<PAGE>
                                    FORM 8-K



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                 CURRENT REPORT



                     Pursuant to Section 13 or 15(d) of the
                       Securities and Exchange Act of 1934



       Date of Report (Date of earliest event reported): February 5, 1996



                          WEBSTER FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)



        Delaware                        0-15213                 06-1187536
---------------------------           ----------              ------------------
(State or Other Jurisdiction          (Commission              (IRS Employer
     of Incorporation)                File Number)           Identification No.)



          Webster Plaza, 145 Bank Street, Waterbury, Connecticut 06702
          ------------------------------------------------------------
                    (Address of principal executive offices)



       Registrant's telephone number, including area code: (203) 753-2921
                                                           --------------


                                 Not Applicable
                                 ---------------
          (Former name or former address, if changed since last report)


<PAGE>


Item 5.         Other Events
                ------------

                On February 5, 1995, the Board of Directors of Webster Financial
Corporation  (the  "Company")   declared  a  dividend  of  one  Right  for  each
outstanding share of common stock, par value $.01 per share (the "Common Stock")
of the Company,  pursuant to a Rights  Agreement,  dated as of February 5, 1996,
between the Company and Chemical Mellon Shareholders Services, L.L.C., as Rights
Agent (the "Rights  Agreement").  The distribution is payable to stockholders of
record as of the close of  business  on  February  16,  1996.  Each Right  would
entitle  the  holder  thereof  to  purchase  under  certain   circumstances  one
one-thousandth  of a share of a new Series C Participating  Preferred Stock, par
value $.01 per share,  at a purchase  price of $100 per share.  The Rights  will
expire on February 4, 2006, unless earlier redeemed by the Company.

                Initially,   the  Rights  are  neither  exercisable  nor  traded
separately  from the Common  Stock.  The Rights  will be  exercisable  only if a
person or group in the future becomes the beneficial owner of 15% or more of the
Common Stock,  or announces a tender or exchange  offer that would result in its
ownership  of 15% or more of the  Common  Stock,  or if the Board  declares  any
person or group to be an "Adverse Person" upon a determination  that such person
or group has  acquired  beneficial  ownership of 10% or more of the Common Stock
and that such ownership is not in the best interest of the Company.

                The Rights have certain  anti-takeover  effects. The Rights will
cause  substantial  dilution  to a person or group that  attempts to acquire the
Company without  conditioning the offer on a substantial  number of Rights being
acquired,  or in a manner or on terms not  approved  by the  Company's  Board of
Directors. The Rights, however, should not deter any prospective offeror willing
to  negotiate in good faith with the Board of  Directors.  Nor should the Rights
interfere with any merger or other business combination approved by the Board of
Directors.

                The Rights  Agreement is attached hereto as Exhibit (c)(1).  The
Certificate of Designation of the Series C Participating  Preferred Stock is set
forth as Exhibit 1 to the Rights  Agreement  and is  attached  hereto as Exhibit
(c)(2);  the form of Rights  Certificate is set forth as Exhibit 2 to the Rights
Agreement and is attached hereto as Exhibit (c)(3); and the Summary of Rights to
Purchase the Preferred  Stock is set forth as Exhibit 3 to the Rights  Agreement
and is attached hereto as Exhibit (c)(4).  Each document is incorporated  herein
by  reference.  The foregoing  description  of the Rights does not purport to be
complete and is qualified in its entirety by reference to such Exhibits.



<PAGE>

Item 7.           Financial Statements and Exhibits.

                  c.  Exhibits

                     (1)   Rights Agreement, dated as of February 5, 1996

                     (2)   Certificate   of   Designation   of  the   Series   C
                           Participation  Preferred  Stock,  as Exhibit 1 to the
                           Rights Agreement

                     (3)   Form of Rights Certificate, as Exhibit 2 to the
                           Rights Agreement

                     (4)   Summary of Rights to Purchase Series C Participating
                           Preferred Stock, as Exhibit 3 to the Rights Agreement





<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.



                                         WEBSTER FINANCIAL CORPORATION
                                         -----------------------------
                                         (Registrant)



                                         /s/ John V. Brennan
                                         ------------------------------
                                         John V. Brennan
                                         Executive Vice President,
                                         Chief Financial Officer and Treasurer








Date: February 12, 1996



<PAGE>

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



                          WEBSTER FINANCIAL CORPORATION

                                       and

                                 CHEMICAL MELLON
                          SHAREHOLDER SERVICES, L.L.C.

                                  Rights Agent





                                Rights Agreement

                          Dated as of February 5, 1996


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



<PAGE>

<TABLE>
<CAPTION>

                                Table of Contents
                                -----------------
                  Section                                                                                 Page
                  -------                                                                                 ----
<S>                                                                                                           <C>
     1        Certain Definitions.........................................................................    1

     2        Appointment of Rights Agent.................................................................    5

     3        Issue of Rights Certificates................................................................    5

     4        Form of Rights Certificates.................................................................    7

     5        Countersignature and Registration...........................................................    8

     6        Transfer, Split Up, Combination and
              Exchange of  Rights Certificates; Mutilated,
              Destroyed, Lost or  Stolen Rights Certificates..............................................    9

     7        Exercise of Rights; Purchase Price;
              Expiration Date of Rights...................................................................   10

     8        Cancellation and Destruction of Rights Certificates.........................................   12

     9        Reservation and Availability of Capital Stock...............................................   12

     10       Preferred Stock Record Date.................................................................   14

     11       Adjustment of Purchase Price, Number and
              Kind of Shares or Number of Rights..........................................................   14

     12       Certificate of Adjusted Purchase Price or
              Number of Shares............................................................................   24

     13       Consolidation, Merger or Sale or Transfer
              of Assets or Earning Power..................................................................   25

     14       Fractional Rights and Fractional Shares.....................................................   27

     15       Rights of Action............................................................................   28

     16       Agreement of Rights Holders.................................................................   29

     17       Rights Certificate Holder Not Deemed
              a Stockholder...............................................................................   30

     18       Concerning the Rights Agent.................................................................   30

     19       Merger or Consolidation or Change
              of Name of Rights Agent.....................................................................   30

     20       Duties of Rights Agent......................................................................   31

     21       Change of Rights Agent......................................................................   33

     22       Issuance of New Rights Certificates.........................................................   34

     23       Redemption and Termination..................................................................   35

     24       Exchange....................................................................................   36

     25       Notice of Certain Events....................................................................   38

     26       Notices.....................................................................................   38

     27       Supplements and Amendments..................................................................   39

     28       Successors..................................................................................   40

     29       Determinations and Actions by the
              Board of Directors, etc.....................................................................   40

     30       Benefits of this Agreement..................................................................   40

     31       Severability................................................................................   41

     32       Governing Law...............................................................................   41

     33       Counterparts................................................................................   41

     34       Descriptive Headings........................................................................   41



Exhibit 1         Certificate of Designation of the Series C Participating Preferred Stock

Exhibit 2         Form of Rights Certificate

Exhibit 3         Summary of Rights to Purchase Series C Participating Preferred Stock
</TABLE>

                                       ii
<PAGE>


                                RIGHTS AGREEMENT


                  RIGHTS   AGREEMENT,   dated  as  of   February  5,  1996  (the
"Agreement"), between WEBSTER FINANCIAL CORPORATION, a Delaware corporation (the
"Company"),  and  CHEMICAL  MELLON  SHAREHOLDER  SERVICES,  L.L.C.  (the "Rights
Agent").

WITNESSETH

                  WHEREAS, on February 5, 1996 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
distribution  of one  Right  for each  share of  Common  Stock  (as  hereinafter
defined) of the  Company  outstanding  at the close of business on February  16,
1996 (the "Record Date"),  and has authorized the issuance of one Right (as such
number may  hereinafter be adjusted  pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock of the Company  issued between the Record
Date (whether  originally  issued or delivered from the Company's  treasury) and
the   Distribution   Date  (as  hereinafter   defined),   each  Right  initially
representing  the right to purchase  one  one-thousandth  of a share of Series C
Participating  Preferred  Stock of the  Company  having the  rights,  powers and
preferences  set forth in the form of Certificate of Designation of the Series C
Participating  Preferred Stock, attached hereto as Exhibit 1, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");

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

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

                  (a)  "Acquiring  Person"  shall  mean any Person who or which,
together  with  all  Affiliates  and  Associates  of such  Person,  shall be the
Beneficial Owner of 15% or more of the shares of Common Stock then  outstanding,
but shall not include the Company,  any Subsidiary of the Company,  any employee
benefit plan of the Company or of any  Subsidiary of the Company,  or any Person
or entity organized,  appointed or established by the Company for or pursuant to
the terms of any such plan.

                  (b) "Adverse  Person" shall mean any Person  declared to be an
Adverse  Person by the Board of Directors upon  determination  that the criteria
set forth in Section 11(a)(ii)(B) apply to such Person.

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

                                      -1-
<PAGE>
the  Securities  Exchange  Act of 1934,  as amended and in effect on the date of
this Agreement (the "Exchange Act").

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

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

                  (ii) which such Person or any of such  Person's  Affiliates or
Associates,  directly or indirectly,  has the right to vote or dispose of or has
"beneficial  ownership" of (as determined  pursuant to Rule 13d-3 of the General
Rules and  Regulations  under the  Exchange Act as in effect on the date of this
Agreement),  including pursuant to any agreement,  arrangement or understanding,
whether or not in writing; provided,  however, that a Person shall not be deemed
the  "Beneficial  Owner" of, or to  "beneficially  own," any security under this
subparagraph  (ii) as a result of an agreement,  arrangement or understanding to
vote such security if such agreement,  arrangement or understanding:  (A) arises
solely  from a revocable  proxy  given in response to a public  proxy or consent
solicitation made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act, and (B) is not also
then  reportable  by such Person on Schedule  13D under the Exchange Act (or any
comparable or successor report); or

                  (iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate  thereof) with which such Person
(or  any  of  such  Person's   Affiliates  or  Associates)  has  any  agreement,
arrangement  or  understanding  (whether or not in writing),  for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
the proviso to  subparagraph  (ii) of this  paragraph  (e)) or  disposing of any
voting  securities  of the  Company;  provided,  however,  that  nothing in this
paragraph  (d) shall cause a 

                                      -2-
<PAGE>
person engaged in business as an underwriter of securities to be the "Beneficial
Owner"  of, or to  "beneficially  own," any  securities  acquired  through  such
person's participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.

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

                  (f)  "Close of  business"  on any given  date  shall mean 5:00
P.M., Eastern Standard Time or Eastern Daylight Savings Time (as applicable), on
such date; provided,  however,  that if such date is not a Business Day it shall
mean 5:00 P.M.,  Eastern  Standard  Time or  Eastern  Daylight  Savings Time (as
applicable), on the next succeeding Business Day.

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

                  (h)  "Common  stock  equivalents"  shall have the  meaning set
forth in Section 11(a)(iii) hereof.

                  (i) "Continuing Director" shall mean a director who either was
a member of the Board of  Directors  of the  Company on  February 5, 1996 or who
subsequently  became a director of the Company and whose  election or nomination
for election by the Company's  stockholders was approved by a vote of a majority
of the Continuing Directors then on the Board of Directors of the Company.

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

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

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

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

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

                                      -3-
<PAGE>
                  (o) "Final  Expiration  Date" shall mean the close of business
on February 4, 2006.

                  (p) "Issuance Triggering Event" shall mean any event described
in Section 3(a) hereof.

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

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

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

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

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

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

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

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

                  (y)  "Section   11(a)(ii)  Event",   also  called  "Conversion
Triggering  Event,"  shall mean any event described in Section  11(a)(ii) (A) or
(B) hereof.

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

                  (aa)  "Section 13 Event",  also called  "Flip-Over  Triggering
Event,"  shall mean any event  described  in clause  (x),  (y) or (z) of Section
13(a) hereof.

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

                                      -4-
<PAGE>
                  (cc) "Stock  Acquisition  Date" shall mean the first date of a
public  announcement  (which,  for purposes of this  definition,  shall include,
without limitation,  a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring  Person that an Acquiring  Person has become
such.

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

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

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

                  (gg)  "Triggering  Event"  shall  mean any  Section  11(a)(ii)
Conversion Triggering Event or any Section 13 Flip-Over Triggering Event.

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

                  (a)  Issuance  Triggering  Event.  Until the  earliest  of the
following  Issuance  Triggering  Events,  (i) the close of business on the tenth
business day after the Stock Acquisition Date, (ii) the close of business on the
tenth  business day after the date that a tender or exchange offer by any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized,  appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the  General  Rules and  Regulations  under the  Exchange  Act as in
effect on the date hereof,  if upon consummation  thereof,  such Person would be
the  Beneficial  Owner  of 15% or  more  of the  shares  of  Common  Stock  then
outstanding  or (iii) the close of business on the tenth  business day after the
Board of Directors of the Company determines, pursuant to the criteria set forth
in Section 11(a)(ii)(B) hereof, that a Person is an Adverse Person (the earliest
of (i), (ii) and (iii) being herein referred to as the 

                                      -5-
<PAGE>

"Distribution  Date"),  (x)  the  Rights  will  be  evidenced  (subject  to  the
provisions  of  paragraph  (b) of this  Section 3) by the  certificates  for the
Common Stock  registered  in the names of the holders of the Common Stock (which
certificates  for  Common  Stock  shall be deemed  also to be  certificates  for
Rights)  and  not  by  separate  certificates,   and  (y)  the  Rights  will  be
transferable  only in connection  with the transfer of the underlying  shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the  Distribution  Date,  the Rights  Agent will send by first  class,  insured,
postage  prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on the
records of the Company,  one or more rights  certificates,  in substantially the
form of Exhibit 2 hereto (the "Rights  Certificates"),  evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. In
the event that an  adjustment  in the number of Rights per share of Common Stock
has been made pursuant to Section 11(p) hereof,  at the time of  distribution of
the Rights  Certificates,  the Company shall make the necessary and  appropriate
rounding  adjustments  (in accordance  with Section 14(a) hereof) so that Rights
Certificates  representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.

                  (b) As promptly as practicable  following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase  Preferred Stock, in
substantially  the form attached  hereto as Exhibit 3, by  first-class,  postage
prepaid  mail,  to each  record  holder of the  Common  Stock as of the close of
business on the Record Date,  at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered  holders of the Common
Stock shall also be the registered holders of the associated  Rights.  Until the
earlier of the  Distribution  Date or the  Expiration  Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights have
been issued shall also  constitute  the transfer of the Rights  associated  with
such shares of Common Stock.

                  (c) Rights  shall be issued in respect of all shares of Common
Stock  which are issued  after the Record  Date but prior to the  earlier of the
Distribution Date or the Expiration Date. Certificates  representing such shares
of Common Stock shall also be deemed to be  certificates  for Rights,  and shall
bear the following legend:

                           This  certificate  also  evidences  and  entitles the
                  holder  hereof to  certain  Rights as set forth in the  Rights
                  Agreement   between   Webster   Financial   Corporation   (the
                  "Company") and Chemical Mellon  Shareholder  Services,  L.L.C.
                  (the  "Rights  Agent")  dated as of  February  5,  1996   (the
                  "Rights   Agreement"),   the   terms  of  which   are   hereby

                                      -6-
<PAGE>
                  incorporated  herein  by  reference  and a copy of which is on
                  file at the  principal  offices of the Company.  Under certain
                  circumstances,  as set  forth in the  Rights  Agreement,  such
                  Rights will be evidenced by separate  certificates and will no
                  longer be evidenced by this certificate. The Company will mail
                  to  the  holder  of  this  certificate  a copy  of the  Rights
                  Agreement, as in effect on the date of mailing, without charge
                  promptly after receipt of a written  request  therefor.  Under
                  certain  circumstances  set  forth  in the  Rights  Agreement,
                  Rights  issued  to,  or held by,  any  Person  who is,  was or
                  becomes  an  Acquiring   Person,  an  Adverse  Person  or  any
                  Affiliate or  Associate  thereof (as such terms are defined in
                  the Rights Agreement),  whether currently held by or on behalf
                  of such Person or by any  subsequent  holder,  may become null
                  and void.

                  With respect to such  certificates  containing  the  foregoing
legend,  until the earlier of (i) the  Distribution  Date or (ii) the Expiration
Date,  the  Rights   associated  with  the  Common  Stock  represented  by  such
certificates  shall be  evidenced  by such  certificates  alone  and  registered
holders of Common Stock shall also be the  registered  holders of the associated
Rights,  and the transfer of any of such certificates  shall also constitute the
transfer of the Rights  associated  with the Common  Stock  represented  by such
certificates.

                  Section 4.  Form of Rights Certificates.

                  (a) The  Rights  Certificates  (and the forms of  election  to
purchase and of assignment to be printed on the reverse  thereof)  shall each be
substantially  in the form set forth in Exhibit 2 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 11
and Section 22 hereof, the Rights Certificates,  whenever distributed,  shall be
dated as of the Record Date and on their face shall entitle the holders  thereof
to purchase such number of one  one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such  exercise  price
per one  one-thousandth  of a share, the "Purchase  Price"),  but the amount and
type of securities  purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.

                  (b) Any Rights  Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights  beneficially owned by any Person known
to be: (i) 

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

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

                  Section 5.  Countersignature and Registration.

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

                                      -8-

<PAGE>
the actual date of the execution of such Rights  Certificate,  shall be a proper
officer of the Company to sign such Rights Certificate,  although at the date of
the execution of this Rights Agreement any such person was not such an officer.

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

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

                  (a) Subject to the  provisions of Section  4(b),  Section 7(e)
and  Section  14  hereof,  at any  time  after  the  close  of  business  on the
Distribution  Date,  and at or prior to the close of business on the  Expiration
Date,  any Rights  Certificate or  Certificates  may be  transferred,  split up,
combined or exchanged for another Rights Certificate or Certificates,  entitling
the  registered  holder to  purchase a like number of one  one-thousandths  of a
share of Preferred Stock (or, following a Triggering Event,  Common Stock, other
securities,  cash or other assets, as the case may be) as the Rights Certificate
or Certificates  surrendered  then entitled such holder (or former holder in the
case of a transfer) to purchase.  Any  registered  holder  desiring to transfer,
split up, combine or exchange any Rights  Certificate or Certificates shall make
such request in writing  delivered to the Rights Agent,  and shall surrender the
Rights  Certificate or  Certificates  to be  transferred,  split up, combined or
exchanged at the principal  office or offices of the Rights Agent designated for
such  purpose.  Neither the Rights  Agent nor the Company  shall be obligated to
take any action  whatsoever with respect to the transfer of any such surrendered
Rights  Certificate  until the registered holder shall have completed and signed
the certificate  contained in the form of assignment on the reverse side of such
Rights  Certificate  and shall have  provided  such  additional  evidence of the
identity of the Beneficial Owner (or former  Beneficial  Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent  shall,  subject  to Section  4(b),  Section  7(e) and  Section 14 hereof,
countersign and deliver to the Person entitled  thereto a Rights  Certificate or
Rights  Certificates,  as the case may be,  as so  requested.  The  Company  may
require payment of a sum sufficient to cover any tax or governmental charge that
may be  imposed  in  connection  with any  transfer,  split-up,  combination  or
exchange of Rights Certificates.

                  (b)  Upon  receipt  by the  Company  and the  Rights  Agent of
evidence  reasonably  satisfactory  to them of the loss,  theft,  destruction or
mutilation of a Rights Certificate,  and, in case of loss, theft or destruction,
of indemnity or security  reasonably  satisfactory to them, and reimbursement to
the Company and the Rights 

                                      -9-
<PAGE>
Agent of all reasonable expenses  incidental thereto,  and upon surrender to the
Rights  Agent and  cancellation  of the Rights  Certificate  if  mutilated,  the
Company will execute and deliver a new Rights  Certificate  of like tenor to the
Rights Agent for  countersignature  and delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.

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

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

                  (b) The Purchase Price for each  one-thousandth  of a share of
Preferred  Stock pursuant to the exercise of a Right shall initially be $100 and
shall be subject to adjustment  from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in accordance with paragraph (c) below.

                  (c)  Upon  receipt  of  a  Rights   Certificate   representing
exercisable  Rights,  with the form of election to purchase and the  certificate
duly executed,  accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one  one-thousandth  of a share of Preferred Stock (or
other  shares,  securities,  cash or  other  assets,  as the  case may be) to be
purchased as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall,  subject to Section 20(k)  hereof,  thereupon as soon as
practicable  (i) (A)  requisition  from  any  transfer  agent of the  shares  of
Preferred  Stock (or make  available,  if the Rights Agent is the transfer agent
for such shares)  certificates for the total number of one  one-thousandths of a
share of Preferred  Stock to be  purchased  and the Company  hereby  irrevocably
authorizes its transfer  agent to comply with all such  requests,  or (B) if the
Company  shall have  elected to deposit the total  number of shares of Preferred
Stock issuable upon exercise of the Rights  hereunder  with a depositary  agent,
requisition  from the depositary  agent depositary  receipts  representing  such
number  of one  one-thousandths  of a  share  of  Preferred  Stock  as are to be
purchased  (in  which  case  certificates  for the  shares  of  Preferred  Stock

                                      -10-
<PAGE>

represented  by such receipts  shall be deposited by the transfer agent with the
depositary  agent) and the Company  will direct the  depositary  agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional  shares in  accordance  with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts,  cause the same
to be  delivered  to or upon the order of the  registered  holder of such Rights
Certificate,  registered  in such  name or  names as may be  designated  by such
holder,  and (iv) after receipt  thereof,  deliver such cash, if any, to or upon
the order of the registered  holder of such Rights  Certificate.  The payment of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) may be made in cash or by certified bank check or money order payable to
the order of the  Company.  In the event that the Company is  obligated to issue
other  securities  (including  Common  Stock) of the  Company,  pay cash  and/or
distribute  other  property  pursuant to Section 11(a) hereof,  the Company will
make all arrangements necessary so that such other securities, cash and/or other
property  are  available  for  distribution  by the  Rights  Agent,  if and when
appropriate.

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

                  (e)   Notwithstanding   anything  in  this  Agreement  to  the
contrary,  from and after the first occurrence of a Conversion Triggering Event,
any Rights  beneficially  owned by (i) an Acquiring Person, an Adverse Person or
an Associate or Affiliate of an Acquiring  Person or an Adverse  Person,  (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate)  who becomes a transferee  after the  Acquiring  Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring  Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or  concurrently  with the Acquiring  Person or Adverse Person becoming such and
receives  such  Rights  pursuant  to either (A) a transfer  (whether  or not for
consideration)  from the  Acquiring  Person or Adverse  Person (or from any such
Associate or Affiliate) to holders of equity  interests in such Acquiring Person
or Adverse  Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person or Adverse Person (or any such Associate or Affiliate)
has  any  continuing  agreement,  arrangement  or  understanding  regarding  the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has  determined  (whether  before  or after  such  transfer)  is part of a plan,
arrangement  or  understanding  which has as a  primary  purpose  or effect  the
avoidance of this Section  7(e),  shall become null and void without any further
action  and no holder of such  Rights  shall  have any  rights  whatsoever  with
respect  to such  Rights,  whether  under any  provision  of this  Agreement  or
otherwise.  The  Company  shall use all  reasonable  efforts to insure  

                                      -11-
<PAGE>
that the  provisions  of this  Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights  Certificates or other
Person as a result of its failure to make any determinations  with respect to an
Acquiring  Person  or  Adverse  Person  or any of their  respective  Affiliates,
Associates or transferees hereunder.

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

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

                  Section 9.  Reservation and Availability of Capital Stock.

                  (a) The Company  covenants and agrees that it will cause to be
reserved  and kept  available  out of its  authorized  and  unissued  shares  of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury),  the number of shares of
Preferred  Stock (and,  following the occurrence of a Triggering  Event,  Common
Stock and/or other  securities)  that, as provided in this Agreement,  including
Section 11(a)(iii) hereof,  will be sufficient to permit the exercise in full of
all outstanding Rights.

                  (b) So long as the shares of Preferred  Stock (and,  following
the  occurrence  of a Triggering  Event,  Common Stock and/or other  securities)
issuable  and  deliverable  upon the exercise of the Rights may be listed on any
national securities  exchange,  the Company shall use its best efforts to cause,
from and after 

                                      -12-
<PAGE>
such  time as the  Rights  become  exercisable,  all  shares  reserved  for such
issuance to be listed on such  exchange  upon  official  notice of issuance upon
such exercise.

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

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

                  (e) The Company further  covenants and agrees that it will pay
when due and payable any and all  federal and state  transfer  taxes and charges
which may be  payable  in  respect of the  issuance  or  delivery  of the Rights
Certificates and of any certificates  for a number of one  one-thousandths  of a
share of Preferred Stock (or Common Stock and/or other  securities,  as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any  transfer  tax which may be payable in  respect  of any  transfer  or
delivery  of Rights  Certificates  to a Person  other than,  or the  issuance or
delivery of a number of one  one-thousandths  of a share of Preferred  Stock (or
Common Stock and/or other  securities,  as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates  evidencing
Rights  surrendered for exercise or to issue or deliver any  certificates  for a
number of one  one-thousandths  of a share of  Preferred  Stock (or Common Stock
and/or  other  securities,  as the case may be) in a name other than that of the

                                      -13-
<PAGE>

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

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

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

                  (a)(i) In the event the  Company  shall at any time  after the
date of this Agreement (A) declare a dividend on the Preferred  Stock payable in
shares of Preferred  Stock,  (B) subdivide the outstanding  Preferred Stock, (C)
combine the outstanding  Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital  stock in a  reclassification  of the  Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),  except
as  otherwise  provided in this  Section  11(a) and  Section  7(e)  hereof,  the
Purchase  Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred  Stock or capital stock,  as the case may
be, issuable on such date, shall be proportionately  adjusted so that the holder
of any Right  exercised  after  such time shall be  entitled  to  receive,  upon
payment of the Purchase Price then in effect,  the aggregate  number and kind of
shares of Preferred  

                                      -14-
<PAGE>
Stock or  capital  stock,  as the case may be,  which,  if such  Right  had been
exercised  immediately prior to such date and at a time when the Preferred Stock
transfer  books of the Company were open, he would have owned upon such exercise
and  been  entitled  to  receive  by  virtue  of  such  dividend,   subdivision,
combination  or  reclassification.  If an event  occurs  which would  require an
adjustment under both this Section 11(a)(i) and Section  11(a)(ii)  hereof,  the
adjustment  provided for in this Section  11(a)(i)  shall be in addition to, and
shall be made prior to, any adjustment  required  pursuant to Section  11(a)(ii)
hereof.

                  (ii)     Conversion Triggering Events.

                  IN THE EVENT:

                  (A) any Person (other than the Company,  any Subsidiary of the
Company,  any employee  benefit plan of the Company or of any  Subsidiary of the
Company,  or any Person or entity  organized,  appointed or  established  by the
Company for or pursuant to the terms of any such plan),  alone or together  with
its  Affiliates and  Associates,  shall,  at any time after the Rights  Dividend
Declaration  Date,  become the Beneficial  Owner of 15% or more of the shares of
Common Stock then outstanding,  unless the event causing the 15% threshold to be
crossed is a transaction set forth in Section 13(a) hereof; or

                  (B)  subject  to the  penultimate  sentence  of  this  Section
11(a)(ii),  the Board of Directors,  by at least a majority vote,  shall declare
any Person to be an Adverse Person,  upon making (x) a  determination  that such
Person,  alone or together with its Affiliates and  Associates,  has or will, at
any time after the Rights Dividend Declaration Date, become the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock (provided that any such
determination  will not be effective until such Person has become the Beneficial
Owner  of 10% or more of the  outstanding  shares  of  Common  Stock)  and (y) a
determination,   after   reasonable   inquiry   and   investigation,   including
consultation with such persons as the Board of Directors deems appropriate, that
(a) such Beneficial Ownership by such Person is intended to cause, is reasonably
likely  to cause or will  cause the  Company  to  repurchase  the  Common  Stock
beneficially  owned by such  Person or to cause  pressure on the Company to take
action or enter into a transaction or series of transactions which would provide
such Person with short-term  financial gain under  circumstances where the Board
of Directors  believes that the best long-term  interests of the Company and its
stockholders, but for the actions and possible actions of such Person, would not
be served by taking such action or entering into such  transactions or series of
transactions  at that  time or (b)  such  Beneficial  Ownership  is  causing  or
reasonably likely to cause a material adverse impact 

                                      -15-

<PAGE>
(including,  but not limited to,  impairment of relationships  with customers or
impairment of the Company's ability to maintain its competitive position) on the
business or prospects of the Company, or (c) such beneficial ownership otherwise
is not in the best  interests  of the Company and its  stockholders,  employees,
customers and communities in which the Company and its subsidiaries do business,

                  THEN,

                  promptly  following  the  first  occurrence  of  a  Conversion
Triggering Event,  proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall  thereafter have the
right to receive,  upon exercise  thereof at the then current  Purchase Price in
accordance  with  the  terms  of this  Agreement,  in lieu  of a  number  of one
one-thousandths  of a share of Preferred Stock,  such number of shares of Common
Stock of the Company as shall equal the result  obtained by (x)  multiplying the
then-current Purchase Price by the then-number of one one-thousandths of a share
of Preferred  Stock for which a Right was exercisable  immediately  prior to the
first occurrence of a Conversion Triggering Event, and (y) dividing that product
(which, following such first occurrence,  shall thereafter be referred to as the
"Purchase  Price" for each Right and for all purposes of this  Agreement) by 50%
of the current  market price  (determined  pursuant to Section 11(d) hereof) per
share of  Common  Stock on the date of such  first  occurrence  (such  number of
shares,  the  "Adjustment  Shares").  Notwithstanding  the provisions of Section
11(a)(ii)(B)  hereof,  the Board of  Directors  of the Company may not declare a
Person to be an Adverse  Person if, prior to the time that such Person  acquired
10% or more of the shares of Common Stock then outstanding, such Person provided
to the Board of Directors in writing a statement  of such  Person's  purpose and
intentions in connection with the proposed acquisition of Common Stock, together
with any other information  reasonably  requested of such Person by the Board of
Directors,  and the Board of Directors,  based on such  statement and reasonable
inquiry and  investigation,  including  consultation  with such  persons as such
directors shall deem appropriate,  determines to notify and notifies such Person
in  writing  that it will not  declare  such  Person  to be an  Adverse  Person;
provided,  however,  that the Board of Directors may expressly  condition in any
manner a  determination  not to  declare  a Person  an  Adverse  Person  on such
conditions as the Board of Directors may select,  including without  limitation,
such Person's not acquiring more than a specified  amount of Common Stock and/or
on  such  Person's  not  taking  actions  inconsistent  with  the  purposes  and
intentions  disclosed by such Person in the  statement  provided to the Board of
Directors.  In the  event  that  the  Board  of  Directors  should  at any  time
determine,  upon reasonable  inquiry and investigation,  including  consultation
with such persons as such directors shall deem appropriate, that such Person has
not met or  complied  with any  condition  specified  by the Board of  Directors
pursuant  to the  preceding  sentence,  the Board of  Directors  may at any time
thereafter  declare  such  Person  to be  an  Adverse  Person  pursuant  to  the
provisions of this Section 11(a)(ii).

                                      -16-
<PAGE>
                  (iii) In the event that the  number of shares of Common  Stock
which are  authorized  by the Company's  Certificate  of  Incorporation  but not
outstanding  or reserved for issuance for purposes  other than upon  exercise of
the Rights are not  sufficient  to permit the  exercise in full of the Rights in
accordance  with the  foregoing  subparagraph  (ii) of this Section  11(a),  the
Company  shall:  (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) Common Stock or other equity securities of the Company  (including,  without
limitation,  shares,  or units of shares,  of preferred stock which the Board of
Directors  of the  Company has deemed to have the same value as shares of Common
Stock (such shares of preferred stock,  "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 one or more investment or financial  advisors  selected
by the Board of  Directors  of the Company;  provided,  however,  if the Company
shall not have made adequate  provision to deliver value  pursuant to clause (B)
above within thirty (30) days following the later of (x) the first occurrence of
a Conversion  Triggering  Event and (y) the date on which the Company's right of
redemption  pursuant to Section  23(a)  expires  (the later of (x) and (y) being
referred to herein as the "Section  11(a)(ii)  Trigger Date"),  then the Company
shall be obligated to deliver,  upon the  surrender  for exercise of a Right and
without requiring payment of the Purchase Price,  shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate  value equal to the Spread.  If the Board of  Directors of the Company
shall  determine  in good faith  that it is likely  that  sufficient  additional
shares of Common Stock could be authorized for issuance upon exercise in full of
the  Rights,  the thirty  (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger  Date, in order that the Company may seek  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 Section  7(e)
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 in order 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 Stock shall be the current
market price (as  determined  pursuant to Section 11(d) hereof) per share of the
Common 

                                      -17-
<PAGE>
Stock 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  Stock on such
date.

                  (iv) In lieu of issuing  shares of Common Stock in  accordance
with  subparagraph  (ii) of this Section 11(a),  the Company may with respect to
each Right, if a majority of members of the Board of Directors and a majority of
the Continuing  Directors determine that such action is in the best interests of
the Company and not  contrary to the  interests  of the holders of Rights,  make
adequate  provision  to  substitute  for the  Adjustment  Shares,  (x)  upon the
surrender for exercise of a Right and payment of the applicable  Purchase Price,
(1) cash, (2) a reduction in Purchase  Price,  (3) Common Stock, or other equity
securities  of  the  Company   (including   without   limitation   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 Adjustment
Value where such aggregate  value has been  determined by the Board of Directors
of the  Company  based upon the advice of one or more  investment  or  financial
advisers  selected  by the Board of  Directors  of the  Company  or (y) upon the
surrender for exercise of a Right and without  requiring payment of the Purchase
Price (1) cash,  (2) Common  Stock or other  equity  securities  of the  Company
(including,  without limitation, common stock equivalents),  (3) debt securities
of the Company, (4) other assets or (5) any combination of the foregoing, having
an  aggregate  value  equal to the Spread  where such  aggregate  value has been
determined by the Board of Directors of the Company based upon the advice of one
or more investment or financial  advisors  selected by the Board of Directors of
the Company.

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

                                      -18-
<PAGE>
additional  shares of Preferred  Stock and/or  equivalent  preferred stock to be
offered for  subscription or purchase (or into which the convertible  securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration  shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a  statement  filed with the Rights  Agent and shall be binding on the Rights
Agent and the holders of the Rights.  Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed  outstanding  for the purpose
of any such  computation.  Such adjustment shall be made  successively  whenever
such a record date is fixed,  and in the event that such rights or warrants  are
not so issued,  the Purchase  Price shall be adjusted to be the  Purchase  Price
which would then be in effect if such record date had not been fixed.

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

                  (d)(i) For the  purpose of any  computation  hereunder,  other
than  computations  made  pursuant to Section  11(a)(iii)  hereof,  the "current
market  price"  per share of Common  Stock on any date shall be deemed to be the
average  of the daily  closing  prices  per share of such  Common  Stock for the
thirty  (30)  consecutive  Trading  Days (as such term is  hereinafter  defined)
immediately  prior to such date, and for purposes of computations  made pursuant
to Section  11(a)(iii)  hereof,  the "current  market price" per share of Common
Stock on any date shall be deemed to be the average of the daily closing  prices
per  share of such  Common  Stock  for the ten  (10)  consecutive  Trading  Days
immediately  following such date; provided,  

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

                  (ii)  For  the  purpose  of  any  computation  hereunder,  the
"current  market price" per share of Preferred  Stock shall be determined in the
same  manner  as set  forth  above for the  Common  Stock in clause  (i) of this
Section  11(d) (other than the last  sentence  thereof).  If the current  market
price per share of Preferred  Stock cannot be determined in the manner  provided
above or if the  Preferred  Stock is not publicly  held or listed or traded in a
manner described in clause (i) of this 

                                      -20-
<PAGE>
Section 11(d),  the "current market price" per share of Preferred Stock shall be
conclusively  deemed  to be an  amount  equal  to 1000 (as  such  number  may be
appropriately  adjusted for such events as stock  splits,  stock  dividends  and
recapitalization  with respect to the Common Stock  occurring  after the date of
this  Agreement)  multiplied by the current market price per share of the Common
Stock.  If neither the Common Stock nor the Preferred  Stock is publicly held or
so listed or traded,  "current  market price" per share of the  Preferred  Stock
shall mean the fair value per share as  determined in good faith by the Board of
Directors of the Company,  whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive  for all  purposes.  For all
purposes of this Agreement,  the "current market price" of one one-thousandth of
a share of Preferred  Stock shall be equal to the "current  market price" of one
share of Preferred Stock divided by 1000.

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

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

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

                  (h) Unless the Company  shall have  exercised  its election as
provided in Section  11(i),  upon each  adjustment  of the  Purchase  Price as a
result  of  

                                      -21-
<PAGE>
the  calculations  made in  Sections  11(b)  and  (c),  each  Right  outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right  to  purchase,  at  the  adjusted  Purchase  Price,  that  number  of  one
one-thousandths  of a  share  of  Preferred  Stock  (calculated  to the  nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths
of a share covered by a Right immediately  prior to this adjustment,  by (y) the
Purchase Price in effect  immediately  prior to such  adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price,

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

                  (j)  Irrespective  of any adjustment or change in the Purchase
Price  or the  number  of one  one-thousandths  of a share  of  Preferred  Stock
issuable upon the exercise of the Rights,  the Rights  Certificates  theretofore
and  thereafter  issued may  continue  to  express  the  Purchase  Price per one
one-thousandth of a share and 

                                      -22-
<PAGE>
the number of one one-thousandths of a share which were expressed in the initial
Rights Certificates issued hereunder.

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

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

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

                  (n) The Company covenants and agrees that it shall not, at any
time after the  Distribution  Date, (i) consolidate with any other Person (other
than a Subsidiary  of the Company in a transaction  which  complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction  which complies with Section 11(o)  hereof),  or
(iii) sell or transfer (or permit any  Subsidiary to sell or  transfer),  in one
transaction,  or a series  of  related  transactions,  assets or  earning  power
aggregating  more than 50% of the assets or earning power of the Company and its
Subsidiaries  (taken as a whole) to any other Person or Persons  (other than the
Company and/or any of its Subsidiaries 

                                      -23-
<PAGE>
in one or more  transactions  each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such  consolidation,  merger, sale or
transfer  there are any rights,  warrants  or other  instruments  or  securities
outstanding  or  agreements  in effect  which  would  substantially  diminish or
otherwise  eliminate  the benefits  intended to be afforded by the Rights or (y)
prior to,  simultaneously with or immediately after such consolidation,  merger,
sale or  transfer,  the  shareholders  of the Person who  constitutes,  or would
constitute,  the  "Principal  Party" for purposes of Section  13(a) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.

                  (o)  The  Company   covenants  and  agrees  that,   after  the
Distribution  Date, it will not, except as permitted by Section 23 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
Rights Dividend  Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock,  (ii) subdivide the outstanding  shares of Common Stock, or (iii) combine
the  outstanding  shares of Common  Stock into a smaller  number of shares,  the
number of Rights associated with each share of Common Stock then outstanding, or
issued or delivered  thereafter  but prior to the  Distribution  Date,  shall be
proportionately adjusted so that the number of Rights thereafter associated with
each  share of Common  Stock  following  any such event  shall  equal the result
obtained  by  multiplying  the  number of Rights  associated  with each share of
Common  Stock  immediately  prior to such event by a fraction  the  numerator of
which  shall  be  the  total  number  of  shares  of  Common  Stock  outstanding
immediately  prior to the  occurrence of the event and the  denominator of which
shall be the total  number of shares  of Common  Stock  outstanding  immediately
following the occurrence of such event.

                  Section 12.  Certificate of Adjusted  Purchase Price or Number
of Shares.  Whenever an adjustment is made as provided in Section 11 and Section
13 hereof,  the Company shall (a) promptly  prepare a certificate  setting forth
such  adjustment  and a  brief  statement  of  the  facts  accounting  for  such
adjustment,  (b) promptly  file with the Rights  Agent,  and with each  transfer
agent for the Preferred Stock and the Common Stock, a copy of such  certificate,
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate  representing
shares of Common Stock) in accordance  with Section 26 hereof.  The Rights Agent
shall  be  fully  protected  in  relying  on  any  such  certificate  and on any
adjustment  therein  contained and shall not be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.

                                      -24-
<PAGE>
                  Section  13.  Consolidation,  Merger  or Sale or  Transfer  of
Assets or Earning Power.

                  (a)      Flip-Over Triggering Event.

                  IN THE EVENT THAT,

                  following the Stock Acquisition Date,  directly or indirectly,
any of the following  Flip-Over  Triggering Events occurs, (x) the Company shall
consolidate  with,  or merge  with and into,  any  other  Person  (other  than a
Subsidiary  of the Company in a  transaction  which  complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation of
such  consolidation  or merger,  (y) any Person  (other than a Subsidiary of the
Company in a  transaction  which  complies  with  Section  11(o)  hereof)  shall
consolidate  with, or merge with or into, the Company,  and the Company shall be
the continuing or surviving  corporation of such consolidation or merger and, in
connection  with such  consolidation  or merger,  all or part of the outstanding
shares of Common  Stock shall be changed  into or  exchanged  for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise  transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer),  in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries  (taken as a whole) to any Person or Persons
(other  than  the  Company  or any  Subsidiary  of the  Company  in one or  more
transactions each of which complies with Section 11(o) hereof),

                  THEN,

                  and in each such case, proper provision shall be made so that:
(i) each holder of a Right,  except as provided in Section  7(e)  hereof,  shall
thereafter  have  the  right  to  receive,  upon  the  exercise  thereof  at the
then-current Purchase Price in accordance with the terms of this Agreement, such
number of validly  authorized and issued,  fully paid,  nonassessable and freely
tradable  shares  of  Common  Stock of the  Principal  Party  (as  such  term is
hereinafter defined),  not subject to any liens,  encumbrances,  rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then-current Purchase Price by the number of one one-thousandths
of a share of Preferred Stock for which a Right is exercisable immediately prior
to the first  occurrence  of a Flip-Over  Triggering  Event (or, if a Conversion
Triggering  Event has  occurred  prior to the first  occurrence  of a  Flip-Over
Triggering Event,  multiplying the number of such one one-thousandths of a share
of Preferred  Stock for which a Right was exercisable  immediately  prior to the
first  occurrence  of a Conversion  Triggering  Event by the  Purchase  Price in
effect  immediately prior to such first  occurrence),  and dividing that product
(which, following the first occurrence of a Flip-Over Triggering Event, shall be
referred to as the "Purchase  Price" for each Right and for all purposes of this
Agreement) by

                                      -25-
<PAGE>
(2) 50% of the current  market price  (determined  pursuant to Section  11(d)(i)
hereof)  per share of the Common  Stock of such  Principal  Party on the date of
consummation of such Flip-Over Triggering Event; (ii) such Principal Party shall
thereafter  be liable  for,  and  shall  assume,  by  virtue  of such  Flip-Over
Triggering Event, all the obligations and duties of the Company pursuant to this
Agreement;  (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being  specifically  intended that the provisions of Section
11  hereof  shall  apply  only to  such  Principal  Party  following  the  first
occurrence of a Flip-Over Triggering Event; (iv) such Principal Party shall take
such steps  (including,  but not limited  to, the  reservation  of a  sufficient
number of shares of its Common Stock) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions  hereof shall
thereafter be  applicable,  as nearly as  reasonably  may be, in relation to its
shares of Common Stock  thereafter  deliverable upon the exercise of the Rights;
and (v) the  provisions  of  Section  11(a)(ii)  hereof  shall  be of no  effect
following the first occurrence of any Flip-Over Triggering Event.

                  (b)      "Principal Party" shall mean

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

                  (ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a),  the Person that is the party receiving the
greatest  portion of the assets or earning  power  transferred  pursuant to such
transaction or transactions;  provided,  however,  that in any such case, (1) if
the  Common  Stock  of  such  Person  is not at  such  time  and  has  not  been
continuously  over the  preceding  twelve  (12) month  period  registered  under
Section  12 of the  Exchange  Act,  and  such  Person  is a direct  or  indirect
Subsidiary  of  another  Person  the  Common  Stock  of which is and has been so
registered,  "Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary,  directly or  indirectly,  of more than one Person,
the  Common  Stocks  of two or more of which  are and have  been so  registered,
"Principal  Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.

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

                                      -26-
<PAGE>
sale or transfer  mentioned in paragraph  (a) of this Section 13, the  Principal
Party will:

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

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

                  The  provisions  of this Section 13 shall  similarly  apply to
successive  mergers or consolidations or sales or other transfers.  In the event
that a Flip-Over  Triggering  Event shall occur at any time after the occurrence
of a Conversion  Triggering  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,  except  prior to the  Distribution  Date as provided  in Section  11(p)
hereof, or to distribute Rights  Certificates which evidence  fractional Rights.
In lieu of such fractional  Rights,  there may be paid to the registered holders
of the Rights  Certificates  with regard to which such  fractional  Rights would
otherwise  be  issuable,  an amount in cash  equal to the same  fraction  of the
current market value of a whole Right.  For purposes of this Section 14(a),  the
current  market value of a whole Right shall be the closing  price of the Rights
for the  Trading  Day  immediately  prior to the date on which  such  fractional
Rights would have been otherwise  issuable.  The closing price of the Rights for
any day shall be the last 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 applicable, 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  reported by NASDAQ or such other  system then in use and are not listed
or  admitted  to trading 

                                      -27-
<PAGE>
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  reported by NASDAQ or such other system then
in use and are not listed or  admitted  to trading  on any  national  securities
exchange,  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
shares of Preferred Stock (other than fractions which are integral  multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or
to distribute  certificates which evidence  fractional shares of Preferred Stock
(other than fractions which are integral  multiples of one  one-thousandth  of a
share of Preferred  Stock). In lieu of fractional shares of Preferred Stock that
are not integral  multiples of one one-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction  of the  current  market  value  of one  one-thousandth  of a share  of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one  one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the  closing  price of a share of  Preferred  Stock (as  determined  pursuant to
Section  11(d)(ii)  hereof) for the Trading Day immediately prior to the date of
such exercise.

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

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

                  Section 15. Rights of Action.  All rights of action in respect
of this  Agreement,  other  than  rights of action  vested in the  Rights  Agent
pursuant to Section 18 hereof,  are vested in the respective  registered holders
of the Rights  Certificates (and, prior to the Distribution Date, the registered
holders  of  the  Common  Stock);  and  any  registered  holder  of  any  Rights
Certificate (or, prior to the Distribution  Date, of the Common Stock),  without
the consent of the Rights Agent or of the holder of any other Rights Certificate
(or,  prior to the  Distribution  Date,  of the Common  Stock),  may, in his own
behalf and for his own  benefit,  enforce,  and 

                                      -28-
<PAGE>
may institute and maintain any suit, action or proceeding against the Company to
enforce,  or  otherwise  act in  respect  of, his right to  exercise  the Rights
evidenced  by such  Rights  Certificate  in the manner  provided  in such Rights
Certificate  and in  this  Agreement.  Without  limiting  the  foregoing  or any
remedies  available to the holders of Rights,  it is  specifically  acknowledged
that the  holders  of Rights  would not have an  adequate  remedy at law for any
breach of this  Agreement and shall be entitled to specific  performance  of the
obligations  hereunder  and  injunctive  relief  against  actual  or  threatened
violations of the obligations hereunder of any Person subject to this Agreement.

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

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

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

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

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

                                      -29-
<PAGE>
                  Section   17.   Rights   Certificate   Holder   Not  Deemed  a
Stockholder.  No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one one-thousandths of a share of Preferred Stock or any other securities of the
Company  which  may at any  time  be  issuable  on the  exercise  of the  Rights
represented  thereby,  nor shall  anything  contained  herein  or in any  Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter  submitted to  stockholders  at any
meeting thereof,  or to give or withhold consent to any corporate  action, or to
receive notice of meetings or other actions  affecting  stockholders  (except as
provided in Section 25 hereof), or to receive dividends or subscription  rights,
or  otherwise,  until the Right or Rights  evidenced by such Rights  Certificate
shall have been exercised in accordance with the provisions hereof.

                  Section 18.  Concerning the Rights Agent.

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

                  (b) The Rights  Agent  shall be  protected  and shall incur no
liability  for or in respect of any action  taken,  suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate  or  certificate  for Common  Stock or for other  securities  of the
Company,  instrument of assignment or transfer, power of attorney,  endorsement,
affidavit, letter, notice, direction, consent, certificate,  statement, or other
paper or document  believed by it to be genuine and to be signed,  executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.

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

                  (a)  Any  corporation  into  which  the  Rights  Agent  or any
successor  Rights Agent may be merged or with which it may be  consolidated,  or
any corporation  resulting from any merger or  consolidation to which the Rights
Agent  or any  successor  Rights  Agent  shall be a  party,  or any  corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor 

                                      -30-
<PAGE>
Rights Agent,  shall be the  successor to the Rights Agent under this  Agreement
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto;  provided,  however,  that such corporation  could be
eligible for  appointment  as a successor  Rights Agent under the  provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement,  any of the Rights  Certificates  shall
have been  countersigned but not delivered,  any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates  so  countersigned;  and in  case at that  time  any of the  Rights
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the  successor  Rights  Agent;  and in all such  cases  such  Rights
Certificates  shall have the full force provided in the Rights  Certificates and
in this Agreement.

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

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

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

                  (b)  Whenever  in the  performance  of its  duties  under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including,  without limitation,  the identity of any Acquiring Person or
Adverse  Person and the  determination  of "current  market price") be proved or
established  by the Company prior to taking or suffering  any action  hereunder,
such  fact or  matter  (unless  other  evidence  in  respect  thereof  be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate  signed by the Chairman of the Board,  the President,  any Vice
President,  the  Treasurer,  any  Assistant  Treasurer,  the  Secretary  or  any
Assistant  Secretary of the Company and delivered to the Rights 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.

                                      -31-
<PAGE>
                  (c) The Rights  Agent shall be liable  hereunder  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
Rights  Certificates  or be  required  to  verify  the  same  (except  as to its
countersignature  on such  Rights  Certificates),  but all such  statements  and
recitals are and shall be deemed to have been made by the Company only.

                  (e) The Rights Agent shall not be under any  responsibility in
respect of the validity of this  Agreement or the execution and delivery  hereof
(except  the due  execution  hereof by the  Rights  Agent) or in  respect of the
validity or execution  of any Rights  Certificate  (except its  countersignature
thereof);  nor shall it be  responsible  for any  breach by the  Company  of any
covenant or condition  contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment  required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner,  method or amount
of any such adjustment or the  ascertaining of the existence of facts that would
require  any such  adjustment  (except  with  respect to the  exercise of Rights
evidenced by Rights  Certificates after receipt of the certificate  described in
Section 12 hereof  setting forth any such  adjustment);  nor shall it by any act
hereunder  be  deemed  to  make  any   representation  or  warranty  as  to  the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights  Certificate or as to whether
any shares of Common Stock or Preferred Stock will,  when so issued,  be validly
authorized and issued, fully paid and nonassessable.

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

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

                  (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in

                                      -32-
<PAGE>
which the  Company  may be  interested,  or  contract  with or lend money to the
Company or otherwise  act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

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

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

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

                  (l)  Any   application   by  the  Rights   Agent  for  written
instructions  from the Company may, at the option of the Rights Agent, set forth
in writing any action  proposed to be taken or omitted by the Rights Agent under
this Rights  Agreement  and the date on and/or  after which such action shall be
taken or such omission shall be effective.  The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in  accordance  with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
the Chairman of the Board, the President,  a Vice Chairman,  any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer
of the Company actually receives such application, unless any such officer shall
have  consented in writing to an earlier date) unless,  prior to taking any such
action (or the  effective  date in the case of an  omission),  the Rights  Agent
shall  have  received  written  instructions  in  response  to such  application
specifying the action to be taken or omitted.

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

                                      -33-
<PAGE>

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

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

                                      -34-
<PAGE>
redemption or expiration of the Rights,  the Company (a) shall,  with respect to
shares of  Common  Stock so issued or sold  pursuant  to the  exercise  of stock
options  or under  any  employee  plan or  arrangement,  or upon  the  exercise,
conversion or exchange of securities  hereinafter issued by the Company, and (b)
may, in any other  case,  if deemed  necessary  or  appropriate  by the Board of
Directors of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection  with such issuance or sale;  provided,  however,
that (i) no such Rights  Certificate shall be issued if, and to the extent that,
the  Company  shall be advised  by counsel  that such  issuance  would  create a
significant  risk of  material  adverse tax  consequences  to the Company or the
Person to whom such Rights  Certificate would be issued, and (ii) no such Rights
Certificate  shall be issued if, and to the extent that  appropriate  adjustment
shall otherwise have been made in lieu of the issuance thereof.

                  Section 23.  Redemption and Termination.

                  (a)(i) The Board may,  at its  option,  at any time during the
period  commencing  on the Rights  Dividend  Declaration  Date and ending on the
earlier of (i) the close of business on the tenth  business  day  following  the
Stock  Acquisition  Date (or, if the Stock  Acquisition Date shall have occurred
prior to the  Record  Date,  the close of  business  on the tenth  business  day
following the Record  Date),  as such period may be extended or shortened in the
discretion of the Board of Directors (the "Redemption Period") or (ii) the Final
Expiration  Date,  cause the  Company to redeem all but not less than all of the
then outstanding  Rights at a redemption price of $.01 per Right, as such amount
may be  appropriately  adjusted to reflect any stock  split,  stock  dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided,  however, that, if
the Board authorizes redemption of the Rights in either of the circumstances set
forth in clauses (i) and (ii)  below,  then there must be  Continuing  Directors
then in  office  and such  authorization  shall  require  the  concurrence  of a
majority of such Continuing Directors: (i) such authorization occurs on or after
the time a Person becomes an Acquiring Person, or (ii) such authorization occurs
on or after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and regulations) in a majority of the
directors in office at the  commencement of such  solicitation if any Person who
is a  participant  in such  solicitation  has stated  (or,  if a majority of the
directors in office at the  commencement of such  solicitation has determined in
good faith) that such Person (or any of its Affiliates or Associates) intends to
take,  or may  consider  taking,  any action  which would  result in such Person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event unless,  concurrently with such solicitation,  such Person (or one or more
of its  Affiliates or  Associates)  is making a cash tender offer  pursuant to a
Schedule  14D-1 (or any successor  form) filed with the  Securities and Exchange
Commission for all outstanding  shares of Common Stock not beneficially owned by
such Person (or by its Affiliates or Associates). Notwithstanding the foregoing,
but subject to 

                                      -35-
<PAGE>
Section 23(a)(ii)  hereof,  the Board of Directors of the Company may not redeem
any Rights after the tenth  business day  following  the  effective  date of any
declaration  that any  Person is an  Adverse  Person  (as  provided  in  Section
11(a)(ii)(B)).

                  (ii) If, following the occurrence of a Stock  Acquisition Date
and/or  following the expiration of the right of redemption  hereunder but prior
to any  Triggering  Event,  (x) a Person who is an  Acquiring  Person shall have
transferred  or otherwise  disposed of a number of shares of Common Stock in one
transaction or series of transactions,  not directly or indirectly involving the
Company or any of its Subsidiaries,  which did not result in the occurrence of a
Triggering  Event such that such Person is thereafter a Beneficial Owner of less
than 10% of the outstanding  shares of Common Stock,  and (y) there are no other
Persons,  immediately  following the occurrence of the event described in clause
(x), who are Acquiring Persons or Adverse Persons,  then the right of redemption
shall be reinstated  and thereafter be subject to the provisions of this Section
23.

                  (iii) Notwithstanding  anything contained in this Agreement to
the contrary,  the Rights shall not be exercisable after the first occurrence of
a  Conversion  Triggering  Event  until  such  time as the  Company's  right  of
redemption hereunder has expired.

                  (iv) The Company may, at its option,  pay the Redemption Price
in cash, shares of Common Stock (based on the "current market price," as defined
in Section  11(d)(i)  hereof,  of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the Board of Directors.

                  (b)  Immediately  upon the action of the Board of Directors of
the Company ordering the redemption of the Rights,  evidence of which shall have
been filed with the Rights Agent and without any further  action and without any
notice,  the right to  exercise  the Rights  will  terminate  and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of Directors ordering
the redemption of the Rights,  the Company shall give notice of such  redemption
to the Rights  Agent and the holders of the then  outstanding  Rights by mailing
such notice to all such holders at each holder's last address as it appears upon
the registry  books of the Rights Agent or, prior to the  Distribution  Date, on
the registry books of the Transfer Agent for the Common Stock.  Any notice which
is mailed in the manner herein  provided  shall be deemed given,  whether or not
the holder  receives the notice.  Each such notice of redemption  will state the
method by which the payment of the Redemption Price will be made.

                  Section 24.  Exchange.

                  (a) The Board of  Directors of the Company may, at its option,
at any time  after any Person  becomes an  Acquiring  Person or is  declared  an
Adverse  

                                      -36-
<PAGE>

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 shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to reflect any stock
split,  stock dividend or similar  transaction  occurring  after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").

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

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

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

                                      -37-
<PAGE>
                  Section 25.  Notice of Certain Events.

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

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

                  Section 26.  Notices.  Notices or demands  authorized  by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently  given or made if sent by
first-

                                      -38-
<PAGE>
class mail, postage prepaid addressed (until another address is filed in writing
with the Rights Agent) as follows:

                  Webster Financial Corporation
                  Webster Plaza
                  145 Bank Street
                  Waterbury, Connecticut  06702

                  Attention:        Corporate Secretary

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

                  Chemical Mellon Shareholder Services, L.L.C.
                  P. O. Box 24935
                  Church Street Station
                  New York, NY  10249

                  Attention:        Securityholder Relations

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

                  Section  27.   Supplements  and   Amendments.   Prior  to  the
Distribution  Date and subject to the  penultimate  sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any  provision  of this  Agreement  without the approval of any holders of
certificates   representing   shares  of  Common  Stock.   From  and  after  the
Distribution  Date and subject to the  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 Rights  Certificates
in order (i) to cure any ambiguity,  (ii) to correct or supplement any provision
contained  herein  which  may  be  defective  or  inconsistent  with  any  other
provisions  herein,  (iii) to shorten or lengthen any time period hereunder,  or
(iv) to change or supplement  the  provisions  hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person,
an Adverse  Person or an Affiliate or Associate of any such  Person);  provided,
this  Agreement  may not be  supplemented  or amended 

                                      -39-

<PAGE>
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,  the Final  Expiration  Date, the Purchase
Price or the number of one  one-thousandths  of a share of  Preferred  Stock for
which a Right is exercisable.  Prior to the Distribution  Date, the interests of
the  holders of Rights  shall be deemed  coincident  with the  interests  of the
holders of Common Stock.

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

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

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

                                      -40-
<PAGE>
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).

                  Section 31. Severability.  If any term, provision, covenant or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors of the Company determines in its good faith judgment that severing the
invalid  language  from this  Agreement  would  adversely  affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be  reinstated  and shall not expire  until the close of  business  on the
tenth  business day  following  the date of such  determination  by the Board of
Directors of the Company.

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

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

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


                                      -41-
<PAGE>
                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  and  their  respective  corporate  seals  to be
hereunto affixed and attested, all as of the day and year first above written.

Attest:                                      WEBSTER FINANCIAL CORPORATION


By  /s/ Lee A. Gagnon                        By   /s/ James C. Smith
   ---------------------                         -------------------------
   Lee A. Gagnon                                 Name:  James C. Smith
   Title:  Secretary                             Title:  Chairman and Chief
                                                          Executive Officer


Attest:                                          CHEMICAL MELLON
                                                 SHAREHOLDER SERVICES, L.L.C.


By  /s/ James E. Hagen                       By   /s/ Michael A. Nespoli
   --------------------                          -------------------------
   Name: James E. Hagen                          Name: Michael A. Nespoli
   Title: Relationship Manager                   Title: Vice President



                                      -42-

<PAGE>
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{"company-data": {"conformed-name": "WEBSTER FINANCIAL CORP", "cik": "0000801337", "assigned-sic": "6035", "irs-number": "061187536", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-15213", "film-number": "96515810"}, "business-address": {"street1": "FIRST FEDERAL PLZ", "street2": "145 BANK ST", "city": "WATERBURY", "state": "CT", "zip": "06702", "phone": "2037532921"}, "mail-address": {"street1": "FIRST FEDERAL PLAZA", "city": "WATERBURY", "state": "CT", "zip": "06702"}}
FORM 8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                       Securities and Exchange Act of 1934

       Date of Report (Date of earliest event reported): February 5, 1996

                          WEBSTER FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

        Delaware                        0-15213                 06-1187536
---------------------------           ----------              ------------------
(State or Other Jurisdiction          (Commission              (IRS Employer
     of Incorporation)                File Number)           Identification No.)

          Webster Plaza, 145 Bank Street, Waterbury, Connecticut 06702
          ------------------------------------------------------------
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (203) 753-2921
                                                           --------------

                                 Not Applicable
                                 ---------------
          (Former name or former address, if changed since last report)
Item 5.         Other Events
                ------------

                On February 5, 1995, the Board of Directors of Webster Financial
Corporation  (the  "Company")   declared  a  dividend  of  one  Right  for  each
outstanding share of common stock, par value $.01 per share (the "Common Stock")
of the Company,  pursuant to a Rights  Agreement,  dated as of February 5, 1996,
between the Company and Chemical Mellon Shareholders Services, L.L.C., as Rights
Agent (the "Rights  Agreement").  The distribution is payable to stockholders of
record as of the close of  business  on  February  16,  1996.  Each Right  would
entitle  the  holder  thereof  to  purchase  under  certain   circumstances  one
one-thousandth  of a share of a new Series C Participating  Preferred Stock, par
value $.01 per share,  at a purchase  price of $100 per share.  The Rights  will
expire on February 4, 2006, unless earlier redeemed by the Company.

                Initially,   the  Rights  are  neither  exercisable  nor  traded
separately  from the Common  Stock.  The Rights  will be  exercisable  only if a
person or group in the future becomes the beneficial owner of 15% or more of the
Common Stock,  or announces a tender or exchange  offer that would result in its
ownership  of 15% or more of the  Common  Stock,  or if the Board  declares  any
person or group to be an "Adverse Person" upon a determination  that such person
or group has  acquired  beneficial  ownership of 10% or more of the Common Stock
and that such ownership is not in the best interest of the Company.

                The Rights have certain  anti-takeover  effects. The Rights will
cause  substantial  dilution  to a person or group that  attempts to acquire the
Company without  conditioning the offer on a substantial  number of Rights being
acquired,  or in a manner or on terms not  approved  by the  Company's  Board of
Directors. The Rights, however, should not deter any prospective offeror willing
to  negotiate in good faith with the Board of  Directors.  Nor should the Rights
interfere with any merger or other business combination approved by the Board of
Directors.

                The Rights  Agreement is attached hereto as Exhibit (c)(1).  The
Certificate of Designation of the Series C Participating  Preferred Stock is set
forth as Exhibit 1 to the Rights  Agreement  and is  attached  hereto as Exhibit
(c)(2);  the form of Rights  Certificate is set forth as Exhibit 2 to the Rights
Agreement and is attached hereto as Exhibit (c)(3); and the Summary of Rights to
Purchase the Preferred  Stock is set forth as Exhibit 3 to the Rights  Agreement
and is attached hereto as Exhibit (c)(4).  Each document is incorporated  herein
by  reference.  The foregoing  description  of the Rights does not purport to be
complete and is qualified in its entirety by reference to such Exhibits.
Item 7.           Financial Statements and Exhibits.

                  c.  Exhibits

                     (1)   Rights Agreement, dated as of February 5, 1996

                     (2)   Certificate   of   Designation   of  the   Series   C
                           Participation  Preferred  Stock,  as Exhibit 1 to the
                           Rights Agreement

                     (3)   Form of Rights Certificate, as Exhibit 2 to the
                           Rights Agreement

                     (4)   Summary of Rights to Purchase Series C Participating
                           Preferred Stock, as Exhibit 3 to the Rights Agreement
SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                         WEBSTER FINANCIAL CORPORATION
                                         -----------------------------
                                         (Registrant)

                                         /s/ John V. Brennan
                                         ------------------------------
                                         John V. Brennan
                                         Executive Vice President,
                                         Chief Financial Officer and Treasurer

Date: February 12, 1996
------------------------------------------------------------------------------

                          WEBSTER FINANCIAL CORPORATION

                                       and

                                 CHEMICAL MELLON
                          SHAREHOLDER SERVICES, L.L.C.

                                  Rights Agent

                                Rights Agreement

                          Dated as of February 5, 1996

------------------------------------------------------------------------------
Table of Contents
                                -----------------
                  Section                                                                                 Page
                  -------                                                                                 ----
1        Certain Definitions.........................................................................    1

     2        Appointment of Rights Agent.................................................................    5

     3        Issue of Rights Certificates................................................................    5

     4        Form of Rights Certificates.................................................................    7

     5        Countersignature and Registration...........................................................    8

     6        Transfer, Split Up, Combination and
              Exchange of  Rights Certificates; Mutilated,
              Destroyed, Lost or  Stolen Rights Certificates..............................................    9

     7        Exercise of Rights; Purchase Price;
              Expiration Date of Rights...................................................................   10

     8        Cancellation and Destruction of Rights Certificates.........................................   12

     9        Reservation and Availability of Capital Stock...............................................   12

     10       Preferred Stock Record Date.................................................................   14

     11       Adjustment of Purchase Price, Number and
              Kind of Shares or Number of Rights..........................................................   14

     12       Certificate of Adjusted Purchase Price or
              Number of Shares............................................................................   24

     13       Consolidation, Merger or Sale or Transfer
              of Assets or Earning Power..................................................................   25

     14       Fractional Rights and Fractional Shares.....................................................   27

     15       Rights of Action............................................................................   28

     16       Agreement of Rights Holders.................................................................   29

     17       Rights Certificate Holder Not Deemed
              a Stockholder...............................................................................   30

     18       Concerning the Rights Agent.................................................................   30

     19       Merger or Consolidation or Change
              of Name of Rights Agent.....................................................................   30

     20       Duties of Rights Agent......................................................................   31

     21       Change of Rights Agent......................................................................   33

     22       Issuance of New Rights Certificates.........................................................   34

     23       Redemption and Termination..................................................................   35

     24       Exchange....................................................................................   36

     25       Notice of Certain Events....................................................................   38

     26       Notices.....................................................................................   38

     27       Supplements and Amendments..................................................................   39

     28       Successors..................................................................................   40

     29       Determinations and Actions by the
              Board of Directors, etc.....................................................................   40

     30       Benefits of this Agreement..................................................................   40

     31       Severability................................................................................   41

     32       Governing Law...............................................................................   41

     33       Counterparts................................................................................   41

     34       Descriptive Headings........................................................................   41

Exhibit 1         Certificate of Designation of the Series C Participating Preferred Stock

Exhibit 2         Form of Rights Certificate

Exhibit 3         Summary of Rights to Purchase Series C Participating Preferred Stock
ii
RIGHTS AGREEMENT

                  RIGHTS   AGREEMENT,   dated  as  of   February  5,  1996  (the
"Agreement"), between WEBSTER FINANCIAL CORPORATION, a Delaware corporation (the
"Company"),  and  CHEMICAL  MELLON  SHAREHOLDER  SERVICES,  L.L.C.  (the "Rights
Agent").

WITNESSETH

                  WHEREAS, on February 5, 1996 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
distribution  of one  Right  for each  share of  Common  Stock  (as  hereinafter
defined) of the  Company  outstanding  at the close of business on February  16,
1996 (the "Record Date"),  and has authorized the issuance of one Right (as such
number may  hereinafter be adjusted  pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock of the Company  issued between the Record
Date (whether  originally  issued or delivered from the Company's  treasury) and
the   Distribution   Date  (as  hereinafter   defined),   each  Right  initially
representing  the right to purchase  one  one-thousandth  of a share of Series C
Participating  Preferred  Stock of the  Company  having the  rights,  powers and
preferences  set forth in the form of Certificate of Designation of the Series C
Participating  Preferred Stock, attached hereto as Exhibit 1, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");

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

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

                  (a)  "Acquiring  Person"  shall  mean any Person who or which,
together  with  all  Affiliates  and  Associates  of such  Person,  shall be the
Beneficial Owner of 15% or more of the shares of Common Stock then  outstanding,
but shall not include the Company,  any Subsidiary of the Company,  any employee
benefit plan of the Company or of any  Subsidiary of the Company,  or any Person
or entity organized,  appointed or established by the Company for or pursuant to
the terms of any such plan.

                  (b) "Adverse  Person" shall mean any Person  declared to be an
Adverse  Person by the Board of Directors upon  determination  that the criteria
set forth in Section 11(a)(ii)(B) apply to such Person.

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

                                      -1-
the  Securities  Exchange  Act of 1934,  as amended and in effect on the date of
this Agreement (the "Exchange Act").

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

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

                  (ii) which such Person or any of such  Person's  Affiliates or
Associates,  directly or indirectly,  has the right to vote or dispose of or has
"beneficial  ownership" of (as determined  pursuant to Rule 13d-3 of the General
Rules and  Regulations  under the  Exchange Act as in effect on the date of this
Agreement),  including pursuant to any agreement,  arrangement or understanding,
whether or not in writing; provided,  however, that a Person shall not be deemed
the  "Beneficial  Owner" of, or to  "beneficially  own," any security under this
subparagraph  (ii) as a result of an agreement,  arrangement or understanding to
vote such security if such agreement,  arrangement or understanding:  (A) arises
solely  from a revocable  proxy  given in response to a public  proxy or consent
solicitation made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act, and (B) is not also
then  reportable  by such Person on Schedule  13D under the Exchange Act (or any
comparable or successor report); or

                  (iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate  thereof) with which such Person
(or  any  of  such  Person's   Affiliates  or  Associates)  has  any  agreement,
arrangement  or  understanding  (whether or not in writing),  for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
the proviso to  subparagraph  (ii) of this  paragraph  (e)) or  disposing of any
voting  securities  of the  Company;  provided,  however,  that  nothing in this
paragraph  (d) shall cause a 

                                      -2-
person engaged in business as an underwriter of securities to be the "Beneficial
Owner"  of, or to  "beneficially  own," any  securities  acquired  through  such
person's participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.

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

                  (f)  "Close of  business"  on any given  date  shall mean 5:00
P.M., Eastern Standard Time or Eastern Daylight Savings Time (as applicable), on
such date; provided,  however,  that if such date is not a Business Day it shall
mean 5:00 P.M.,  Eastern  Standard  Time or  Eastern  Daylight  Savings Time (as
applicable), on the next succeeding Business Day.

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

                  (h)  "Common  stock  equivalents"  shall have the  meaning set
forth in Section 11(a)(iii) hereof.

                  (i) "Continuing Director" shall mean a director who either was
a member of the Board of  Directors  of the  Company on  February 5, 1996 or who
subsequently  became a director of the Company and whose  election or nomination
for election by the Company's  stockholders was approved by a vote of a majority
of the Continuing Directors then on the Board of Directors of the Company.

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

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

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

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

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

                                      -3-
(o) "Final  Expiration  Date" shall mean the close of business
on February 4, 2006.

                  (p) "Issuance Triggering Event" shall mean any event described
in Section 3(a) hereof.

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

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

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

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

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

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

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

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

                  (y)  "Section   11(a)(ii)  Event",   also  called  "Conversion
Triggering  Event,"  shall mean any event described in Section  11(a)(ii) (A) or
(B) hereof.

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

                  (aa)  "Section 13 Event",  also called  "Flip-Over  Triggering
Event,"  shall mean any event  described  in clause  (x),  (y) or (z) of Section
13(a) hereof.

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

                                      -4-
(cc) "Stock  Acquisition  Date" shall mean the first date of a
public  announcement  (which,  for purposes of this  definition,  shall include,
without limitation,  a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring  Person that an Acquiring  Person has become
such.

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

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

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

                  (gg)  "Triggering  Event"  shall  mean any  Section  11(a)(ii)
Conversion Triggering Event or any Section 13 Flip-Over Triggering Event.

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

                  (a)  Issuance  Triggering  Event.  Until the  earliest  of the
following  Issuance  Triggering  Events,  (i) the close of business on the tenth
business day after the Stock Acquisition Date, (ii) the close of business on the
tenth  business day after the date that a tender or exchange offer by any Person
(other than the Company,  any  Subsidiary of the Company,  any employee  benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized,  appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the  General  Rules and  Regulations  under the  Exchange  Act as in
effect on the date hereof,  if upon consummation  thereof,  such Person would be
the  Beneficial  Owner  of 15% or  more  of the  shares  of  Common  Stock  then
outstanding  or (iii) the close of business on the tenth  business day after the
Board of Directors of the Company determines, pursuant to the criteria set forth
in Section 11(a)(ii)(B) hereof, that a Person is an Adverse Person (the earliest
of (i), (ii) and (iii) being herein referred to as the 

                                      -5-
"Distribution  Date"),  (x)  the  Rights  will  be  evidenced  (subject  to  the
provisions  of  paragraph  (b) of this  Section 3) by the  certificates  for the
Common Stock  registered  in the names of the holders of the Common Stock (which
certificates  for  Common  Stock  shall be deemed  also to be  certificates  for
Rights)  and  not  by  separate  certificates,   and  (y)  the  Rights  will  be
transferable  only in connection  with the transfer of the underlying  shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the  Distribution  Date,  the Rights  Agent will send by first  class,  insured,
postage  prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on the
records of the Company,  one or more rights  certificates,  in substantially the
form of Exhibit 2 hereto (the "Rights  Certificates"),  evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. In
the event that an  adjustment  in the number of Rights per share of Common Stock
has been made pursuant to Section 11(p) hereof,  at the time of  distribution of
the Rights  Certificates,  the Company shall make the necessary and  appropriate
rounding  adjustments  (in accordance  with Section 14(a) hereof) so that Rights
Certificates  representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.

                  (b) As promptly as practicable  following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase  Preferred Stock, in
substantially  the form attached  hereto as Exhibit 3, by  first-class,  postage
prepaid  mail,  to each  record  holder of the  Common  Stock as of the close of
business on the Record Date,  at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered  holders of the Common
Stock shall also be the registered holders of the associated  Rights.  Until the
earlier of the  Distribution  Date or the  Expiration  Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights have
been issued shall also  constitute  the transfer of the Rights  associated  with
such shares of Common Stock.

                  (c) Rights  shall be issued in respect of all shares of Common
Stock  which are issued  after the Record  Date but prior to the  earlier of the
Distribution Date or the Expiration Date. Certificates  representing such shares
of Common Stock shall also be deemed to be  certificates  for Rights,  and shall
bear the following legend:

                           This  certificate  also  evidences  and  entitles the
                  holder  hereof to  certain  Rights as set forth in the  Rights
                  Agreement   between   Webster   Financial   Corporation   (the
                  "Company") and Chemical Mellon  Shareholder  Services,  L.L.C.
                  (the  "Rights  Agent")  dated as of  February  5,  1996   (the
                  "Rights   Agreement"),   the   terms  of  which   are   hereby

                                      -6-
incorporated  herein  by  reference  and a copy of which is on
                  file at the  principal  offices of the Company.  Under certain
                  circumstances,  as set  forth in the  Rights  Agreement,  such
                  Rights will be evidenced by separate  certificates and will no
                  longer be evidenced by this certificate. The Company will mail
                  to  the  holder  of  this  certificate  a copy  of the  Rights
                  Agreement, as in effect on the date of mailing, without charge
                  promptly after receipt of a written  request  therefor.  Under
                  certain  circumstances  set  forth  in the  Rights  Agreement,
                  Rights  issued  to,  or held by,  any  Person  who is,  was or
                  becomes  an  Acquiring   Person,  an  Adverse  Person  or  any
                  Affiliate or  Associate  thereof (as such terms are defined in
                  the Rights Agreement),  whether currently held by or on behalf
                  of such Person or by any  subsequent  holder,  may become null
                  and void.

                  With respect to such  certificates  containing  the  foregoing
legend,  until the earlier of (i) the  Distribution  Date or (ii) the Expiration
Date,  the  Rights   associated  with  the  Common  Stock  represented  by  such
certificates  shall be  evidenced  by such  certificates  alone  and  registered
holders of Common Stock shall also be the  registered  holders of the associated
Rights,  and the transfer of any of such certificates  shall also constitute the
transfer of the Rights  associated  with the Common  Stock  represented  by such
certificates.

                  Section 4.  Form of Rights Certificates.

                  (a) The  Rights  Certificates  (and the forms of  election  to
purchase and of assignment to be printed on the reverse  thereof)  shall each be
substantially  in the form set forth in Exhibit 2 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 11
and Section 22 hereof, the Rights Certificates,  whenever distributed,  shall be
dated as of the Record Date and on their face shall entitle the holders  thereof
to purchase such number of one  one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such  exercise  price
per one  one-thousandth  of a share, the "Purchase  Price"),  but the amount and
type of securities  purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.

                  (b) Any Rights  Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights  beneficially owned by any Person known
to be: (i) 

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

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

                  Section 5.  Countersignature and Registration.

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

                                      -8-
the actual date of the execution of such Rights  Certificate,  shall be a proper
officer of the Company to sign such Rights Certificate,  although at the date of
the execution of this Rights Agreement any such person was not such an officer.

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

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

                  (a) Subject to the  provisions of Section  4(b),  Section 7(e)
and  Section  14  hereof,  at any  time  after  the  close  of  business  on the
Distribution  Date,  and at or prior to the close of business on the  Expiration
Date,  any Rights  Certificate or  Certificates  may be  transferred,  split up,
combined or exchanged for another Rights Certificate or Certificates,  entitling
the  registered  holder to  purchase a like number of one  one-thousandths  of a
share of Preferred Stock (or, following a Triggering Event,  Common Stock, other
securities,  cash or other assets, as the case may be) as the Rights Certificate
or Certificates  surrendered  then entitled such holder (or former holder in the
case of a transfer) to purchase.  Any  registered  holder  desiring to transfer,
split up, combine or exchange any Rights  Certificate or Certificates shall make
such request in writing  delivered to the Rights Agent,  and shall surrender the
Rights  Certificate or  Certificates  to be  transferred,  split up, combined or
exchanged at the principal  office or offices of the Rights Agent designated for
such  purpose.  Neither the Rights  Agent nor the Company  shall be obligated to
take any action  whatsoever with respect to the transfer of any such surrendered
Rights  Certificate  until the registered holder shall have completed and signed
the certificate  contained in the form of assignment on the reverse side of such
Rights  Certificate  and shall have  provided  such  additional  evidence of the
identity of the Beneficial Owner (or former  Beneficial  Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent  shall,  subject  to Section  4(b),  Section  7(e) and  Section 14 hereof,
countersign and deliver to the Person entitled  thereto a Rights  Certificate or
Rights  Certificates,  as the case may be,  as so  requested.  The  Company  may
require payment of a sum sufficient to cover any tax or governmental charge that
may be  imposed  in  connection  with any  transfer,  split-up,  combination  or
exchange of Rights Certificates.

                  (b)  Upon  receipt  by the  Company  and the  Rights  Agent of
evidence  reasonably  satisfactory  to them of the loss,  theft,  destruction or
mutilation of a Rights Certificate,  and, in case of loss, theft or destruction,
of indemnity or security  reasonably  satisfactory to them, and reimbursement to
the Company and the Rights 

                                      -9-
Agent of all reasonable expenses  incidental thereto,  and upon surrender to the
Rights  Agent and  cancellation  of the Rights  Certificate  if  mutilated,  the
Company will execute and deliver a new Rights  Certificate  of like tenor to the
Rights Agent for  countersignature  and delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.

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

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

                  (b) The Purchase Price for each  one-thousandth  of a share of
Preferred  Stock pursuant to the exercise of a Right shall initially be $100 and
shall be subject to adjustment  from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in accordance with paragraph (c) below.

                  (c)  Upon  receipt  of  a  Rights   Certificate   representing
exercisable  Rights,  with the form of election to purchase and the  certificate
duly executed,  accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one  one-thousandth  of a share of Preferred Stock (or
other  shares,  securities,  cash or  other  assets,  as the  case may be) to be
purchased as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall,  subject to Section 20(k)  hereof,  thereupon as soon as
practicable  (i) (A)  requisition  from  any  transfer  agent of the  shares  of
Preferred  Stock (or make  available,  if the Rights Agent is the transfer agent
for such shares)  certificates for the total number of one  one-thousandths of a
share of Preferred  Stock to be  purchased  and the Company  hereby  irrevocably
authorizes its transfer  agent to comply with all such  requests,  or (B) if the
Company  shall have  elected to deposit the total  number of shares of Preferred
Stock issuable upon exercise of the Rights  hereunder  with a depositary  agent,
requisition  from the depositary  agent depositary  receipts  representing  such
number  of one  one-thousandths  of a  share  of  Preferred  Stock  as are to be
purchased  (in  which  case  certificates  for the  shares  of  Preferred  Stock

                                      -10-
represented  by such receipts  shall be deposited by the transfer agent with the
depositary  agent) and the Company  will direct the  depositary  agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional  shares in  accordance  with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts,  cause the same
to be  delivered  to or upon the order of the  registered  holder of such Rights
Certificate,  registered  in such  name or  names as may be  designated  by such
holder,  and (iv) after receipt  thereof,  deliver such cash, if any, to or upon
the order of the registered  holder of such Rights  Certificate.  The payment of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) may be made in cash or by certified bank check or money order payable to
the order of the  Company.  In the event that the Company is  obligated to issue
other  securities  (including  Common  Stock) of the  Company,  pay cash  and/or
distribute  other  property  pursuant to Section 11(a) hereof,  the Company will
make all arrangements necessary so that such other securities, cash and/or other
property  are  available  for  distribution  by the  Rights  Agent,  if and when
appropriate.

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

                  (e)   Notwithstanding   anything  in  this  Agreement  to  the
contrary,  from and after the first occurrence of a Conversion Triggering Event,
any Rights  beneficially  owned by (i) an Acquiring Person, an Adverse Person or
an Associate or Affiliate of an Acquiring  Person or an Adverse  Person,  (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate)  who becomes a transferee  after the  Acquiring  Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring  Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or  concurrently  with the Acquiring  Person or Adverse Person becoming such and
receives  such  Rights  pursuant  to either (A) a transfer  (whether  or not for
consideration)  from the  Acquiring  Person or Adverse  Person (or from any such
Associate or Affiliate) to holders of equity  interests in such Acquiring Person
or Adverse  Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person or Adverse Person (or any such Associate or Affiliate)
has  any  continuing  agreement,  arrangement  or  understanding  regarding  the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has  determined  (whether  before  or after  such  transfer)  is part of a plan,
arrangement  or  understanding  which has as a  primary  purpose  or effect  the
avoidance of this Section  7(e),  shall become null and void without any further
action  and no holder of such  Rights  shall  have any  rights  whatsoever  with
respect  to such  Rights,  whether  under any  provision  of this  Agreement  or
otherwise.  The  Company  shall use all  reasonable  efforts to insure  

                                      -11-
that the  provisions  of this  Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights  Certificates or other
Person as a result of its failure to make any determinations  with respect to an
Acquiring  Person  or  Adverse  Person  or any of their  respective  Affiliates,
Associates or transferees hereunder.

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

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

                  Section 9.  Reservation and Availability of Capital Stock.

                  (a) The Company  covenants and agrees that it will cause to be
reserved  and kept  available  out of its  authorized  and  unissued  shares  of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury),  the number of shares of
Preferred  Stock (and,  following the occurrence of a Triggering  Event,  Common
Stock and/or other  securities)  that, as provided in this Agreement,  including
Section 11(a)(iii) hereof,  will be sufficient to permit the exercise in full of
all outstanding Rights.

                  (b) So long as the shares of Preferred  Stock (and,  following
the  occurrence  of a Triggering  Event,  Common Stock and/or other  securities)
issuable  and  deliverable  upon the exercise of the Rights may be listed on any
national securities  exchange,  the Company shall use its best efforts to cause,
from and after 

                                      -12-
such  time as the  Rights  become  exercisable,  all  shares  reserved  for such
issuance to be listed on such  exchange  upon  official  notice of issuance upon
such exercise.

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

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

                  (e) The Company further  covenants and agrees that it will pay
when due and payable any and all  federal and state  transfer  taxes and charges
which may be  payable  in  respect of the  issuance  or  delivery  of the Rights
Certificates and of any certificates  for a number of one  one-thousandths  of a
share of Preferred Stock (or Common Stock and/or other  securities,  as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any  transfer  tax which may be payable in  respect  of any  transfer  or
delivery  of Rights  Certificates  to a Person  other than,  or the  issuance or
delivery of a number of one  one-thousandths  of a share of Preferred  Stock (or
Common Stock and/or other  securities,  as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates  evidencing
Rights  surrendered for exercise or to issue or deliver any  certificates  for a
number of one  one-thousandths  of a share of  Preferred  Stock (or Common Stock
and/or  other  securities,  as the case may be) in a name other than that of the

                                      -13-
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time  of  surrender)  or  until  it  has  been   established  to  the  Company's
satisfaction that no such tax is due.

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

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

                  (a)(i) In the event the  Company  shall at any time  after the
date of this Agreement (A) declare a dividend on the Preferred  Stock payable in
shares of Preferred  Stock,  (B) subdivide the outstanding  Preferred Stock, (C)
combine the outstanding  Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital  stock in a  reclassification  of the  Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),  except
as  otherwise  provided in this  Section  11(a) and  Section  7(e)  hereof,  the
Purchase  Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred  Stock or capital stock,  as the case may
be, issuable on such date, shall be proportionately  adjusted so that the holder
of any Right  exercised  after  such time shall be  entitled  to  receive,  upon
payment of the Purchase Price then in effect,  the aggregate  number and kind of
shares of Preferred  

                                      -14-
Stock or  capital  stock,  as the case may be,  which,  if such  Right  had been
exercised  immediately prior to such date and at a time when the Preferred Stock
transfer  books of the Company were open, he would have owned upon such exercise
and  been  entitled  to  receive  by  virtue  of  such  dividend,   subdivision,
combination  or  reclassification.  If an event  occurs  which would  require an
adjustment under both this Section 11(a)(i) and Section  11(a)(ii)  hereof,  the
adjustment  provided for in this Section  11(a)(i)  shall be in addition to, and
shall be made prior to, any adjustment  required  pursuant to Section  11(a)(ii)
hereof.

                  (ii)     Conversion Triggering Events.

                  IN THE EVENT:

                  (A) any Person (other than the Company,  any Subsidiary of the
Company,  any employee  benefit plan of the Company or of any  Subsidiary of the
Company,  or any Person or entity  organized,  appointed or  established  by the
Company for or pursuant to the terms of any such plan),  alone or together  with
its  Affiliates and  Associates,  shall,  at any time after the Rights  Dividend
Declaration  Date,  become the Beneficial  Owner of 15% or more of the shares of
Common Stock then outstanding,  unless the event causing the 15% threshold to be
crossed is a transaction set forth in Section 13(a) hereof; or

                  (B)  subject  to the  penultimate  sentence  of  this  Section
11(a)(ii),  the Board of Directors,  by at least a majority vote,  shall declare
any Person to be an Adverse Person,  upon making (x) a  determination  that such
Person,  alone or together with its Affiliates and  Associates,  has or will, at
any time after the Rights Dividend Declaration Date, become the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock (provided that any such
determination  will not be effective until such Person has become the Beneficial
Owner  of 10% or more of the  outstanding  shares  of  Common  Stock)  and (y) a
determination,   after   reasonable   inquiry   and   investigation,   including
consultation with such persons as the Board of Directors deems appropriate, that
(a) such Beneficial Ownership by such Person is intended to cause, is reasonably
likely  to cause or will  cause the  Company  to  repurchase  the  Common  Stock
beneficially  owned by such  Person or to cause  pressure on the Company to take
action or enter into a transaction or series of transactions which would provide
such Person with short-term  financial gain under  circumstances where the Board
of Directors  believes that the best long-term  interests of the Company and its
stockholders, but for the actions and possible actions of such Person, would not
be served by taking such action or entering into such  transactions or series of
transactions  at that  time or (b)  such  Beneficial  Ownership  is  causing  or
reasonably likely to cause a material adverse impact 

                                      -15-
(including,  but not limited to,  impairment of relationships  with customers or
impairment of the Company's ability to maintain its competitive position) on the
business or prospects of the Company, or (c) such beneficial ownership otherwise
is not in the best  interests  of the Company and its  stockholders,  employees,
customers and communities in which the Company and its subsidiaries do business,

                  THEN,

                  promptly  following  the  first  occurrence  of  a  Conversion
Triggering Event,  proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall  thereafter have the
right to receive,  upon exercise  thereof at the then current  Purchase Price in
accordance  with  the  terms  of this  Agreement,  in lieu  of a  number  of one
one-thousandths  of a share of Preferred Stock,  such number of shares of Common
Stock of the Company as shall equal the result  obtained by (x)  multiplying the
then-current Purchase Price by the then-number of one one-thousandths of a share
of Preferred  Stock for which a Right was exercisable  immediately  prior to the
first occurrence of a Conversion Triggering Event, and (y) dividing that product
(which, following such first occurrence,  shall thereafter be referred to as the
"Purchase  Price" for each Right and for all purposes of this  Agreement) by 50%
of the current  market price  (determined  pursuant to Section 11(d) hereof) per
share of  Common  Stock on the date of such  first  occurrence  (such  number of
shares,  the  "Adjustment  Shares").  Notwithstanding  the provisions of Section
11(a)(ii)(B)  hereof,  the Board of  Directors  of the Company may not declare a
Person to be an Adverse  Person if, prior to the time that such Person  acquired
10% or more of the shares of Common Stock then outstanding, such Person provided
to the Board of Directors in writing a statement  of such  Person's  purpose and
intentions in connection with the proposed acquisition of Common Stock, together
with any other information  reasonably  requested of such Person by the Board of
Directors,  and the Board of Directors,  based on such  statement and reasonable
inquiry and  investigation,  including  consultation  with such  persons as such
directors shall deem appropriate,  determines to notify and notifies such Person
in  writing  that it will not  declare  such  Person  to be an  Adverse  Person;
provided,  however,  that the Board of Directors may expressly  condition in any
manner a  determination  not to  declare  a Person  an  Adverse  Person  on such
conditions as the Board of Directors may select,  including without  limitation,
such Person's not acquiring more than a specified  amount of Common Stock and/or
on  such  Person's  not  taking  actions  inconsistent  with  the  purposes  and
intentions  disclosed by such Person in the  statement  provided to the Board of
Directors.  In the  event  that  the  Board  of  Directors  should  at any  time
determine,  upon reasonable  inquiry and investigation,  including  consultation
with such persons as such directors shall deem appropriate, that such Person has
not met or  complied  with any  condition  specified  by the Board of  Directors
pursuant  to the  preceding  sentence,  the Board of  Directors  may at any time
thereafter  declare  such  Person  to be  an  Adverse  Person  pursuant  to  the
provisions of this Section 11(a)(ii).

                                      -16-
(iii) In the event that the  number of shares of Common  Stock
which are  authorized  by the Company's  Certificate  of  Incorporation  but not
outstanding  or reserved for issuance for purposes  other than upon  exercise of
the Rights are not  sufficient  to permit the  exercise in full of the Rights in
accordance  with the  foregoing  subparagraph  (ii) of this Section  11(a),  the
Company  shall:  (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) Common Stock or other equity securities of the Company  (including,  without
limitation,  shares,  or units of shares,  of preferred stock which the Board of
Directors  of the  Company has deemed to have the same value as shares of Common
Stock (such shares of preferred stock,  "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 one or more investment or financial  advisors  selected
by the Board of  Directors  of the Company;  provided,  however,  if the Company
shall not have made adequate  provision to deliver value  pursuant to clause (B)
above within thirty (30) days following the later of (x) the first occurrence of
a Conversion  Triggering  Event and (y) the date on which the Company's right of
redemption  pursuant to Section  23(a)  expires  (the later of (x) and (y) being
referred to herein as the "Section  11(a)(ii)  Trigger Date"),  then the Company
shall be obligated to deliver,  upon the  surrender  for exercise of a Right and
without requiring payment of the Purchase Price,  shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate  value equal to the Spread.  If the Board of  Directors of the Company
shall  determine  in good faith  that it is likely  that  sufficient  additional
shares of Common Stock could be authorized for issuance upon exercise in full of
the  Rights,  the thirty  (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger  Date, in order that the Company may seek  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 Section  7(e)
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 in order 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 Stock shall be the current
market price (as  determined  pursuant to Section 11(d) hereof) per share of the
Common 

                                      -17-
Stock 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  Stock on such
date.

                  (iv) In lieu of issuing  shares of Common Stock in  accordance
with  subparagraph  (ii) of this Section 11(a),  the Company may with respect to
each Right, if a majority of members of the Board of Directors and a majority of
the Continuing  Directors determine that such action is in the best interests of
the Company and not  contrary to the  interests  of the holders of Rights,  make
adequate  provision  to  substitute  for the  Adjustment  Shares,  (x)  upon the
surrender for exercise of a Right and payment of the applicable  Purchase Price,
(1) cash, (2) a reduction in Purchase  Price,  (3) Common Stock, or other equity
securities  of  the  Company   (including   without   limitation   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 Adjustment
Value where such aggregate  value has been  determined by the Board of Directors
of the  Company  based upon the advice of one or more  investment  or  financial
advisers  selected  by the Board of  Directors  of the  Company  or (y) upon the
surrender for exercise of a Right and without  requiring payment of the Purchase
Price (1) cash,  (2) Common  Stock or other  equity  securities  of the  Company
(including,  without limitation, common stock equivalents),  (3) debt securities
of the Company, (4) other assets or (5) any combination of the foregoing, having
an  aggregate  value  equal to the Spread  where such  aggregate  value has been
determined by the Board of Directors of the Company based upon the advice of one
or more investment or financial  advisors  selected by the Board of Directors of
the Company.

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

                                      -18-
additional  shares of Preferred  Stock and/or  equivalent  preferred stock to be
offered for  subscription or purchase (or into which the convertible  securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration  shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a  statement  filed with the Rights  Agent and shall be binding on the Rights
Agent and the holders of the Rights.  Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed  outstanding  for the purpose
of any such  computation.  Such adjustment shall be made  successively  whenever
such a record date is fixed,  and in the event that such rights or warrants  are
not so issued,  the Purchase  Price shall be adjusted to be the  Purchase  Price
which would then be in effect if such record date had not been fixed.

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

                  (d)(i) For the  purpose of any  computation  hereunder,  other
than  computations  made  pursuant to Section  11(a)(iii)  hereof,  the "current
market  price"  per share of Common  Stock on any date shall be deemed to be the
average  of the daily  closing  prices  per share of such  Common  Stock for the
thirty  (30)  consecutive  Trading  Days (as such term is  hereinafter  defined)
immediately  prior to such date, and for purposes of computations  made pursuant
to Section  11(a)(iii)  hereof,  the "current  market price" per share of Common
Stock on any date shall be deemed to be the average of the daily closing  prices
per  share of such  Common  Stock  for the ten  (10)  consecutive  Trading  Days
immediately  following such date; provided,  

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

                  (ii)  For  the  purpose  of  any  computation  hereunder,  the
"current  market price" per share of Preferred  Stock shall be determined in the
same  manner  as set  forth  above for the  Common  Stock in clause  (i) of this
Section  11(d) (other than the last  sentence  thereof).  If the current  market
price per share of Preferred  Stock cannot be determined in the manner  provided
above or if the  Preferred  Stock is not publicly  held or listed or traded in a
manner described in clause (i) of this 

                                      -20-
Section 11(d),  the "current market price" per share of Preferred Stock shall be
conclusively  deemed  to be an  amount  equal  to 1000 (as  such  number  may be
appropriately  adjusted for such events as stock  splits,  stock  dividends  and
recapitalization  with respect to the Common Stock  occurring  after the date of
this  Agreement)  multiplied by the current market price per share of the Common
Stock.  If neither the Common Stock nor the Preferred  Stock is publicly held or
so listed or traded,  "current  market price" per share of the  Preferred  Stock
shall mean the fair value per share as  determined in good faith by the Board of
Directors of the Company,  whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive  for all  purposes.  For all
purposes of this Agreement,  the "current market price" of one one-thousandth of
a share of Preferred  Stock shall be equal to the "current  market price" of one
share of Preferred Stock divided by 1000.

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

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

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

                  (h) Unless the Company  shall have  exercised  its election as
provided in Section  11(i),  upon each  adjustment  of the  Purchase  Price as a
result  of  

                                      -21-
the  calculations  made in  Sections  11(b)  and  (c),  each  Right  outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right  to  purchase,  at  the  adjusted  Purchase  Price,  that  number  of  one
one-thousandths  of a  share  of  Preferred  Stock  (calculated  to the  nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths
of a share covered by a Right immediately  prior to this adjustment,  by (y) the
Purchase Price in effect  immediately  prior to such  adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price,

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

                  (j)  Irrespective  of any adjustment or change in the Purchase
Price  or the  number  of one  one-thousandths  of a share  of  Preferred  Stock
issuable upon the exercise of the Rights,  the Rights  Certificates  theretofore
and  thereafter  issued may  continue  to  express  the  Purchase  Price per one
one-thousandth of a share and 

                                      -22-
the number of one one-thousandths of a share which were expressed in the initial
Rights Certificates issued hereunder.

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

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

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

                  (n) The Company covenants and agrees that it shall not, at any
time after the  Distribution  Date, (i) consolidate with any other Person (other
than a Subsidiary  of the Company in a transaction  which  complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction  which complies with Section 11(o)  hereof),  or
(iii) sell or transfer (or permit any  Subsidiary to sell or  transfer),  in one
transaction,  or a series  of  related  transactions,  assets or  earning  power
aggregating  more than 50% of the assets or earning power of the Company and its
Subsidiaries  (taken as a whole) to any other Person or Persons  (other than the
Company and/or any of its Subsidiaries 

                                      -23-
in one or more  transactions  each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such  consolidation,  merger, sale or
transfer  there are any rights,  warrants  or other  instruments  or  securities
outstanding  or  agreements  in effect  which  would  substantially  diminish or
otherwise  eliminate  the benefits  intended to be afforded by the Rights or (y)
prior to,  simultaneously with or immediately after such consolidation,  merger,
sale or  transfer,  the  shareholders  of the Person who  constitutes,  or would
constitute,  the  "Principal  Party" for purposes of Section  13(a) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.

                  (o)  The  Company   covenants  and  agrees  that,   after  the
Distribution  Date, it will not, except as permitted by Section 23 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
Rights Dividend  Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock,  (ii) subdivide the outstanding  shares of Common Stock, or (iii) combine
the  outstanding  shares of Common  Stock into a smaller  number of shares,  the
number of Rights associated with each share of Common Stock then outstanding, or
issued or delivered  thereafter  but prior to the  Distribution  Date,  shall be
proportionately adjusted so that the number of Rights thereafter associated with
each  share of Common  Stock  following  any such event  shall  equal the result
obtained  by  multiplying  the  number of Rights  associated  with each share of
Common  Stock  immediately  prior to such event by a fraction  the  numerator of
which  shall  be  the  total  number  of  shares  of  Common  Stock  outstanding
immediately  prior to the  occurrence of the event and the  denominator of which
shall be the total  number of shares  of Common  Stock  outstanding  immediately
following the occurrence of such event.

                  Section 12.  Certificate of Adjusted  Purchase Price or Number
of Shares.  Whenever an adjustment is made as provided in Section 11 and Section
13 hereof,  the Company shall (a) promptly  prepare a certificate  setting forth
such  adjustment  and a  brief  statement  of  the  facts  accounting  for  such
adjustment,  (b) promptly  file with the Rights  Agent,  and with each  transfer
agent for the Preferred Stock and the Common Stock, a copy of such  certificate,
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate  representing
shares of Common Stock) in accordance  with Section 26 hereof.  The Rights Agent
shall  be  fully  protected  in  relying  on  any  such  certificate  and on any
adjustment  therein  contained and shall not be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.

                                      -24-
Section  13.  Consolidation,  Merger  or Sale or  Transfer  of
Assets or Earning Power.

                  (a)      Flip-Over Triggering Event.

                  IN THE EVENT THAT,

                  following the Stock Acquisition Date,  directly or indirectly,
any of the following  Flip-Over  Triggering Events occurs, (x) the Company shall
consolidate  with,  or merge  with and into,  any  other  Person  (other  than a
Subsidiary  of the Company in a  transaction  which  complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation of
such  consolidation  or merger,  (y) any Person  (other than a Subsidiary of the
Company in a  transaction  which  complies  with  Section  11(o)  hereof)  shall
consolidate  with, or merge with or into, the Company,  and the Company shall be
the continuing or surviving  corporation of such consolidation or merger and, in
connection  with such  consolidation  or merger,  all or part of the outstanding
shares of Common  Stock shall be changed  into or  exchanged  for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise  transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer),  in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries  (taken as a whole) to any Person or Persons
(other  than  the  Company  or any  Subsidiary  of the  Company  in one or  more
transactions each of which complies with Section 11(o) hereof),

                  THEN,

                  and in each such case, proper provision shall be made so that:
(i) each holder of a Right,  except as provided in Section  7(e)  hereof,  shall
thereafter  have  the  right  to  receive,  upon  the  exercise  thereof  at the
then-current Purchase Price in accordance with the terms of this Agreement, such
number of validly  authorized and issued,  fully paid,  nonassessable and freely
tradable  shares  of  Common  Stock of the  Principal  Party  (as  such  term is
hereinafter defined),  not subject to any liens,  encumbrances,  rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then-current Purchase Price by the number of one one-thousandths
of a share of Preferred Stock for which a Right is exercisable immediately prior
to the first  occurrence  of a Flip-Over  Triggering  Event (or, if a Conversion
Triggering  Event has  occurred  prior to the first  occurrence  of a  Flip-Over
Triggering Event,  multiplying the number of such one one-thousandths of a share
of Preferred  Stock for which a Right was exercisable  immediately  prior to the
first  occurrence  of a Conversion  Triggering  Event by the  Purchase  Price in
effect  immediately prior to such first  occurrence),  and dividing that product
(which, following the first occurrence of a Flip-Over Triggering Event, shall be
referred to as the "Purchase  Price" for each Right and for all purposes of this
Agreement) by

                                      -25-
(2) 50% of the current  market price  (determined  pursuant to Section  11(d)(i)
hereof)  per share of the Common  Stock of such  Principal  Party on the date of
consummation of such Flip-Over Triggering Event; (ii) such Principal Party shall
thereafter  be liable  for,  and  shall  assume,  by  virtue  of such  Flip-Over
Triggering Event, all the obligations and duties of the Company pursuant to this
Agreement;  (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being  specifically  intended that the provisions of Section
11  hereof  shall  apply  only to  such  Principal  Party  following  the  first
occurrence of a Flip-Over Triggering Event; (iv) such Principal Party shall take
such steps  (including,  but not limited  to, the  reservation  of a  sufficient
number of shares of its Common Stock) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions  hereof shall
thereafter be  applicable,  as nearly as  reasonably  may be, in relation to its
shares of Common Stock  thereafter  deliverable upon the exercise of the Rights;
and (v) the  provisions  of  Section  11(a)(ii)  hereof  shall  be of no  effect
following the first occurrence of any Flip-Over Triggering Event.

                  (b)      "Principal Party" shall mean

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

                  (ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a),  the Person that is the party receiving the
greatest  portion of the assets or earning  power  transferred  pursuant to such
transaction or transactions;  provided,  however,  that in any such case, (1) if
the  Common  Stock  of  such  Person  is not at  such  time  and  has  not  been
continuously  over the  preceding  twelve  (12) month  period  registered  under
Section  12 of the  Exchange  Act,  and  such  Person  is a direct  or  indirect
Subsidiary  of  another  Person  the  Common  Stock  of which is and has been so
registered,  "Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary,  directly or  indirectly,  of more than one Person,
the  Common  Stocks  of two or more of which  are and have  been so  registered,
"Principal  Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.

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

                                      -26-
sale or transfer  mentioned in paragraph  (a) of this Section 13, the  Principal
Party will:

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

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

                  The  provisions  of this Section 13 shall  similarly  apply to
successive  mergers or consolidations or sales or other transfers.  In the event
that a Flip-Over  Triggering  Event shall occur at any time after the occurrence
of a Conversion  Triggering  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,  except  prior to the  Distribution  Date as provided  in Section  11(p)
hereof, or to distribute Rights  Certificates which evidence  fractional Rights.
In lieu of such fractional  Rights,  there may be paid to the registered holders
of the Rights  Certificates  with regard to which such  fractional  Rights would
otherwise  be  issuable,  an amount in cash  equal to the same  fraction  of the
current market value of a whole Right.  For purposes of this Section 14(a),  the
current  market value of a whole Right shall be the closing  price of the Rights
for the  Trading  Day  immediately  prior to the date on which  such  fractional
Rights would have been otherwise  issuable.  The closing price of the Rights for
any day shall be the last 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 applicable, 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  reported by NASDAQ or such other  system then in use and are not listed
or  admitted  to trading 

                                      -27-
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  reported by NASDAQ or such other system then
in use and are not listed or  admitted  to trading  on any  national  securities
exchange,  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
shares of Preferred Stock (other than fractions which are integral  multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or
to distribute  certificates which evidence  fractional shares of Preferred Stock
(other than fractions which are integral  multiples of one  one-thousandth  of a
share of Preferred  Stock). In lieu of fractional shares of Preferred Stock that
are not integral  multiples of one one-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction  of the  current  market  value  of one  one-thousandth  of a share  of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one  one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the  closing  price of a share of  Preferred  Stock (as  determined  pursuant to
Section  11(d)(ii)  hereof) for the Trading Day immediately prior to the date of
such exercise.

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

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

                  Section 15. Rights of Action.  All rights of action in respect
of this  Agreement,  other  than  rights of action  vested in the  Rights  Agent
pursuant to Section 18 hereof,  are vested in the respective  registered holders
of the Rights  Certificates (and, prior to the Distribution Date, the registered
holders  of  the  Common  Stock);  and  any  registered  holder  of  any  Rights
Certificate (or, prior to the Distribution  Date, of the Common Stock),  without
the consent of the Rights Agent or of the holder of any other Rights Certificate
(or,  prior to the  Distribution  Date,  of the Common  Stock),  may, in his own
behalf and for his own  benefit,  enforce,  and 

                                      -28-
may institute and maintain any suit, action or proceeding against the Company to
enforce,  or  otherwise  act in  respect  of, his right to  exercise  the Rights
evidenced  by such  Rights  Certificate  in the manner  provided  in such Rights
Certificate  and in  this  Agreement.  Without  limiting  the  foregoing  or any
remedies  available to the holders of Rights,  it is  specifically  acknowledged
that the  holders  of Rights  would not have an  adequate  remedy at law for any
breach of this  Agreement and shall be entitled to specific  performance  of the
obligations  hereunder  and  injunctive  relief  against  actual  or  threatened
violations of the obligations hereunder of any Person subject to this Agreement.

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

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

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

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

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

                                      -29-
Section   17.   Rights   Certificate   Holder   Not  Deemed  a
Stockholder.  No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one one-thousandths of a share of Preferred Stock or any other securities of the
Company  which  may at any  time  be  issuable  on the  exercise  of the  Rights
represented  thereby,  nor shall  anything  contained  herein  or in any  Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter  submitted to  stockholders  at any
meeting thereof,  or to give or withhold consent to any corporate  action, or to
receive notice of meetings or other actions  affecting  stockholders  (except as
provided in Section 25 hereof), or to receive dividends or subscription  rights,
or  otherwise,  until the Right or Rights  evidenced by such Rights  Certificate
shall have been exercised in accordance with the provisions hereof.

                  Section 18.  Concerning the Rights Agent.

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

                  (b) The Rights  Agent  shall be  protected  and shall incur no
liability  for or in respect of any action  taken,  suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate  or  certificate  for Common  Stock or for other  securities  of the
Company,  instrument of assignment or transfer, power of attorney,  endorsement,
affidavit, letter, notice, direction, consent, certificate,  statement, or other
paper or document  believed by it to be genuine and to be signed,  executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.

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

                  (a)  Any  corporation  into  which  the  Rights  Agent  or any
successor  Rights Agent may be merged or with which it may be  consolidated,  or
any corporation  resulting from any merger or  consolidation to which the Rights
Agent  or any  successor  Rights  Agent  shall be a  party,  or any  corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor 

                                      -30-
Rights Agent,  shall be the  successor to the Rights Agent under this  Agreement
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto;  provided,  however,  that such corporation  could be
eligible for  appointment  as a successor  Rights Agent under the  provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement,  any of the Rights  Certificates  shall
have been  countersigned but not delivered,  any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates  so  countersigned;  and in  case at that  time  any of the  Rights
Certificates shall not have been  countersigned,  any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the  successor  Rights  Agent;  and in all such  cases  such  Rights
Certificates  shall have the full force provided in the Rights  Certificates and
in this Agreement.

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

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

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

                  (b)  Whenever  in the  performance  of its  duties  under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including,  without limitation,  the identity of any Acquiring Person or
Adverse  Person and the  determination  of "current  market price") be proved or
established  by the Company prior to taking or suffering  any action  hereunder,
such  fact or  matter  (unless  other  evidence  in  respect  thereof  be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate  signed by the Chairman of the Board,  the President,  any Vice
President,  the  Treasurer,  any  Assistant  Treasurer,  the  Secretary  or  any
Assistant  Secretary of the Company and delivered to the Rights 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.

                                      -31-
(c) The Rights  Agent shall be liable  hereunder  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
Rights  Certificates  or be  required  to  verify  the  same  (except  as to its
countersignature  on such  Rights  Certificates),  but all such  statements  and
recitals are and shall be deemed to have been made by the Company only.

                  (e) The Rights Agent shall not be under any  responsibility in
respect of the validity of this  Agreement or the execution and delivery  hereof
(except  the due  execution  hereof by the  Rights  Agent) or in  respect of the
validity or execution  of any Rights  Certificate  (except its  countersignature
thereof);  nor shall it be  responsible  for any  breach by the  Company  of any
covenant or condition  contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment  required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner,  method or amount
of any such adjustment or the  ascertaining of the existence of facts that would
require  any such  adjustment  (except  with  respect to the  exercise of Rights
evidenced by Rights  Certificates after receipt of the certificate  described in
Section 12 hereof  setting forth any such  adjustment);  nor shall it by any act
hereunder  be  deemed  to  make  any   representation  or  warranty  as  to  the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights  Certificate or as to whether
any shares of Common Stock or Preferred Stock will,  when so issued,  be validly
authorized and issued, fully paid and nonassessable.

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

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

                  (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in

                                      -32-
which the  Company  may be  interested,  or  contract  with or lend money to the
Company or otherwise  act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

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

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

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

                  (l)  Any   application   by  the  Rights   Agent  for  written
instructions  from the Company may, at the option of the Rights Agent, set forth
in writing any action  proposed to be taken or omitted by the Rights Agent under
this Rights  Agreement  and the date on and/or  after which such action shall be
taken or such omission shall be effective.  The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in  accordance  with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
the Chairman of the Board, the President,  a Vice Chairman,  any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer
of the Company actually receives such application, unless any such officer shall
have  consented in writing to an earlier date) unless,  prior to taking any such
action (or the  effective  date in the case of an  omission),  the Rights  Agent
shall  have  received  written  instructions  in  response  to such  application
specifying the action to be taken or omitted.

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

                                      -33-
certified  mail,  and to the holders of the Rights  Certificates  by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days'  notice in writing,  mailed to the Rights  Agent or  successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred  Stock, by registered or certified mail, and to the holders of the
Rights  Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a  successor  to the  Rights  Agent.  If the  Company  shall  fail to make  such
appointment  within a period of thirty  (30) days  after  giving  notice of such
removal  or  after  it has been  notified  in  writing  of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder of a
Rights  Certificate (who shall, with such notice,  submit his Rights Certificate
for  inspection  by the  Company),  then any  registered  holder  of any  Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent.  Any successor  Rights  Agent,  whether  appointed by the
Company or by such a court, shall be (a) a corporation or financial  institution
organized and doing business under the laws of the United States or of the State
of New  York  (or of any  other  state  of the  United  States  so  long as such
corporation  is authorized to do business as a banking  institution in the State
of New York, in good  standing),  having a principal  office in the State of New
York,  which is authorized  under such laws to exercise  corporate trust powers,
and which is subject to supervision or examination by federal or state authority
and has at the time of its  appointment  as Rights Agent a combined  capital and
surplus  of at  least  $100,000,000  or (b) an  affiliate  of a  corporation  or
financial  institution   described  in  clause  (a)  of  this  sentence.   After
appointment,  the  successor  Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent  without  further  act or deed;  but the  predecessor  Rights  Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance,  conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment,  the  Company  shall  file  notice  thereof  in  writing  with  the
predecessor  Rights  Agent and each  transfer  agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the registered  holders
of the Rights  Certificates.  Failure to give any  notice  provided  for in this
Section 21,  however,  or any defect  therein,  shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

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

                                      -34-
redemption or expiration of the Rights,  the Company (a) shall,  with respect to
shares of  Common  Stock so issued or sold  pursuant  to the  exercise  of stock
options  or under  any  employee  plan or  arrangement,  or upon  the  exercise,
conversion or exchange of securities  hereinafter issued by the Company, and (b)
may, in any other  case,  if deemed  necessary  or  appropriate  by the Board of
Directors of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection  with such issuance or sale;  provided,  however,
that (i) no such Rights  Certificate shall be issued if, and to the extent that,
the  Company  shall be advised  by counsel  that such  issuance  would  create a
significant  risk of  material  adverse tax  consequences  to the Company or the
Person to whom such Rights  Certificate would be issued, and (ii) no such Rights
Certificate  shall be issued if, and to the extent that  appropriate  adjustment
shall otherwise have been made in lieu of the issuance thereof.

                  Section 23.  Redemption and Termination.

                  (a)(i) The Board may,  at its  option,  at any time during the
period  commencing  on the Rights  Dividend  Declaration  Date and ending on the
earlier of (i) the close of business on the tenth  business  day  following  the
Stock  Acquisition  Date (or, if the Stock  Acquisition Date shall have occurred
prior to the  Record  Date,  the close of  business  on the tenth  business  day
following the Record  Date),  as such period may be extended or shortened in the
discretion of the Board of Directors (the "Redemption Period") or (ii) the Final
Expiration  Date,  cause the  Company to redeem all but not less than all of the
then outstanding  Rights at a redemption price of $.01 per Right, as such amount
may be  appropriately  adjusted to reflect any stock  split,  stock  dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided,  however, that, if
the Board authorizes redemption of the Rights in either of the circumstances set
forth in clauses (i) and (ii)  below,  then there must be  Continuing  Directors
then in  office  and such  authorization  shall  require  the  concurrence  of a
majority of such Continuing Directors: (i) such authorization occurs on or after
the time a Person becomes an Acquiring Person, or (ii) such authorization occurs
on or after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and regulations) in a majority of the
directors in office at the  commencement of such  solicitation if any Person who
is a  participant  in such  solicitation  has stated  (or,  if a majority of the
directors in office at the  commencement of such  solicitation has determined in
good faith) that such Person (or any of its Affiliates or Associates) intends to
take,  or may  consider  taking,  any action  which would  result in such Person
becoming an Acquiring Person or which would cause the occurrence of a Triggering
Event unless,  concurrently with such solicitation,  such Person (or one or more
of its  Affiliates or  Associates)  is making a cash tender offer  pursuant to a
Schedule  14D-1 (or any successor  form) filed with the  Securities and Exchange
Commission for all outstanding  shares of Common Stock not beneficially owned by
such Person (or by its Affiliates or Associates). Notwithstanding the foregoing,
but subject to 

                                      -35-
Section 23(a)(ii)  hereof,  the Board of Directors of the Company may not redeem
any Rights after the tenth  business day  following  the  effective  date of any
declaration  that any  Person is an  Adverse  Person  (as  provided  in  Section
11(a)(ii)(B)).

                  (ii) If, following the occurrence of a Stock  Acquisition Date
and/or  following the expiration of the right of redemption  hereunder but prior
to any  Triggering  Event,  (x) a Person who is an  Acquiring  Person shall have
transferred  or otherwise  disposed of a number of shares of Common Stock in one
transaction or series of transactions,  not directly or indirectly involving the
Company or any of its Subsidiaries,  which did not result in the occurrence of a
Triggering  Event such that such Person is thereafter a Beneficial Owner of less
than 10% of the outstanding  shares of Common Stock,  and (y) there are no other
Persons,  immediately  following the occurrence of the event described in clause
(x), who are Acquiring Persons or Adverse Persons,  then the right of redemption
shall be reinstated  and thereafter be subject to the provisions of this Section
23.

                  (iii) Notwithstanding  anything contained in this Agreement to
the contrary,  the Rights shall not be exercisable after the first occurrence of
a  Conversion  Triggering  Event  until  such  time as the  Company's  right  of
redemption hereunder has expired.

                  (iv) The Company may, at its option,  pay the Redemption Price
in cash, shares of Common Stock (based on the "current market price," as defined
in Section  11(d)(i)  hereof,  of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the Board of Directors.

                  (b)  Immediately  upon the action of the Board of Directors of
the Company ordering the redemption of the Rights,  evidence of which shall have
been filed with the Rights Agent and without any further  action and without any
notice,  the right to  exercise  the Rights  will  terminate  and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of Directors ordering
the redemption of the Rights,  the Company shall give notice of such  redemption
to the Rights  Agent and the holders of the then  outstanding  Rights by mailing
such notice to all such holders at each holder's last address as it appears upon
the registry  books of the Rights Agent or, prior to the  Distribution  Date, on
the registry books of the Transfer Agent for the Common Stock.  Any notice which
is mailed in the manner herein  provided  shall be deemed given,  whether or not
the holder  receives the notice.  Each such notice of redemption  will state the
method by which the payment of the Redemption Price will be made.

                  Section 24.  Exchange.

                  (a) The Board of  Directors of the Company may, at its option,
at any time  after any Person  becomes an  Acquiring  Person or is  declared  an
Adverse  

                                      -36-
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 shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to reflect any stock
split,  stock dividend or similar  transaction  occurring  after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").

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

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

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

                                      -37-
Section 25.  Notice of Certain Events.

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

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

                  Section 26.  Notices.  Notices or demands  authorized  by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently  given or made if sent by
first-

                                      -38-
class mail, postage prepaid addressed (until another address is filed in writing
with the Rights Agent) as follows:

                  Webster Financial Corporation
                  Webster Plaza
                  145 Bank Street
                  Waterbury, Connecticut  06702

                  Attention:        Corporate Secretary

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

                  Chemical Mellon Shareholder Services, L.L.C.
                  P. O. Box 24935
                  Church Street Station
                  New York, NY  10249

                  Attention:        Securityholder Relations

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

                  Section  27.   Supplements  and   Amendments.   Prior  to  the
Distribution  Date and subject to the  penultimate  sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any  provision  of this  Agreement  without the approval of any holders of
certificates   representing   shares  of  Common  Stock.   From  and  after  the
Distribution  Date and subject to the  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 Rights  Certificates
in order (i) to cure any ambiguity,  (ii) to correct or supplement any provision
contained  herein  which  may  be  defective  or  inconsistent  with  any  other
provisions  herein,  (iii) to shorten or lengthen any time period hereunder,  or
(iv) to change or supplement  the  provisions  hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person,
an Adverse  Person or an Affiliate or Associate of any such  Person);  provided,
this  Agreement  may not be  supplemented  or amended 

                                      -39-
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,  the Final  Expiration  Date, the Purchase
Price or the number of one  one-thousandths  of a share of  Preferred  Stock for
which a Right is exercisable.  Prior to the Distribution  Date, the interests of
the  holders of Rights  shall be deemed  coincident  with the  interests  of the
holders of Common Stock.

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

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

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

                                      -40-
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).

                  Section 31. Severability.  If any term, provision, covenant or
restriction  of this Agreement is held by a court of competent  jurisdiction  or
other  authority  to be invalid,  void or  unenforceable,  the  remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or invalidated;
provided,  however,  that  notwithstanding  anything  in this  Agreement  to the
contrary, if any such term,  provision,  covenant or restriction is held by such
court  or  authority  to be  invalid,  void or  unenforceable  and the  Board of
Directors of the Company determines in its good faith judgment that severing the
invalid  language  from this  Agreement  would  adversely  affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be  reinstated  and shall not expire  until the close of  business  on the
tenth  business day  following  the date of such  determination  by the Board of
Directors of the Company.

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

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

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

                                      -41-
IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  and  their  respective  corporate  seals  to be
hereunto affixed and attested, all as of the day and year first above written.

Attest:                                      WEBSTER FINANCIAL CORPORATION

By  /s/ Lee A. Gagnon                        By   /s/ James C. Smith
   ---------------------                         -------------------------
   Lee A. Gagnon                                 Name:  James C. Smith
   Title:  Secretary                             Title:  Chairman and Chief
                                                          Executive Officer

Attest:                                          CHEMICAL MELLON
                                                 SHAREHOLDER SERVICES, L.L.C.

By  /s/ James E. Hagen                       By   /s/ Michael A. Nespoli
   --------------------                          -------------------------
   Name: James E. Hagen                          Name: Michael A. Nespoli
   Title: Relationship Manager                   Title: Vice President

                                      -42-