UNITED COMPANIES FINANCIAL CORP, 8-A12G, 1994-08-05

UNITED COMPANIES FINANCIAL CORP
8-A12G, 1994-08-05
MORTGAGE BANKERS & LOAN CORRESPONDENTS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________

FORM 8-A

FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934

UNITED COMPANIES FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

LOUISIANA 71-0430414
(STATE OF INCORPORATION OR ORGANIZATION) (IRS EMPLOYER
IDENTIFICATION NO.)

4041 ESSEN LANE
BATON ROUGE, LOUISIANA 70809
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED

NONE NONE

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS
(TITLE OF CLASS)

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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.

On July 27, 1994, the Board of Directors of United Companies
Financial Corporation (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of common stock,
par value $2.00 per share (the "Common Shares"), of the Company. The dividend
is payable on August 6, 1994 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $2.00 per share (the "Preferred Shares"), of the Company at a
price of $240.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement dated as of July 27, 1994 (the "Rights
Agreement") between the Company and Chemical Bank, as Rights Agent (the "Rights
Agent").

Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, regardless of whether any such
certificate has a copy of the Summary of Rights attached thereto and no
separate Rights Certificates will be distributed. The Rights will separate
from the Common Shares and a Distribution Date will occur upon the earlier of
(i) 10 days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of 20% or more of the outstanding Common Shares, (ii) 10
business days (or such later date as may be determined by action of the Board
of Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 25% or more of such outstanding
Common Shares, or (iii) 10 days after the Board of Directors shall declare any
person to be an "Adverse Person," upon a determination that such person, alone
or together with its affiliates or associates have become the beneficial owner
of 10% or more of the outstanding Common Shares and a determination by at least
a majority of the Board of Directors who are not officers of the Company, after
reasonable inquiry and investigation, including consultation with such persons
as such directors shall deem 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 Shares beneficially owned by such person
or to cause pressure on the Company to take action or enter into a transaction
or series of transactions intended to provide such person with short-term
financial gain under circumstances where the Board of Directors determines that
the best long- term interests of the Company and its stockholders 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 is
reasonably likely to cause a material adverse impact (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. However, the Board of Directors may not declare a
person to be an Adverse Person if, prior to the time that the person acquired
10% or more of the Common Shares then outstanding, such person provided to the
Board of Directors in writing a statement of the person's purpose and
intentions in connection with the proposed acquisition of Common Shares,
together with any other information reasonably requested of the person by the
Board of Directors, and the Board of Directors, based on such statement and
reasonable inquiry and investigation as it deems appropriate, determines to
notify and notifies such person in writing that it will not declare the person
to be an Adverse Person;
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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 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, that such person has not met or complied
with any conditions specified by the Board of Directors, the Board of Directors
may at any time thereafter declare the person to be an Adverse Person.

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

The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 31, 2004 (the "Final Expiration Date"), unless the
Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.

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

The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or a
subdivision, consolidation or combination of the Common Shares occurring, in
any such case, prior to the Distribution Date.

2
<PAGE> 4
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $100.00 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.

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

In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold (a "flip-over event"), proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number
of shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that (i) any person or group of affiliated or associated
persons becomes the beneficial owner of 20% or more of the outstanding Common
Shares (unless such person first acquires 20% or more of the outstanding Common
Shares by a purchase pursuant to a tender offer for all of the Common Shares
which the independent directors determine to be fair to and otherwise in the
best interest of the Company and its shareholders, employees, customers and
communities in which the Company does business), (ii) any person is declared by
the Board of Directors to be an Adverse Person, (iii) an Acquiring Person
engages in one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person, there
shall be a reclassification of securities or a recapitalization or
reorganization of the Company or other transaction or series of transactions
involving the Company which has the effect of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its subsidiaries beneficially owned by the Acquiring
Person (each, a "flip-in event"), proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares (or, in the event that there are
insufficient authorized Common Shares, substitute consideration such as cash,
property, or other securities of the Company) having a market value of two
times the exercise price of the Right.

3
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such person or group which have become void), in whole or in part, at an
exchange ratio of one Common Share, or one one-hundredth of a Preferred Share
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).

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

At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"). After the redemption period has expired, the Company's
rights of redemption may be reinstated if, prior to any event triggering the
right to exchange the Rights for Common Shares or shares of an acquiring
company, an Acquiring Person reduces its beneficial ownership to 10% or less of
the outstanding Common Shares in a transaction or series of transactions not
involving the Company. The redemption of the rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.

The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) any percentage greater than the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons and (ii) 10%, except
that from and after such time as any person becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights.

Until a Right is exercised, the holder of a Right will not, by
reason of being such a holder, have rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.

The Rights Agreement, specifying the terms of the Rights, the Form
of Rights Certificate (Exhibit A to the Rights Agreement), and the Summary of
Rights to Purchase Preferred Shares (Exhibit B to the Rights Agreement) is
filed herein as Exhibit 1, and is incorporated herein in its entirety by
reference. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.

4
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The Company had previously entered into a Rights Agreement with
Manufacturers Hanover Trust Company (now Chemical Bank), dated February 1,
1989, pursuant to which a dividend of one preferred share purchase right (the
"1989 Rights") for each Common Share was authorized and declared. A Form 8-A
registering the 1989 Rights was filed with the Commission in February, 1989.
By authorization of the Board of Directors, all of the 1989 Rights under such
1989 Rights Agreement have been redeemed.

5
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Item 2. EXHIBITS.

1. Rights Agreement dated as of July 27, 1994, between United
Companies Financial Corporation and Chemical Bank, as Rights
Agent, which includes the Form of Right Certificate (attached
as Exhibit A to the Rights Agreement), and the Summary of
Rights to Purchase Preferred Shares (attached as Exhibit B to
the Rights Agreement). Pursuant to the Rights Agreement,
printed Right Certificates will not be mailed until as soon as
practicable after the earlier of (i) the tenth day after
public announcement that a person or group has acquired
beneficial ownership of 20% or more of the Common Shares, (ii)
the tenth business day (or such later date as may be
determined by action of the Board of Directors) after a person
commences, or announces its intention to commence, a tender
offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 25% or
more of the Common Shares, or (iii) the tenth day after the
Board of Directors declares any person to be an "Adverse
Person" pursuant to the provisions of the Rights Agreement.

2. Articles of Amendment to Articles of Incorporation of the
Company dated February 1, 1989, establishing Series A Junior
Participating Preferred Stock, par value $2.00 per share.

3. Articles of Amendment to Articles of Incorporation of the
Company dated July 27, 1994, increasing the number of
authorized shares of Series A Junior Participating Preferred
Stock, par value $2.00 per share.

4. Press Release of United Companies Financial Corporation dated
July 29, 1994.

5. Letter to Shareholders of United Companies Financial
Corporation dated August 4, 1994.

6
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SIGNATURE

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.

August 4, 1994.

UNITED COMPANIES
FINANCIAL CORPORATION

By: /s/ SHERRY E. ANDERSON
_______________________________________
Sherry E. Anderson
Senior Vice President and Secretary

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Exhibit Index

<TABLE>
<CAPTION>
Sequential
Exhibit Description Page No.
------- ----------- ----------
<S> <C> <C>
1 Rights Agreement dated as of July 27, 1994, between United Companies
Financial Corporation and Chemical Bank, as Rights Agent, which
includes the Form of Right Certificate (attached as Exhibit A to the
Rights Agreement), and the Summary of Rights to Purchase Preferred
Shares (attached as Exhibit B to the Rights Agreement). Pursuant to
the Rights Agreement, printed Right Certificates will not be mailed
until as soon as practicable after the earlier of (i) the tenth day
after public announcement that a person or group has acquired
beneficial ownership of 20% or more of the Common Shares, (ii) the
tenth business day (or such later date as may be determined by action
of the Board of Directors) after a person commences, or announces its
intention to commence, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a
person or group of 25% or more of the Common Shares, or (iii) the
tenth day after the Board of Directors declares any person to be an
"Adverse Person" pursuant to the provisions of the Rights Agreement.

2 Articles of Amendment to Articles of Incorporation of the Company
dated February 1, 1989, establishing Series A Junior Participating
Preferred Stock, par value $2.00 per share.

3 Articles of Amendment to Articles of Incorporation of the Company
dated July 27, 1994, increasing the number of authorized shares of
Series A Junior Participating Preferred Stock, par value $2.00 per
share.

4 Press Release of United Companies Financial Corporation dated July 29,
1994.

5 Letter to Shareholders of United Companies Financial Corporation dated
August 4, 1994.
</TABLE>

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EXHIBIT 1

UNITED COMPANIES FINANCIAL CORPORATION

and

CHEMICAL BANK

Rights Agent

Rights Agreement

Dated as of July 27, 1994

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TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 9. Availability of Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . . . . . 9
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . . . . 17
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>

i
<PAGE> 3
TABLE OF CONTENTS
(Continued)

<TABLE>
<S> <C> <C>
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 28. Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 29. Determinations and Actions by the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 30. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 31. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 34. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 35. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Exhibit A Form of Right Certificate
Exhibit B Summary of Rights to Purchase Preferred Shaes

</TABLE>

<PAGE> 4

RIGHTS AGREEMENT

Agreement, dated as of July 27, 1994 between United Companies
Financial Corporation, a Louisiana corporation (the "Company"), and Chemical
Bank (the "Rights Agent").

The Company entered into a Rights Agreement with Manufacturers Hanover
Trust Company, dated February 1, 1989, pursuant to which a dividend of one
preferred share purchase right for each Common Share was authorized and
declared. By authorization of the Board of Directors, all of the rights under
said 1989 Rights Agreement have been redeemed.

Pursuant to this Agreement, the Board of Directors of the Company has
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding on August 6, 1994 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and
has further authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).

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

SECTION 1. CERTAIN DEFINITIONS

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

(a) "Acquiring Person'' shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the Common Shares
of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit plan of the Company (including without limitation the Plans) or of any
Subsidiary of the Company, or of any entity holding Common Shares for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 20% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be an "Acquiring Person".

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

(c) "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)(C) apply to such Person.

<PAGE> 5
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.

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

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

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

(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated
by the proviso to Section l(d)(ii)(B)) or disposing of any securities of
the Company; provided, however, that in no case shall an officer or
director of the Company be deemed the Beneficial Owner of securities held
of record by the trustee of any employee benefit plan of the Company
(including without limitation the Plans) or any Subsidiary of the Company
for the benefit of any employee of the Company or any Subsidiary of the
Company, other than the officer or director, by reason of any influence
that such officer or director may have over the voting of the securities
held in the plan.

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

<PAGE> 6
(f) "Business Day'' shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

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

(h) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $2.00 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-mentioned
Person.

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

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

(k) "Employee Plans" shall mean the United Companies Financial
Corporation Employee Stock Ownership Plan and Trust and the United Companies
Financial Corporation Employees Savings Plan and Trust, or either of them, and
any successor to either of them.

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

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

(n) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $2.00 per share, of the Company having
the rights and preferences set forth in Section 5 of Article III of the
Articles of Incorporation.

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

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

(q) "Registered Common Shares" shall have the meaning set forth in
Section 13(d) hereof.

(r) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such or
such earlier date as a majority of the directors of the Company shall become
aware of the existence of an Acquiring Person.

(s) "Spread" shall have the maning set forth in Section 11(a)(iv)
hereof.

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

<PAGE> 7
(u) "Substitution Period" shall have the meaning set forth in Section
11(a)(iv) hereof.

(v) "Trading Day" shall have the meaning set forth in Section
11(a)(iv) hereof.

(w) A "Trigger Event'' shall be deemed to have occurred upon any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company (including without limitation the Plans) or of any
Subsidiary of the Company, or of any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becoming the Beneficial Owner of 25% or more of the
Common Shares of the Company then outstanding. Notwithstanding the foregoing,
no Trigger Event shall be deemed to have occurred as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person, together with all Affiliates and Associates of such
Person, to 25% or more of the Common Shares of the Company then outstanding,
provided, however, that in the event that a Person shall become the Beneficial
Owner of 25% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company, a Trigger Event shall be deemed to
have occurred upon such Person, after such share purchases by the Company,
becoming the Beneficial Owner of any additional Common Shares of the Company.

SECTION 2. APPOINTMENT OF RIGHTS AGENT

The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable.

SECTION 3. ISSUE OF RIGHT CERTIFICATES

(a) Until the earlier of the close of business on (i) the tenth day
after the Shares Acquisition Date, (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company (including without limitation
the Plans) or of any Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company (including
without limitation the Plans) or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of Common Shares aggregating 25% or
more of the then outstanding Common Shares (irrespective of whether any Common
Shares are actually purchased pursuant to such offer) (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights), or (iii) the tenth day after the Board of Directors determines,
pursuant to the criteria set forth in Section 11(a)(ii)(C) hereof, that a
Person is an Adverse Person (the earliest of such dates being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates, and

<PAGE> 8
(y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right for each Common Share so held. As of
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

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

(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:

This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between United
Companies Financial Corporation and Chemical Bank, dated as of
July 27, 1994 (the ''Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of United Companies
Financial Corporation. 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. United Companies Financial Corporation will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring Person (as
defined in the Rights Agreement) may become null and void.

With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the

<PAGE> 9
Distribution Date, the Company shall not be entitled to exercise any Rights
associated with such Common Shares while they are not outstanding.

SECTION 4. FORM OF RIGHT CERTIFICATES

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

SECTION 5. COUNTERSIGNATURE AND REGISTRATION

The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its President, or any
of its Executive Vice Presidents, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile

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

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

SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES

Subject to the provisions of Section 14 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates

<PAGE> 10
representing Rights that have become void pursuant to Section 11(a)(ii) hereof
or that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.

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

SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS

(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on July 31, 2004 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.

(b) The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall initially be $240, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.

(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof by cash, certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent
depositary receipts

<PAGE> 11
representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated
by such holder and (iv) when appropriate, after receipt, deliver such cash to
or upon the order of the registered holder of such Right Certificate.

(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.

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

SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES

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

SECTION 9. AVAILABILITY OF PREFERRED SHARES

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

The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to
deliver

<PAGE> 12
any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.

SECTION 10. PREFERRED SHARES RECORD DATE

Each person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred 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 OF SHARES OR NUMBER OF RIGHTS

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

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

(ii) Subject to Section 24 of this Agreement, in the event:

<PAGE> 13

(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, (1) shall merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and Common Shares
of the Company shall remain outstanding and unchanged, (2) shall, in
one transaction or a series of transactions, transfer any assets to
the Company or to any of its Subsidiaries in exchange (in whole or in
part) for shares of Common Shares of the Company, for other equity
securities of the Company or of any such Subsidiary, or for securities
exercisable for or convertible into shares of equity securities of the
Company or of any of its Subsidiaries (whether Common Shares of the
Company or otherwise) or otherwise obtain from the Company or any of
its Subsidiaries, with or without consideration, any additional shares
of such equity securities or securities exercisable for or convertible
into such equity securities (other than pursuant to a pro rata
distribution to all holders of Common Shares of the Company), (3)
shall sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with (as the case may be) the Company or any
of its Subsidiaries or any employee benefit plan maintained by the
Company (including without limitation the Plans) or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, assets (including securities) on terms and
conditions less favorable to the Company or such Subsidiary or plan
than those that could have been obtained in arm's-length negotiations
with an unaffiliated third party, other than pursuant to a transaction
set forth in Section 13 hereof, (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of in one transaction or a series of transactions, to, from or with
the Company or any of the Company's Subsidiaries or any employee
benefit plan maintained by the Company (including without limitation
the Plans) or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity (other than transactions,
if any, consistent with those engaged in, as of the date hereof, by
the Company and such Acquiring Person or Affiliate), assets (including
securities) having an aggregate fair market value of more than
$50,000,000, other than pursuant to a transaction set
forth in Section 13 hereof, (5) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of in one
transaction or a series of transactions, to, from or with the Company
or any of its Subsidiaries or any employee benefit plan maintained by
the Company (including without limitation the Plans) or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, any material trademark or material service
mark, other than pursuant to a transaction set forth in Section 13
hereof, (6) shall receive any compensation from the Company or any of
its Subsidiaries other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (7) shall receive the benefit,
directly or indirectly (except proportionately as a shareholder or as
required by law or governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its
Subsidiaries or any employee benefit plan maintained by the Company
(including without limitation the Plans) or any of its Subsidiaries;
or

<PAGE> 14
(B) a Trigger Event shall have occurred (other than through
an acquisition described in subparagraph (iii) of this paragraph (a));
or

(C) subject to the provisions of this Section 11(a)(ii) set
forth below, the Board of Directors shall declare any Person to be an
Adverse Person, upon (1) a determination that such Person, alone or
together with its Affiliates and Associates, has, at any time after
the date hereof, become the Beneficial Owner of 10% or more of the
Common Shares and (2) a determination by at least a majority of the
members of the Board of Directors who are not officers of the Company
and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after reasonable inquiry and investigation,
including consultation with such persons as such directors shall deem
appropriate, that (x) such Beneficial Ownership by such Person is
intended to cause, is reasonably likely to cause or will cause the
Company to repurchase Common Shares 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 determines 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 (y) such
Beneficial Ownership is causing or reasonably likely to cause a
material adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Companys ability to
maintain its competitive position) on the business or prospects of the
Company; or

(D) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization or reorganization of the Company or
other transaction or series of transactions involving the Company
which has the effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its Subsidiaries
beneficially owned by any Acquiring Person or any Affiliate or
Associate thereof,

each holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company (such number of
shares being referred to herein as the "Adjustment Shares") as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of the Company's Common Shares (determined pursuant to Section
11(d) hereof) on the date of the occurrence of the earliest of the events
described in clauses (A), (B), (C) and (D) above. Notwithstanding the
provisions of Section 11(a)(ii)(C), 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 Common Shares, 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 Shares,
together with any other information reasonably requested of such

<PAGE> 15
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 Persons not acquiring more than a specified amount of
Common Shares 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).

From and after the occurrence of the earlier of the events described
in clauses (A), (B), (C) and (D) above, any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) shall be void and any holder of such Rights (including
any subsequent transferee) shall thereafter have no right to exercise such
Rights under any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
shall be cancelled.

(iii) The right to buy Common Shares of the Company pursuant to
subparagraph (ii) of this paragraph (a) shall not arise as a result of any
Person becoming an Acquiring Person through a purchase of Common Shares
pursuant to a tender offer made in the manner prescribed by Section 14(d) of
the Exchange Act and the rules and regulations promulgated thereunder;
provided, however, that such tender offer shall provide for the acquisition of
all of the outstanding Common Shares held by any Person other than such Person
and its Affiliates or Associates at a price and on terms determined by at least
a majority of the members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one or more investment or
financial advisers, to be (A) fair to stockholders (taking into account all
factors which such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (B)
otherwise in the best interests of the Company and its stockholders, employees,
customers and communities in which the Company does business.

(iv) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value"),
over (2) the Purchase

<PAGE> 16
Price (such excess being hereinafter referred to as the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute for such
unavailable Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of
the Company, including without limitation, Preferred Shares, (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having, together with the Adjustment Shares issued upon exercise of
such Right, an aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall have
not made adequate provision to deliver value pursuant to clause (B) above
within 30 days following the date of the occurrence of the earliest of the
events described in clauses (A), (B), (C) and (D) of Section 11(a)(ii) above,
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, Common Shares
(to the extent such shares are available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days following the date
of the occurrence of the earliest of the events described in clauses (A), (B),
(C) and (D) of Section 11(a)(ii) above, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such
period, as it may be extended, hereinafter referred to as the "Substitution
Period"). To the extent that the Company determines that action need be taken
pursuant to the first and/or second sentences of this Section 11(a)(iv), the
Company (x) shall provide, subject to Section 11(a)(ii) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period 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)(iv), the value of the Common Shares shall be the current per
share market price (as determined pursuant to Section 11(d) hereof) per Common
Share on the date of the occurrence of the earliest of the events described in
clauses (A), (B), (C) and (D) of Section 11(a)(ii) above.

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

<PAGE> 17
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such
record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.

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

(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to

<PAGE> 18
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last reported
trade in the over-the-counter market, as reported by the NASDAQ National Market
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.

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

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

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

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

<PAGE> 19
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of
a Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-hundredths 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 substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.

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

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

<PAGE> 20
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.

(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares 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, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o)), (ii) permit or cause any Person to consolidate
with the Company, or merge with and into the Company (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o)), or (iii)
sell or otherwise transfer (or permit any Subsidiary to sell or transfer), in
one or more transactions, assets or earning power aggregating 50% or more 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)), if at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.

(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary of the Company 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) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares

<PAGE> 21
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.

SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES

Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.

SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER

(a) If, following the Distribution Date, directly or indirectly, (i)
the Company shall consolidate with, or merge with and into, any other Person
and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all
or part of the Common Shares shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any other
property, (iii) any Person shall acquire all or a majority of the Common Shares
pursuant to a statutory plan of exchange, or (iv) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more of
its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (A) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof
at a price equal to the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of the Principal Party (as hereinafter defined),
not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall equal the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (2) 50% of
the then current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof) of such Principal Party on the date of
consummation of such consolidation, merger, sale or transfer; (B) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (C) the term "Company" shall thereafter
be deemed to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 shall apply only to such Principal Party after
the first occurrence of an event described in this Section 13(a); (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be

<PAGE> 22
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights; and (E) the provisions of Section
11(a)(ii) shall be of no further effect following the first occurrence of any
event described in this Section 13(a).

(b) "Principal Party" shall mean:

(i) in the case of any transaction described in clause (i), (ii)
or (iii) of Section 13(a), (A) the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger, consolidation or for which they are exchanged in such statutory
plan of exchange, or, if there is more than one such issuer, the issuer of
Common Shares that has the highest aggregate current market price
(determined in accordance with Section 11(d)) and (B) if no securities are
so issued, the Person that is the other party to such merger,
consolidation or statutory plan of exchange, or, if there is more than one
such Person, the Person the Common Shares of which has the highest
aggregate current market price (determined in accordance with Section
11(d)); and

(ii) in the case of any transaction described in clause (iv) of
Section 13(a), the Person that is the party receiving the largest portion
of the assets or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power
transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Shares of which has the highest
aggregate current market price (determined in accordance with Section
11(d));

provided, however, that in any such case, (A) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("Registered Common Shares"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person that has Registered
Common Shares outstanding, "Principal Party" shall refer to such other Person;
(B) if the Common Shares of such Person are not Registered Common Shares or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person but is not a direct or indirect Subsidiary of
another Person which has Registered Common Shares outstanding, "Principal
Party" shall refer to the ultimate parent entity of such first-mentioned
Person; (C) if the Common Shares of such Person are not Registered Common
Shares or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and one or more of such other
Persons has Registered Common Shares outstanding, "Principal Party" shall refer
to whichever of such other Persons is the issuer of the Registered Common
Shares having the highest aggregate current market price (determined in
accordance with Section 11(d)); and (D) if the Common Shares of such Person are
not Registered Common Shares or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person, and none
of such other Persons have Registered Common Shares outstanding, "Principal
Party" shall refer to whichever ultimate parent entity is the corporation
having the greatest shareholders equity or, if no such ultimate parent entity
is a corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.

(c) The Company shall not consummate any such consolidation, merger,
statutory plan of exchange, sale or transfer unless prior thereto the Company
and the Principal Party shall have

<PAGE> 23
executed and delivered to the Rights Agent a supplemental agreement confirming
that (i) such Principal Party shall, upon consummation of such consolidation,
merger, statutory plan of exchange or sale or transfer of assets or earning
power, assume this Agreement in accordance with Section 13, (ii) all rights of
first refusal or preemptive rights in respect of the issuance of Common Shares
of such Principal Party upon exercise of outstanding Rights have been waived,
(iii) any provision of the authorized securities of such Principal Party or of
its charter, bylaws or other instruments governing its corporate affairs which
would obligate such Principal Party to issue in connection with, or as a
consequence of, the consummation of a transaction referred to in Section 13(a),
Common Shares of such Principal Party at less than the then current per share
market price (determined in accordance with Section 11(d)(i)) or securities
exercisable for, or convertible into, such Common Shares at less than such then
current per share market price (other than to the holders of Rights pursuant to
this Section 13 have been waived or canceled, and (iv) such transaction shall
not result in a default by such Principal Party under this Agreement and
further providing that, as soon as practicable after the date of any
consolidation, merger, statutory plan of exchange or sale or transfer of assets
or earning power referred to in Section 13(a), such Principal Party will:

(A) prepare and file a registration statement under the Securites
Act of 1933, as amended, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective as
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act of 1933, as amended)
until the Final Expiration Date of the Rights, and similarly comply with
applicable state securities laws;

(B) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights or to
meet the eligibility requirements for quotation of the Rights and such
securities on NASDAQ or other system then in use; and

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

In the event that at any time after the occurence of an event
described in Section 11(a)(ii) hereof some or all of the Rights shall no have
then been exercised at the time of the occurrence of an event described in
Section 13(a) hereof, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 13(a)
(without taking into account any prior adjustment required by Section
11(a)(ii)).

(d) the provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.

(e) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not be applicable to a transaction described in Section
13(a)(i), (ii) or (iii) if: (i) such transaction is consummated with a Person
or Persons who acquired Common Shares pursuant to a tender offer described in
Section 11(a)(iii) (or with a wholly-owned Subsidiary of any such Person or
Persons), (ii) the price per Common Share offered in such transaction is not
less than the price per Common Share paid to all holders of Common Shares
whose shares were puchased pursuant to such tender or

20
<PAGE> 24
exchange offer, and (iii) the form of consideration being offered to the
remaining holders of Common Shares pursuant to such transaction is the same as
the form of consideration paid pursuant to such tender offer. Upon consummation
of any such transaction contemplated by this Section 13(a), all Rights shall
expire.

SECTION 14. FRACTION RIGHTS AND FRACTION SHARES

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

(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Preferred Share. For the
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.

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

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<PAGE> 25
SECTION 15. RIGHTS OF ACTION

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

SECTION 16. AGREEMENT OF RIGHT HOLDERS

Every holder of a Right, by accepting the same, consents and agrees
with the Company and with every other holder of a Right that:

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

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

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

SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER

No holder of any Right Certificate, by reason of being a holder of
such Right Certificate, shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, by reason of being a holder of such Right Certificate, 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 Right Certificate shall have been
exercised in accordance with the provisions hereof.

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<PAGE> 26
SECTION 18. CONCERNING THE RIGHTS AGENT

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

The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT

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

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

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<PAGE> 27
SECTION 20. DUTIES OF RIGHTS AGENT

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

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

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

(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.

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

(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

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<PAGE> 28
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

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

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

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

SECTION 21. CHANGE OF RIGHTS AGENT

The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
any state of the United States so long as such corporation is authorized to do
business as a banking institution, is authorized under such laws to exercise
corporate trust or stock transfer powers, is in good standing, and is subject
to supervision or examination by federal or state authority, and has at the
time of its appointment as Rights Agent a

25
<PAGE> 29
combined capital and surplus of at least $50 million. 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 with the predecessor Rights Agent and
each transfer agent of the Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES

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

SECTION 23. REDEMPTION

(a) The Board of Directors of the Company may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person, redeem all
but not less than all the then outstanding Rights at a redemption price of
$0.001 per Right, 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, following the occurrence of a Shares Acquisition
- --------- --------
Date and following the expiration of the right of redemption hereunder but
prior to any event described in clauses (A), (B), (C) or (D) of Section
11(a)(ii) or clauses (i), (ii), (iii) or (iv) of Section 13(a) hereof, (i) a
Person who is an Acquiring Person shall have transferred or otherwise disposed
of a number of shares of Common Shares 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 an event described in
clauses (A), (B), (C) or (D) of Section 11(a)(ii) or clauses (i), (ii), (iii)
or (iv) of Section 13(a) hereof such that such Person is thereafter a
Beneficial Owner of 10% or less of the outstanding Common Shares, and (ii)
there are no other Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23. The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. The Company may, in
its discretion, round up the redemption price to be paid to any holder of
Rights to the nearest whole cent.

(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
--------- --------
to give, or any defect in,

26
<PAGE> 30
any such notice shall not affect the validity of such redemption. Within 10
days after such action of the Board of Directors ordering the redemption of the
Rights, the Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.

SECTION 24. EXCHANGE

(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company (including without limitation the Plans) or of any
such Subsidiary, or of any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 25% or more of the Common Shares then
outstanding.

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

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

27
<PAGE> 31

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

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

SECTION 25. NOTICE OF CERTAIN EVENTS

(a) In case the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or 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 Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.

(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.

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<PAGE> 32
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 Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:

United Companies Financial Corporation
One United Plaza
4041 Essen Lane
P. O. Box 1591
Baton Rouge, LA 90821
Attention: Corporate Secretary

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

Chemical Bank
450 West 33rd Street
15th Floor
New York, NY 10001
Attention: Vice President-Equity Relationship Management

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

SECTION 27. SUPPLEMENTS AND AMENDMENTS

The Company may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company may deem
necessary or desirable, any such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights. Without limiting the foregoing, the Company
may at any time prior to such time as any Person becomes an Acquiring Person
amend this Agreement to lower the thresholds set forth in Sections l(a) and
3(a) to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Common Shares then known by the Company
to be beneficially owned 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 entity holding Common Shares for or pursuant to the terms
of any such plan) and (ii) 10%.

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<PAGE> 33
SECTION 28. REGISTRATION OF SECURITIES

The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days, the exercisability of the Rights in order to prepare
and file, if deemed necessary by the Company, such registration statements and
other filings under the Securities Act of 1933, as amended, and the securities
or "blue sky" laws of any state, with respect to any securities purchasable
upon the exercise of the Rights, and to permit the same 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 has been obtained.

SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS

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

SECTION 30. 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 31. BENEFITS OF THIS AGREEMENT

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

SECTION 32. 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.

30
<PAGE> 34
SECTION 33. GOVERNING LAW

This Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Louisiana and for
all purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed entirely within
such State, except that the rights, duties and obligations of Chemical Bank
under this Agreement shall be governed by the laws of the State of New York.

SECTION 34. 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.

31
<PAGE> 35

SECTION 35. DESCRIPTIVE HEADINGS

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

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

UNITED COMPANIES FINANCIAL CORPORATION
Attest:

By___________________________ By______________________________________
Sherry E. Anderson J. Terrell Brown
Secretary Chief Executive Officer and President

CHEMICAL BANK
Attest:

By___________________________ By______________________________________
Title: Title:

32
<PAGE> 36
EXHIBIT A

FORM OF RIGHT CERTIFICATE

Certificate No. R- _______ Rights

NOT EXERCISABLE AFTER (JULY 31, 2004 )OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT.

RIGHT CERTIFICATE
UNITED COMPANIES FINANCIAL CORPORATION

This certifies that _______________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of July 27, 1994 (the "Rights
Agreement"), between United Companies Financial Corporation, a Louisiana
corporation (the "Company"), and Chemical Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., New York City time,
on July 31, 2004 at the principal office of the Rights Agent, or at the office
of its successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series A Junior Participating Preferred
Stock, par value $2.00 per share (the "Preferred Shares"), of the Company, at a
purchase price of $240.00 per one one-hundredth of a Preferred Share (the
"Purchase Price") payable as provided in the Rights Agreement, upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and
the number of one one-hundredths of a Preferred Share which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of July 27, 1994, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.

This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of the rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of

A-1
<PAGE> 37
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.

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

Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $0.001 per Right or (ii) may be exchanged in whole or in
part for Preferred Shares or shares of the Company's Common Stock, par value
$2.00 per share.

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

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

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

A-2

<PAGE> 38
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________, ____.

ATTEST: UNITED COMPANIES FINANCIAL
CORPORATION

_____________________________ By_____________________________

Countersigned:
CHEMICAL BANK

By___________________________
Authorized Signature

A-3
<PAGE> 39
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)

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

Signature
Signature Guaranteed:

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

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

Signature
_______________________________________________________________________

A-4
<PAGE> 40
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)

To UNITED COMPANIES FINANCIAL CORPORATION:

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

Please insert social security
or other identifying number

________________________________________________________________________________
(Please print name and address)

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

Please insert social security
or other identifying number

________________________________________________________________________________
(Please print name and address)

________________________________________________________________________________
Dated: __________________, ____.

Signature
Signature Guaranteed:

_________________________________________________________________________

A-5
<PAGE> 41

Form of Reverse Side of Right Certificate -- continued

Signature
________________________________________________________________________

NOTICE

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

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

A-6
<PAGE> 42
EXHIBIT B

SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES

B-1

<PAGE> 43
position) on the business or prospects of the Company. However, the Board of
Directors may not declare a Person to be an Adverse Person if, prior to the
time that the Person acquired 10% or more of the Common Shares then
outstanding, such Person provided to the Board of Directors in writing a
statement of the Person's purpose and intentions in connection with the
proposed acquisition of Common Shares, together with any other information
reasonably requested of the Person by the Board of Directors, and the Board of
Directors, based on such statement and reasonable inquiry and investigation as
it deems appropriate, determines to notify and notifies such Person in writing
that it will not declare the 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 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, that such Person has not met or complied with any conditions
specified by the Board of Directors, the Board of Directors may at any time
thereafter declare the Person to be an Adverse Person.

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

The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 31, 2004 (the "Final Expiration Date''), unless the
Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.

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

B-2
<PAGE> 44
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or a
subdivision, consolidation or combination of the Common Shares occurring, in
any such case, prior to the Distribution Date.

Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per Common Share.
In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100.00 per share but
will be entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Preferred Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.

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

In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold (a "flip-over event"), proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number
of shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that (i) any person or group of affiliated or associated
persons becomes the beneficial owner of 25% or more of the outstanding Common
Shares (unless such person first acquires 25% or more of the outstanding Common
Shares by a purchase pursuant to a tender offer for all of the Common Shares
which the independent directors determine to be fair to and otherwise in the
best interests of the Company and its shareholders, employees, customers and
communities in which the Company does business), (ii) any person is declared by
the Board of Directors to be an Adverse Person, (iii) an Acquiring Person
engages in one or more "self-dealing" transactions as set forth in the Rights
Agreement or (iv) during such time as there is an Acquiring Person, there shall
be a reclassification of securities or a recapitalization or reorganization of
the Company or other transaction or series of transactions involving the
Company which has the effect of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the
Company or any of its subsidiaries beneficially owned by the Acquiring Person
(each a "flip-in" event), proper provision shall be made so that each holder of
a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares (or, in the event that there are
insufficient authorized Common Shares, substitute consideration such as cash,
property, or other securities of the Company) having a market value of two
times the exercise price of the Right.

B-3
<PAGE> 45
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares and prior to the acquisition by such person or group
of 25% or more of the outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
Common Share, or one one-hundredth of a Preferred Share (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).

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

At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $0.001 per Right (the
"Redemption Price"). After the redemption period has expired, the Company's
rights of redemption may be reinstated if, prior to any event triggering the
right to exchange the Rights for Common Shares or shares of an acquiring
company, an Acquiring Person reduces its beneficial ownership to 10% or less of
the outstanding Common Shares in a transaction or series of transactions not
involving the Company. The redemption of the rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.

The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) any percentage greater than the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons and (ii) 10%, except
that from and after such time as any person becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights.

B-4
<PAGE> 46
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.

B-5

<PAGE> 1
EXHIBIT 2

ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
UNITED COMPANIES FINANCIAL CORPORATION

On February 1, 1989, pursuant to the authority granted to and vested
in the Board of Directors (hereinafter called the "Board of Directors" or the
"Board") of United Companies Financial Corporation, a corporation organized and
existing under the Louisiana Business Corporation Law (hereinafter called the
"Corporation"), and in accordance with the provisions of Section 33 of the
Louisiana Business Corporation Law and Article III of the Corporation's
Articles of Incorporation (the "Articles of Incorporation") , the Board of
Directors voted in favor of amending Article III of the Articles of
Incorporation to add Section 5 to Article III of the Articles of Incorporation
to create a series of Preferred Stock, par value $2.00 per share (the
"Preferred Stock"), of the Corporation and to state the designation and number
of shares, and to fix the preferences, limitations and relative rights thereof,
all as set forth hereinafter.

"Section 5--Series A Junior Participating Preferred Stock:

Paragraph 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 200,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

Paragraph 2. Dividends and Distributions.

(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $2.00 per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the

1
<PAGE> 2
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Paragraph 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.

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

(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend, in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately. after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.

2
<PAGE> 3
(B) Except as otherwise provided herein, in any other Articles of
Amendment to the Articles of Incorporation creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of shareholders of the Corporation.

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

Paragraph 4. Certain Restrictions.

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

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

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

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

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

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

3
<PAGE> 4
Paragraph 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Articles of
Amendment to the Articles of Incorporation creating a series of Preferred Stock
or any similar stock or as otherwise required by law.

Paragraph 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

Paragraph 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock), then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding

4
<PAGE> 5
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

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

Paragraph 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.

Paragraph 10. Amendment. The Articles of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without, in addition to any other vote of shareholders required
by law, the affirmative vote of the holders of at least eighty percent of the
outstanding shares of Series A Preferred Stock, voting together as a single
class."

Executed this 1st day of February, 1989 by the undersigned officers of
the Corporation in the presence of the undersigned competent witnesses.

WITNESSES: UNITED COMPANIES FINANCIAL
CORPORATION

/s/ CONSTANCE E. BAGLEY By: /s/ J. TERRELL BROWN
_______________________ ______________________________
J. Terrell Brown, President

/s/ DEANNA SMITH By: /s/ DALE E. REDMAN
_______________________ ______________________________
Dale E. Redman, Secretary

5
<PAGE> 6

STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE

I, Lee C. Kantrow, a Notary Public, do hereby certify that on this 1st
day of February, 1989, personally appeared before me J. TERRELL BROWN and DALE
E. REDMAN, who, being by me first duly sworn, declared that they are the
President and Secretary, respectively, of United Companies Financial
Corporation, that they signed the foregoing document as President and
Secretary, respectively, of that Corporation and the statements contained
therein are true.

/s/ LEE C. KANTROW
_______________________________
Notary Public

<PAGE> 1
EXHIBIT 3

ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
UNITED COMPANIES FINANCIAL CORPORATION

On July 27, 1994, pursuant to the authority granted to and vested in
the Board of Directors (hereinafter called the "Board of Directors" or the
"Board") of United Companies Financial Corporation, a corporation organized and
existing under the Louisiana Business Corporation Law (hereinafter called the
"Corporation"), and in accordance with the provisions of Section 33 of the
Louisiana Business Corporation Law and Article III of the Corporation's
Articles of Incorporation (the "Articles of Incorporation"), the Board of
Directors voted in favor of amending Paragraph 1 of Section 5 of Article III of
the Articles of Incorporation to increase the number of shares of the Series A
Junior Participating Preferred Stock from "200,000" to "1,000,000".
Accordingly, the first sentence of Paragraph 1 of Section 5 of Article III of
the Articles of Incorporation is hereby amended and restated to read as
follows:

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

Executed this 27th day of July, 1994, by the undersigned officers of
the Corporation in the presence of the undersigned competent witnesses.

WITNESSES: UNITED COMPANIES FINANCIAL
CORPORATION

/s/ DALE E. REDMAN By: /s/ J. TERRELL BROWN
______________________________ _________________________________
J. Terrell Brown, President
and Chief Executive Officer

/s/ ANNE GAUBE By: /s/ SHERRY E. ANDERSON
______________________________ _________________________________
Sherry E. Anderson, Secretary

<PAGE> 2
STATE OF LOUISIANA

PARISH OF EAST BATON ROUGE

I, Lee C. Kantrow, a Notary Public in and for the Parish and State
aforesaid, do hereby certify that on this 27th day of July, 1994, personally
appeared before me J. TERRELL BROWN and SHERRY E. ANDERSON, who, being by me
first duly sworn, declared that they are the President and Chief Executive
Officer and Secretary, respectively, of United Companies Financial Corporation,
that they signed the foregoing document as President and Chief Executive
Officer and Secretary, respectively, of that Corporation and the statements
contained therein are true.

/s/ LEE C. KANTROW
____________________________________
Lee C. Kantrow
Notary Public

<PAGE> 1
EXHIBIT 4

UNITED COMPANIES FINANCIAL CORPORATION
PRESS RELEASE
JULY 29, 1994

UCFC DECLARES QUARTERLY DIVIDEND, ADOPTS NEW RIGHTS PLAN

BATON ROUGE - United Companies Financial Corporation (NASDAQ:UCFC)
announced today that its Board of Directors has declared a regular quarterly
cash dividend of 10 cents ($.10) per share for the third quarter of 1994.

The dividend is payable on October 1, 1994 to all shareholders of
record of its common stock as of the close of business on September 15, 1994.
This marks the 122nd consecutive quarter in which United Companies has paid a
cash and/or stock dividend since going public in 1963.

In addition, the Board also announced today that it has redeemed the
rights previously issued under its shareholder rights plan adopted in 1989.
The Board also adopted a new shareholder rights plan and declared a dividend
distribution under the new plan of one preferred share purchase right for each
outstanding share of the Company's common stock.

"The rights plan is designed to assure that all shareholders of the
Company receive fair value for their common shares in the event of any proposed
takeover of the Company and to guard against the use of partial tender offers
or other coercive tactics to gain control of the Company without offering fair
value to the Company's shareholders," said J. Terrell Brown, President & Chief
Executive Officer of United Companies.

The new shareholder rights plan is an update of the Company's
previously existing rights plan. The rights become exercisable and trade
separately when a person or group acquires beneficial ownership of 20% or more
of the common shares; or when a tender or exchange offer for 25% or more of the
common shares is commenced. The new plan also adds an adverse person provision
whereby the rights may become exercisable and trade separately. The trigger
for a flip-in event is 25% ownership by a person. The new plan's final
expiration date is July 31, 2004, and the exercise price of the rights is
$240.00. Adoption of this new plan was not made in response to any specific
effort to acquire control of the Company. The plan should not interfere with a
transaction that is in the best interests of United Companies Financial
Corporation and its shareholders because the Company will continue to have the
ability to redeem the rights prior to a triggering event.

United Companies Financial Corporation, founded in 1946, is a $1.9
billion diversified financial services group of companies active nationwide in
the mortgage lending and insurance industries, with a nearly half-century
tradition of providing quality financial products and exemplary service.
Common stock of United Companies is traded on The NASDAQ Stock Market under the
symbol "UCFC".

<PAGE> 1
EXHIBIT 5

(LOGO)

UNITED COMPANIES
FINANCIAL CORPORATION

August 4, 1994

Dear Shareholder:

On July 27, 1994, the Board of Directors of United Companies Financial
Corporation took actions to update the protections to you as a shareholder of
the Company afforded by its shareholder rights plan. The Board redeemed the
rights (the "1989 Rights") issued under the shareholder rights plan previously
adopted in 1989 (the "1989 Rights Plan"), and adopted a new shareholder rights
plan (the "1994 Rights Plan) under which the Company's common shareholders as
of the record date of August 6, 1994, will receive preferred share purchase
rights (the "1994 Rights"). My purpose in writing this letter is to give you
notice of and to describe the Board's reasons for redeeming the 1989 Rights and
adopting the 1994 Rights Plan, and to send you a summary of the 1994 Rights
Plan. A complete copy of the 1994 Rights Plan is available free of charge from
the Company.

As a result of the significant increase in the price of the Company's
common stock and the dilutive effect of common stock dividends paid after the
adoption of the 1989 Rights Plan, the deterrent value of the 1989 Rights Plan
was reduced. In addition, changes in the capitalization of the Company and
reductions in concentration of holdings by individuals and family groups over
the last five years made it advisable to decrease the threshold percentages
provided in the 1989 Rights Plan for the exercise of the rights and the
triggering of certain provisions. The principal differences between the 1989
and 1994 Rights Plans are set forth on the attachment to the enclosed Summary
of the 1994 Rights Plan.

The purpose of the 1994 Rights Plan is to keep effective the
additional protections to you as a shareholder of the Company which were
intended by the 1989 Rights Plan, in the event of an unsolicited attempt to
acquire the Company in a manner or on terms that the Board does not believe are
fair to you or in your best interests. Such unsolicited takeover attempts
could include a substantial accumulation of shares in the open market without
payment of a control premium, a partial or two-tier tender offer that does not
treat all shareholders equally, a squeeze-out merger, and other comparable
takeover tactics. The Board continues to believe these tactics are a very
serious potential problem and are not in the best interests of shareholders
because they could deprive the Board and the Company's shareholders of any real
opportunity to determine the destiny of the Company by unfairly pressuring
shareholders, squeezing them out of their investment without giving them any
real choice and depriving them of the full value of their shares.

Many other companies have adopted shareholder rights plans and issued
rights to protect shareholders against these tactics. A number of these
companies have amended their plans after adoption to keep them current and
effective. In the view of the Board, the 1994 Rights should further protect
both your right to retain your equity investment in the Company and the full
value of that investment, while not foreclosing a fair acquisition bid for the
Company.
<PAGE> 2
As with the 1989 Rights, the 1994 Rights are not intended to prevent a
takeover or attempted takeover of the Company on terms that are favorable and
fair to all shareholders and other corporate constituencies, including
employees, and will not do so. The 1994 Rights should not affect any
prospective offeror willing to make an all cash offer at a full price and on
fair terms, or to negotiate with the Board concerning a proposed transaction.
Moreover, the 1994 Rights will not affect or interfere with a merger or other
business combination transaction approved by the Board before the 1994 Rights
are distributed.

Issuance of the 1994 Rights does not in any way weaken the financial
strength of the Company nor interfere with its business plans. The issuance of
the 1994 Rights has no dilutive effect, will not affect reported earnings per
share, is not taxable to the Company or to you, and will not change the way in
which you can presently trade the Company's shares. As explained in the
enclosed Summary, the 1994 Rights will only be exercisable if and when a
situation arises which they were created to address. They will then operate to
protect you against being deprived of your right to share in the full measure
of your Company's long-term value.

The Board did not redeem the 1989 Rights and adopt the 1994 Rights
Plan in response to any specific proposal. However, the Board concluded that
these actions should be taken now so that the 1994 Rights would be in place to
protect your interests in the future.

In taking these actions, we have expressed our confidence in the
future and our determination that you, as a Company shareholder, be given every
opportunity to participate fully in that future.

With respect to the redemption of the 1989 Rights, enclosed please
find the Company's check in payment of the redemption price of $.0039526 per
1989 Right (which reflects adjustments for stock dividends paid after the
adoption of the 1989 Rights Plan), rounded up to the nearest $.01 for each
holder.

We appreciate your continued support.

On behalf of the Board of Directors

/s/ J. TERRELL BROWN
_______________________
J. Terrell Brown
President and
Chief Executive Officer

<PAGE> 3
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES

Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, regardless of whether any such
certificates has a copy of this Summary of Rights attached thereto, and no
separate Right Certificates will be distributed. The Rights will separate from
the Common Shares and a Distribution Date will occur upon the earlier of (i) 10
days following a public announcement that a person or group of affiliated or
associated persons (an ''Acquiring Person'') have acquired beneficial ownership
of 20% or more of the outstanding Common Shares, (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 25% or more of such outstanding Common Shares, or (iii) 10 days
after the Board of Directors shall declare any Person to be an "Adverse
Person," upon a determination that such Person, alone or together with its
Affiliates and Associates, has become the Beneficial Owner of 10% or more of
the outstanding Common Shares and a determination by at least a majority of the
Board of Directors who are not officers of the Company, after reasonable
inquiry and investigation, including consultation with such persons as such
directors shall deem 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 Shares beneficially owned by such Person or to
cause pressure on the Company to take action or enter into a transaction or
series of transactions intended to provide such Person with short-term
financial gain under circumstances where the Board of Directors determines that
the best long- term interests of the Company and its stockholders 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 is
reasonably likely to cause a material adverse impact (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. However, the Board of Directors may not declare a
Person to be an Adverse Person if, prior to the time that the Person acquired
10% or more of the Common Shares then outstanding, such Person provided to the
Board of Directors in writing a statement of the Person's purpose and
intentions in connection with the proposed acquisition of Common Shares,
together with any other information reasonably requested of the Person by the
Board of Directors, and the Board of Directors, based on such statement and
reasonable inquiry and investigation as it
<PAGE> 4
deems appropriate, determines to notify and notifies such Person in writing
that it will not declare the 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 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, that such Person has not met or complied with any conditions
specified by the Board of Directors, the Board of Directors may at any time
thereafter declare the Person to be an Adverse Person.

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

The Rights are not exercisable until the Distribution Date.
The Rights will expire on July 31, 2004 (the "Final Expiration Date''), unless
the Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.

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

Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per Common Share.
In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100.00 per share but
will be entitled to an aggregate payment of 100 times the payment
<PAGE> 5
made per Common Share. Each Preferred Share will have 100 votes, voting
together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
Common Share. These rights are protected by customary antidilution provisions.

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

In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold (a "flip-over event"), proper provision will be made so
that each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number
of shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. In the event that (i) any person or group of affiliated or associated
persons becomes the beneficial owner of 25% or more of the outstanding Common
Shares (unless such person first acquires 25% or more of the outstanding Common
Shares by a purchase pursuant to a tender offer for all of the Common Shares
which the independent directors determine to be fair to and otherwise in the
best interests of the Company and its shareholders, employees, customers and
communities in which the Company does business), (ii) any person is declared by
the Board of Directors to be an Adverse Person, (iii) an Acquiring Person
engages in one or more "self-dealing" transactions as set forth in the Rights
Agreement or (iv) during such time as there is an Acquiring Person, there shall
be a reclassification of securities or a recapitalization or reorganization of
the Company or other transaction or series of transactions involving the
Company which has the effect of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the
Company or any of its subsidiaries beneficially owned by the Acquiring Person
(each a "flip-in" event), proper provision shall be made so that each holder of
a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares (or, in the event that there are
insufficient authorized Common Shares, substitute consideration such as cash,
property, or other securities of the Company) having a market value of two
times the exercise price of the Right.

At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares and prior to the acquisition by such person or group
of 25% or more of the outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
Common Share, or one one-hundredth of a Preferred Share (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).

With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preferred Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash
<PAGE> 6
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.

At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $0.001 per Right (the
"Redemption Price"). After the redemption period has expired, the Company's
rights of redemption may be reinstated if, prior to any event triggering the
right to exchange the Rights for Common Shares or shares of an acquiring
company, an Acquiring Person reduces its beneficial ownership to 10% or less of
the outstanding Common Shares in a transaction or series of transactions not
involving the Company. The redemption of the rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.

The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower certain thresholds described above to not less
than the greater of (i) any percentage greater than the largest percentage of
the outstanding Common Shares then known to the Company to be beneficially
owned by any person or group of affiliated or associated persons and (ii) 10%,
except that from and after such time as any person becomes an Acquiring Person
no such amendment may adversely affect the interests of the holders of the
Rights.

A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement has also been filed with the Office
of the Secretary of State of the State of Louisiana. A copy of the Rights
Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
<PAGE> 7
PRINCIPAL DIFFERENCES BETWEEN 1989 RIGHTS PLAN
AND 1994 RIGHTS PLAN OF UNITED COMPANIES FINANCIAL CORPORATION

<TABLE>
<CAPTION>
1989 Rights Plan 1994 Rights Plan
---------------- ----------------
<S> <C> <C> <C>
1. An Acquiring Person is defined as holding 1. An Acquiring Person is defined as holding
45% of the Common Stock. 20% of the Common Stock.

2. A Distribution Date occurs 2. A Distribution Date occurs

(a) ten days after an Acquiring Person (a) ten days after an Acquiring Person
exists, or exists, or

(b) ten business days after a tender (b) ten business days after a tender
offer or exchange offer is offer or exchange offer is
commenced for 50% or more of the commenced for 25% or more of the
Common Stock. Common Stock, or

(c) ten days after a majority of the
outside members of the Board of
Directors determines that a Person
is an Adverse Person. An Adverse
Person is any person which
beneficially owns more than 10% of
the Common Stock, and has the
intent to obtain a short-term
financial gain for itself under
circumstances which is not in the
best long-term interests of the
Company or is reasonably likely to
cause a material adverse impact on
the Company's business.

3. The Exercise Price is $240

4. The Expiration Date is July 31, 2004.

3. The Exercise Price is $80.00

4. The Expiration Date is February 1, 1999.
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
5. A flip-in event is triggered by 5. A flip-in event is triggered by

(a) an Acquiring Person engaging in (a) an Acquiring Person engaging in
various self-dealing transactions, various self-dealing transactions,
including a merger in which the including a merger in which the
Company is the surviving Company is the surviving
corporation, or corporation, or

(b) a Person becoming the owner of more (b) a Person becoming the owner of more
than 50% of the Common Stock, or than 25% of the Common Stock, or

(c) an recapitalization or (c) any recapitalization or
reclassification transaction which reclassification transaction which
increases by more than 1% an increases by more than 1% an
Acquiring Person's proportionate Acquiring Person's proportionate
share of the outstanding shares of share of the outstanding shares of
any class of equity securities of any class of equity securities of
the Company. the Company, or

(d) the Board of Directors determining
that a person is an Adverse Person.

6. In both Plans the flip-in event can be prevented if the Acquiring Person purchased its Common
Stock through a tender offer approved by the Board of Directors.

7. A flip-over event is basically triggered by the same events in both Plans.

8. The Redemption Price of the 1989 Rights is 8. The Redemption Price of the 1994 Rights is
$0.01 per 1989 Right. $0.001 per 1994 Right.
</TABLE>