AGREEMENT

                          Dated as of February 17, 2000

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                                TABLE OF CONTENTS

Section 1.   Certain Definitions...............................................1

Section 2.   Appointment of Rights Agent.......................................3

Section 3.   Issue of Right Certificates.......................................3

Section 4.   Form of Right Certificates........................................5

Section 5.   Countersignature and Registration.................................5

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

Section 7.   Exercise of Rights; Purchase Price; Expiration
             Date of Rights....................................................6

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

Section 9.   Reservation and Availability of Preferred Shares..................8

Section 10.  Preferred Shares Record Date......................................8

Section 11.  Adjustment of Purchase Price, Number of Shares or
             Number of Rights..................................................9

Section 12.  Certificate of Adjusted Purchase Price or Number
             of Shares........................................................16

Section 13.  Consolidation, Merger, Share Exchange or Sale or
             Transfer of Assets or Earning Power..............................16

Section 14.  Fractional Rights and Fractional Shares..........................18

Section 15.  Rights of Action.................................................19

Section 16.  Agreement of Right Holders.......................................19

Section 17.  Right Certificate Holder Not Deemed a Shareholder................20

Section 18.  Concerning the Rights Agent......................................20

Section 19.  Merger or Consolidation or Change of Name of Rights
             Agent............................................................21

Section 20.  Duties of Rights Agent...........................................21

Section 21.  Change of Rights Agent...........................................23

Section 22.  Issuance of New Right Certificates...............................23

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Section 23.  Redemption.......................................................24

Section 24.  Exchange.........................................................24

Section 25.  Notice of Certain Events.........................................26

Section 26.  Notices..........................................................26

Section 27.  Supplements and Amendments.......................................27

Section 28.  Successors.......................................................27

Section 29.  Benefits of this Agreement.......................................28

Section 30.  Severability.....................................................28

Section 31.  Governing Law....................................................28

Section 32.  Counterparts.....................................................28

Section 33.  Descriptive Headings.............................................28

Section 34.  Determinations and Actions by the Board of Directors.............28

Exhibit A - Terms of Series A Junior Participating Preferred Stock

Exhibit B - Form of Right Certificate

Exhibit C - Summary of Rights to Purchase Preferred Shares

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<PAGE>

                                RIGHTS AGREEMENT

          THIS   AGREEMENT,   dated   as   of   February   17,   2000,   between
HARLEY-DAVIDSON,  INC., a Wisconsin  corporation  (the  "Company"),  and FIRSTAR
BANK, N. A. (the "Rights Agent").

          WHEREAS,  the Board of  Directors  of the Company has  authorized  and
declared a dividend of one preferred  share  purchase right (a "Right") for each
Common Share of the Company outstanding upon the close of business on August 20,
2000 (the "Record  Date")  payable upon the close of business on such date,  and
has  authorized  and  directed  the  issuance of one Right with  respect to each
Common  Share that shall  become  outstanding  between  the Record  Date and the
earliest of the Distribution  Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined),  each Right representing the right
to purchase one ten-thousandth of a Preferred Share (as hereinafter  defined) of
the Company upon the terms and subject to the conditions hereinafter set forth.

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

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

          (a)  "Acquiring  Person"  shall  mean  any  Person  (as  such  term is
hereinafter  defined) who or which,  together with all Affiliates and Associates
(as such terms are hereinafter  defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter  defined) of 15% or more of the Common Shares
of the  Company  then  outstanding,  but  shall not  include  the  Company,  any
Subsidiary  (as such term is hereinafter  defined) of the Company,  any employee
benefit plan of the Company or any Subsidiary of the Company, any entity holding
Common  Shares for or  pursuant to the terms of any such plan,  or any  trustee,
administrator  or fiduciary of such a plan.  Notwithstanding  the foregoing,  no
Person  shall  become an  "Acquiring  Person" as a result of an  acquisition  of
Common  Shares  by  the  Company  which,   by  reducing  the  number  of  shares
outstanding,  increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Common Shares of the Company then outstanding;
provided,  however,  that if a Person would,  but for the  foregoing,  become an
Acquiring  Person by reason of share  purchases by the Company and shall,  after
such  share  purchases  by the  Company,  become  the  Beneficial  Owner  of any
additional  Common  Shares  of the  Company  at any time  that the  Person is or
thereby becomes the Beneficial  Owner of 15% or more of the Common Shares of the
Company then  outstanding  (other than Common Shares acquired solely as a result
of corporate action of the Company not caused,  directly or indirectly,  by such
Person),  then  such  Person  shall  be  deemed  to  be an  "Acquiring  Person".
Notwithstanding  the  foregoing,  if the  Board  of  Directors  of  the  Company
determines  in good  faith that a Person who would  otherwise  be an  "Acquiring
Person", as defined pursuant to the foregoing  provisions of this paragraph (a),
has  become  such  inadvertently,   and  such  Person  divests  as  promptly  as
practicable  a sufficient  number of Common  Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this  paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.

<PAGE>

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

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

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

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

               (iii)  which are beneficially owned,  directly or indirectly,  by
     any other Person with which such Person or any of such  Person's Affiliates
     or Associates has any agreement, arrangement or  understanding  (other than
     customary  agreements  with and  between  underwriters  and  selling  group
     members with respect to a bona fide public  offering of securities) for the
     purpose of, or with respect to, acquiring,  holding,  voting (except to the
     extent contemplated by the proviso to Section  1(c)(ii)(B)) or disposing of
     any securities of the Company.

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

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

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<PAGE>

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

          (f)  "Common Shares"  when  used  with  reference to the Company shall
mean  the  shares  of  common  stock,  par value $.01, of the Company, or shares
having equivalent rights,  privileges  and preferences to common stock.  "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equivalent equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons that ultimately control such first-mentioned Person.

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

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

          (i)  "Person"  shall mean any  individual,  firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.

          (j)  "Preferred   Shares"  shall   mean  shares  of  Series  A  Junior
Participating  Preferred  Stock,  par value  $1.00,  of the  Company  having the
preferences and rights set forth in Exhibit A attached to this Agreement.

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

          (l)  "Shares  Acquisition  Date"  shall  mean 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.

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

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

          Section 3.  Issue of Right Certificates.

          (a)  Until  the  earlier  of  (i)  the  tenth  day  after  the  Shares
Acquisition  Date or (ii) the tenth  Business  Day (or such later date as may be
determined by action of the Company's  Board of Directors  prior to such time as
any Person becomes an Acquiring  Person) after the date of the  commencement of,
or of the first public  announcement of the intention of any Person to commence,
a tender or exchange offer the  consummation of which would result in any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan of the

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Company or of any  Subsidiary of the Company,  any entity  holding Common Shares
for or pursuant to the terms of any such plan, or any trustee, administrator, or
fiduciary of such a plan) becoming the Beneficial  Owner of Common Shares of the
Company aggregating 25% or more of the then outstanding Common Shares (including
in either case any such date which is after the date of this Agreement and prior
to the Record Date;  the earlier of such dates being  herein  referred to as the
"Distribution Date";  provided,  however, that if the tenth day or Business Day,
as the case may be,  after the  pertinent  date occurs  before the Record  Date,
"Distribution  Date"  shall  mean  the  Record  Date),  (x) the  Rights  will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Common Shares of the Company  registered in the names of the holders thereof
(which  certificates  shall also be deemed to be Right  Certificates) and not by
separate  Right  Certificates,  and (y) the right to receive Right  Certificates
will be  transferable  only in connection  with the transfer of Common Shares of
the Company.  As soon as practicable  after the  Distribution  Date, the Company
will prepare and execute,  the Rights  Agent will  countersign,  and the Company
will send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class,  insured,  postage-prepaid  mail,  to each record  holder of Common
Shares of the Company as of the close of business on the  Distribution  Date, at
the  address  of such  holder  shown  on the  records  of the  Company,  a Right
Certificate,   in  substantially   the  form  of  Exhibit  B  hereto  (a  "Right
Certificate"),  evidencing  one Right for each  Common  Share of the  Company so
held. As of the  Distribution  Date, the Rights will be evidenced solely by such
Right Certificates.

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

          (c)  Certificates  for  Common  Shares  of  the  Company  that  become
outstanding (including,  without limitation,  certificates for reacquired Common
Shares  referred to in the last sentence of this paragraph (c) and  certificates
issued on the transfer of Common  Shares) after the Record Date but prior to the
earliest of the  Distribution  Date, the Redemption Date or the Final Expiration
Date shall have  impressed on,  printed on,  written on or otherwise  affixed to
them a legend in  substantially  the following  form  (provided,  however,  that
certificates  for Common  Shares of the Company in  existence on the Record Date
may bear the legend required by the Company's predecessor rights agreement):

                    This  certificate  also evidences and entitles the
          holder  hereof  to  certain  rights as set forth in a Rights
          Agreement between Harley-Davidson, Inc. and Firstar Bank, N.
          A., dated as of February 17, 2000, and as such agreement may
          be amended (the "Rights Agreement"),  the terms of which are
          hereby  incorporated herein by reference and a copy of which
          is  on  file  at  the   principal   executive   offices   of
          Harley-Davidson,  Inc. Under certain  circumstances,  as set
          forth in the Rights Agreement, such Rights will be evidenced

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          by separate  certificates and will no longer be evidenced by
          this  certificate.  Harley-Davidson,  Inc.  will mail to the
          holder of this  certificate  a copy of the Rights  Agreement
          without charge after receipt of a written request  therefor.
          Under  certain   circumstances   set  forth  in  the  Rights
          Agreement, Rights issued to, or held by, an Acquiring Person
          or any  Affiliate  or  Associate  thereof (as such terms are
          defined  in the  Rights  Agreement),  whether  held  by such
          person or any subsequent holder, shall become null and void.

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date, the Rights associated with the Common Shares  represented by
such  certificates  shall  be  evidenced  by such  certificates  alone,  and the
surrender  for  transfer  of any such  certificate  shall  also  constitute  the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company  purchases  or acquires  any Common  Shares after the
Record Date but prior to the Distribution  Date, any Rights associated with such
Common  Shares shall be deemed  cancelled  and retired so that the Company shall
not be entitled to exercise any Rights  associated  with the Common Shares which
are no longer outstanding.

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

          Section 5.  Countersignature and Registration.

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

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<PAGE>

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

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

          (a)  Subject to the provisions of Section 14 hereof, at any time after
the close of business on the Distribution  Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date, any
Right  Certificate  or  Right   Certificates   (other  than  Right  Certificates
representing  Rights that have become void pursuant to Section  11(a)(ii) hereof
or that have been exchanged  pursuant to Section 24 hereof) may be  transferred,
split  up,  combined  or  exchanged  for  another  Right  Certificate  or  Right
Certificates,  entitling the registered  holder to purchase a like number of one
ten-thousandths  of  a  Preferred  Share  as  the  Right  Certificate  or  Right
Certificates  surrendered then entitled such holder to purchase.  Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent,  and shall  surrender the Right  Certificate or Right  Certificates to be
transferred,  split up,  combined or  exchanged at the  principal  office of the
Rights Agent.  Thereupon the Rights Agent shall  countersign  and deliver to the
person entitled thereto a Right Certificate or Right  Certificates,  as the case
may be, as so requested.  The Company may require payment of a sum sufficient to
cover any tax or governmental  charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.

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

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

          (a)  The registered  holder of any Right Certificate  may exercise the
Rights  evidenced  thereby (except as otherwise  provided herein) in whole or in
part at any time  after  the  Distribution  Date  upon  surrender  of the  Right
Certificate,  with the form of election to purchase on the reverse  side thereof
duly executed,  to the Rights Agent at the principal office of the Rights Agent,
together  with payment of the Purchase  Price for each one  ten-thousandth  of a
Preferred  Share  as to  which  the  Rights  are  exercised,  at or prior to the
earliest of (i) the close of business on August 20,  2010,  subject to extension
(the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof  (the  "Redemption  Date"),  and (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.

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<PAGE>

          (b)  The  Purchase  Price for each one  ten-thousandth  of a Preferred
Share pursuant to the exercise of a Right shall  initially be $175.00,  shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be  payable  in  lawful  money of the  United  States  of  America  in
accordance with paragraph (c) below.

          (c)  Upon  receipt  of a Right  Certificate  representing  exercisable
Rights,  with the form of election to purchase  duly  executed,  accompanied  by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any  applicable  transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof,  as set forth below, the Rights
Agent shall thereupon  promptly (i) (A)  requisition  from any transfer agent of
the  Preferred  Shares  certificates  for the number of  Preferred  Shares to be
purchased and the Company  hereby  irrevocably  authorizes its transfer agent to
comply with all such requests,  or (B)  requisition  from the  depositary  agent
depositary  receipts  representing  such  number  of  one  ten-thousandths  of a
Preferred  Share as are to be  purchased  (in which  case  certificates  for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary  agent),  (ii) when appropriate,  requisition from the
Company the amount of cash to be paid in lieu of issuance of  fractional  shares
in accordance with Section 14 hereof,  (iii) after receipt of such  certificates
or depositary  receipts,  cause the same to be delivered to or upon the order of
the  registered  holder of such Right  Certificate,  registered  in such name or
names as may be  designated  by such  holder  and (iv) when  appropriate,  after
receipt, deliver such cash to or upon the order of the registered holder of such
Right  Certificate.  The  payment of the  Purchase  Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) shall be made by certified check,
cashier's check,  bank draft or money order payable to the order of the Company,
except  that,  if so  provided by the Board of  Directors  of the  Company,  the
payment of the Purchase Price  following the  occurrence of a Section  11(a)(ii)
Event (as  hereinafter  defined) and until the first  occurrence of a Section 13
Event (as  hereinafter  defined)  may be made wholly or in part by delivery of a
certificate or  certificates  (with  appropriate  stock powers executed in blank
attached  thereto)  evidencing a number of Common Shares of the Company equal to
the then Purchase Price divided by the closing price (as determined  pursuant to
Section  11(d)  hereof)  per Common  Share on the  Trading  Day (as such term is
hereinafter  defined)  immediately  preceding the date of such exercise.  If 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 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  Right  Certificate shall
exercise less than all the Rights  evidenced  thereby,  a new Right  Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.

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

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<PAGE>

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

          Section 9.  Reservation and Availability of Preferred Shares.

          (a)  The  Company  covenants  and  agrees  that  it  will  cause to be
reserved and kept available out of its authorized  and unissued Preferred Shares
or any authorized and issued Preferred Shares  held in its  treasury  the number
of  Preferred  Shares  that will be sufficient to permit the exercise in full of
all outstanding Rights in accordance with Section 7.

          (b)  So long as the Preferred  Shares  issuable  upon the  exercise of
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  Preferred  Shares  reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.

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

          (d)  The  Company further  covenants  and agrees that it will pay when
due and payable any and all federal and state  transfer  taxes and charges which
may be payable in respect of the issuance or delivery of the Right  Certificates
or of any Preferred Shares upon the exercise of Rights.  The Company  shall not,
however,  be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right  Certificates  to a person other than,  or the
issuance or delivery of  certificates  for the Preferred  Shares in a name other
than that of, the registered holder of the Right  Certificate  evidencing Rights
surrendered  for  exercise  or to  issue  or to  deliver  any  certificates  for
Preferred  Shares upon the  exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificate at
the  time of  surrender)  or  until it has  been  established  to the  Company's
reasonable satisfaction that no such tax is due.

          Section 10. Preferred  Shares  Record Date.  Each person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the  Preferred
Shares  represented  thereby on, and such  certificate  shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the  Purchase  Price (and any  applicable  transfer  taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the

                                       8
<PAGE>

Preferred Shares transfer books of the Company are closed,  such person shall be
deemed to have become the record holder of such shares on, and such  certificate
shall be dated,  the next succeeding  Business Day on which the Preferred Shares
transfer books of the Company are open.

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

          (a)  (i)    In the event the Company  shall at any time after the date
     of this Agreement (A) declare a dividend on the Preferred Shares payable in
     Preferred  Shares,  (B) subdivide the  outstanding  Preferred  Shares,  (C)
     combine the outstanding Preferred Shares into a smaller number of Preferred
     Shares or (D) issue any shares of its capital  stock in a  reclassification
     of the Preferred Shares (including any such  reclassification in connection
     with a  consolidation  or merger in which the Company is the  continuing or
     surviving corporation), except as otherwise provided in this Section 11(a),
     the  Purchase  Price  in  effect  at the time of the  record  date for such
     dividend  or of the  effective  date of such  subdivision,  combination  or
     reclassification,  and the  number  and kind of  shares  of  capital  stock
     issuable on such date, shall be proportionately adjusted so that the holder
     of any Right  exercised  after such time shall be  entitled  to receive the
     aggregate  number and kind of shares of capital stock which,  if such Right
     had been  exercised  immediately  prior to such date and at a time when the
     Preferred Shares transfer books of the Company were open, such holder would
     have owned upon such  exercise  and been  entitled  to receive by virtue of
     such  dividend,  subdivision,  combination or  reclassification;  provided,
     however,  that in no event  shall  the  consideration  to be paid  upon the
     exercise of one Right be less than the aggregate par value of the shares of
     capital stock of the Company  issuable  upon  exercise of one Right.  If an
     event occurs which would require an adjustment  under both Section 11(a)(i)
     and Section 11(a)(ii), 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).

               (ii)   Subject to Section 24  of this  Agreement,  in  the  event
     any Person shall become an  Acquiring  Person,  other than  pursuant to any
     transaction  set forth in Section  13(a),  each holder  of  a  Right  shall
     thereafter have a right to receive,  upon exercise thereof at a price equal
     to the then  current Purchase  Price  multiplied  by the number of one ten-
     thousandths of a Preferred Share for which a Right is then  exercisable, in
     accordance  with the terms  of  this  Agreement  and  in  lieu of Preferred
     Shares,  such number of Common Shares of  the Company as  shall  equal  the
     result obtained by (x) multiplying the then current  Purchase  Price by the
     number  of one  ten-thousandths  of a Preferred  Share for which a Right is
     then  exercisable and dividing that  product by (y) 50% of the then current
     per share market price of the  Common  Shares of  the  Company  (determined
     pursuant  to  Section 11(d))  on  the  date  the Person became an Acquiring
     Person (such number of shares, the "Adjustment Shares").

                                       9
<PAGE>

               From and after such time as a Person becomes an Acquiring  Person
     (a "Section  11(a)(ii)  Event"),  any Rights  that are or were  acquired or
     beneficially  owned by such Acquiring Person (or any Associate or Affiliate
     of such Acquiring Person) shall be void and any holder of such Rights shall
     thereafter  have no right to exercise  such Rights  under any  provision of
     this Agreement.  No Right Certificate shall be issued pursuant to Section 3
     that  represents  Rights  beneficially  owned by an Acquiring  Person whose
     Rights would be void pursuant to the preceding sentence or any Associate or
     Affiliate  thereof;  no Right  Certificate shall be issued at any time upon
     the  transfer of any Rights to an  Acquiring  Person  whose Rights would be
     void  pursuant to the  preceding  sentence or any  Associate  or  Affiliate
     thereof or to any nominee of such Acquiring Person, Associate or Affiliate;
     and any Right Certificate  delivered to the Rights Agent for transfer to an
     Acquiring  Person  whose  Rights  would be void  pursuant to the  preceding
     sentence shall be cancelled.  The Company shall use all reasonable  efforts
     to ensure that the  provisions  of this  paragraph are complied  with,  but
     shall have no liability to any holder of Right Certificates or 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.

               (iii)  In the event  that  there  shall not be  sufficient Common
     Shares of the Company issued but not outstanding or authorized but unissued
     (and not reserved for issuance for purposes other than upon exercise of the
     Rights) to permit the exercise in full of the Rights in accordance with the
     foregoing subparagraph (ii), the Company shall: (A) determine the excess of
     (1) the value of the  Adjustment  Shares  issuable  upon the  exercise of a
     Right (the "Current  Value") over (2) the Purchase Price (such excess,  the
     "Spread"),  and (B) with respect to each Right, make adequate  provision to
     substitute  for the  Adjustment  Shares,  upon  payment  of the  applicable
     Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) equity
     securities   of   the   Company   (including,   without   limitation,   one
     ten-thousandth  of a  Preferred  Share or shares,  or units of  shares,  of
     preferred  stock which the Board of  Directors of the Company has deemed to
     have  the  same  value  as  Common   Shares  of  the   Company   (such  one
     ten-thousandth   of  a  Preferred  Share  or  shares  of  preferred  stock,
     hereinafter  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  of the
     Company based upon the advice of a nationally recognized investment banking
     firm selected by the Board of Directors of the Company; provided,  however,
     if the Company shall not have made adequate provision to substitute for the
     Adjustment  Shares  pursuant  to clause (B) above  within  thirty (30) days
     following  the  occurrence  of a  Section  11(a)(ii)  Event  (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
     any portion of the  Purchase  Price,  Common  Shares of the Company (to the
     extent  available) and then, if necessary,  cash,  which shares and/or cash
     have an aggregate  value equal to the Spread.  If the Board of Directors of
     the Company shall determine in good faith that it is likely that sufficient
     additional  Common Shares of the Company  might be authorized  for issuance
     for  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

                                       10
<PAGE>

     the Company may seek shareholder approval  for  the  authorization  of such
     additional  shares (such period,  as it may be extended,  the "Substitution
     Period").  To the extent that the Company  determines that some action need
     be taken  pursuant to the first  and/or  second  sentences  of this Section
     11(a)(iii), the Company (x) shall provide, subject to the last paragraph of
     Section  11(a)(ii)  hereof,  that such action shall apply  uniformly to all
     outstanding  Rights,  and (y) may suspend the  exercisability of the Rights
     until the expiration of the Substitution  Period to seek any  authorization
     of additional  shares and/or to decide the appropriate form of distribution
     to be made  pursuant  to such first  sentence  and to  determine  the value
     thereof.  In the event of any such  suspension,  the Company  shall issue a
     public announcement  stating that the exercisability of the Rights has been
     temporarily suspended, as well as a public announcement at such time as the
     suspension is no longer in effect. For purposes of this Section 11(a)(iii),
     the value of the Common  Shares of the  Company  shall be the  current  per
     share market price (as determined  pursuant to Section 11(d) hereof) of the
     Common Shares of the Company on the Section  11(a)(ii) Trigger Date and the
     value of any  "common  stock  equivalent"  shall be deemed to have the same
     value as the Common Shares of the Company 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 Preferred  Shares  entitling them
(for a period  expiring  within 45  calendar  days  after such  record  date) to
subscribe  for or purchase  Preferred  Shares (or shares having the same rights,
privileges  and  preferences  as the  Preferred  Shares  ("equivalent  preferred
shares"))  or  securities  convertible  into  Preferred  Shares  at a price  per
Preferred Share or equivalent  preferred share (or having a conversion price per
share, if a security  convertible into Preferred Shares or equivalent  preferred
shares)  less than the then  current  per share  market  price of the  Preferred
Shares (as defined in Section  11(d)) on such record date, the Purchase Price to
be in effect  after such  record date shall be  determined  by  multiplying  the
Purchase  Price in effect  immediately  prior to such record date by a fraction,
the numerator of which shall be the number of Preferred  Shares  outstanding  on
such  record  date  plus the  number of  Preferred  Shares  which the  aggregate
offering  price of the  total  number  of  Preferred  Shares  and/or  equivalent
preferred shares so to be offered (and/or the aggregate initial conversion price
of the  convertible  securities so to be offered) would purchase at such current
market  price and the  denominator  of which  shall be the  number of  Preferred
Shares  outstanding on such record date plus the number of additional  Preferred
Shares and/or  equivalent  preferred  shares to be offered for  subscription  or
purchase  (or  into  which  the  convertible  securities  so to be  offered  are
initially  convertible);   provided,   however,  that  in  no  event  shall  the
consideration  to be paid  upon  the  exercise  of one  Right  be less  than the
aggregate par value of the shares of capital stock of the Company  issuable upon
exercise  of one  Right.  In  case  such  subscription  price  may be  paid in a
consideration part or all of which shall be in a form other than cash, the value
of such  consideration  shall be as  determined  in good  faith by the  Board of
Directors of the Company,  whose determination shall be described in a statement
filed with the Rights Agent.  Preferred  Shares owned by or held for the account
of the  Company  shall not be deemed  outstanding  for the  purpose  of any such
computation.  Such adjustment shall be made successively  whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued,  the  Purchase  Price shall be adjusted to be the  Purchase  Price which
would then be in effect if such record date had not been fixed.

          (c)  In case the  Company  shall fix a record date for the making of a
distribution  to all  holders  of  the  Preferred  Shares  (including  any  such
distribution  made in  connection  with a

                                       11
<PAGE>

consolidation  or merger in which the  Company is the  continuing  or  surviving
corporation)  of  evidences  of  indebtedness  or assets  (other  than a regular
quarterly  cash  dividend  or  a  dividend  payable  in  Preferred   Shares)  or
subscription  rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect  immediately  prior to such record date
by a fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares (as defined in Section 11(d)) on such record date,
less the  fair  market  value  (as  determined  in good  faith  by the  Board of
Directors of the Company,  whose determination shall be described in a statement
filed  with the Rights  Agent) of the  portion  of the  assets or  evidences  of
indebtedness  so to be  distributed or of such  subscription  rights or warrants
applicable to one  Preferred  Share and the  denominator  of which shall be such
current per share market price of the Preferred Shares; provided,  however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the  aggregate par value of the shares of capital stock of the Company
to be  issued  upon  exercise  of one  Right.  Such  adjustments  shall  be made
successively  whenever  such a record date is fixed;  and in the event that such
distribution  is not so made,  the Purchase  Price shall again be adjusted to be
the  Purchase  Price  which  would then be in effect if such record date had not
been fixed.

          (d)  (i)    For the purpose of any computation hereunder, the "current
per share market price" of any  security (a  "Security" for the  purpose of this
Section  11(d)(i))  on any date  shall be deemed to be the  average of the daily
closing  prices per share of such Security for the 30  consecutive  Trading Days
(as such term is hereinafter  defined) immediately prior to such date; provided,
however,  that in the  event  that the  current  per share  market  price of the
Security is determined  during a period following the announcement by the issuer
of such Security of (i) a dividend or distribution  on such Security  payable in
shares of such Security or securities  convertible into such shares, or (ii) any
subdivision,  combination or  reclassification of such Security and prior to the
expiration  of 30 Trading Days after the  ex-dividend  date for such dividend or
distribution,   or  the  record  date  for  such  subdivision,   combination  or
reclassification,  then,  and in each such case,  the current  per share  market
price shall be  appropriately  adjusted to reflect the current  market price per
share equivalent of such Security.  The closing price for each Trading 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  Securities  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  Security  is listed or admitted to
trading or, if the Security is not listed or admitted to trading on any national
securities exchange,  the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotations System
("Nasdaq")  or such  other  system  then in use,  or,  if on any  such  date the
Security is not quoted by any such organization,  the average of the closing bid
and asked prices as furnished by a professional  market maker making a market in
the  Security  selected  by the  Board of  Directors  of the  Company.  The term
"Trading  Day"  shall  mean a day on which  the  principal  national  securities
exchange on which the  Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.

                                       12
<PAGE>

               (ii)   For the purpose of any computation hereunder, the "current
     per share market  price" of the  Preferred  Shares shall be  determined  in
     accordance with the method set forth in Section 11(d)(i).  If the Preferred
     Shares are not publicly traded, the "current per share market price" of the
     Preferred  Shares shall be conclusively  deemed to be the current per share
     market price of the Common Shares of the Company as determined  pursuant to
     Section 11(d)(i)  (appropriately adjusted to reflect any stock split, stock
     dividend  or  similar   transaction   occurring  after  the  Record  Date),
     multiplied  by 10,000.  If neither the Common Shares of the Company nor the
     Preferred  Shares are  publicly  held or so listed or traded,  "current per
     share market  price" shall mean the fair value per share as  determined  in
     good faith by the Board of Directors of the  Company,  whose  determination
     shall be described in a statement filed with the Rights Agent.

          (e)  No adjustment in the Purchase Price shall be required unless such
adjustment  would require an increase or decrease of at least 1% in the Purchase
Price;  provided,  however, that any adjustments which by reason of this Section
11(e) are not  required  to be made  shall be  carried  forward  and taken  into
account in any subsequent  adjustment.  All  calculations  under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a 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  years  from  the  date of the  transaction  which  requires  such
adjustment  or (ii) the date of the  expiration  of the  right to  exercise  any
Rights.

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

          (h)  Unless the Company  shall have exercised its election as provided
in Section 11(i),  upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) 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  Preferred  Shares
(calculated to the nearest  ten-thousandth of a Preferred Share) obtained by (i)
multiplying (x) the number of one ten-thousandth of a Preferred Share covered by
a Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so  obtained  by the  Purchase  Price in effect  immediately  after such
adjustment of the Purchase Price.

          (i)  The Company may elect on or after the date of any  adjustment  of
the  Purchase  Price to adjust  the number of Rights,  in  substitution  for any
adjustment in the number of one ten-thousandths of a Preferred Share purchasable
upon  the  exercise  of a  Right.  Each of the  Rights  outstanding  after  such
adjustment  of the number of Rights shall be  exercisable  for the

                                       13
<PAGE>

number  of one  ten-thousandths  of a  Preferred  Share  for  which a Right  was
exercisable  immediately  prior to such  adjustment.  Each  Right held of record
prior to such  adjustment  of the number of Rights  shall  become that number of
Rights (calculated to the nearest one  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 Right Certificates have been issued, shall be at least 10 days later than
the date of the public  announcement.  If Right  Certificates  have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates  evidencing,
subject to Section 14 hereof,  the additional Rights to which such holders shall
be entitled as a result of such  adjustment,  or, at the option of the  Company,
shall cause to be  distributed  to such  holders of record in  substitution  and
replacement for the Right Certificates held by such holders prior to the date of
adjustment,  and upon surrender thereof,  if required by the Company,  new Right
Certificates  evidencing  all the Rights to which such holders shall be entitled
after such adjustment.  Right Certificates so to be distributed shall be issued,
executed  and  countersigned  in the  manner  provided  for  herein and shall be
registered  in the names of the holders of record of Right  Certificates  on the
record date specified in the public announcement.

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

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

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

          (m) Anything in this Section 11 to the contrary  notwithstanding,  the
Company  shall be entitled to make such  reductions  in the Purchase  Price,  in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that it in its sole  discretion  shall

                                       14
<PAGE>

determine to be advisable in order that any  consolidation or subdivision of the
Preferred Shares,  issuance wholly for cash of any Preferred Shares at less than
the  current  market  price,  issuance  wholly for cash of  Preferred  Shares or
securities  which  by their  terms  are  convertible  into or  exchangeable  for
Preferred  Shares,  dividends on Preferred Shares payable in Preferred Shares or
issuance of rights,  options or warrants  referred to in Section  11(b)  hereof,
hereafter  made by the  Company to holders  of its  Common  Shares  shall not be
taxable to such shareholders.

          (n)  The Company  covenants  and agrees that it shall not, at any time
after the earlier of the Distribution  Date or the Shares  Acquisition 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),  (iii) sell or transfer  (or permit any
Subsidiary  to sell or  transfer),  in one  transaction,  or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning  power of the  Company  and its  Subsidiaries  (taken as a whole) to any
other Person or Persons (other than the Company  and/or any of its  Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof) or
(iv)  consummate a share  exchange with any other  Person,  if at the time of or
immediately after such  consolidation,  merger, sale or share exchange (A) 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, (B) prior to, simultaneously
with or immediately after such consolidation, merger, sale or share exchange the
shareholders of the Person who constitute,  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  or (C) the form or nature of  organization  of the  Principal  Party
would preclude or limit the exercisability of the Rights.

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

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

          Section 12. Certificate  of  Adjusted  Purchase  Price  or  Number  of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the  Company  shall  promptly  (a)  prepare a  certificate  setting  forth  such
adjustment,  and a brief statement of the facts

                                       15
<PAGE>

accounting  for such  adjustment,  (b) file with the Rights  Agent and with each
transfer  agent for the Common Shares of the Company a copy of such  certificate
and (c) mail a brief summary  thereof to each holder of a Right  Certificate  in
accordance with Section 25 hereof.

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

          (a)  In  the  event  that,  following  the  Shares  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,  or any Person or Persons (other
than a Subsidiary  of the Company in a  transaction  that  complies with Section
11(o)  hereof)  shall  consummate a share  exchange  with the  Company,  and, in
connection with such consolidation, merger or share exchange, all or part of the
outstanding  Common Shares of the Company shall be changed into or exchanged for
stock or other  securities  of any other  Person (or the Company) or cash or any
other property,  or (z) the Company shall sell or otherwise  transfer (or one or
more of its Subsidiaries shall sell or otherwise  transfer),  in one transaction
or a series of related  transactions,  assets or earning power  aggregating more
than 50% of the  assets or earning  power of the  Company  and its  Subsidiaries
(taken as a whole) to any  Person or  Persons  (other  than the  Company  or any
Subsidiary  of the Company in one or more  transactions  each of which  complies
with Section 11(o) hereof),  then, and in each such case, proper provision shall
be made so that:  (i) each  holder  of a Right  (except  as  otherwise  provided
herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price multiplied by the number of one
ten-thousandths  of a Preferred Share for which a Right is then exercisable (or,
if a Section  11(a)(ii) Event has occurred prior to the first  occurrence of any
of the events described in clauses (x), (y) or (z) above (a "Section 13 Event"),
the Purchase  Price in effect  immediately  prior to the first  occurrence  of a
Section  11(a)(ii) Event  multiplied by the number of one  ten-thousandths  of a
Preferred  Share  for which a Right was  exercisable  immediately  prior to such
first occurrence),  in accordance with the terms of this Agreement,  such number
of validly authorized and issued, fully paid, nonassessable (except as otherwise
required by any  corporation law applicable to the Principal Party (as such term
is  hereinafter  defined)) and freely  tradeable  Common Shares of the Principal
Party, 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 one  ten-thousandths of a Preferred
Share 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)
hereof) per Common Share of such Principal  Party on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume,  by virtue of such Section 13 Event,  all the  obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer

                                       16
<PAGE>

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
its Common Shares) 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 Common  Shares
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 Common  Shares of the Company are converted in
     such merger,  consolidation or share exchange,  and if no securities are so
     issued, (A) the Person that is the other party to the merger, consolidation
     or share  exchange and that survives such merger or  consolidation,  or, if
     there is more than one such Person,  the Person the Common  Shares of which
     have the greatest  aggregate  market value of shares  outstanding or (B) if
     the Person that is the other party to the merger or consolidation  does not
     survive  the merger or  consolidation,  the Person  that does  survive  the
     merger or consolidation (including the Company if it survives); and

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

provided,  however,  that in any such  case,  (1) if the  Common  Shares of such
Person are not at such time and have 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
Shares of which are and have 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 Shares 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  Shares  having the greatest  aggregate
market value.

          (c)  The Company shall not consummate any such consolidation,  merger,
share  exchange,  sale or  transfer  unless  the  Principal  Party  shall have a
sufficient  number of  authorized  Common  Shares  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,  share  exchange  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
     Securities Act of 1933, as amended (the "Act"),  with respect to the Rights
     and  the  securities   purchasable  upon  exercise  of  the  Rights  on  an
     appropriate  form, and will use its

                                       17
<PAGE>

     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
     Final Expiration Date; and

               (ii)   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,
consolidations,  share exchanges,  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).

          Section 14. Fractional Rights and Fractional Shares.

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

          (b)  The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral  multiples of one ten-thousandth
of a Preferred Share) upon exercise of the Rights or to distribute  certificates
which  evidence  fractional  Preferred  Shares (other than  fractions  which are
integral  multiples of one  ten-thousandth of a Preferred  Share).  Fractions of
Preferred  Shares in integral  multiples  of one  ten-thousandth  of a Preferred
Share may, at the election of the Company, be evidenced by depositary  receipts,
pursuant to an  appropriate  agreement  between  the  Company  and a  depositary
selected by it; provided,  that such agreement shall provide that the holders of
such depositary  receipts shall have all the rights,  privileges and preferences
to which  they  are  entitled  as  beneficial  owners  of the  Preferred  Shares
represented by such depositary receipts.  In lieu of fractional Preferred Shares
that are not integral  multiples of

                                       18
<PAGE>

one ten-thousandth of a Preferred Share, the Company shall pay to the registered
holders of Right  Certificates  at the time such Rights are  exercised as herein
provided  an amount in cash equal to the same  fraction  of the  current  market
value of one Preferred  Share.  For purposes of this Section 14(b),  the current
market  value of a Preferred  Share  shall be the  closing  price of a Preferred
Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.

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

          Section 15. Rights of Action.  All rights of action in respect of this
Agreement,  excepting  the  rights of action  given to the  Rights  Agent  under
Section 18 hereof, are vested in the respective  registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares),  without the consent of the Rights
Agent  or of the  holder  of any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit,  enforce, and may institute and maintain any suit, action or proceeding
against  the Company to enforce,  or  otherwise  act in respect of, his right to
exercise the Rights  evidenced by such Right  Certificate in the manner provided
in such Right Certificate and in this Agreement.  Without limiting the foregoing
or  any  remedies  available  to  the  holders  of  Rights,  it is  specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the  obligations  under,  and  injunctive  relief  against  actual or threatened
violations of the obligations of any Person subject to, this Agreement.

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

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

          (b)  after  the   Distribution   Date,  the  Right   Certificates  are
transferable  only on the registry  books of the Rights Agent if  surrendered at
the principal  office of the Rights Agent,  duly  endorsed or  accompanied  by a
proper instrument of transfer;

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

          (d)  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

                                       19
<PAGE>

preliminary or permanent injunction or other order, decree or ruling issued by a
court  or  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. Right  Certificate  Holder  Not Deemed a  Shareholder.  No
holder,  as such, of any Right  Certificate  shall be entitled to vote,  receive
dividends or other  distributions or be deemed for any purpose the holder of the
Preferred Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented  thereby,  nor shall anything
contained  herein or in any Right  Certificate  be  construed to confer upon the
holder of any Right Certificate,  as such, any of the rights of a shareholder of
the  Company  or any right to vote for the  election  of  directors  or upon any
matter submitted to shareholders at any meeting thereof,  or to give or withhold
consent to any  corporate  action,  or to receive  notice of  meetings  or other
actions affecting  shareholders (except as provided in Section 25 hereof), or to
receive  dividends or  subscription  rights,  or  otherwise,  until the Right or
Rights  evidenced  by such  Right  Certificate  shall  have  been  exercised  in
accordance with the provisions hereof.

          Section 18. Concerning the Rights Agent.

          (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
other  disbursements  incurred  in the  administration  and  execution  of  this
Agreement and the exercise and performance of its duties hereunder.  The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless  against,
any loss,  liability,  or expense,  incurred  without  negligence,  bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement,  including  the costs and expenses of defending  against any claim of
liability in the premises.

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

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

          (a)  Any  corporation  into  which the  Rights  Agent or any successor
Rights  Agent  may be  merged  or  with  which  it may be  consolidated,  or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock  transfer  or  corporate  trust  business  of the Rights  Agent or any
successor  Rights  Agent,  shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the  parties

                                       20
<PAGE>

hereto,  provided that such  corporation  would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such  successor  Rights Agent shall  succeed to the agency  created by this
Agreement,  any of the Right  Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor  Rights Agent and deliver such Right  Certificates so countersigned;
and in case at that  time any of the  Right  Certificates  shall  not have  been
countersigned,   any  successor   Rights  Agent  may   countersign   such  Right
Certificates  either in the name of the predecessor  Rights Agent or in the name
of the  successor  Rights Agent;  and in all such cases such Right  Certificates
shall  have  the full  force  provided  in the  Right  Certificates  and in this
Agreement.

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

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

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

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

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

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

          (e)  The Rights Agent shall not be under any responsibility in respect
of the validity of this  Agreement or the execution and delivery  hereof (except
the due authorization,

                                       21
<PAGE>

execution and delivery hereof by the Rights Agent) or in respect of the validity
or execution of any Right Certificate (except its countersignature thereof); nor
shall it be  responsible  for any  breach  by the  Company  of any  covenant  or
condition contained in this Agreement or in any Right Certificate;  nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section  11(a)(ii) hereof) or any adjustment in
the terms of the  Rights  (including  the  manner,  method  or  amount  thereof)
provided  for in  Section  3,  11,  13,  23 or 24,  or the  ascertaining  of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right  Certificates  after actual
notice  that such change or  adjustment  is  required);  nor shall it by any act
hereunder  be  deemed  to  make  any   representation  or  warranty  as  to  the
authorization  or reservation of any Preferred  Shares or other securities to be
issued pursuant to this Agreement or any Right  Certificate or as to whether any
Preferred Shares or other securities  will, when issued,  be validly  authorized
and issued, fully paid and nonassessable.

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

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

          (h)  The  Rights  Agent  and any  shareholder,  director,  officer  or
employee of the Rights  Agent may buy,  sell or deal in, or act as the  transfer
agent for, any of the Rights,  Common Shares 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  reasonable care was exercised in the selection
and continued employment thereof.

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

                                       22
<PAGE>

transfer agent of the Common Shares by registered or certified  mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting,  the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment  within a period of 30 days after giving notice of such removal
or after it has been  notified in writing of such  resignation  or incapacity by
the  resigning  or  incapacitated  Rights  Agent  or by the  holder  of a  Right
Certificate  (who shall,  with such  notice,  submit his Right  Certificate  for
inspection by the Company),  then the registered holder of any Right Certificate
may apply to any court of competent  jurisdiction  for the  appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation  organized and doing business under the
laws of the United  States or of the State of New York or the State of Wisconsin
(or of any  other  state of the  United  States so long as such  corporation  is
authorized to do business as a banking  institution  in the State of New York or
the State of  Wisconsin),  in good  standing,  having an office or agency in the
State of Wisconsin or the State of New York, which is authorized under such laws
to  exercise  corporate  trust  or  stock  transfer  powers  and is  subject  to
supervision or  examination  by federal or state  authority and which has at the
time of its  appointment  as Rights  Agent a combined  capital and surplus of at
least $50 million, or (b) an Affiliate of a corporation  described in clause (a)
of this sentence. After appointment,  the successor Rights Agent shall be vested
with the same  powers,  rights,  duties and  responsibilities  as if it had been
originally  named  as  Rights  Agent  without  further  act  or  deed;  but  the
predecessor  Rights  Agent shall  deliver and transfer to the  successor  Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance,  conveyance, act or deed necessary for the purpose. Not later
than the effective  date of any such  appointment  the Company shall file notice
thereof in writing with the predecessor  Rights Agent and each transfer agent of
the Common  Shares,  and mail a notice  thereof  in  writing  to the  registered
holders of the Right  Certificates.  Failure to give any notice  provided for in
this Section 21, however,  or any defect therein,  shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

          Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this  Agreement or of the Rights to the contrary,  the Company
may, at its option, issue new Right Certificates  evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the  Purchase  Price  and the  number  or kind or  class of  shares  or other
securities  or  property  purchasable  under  the  Right  Certificates  made  in
accordance with the provisions of this Agreement.

          Section 23. Redemption.

          (a)  The Rights  may be redeemed  by action of the Board of  Directors
pursuant to  subsection  (b) of this Section 23 and shall not be redeemed in any
other manner.

          (b)  The Board of Directors of the Company may, at its option,  at any
time prior to such time as any Person  becomes an Acquiring  Person,  redeem all
but not less than all the then outstanding  Rights at a redemption price of $.01
per Right,  appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the Record Date (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board of Directors  may be made  effective at such time on such basis and
with  such  conditions  as the Board of  Directors  in its sole  discretion  may
establish. Notwithstanding anything

                                       23
<PAGE>

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.

          (c)  Immediately  upon the effectiveness of the action of the Board of
Directors  of the Company  ordering  the  redemption  of the Rights  pursuant to
subsection  (b) of this  Section 23, and without any further  action and without
any notice,  the right to exercise the Rights will  terminate and the only right
thereafter  of the holders of Rights shall be to receive the  Redemption  Price.
The Company shall promptly give public notice of any such redemption;  provided,
however,  that the failure to give,  or any defect in, any such notice shall not
affect the validity of such redemption.  Within 10 days after the  effectiveness
of the action of the Board of Directors  ordering the  redemption  of the Rights
pursuant to subsection (b), the Company shall mail a notice of redemption to all
the  holders  of the then  outstanding  Rights at their last  addresses  as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry  books of the transfer  agent for the Common  Shares.  Any
notice  which is mailed in the manner  herein  provided  shall be deemed  given,
whether or not the holder  receives the notice.  Each such notice of  redemption
will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem,  acquire
or  purchase  for value any  Rights at any time in any  manner  other  than that
specifically  set forth in this  Section 23 or in  Section 24 hereof,  and other
than in connection with the purchase of Common Shares prior to the  Distribution
Date.

          Section 24. Exchange.

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

          (b)  Immediately  upon the  action  of the Board of  Directors  of the
Company  ordering the exchange of any Rights  pursuant to subsection (a) of this
Section 24 and without any further  action and without any notice,  the right to
exercise such Rights shall  terminate and the only right  thereafter of a holder
of such Rights shall be to receive  that number of Common  Shares of the Company
equal  to the  number  of such  Rights  held by such  holder  multiplied  by the
Exchange  Ratio.  The Company  shall  promptly  give  public  notice of any such
exchange;  provided,  however,  that the failure to give, or any defect in, such
notice  shall not affect the  validity of such  exchange.  The Company  promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein  provided shall be deemed given,
whether or not the

                                       24
<PAGE>

holder  receives the notice.  Each such notice of exchange will state the method
by which the  exchange  of the Common  Shares of the  Company for Rights will be
effected and, in the event of any partial  exchange,  the number of Rights which
will be exchanged.  Any partial exchange shall be effected pro rata based on the
number of Rights  (other  than Rights  which have  become  void  pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

          (c)  In any exchange  pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b) hereof) for some or all of the Common Shares of
the Company  exchangeable for Rights, at the initial rate of one  ten-thousandth
of a Preferred  Share (or equivalent  preferred  share) for each Common Share of
the Company,  as  appropriately  adjusted to reflect  adjustments  in the voting
rights  of the  Preferred  Shares  pursuant  to the terms  thereof,  so that the
fraction  of a Preferred  Share  delivered  in lieu of each Common  Share of the
Company shall have the same voting rights as one Common Share of the Company.

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

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

          Section 25. Notice of Certain Events.

          (a)  In case the Company shall propose, after the  Distribution  Date,
(i) to pay any  dividend  payable  in  stock  of any  class  to the  holders  of
Preferred  Shares or to make any other  distribution to the holders of Preferred
Shares  (other than a regular  quarterly  cash  dividend),  (ii) to offer to the
holders of Preferred  Shares  rights or warrants to subscribe for or to purchase
any  additional  Preferred  Shares  or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of Preferred
Shares  (other  than  a  reclassification  involving  only  the  subdivision  of
outstanding  Preferred Shares),  (iv) to effect any consolidation or merger into
or with  (other  than a merger of a  Subsidiary  into or with the  Company),  to
effect any share  exchange  with or to effect any sale or other  transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer), in
one or more  transactions,  of 50% or more of the assets or earning power of the
Company and its Subsidiaries  (taken as a whole) to, any other Person, 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 Right  Certificate,  in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the

                                       25
<PAGE>

purposes of such stock dividend,  or distribution of rights or warrants,  or the
date on which such  reclassification,  consolidation,  merger,  share  exchange,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Preferred Shares if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause  (i) or (ii)  above at least 10 days prior to the record  date
for determining  holders of Preferred Shares for purposes of such action, and in
the case of any such  other  action,  at least 10 days  prior to the date of the
taking of such  proposed  action  or the date of  participation  therein  by the
holders of the Preferred Shares, whichever shall be the earlier.

          (b)  In case any of Section  11(a)(ii) Event or Section 13 Event shall
occur,  then,  in any such case,  (i) the Company  shall as soon as  practicable
thereafter  give to each  holder  of a Right  Certificate,  in  accordance  with
Section 26 hereof, a notice of the occurrence of such event,  which notice shall
include a brief summary of the Section  11(a)(ii)  Event or Section 13 Event, as
the case may be, and the consequences thereof to holders of Rights, and (ii) all
references  in the  preceding  paragraph  to  Preferred  Shares  shall be deemed
thereafter to refer to Common Shares and/or, if appropriate, other securities.

          Section 26. Notices.

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

                      Harley-Davidson, Inc.
                      3700 West Juneau Avenue
                      Milwaukee, Wisconsin 53208
                      Attention:  Secretary

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

                      Firstar Bank, N. A.
                      1555 RiverCenter Drive, Suite 301
                      Milwaukee, Wisconsin 53212
                      Attention:  Corporate Trust Department

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

          Section 27. Supplements  and  Amendments.  Prior  to  the later of the
Record Date and such time as any Person becomes an Acquiring  Person and subject
to the  penultimate  sentence of this Section 27, the Company may and the Rights
Agent shall,  if the Company so directs,  supplement  or amend any  provision of
this Agreement without the approval of any holders

                                       26
<PAGE>

of certificates  representing Common Shares of the Company. Without limiting the
foregoing, the Company may at any time prior to the later of the Record Date and
such time as any Person  becomes an  Acquiring  Person  amend this  Agreement to
lower the thresholds set forth in Sections 1(a) and 3(a) hereof from 25% or 15%,
as the case may be,  to not less  than  10%,  with  appropriate  exceptions  for
persons then  beneficially  owning Common Shares of the Company  constituting  a
percentage of the number of Common Shares then outstanding equal to or in excess
of the new threshold.  From and after the later of the Record Date and such time
as any  Person  becomes an  Acquiring  Person  and  subject  to the  penultimate
sentence of this  Section 27, the Company  and the Rights  Agent  shall,  if the
Company so directs,  supplement or amend this Agreement  without the approval of
any holders of Right  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 provision  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 Right  Certificates  (other
than an Acquiring  Person or an Affiliate or Associate of an Acquiring  Person);
provided,  that from and after the later of the Record Date and such time as any
Person  becomes an Acquiring  Person this Agreement may not be  supplemented  or
amended to  lengthen,  pursuant  to clause  (iii) of this  sentence,  (A) a time
period  relating  to when the Rights may be  redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights.  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 27, the Rights Agent
shall execute such supplement or amendment.  Notwithstanding  anything contained
in this  Agreement to the contrary,  no  supplement  or amendment  shall be made
which  changes  the  Redemption  Price  or  moves  to an  earlier  date the then
effective Final Expiration  Date. Prior to the Distribution  Date, the interests
of the holders of Rights shall be deemed  coincident  with the  interests of the
holders of Common Shares of the Company.

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

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

          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.

                                       27
<PAGE>

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

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

          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.

          Section 34. Determinations and Actions by the Board of Directors.  For
all purposes of this  Agreement,  any calculation of the number of Common Shares
of the Company  outstanding  at any particular  time,  including for purposes of
determining the particular percentage of such outstanding Common Shares of which
any Person is the Beneficial  Owner,  shall be made in accordance  with the last
sentence of Rule  13d-3(d)(1)(i)  of the General Rules and Regulations under the
Exchange  Act. The Board of Directors  of the Company  shall have the  exclusive
power and authority to administer  this Agreement and to exercise all rights and
powers  specifically  granted to the Board 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 (a)  interpret  the
provisions of this Agreement,  and (b) make all determinations  deemed necessary
or advisable for the administration of this Agreement (including a determination
to  redeem  or  not  redeem  the  Rights  or to  amend  the  Agreement  and  any
determination as to whether actions or any Person shall be such as to cause such
Person to  beneficially  own shares held by another  Person).  All such actions,
calculations,  interpretations  and determinations  (including,  for purposes of
clause (ii) below,  all omissions with respect to the foregoing)  which are done
or made by the Board of  Directors  of the Company in good  faith,  shall (i) be
final,  conclusive and binding on the Company,  the Rights Agent, the holders of
the Rights and all other parties, and (ii) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.

                                       28
<PAGE>

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

                                                HARLEY-DAVIDSON, INC.

Attest:

  /s/  Tonit M. Calaway                           /s/  Gail A. Lione
------------------------------                  ------------------------------
By: Tonit M. Calaway                            By: Gail A. Lione
Title: Assistant Secretary                      Title: Vice President,
                                                         General Counsel

                                                FIRSTAR BANK, N. A.

Attest:

  /s/  Janice Grezinski                           /s/  Nikhat Quryshi
------------------------------                  ------------------------------
By: Janice Grezinski                            By: Nikhat Quryshi
Title: Senior Trust Officer                     Title: Trust Officer

                                       29
<PAGE>

                                                           =====================
                                                                       EXHIBIT A
                                                           =====================

           Terms of the Series A Junior Participating Preferred Stock,
                               $1.00 par value, of
                             Harley-Davidson, Inc.,
                                   As Amended

                  Series A Junior Participating Preferred Stock

          Section 1.  Designation and Amount. The shares of such series shall be
designated  as "Series A Junior  Participating  Preferred  Stock" (the "Series A
Preferred  Stock") and the number of shares  constituting  such series  shall be
500,000.

          Section 2.  Dividends and Distributions.

          (A)  The holders of shares of Series A Preferred  Stock, in preference
to the holders of shares of Common Stock and of any other junior stock, shall be
entitled to receive,  when,  as and if declared by the Board of Directors out of
funds legally available for the purpose,  quarterly dividends payable in cash on
the first business days of January,  April,  July and October in each year (each
such date being  referred to herein as a  "Quarterly  Dividend  Payment  Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred  Stock, in an amount per
share  (rounded to the  nearest  cent) equal to the greater of (i) $1.00 or (ii)
subject to the provision for adjustment  hereinafter set forth, 10,000 times the
aggregate per share amount of all cash dividends, and 10,000 times the aggregate
per  share  amount  (payable  in  kind)  of  all  noncash   dividends  or  other
distributions,  other  than a dividend  payable  in shares of Common  Stock or a
subdivision of the outstanding  shares of Common Stock (by  reclassification  or
otherwise),  declared  on the  Common  Stock  since  the  immediately  preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Payment
Date,  since the first  issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation  shall at any time after the close
of business on August 20, 2000 (the  "Record  Date") (a) declare any dividend on
Common Stock  payable in shares of Common Stock,  (b) subdivide the  outstanding
Common Stock, or (c) combine the outstanding  Common Stock into a smaller number
of  shares,  then in each such case the  amount  to which  holders  of shares of
Series A Preferred  Stock were  entitled  immediately  prior to such event under
clause (ii) of the  preceding  sentence  shall be adjusted by  multiplying  such
amount by a fraction  the  numerator  of which is the number of shares of Common
Stock that are outstanding  immediately  after such event and the denominator of
which is the number of shares of Common Stock that were outstanding  immediately
prior to such event.

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

                                       A-1
<PAGE>

$1.00 per share on the Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

          (C)  Dividends shall begin to accrue and be cumulative on  outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred  Stock,  unless
the date of issue of such  shares  is  prior to the  record  date for the  first
Quarterly  Dividend  Payment Date, in which case  dividends on such shares shall
begin to accrue  from the date of issue of such  shares,  or unless  the date of
issue is a Quarterly  Dividend  Payment  Date or is a date after the record date
for the  determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly  Dividend  Payment Date.  Accrued but unpaid dividends shall
not bear interest.  Dividends paid on the shares of Series A Preferred  Stock in
an amount less than the total  amount of such  dividends at the time accrued and
payable on such shares shall be  allocated  pro rata on a  share-by-share  basis
among all such shares at the time outstanding.  The Board of Directors may fix a
record  date for the  determination  of holders of shares of Series A  Preferred
Stock  entitled  to  receive  payment  of a dividend  or  distribution  declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.

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

          (A)  Subject to the provision  for adjustment  hereinafter  set forth,
each share of Series A  Preferred  Stock  shall  entitle  the holder  thereof to
10,000  votes on all  matters  submitted  to a vote of the  shareholders  of the
Corporation.  In the event the  Corporation  shall at any time  after the Record
Date  declare or pay any  dividend on Common  Stock  payable in shares of Common
Stock,  or  effect  a  subdivision  or  combination  or   consolidation  of  the
outstanding  shares of Common Stock (by  reclassification  or otherwise  than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock,  then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by  multiplying  such number by a fraction
the  numerator  of which is the  number  of  shares  of  Common  Stock  that are
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

          (B)  Except as otherwise  provided  herein, in any other resolution of
the Board of  Directors  creating  a series of  Preferred  Stock or any  similar
stock,  or by law,  the  holders of shares of Series A  Preferred  Stock and the
holders  of shares of  Common  Stock  shall  vote  together  as one class on all
matters submitted to a vote of shareholders of the Corporation.

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

                                       A-2
<PAGE>

          Section 4.  Certain Restrictions.

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

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

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

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

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

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

                                       A-3
<PAGE>

          5.   Reacquired Shares.  All shares of Series A  Preferred  Stock that
shall at any time have been  reacquired  by the  Corporation  shall,  after such
reacquisition,  have the status of authorized  but unissued  shares of Preferred
Stock of the Corporation,  without designation as to series, and may be reissued
as part of a new  series of  Preferred  Stock to be  created  by  resolution  or
resolutions   of  the  Board  of  Directors,   subject  to  the  conditions  and
restrictions on issuance set forth herein.

          6.   Liquidation, Dissolution  or Winding  Up.  Upon any  liquidation,
dissolution or winding up of the Corporation,  no distribution shall be made (A)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation,  dissolution or winding up) to the Series A Preferred Stock unless,
prior  thereto,  the  holders of shares of Series A  Preferred  Stock shall have
received  $100 per share,  plus an amount equal to accrued and unpaid  dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided  that the  holders  of  shares  of Series A  Preferred  Stock  shall be
entitled to receive an aggregate amount per share,  subject to the provision for
adjustment  hereinafter set forth, equal to 10,000 times the aggregate amount to
be  distributed  per share to holders of shares of Common  Stock,  or (B) to the
holders of shares of stock  ranking on a parity  (either as to dividends or upon
liquidation,  dissolution  or  winding  up) with the Series A  Preferred  Stock,
except  distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such  liquidation,  dissolution  or winding up. In
the event the Corporation shall at any time after the Record Date declare or pay
any dividend on the Common Stock payable in shares of Common Stock,  or effect a
subdivision or combination or consolidation of the outstanding  shares of Common
Stock (by  reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the  aggregate  amount to which  holders of shares of Series A
Preferred Stock were entitled  immediately prior to such event under the proviso
in clause (A) of the preceding  sentence shall be adjusted by  multiplying  such
amount by a fraction  the  numerator  of which is the number of shares of Common
Stock  outstanding  immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding  immediately prior to
such event.

          7.   Consolidation,  Merger, etc. In case the Corporation  shall enter
into any consolidation, merger, combination, share exchange or other transaction
in which the shares of Common  Stock are  exchanged  for or  changed  into other
stock or securities,  cash and/or any other property,  then in any such case the
shares of Series A Preferred Stock shall at the same time be similarly exchanged
or changed in an amount  per share  (subject  to the  provision  for  adjustment
hereinafter  set forth)  equal to 10,000  times the  aggregate  amount of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or  exchanged.
In the event the Corporation shall at any time after the Record Date (A) declare
any dividend on Common Stock  payable in shares of Common  Stock,  (B) subdivide
the outstanding  Common Stock,  or (C) combine the outstanding  shares of Common
Stock  into a smaller  number of  shares,  then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred  Stock shall be adjusted by  multiplying  such amount by a
fraction the numerator of which is the number of shares of Common Stock that are
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

                                       A-4
<PAGE>

          8.   No Redemption.  The shares of Series A Preferred  Stock shall not
be redeemable.

          9.   Amendment.  To the  fullest extent  permitted by applicable  law,
prior to such  time as  shares  of  Series A  Preferred  Stock  are  issued  and
outstanding,  the Board of Directors may modify,  amend,  alter or revoke any of
the number of shares of Series A Preferred  Stock,  the powers,  preferences  or
special rights of the Series A Preferred  Stock or the other terms of the Series
A  Preferred  Stock.  From and after  such time as shares of Series A  Preferred
Stock are issued and outstanding,  the Restated Articles of Incorporation of the
Corporation  shall not be amended in any manner that would  materially  alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding  shares of Series A Preferred Stock,  voting
together as a single class.

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

                                       A-5
<PAGE>

                                                           =====================
                                                                       EXHIBIT B
                                                           =====================

                           [Form of Right Certificate]

Certificate No. R-                                                _______ Rights

            NOT   EXERCISABLE   AFTER  AUGUST  20,  2010  (SUBJECT  TO
            EXTENSION) OR EARLIER IF  REDEMPTION  OR EXCHANGE  OCCURS.
            THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND
            TO   EXCHANGE  ON  THE  TERMS  SET  FORTH  IN  THE  RIGHTS
            AGREEMENT.

                                Right Certificate

                              HARLEY-DAVIDSON, INC.

          This certifies that  ________________,  or registered  assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement,  dated as of February 17, 2000,  and as such agreement may be amended
(the "Rights Agreement"), between Harley-Davidson, Inc., a Wisconsin corporation
(the "Company"),  and Firstar Bank, N. A. (the "Rights Agent"), to purchase from
the Company at any time after the Distribution  Date (as such term is defined in
the Rights  Agreement)  and prior to 5:00 P.M.,  Milwaukee,  Wisconsin  time, on
August 20, 2010,  subject to extension,  at the  principal  office of the Rights
Agent, or at the office of its successor as Rights Agent, one  ten-thousandth of
one fully paid  nonassessable  (except as otherwise  provided by any corporation
law applicable to the Company) share of Series A Junior Participating  Preferred
Stock, par value $1.00 ("Preferred Shares"), of the Company, at a purchase price
of $175.00 per one  ten-thousandth of a Preferred Share (the "Purchase  Price"),
upon  presentation  and  surrender  of this Right  Certificate  with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate  (and the number of one  ten-thousandths  of a Preferred Share which
may be purchased upon exercise  hereof) set forth above,  and the Purchase Price
set forth above,  are the number and Purchase Price as of August 20, 2000, based
on the Preferred  Shares as  constituted at such date. As provided in the Rights
Agreement,  the  Purchase  Price  and the  number  of one  ten-thousandths  of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right  Certificate are subject to  modification  and adjustment upon the
happening of certain events.

          This Right Certificate is subject to all of the terms,  provisions and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by

                                       B-1
<PAGE>

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

          This Right Certificate, with or without other Right Certificates, upon
surrender at the  principal  office of the Rights  Agent,  may be exchanged  for
another  Right  Certificate  or  Right  Certificates  of  like  tenor  and  date
evidencing  Rights  entitling the holder to purchase a like aggregate  number of
Preferred  Shares as the  Rights  evidenced  by the Right  Certificate  or Right
Certificates  surrendered  shall have entitled such holder to purchase.  If this
Right  Certificate  shall be exercised in part,  the holder shall be entitled to
receive upon surrender  hereof another Right  Certificate or Right  Certificates
for the number of whole Rights not exercised.

          Subject  to  the  provisions  of  the  Rights  Agreement,  the  Rights
evidenced  by this  Certificate  may be redeemed by the Company at a  redemption
price of $.01 per Right.

          The Board of Directors of the Company may, at its option,  at any time
after any  Person  becomes  an  Acquiring  Person,  but  prior to such  Person's
acquisition of 50% or more of the outstanding  shares of Common Stock, par value
$.01  ("Common  Stock"),  of the Company,  exchange the Rights  evidenced by the
certificates  for  Preferred  Shares or shares of Common  Stock,  at an exchange
ratio of one  ten-thousandth  of a Preferred Share or one share of Common Stock,
as the case may be, per Right, subject to adjustment,  as provided in the Rights
Agreement.

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

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

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

                                       B-2
<PAGE>

          WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________, ____.

ATTEST:                                     HARLEY-DAVIDSON, INC.

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

Countersigned:

FIRSTAR BANK, N. A.

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

                                       B-3
<PAGE>

                   [Form of Reverse Side of Right Certificate]

                               FORM OF ASSIGNMENT

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

          FOR  VALUE  RECEIVED                                    hereby  sells,
                                --------------------------------
assigns  and  transfers  unto  (Please  print name and  address  of  transferee)
                                                                    this   Right
------------------------------------------------------------------
Certificate,  together  with all right,  title and  interest  therein,  and does
hereby  irrevocably  constitute  and appoint                        Attorney, to
                                             ----------------------
transfer the within Right Certificate on the books of the within-named  Company,
with full power of substitution.

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

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

Signature Guaranteed:

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

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

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

                                       B-4
<PAGE>

            [Form of Reverse Side of Right Certificate -- continued]

                          FORM OF ELECTION TO PURCHASE

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

To HARLEY-DAVIDSON, INC.:

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

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

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

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

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

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

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

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

Signature Guaranteed:

                  Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers,  Inc.,  or a  commercial  bank or trust  company  having  an  office or
correspondent in the United States.

                                       B-5
<PAGE>

            [Form of Reverse Side of Right Certificate -- continued]

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

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

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

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

                                     NOTICE

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

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

                                       B-6
<PAGE>

                                                           =====================
                                                                       EXHIBIT C
                                                           =====================

                              HARLEY-DAVIDSON, INC.

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

          On February 17, 2000, the Board of Directors of Harley-Davidson,  Inc.
(the  "Company")  declared a dividend of one preferred  share  purchase right (a
"Right") for each  outstanding  share of common stock,  $.01 par value  ("Common
Shares"),  of the Company. The dividend is payable upon the close of business on
August 20,  2000 to the  shareholders  of record  upon the close of  business on
August 20, 2000 (the "Record Date").  Each Right entitles the registered  holder
to purchase  from the Company one  ten-thousandth  of a share of Series A Junior
Participating  Preferred Stock,  $.1.00 par value ("Preferred  Shares"),  of the
Company, at a price of $175 per one ten-thousandth of a Preferred Share, subject
to adjustment  (the "Purchase  Price").  The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and Firstar Bank, N. A., as Rights Agent (the "Rights Agent").

          Until  the  earlier  to  occur  of  (i) 10  days  following  a  public
announcement  that a person or group of affiliated or associated  persons (other
than the Company, a subsidiary of the Company or an employee benefit plan of the
Company  or a  subsidiary)  (an  "Acquiring  Person")  has  acquired  beneficial
ownership  of  15% or  more  of  the  outstanding  Common  Shares  (the  "Shares
Acquisition  Date")  or (ii) 10  business  days  (or such  later  date as may be
determined by action of the Company's  Board of Directors  prior to such time as
any person  becomes an  Acquiring  Person)  following  the  commencement  of, or
announcement  of an  intention  to make,  a tender  offer or exchange  offer the
consummation  of which would result in the  beneficial  ownership by a person or
group  (other  than the  Company,  a  subsidiary  of the  Company or an employee
benefit plan of the Company or a subsidiary) of 25% or more of such  outstanding
Common Shares (the earlier of such dates being called the "Distribution  Date"),
the  Rights  will  be  evidenced,  with  respect  to  any of  the  Common  Share
certificates   outstanding   as  of  the  Record  Date,  by  such  Common  Share
certificate.

          The Rights Agreement  provides that, until the Distribution  Date, the
Rights  will be  transferred  with and only with the  Common  Shares.  Until the
Distribution  Date (or earlier  redemption  or  expiration  of the Rights),  new
Common Share  certificates  issued after the Record Date,  upon  transfer or new
issuance of Common  Shares,  will  contain a notation  incorporating  the Rights
Agreement by reference.  Until the Distribution  Date (or earlier  redemption or
expiration of the Rights),  the surrender for transfer of any  certificates  for
Common Shares,  outstanding  as of the Record Date,  even without such notation,
will also  constitute  the  transfer  of the Rights  associated  with the Common
Shares  represented by such  certificate.  As soon as practicable  following the
Distribution  Date,   separate   certificates   evidencing  the  Rights  ("Right
Certificates")  will be mailed to holders  of record of the Common  Shares as of
the  close  of  business  on the  Distribution  Date  and  such  separate  Right
Certificates alone will evidence the Rights.

          The Rights are not exercisable until the Distribution Date. The Rights
will  expire on August  20,  2010 (the  "Final  Expiration  Date"),  subject  to
extension,  unless the Rights are

                                       C-1
<PAGE>

earlier  redeemed  or  exchanged  by the  Company,  or the Rights  Agreement  is
amended, in each case as described below.

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

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

          Preferred  Shares  purchasable upon the exercise of Rights will not be
redeemable.  Each  Preferred  Share will be entitled  to a minimum  preferential
quarterly  dividend  payment  of $1.00  per  share  but will be  entitled  to an
aggregate  dividend of 10,000 times the dividend  declared per Common Share.  In
the event of liquidation,  the holders of the Preferred  Shares will be entitled
to a  minimum  preferential  liquidation  payment  of $100 per share but will be
entitled to an  aggregate  payment of 10,000  times the payment  made per Common
Share.  Each Preferred  Share will have 10,000 votes,  voting  together with the
Common  Shares.  Finally,  in the event of any  merger,  consolidation  or other
transaction in which Common Shares are exchanged,  each Preferred  Share will be
entitled to receive  10,000 times the amount  received per Common  Share.  These
rights are protected by customary antidilution provisions.

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

          In the event that any person  becomes an Acquiring  Person (a "Flip-In
Event"),  each  holder of a Right  (except as  otherwise  provided in the Rights
Agreement)  will  thereafter have the right to receive upon exercise that number
of  Common  Shares  (or,  in  certain  circumstances  cash,  property  or  other
securities of the Company or a reduction in the Purchase  Price) having a market
value of two times the then current Purchase Price.  Notwithstanding  any of the
foregoing,  following the  occurrence of a Flip-In Event all Rights that are, or
(under  certain  circumstances  specified  in the  Rights  Agreement)  were,  or
subsequently become  beneficially owned by an Acquiring Person,  related persons
and transferees will be null and void.

                                       C-2
<PAGE>

          In the event that, at any time following the Shares  Acquisition Date,
(i)  the  Company  is  acquired  in  a  merger  or  other  business  combination
transaction or (ii) 50% or more of its consolidated  assets or earning power are
sold (the events  described  in clauses  (i) and (ii) are herein  referred to as
"Flip-Over  Events"),  proper  provision  will be made so that each  holder of a
Right (except as otherwise  provided in the Rights  Agreement)  will  thereafter
have the  right  to  receive,  upon the  exercise  thereof  at the then  current
Purchase Price,  that number of shares of common stock of the acquiring  company
which at the time of such  transaction will have a market value of two times the
then current Purchase Price.

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

          The Purchase  Price is payable by certified  check,  cashier's  check,
bank draft or money order or, if so provided by the Company,  the Purchase Price
following the occurrence of a Flip-In Event and until the first  occurrence of a
Flip-Over Event may be paid in Common Shares having an equivalent value.

          At any time after a person  becomes an  Acquiring  Person and prior to
the  acquisition  by such  Acquiring  Person  of 50% or more of the  outstanding
Common  Shares,  the Board of  Directors  of the Company may exchange the Rights
(other than Rights owned by any  Acquiring  Person which have become  void),  in
whole  or  in  part,  at  an  exchange  ratio  of  one  Common  Share,   or  one
ten-thousandth  of a Preferred  Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).

          At any time prior to a person becoming an Acquiring Person,  the Board
of Directors of the Company may redeem the Rights in whole,  but not in part, at
a price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made  effective at such time,  on such basis and with such  conditions as
the Board of Directors in its sole  discretion may establish.  Immediately  upon
any  redemption of the Rights,  the right to exercise the Rights will  terminate
and the only right of the holders of Rights  will be to receive  the  Redemption
Price.

          Other than amendments  that would change the Redemption  Price or move
to an earlier  date the final  expiration  date of the Rights,  the terms of the
Rights may be amended  by the Board of  Directors  of the  Company  without  the
consent of the  holders  of the  Rights,  including  an  amendment  to lower the
threshold for  exercisability of the Rights from 25% or 15%, as the case may be,
to  not  less  than  10%,  with  appropriate  exceptions  for  any  person  then
beneficially owning a percentage of the number of Common Shares then outstanding
equal to or in excess of the new threshold, except that from and after the later
of the Record Date and such time as any person  becomes an  Acquiring  Person no
such amendment may adversely affect the interests of the holders of the Rights.

          Until a Right is exercised,  the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.

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

                                       C-3<PAGE>

                                                                   EXHIBIT 10.18

                            AMGEN INC. SUPPLEMENTAL

                                RETIREMENT PLAN

             (As Amended and Restated Effective November 1, 1999)
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                      AMGEN SUPPLEMENTAL RETIREMENT PLAN
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             (As Amended and Restated Effective November 1, 1999)

                                   ARTICLE I
                         INTRODUCTION AND PLAN PURPOSE
                         -----------------------------

The Amgen Supplemental Retirement Plan (the "Plan") was established by Amgen
Inc. (the "Company") effective as of January 1, 1993, was amended and restated
effective January 1, 1998, and was amended and restated again effective November
1, 1999.  The purpose of this Plan is to provide benefits to employees of the
Company and certain of its affiliates whose Matching Contributions and
Nonelective Contributions are limited under the Amgen Inc. Retirement and
Savings Plan (the "Retirement Plan").  The Company intends that the Plan will
aid in retaining and attracting employees of exceptional ability by providing
them with these benefits.

                                  ARTICLE II
                                  DEFINITIONS
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For the purposes of this Plan, the following terms, when capitalized, have the
following meanings.  Any capitalized term in this Plan that is not defined in
this Article II has the meaning given such term in the Retirement Plan.

2.1  Account means the Account maintained by the Company in accordance with
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Article IV with respect to Matching Credits, Core Credits and Earnings.

2.2  Beneficiary means the person, persons or entity entitled under Article VI
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to receive Plan benefits payable in the event of your death.

2.3  Board means the Board of Directors of the Company.
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2.4  Code means the Internal Revenue Code of 1986, as amended.
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2.5  Committee means the Compensation Committee of the Company's Board.
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2.6  Company means Amgen Inc. or any subsidiary or affiliate of Amgen Inc.
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selected by the Board or the Committee to participate in the Plan.

2.7  Compensation has the same meaning as such term has under the Retirement
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Plan, except that, for purposes of this Plan, Compensation is not limited by the
Salary Cap and Compensation for purposes of this Plan will not include any
foreign assignment differential, that is, an amount paid to you to compensate
for costs unique to an overseas assignment.

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2.8  Core Credit means the amount credited to your Account under Section 4.2(a)
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of the Plan.

2.9   Deferral Commitment means the election to defer "Participant Elected
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Contributions," as described in the Retirement Plan.

2.10  Earnings means the amount credited to your Account under Section 4.3 of
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the Plan.

2.11  Hour of Service has the same meaning as such term in the Retirement Plan
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except that, for purposes of determining Hours of Service under this Plan, you
will be credited only for the period during which you are a Regular Full-Time
Employee, including any period during which you are on a leave of absence that
has been approved by the Company.

2.12  Matching Credit refers to amounts credited to your Account under Section
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4.2(b) of the Plan.

2.13  Normal Retirement Date means the first day of the month coinciding with or
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next following your attainment of age 65.

2.14  Participation Agreement means the agreement you file with the Committee
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acknowledging the terms of the Plan and enrolling in the Plan.

2.15  Plan means this Amgen Inc. Supplemental Retirement Plan.
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2.16  Regular Full-Time Employee means an Employee of the Company who is
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classified as a Regular Full-Time Employee by the Company, in its sole
discretion.  The Company's classification of you as a Regular Full-Time Employee
or something other than a Regular Full-Time Employee will be conclusive and
binding.  You will not be a Regular Full-Time Employee if the Company does not
withhold federal income and employment taxes from your Compensation or if the
Company classifies you as a part-time employee, leased employee, temporary
employee, independent contractor, or consultant, regardless of the length of
time you have held such position with the Company.

2.17  Retirement Plan means the Amgen Inc. Retirement and Savings Plan.
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2.18  Salary Cap means the highest level of compensation that can be considered
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for the purpose of calculating benefits under Section 401(a)(17) of the Code.

2.19   Spouse means your wife or husband who is lawfully married to you at the
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time of your death.

2.20  Year of Service means each calendar year or portion thereof during which
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you are credited with 1,000 Hours of Service.

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                                  ARTICLE III
                         ELIGIBILITY AND PARTICIPATION
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3.1  Eligibility.  You are eligible to elect to receive credits in your Account
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as provided in Section 4.2 of the Plan during the time you are a Regular Full-
Time Employee and your Compensation for the relevant calendar year is in excess
of the Salary Cap.

3.2  Election.  Once you are eligible under Section 3.1 of the Plan, you may
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elect to receive credits under the Plan by submitting a Participation Agreement
to the Committee by the last day of the calendar year in which you are eligible
and wish to receive credits.  Your Participation Agreement will remain in effect
unless and until you submit a new Participation Agreement changing or canceling
your future election.

3.3  Participation.  After you first become eligible and elect to receive
     -------------
credits under the Plan, you will continue to participate in the Plan (that is,
you will receive Earnings on the balance in your Account) as long as you have
not received a distribution of your Account, even if you are no longer eligible
to receive credits under the Plan.

                                  ARTICLE IV
                            CREDITS TO YOUR ACCOUNT
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4.1  Account.  For record keeping purposes only, an Account will be maintained
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for all persons participating in the Plan.  Your Account will be used solely to
determine the amounts to be paid to you under the Plan.  Your Account will not
constitute or be treated as a trust fund for your benefit.

4.2  Credits.  The Company will credit your Account with your share of Matching
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Credits and Core Credits.

(a)  Core Credits.  The amount of Core Credits to be credited to your account
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     will be determined by calculating first what you would have received as a
     Nonelective Contribution under the Retirement Plan as if the Salary Cap
     were not in effect, less the amount of Nonelective Contributions that were
     actually contributed on your behalf to the Retirement Plan.

(b)  Matching Credits.  The amount of Matching Credits to be credited to your
     ----------------
     account will be the amount of matching contributions that would have been
     made on your behalf under the Retirement Plan as if the Salary Cap were not
     in effect, based on your Deferral Commitment in effect at the time your
     Compensation reaches the Salary Cap for the year (provided that you can
     demonstrate to the Company that you have set aside for investment an amount
     equal to the amount you were prevented from deferring because of the Salary
     Cap), less the amount of matching contributions that were actually
     contributed on your behalf to the Retirement Plan.

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4.3  Earnings.  Your Account will be credited with Earnings with respect to the
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investments of the Core and Matching Credits credited to your Account.  Earnings
will be credited at the rate declared by the Committee, acting in its sole
discretion, after taking into account the investment performance of the
investment vehicles selected by the Committee, or, if the Committee permits,
selected by you from among the investment vehicles available under the
Retirement Plan.

4.4  Vesting of Your Account.  Your Account will become fully vested upon
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termination of your employment with the Company on or after (1) your Normal
Retirement Date, (2) the date of your Disability, or (3) your death.  If your
employment with the Company is terminated for any other reason, your Account
will be vested in accordance with the following schedule:

                    Years of Service             Vested Percentage
                    ----------------             -----------------

                      Less than 5                          0%

                   5 but less than 6                      50%

                   6 but less than 7                      60%

                   7 but less than 8                      70%

                   8 but less than 9                      80%

                   9 but less than 10                     90%

                       10 or more                        100%

All Accounts will be subject to the creditors of the Company in the event of the
insolvency of the Company.

4.5  Determination of Accounts.  Your Account will consist of all your credited
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Matching Credits, Core Credits, and Earnings.

4.6  Statement of Accounts.  Prior to March 1 of each year or at such other time
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as determined by the Committee, the Committee will distribute statements to you
showing the balance of your Account.

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                                   ARTICLE V
                                 DISTRIBUTIONS
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5.1  Distributions.  Following the termination of your employment with the
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Company, the Company will pay you the vested balance in your Account.  The
payments will be made to you in cash and may be paid either in a lump sum or in
periodic installments at such time and in such form as determined by the
Committee. If you are paid in periodic installments, the amount of each
installment will be equal to the vested balance in your Account divided by the
number of remaining installments that you are to receive. Any unpaid balance
will continue to receive Earnings. In the event of your death prior to receiving
your full distribution, the unpaid balance will be paid to your Beneficiary at
such times and in such form as the Committee determines in its sole discretion.

5.2  Withholding Payroll Taxes.  The Company will withhold any taxes required to
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be withheld from payments made from the Plan to satisfy any federal, state, or
local requirements regarding tax withholding.

5.3  Payment to Guardian.  If a Plan benefit is payable to a minor, a person
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declared incompetent or a person incapable of handling the disposition of
property, the Committee may direct payment of such Plan benefit to the guardian,
legal representative or person having the care and custody of such minor,
incompetent or person.  The Committee may require proof of incompetency,
minority, incapacity or guardianship as may be appropriate prior to distribution
of the Plan benefit.  Such distribution completely discharges the Committee and
the Company from all liability with respect to such benefit.

                                  ARTICLE VI
                            BENEFICIARY DESIGNATION
                            -----------------------

6.1  Beneficiary Designation.  Your Beneficiary under the Plan will be the same
     -----------------------
Beneficiary you select under the Retirement Plan.  If you change your
Beneficiary designation under the Retirement Plan, your Beneficiary designation
under the Plan will automatically change as well.

6.2  No Beneficiary Designation.  If you fail to designate a Beneficiary under
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the Retirement Plan, or if the Beneficiary you designate dies before you or
before complete distribution of your benefits, your designated Beneficiary will
be the first of the following classes in which there is a survivor:

     (a)  your surviving Spouse;

     (b)  your children, except if any of the children predecease you but leave
          surviving issue, then such issue will take by right of representation
          the share the parent would have taken if living;

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     (c)  your estate.

6.3  Effect of Payment.  The distribution to the Beneficiary completely
     -----------------
discharges Company's obligations under this Plan.

                                  ARTICLE VII
                                ADMINISTRATION
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7.1  Committee; Duties.  This Plan is administered by the Committee.  The
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Committee is responsible for making such rules, interpretations and computations
as may be appropriate.  Any decision of the Committee with respect to the Plan
including, without limitation, any determination of eligibility to receive
credits under the Plan and any calculation of Plan benefits, is conclusive and
binding on all persons.  The Committee may appoint a panel consisting of any
number of individuals, who may or may not be employees of the Company, to carry
out the Committee's duties and responsibilities under the Plan.

7.2  Agents.  The Committee may employ other agents and delegate to them such
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administrative duties as it sees fit, and may from time to time consult with
counsel who may be counsel to the Company.

7.3  Binding Effect of Decisions.  The decisions or actions of the Committee
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with respect to any question arising out of or in connection with the
administration, interpretation or application of the Plan and the rules or
regulations promulgated hereunder will be final, conclusive and binding upon all
persons having any interest in the Plan.

7.4  Indemnity of Committee.  The Company will indemnify and hold harmless the
     ----------------------
members of the Committee against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to this Plan,
except in the case of the Committee's gross negligence or willful misconduct.

7.5  Claims Procedure.  The Claims Procedure under the Plan is the same as that
     ----------------
under the Retirement Plan, except that the Committee will be substituted for the
Review Panel.

                                 ARTICLE VIII
                       AMENDMENT AND TERMINATION OF PLAN
                       ---------------------------------

8.1  Amendment.  The Committee may at any time amend the Plan in whole or in
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part.  No amendment may decrease or restrict the amount accrued in any Account
maintained under the Plan through the date of Amendment.

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8.2  Company's Right to Terminate.  The Board may at any time partially or
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completely terminate the Plan if, in its judgment, the tax, accounting, or other
effects of the continuance of the Plan, or potential payments thereunder, would
not be in the best interests of the Company.

                                  ARTICLE IX
                                 MISCELLANEOUS
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9.1  Unfunded Plan.  This Plan is intended to be an unfunded plan for tax law
     -------------
purposes and for purposes of Title I of the Employee Retirement Income Act of
1974, as amended ("ERISA"), maintained primarily to provide benefits for a
select group of management or highly compensated employees.  This Plan is not
intended to create an investment contract, but to provide tax planning
opportunities and retirement benefits to eligible individuals who have elected
to participate in the Plan.  Eligible individuals are members of management who,
by virtue of their position with the Company, are uniquely informed as to the
Company's operations and have the ability to materially affect the Company's
profitability and operations.

9.2  Unsecured General Creditor.  Neither you nor your Beneficiaries, heirs,
     --------------------------
successors and assigns will have any legal or equitable rights, interest or
claims in any property or assets of the Company, nor will they be Beneficiaries
of, or have any rights, claims or interests in any life insurance policies,
annuity contracts or the proceeds therefrom owned or which may be acquired by
the Company.  Such policies or other assets of the Company will not be held
under any trust for your benefit or that of your Beneficiaries, heirs,
successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan.  Any and all of
the Company's assets and policies will be, and remain, the general, unpledged,
unrestricted assets of the Company.  The Company's obligation under the Plan
will be that of an unfunded and unsecured promise of the Company to pay money in
the future.

9.3  Trust Fund.  The Company will pay all Plan benefits.  At its discretion,
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the Company may establish one or more trusts, with such trustees as the Board
may approve, for the purpose of providing for the payment of such benefits.
Such trust or trusts may be irrevocable, but the assets thereof will be subject
to the claims of the Company's creditors.  To the extent any benefits provided
under the Plan are actually paid from any such trust, the Company will have no
further obligation with respect thereto, but to the extent not so paid, such
benefits will remain the obligation of, and paid by, the Company.

9.4  Nonassignability.  Neither you nor any other person may commute, sell,
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assign, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are expressly
declared to be nonassignable and nontransferable.  No part of the amounts
payable will, prior to actual payment, be subject to seizure or sequestration
for the payment of any debts, judgments, alimony or separate

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maintenance owed by you or any other person (other than amounts owed to the
Company's creditors in the event of the Company's insolvency), nor be
transferable by operation of law in the event of the bankruptcy or insolvency of
you or any other person (other than the Company). Notwithstanding the above,
vested benefits will be payable to an individual other than you under this Plan
in accordance with a court order upon the determination by the Committee that
such order (i) has been issued by a court with appropriate jurisdiction (ii) has
been properly served on the Company, (iii) is reasonably clear to, and
administrable by, the Committee, (iv) does not require any benefit not otherwise
provided under the Plan, and (v) requires payment of a portion of your vested
Account to someone other than you.

9.5  Not a Contract of Employment.  The terms and conditions of this Plan may
     ----------------------------
not be construed to constitute a contract of employment between you and the
Company and you (or your Beneficiary) will have no rights against the Company
except as otherwise specifically provided herein.  Moreover, nothing in this
Plan will be deemed to give you the right to be retained in the service of the
Company as a Regular Full-Time Employee or otherwise, or to interfere with the
right of the Company to discipline or discharge you at any time.

9.6  Cooperation.  You are required to cooperate with the Company by furnishing
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any and all information requested by the Company in order to facilitate the
payment of benefits hereunder.

9.7  Terms.  Whenever words are used in this Plan in the masculine they will be
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construed as though they were used in the feminine in all cases where they would
so apply; and whenever any words are used in this Plan in the singular or in the
plural, they will be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

9.8  Captions.  The captions of the articles, sections and paragraphs of this
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Plan are for convenience only and do not control or affect the meaning or
construction of any of its provisions.

9.9  Governing Law.  The provisions of this Plan are to be construed and
     -------------
interpreted according to the laws of the State of California to the extent that
they have not been preempted by federal law.

9.10 Validity.  In case any provision of this Plan is found to be held illegal
     --------
or invalid for any reason, said illegality or invalidity will not affect the
remaining parts hereof, but this

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<PAGE>

Plan will be construed and enforced as if such illegal and invalid provision had
never been inserted herein.

Adopted this 1st day of November 1999.

                                  /s/ Edward F. Garnett
                                  Edward F. Garnett
                                  Vice President, Human Resources

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