
                                ACTEL CORPORATION

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                           To be held on May 23, 2003

TO THE SHAREHOLDERS:

     NOTICE IS HEREBY  GIVEN that the Annual  Meeting of  Shareholders  of Actel
Corporation,  a California corporation (Actel), will be held on May 23, 2003, at
10:00 a.m. PDT in the Diplomat  Room at Embassy  Suites,  2885  Lakeside  Drive,
Santa Clara, California 95054, for the following purposes:

          1. To elect  directors  to serve  until  the next  Annual  Meeting  of
     Shareholders and until their successors are elected.

          2. To  approve  Actel's  Amended  and  Restated  1993  Employee  Stock
     Purchase Plan.

          3. To approve  Actel's  Amended and  Restated  1993  Directors'  Stock
     Option Plan.

          4.  To  ratify  the  appointment  of  Ernst  &  Young  LLP as  Actel's
     independent auditors for the fiscal year ending January 4, 2004.

          5. To transact  such other  business as may  properly  come before the
     Annual Meeting or any adjournments of the Annual Meeting.

     Only shareholders of record at the close of business on March 24, 2003, are
entitled  to notice of and to vote at the  Annual  Meeting.  On March 24,  2003,
24,428,367 shares of Actel's Common Stock were issued and outstanding.

     All  shareholders  are  cordially  invited to attend the Annual  Meeting in
person.  However, to ensure your  representation at the Annual Meeting,  you are
urged to sign and return the  enclosed  Proxy as  promptly  as  possible  in the
postage-prepaid,   self-addressed   envelope  enclosed  for  that  purpose.  Any
shareholder  attending  the  Annual  Meeting  may  vote in  person  even if such
shareholder has returned a proxy.

                                             BY ORDER OF THE BOARD OF DIRECTORS

                                             David L. Van De Hey
                                             Secretary
Sunnyvale, California
April 4, 2003


<PAGE>



                                ACTEL CORPORATION

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

                               PROXY STATEMENT FOR

                       2003 ANNUAL MEETING OF SHAREHOLDERS


     The  enclosed  Proxy is  solicited  on behalf of the Board of  Directors of
Actel Corporation,  a California  corporation,  for use at the Annual Meeting of
Shareholders  to be held on Friday,  May 23, 2003, at 10:00 a.m. PDT, and at any
adjournments  of the Annual  Meeting  for the  purposes  set forth in this Proxy
Statement and in the accompanying Notice of Annual Meeting of Shareholders.  The
Annual  Meeting  will be held in the  Diplomat  Room  at  Embassy  Suites,  2885
Lakeside Drive,  Santa Clara,  California  95054.  The telephone  number at that
address  is (408)  496-6400.  In this  Proxy  Statement,  Actel  Corporation  is
referred to as "we," "us," and "our."

     These proxy solicitation  materials were mailed on or about April 16, 2003,
to all shareholders entitled to vote at the Annual Meeting.


                 INFORMATION CONCERNING SOLICITATION AND VOTING

Record Date

     Holders of record of our Common Stock at the close of business on March 24,
2003 (Record Date), are entitled to notice of and to vote at the Annual Meeting.
At the  Record  Date,  24,428,367  shares of our Common  Stock  were  issued and
outstanding.

Revocability of Proxies

     Any proxy given pursuant to this  solicitation may be revoked by the person
giving  it at any time  before  its use by (i)  delivering  to our  Secretary  a
written  notice of revocation  or a duly executed  proxy bearing a later date or
(ii) attending the Annual Meeting and voting in person. Our principal  executive
offices are located at 955 East Arques Avenue, Sunnyvale,  California 94086. Our
telephone number at that address is (408) 739-1010.

Voting and Solicitation

     Each  shareholder  is  entitled  to one  vote for  each  share  held on all
matters.

     This  solicitation  of  proxies is made by our Board of  Directors  and all
related costs will be borne by us. In addition, we may reimburse brokerage firms
and other persons representing beneficial owners of shares for their expenses in
forwarding   solicitation   material  to  such   beneficial   owners.   Original
solicitation of proxies by mail may be supplemented by telephone,  facsimile, or
personal  solicitation by our directors,  officers, or regular employees without
payment of additional compensation. We have retained The Proxy Advisory Group of
Strategic  Stock  Surveillance,  LLC  to  solicit  proxies  for a  services  fee
estimated  at $7,500,  plus the  reimbursement  of customary  expenses  incurred
during the distribution of proxy materials and solicitation of shareholders.

Required Vote

     The quorum  required  to  conduct  business  at the  Annual  Meeting or any
adjournments  of the Annual  Meeting  is a majority  of the shares of our Common
Stock issued and outstanding on the Record Date. If a quorum is present, the six
candidates  receiving  the  highest  number of  affirmative  votes  are  elected
directors;  votes against any candidate and votes withheld have no legal effect.
The  affirmative  vote of a  majority  of the shares  represented  at the Annual
Meeting and "entitled to vote" are required to approve Proposals No. 2 (Approval
of Amended and Restated 1993 Employee  Stock  Purchase Plan) and No. 3 (Approval
of Amended  and  Restated  1993  Directors'  Stock  Option  Plan).  On all other
proposals  set  forth  in this  Proxy  Statement,  the  affirmative  vote of the
majority of the shares  represented  at the Annual  Meeting and "voting" will be
the act of the shareholders.

     Although  there is no definitive  California  statute or case law as to the
proper  treatment  of  abstentions  and broker  nonvotes,  we believe  that both
abstentions  and broker  nonvotes  should be counted for purposes of determining
the presence or absence of a quorum for the  transaction  of  business.  We also
believe  that  neither  abstentions  nor broker  nonvotes  should be counted for
purposes of determining  the total number of shares  represented and "voting" on
each matter for which that is the required vote of the shareholders.  We further
believe that abstentions  should be counted,  but broker non-votes should not be
counted,  for purposes of determining the total number of shares represented and
"entitled  to vote" on each  matter for which that is the  required  vote of the
shareholders. In the absence of controlling precedent to the contrary, we intend
to treat  abstentions  and  broker  nonvotes  in the  manner  described  in this
paragraph.

Deadline for Receipt of Shareholder Proposals

     In order to be considered for inclusion in our proxy  statement and form of
proxy relating to our 2004 Annual Meeting of Shareholders, shareholder proposals
must be received by our  Secretary no later than December 18, 2003. In addition,
under our Bylaws, a shareholder wishing to nominate a person for election to the
Board of Directors or make a proposal at the 2004 Annual Meeting of Shareholders
must submit  notice of such  nomination  or proposal to our  Secretary 90 to 120
days before the meeting.

Share Ownership

     The following table sets forth certain information regarding the beneficial
ownership of our Common Stock by each person who we believe  owned  beneficially
more than 5% of our outstanding shares of Common Stock as of the Record Date:
<TABLE>
<CAPTION>

                                                                                          Amount and
                                                                                           Nature of
                                                                                          Beneficial      Percent of
                         Name and Address of Beneficial Owner                              Ownership      Class (1)
--------------------------------------------------------------------------------------   --------------  ------------

<S>                                                                                       <C>                <C>
Dalton, Greiner, Hartman, Maher & Co...............................................       1,251,565 (2)      5.1%
     565 Fifth Ave., Suite 2101
     New York, NY 10017

Neuberger Berman, Inc..............................................................       2,564,909 (3)     10.5%
     605 Third Ave.
     New York, NY, 10158-3698

Wellington Management Company, LLP.................................................       2,133,800 (4)      8.7%
     75 State Street
     Boston, Massachusetts  02109
</TABLE>

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

(1)  Calculated as a percentage of shares of our Common Stock  outstanding as of
     the Record Date.

(2)  As reported by the beneficial  owner as of December 31, 2002, in a Schedule
     13G filed with the Securities and Exchange  Commission (SEC) on January 28,
     2003. The reporting person, which is an investment adviser registered under
     Section 203 of the  Investment  Advisers Act of 1940, has sole voting power
     with respect to 1,102,565 shares of Common Stock and sole dispositive power
     with respect to 1,251,565 shares of Common Stock.

(3)  As reported by the beneficial  owner as of December 31, 2002, in a Schedule
     13G  (Amendment  No.  2)  filed  with the SEC on  February  12,  2003.  The
     reporting  person has sole voting  power with  respect to 82,759  shares of
     Common  Stock,  shared  voting power with  respect to  1,689,700  shares of
     Common Stock, and shared dispositive power with respect to 2,564,909 shares
     of Common Stock. The reporting person, which is an investment company and a
     parent holding company,  owns 100% of Neuberger  Berman,  LLC and Neuberger
     Berman Management Inc.  Neuberger Berman,  LLC is an investment advisor and
     broker/dealer  with  discretion.  Neuberger  Berman  Management  Inc. is an
     investment  advisor to a Series of Public  Mutual Funds.  Neuberger  Berman
     Genesis Fund Portfolio,  a series of Equity  Managers  Trust,  beneficially
     owns  1,618,000  shares of Common Stock.  Neuberger  Berman,  LLC serves as
     sub-adviser  and  Neuberger  Berman  Management  Inc.  serves as investment
     manager of Neuberger Berman Genesis Fund Portfolio, which holds such shares
     in the ordinary course of its business and not with the purpose of changing
     or  influencing  the control of the issuer.  The balance of the shares with
     respect to which the  reporting  person has shared  voting power is held by
     Neuberger  Berman's  various  other  Funds.  Neuberger  Berman,  LLC is the
     sub-advisor to such Funds. Neuberger Berman, LLC also has the sole power to
     vote the  shares of many  unrelated  clients.  The  clients  are the actual
     owners of those  shares and have the sole right to receive and the power to
     direct the  receipt of  dividends  from or  proceeds  from the sale of such
     shares.  The  balance of the  shares  with  respect to which the  reporting
     person has shared dispositive power is for individual client accounts.

(4)  As reported by the beneficial  owner as of December 31, 2002, in a Schedule
     13G  (Amendment  No.  1)  filed  with the SEC on  February  13,  2003.  The
     reporting  person,  which is an  investment  adviser  and a parent  holding
     company  or  control  person,  has  shared  voting  power  with  respect to
     1,325,300 shares of Common Stock and shared  dispositive power with respect
     to 2,133,800 shares of Common Stock. The shares were acquired by Wellington
     Trust  Company,  NA,  75 State  Street,  Boston MA  02109,  a wholly  owned
     subsidiary of Wellington  Management Company,  LLP and a bank as defined in
     Section 3(a)(6) of the Exchange Act of 1934, as amended (Exchange Act). The
     shares  are owned of record  by  clients  of the  reporting  person.  Those
     clients  have the right to receive,  or the power to direct the receipt of,
     dividends from, or the proceeds from the sale of, such shares.


<PAGE>


                     PROPOSAL NO. 1 -- ELECTION OF DIRECTORS

Nominees

     A board of six  directors  is to be elected at the Annual  Meeting.  Unless
otherwise  instructed,  the proxy holders will vote the proxies received by them
for the nominees named below. If any nominee is unable or declines to serve as a
director at the time of the Annual  Meeting,  the proxies  will be voted for any
nominee designated by our present Board of Directors to fill the vacancy. We are
not  aware of any  nominee  who will be  unable  or will  decline  to serve as a
director.  The term of office of each person elected as a director will continue
until the next Annual Meeting and until a successor has been elected.

     The Board of Directors recommends that shareholders vote "FOR" the nominees
listed below:
<TABLE>
<CAPTION>


                                                                                                           Director
               Name of Nominee                   Age                 Principal Occupation                   Since
--------------------------------------------   ------   ----------------------------------------------     --------

<S>                                              <C>    <C>                                                  <C>
John C. East (1)............................     58     President and Chief Executive Officer                1988
                                                        Actel Corporation

James R. Fiebiger (1)(2)....................     61     Chairman and Chief Executive Officer                 2000
                                                        Lovoltech, Inc.

Jos C. Henkens (1)(3).......................     50     General Partner                                      1988
                                                        Advanced Technology Ventures

Jacob S. Jacobsson (3)......................     49     President and Chief Executive Officer                1998
                                                        Forte Design Systems

Henry L. Perret (2).........................     57     Chief Financial Officer and General Manager          2003
                                                        Legerity, Inc.

Robert G. Spencer (2).......................     59     Principal                                            1989
                                                        The Spencer Group
</TABLE>

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

(1)  Member of Nominating and Governance Committee.

(2)  Member of Audit Committee.

(3)  Member of Compensation Committee.


     Mr.  East has  served as our  President,  Chief  Executive  Officer,  and a
director  since  December  1988.  Mr. East also serves as a director of Adaptec,
Inc.

     Mr. Fiebiger has been a director since December 2000.  Since December 1999,
he has been Chairman and Chief Executive Officer of Lovoltech, Inc., a privately
held semiconductor  company  specializing in low voltage devices. He also serves
as a director of Mentor Graphics Corporation,  QLogic Corporation, and a private
company.  Mr.  Fiebiger was Vice  Chairman and Managing  Director of  Technology
Licensing of GateField Corporation, a semiconductor company that we purchased in
November 2000, from 1998 to 2000, and President,  Chief Executive Officer, and a
director of GateField from 1996 to 1998.

     Mr.  Henkens  has been a director  since  April  1988.  He also served as a
director from October 1985 to July 1986. Mr. Henkens has been a general  partner
of Advanced  Technology  Ventures,  a venture  capital  firm,  for the past five
years.  Mr. Henkens also serves as a director of Credence  Systems  Corporation,
Docent, Inc., and various private companies.

     Mr.  Jacobsson has been a director since May 1998.  Since November 2000, he
has been President, Chief Executive Officer, and a director of Cynapps, Inc. and
its successor by merger,  Forte Design Systems,  a  privately-held  company that
offers  products and services for the  hierarchical  design and  verification of
large, complex systems and integrated circuits.  For the five years before that,
he was President and Chief  Executive  Officer of SCS  Corporation,  a privately
held  semiconductor  company in the Radio  Frequency  Identification  area.  Mr.
Jacobsson also serves as a director of various private companies.

     Mr. Perret has been a director  since  January 2003.  Since August 2001, he
has been Vice President of Finance, Chief Financial Officer, and General Manager
of the Voice  Network  Access  product line at  Legerity,  Inc.  Before  joining
Legerity,  Mr.  Perret was our Vice  President  of Finance  and Chief  Financial
Officer from June 1997 and our  Controller  from January  1996.  From April 1992
until joining us, he was the Site Controller for the  manufacturing  division of
Applied Materials, a maker of semiconductor  manufacturing equipment, in Austin,
Texas.  From 1978 to 1991,  Mr.  Perret held various  financial  positions  with
National Semiconductor, a semiconductor manufacturer.

     Mr.  Spencer  has been a  director  since  February  1989.  He has been the
principal of The Spencer Group, a consulting firm, for the past five years.

     Mr. Frederic N.  Schwettmann,  who has been a director since April 1990, is
not standing for re-election.

     There is no family relationship  between any of our directors and executive
officers.

Board Meetings and Committees

     During our 2002  fiscal  year,  which ended  January 5, 2003,  the Board of
Directors held four meetings,  the Board's Audit  Committee held seven meetings,
the  Board's  Compensation  Committee  held  three  meetings,  and  the  Board's
Nominating and Governance Committee held no meetings.  Each director attended at
least 75% of the aggregate  number of meetings of the Board of Directors and all
committees of the Board of Directors on which he served.

     The  Audit  Committee,   which  currently  consists  of  Messrs.  Fiebiger,
Schwettmann,  and Spencer,  reviews the results and scope of the audit and other
services provided by our independent auditors. The Compensation Committee, which
currently  consists of Messrs.  Henkens,  Jacobsson,  and Schwettmann,  approves
salary,   benefit,  and  incentive  compensation  matters.  The  Nominating  and
Governance  Committee,  which currently consists of Messrs. East, Fiebiger,  and
Henkens,  recommends director nominees to the Board of Directors. The Nominating
and Governance  Committee will consider  nominees (other than  self-nominations)
recommended  by our  shareholders.  Suggestions  submitted  to our  Secretary by
December 18, 2003,  will be  considered  by the  Committee at a regular  meeting
before proxy materials are mailed to shareholders in the following year.

Director Compensation

     Cash Compensation

     Directors who are not employees receive  compensation for their services as
directors  at the rate of $1,500  per Board  meeting  attended  and  $1,000  per
committee meeting attended. In addition, nonemployee directors receive an annual
retainer of $15,000.  Directors are also reimbursed for reasonable out-of-pocket
expenses  incurred in the  performance  of their duties.  The Board of Directors
intends to review,  at the Board  meeting on April 18,  2003,  the level of cash
compensation received by directors.  Accordingly, the cash compensation received
by  directors  elected at the Annual  Meeting  could be higher  than the current
rates described above.

     1993 Directors' Stock Option Plan

     Our 1993  Directors'  Stock Option Plan  (Director  Plan)  provides for the
grant of nonstatutory  stock options to nonemployee  directors.  If our nominees
are elected, five directors (Messrs. Fiebiger, Henkens,  Jacobsson,  Perret, and
Spencer) will be eligible to receive  option grants under the Director Plan. For
a summary of the material  terms of the  Director  Plan,  as well as  disclosure
regarding the approximate  dollar value and number of options to purchase shares
that were  allocated  to directors  under the  Director  Plan in the last fiscal
year,  see "PROPOSAL  NO. 3 -- APPROVAL OF AMENDED AND RESTATED 1993  DIRECTORS'
STOCK  OPTION  PLAN." If the Amended and Restated  Director  Plan is approved by
shareholders,  each continuing nonemployee director will be granted an option to
purchase 12,500 shares of our Common Stock, which vests and becomes  exercisable
(subject to continued service) on the date of our annual meeting of shareholders
in  2004.  If  the  Amended  and  Restated  Director  Plan  is not  approved  by
shareholders,  each continuing nonemployee director will be granted an option to
purchase 5,000 shares of our Common Stock,  which vests and becomes  exercisable
(subject to continued service) on the date of our annual meeting of shareholders
in 2007, and the Director Plan will terminate on August 2, 2003.


               PROPOSAL NO. 2 -- APPROVAL OF AMENDED AND RESTATED
                        1993 EMPLOYEE STOCK PURCHASE PLAN

     The Amended and  Restated  ESPP  extends the term of our ESPP by ten years.
Unless the Amended and  Restated  ESPP is approved,  the ESPP will  terminate on
August 2,  2003.  The ESPP is  intended  to  qualify  under  Section  423 of the
Internal  Revenue Code of 1986, as amended  (Code).  As a qualified  Section 423
plan, the ESPP permits  employees to purchase  shares of our Common Stock at 85%
of the market price on the date of grant over a period of two years. Approval of
the Amended and Restated  ESPP will  provide our  employees  with the  continued
opportunity  to buy  shares of our  Common  Stock  through  accumulated  payroll
deductions.  We believe that employee ownership of our Common Stock helps ensure
that the interests of our employees and shareholders are aligned.

     The Amended and Restated ESPP also increases the number of shares  reserved
for issuance by 500,000. This increase will help assure that a sufficient number
of shares of Common Stock will be available  under the Amended and Restated ESPP
to meet  employee  demand in the next offering  period.  If the number of shares
sold to our employees in an offering  period were to exceed the number of shares
reserved for issuance at the beginning of that offering period, we might incur a
compensation charge, which could be significant. The Board of Directors believes
our recognition of compensation  expense in that circumstance  would be contrary
to the  interests  of our  shareholders.  The Board  further  believes  that the
reservation  of shares in excess of that required for issuance under the Amended
and  Restated  ESPP  during  the next  offering  period  is not  adverse  to the
interests  of our  shareholders  because  the  provisions  of the Code limit the
number of shares  that may  actually be issued  under the  Amended and  Restated
ESPP.

     In summary, we are seeking shareholder approval of the Amended and Restated
ESPP to offer our  employees  the  continued  opportunity  to buy  shares of our
Common  Stock  through  payroll  deductions  and to reduce the risk of incurring
compensation charges in connection with that offering.

General

     On January 17, 2003,  our 1993 Employee Stock Purchase Plan was amended and
restated by our Board of Directors  (subject to shareholder  approval) to extend
the term of the Plan by ten years and to  increase  the  number of shares of our
Common  Stock  reserved for  issuance  under the Plan by 500,000.  In this Proxy
Statement,  "ESPP"  means our 1993  Employee  Stock  Purchase  Plan prior to its
amendment  and  restatement  by our Board on January 17, 2003,  and "Amended and
Restated  ESPP"  means our 1993  Employee  Stock  Purchase  Plan  following  its
amendment (subject to shareholder approval) and restatement by our Board.

     The total  number  of  shares  authorized  for  issuance  under the ESPP is
3,019,680. If approved, the total number of shares authorized for issuance under
the Amended and Restated  ESPP will be  3,519,680.  A total of 2,484,287  shares
have been  issued  and sold  under the ESPP.  Accordingly,  the total  number of
shares currently  available for issuance under the ESPP is 535,393. If approved,
the total number of shares available for issuance under the Amended and Restated
ESPP  will  be  1,035,393.   That  number  should  be  sufficient  to  meet  our
requirements  for three or four years if we continue to issue  shares  under the
Amended and Restated ESPP at rates approximating historical levels.

     The Board of Directors  recommends that shareholders vote "FOR" approval of
the Amended and Restated ESPP. An abstention will have the same effect as a vote
"AGAINST" approval of the Amended and Restated ESPP.

Summary of the ESPP

     The ESPP and the right of participants to make purchases under the ESPP are
intended to qualify under the provisions of Section 423 of the Code. The ESPP is
not a qualified deferred  compensation plan under Section 401(a) of the Code and
it is not  subject  to the  Employee  Retirement  Income  Security  Act of  1974
(ERISA). The essential features of the ESPP are summarized below.

     Purpose

     The purpose of the ESPP is to provide our employees  with an opportunity to
purchase our Common Stock through accumulated payroll deductions.

     Administration

     The ESPP may be  administered  by our Board of  Directors or by a committee
appointed by the Board.  All questions of  interpretation  or application of the
ESPP are determined by our Board or its committee, whose decisions are final and
binding on all participants. Members of the Board who are eligible employees are
permitted to  participate  in the ESPP but may not vote on any matter  affecting
the  administration of the ESPP or the grant of any option pursuant to the Plan.
No director  who is eligible to  participate  in the ESPP may be a member of the
committee  appointed to administer  the ESPP. No charges for  administrative  or
other costs may be made against the payroll  deductions of a participant  in the
ESPP. Members of the Board receive no additional compensation for their services
in connection with the administration of the ESPP.

     Eligibility and Participation

     Any person who is customarily  employed by us (or any of our majority-owned
subsidiaries)  at least 20 hours per week for at least five months in a calendar
year is eligible  to  participate  in the ESPP,  provided  that the  employee is
employed  on the first day of an  offering  period.  Eligible  employees  become
participants  in  the  ESPP  by  delivering  to  us  a  subscription   agreement
authorizing  payroll  deductions  prior to the  applicable  enrollment  date. An
employee who becomes  eligible to participate in the ESPP after the commencement
of an offering period may not participate in the ESPP until the  commencement of
the next offering period.

     Offering and Purchase Periods

     The  ESPP is  generally  implemented  during  consecutive  and  overlapping
24-month offering periods, each of which is divided into four six-month purchase
periods.  Generally,  offering and purchase  periods  commence on February 1 and
August 1 of each year. Shares are purchased for  participating  employees on the
last day of each purchase period,  referred to as the "Exercise Date." Our Board
may alter the duration of the offering periods without  shareholder  approval if
such change is announced five days prior to the scheduled beginning of the first
offering period to be affected. The maximum offering period for an ESPP intended
to qualify under the provisions of Section 423 of Code is 27 months.

     Purchase Price

     The purchase price per share at which shares will be sold under the ESPP is
the lower of 85% of the fair market  value of our Common  Stock on the first day
of each  offering  period or 85% of the fair market value of our Common Stock on
the Exercise  Date.  The fair market value of a share of our Common Stock is the
closing sales price of our stock (or the closing bid, if no sales were reported)
as quoted on the Nasdaq National Market.

     The purchase price of the shares is accumulated  through payroll deductions
during the offering period. The deductions may not exceed 15% of a participant's
compensation,  which is defined in the ESPP to mean all base straight time gross
earnings,  including overtime and shift premium, and all incentive compensation,
incentive payments,  bonuses,  and other compensation.  A participant may at any
time  discontinue  his or her  participation  in the  ESPP  or may  increase  or
decrease  the rate of payroll  deductions.  Payroll  deductions  commence on the
first payday in the offering period and continue at the same rate in the current
and consecutive  offering  periods until amended or as provided in the ESPP. All
payroll deductions are credited to the participant's  account under the ESPP and
are deposited with our general funds. All payroll deductions received or held by
us may be used for any corporate purpose.

     Purchase of Stock

     At the beginning of each offering period, each participant,  by executing a
subscription  agreement  to  participate  in the ESPP,  is in effect  granted an
option to purchase shares of our Common Stock on each Exercise Date. The maximum
number of shares  placed under option to a participant  in a purchase  period is
that number  determined  by dividing the amount of  participant's  total payroll
deductions  to be  accumulated  during  the  purchase  period by the  applicable
purchase price;  provided,  however,  that no participant may purchase more than
10,000 shares in any offering  period.  Unless a participant  withdraws from the
ESPP,  such  participant's  option for the  purchase of shares will be exercised
automatically at the end of the purchase period for the maximum number of shares
at the applicable price.

     Notwithstanding  the foregoing,  no employee will be permitted to subscribe
for shares  under the ESPP if,  immediately  after the grant of the option,  the
employee would own 5% or more of the voting power or value of all our classes of
stock or of all classes of stock of our parent or of our subsidiaries (including
stock that may be  purchased  under the ESPP or pursuant to any other  options),
nor shall any  employee be granted an option that would  permit the  employee to
purchase  stock  under all of our  employee  stock  purchase  plans in excess of
$25,000 of fair  market  value of stock  (determined  at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

     Withdrawal

     A  participant's  interest in a given  offering may be terminated in whole,
but not in part, by signing and delivering to us a notice of withdrawal from the
ESPP. Any withdrawal by the participant of accumulated  payroll deductions for a
given offering period  automatically  terminates the  participant's  interest in
that offering period. The ESPP also provides that participants will be deemed to
have withdrawn from an offering  during certain leaves of absence.  In addition,
if the fair market value of our Common Stock on any Exercise Date in an offering
period is lower than the fair market value of our Common Stock on the enrollment
date of such offering  period,  then all  participants  in such offering  period
shall be automatically withdrawn from such offering period immediately after the
exercise of their options on such Exercise Date and automatically re-enrolled in
the immediately following offering period. Generally, a participant's withdrawal
from an  offering  period  does not affect  such  participant's  eligibility  to
participate in subsequent offering periods.

     Termination of Employment

     Termination  of  a  participant's  employment  for  any  reason,  including
retirement or death,  cancels his or her  participation in the ESPP immediately.
In such event, the payroll deductions credited to the participant's account will
be  returned  to such  participant  or, in the case of death,  to the  person or
persons  entitled  thereto as  specified  by the  employee  in the  subscription
agreement.

     Capital Changes

     In the event  any  change  is made in our  capitalization,  such as a stock
split or stock  dividend,  that results in an increase or decrease in the number
of outstanding  shares of our Common Stock without receipt of  consideration  by
us, appropriate adjustments will be made in the shares subject to purchase under
the ESPP and in the purchase price per share,  subject to any required action by
our shareholders.  In the event of our liquidation or dissolution,  the offering
periods then in progress will terminate immediately prior to the consummation of
such event,  unless  otherwise  provided by our Board. In the event of a sale of
all or  substantially  all of our  assets,  or a  merger  with or  into  another
corporation, each option under the ESPP shall be assumed or an equivalent option
shall be submitted by such  successor  corporation  or a parent or subsidiary of
such successor  corporation.  If the successor  corporation refuses to assume or
substitute for the  outstanding  options,  the offering  period then in progress
will be shortened and a new exercise date will be set.

     Nonassignability

     No rights or accumulated payroll deductions of a participant under the ESPP
may be pledged, assigned, or transferred for any reason and any such attempt may
be treated by us as an election to withdraw from the ESPP.

     Amendment and Termination

     Our Board may at any time amend or terminate  the ESPP,  provided that such
termination shall not affect options previously granted, except that an offering
period may be terminated or shortened by our Board at any time. No amendment may
be made to the ESPP without prior approval of our shareholders if such amendment
would constitute an amendment for which  shareholder  approval is required under
the federal securities laws or the Code. Unless the Amended and Restated ESPP is
approved, the ESPP will terminate on August 2, 2003.

Certain Federal Income Tax Information

     The ESPP and the right of participants to make purchases under the ESPP are
intended to qualify  under the  provisions  of Sections 421 and 423 of the Code.
Under these  provisions,  no income will be taxable to a  participant  until the
sale or other disposition of the shares purchased under the ESPP. Upon such sale
or disposition,  the  participant  will generally be subject to tax in an amount
that depends upon the holding period. If the shares are sold or disposed of more
than two years from the first day of the  offering  period and one year from the
date of purchase, the participant will recognize ordinary income measured as the
lesser of (a) the excess of the fair  market  value of the shares at the time of
such sale or  disposition  over the purchase price or (b) an amount equal to 15%
of the fair  market  value of the  shares as of the  first  day of the  offering
period.  Any additional  gain will be treated as long-term  capital gain. If the
shares are sold or otherwise  disposed of before the  expiration of this holding
period, the participant will recognize ordinary income generally measured as the
excess  of the fair  market  value of the  shares  on the  date the  shares  are
purchased over the purchase  price.  Any additional gain or loss on such sale or
disposition will be long-term or short-term  capital gain or loss,  depending on
the holding  period.  We are not  entitled to a deduction  for amounts  taxed as
ordinary  income  or  capital  gain to a  participant  except  to the  extent of
ordinary  income  recognized  upon a sale or  disposition of shares prior to the
expiration of the holding periods described above.

     The  foregoing  summary  of the  federal  income tax  consequences  of ESPP
transactions  is based on federal  income tax laws in effect on the date of this
Proxy Statement. This summary does not purport to be comprehensive, and does not
describe foreign, state, or local tax consequences.

     The following table  summarizes the approximate  dollar value and number of
shares  purchased  with  contributions  made  under  the ESPP in 2002 by (i) the
executive officers named in the Summary  Compensation  Table, (ii) all executive
officers as a group, and (iii) all employees who are not executive officers as a
group.  Only directors who are also executive  officers are eligible to purchase
shares under the ESPP.

                              Amended Plan Benefits
<TABLE>
<CAPTION>

                                                                                      1993 Employee Stock Purchase
                                                                                                Plan (1)
                                                                                    ---------------------------------
                                                                                                         Number of
                                                                                     Dollar Value          Shares
                                                                                          (2)           Purchased (3)
                                Name and Position
----------------------------------------------------------------------------------  ---------------   ---------------

<S>                                                                                 <C>               <C>
John C. East....................................................................                  -                 -
   President and Chief Executive Officer

Fares Mubarak...................................................................    $         6,719   $         1,576
    Vice President of Engineering

Esmat Z. Hamdy..................................................................              6,904             1,619
    Senior Vice President of Technology and Operations

Paul Indaco.....................................................................              6,082             1,375
    Vice President of Sales

Dennis G. Kish..................................................................                (76)              108
    Vice President of Marketing

Executive Officer Group (9 Persons).............................................             39,315             9,116

Non-Executive Officer Employee Group............................................          1,480,227           321,340
</TABLE>

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

(1)  Future benefits under the ESPP are not determinable  because  participation
     in the ESPP is voluntary.

(2)  Indicates the  difference  between the price at which shares were purchased
     under the ESPP with  contributions  made in 2002 and  $17.27,  the  closing
     price of our Common Stock on January 3, 2003,  the last business day in our
     2002 fiscal year.

(3)  Indicates the number of shares that were purchased with  contributions made
     in 2002  under  the  ESPP.  More  specifically,  the  number  in the  table
     indicates  shares of Common Stock  purchased on January 31, 2002,  July 31,
     2002, and January 31, 2003, with contributions made under the ESPP in 2002,
     and excludes shares purchased on January 31, 2002, with  contributions made
     under the ESPP in 2001 and shares  purchased  on  January  31,  2003,  with
     contributions made under the ESPP in January 2003.

     The  following  table  summarizes  as of  January  5,  2003,  the number of
securities to be issued upon the exercise of outstanding  derivative  securities
(options,  warrants,  and rights);  the  weighted-average  exercise price of the
outstanding  derivative  securities;  and the  number  of  securities  remaining
available for future issuance under our equity compensation plans.
<TABLE>
<CAPTION>


                                         Equity Compensation Plan Information

<S>                             <C>                           <C>                           <C>
                                            (a)                          (b)                          (c)

                                                                                             Number of securities
                                                                                            remaining available for
                                Number of securities to be    Weighted-average exercise      future issuance under
                                  issued upon exercise of       price of outstanding       equity compensation plans
                                   outstanding options,         options, warrants and        (excluding securities
        Plan Category               warrants and rights                rights               reflected in column (a)
------------------------------   --------------------------    -------------------------    -------------------------

Equity compensation plans
approved by security holders..           6,665,611                     $ 19.71                       799,450 (1)(2)

Equity compensation plans not
approved by security holders
(3)...........................           1,662,249                     $ 17.65                     2,264,753
                                 --------------------------    -------------------------    -------------------------

Total.........................           8,327,898 (4)(5)              $ 19.26 (4)                 3,064,203 (2)
</TABLE>

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

(1)  Consists of 203 shares  available  for  issuance  under our 1986  Incentive
     Stock Option Plan,  75,000 shares available for issuance under our Director
     Plan, and 724,247 shares  available for issuance under our ESPP. On January
     31,  2003,  188,854  shares were  issued  under our ESPP,  leaving  535,393
     available for issuance.

(2)  Does not include  1,208,624 shares added to our 1986 Incentive Stock Option
     and 25,000 shares added to our Director Plan on January 6, 2003,  under the
     annual replenishment provisions of those Plans.

(3)  Consists  of options  granted and  available  for  issuance  under our 1995
     Employee and Consultant Stock Plan.

(4)  Does not include information for options assumed in connection with mergers
     and  acquisitions.  As of  January 5,  2003,  a total of 106,038  shares of
     Common Stock with a weighted-average exercise price of $16.34 were issuable
     upon exercise of such outstanding options.

(5)  Does not include  20,353 shares of Common Stock  issuable to Mr. East under
     our Deferred Compensation Plan.

Summary of 1995 Employee and Consultant Stock Plan

     The 1995 Employee and Consultant  Stock Plan (1995 Plan) was adopted by our
Board of  Directors  on March 6,  1995.  The  purposes  of the 1995  Plan are to
attract and retain the best  available  personnel  for employee  and  consultant
positions,  to provide  additional  incentive  to such  persons,  and to thereby
promote the success of our  business.  Options  granted  under the 1995 Plan are
nonstatutory  stock  options.   The  1995  Plan  is  not  a  qualified  deferred
compensation plan under Section 401(a) of the Code nor is it subject to ERISA.

     Administration; Eligibility; Terms of Options; Exercise of Options

     The 1995 Plan is  administered by the  Compensation  Committee of the Board
(Administrator). Options under the 1995 Plan may be granted as the Administrator
determines,  in its  discretion,  only to employees or  consultants  who are not
directors or officers.  Each option  granted under the 1995 Plan is subject to a
written  stock  option  agreement.  The  agreement  sets  forth  the  terms  and
conditions of such grants, including the schedule under which the option becomes
exercisable  and the exercise  price of the option.  An option is exercised when
the optionee gives written notice specifying the number of full shares of Common
Stock to be purchased and tenders payment of the purchase price.  Funds received
by us upon exercise of an option are used for general corporate purposes.

     Termination of Status as Employee or Consultant

     If the  optionee's  status as an employee or consultant  terminates for any
reason (other than as a result of death), the optionee may, within the period of
time set forth in the stock option agreement,  exercise any option granted under
the 1995 Plan, but only to the extent such option was exercisable on the date of
such  termination.  To the extent that the option is not  exercised  within such
period,  the option  terminates.  If the  optionee's  status as an  employee  or
consultant  terminates as a result of death, the optionee's legal representative
may exercise the entire  option at any time within 12 months  following the date
of death.  To the extent that the option is not  exercised  within such 12-month
period,  the option  terminates.  An option is not transferable by the optionee,
other than by will or the laws of descent and  distribution,  and is exercisable
during the optionee's lifetime only by the optionee.

     Adjustments; Dissolution; Mergers and Asset Sales

     In the event any change, such as a stock split or dividend,  is made in our
capitalization  that  results  in an  increase  or  decrease  in the  number  of
outstanding  shares of our Common Stock  without  receipt of  consideration,  an
appropriate adjustment shall be made in the number of shares under the 1995 Plan
and the price per share covered by each  outstanding  option.  In the event of a
dissolution or liquidation,  all outstanding options will terminate  immediately
prior to the consummation of such action.  In the event of a merger with or into
another  corporation or a sale of all or substantially  all of our assets,  each
outstanding  option shall be assumed or an equivalent option  substituted by the
successor  corporation.  If the  successor  corporation  refuses to assume  such
options or to  substitute  equivalent  options,  each  outstanding  option shall
become fully vested and exercisable.

     Amendment and Termination

     The Board may amend or  terminate  the 1995 Plan at any time,  but any such
action shall not adversely  affect any stock option then  outstanding  under the
1995 Plan  without the  consent of the holder of the option.  The 1995 Plan will
terminate on July 19, 2012, unless earlier terminated as described above.


                PROPOSAL NO. 3 - APPROVAL OF AMENDED AND RESTATED
                        1993 DIRECTORS' STOCK OPTION PLAN

     The Amended and  Restated  Director  Plan  extends the term of our Director
Plan by ten years.  Unless the Amended and Restated  Director  Plan is approved,
the Director Plan will terminate on August 2, 2003.

     The Amended and Restated Director Plan also contains amendments prohibiting
the repricing of director  stock options and the re-grant of forfeited  director
stock  options.  We believe these  amendments  will conform the Director Plan to
current accounting standards and prevailing shareholder views.

     The Amended and Restated Director Plan also contains  amendments  regarding
the size,  vesting,  and post-service  exercisability of director stock options.
These  amendments  are  intended to  increase  director  remuneration  under our
Director  Plan to a level  that we think  will  approximate  the median for high
technology companies of comparable size. We believe than an increase in director
remuneration  is necessary in light of recent  federal  securities and corporate
governance  developments,  most notably the  Sarbanes-Oxley  Act of 2002.  These
developments  have  made it more  difficult  to  retain  and  attract  qualified
independent directors who possess the requisite financial and business expertise
to make valuable contributions to the effectiveness of the Board.

     In addition,  blackout periods can impose  significant  restrictions on the
opportunity of directors to exercise  stock  options.  Shortening the vesting of
director  stock  options  and  extending  the  period  during  which they may be
exercised   following  Board  service  will  provide  directors  with  increased
flexibility. We believe this not only enhances the attractiveness of the options
to directors but also encourages  them to wait to exercise  options and sell the
underlying   stock  until  they  are  no  longer  subject  to  insider   trading
restrictions, which helps avoid any appearance of impropriety.

     In summary, we are seeking shareholder approval of the Amended and Restated
Director  Plan  to  conform  to  current  accounting  standards  and  prevailing
shareholder  views,  attract and retain qualified outside  directors,  encourage
their continued service on the Board, foster their continued  independence,  and
help avoid the appearance of insider trading.

General

     On January 17,  2003,  our  Director  Plan was amended and  restated by the
Board of Directors (subject to shareholder approval) to extend the term Director
Plan  for  ten  years  and  to  (1)  prohibit   stock  option   repricings   and
cancellation/replacement  awards that result in variable award accounting unless
shareholder  approval  is  obtained;  (2) make  options  that  expire  or become
unexercisable for any reason unavailable for future grant; (3) reduce the number
of  options  initially  granted to new  directors  from  15,000 to  12,500;  (4)
increase the number of options  granted  annually to continuing  directors  from
5,000 to 12,500;  (5) change the date on which  annual  options  are  granted to
continuing  directors  from  August  1 to the  date  of the  annual  meeting  of
shareholders;  (6) provide  that  options  vest on the date of the first  annual
meeting of shareholders following the date of grant; and (7) increase the period
during which options may be exercised  following  termination  of service from a
minimum of three  months to four years (but in no event  beyond the  contractual
term of the option).

     Amendments  (1)  and  (2),  regarding   repricings  and  forfeitures,   are
applicable to all past,  present,  and future options granted under the Director
Plan.  Amendments (3), (4), and (5), regarding the size and date of options, are
applicable to all options  granted on or after May 23, 2003.  Amendments (6) and
(7),  regarding  vesting and  post-service  exercisability,  are  applicable  to
outstanding  options  (including  options  held by Mr.  Schwettmann,  who is not
seeking  re-election) with an exercise price equal to or greater than 75% of the
fair  market  value of our  Common  Stock on May 23,  2003,  and to all  options
granted on and after May 23, 2003. The modification of outstanding  options with
exercise  prices  that are  less  than  fair  market  value  will  result  in an
accounting  charge,  which we  estimate  will  not  exceed  $84,000.  Additional
accounting charges are possible in the future, which we estimate will not exceed
$252,000 in the aggregate.

     In this Proxy  Statement,  "Director Plan" means our 1993 Directors'  Stock
Option Plan prior to its amendment and  restatement  by our Board on January 17,
2003, and "Amended and Restated  Director Plan" means our 1993 Directors'  Stock
Option Plan  following  its  amendment  (subject to  shareholder  approval)  and
restatement by our Board.

     The Board of Directors  recommends that shareholders vote "FOR" the Amended
and Restated  Director  Plan. An abstention  will have the same effect as a vote
"AGAINST" approval of the Amended and Restated Director Plan.

Summary of the Director Plan and the Amended and Restated Director Plan

     The  essential  features  of the  Director  Plan and, to the extent that it
differs,  the Amended and  Restated  Director  Plan are  summarized  below.  The
Director Plan is not a qualified deferred compensation plan under Section 401(a)
of the Code and it is not subject to ERISA.

     Purposes

     The  purposes  of the  Director  Plan are to  attract  and  retain the best
available  personnel  for service as outside  directors,  to provide  additional
incentive  to such  nonemployee  directors,  and to  encourage  their  continued
service on the Board.

     Administration

     The Director Plan is designed to operate  automatically  without  requiring
administration. To the extent administration is necessary, it is provided by the
Board. The interpretation and construction of any provision of the Director Plan
by the Board  shall be final and  conclusive.  Members  of the Board  receive no
additional compensation for their services in connection with the administration
of the Director Plan.

     The Amended and Restated  Director  Plan  prohibits the Board from reducing
the exercise price of any outstanding  option,  or substituting  new options for
previously  granted options,  if such reduction or substitution  would result in
variable award accounting, unless shareholder approval is obtained.

     Terms of Options

     The Director Plan provides for the grant of  nonstatutory  stock options to
nonemployee directors. The Director Plan provides that each eligible director is
granted an initial  option to purchase  15,000 shares of our Common Stock on the
date on which such person first becomes an eligible  director  (Initial Option).
Thereafter,  each  eligible  director  is  granted an option to  purchase  5,000
additional shares of Common Stock on August 1 of each year if, on such date, the
eligible  director has served on our Board of Directors  for at least six months
(Subsequent Option).

     The Amended and Restated Director Plan provides that each eligible director
shall be granted an initial option to purchase 12,500 shares of our Common Stock
on the date on which such  person  first  becomes an  eligible  director  and an
additional  option  to  purchase  12,500  shares  of our  Common  Stock  on each
subsequent  date that such person is elected as a director at an annual  meeting
of our shareholders.

     All but one of our  directors  (Mr.  East) is  eligible  to receive  option
grants under the Director Plan.  Options  granted under the Director Plan expire
10 years after the date of grant.  Each option is  evidenced  by a stock  option
agreement.

          Exercise of the Options

          Under the Director Plan, the Initial Option becomes  exercisable as to
     25% of the shares  subject to the Initial  Option on the date of our annual
     shareholder  meeting  occurring  in the first,  second,  third,  and fourth
     calendar year  following the calendar year in which the Initial  Option was
     granted,  subject to the  optionee  remaining a director.  Each  Subsequent
     Option becomes  exercisable  in full on the date of our annual  shareholder
     meeting  occurring in the fourth  calendar year following the calendar year
     in which  the  Subsequent  Option  was  granted,  subject  to the  optionee
     remaining a director.

          Under the Amended  and  Restated  Director  Plan,  all options  become
     exercisable  on the  date  of the  first  annual  meeting  of  shareholders
     following the date of grant,  subject to the optionee  remaining a director
     until that annual  meeting.  These changes are  applicable  to  outstanding
     options  with an exercise  price  equal to or greater  than 75% of the fair
     market  value of our  Common  Stock  on May 23,  2003,  and to all  options
     granted on and after May 23, 2003.

          An  option  is  exercised  by  giving   written  notice  of  exercise,
     specifying  the number of full shares of Common Stock to be  purchased  and
     tendering  payment of the purchase price. The  consideration to be paid for
     shares issued upon exercise of options  granted under the Directors'  Plan,
     including the method of payment,  shall be determined by the administrators
     and may consist  entirely of (i) cash,  (ii) check,  (iii) shares of Common
     Stock,  (iv) the delivery of a properly  executed  exercise notice together
     with such other  documentation as the Board and the broker,  if applicable,
     shall  require to effect an  exercise  of the option  and  delivery  of the
     amount of sale or loan proceeds required to pay the exercise price, (v) any
     other   consideration   permissible  under  applicable  law,  or  (vi)  any
     combination of the foregoing methods.

          Option Price

          The exercise price for options  granted under the Director Plan is the
     fair market value of our Common Stock on the date of grant. The fair market
     value of a share of our Common  Stock is the  closing  sales price for such
     stock as quoted on the Nasdaq National Market on the date of grant.

          Termination of Status as a Director

          The Director Plan provides that, if the optionee  ceases to serve as a
     director,  the optionee may, but only within three months after the date he
     or she ceases to be a  director,  exercise  his or her option to the extent
     that  the  optionee  was  entitled  to  exercise  it at the  date  of  such
     termination,  provided  that the  option  is  exercised  no later  than its
     expiration  date.  The Director Plan also provides  that, if an optionee is
     unable to  continue  service as a director  as a result of his or her total
     and  permanent  disability,  the  optionee  may, but only within six months
     after the date of the optionee's termination, exercise his or her option to
     the extent  that the  optionee  was  entitled to exercise it at the date of
     such  termination,  provided that the option is exercised no later than its
     expiration  date. The Director Plan further  provides that, in the event an
     optionee  dies  while  serving  as a  director,  the  entire  option may be
     exercised  at any time within six months  after  death,  provided  that the
     option is exercised no later than its expiration  date. In addition,  if an
     optionee  dies within three months after he or she ceases to be a director,
     the option may be  exercised  at any time within six months  after death to
     the extent  that the  optionee  was  entitled to exercise it on the date of
     death,  provided that the option is exercised no later than its  expiration
     date.

          The Amended and Restated  Director  Plan provides that an optionee may
     exercise  an option  within  four years  after the date he or she ceases to
     serve as a director,  provided  that the option is  exercised no later than
     its expiration date. This change is applicable to outstanding  options with
     an exercise  price equal to or greater than 75% of the fair market value of
     our Common Stock on May 23, 2003,  and to all options  granted on and after
     May 23, 2003.

          Nontransferability of Options

          An option is not  transferable by the optionee,  other than by will or
     the  laws of  descent  and  distribution,  and is  exercisable  during  the
     optionee's lifetime only by the optionee.

     Stock Subject to the Option Plan

     The total  number of shares of our  Common  Stock  currently  reserved  for
issuance  under the Director  Plan is 85,000.  In addition,  the total number of
shares reserved for issuance  increases  automatically  on the first day of each
new fiscal year during the term of the Amended and Restated  Director Plan by an
amount  equal to (x)  100,000  shares of Common  Stock  minus (y) the  number of
shares of Common Stock  available for issuance under the Plan on the last day of
the immediately  preceding fiscal year.  Thus, after each annual  replenishment,
100,000  shares are  available  for grant.  The number of shares of Common Stock
reserved for issuance should be sufficient to meet all of our  requirements  for
option grants to directors.

     Under the Director Plan, if options expire or become  unexercisable for any
reason  without having been  exercised in full,  the  unpurchased  shares become
available  for future  grant  under the Plan.  Under the  Amended  and  Restated
Director Plan, those shares are not available for future grant.

     Adjustments; Dissolution; Mergers and Asset Sales

     In the event any change, such as a stock split or dividend,  is made in our
capitalization  that  results  in an  increase  or  decrease  in the  number  of
outstanding  shares of our Common Stock  without  receipt of  consideration,  an
appropriate  adjustment shall be made in the number of shares under the Director
Plan and the price per share covered by each outstanding option. In the event of
a dissolution or liquidation, all outstanding options will terminate immediately
prior to the consummation of such action.  In the event of a merger with or into
another  corporation or a sale of all or substantially  all of our assets,  each
outstanding  option shall be assumed or an equivalent option  substituted by the
successor  corporation.  In the event that the successor  corporation refuses to
assume such options or to substitute equivalent options, each outstanding option
shall become fully vested and exercisable.

     Amendment and Termination

     The Board may amend or  terminate  the Director  Plan at any time,  but any
such action shall not adversely affect any stock option then  outstanding  under
the Director Plan without the consent of the holder of the option. To the extent
necessary and desirable to comply with Rule 16b-3 (or any other  applicable  law
or regulation), shareholder approval of any amendment to the Director Plan shall
be  obtained  in such a manner  and to such a degree  as  required.  Unless  the
Amended and Restated Director Plan is approved, the Director Plan will terminate
on August 2, 2003. Any options  outstanding  under the Director Plan at the time
of its termination shall remain outstanding until they expire by their terms.

Certain Federal Income Tax Information

     Options  granted  under the  Director  Plan are  nonstatutory  options.  An
optionee  will  not  recognize  any  taxable  income  at the  time of grant of a
nonstatutory  option.  However,  upon its exercise,  the optionee will recognize
ordinary income for tax purposes measured by the excess of the fair market value
of the shares on the date of  exercise  over the  exercise  price.  Because  the
optionee is a director and therefore  subject to Section 16 of the Exchange Act,
the date of taxation (and the date of  measurement of taxable  ordinary  income)
may be deferred unless the optionee files an election under Section 83(b) of the
Code.  Upon resale of such shares by the optionee,  any  difference  between the
sales price and the exercise  price,  to the extent not  recognized  as ordinary
income as provided  above,  will be treated as capital gain or loss.  We will be
entitled  to a tax  deduction  in the amount  and at the time that the  optionee
recognizes  ordinary  income with respect to shares acquired upon exercise of an
option.

     The foregoing  summary of the federal income tax  consequences  of Director
Plan  transactions  is based on federal income tax laws in effect on the date of
this Proxy Statement.  This summary is not intended to be complete, and does not
describe foreign, state, or local tax consequences.

     The following table  summarizes the approximate  dollar value and number of
option  shares  granted under the Director Plan in 2002 to (i) each director who
is not an  executive  officer  and  (ii)  all  directors  who are not  executive
officers as a group.  Only  directors  who are not also  executive  officers are
eligible to receive options under the Director Plan.

                              Amended Plan Benefits
<TABLE>
<CAPTION>

                                                                                      1993 Directors' Stock Option
                                                                                                Plan (1)
                                                                                    ---------------------------------
                                                                                                         Number of
                                                                                                          Option
                                                                                     Dollar Value         Shares
                                Name and Position                                         (2)             Granted
----------------------------------------------------------------------------------  ---------------    --------------

<S>                                                                                 <C>                <C>
Jos C. Henkens (3)..............................................................    $        13,850             5,000
   Director

Jacob S. Jacobsson (3)..........................................................             13,850             5,000
   Director

Henry L. Perret (4).............................................................                 --                --
   Director

Frederic N. Schwettmann (3).....................................................             13,850             5,000
   Director

Robert G. Spencer (3)...........................................................             13,850             5,000
   Director

James R. Fiebiger (3)...........................................................             13,850             5,000
   Director
                                                                                    ---------------    --------------
Non-Executive Officer Director Group (5 persons)................................    $        69,250            25,000
</TABLE>
----------------------------------------

(1)  Future  benefits under the Director Plan are not  determinable  because the
     value of options  depends on the  market  price of our Common  Stock on the
     date of grant.

(2)  Indicates the  difference  between the exercise  price at which shares were
     granted under the Director Plan and $17.27, the closing price of our Common
     Stock on January 3, 2003,  the last  business  day in our 2002 fiscal year.
     However, none of the options was exercisable in 2002.

(3)  Option vests on the date of our annual shareholder  meeting in 2006, unless
     the Amended  and  Restated  Director  Plan is  approved,  in which case the
     option vests immediately.

(4)  Mr. Perret was elected to our Board of Directors on January 17, 2003,  when
     he received an initial  option  grant for 15,000  shares under the Director
     Plan. If the Amended and Restated  Director  Plan is approved,  this option
     will vest  immediately  unless the fair market value of our Common Stock on
     May 23, 2003, is $22.63 or more.


                 PROPOSAL NO. 4 - RATIFICATION OF APPOINTMENT OF
                              INDEPENDENT AUDITORS

     The  Board  of  Directors  has  selected  Ernst & Young  LLP to  audit  our
financial  statements for the current  fiscal year,  which ends January 4, 2004.
The Board of Directors  recommends that shareholders vote "FOR"  ratification of
the selection of Ernst & Young LLP as our independent  auditors. In the event of
a negative vote, the Board will reconsider its selection.

     Representatives  of Ernst & Young LLP are  expected  to be  present  at the
Annual Meeting, will have the opportunity to make a statement if they so desire,
and are expected to be available to respond to appropriate questions.

Audit Fees

     The  aggregate  fees  billed  for  professional  services  rendered  by our
auditors,  Ernst & Young LLP, for the most two recent fiscal years  consisted of
the following:
<TABLE>
<CAPTION>
                                                                                          2002             2001
                                                                                    ----------------  ----------------

<S>                                                                                 <C>               <C>
Audit Fees......................................................................    $    355,680      $    327,811

Audit Related Fees..............................................................          46,800            16,545

Tax Fees (1)....................................................................         315,378 (2)       407,757 (3)

All Other Fees..................................................................               0                 0
</TABLE>
----------------------------------------

(1)  Consists  of  tax-related   services   performed  in  connection  with  the
     preparation  of  state  and  federal  tax  returns,  as well as  other  tax
     consulting  matters,  including an analysis  regarding the realizability of
     net operating losses we acquired in our purchase of GateField  Corporation.
     The  completion  of  the  net  operating   loss  analysis   resulted  in  a
     reclassification  from  goodwill to net deferred tax assets.  See Note 5 of
     Notes to Consolidated Financial Statements for more information.

(2)  Includes  $94,508 in fees for  services  performed in  connection  with the
     preparation of state and federal tax returns.

(3)  Includes  $89,115 in fees for  services  performed in  connection  with the
     preparation of state and federal tax returns.




<PAGE>


                                OTHER INFORMATION

Security Ownership of Management

     The following table sets forth certain information regarding the beneficial
ownership of our Common Stock as of the Record Date by (i) each  director,  (ii)
each officer named in the Summary  Compensation  Table,  and (iii) all directors
and officers as a group:
<TABLE>
<CAPTION>

                                                                                         Shares         Percentage
                                                                                       Beneficially    Beneficially
                                       Name                                             Owned (1)        Owned (2)
--------------------------------------------------------------------------------      --------------   ------------
<S>                                                                                          <C>          <C>
John C. East (3)................................................................             344,737      1.40%
James R. Fiebiger (3)...........................................................              11,250         *
Esmat Z. Hamdy (3)..............................................................             106,350         *
Jos C. Henkens (3)..............................................................              21,297         *
Paul V. Indaco (3)..............................................................             186,537         *
Jacob S. Jacobsson (3)..........................................................              15,000         *
Dennis G. Kish (3)..............................................................             105,310         *
Fares N. Mubarak (3)............................................................             143,755         *
Henry L. Perret.................................................................              26,238         *
Frederic N. Schwettmann (3).....................................................              37,500         *
Robert G. Spencer (3)...........................................................              33,166         *
All Directors and Executive Officers as a Group (15 persons) (3)................           1,359,749       5.45%
</TABLE>

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

*    Less than one percent.

(1)  Except  as  indicated  in the  footnotes  to this  table  and  pursuant  to
     applicable  community  property laws, the persons and entities named in the
     table have sole voting and sole investment power with respect to all shares
     of Common Stock beneficially owned.

(2)  Calculated as a percentage of shares of Common Stock  outstanding as of the
     Record Date.

(3)  Includes for each indicated  director and officer shares issuable  pursuant
     to stock options that are exercisable within 60 days after the Record Date:
     for Mr. East,  276,345 shares;  for Mr.  Fiebiger,  11,250 shares;  for Mr.
     Hamdy,  67,136 shares;  for Mr.  Henkens,  17,500  shares;  for Mr. Indaco,
     179,561 shares;  for Mr. Jacobsson,  15,000 shares;  for Mr. Kish,  105,310
     shares;  for Mr.  Mubarak,  143,755  shares;  for Mr.  Schwettmann,  37,500
     shares; for Mr. Spencer,  30,500 shares; and for all directors and officers
     as a group, 1,201,563 shares.

Certain Transactions

     On  February  3, 2000,  David L. Van De Hey,  our Vice  President & General
Counsel and  Secretary,  exercised  options to purchase  34,952 shares of Common
Stock and, as permitted under the options plans,  tendered a promissory note for
payment of the $367,674.25  purchase price. The promissory note had a three-year
term  and was a  full-recourse  obligation  (secured  by the  shares  purchased)
bearing interest at the rate of 6.11% per annum,  compounded  semiannually.  The
largest aggregate amount of indebtedness  outstanding under the note at any time
during the last fiscal year was  $423,174.51  in June 2002,  when Mr. Van De Hey
paid the promissory note in full.

Executive Compensation

     Summary of Officer Compensation

     The following table sets forth  information  concerning the compensation of
the five mostly highly  compensated  executive  officers who were serving as our
executive officers at the end of the last completed fiscal year:

                                        Summary Compensation Table (1)
<TABLE>
<CAPTION>

                                                                                                       Long Term
                                                                                                     Compensation
                                                                                                     -------------
                                                                  Annual Compensation                    Awards
                                                     ---------------------------------------------   -------------
                                                                                                       Securities
                                                                                   Other Annual        Underlying
       Name and Principal Position           Year       Salary       Bonus (2)     Compensation         Options
-----------------------------------------   -------  -------------  -----------  -----------------   ------------

<S>                                          <C>     <C>            <C>          <C>                      <C>
John C. East...........................      2002    $  381,894     $        0   $           0            120,000
   President and                             2001       362,800 (3)          0               0            125,000
   Chief Executive Officer                   2000       378,863        445,044               0            140,000

Esmat Z. Hamdy.........................      2002       280,957              0               0             45,000
   Senior Vice President of                  2001       280,957              0               0             50,000
   Technology and Operations                 2000       275,434        229,261               0             63,000

Paul V. Indaco.........................      2002       259,064              0           8,700 (4)         45,000
   Vice President of Sales                   2001       259,064              0           8,700 (4)         50,000
                                             2000       256,620        221,469           8,700 (4)         52,000

Dennis G. Kish  .......................      2002       233,257              0               0             45,000
   Vice President of Marketing               2001       235,000              0               0             50,000
                                             2000       215,697        191,760               0             65,000

Fares N. Mubarak.......................      2002       273,505              0               0             45,000
   Vice President of Engineering             2001       283,936              0               0             50,000
                                             2000       271,250        223,111               0             65,000
</TABLE>
----------------------------------------

(1)  Except as set forth in this  table,  there was no  reportable  compensation
     awarded  to,  earned by, or paid to the named  executive  officers in 2002.

(2)  We pay bonuses in the year following that in which the bonuses were earned.

(3)  Mr. East  voluntarily  cut his salary from March 1 to September 1, 2001, as
     well as from January 16, 2003, until the present.

(4)  Other compensation related to car allowance.

     Option Grants

     The following  table sets forth certain  information  with respect to stock
options  granted  during  2002 to each of the  executive  officers  named in the
Summary Compensation Table:

                        Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
                                                                                    Potential Realizable Value at
                                                                                 Assumed Annual Rates of Stock Price
                                           Individual Grants (1)                   Appreciation for Option Term (2)
                            ---------------------------------------------------  ------------------------------------

                                           % of Total
                                             Options
                               Number of   Granted to     Per
                              Securities    Employees     Share
                              Underlying    in Fiscal   Exercise     Expiration
           Name               Options (3)      Year      Price          Date      0%         5%            10%
-----------------------     --------------  ----------  ---------    ----------  -----  -------------  -------------
<S>                            <C>               <C>    <C>            <C>       <C>    <C>            <C>
John C. East...........        120,000 (4)       8.18%  $  19.73       03/14/12  $   0  $   1,488,971  $   3,773,345

Esmat Z. Hamdy.........         45,000 (4)       3.07%      19.73      03/14/12      0        558,364       1,415,004

Paul V. Indaco.........         45,000 (4)       3.07%      19.73      03/14/12      0        558,364       1,415,004

Dennis G. Kish.........         45,000 (4)       3.07%      19.73      03/14/12      0        558,364       1,415,004

Fares N. Mubarak.......         45,000 (4)       3.07%      19.73      03/14/12      0        558,364       1,415,004
</TABLE>

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

(1)  The  exercise  price of these  options is equal to the fair market value of
     our  Common  Stock on the date of  grant,  as  determined  by our  Board of
     Directors.  The  options  expire ten years from the date of grant,  are not
     transferable by the optionee (other than by will or the laws of descent and
     distribution),  and are exercisable during the optionee's  lifetime only by
     the optionee. To the extent exercisable at the time of termination, options
     may be exercised within six months following  termination of the optionee's
     employment,  unless  termination is the result of death,  in which case the
     options  become  fully  vested and may be  exercised  at any time within 12
     months  following  death by the optionee's  estate or a person who acquired
     the right to exercise the option by bequest or inheritance.

(2)  The 0%, 5%, and 10% assumed  annual rates of  appreciation  are mandated by
     the rules of the SEC and do not  represent  our estimate or  projection  of
     future Common Stock prices. The "potential realizable value" was calculated
     at the assumed rates of appreciation using the applicable exercise price as
     the base.

(3)  Options  vest and are fully  exercisable  upon an  involuntary  termination
     other  than "for  cause," or a  voluntary  termination  "for good  reason,"
     following a "change of control."

(4)  Option begins vesting August 1, 2002, and vests 50% on August 1, 2004, then
     quarterly at a rate of 6.25% until August 1, 2006.


<PAGE>


     Option Values

     The following table sets forth certain information concerning the number of
options  exercised  during 2002 by the executive  officers  named in the Summary
Compensation  Table, as well as the number and aggregate value of shares covered
by both  exercisable  and  unexercisable  stock  options held by such  executive
officers as of January 5, 2003, the end of the fiscal year.

                 Aggregated Option Exercises in Last Fiscal Year
                        and Fiscal Year End Option Values
<TABLE>
<CAPTION>

                                                               Number of Securities         Value of Unexercised
                                                              Underlying Unexercised       In-the-Money Options at
                                                            Options at Fiscal Year-End       Fiscal Year-End (1)
                                                           -----------------------------  --------------------------

                                 Shares
                                Acquired         Value                         Not                           Not
            Name               On Exercise   Realized (2)    Exercisable   Exercisable    Exercisable    Exercisable
---------------------------    -----------  -------------  -------------  ------------  -------------  -------------

<S>                                <C>      <C>                  <C>           <C>      <C>            <C>
John C. East...............        135,719  $   1,490,566        249,158       318,438  $     512,477  $      68,006

Esmat Z. Hamdy.............         67,839        602,533         57,262       127,438         52,417          21,792

Paul Indaco................              -              -        164,123       127,877        555,343          47,245

Dennis G. Kish.............         10,000         73,500         87,187       147,813              -               -

Fares Mubarak..............         10,867        119,485        133,756       128,438        446,879          21,792
</TABLE>

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

(1)  Calculated on the basis of the difference between the closing sale price at
     the fiscal year end ($17.27) and the exercise price.

(2)  Calculated on the basis of the  difference  between the exercise  price and
     (i) the sale  price  when the  exercised  option is sold on the same day or
     (ii) the closing sale price on the exercise date.

     Change-in-Control Arrangements

     We have entered into  Management  Continuity  Agreements with our executive
officers,  which are  designed  to ensure  continued  service  in the event of a
"change of  control."  Each  Agreement  provides for  accelerated  vesting of an
officer's  stock options  outstanding  at the time of a change in control if the
officer dies or in the event of an  "involuntary  termination"  of the officer's
employment other than for "cause" following the change of control.

     We also have an Employee  Retention Plan, which provides that all employees
who hold unvested  stock options as of the date of any "change of control" shall
receive,  upon remaining in our employ for six months following the date of such
change of control (or earlier, if terminated other than for "cause"),  an amount
equal to one-third of the aggregate "spread" on their unvested options as of the
date of such change of control.  "Spread" is defined as the  difference  between
the  change-of-control  price and the option exercise price. Payment may be made
in cash, common stock, or a combination of cash and common stock.

     "Change  of  control"  is  defined  as (i)  acquisition  by any  person  of
beneficial  ownership  of more  than  30% of the  combined  voting  power of our
outstanding securities;  (ii) a change of the majority of our Board of Directors
within a  two-year  period;  (iii) our  merger or  consolidation  with any other
corporation that has been approved by our  shareholders,  other than a merger or
consolidation that would result in our voting securities outstanding immediately
prior the merger or  consolidation  continuing  to represent at least 50% of the
total voting power of the surviving entity  outstanding  immediately  after such
merger or  consolidation;  or (iv)  approval  by our  shareholders  of a plan of
complete  liquidation  or an  agreement  for the sale or  disposition  of all or
substantially all of our assets.

Compensation Committee Report

     The  following  report is  provided  to  shareholders  by the  Compensation
Committee of the Board of Directors.

     Background

     The  Compensation  Committee  is a  standing  committee  of  the  Board  of
Directors  with  the same  authority  as the  Board  to act on all  compensation
matters,  except for actions  requiring  shareholder  approval or related to the
compensation of directors. Since Actel's incorporation in 1986, the Compensation
Committee has been primarily  responsible for establishing and reviewing Actel's
management  compensation  policies.  Since Actel's  initial  public  offering in
August  1993,  the  Compensation  Committee  has formally  administered  Actel's
management  compensation policies and plans,  including our 1986 Incentive Stock
Option Plan,  1995 Employee and  Consultant  Stock Plan, and 1993 Employee Stock
Purchase Plan.

     No member of the  Compensation  Committee is a former or current officer or
employee of Actel. The current members of the Compensation  Committee are Jos C.
Henkens, Jacob S. Jacobsson, and Frederic N. Schwettmann. Mr. Henkens has been a
member of the  Compensation  Committee since 1988, Mr. Jacobsson since 1998, and
Mr. Schwettmann since 1993. Meetings of the Compensation  Committee are attended
by Actel's Vice President of Human Resources and/or Chief Financial Officer, who
provide  background  and  market  information  and make  executive  compensation
recommendations but do not vote on any matter before the Compensation Committee.

     Compensation Policy

     There are three major elements of Actel's executive  compensation  program.
The first  element is annual  cash  compensation  in the form of base salary and
incentive  bonuses.  The second  element is long-term  incentive  stock options,
which are designed to align compensation  incentives with shareholder goals. The
third element is compensation and employee benefits  generally  available to all
employees  of Actel,  such as the 1993  Employee  Stock  Purchase  Plan,  health
insurance, and a 401(k) plan.

     The  Compensation  Committee  establishes the  compensation of each officer
principally  by  considering  the average  compensation  for officers in similar
positions with 20 companies in the semiconductor,  software,  and CAE industries
that have annual  revenues  between  $100  million and $999  million  (Reference
Group). The purpose of monitoring the Reference Group is to provide a stable and
continuing frame of reference for compensation decisions.  Most of the companies
in the Reference Group are included in the Nasdaq  Electronic  Component  Stocks
index (see "Company Stock Performance"  below). The composition of the Reference
Group is subject to change from year to year based on the Committee's assessment
of  comparability,  including the extent to which the Reference  Group  reflects
changes occurring within Actel and in the industry as a whole. Actel's policy is
to have officer compensation near the average of the Reference Group.

     After  analyzing  Reference Group base salaries and comparing them with the
base salaries of Actel's  officers,  the  Compensation  Committee  determines an
annual  salary  increase  budget.  In January 2002,  the  Committee  approved no
changes  to base  salary.  In  addition,  the  Committee  cancelled  the  salary
increases  approved for 2001,  which were not  implemented in 2001 in accordance
with a company-wide postponement of salary increases.

     Under Actel's  Executive Bonus Plan for 2002,  incentive cash payments were
based on Actel's  revenues and profits,  the achievement of corporate goals, and
the growth of Actel  relative  to its  principal  competitors.  The  revenue and
profitability  objectives  were  established in the Plan on a sliding scale,  so
that the percentage achievement of each was determinable  objectively at the end
of the year. The corporate  goals for 2002 included  engineering,  selling,  and
marketing  objectives,   which  were  weighted  in  the  order  indicated.   The
engineering  objectives  included  silicon,  software,  and process  goals.  The
selling objectives included sales and design-win goals. The marketing objectives
included product launch and product planning goals. The revenue,  profitability,
and corporate goals were weighted differently under the Executive Bonus Plan for
some  executive  officers,  based on  relevance to their  positions,  but had an
aggregate  weighting  of  80%  for  all  executive  officers.  The  "competitive
performance"  objective  accounted  for  the  remaining  20%,  and it  was  also
determinable  objectively at the end of the year. In 2002, Actel did not achieve
the  minimum  levels   required  by  the  Executive  Bonus  Plan's  revenue  and
profitability objectives.  The result was that no bonuses were paid to executive
officers for 2002. The  Compensation  Committee  believes that the payment of no
bonuses for 2002 was appropriate in light of Actel's operating results.

     Actel believes that executive  officers should hold substantial,  long-term
equity  stakes  in  Actel so that  the  interests  of  executive  officers  will
correspond with the interests of the shareholders.  As a result,  stock or stock
options  constitute a significant  portion of the compensation  paid by Actel to
its  officers.  After  analyzing  the  practices  of the  Reference  Group,  the
Compensation  Committee determines an annual budget for option grants to Actel's
employees and officers. In granting stock options to officers,  the Compensation
Committee  considers  a  number  of  factors,  such as the  officer's  position,
responsibility,  and equity interest in Actel,  and evaluates the officer's past
performance  and  future   potential  to  influence  the  long-term  growth  and
profitability  of Actel.  After taking these  considerations  into account,  the
Compensation Committee granted to Messrs. East, Hamdy, Indaco, Kish, and Mubarak
in 2002 the  options to  purchase  shares of Common  Stock  shown on the "Option
Grants"  table.  All of such options were granted at the value of Actel's Common
Stock on the date of grant.

     Compensation of Chief Executive Officer

     The  Compensation  Committee  generally  uses the same factors and criteria
described above in making  compensation  decisions regarding the Chief Executive
Officer.  In 2002,  Mr.  East's  annual base salary  remained  at  $381,894.  An
increase  approved in 2001 but not  implemented  was cancelled.  Mr. East's 2002
bonus was determined under Actel's  Executive Bonus Plan in the manner described
above  (except that his target bonus was 90% of his base salary) and resulted in
no bonus payment for 2002.

     Deductibility of Executive Compensation

     Beginning in 1994, the Code limited the federal income tax deductibility of
compensation  paid to Actel's chief executive and to each of the other four most
highly  compensated  executive  officers.  For this  purpose,  compensation  can
include,  in addition to cash compensation,  the difference between the exercise
price of stock  options  and the  value of the  underlying  stock on the date of
exercise. Actel may deduct compensation with respect to any of these individuals
only to the extent that during any fiscal year such compensation does not exceed
$1 million or meets certain other  conditions  (such as  shareholder  approval).
Considering  Actel's  current  compensation  plans  and  policy,  Actel  and the
Compensation  Committee believe that, for the near future,  there is little risk
that  Actel  will lose any  significant  tax  deduction  relating  to  executive
compensation.   If  the  deductibility  of  executive   compensation  becomes  a
significant  issue,  Actel's  compensation  plans and policy will be modified to
maximize deductibility if the Compensation Committee determines that such action
is in the best interests of Actel.

                                                         Jos C. Henkens
                                                         Jacob S. Jacobsson
                                                         Frederic N. Schwettmann


Compensation Committee Interlocks and Insider Participation

     No member of the Compensation  Committee is an officer or employee of Actel
or any of its  subsidiaries,  and no officer or  employee of Actel or any of its
subsidiaries has served as a member of the Compensation  Committee since Actel's
initial public offering.

Audit Committee Report

     The following  report is provided to shareholders by the Audit Committee of
the Board of Directors.

     The Audit Committee of Actel's Board of Directors is currently  composed of
four directors and operates under a written charter adopted by the Board.  Henry
L.  Perret was added to Actel's  Board of  Directors  on January 17,  2003,  and
appointed  to the  Audit  Committee  to serve as the Audit  Committee  Financial
Expert.  Mr.  Perret was  employed by Actel from January 1996 until August 2001,
last serving as Vice President of Finance and Chief Financial Officer.  Although
Mr.  Perret is  "independent"  as defined in Section  10A(m)(3)  of the Sarbanes
Oxley Act, he is not  "independent" as defined in NASD Rule 4200 proposed by The
Nasdaq Stock Market,  Inc. The Board of Directors  determined  that Mr. Perret's
membership  on the Audit  Committee  was in the best  interests of Actel and its
shareholders  because of his  experience  and  sophistication  in accounting and
financial  matters and his familiarity with Actel and its financial  statements.
The other three members of the Audit Committee are  "independent"  as defined in
the Sarbanes Oxley Act as well as in proposed NASD Rule 4200. The members of the
Committee are listed at the end of this report.

     Management is responsible for Actel's  internal  controls and the financial
reporting process.  The independent  accountants  (auditors) are responsible for
performing an independent audit of Actel's consolidated  financial statements in
accordance  with  generally  accepted  auditing  standards  and issuing a report
thereon.  The  Committee's  responsibility  is to monitor  these  processes.  In
addition, the Committee appoints Actel's auditors (Ernst & Young LLP).

     In this context,  the Committee  has  discussed  with Actel's  auditors the
overall scope and plans for the independent audit. Management represented to the
Committee  that  Actel's  consolidated  financial  statements  were  prepared in
accordance with generally accepted accounting principles.

     Discussions  about  Actel's  audited  financial   statements  included  the
auditors'  judgments  about  the  quality,  not just the  acceptability,  of the
accounting  principles,  the  reasonableness of significant  judgments,  and the
clarity of disclosures in the financial statements. The Committee also discussed
with the auditors  other  matters  required by  Statement on Auditing  Standards
(SAS) No. 61,  Communication  with Audit  Committees,  as amended by SAS No. 90,
Audit Committee Communications.

     Actel's auditors provided to the Committee the written disclosures required
by Independence  Standards Board Standard No. 1,  Independence  Discussions with
Audit Committees,  and the Committee  discussed the auditors'  independence with
management and the auditors.  In addition,  the Committee considered whether the
tax and other non-audit consulting services provided by the auditors' firm could
impair the  auditors'  independence  and  concluded  that such services have not
impaired the auditors' independence.

     Based on the  Committee's  discussion  with management and the auditors and
the Committee's  review of the  representations  of management and the report of
the auditors to the Committee,  the Committee  recommended to the Board that the
audited  consolidated  financial statements be included in Actel's Annual Report
on Form 10-K for the year ended January 5, 2003, filed with the SEC.

                                                         James R. Fiebiger
                                                         Henry L. Perret
                                                         Frederic N. Schwettmann
                                                         Robert G. Spencer

Company Stock Performance

     The following  graph shows a comparison of cumulative  total return for our
Common  Stock,  The Nasdaq Stock Market (US),  and Nasdaq  Electronic  Component
Stocks.  In  preparing  the graph,  it was assumed that (i) $100 was invested on
December 31, 1997, in our Common Stock, The Nasdaq Stock Market (US), and Nasdaq
Electronic Component Stocks and (ii) all dividends were reinvested.

                      Comparison of Cumulative Total Return
                                [OBJECT OMITTED]

<TABLE>
<CAPTION>
                                      12/31/97  12/31/98  12/31/99  12/31/00  12/31/01  12/31/02
                                      --------  --------  --------  --------  --------  --------
<S>                                     <C>       <C>       <C>       <C>       <C>       <C>
Nasdaq Stock Market..................   $100      $141      $261      $157      $125      $ 86

Nasdaq Electronic Components Stocks..   $100      $154      $287      $236      $161      $ 86

Actel Corporation....................   $100      $158      $190      $192      $158      $128

</TABLE>



The closing sale price of our Common Stock on December 31, 2002, was $16.22. The
closing sale price of our Common Stock on April 3, 2003, was $17.95.


<PAGE>


                          COMPLIANCE WITH SECTION 16(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

     To our  knowledge,  based  solely on our  review of the  copies of  reports
furnished to us, all of our directors,  officers,  and beneficial owners of more
than ten percent of our Common  Stock  filed with the SEC on a timely  basis all
reports  required by Section  16(a) of the  Exchange  Act during our most recent
fiscal year.

                                  OTHER MATTERS

     We know of no other matters to be submitted to the Annual  Meeting.  If any
other matters  properly come before the Annual  Meeting,  it is the intention of
the persons named in the enclosed  proxy card to vote the shares they  represent
as the Board of Directors may recommend.

                                              BY ORDER OF THE BOARD OF DIRECTORS

                                              David L. Van De Hey
                                              Secretary
Dated:  April 4, 2003

WE WILL MAIL WITHOUT CHARGE TO ANY  SHAREHOLDER  UPON WRITTEN  REQUEST A COPY OF
OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JANUARY 5, 2003, INCLUDING THE
FINANCIAL  STATEMENTS  AND SCHEDULE AND A LIST OF EXHIBITS.  REQUESTS  SHOULD BE
SENT  TO  INVESTOR  RELATIONS,  ACTEL  CORPORATION,   955  EAST  ARQUES  AVENUE,
SUNNYVALE, CALIFORNIA 94086-4533.

<PAGE>


 ACTEL CORPORATION

                         ANNUAL MEETING OF SHAREHOLDERS

                                  May 23, 2003
                        10:00 a.m. Pacific Daylight Time

                                 Delegate Room
                                 Embassy Suites
                               2885 Lakeside Drive
                              Santa Clara, CA 95054

Embassy Suites Santa Clara Silicon Valley is located five miles north of the San
Jose International  Airport at the intersection of Highway 101 and Great America
Parkway exit. From Highway 101 North,take the Bowers  Avenue/Great  America exit
and turn left. Turn right on Augustine,and  then turn right on Lakeside Drive to
the hotel.

[MAP]

                                      PROXY

This proxy is solicited by the Board of Directors for use at the annual  Meeting
on May 23,  2003.  The shares of stock you hold in your account or in a dividend
reinvestment account will be voted as you specify below.

If no choice is specified, the proxy will be voted "FOR" all Items.

By signing the proxy,  you revoke all prior proxies and appoint John C. East and
Jos C. Henkens, and each of them, with full power of substitution,  to vote your
shares on the matters  shown on the reverse side and any other  matters that may
come before the Annual Meeting and all adjournments.

                      See reverse for voting instructions.
<PAGE>

          The Board of Directors Recommends a Vote FOR all Items.

1.   Election of Directors:   01 John C. East
                              02 James R. Fiebiger
                              03 Jos C. Henkens
                              04 Jacob S. Jacobsson
                              05 Henry L. Perret
                              06 Robert G. Spencer

       -- Vote FOR all nominees               -- Vote WITHHELD from all nominees
          (except as marked)

(Instructions:  To withhold  authority to
vote for any  indicated  nominee,  write
the  number(s) of the  nominee(s) in the
box provided to the right.)                  -----------------------------------


2.   To approve Actel  Corporation's  Amended and Restated  1993 Employee  Stock
     Purchase Plan
                              -- FOR           -- AGAINST           -- ABSTAIN

3.   To approve Actel  Corporation's  Amended and Restated 1993 Directors' Stock
     Purchase Plan
                              -- FOR           -- AGAINST           -- ABSTAIN

4.   To  ratify  the  appointment  of Ernst & Young  LLP as Actel  Corporation's
     independent auditors.

                              -- FOR           -- AGAINST           -- ABSTAIN


THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.

Address Change?  Mark Box     --
Indicate changes below:

                                      Date:
                                               ---------------------------------


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

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

                                        Signature(s) in Box.

                                        Please  sign  exactly  as  your  name(s)
                                        appear  on  Proxy.   If  held  in  joint
                                        tenancy,    all   persons   must   sign.
                                        Trustees,  administrators,  etc., should
                                        include     title     and     authority.
                                        Corporations should provide full name of
                                        corporation   and  title  of  authorized
                                        officer signing the proxy.

Mark,sign,  and date your proxy card and return it in the postage-paid  envelope
we have provided or return it to Actel Corporation,  c/o:  Shareowner  Services,
P.O. Box 64873, St Paul, MN 55164-0873

<PAGE>
                                   APPENDIX A

                                ACTEL CORPORATION

                        1993 EMPLOYEE STOCK PURCHASE PLAN

                     Amended and Restated as of May23, 2003

                        [subject to shareholder approval]



     The following constitute the provisions of the 1993 Employee Stock Purchase
Plan of Actel Corporation.

     1. Purpose.  The purpose of the Plan is to provide employees of the Company
and its Designated  Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated  payroll deductions.  It is the intention of the
Company to have the Plan  qualify as an  "Employee  Stock  Purchase  Plan" under
Section  423 of the Code.  The  provisions  of the Plan,  accordingly,  shall be
construed so as to extend and limit  participation  in a manner  consistent with
the requirements of that section of the Code.

     2. Definitions.

          (a) "Board" shall mean the Board of Directors of the Company.

          (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

          (c) "Common Stock" shall mean the Common Stock of the Company.

          (d) "Company" shall mean Actel Corporation, a California corporation.

          (e)  "Compensation"  shall mean all base straight time gross  earnings
     including  commissions,  overtime  and shift  premiums,  and all  incentive
     compensation, incentive payments, bonuses and other compensation.

          (f) "Designated  Subsidiaries"  shall mean the Subsidiaries which have
     been  designated  by the Board from time to time in its sole  discretion as
     eligible to participate in the Plan.

          (g)  "Employee"  shall mean any  individual  who is an employee of the
     Company or any Designated Subsidiary for tax purposes whose employment with
     the Company or any  Designated  Subsidiary  averages  at least  twenty (20)
     hours per week and more than five (5)  months  in any  calendar  year.  For
     purposes  of the Plan,  the  employment  relationship  shall be  treated as
     continuing  intact while the  individual is on sick leave or other leave of
     absence approved by the Company.  Where the period of leave exceeds 90 days
     and the  individual's  right to  reemployment  is not guaranteed  either by
     statute or by contract, the employment  relationship will be deemed to have
     terminated on the 91st day of such leave.

          (h)  "Enrollment  Date"  shall  mean the  first  day of each  Offering
     Period.

          (i) "Exercise Date" shall mean the last day of each Purchase Period.

          (j) "Fair  Market  Value"  shall  mean,  as of any date,  the value of
     Common Stock determined as follows:

               (1) If the  Common  Stock  is  listed  on any  established  stock
          exchange or a national market system, including without limitation the
          National  Market  System of the  National  Association  of  Securities
          Dealers,  Inc. Automated Quotation  ("NASDAQ") System, its Fair Market
          Value  shall be the  closing  sale price for the Common  Stock (or the
          mean of the closing bid and asked prices,  if no sales were reported),
          as quoted on such exchange (or the exchange  with the greatest  volume
          of  trading   in  Common   Stock)  or  system  on  the  date  of  such
          determination,  as reported  in the Wall Street  Journal or such other
          source as the Board deems reliable, or;

               (2) If the Common  Stock is quoted on the NASDAQ  system (but not
          on the National  Market  System  thereof) or is regularly  quoted by a
          recognized securities dealer but selling prices are not reported,  its
          Fair  Market  Value  shall be the mean of the  closing  bid and  asked
          prices  for the  Common  Stock on the date of such  determination,  as
          reported in the Wall Street  Journal or such other source as the Board
          deems reliable, or;

               (3) In the absence of an established market for the Common Stock,
          the Fair Market Value thereof shall be determined in good faith by the
          Board.

               (4) For purposes of the Enrollment  Date under the first Offering
          Period under the Plan, the Fair Market Value of the Common Stock shall
          be the Price to Public as set forth in the final prospectus filed with
          the Securities and Exchange  Commission pursuant to Rule 424 under the
          Securities Act of 1933, as amended.

          (k)  "Offering   Period"  shall  mean  the  period  of   approximately
     twenty-four (24) months during which an option granted pursuant to the Plan
     may be exercised. The first offering period shall commence with the date on
     which the  Company's  registration  statement on Form S-1 (or any successor
     form  thereof)  is  declared  effective  by  the  Securities  and  Exchange
     Commission.  This first offering period shall terminate on the last Trading
     Day in the period  ending  August 1 or February 1  approximately  24 months
     later.  Subsequent offering periods shall commence on the first Trading Day
     on or after August 1 and February 1 of each year and  terminate on the last
     Trading Day of the periods ending  twenty-four  months later.  The duration
     and timing of Offering Periods may be changed pursuant to Section 4 of this
     Plan.

          (l) "Plan" shall mean this Employee Stock Purchase Plan.

          (m)  "Purchase  Price"  shall mean an amount  equal to 85% of the Fair
     Market  Value of a share of Common Stock on the  Enrollment  Date or on the
     Exercise Date, whichever is lower.

          (n) "Purchase  Period" shall mean the  approximately  six month period
     commencing  after one Exercise Date and ending with the next Exercise Date,
     except that the first Purchase Period of any Offering Period shall commence
     on the Enrollment  Date and end with the next Exercise Date.  However,  the
     first Purchase  Period of the first  Offering  Period under the Plan may be
     more or less than six months in duration.

          (o) "Reserves" shall mean the number of shares of Common Stock covered
     by each  option  under the Plan which have not yet been  exercised  and the
     number of shares of Common  Stock which have been  authorized  for issuance
     under the Plan but not yet placed under options.

          (p)  "Subsidiary"  shall mean a corporation,  domestic or foreign,  of
     which not less than 50% of the voting  shares are held by the  Company or a
     Subsidiary,  whether or not such  corporation  now  exists or is  hereafter
     organized or acquired by the Company or a Subsidiary.

          (q) "Trading Day" shall mean a day on which national  stock  exchanges
     and the National  Association  of Securities  Dealers  Automated  Quotation
     (NASDAQ) System are open for trading.

     3. Eligibility.

          (a) Any Employee (as defined in Section  2(g)),  who shall be employed
     by the Company on a given  Enrollment Date shall be eligible to participate
     in the Plan.

          (b) Any  provisions  of the Plan to the contrary  notwithstanding,  no
     Employee shall be granted an option under the Plan (i) if immediately after
     the  grant,  such  Employee  (or any  other  person  whose  stock  would be
     attributed to such Employee  pursuant to Section  424(d) of the Code) would
     own  capital  stock of the  Company  and/or  hold  outstanding  options  to
     purchase  such  stock  possessing  five  percent  (5%) or more of the total
     combined  voting power or value of all classes of the capital  stock of the
     Company or of any  Subsidiary,  or (ii) which  permits his or her rights to
     purchase  stock under all employee  stock purchase plans of the Company and
     its  subsidiaries  to accrue at a rate which exceeds  twenty-five  thousand
     dollars  ($25,000)  of Fair Market Value of such stock  (determined  at the
     time such option is granted) for each calendar year in which such option is
     outstanding at any time.

     4. Offering  Periods.  The  Plan  shall  be  implemented  by  consecutive,
overlapping  Offering Periods with the first Offering Period commencing with the
date on which the Company's registration statement on Form S-1 (or any successor
form thereof) is declared  effective by the Securities and Exchange  Commission.
The Board  shall  have the power to change  the  duration  of  Offering  Periods
(including  the  commencement  dates  thereof) with respect to future  offerings
without shareholder  approval if such change is announced at least five (5) days
prior to the scheduled  beginning of the first  Offering  Period to be affected.
Absent  action  by the  Board,  each  Offering  Period  shall be for a period of
approximately twenty-four months (24) and new Offering Periods shall commence on
the first  Trading Day of February and August of each year.  The first  Offering
Period  under  the Plan may be more or less  than  twenty-four  (24)  months  in
duration.

     5. Participation.

          (a) An  eligible  Employee  may  become a  participant  in the Plan by
     completing a subscription  agreement authorizing payroll deductions (in the
     form of Exhibit A to this Plan) and  filing it with the  Company's  payroll
     office prior to the applicable Enrollment Date.

          (b) Payroll  deductions for a participant  shall commence on the first
     payroll  following the Enrollment Date and shall end on the last payroll in
     the  Offering  Period to which such  authorization  is  applicable,  unless
     sooner terminated by the participant as provided in Section 10 hereof.

     6. Payroll Deductions.

          (a) At the time a participant files his or her subscription agreement,
     he or she  shall  elect  to have  payroll  deductions  made on each pay day
     during the Offering Period in an amount not exceeding fifteen percent (15%)
     of the  Compensation  which he or she  receives  on each pay day during the
     Offering Period,  and the aggregate of such payroll  deductions  during the
     Offering Period shall not exceed fifteen percent (15%) of the participant's
     Compensation during said Offering Period.

          (b) All payroll deductions made for a participant shall be credited to
     his or her account under the Plan and will be withheld in whole percentages
     only. A participant may not make any additional payments into such account.

          (c) A participant may discontinue his or her participation in the Plan
     as provided in Section 10 hereof,  or may  increase or decrease the rate of
     his or her payroll deductions during the Offering Period by filing with the
     Company  a new  subscription  agreement  authorizing  a change  in  payroll
     deduction  rate.  The Board  may,  in its  discretion,  limit the number of
     participation  rate changes during any Offering Period.  The change in rate
     shall be effective  with the first full payroll  period  following five (5)
     business days after the Company's receipt of the new subscription agreement
     unless the Company elects to process a given change in  participation  more
     quickly. A participant's  subscription agreement shall remain in effect for
     successive  Offering  Periods  unless  terminated as provided in Section 10
     hereof.

          (d) Notwithstanding  the foregoing,  to the extent necessary to comply
     with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
     payroll  deductions  may be decreased to 0% if the following  should occur:
     For the Purchase Periods that end during a single calendar year, the sum of
     all payroll deductions that have been used to purchase stock under the Plan
     plus all payroll  deductions  accumulated  for the purchase of stock equals
     $21,250.  Payroll  deductions shall recommence at the rate provided in such
     participant's subscription agreement at the beginning of the first Purchase
     Period which is scheduled to end in the subsequent  calendar  year,  unless
     terminated by the participant as provided in Section 10 hereof.

          (e) At the time the option is  exercised,  in whole or in part,  or at
     the time some or all of the Company's Common Stock issued under the Plan is
     disposed of, the participant must make adequate provision for the Company's
     federal, state, or other tax withholding  obligations,  if any, which arise
     upon the exercise of the option or the  disposition of the Common Stock. At
     any time, the Company may, but will not be obligated to,  withhold from the
     participant's  compensation  the amount  necessary  for the Company to meet
     applicable withholding  obligations,  including any withholding required to
     make available to the Company any tax  deductions or benefits  attributable
     to sale or early disposition of Common Stock by the Employee.

     7. Grant of Option.  On the Enrollment Date of each Offering  Period,  each
eligible  Employee  participating  in such  Offering  Period shall be granted an
option  to  purchase  on the  Exercise  Date of  such  Offering  Period  (at the
applicable  Purchase  Price) up to a number of  shares of the  Company's  Common
Stock  determined by dividing such  Employee's  payroll  deductions  accumulated
prior to such Exercise Date and retained in the Participant's  account as of the
Exercise  Date by the  applicable  Purchase  Price;  provided that such purchase
shall be subject to the  limitations  set forth in Sections  3(b) and 12 hereof;
provided, further, that in no event shall any Employee purchase in excess of ten
thousand  shares in any Offering  Period.  Exercise of the option shall occur as
provided in Section 8 hereof,  unless the participant has withdrawn  pursuant to
Section 10 hereof,  and the option  shall expire on the last day of the Offering
Period.

     8.  Exercise of Option.  Unless a  participant  withdraws  from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised  automatically on the Exercise Date, and the maximum number of full
shares  subject to the option shall be  purchased  for such  participant  at the
applicable  Purchase Price with the accumulated payroll deductions in his or her
account.  No  fractional  shares  will  be  purchased;  any  payroll  deductions
accumulated  in a  participant's  account which are not sufficient to purchase a
full share  shall be retained in the  participant's  account for the  subsequent
Purchase Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof.  Any other monies left over in a participant's  account after
the Exercise Date shall be returned to the  participant.  During a participant's
lifetime,  a participant's  option to purchase  shares  hereunder is exercisable
only by him or her.

     9. Delivery. As promptly as practicable after each Exercise Date on which a
purchase of shares  occurs,  the  Company  shall  arrange  the  delivery to each
participant,  as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option.

     10. Withdrawal; Termination of Employment.

          (a) A  participant  may withdraw all but not less than all the payroll
     deductions  credited to his or her account and not yet used to exercise his
     or her option  under the Plan at any time by giving  written  notice to the
     Company  in the form of Exhibit B to this  Plan.  All of the  participant's
     payroll  deductions  credited  to his or her  account  will be paid to such
     participant  promptly  after  receipt  of  notice  of  withdrawal  and such
     participant's   option  for  the  Offering  Period  will  be  automatically
     terminated,  and no further  payroll  deductions for the purchase of shares
     will be made during the Offering Period. If a participant withdraws from an
     Offering Period, payroll deductions will not resume at the beginning of the
     succeeding Offering Period unless the participant delivers to the Company a
     new subscription agreement.

          (b) Upon a  participant's  ceasing to be an  Employee  (as  defined in
     Section  2(g)  hereof),  for any  reason,  he or she will be deemed to have
     elected to withdraw  from the Plan and the payroll  deductions  credited to
     such  participant's  account during the Offering Period but not yet used to
     exercise the option will be returned to such participant or, in the case of
     his or her death, to the person or persons  entitled  thereto under Section
     14 hereof, and such participant's option will be automatically terminated.

     11.  Interest.  No interest  shall  accrue on the payroll  deductions  of a
participant in the Plan.

     12. Stock.

          (a) The maximum  number of shares of the Company's  Common Stock which
     shall be made available for sale under the Plan shall be 3,519,680  shares,
     subject to  adjustment  upon  changes in  capitalization  of the Company as
     provided in Section 18 hereof.  If on a given  Exercise  Date the number of
     shares with respect to which options are to be exercised exceeds the number
     of shares then available  under the Plan, the Company shall make a pro rata
     allocation of the shares  remaining  available for purchase in as uniform a
     manner as shall be practicable and as it shall determine to be equitable.

          (b) The  participant  will have no interest or voting  right in shares
     covered by his option until such option has been exercised.

          (c) Shares to be  delivered  to a  participant  under the Plan will be
     registered in the name of the participant or in the name of the participant
     and his or her spouse.

     13. Administration.

          (a)  Administrative  Body. The Plan shall be administered by the Board
     or a committee of members of the Board appointed by the Board. The Board or
     its  committee  shall have full and  exclusive  discretionary  authority to
     construe,  interpret  and  apply  the  terms  of  the  Plan,  to  determine
     eligibility  and to  adjudicate  all disputed  claims filed under the Plan.
     Every  finding,  decision  and  determination  made  by  the  Board  or its
     committee  shall, to the full extent permitted by law, be final and binding
     upon all  parties.  Members  of the Board who are  eligible  Employees  are
     permitted to participate in the Plan, provided that:

               (1) Members of the Board who are eligible to  participate  in the
          Plan may not vote on any matter  affecting the  administration  of the
          Plan or the grant of any option pursuant to the Plan.

               (2) If a Committee is  established  to  administer  the Plan,  no
          member of the Board who is eligible to  participate in the Plan may be
          a member of the Committee.

          (b)  Rule  16b-3  Limitations.   Notwithstanding   the  provisions  of
     Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
     under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
     or any successor  provision ("Rule 16b-3") provides  specific  requirements
     for the  administrators  of plans  of this  type,  the  Plan  shall be only
     administered  by such a body and in such a manner as shall  comply with the
     applicable  requirements of Rule 16b-3.  Unless permitted by Rule 16b-3, no
     discretion concerning decisions regarding the Plan shall be afforded to any
     committee  or person  that is not  "disinterested"  as that term is used in
     Rule 16b-3.

     14. Designation of Beneficiary.

          (a) A participant may file a written  designation of a beneficiary who
     is to receive any shares and cash, if any, from the  participant's  account
     under the Plan in the event of such  participant's  death  subsequent to an
     Exercise  Date on which the option is  exercised  but prior to  delivery to
     such  participant of such shares and cash. In addition,  a participant  may
     file a written designation of a beneficiary who is to receive any cash from
     the participant's account under the Plan in the event of such participant's
     death prior to exercise of the option.  If a participant is married and the
     designated beneficiary is not the spouse, spousal consent shall be required
     for such designation to be effective.

          (b) Such  designation of beneficiary may be changed by the participant
     at any time by written  notice.  In the event of the death of a participant
     and in the absence of a beneficiary  validly  designated under the Plan who
     is  living  at the time of such  participant's  death,  the  Company  shall
     deliver  such shares  and/or cash to the executor or  administrator  of the
     estate of the participant, or if no such executor or administrator has been
     appointed  (to  the  knowledge  of  the  Company),   the  Company,  in  its
     discretion, may deliver such shares and/or cash to the spouse or to any one
     or more  dependents  or  relatives  of the  participant,  or if no  spouse,
     dependent or relative is known to the Company, then to such other person as
     the Company may designate.

     15. Transferability. Neither payroll deductions credited to a participant's
account nor any rights  with  regard to the  exercise of an option or to receive
shares  under  the Plan  may be  assigned,  transferred,  pledged  or  otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided  in Section 14 hereof) by the  participant.  Any such  attempt at
assignment,  transfer,  pledge or other  disposition  shall be  without  effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 10 hereof.

     16. Use of Funds.  All payroll  deductions  received or held by the Company
under the Plan may be used by the Company  for any  corporate  purpose,  and the
Company shall not be obligated to segregate such payroll deductions.

     17. Reports. Individual accounts will be maintained for each participant in
the Plan.  Statements  of account  will be given to  participating  Employees at
least  annually,  which  statements  will  set  forth  the  amounts  of  payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

     18. Adjustments Upon Changes in Capitalization.

          (a) Changes in  Capitalization.  Subject to any required action by the
     shareholders of the Company, the Reserves as well as the price per share of
     Common  Stock  covered by each option under the Plan which has not yet been
     exercised shall be proportionately adjusted for any increase or decrease in
     the number of issued shares of Common Stock  resulting  from a stock split,
     reverse stock split, stock dividend, combination or reclassification of the
     Common Stock,  or any other increase or decrease in the number of shares of
     Common Stock  effected  without  receipt of  consideration  by the Company;
     provided,  however,  that conversion of any  convertible  securities of the
     Company  shall  not be deemed to have been  "effected  without  receipt  of
     consideration".   Such  adjustment  shall  be  made  by  the  Board,  whose
     determination  in that  respect  shall be final,  binding  and  conclusive.
     Except as expressly  provided herein,  no issuance by the Company of shares
     of stock of any class,  or securities  convertible  into shares of stock of
     any class,  shall affect, and no adjustment by reason thereof shall be made
     with respect to, the number or price of shares of Common  Stock  subject to
     an option.

          (b)  Dissolution  or  Liquidation.   In  the  event  of  the  proposed
     dissolution  or  liquidation  of the  Company,  the  Offering  Periods will
     terminate  immediately  prior to the  consummation of such proposed action,
     unless otherwise provided by the Board.

          (c) Merger or Asset  Sale.  In the event of a proposed  sale of all or
     substantially  all of the  assets  of the  Company,  or the  merger  of the
     Company with or into another corporation,  each option under the Plan shall
     be assumed or an equivalent  option shall be  substituted by such successor
     corporation or a parent or subsidiary of such successor corporation, unless
     the Board determines, in the exercise of its sole discretion and in lieu of
     such assumption or  substitution,  to shorten the Offering  Periods then in
     progress by setting a new  Exercise  Date (the "New  Exercise  Date") or to
     cancel each  outstanding  option to purchase and refund all sums  collected
     from participants during the Offering Period then in progress. If the Board
     shortens the Offering  Periods  then in progress in lieu of  assumption  or
     substitution  in the event of a merger or sale of assets,  the Board  shall
     notify each  participant in writing,  at least ten (10) business days prior
     to the New Exercise  Date,  that the Exercise  Date for his option has been
     changed  to the New  Exercise  Date and that his option  will be  exercised
     automatically  on the New Exercise  Date,  unless prior to such date he has
     withdrawn  from the Offering  Period as provided in Section 10 hereof.  For
     purposes  of this  paragraph,  an option  granted  under the Plan  shall be
     deemed to be assumed if, following the sale of assets or merger, the option
     confers  the right to  purchase,  for each  share of stock  subject  to the
     option immediately prior to the sale of assets or merger, the consideration
     (whether stock, cash or other securities or property)  received in the sale
     of assets or merger by  holders  of Common  Stock for each  share of Common
     Stock held on the effective  date of the  transaction  (and if such holders
     were offered a choice of consideration, the type of consideration chosen by
     the  holders  of a majority  of the  outstanding  shares of Common  Stock);
     provided,  however,  that if such  consideration  received  in the  sale of
     assets or merger was not solely common stock of the  successor  corporation
     or its parent (as  defined in Section  424(e) of the Code),  the Board may,
     with the consent of the successor corporation and the participant,  provide
     for the  consideration  to be  received  upon  exercise of the option to be
     solely  common stock of the  successor  corporation  or its parent equal in
     fair  market  value to the per share  consideration  received by holders of
     Common Stock and the sale of assets or merger.

          The  Board  may,  if it so  determines  in the  exercise  of its  sole
     discretion,  also make provision for adjusting the Reserves, as well as the
     price per share of Common Stock covered by each outstanding  option, in the
     event the Company effects one or more  reorganizations,  recapitalizations,
     rights  offerings  or  other  increases  or  reductions  of  shares  of its
     outstanding   Common  Stock,   and  in  the  event  of  the  Company  being
     consolidated with or merged into any other corporation.

     19. Amendment or Termination.

          (a) The Board of  Directors of the Company may at any time and for any
     reason  terminate or amend the Plan.  Except as provided in Sections 18 and
     19 hereof,  no such  termination  can affect  options  previously  granted,
     provided that  outstanding  and/or future Offering Periods may be shortened
     and/or terminated by the Board of Directors at any time. Except as provided
     in Section 18 hereof and in the preceding  sentence,  no amendment may make
     any change in any option  theretofore  granted which adversely  affects the
     rights of any  participant.  To the extent  necessary  to comply  with Rule
     16b-3 or under Section 423 of the Code (or any successor  rule or provision
     or any other  applicable  law or  regulation),  the  Company  shall  obtain
     shareholder approval in such a manner and to such a degree as required.

          (b) Without  shareholder  consent  and  without  regard to whether any
     participant rights may be considered to have been "adversely affected," the
     Board (or its committee) shall be entitled to change the Offering  Periods,
     limit the frequency  and/or number of changes in the amount withheld during
     an Offering  Period,  establish  the exchange  ratio  applicable to amounts
     withheld in a currency other than U.S. dollars,  permit payroll withholding
     in excess of the amount  designated by a participant in order to adjust for
     delays or  mistakes  in the  Company's  processing  of  properly  completed
     withholding elections,  establish reasonable waiting and adjustment periods
     and/or  accounting and crediting  procedures to ensure that amounts applied
     toward  the  purchase  of  Common  Stock  for  each  participant   properly
     correspond with amounts withheld from the participant's  Compensation,  and
     establish  such  other  limitations  or  procedures  as the  Board  (or its
     committee) determines in its sole discretion advisable which are consistent
     with the Plan.

     20. Notices.  All notices or other  communications  by a participant to the
Company under or in  connection  with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location,  or by
the person, designated by the Company for the receipt thereof.

     21.  Conditions  Upon  Issuance of Shares.  Shares shall not be issued with
respect to an option  unless the  exercise of such option and the  issuance  and
delivery of such  shares  pursuant  thereto  shall  comply  with all  applicable
provisions  of law,  domestic or foreign,  including,  without  limitation,  the
Securities  Act of 1933,  as amended,  the  Securities  Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder,  and the requirements
of any stock  exchange  upon which the  shares may then be listed,  and shall be
further  subject to the approval of counsel for the Company with respect to such
compliance.

     As a condition  to the  exercise of an option,  the Company may require the
person  exercising  such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  shares  if, in the  opinion of
counsel  for  the  Company,  such a  representation  is  required  by any of the
aforementioned applicable provisions of law.

     22. Term of Plan. The Plan shall become  effective on the date on which the
Company's  registration statement on Form S-1 (or any successor form thereof) is
declared effective by the Securities and Exchange Commission.  It shall continue
in effect  until  August 2, 2013,  unless  sooner  terminated  under  Section 19
hereof.

     23.  Additional  Restrictions  of Rule 16b-3.  The terms and  conditions of
options granted  hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the  applicable  provisions  of
Rule  16b-3.  This Plan  shall be  deemed to  contain,  and such  options  shall
contain,  and the shares issued upon exercise  thereof shall be subject to, such
additional  conditions  and  restrictions  as may be  required  by Rule 16b-3 to
qualify for the  maximum  exemption  from  Section 16 of the  Exchange  Act with
respect to Plan transactions.

     24.  Automatic  Transfer  to Low  Price  Offering  Period.  To  the  extent
permitted by Rule 16b-3 of the Securities  Exchange Act of 1934, as amended,  if
the Fair Market Value of the Common  Stock on any  Exercise  Date in an Offering
Period is lower than the Fair Market Value of the Common Stock on the Enrollment
Date of such Offering  Period,  then all  participants  in such Offering  Period
shall be automatically withdrawn from such Offering Period immediately after the
exercise of their options on such Exercise Date and automatically re-enrolled in
the immediately following Offering Period as of the first day thereof.

<PAGE>
                                   APPENDIX B

                                ACTEL CORPORATION

                        1993 DIRECTORS' STOCK OPTION PLAN

                     Amended and Restated as of May 23, 2003

                        [subject to shareholder approval]



     1. Purposes of the Plan. The purposes of this Directors'  Stock Option Plan
are to attract and retain the best available  personnel for service as Directors
of the Company, to provide additional  incentive to the Outside Directors of the
Company to serve as Directors,  and to encourage their continued  service on the
Board.

        All options granted hereunder shall be "nonstatutory stock options".

     2. Definitions. As used herein, the following definitions shall apply:

        (a) "Board" shall mean the Board of Directors of the Company.

        (b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

        (c) "Common Stock" shall mean the Common Stock of the Company.

        (d) "Company" shall mean Actel Corporation, a California corporation.

        (e) "Continuous  Status as a Director"  shall mean the absence of any
     interruption or termination of service as a Director.

        (f) "Director" shall mean a member of the Board.

        (g) "Effective  Date" shall have the meaning as set forth in Section 6
     below.

        (h) "Employee"  shall  mean  any  person,   including   officers  and
     Directors,  employed  by the  Company  or any Parent or  Subsidiary  of the
     Company.  The  payment  of a  director's  fee by the  Company  shall not be
     sufficient in and of itself to constitute "employment" by the Company.

        (i) "Exchange Act" shall mean the Securities  Exchange Act of 1934, as
     amended.

        (j) "First  Option"  shall  have the  meaning as set forth in Section
     4(b)(ii) below.

        (k) "Option" shall mean a stock option granted pursuant to the Plan.

        (l) "Optioned Stock" shall mean the Common Stock subject to an Option.

        (m) "Optionee" shall mean an Outside Director who receives an Option.

        (n) "Outside Director" shall mean a Director who is not an Employee.

        (o) "Parent"  shall  mean  a  "parent  corporation",  whether  now or
     hereafter existing, as defined in Section 424(e) of the Code.

        (p) "Plan" shall mean this 1993 Directors' Stock Option Plan.

        (q) "Share"  shall mean a share of the Common  Stock,  as adjusted in
     accordance with Section 11 of the Plan.

        (r) "Subsequent Option" shall have the meaning as set forth in Section
     4(b)(iii) below.

        (s) "Subsidiary" shall mean a "subsidiary corporation", whether now or
     hereafter existing, as defined in Section 424(f) of the Code.

     3. Stock  Subject to the Plan.  Subject to the  provisions of Section 11 of
the Plan, the maximum  aggregate number of Shares which may be optioned and sold
under  the Plan is  230,000  Shares  (the  "Pool")  of Common  Stock,  increased
annually  (subsequent to the January 23, 1998,  amendment and restatement of the
Plan) on the first day of each fiscal year by (x) 100,000 less (y) the number of
shares  available  for issuance  under the Director  Plan on the last day of the
immediately  preceding fiscal year. The Shares may be authorized,  but unissued,
or reacquired Common Stock.

     If an Option should expire or become  unexercisable  for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall not in any event be  returned  to the Plan and shall not become  available
for future grant under the Plan.  If Shares which were acquired upon exercise of
an Option are subsequently  repurchased by the Company, such Shares shall not in
any event be  returned  to the Plan and shall not  become  available  for future
grant under the Plan.

     4. Administration of and Grants of Options under the Plan.

          (a) Administrator. Except as otherwise required herein, the Plan shall
     be administered by the Board.

          (b) Procedure  for  Grants.  The Board may grant  Options  to Outside
     Directors  hereunder,  and on such terms, as are decided in its discretion.
     Additionally,   Options  shall   automatically  be  granted   hereunder  in
     accordance with the following provisions:

               (i) After May 23, 2003,  each person who first becomes an Outside
          Director shall be  automatically  granted an Option to purchase 12,500
          Shares  (the "First  Option")  on the date on which such person  first
          becomes  an  Outside   Director,   whether  through  election  by  the
          shareholders  of the Company or  appointment by the Board of Directors
          to fill a vacancy.

               (ii)  Beginning on May 23, 2003,  each Outside  Director shall be
          automatically   granted  an  Option  to  purchase   12,500  Shares  (a
          "Subsequent  Option")  on the  date  of  each  annual  meeting  of the
          Company's  shareholder  in which the  Outside  Director  is elected to
          serve on the Board.

               (iii)  Notwithstanding the provisions of subsections (i) and (ii)
          hereof,  in the event  that a grant  would  cause the number of Shares
          subject to  outstanding  Options plus the number of Shares  previously
          purchased upon exercise of Options to exceed the Pool,  then each such
          automatic  grant  shall be for that  number  of Shares  determined  by
          dividing the total number of Shares  remaining  available for grant by
          the number of Outside  Directors  on the  automatic  grant  date.  Any
          further  grants  shall then be  deferred  until such time,  if any, as
          additional  Shares  become  available for grant under the Plan through
          action of the  shareholders to increase the number of Shares which may
          be issued  under the Plan or through  cancellation  or  expiration  of
          Options previously granted hereunder.

               (iv)  Notwithstanding  the provisions of subsections (i) and (ii)
          hereof,  any grant of an Option made  before the Company has  obtained
          shareholder  approval of the Plan in accordance with Section 17 hereof
          shall be conditioned upon obtaining such  shareholder  approval of the
          Plan in accordance with Section 17 hereof.

               (v) The terms of a First  Option  granted  hereunder  shall be as
          follows:

                    (A) the First  Option  shall be  exercisable  only while the
               Outside Director remains a Director of the Company, except as set
               forth in Section 9 hereof.

                    (B) the  exercise  price per Share shall be 100% of the fair
               market value (as defined in Section 8(b)  hereunder) per Share on
               the date of grant of the First Option.

                    (C) the First Option shall vest and become exercisable as to
               one  hundred  percent  (100%) of the Shares  subject to the First
               Option on the date of the  Company's  second  annual  shareholder
               meeting  following the date of grant,  subject to the  provisions
               set forth in Section 9 below. Notwithstanding the foregoing, with
               respect to a First  Option  that was  outstanding  before May 23,
               2003,  and has an exercise price less than 75% of the fair market
               value of the Company's  Common Stock on May 23, 2003,  such First
               Option shall vest and become  exercisable as to 25% of the Shares
               subject to the First Option on the date of the  Company's  annual
               shareholder  meetings  occurring  in each of the  first,  second,
               third,  and fourth  calendar years following the calendar year in
               which the date of grant  occurred,  subject to the provisions set
               forth in Sections 9 and 11 below.

               (vi) The terms of a Subsequent  Option granted hereunder shall be
          as follows:

                    (A) the Subsequent  Option shall be  exercisable  only while
               the Outside Director remains a Director of the Company, except as
               set forth in Section 9 hereof.

                    (B) the  exercise  price per Share shall be 100% of the fair
               market  value  per  Share on the date of grant of the  Subsequent
               Option.

                    (C) the Subsequent Option shall become exercisable as to one
               hundred  percent  (100%) of the Shares  subject to the Subsequent
               Option on the date of the Company's  annual  shareholder  meeting
               occurring in the year following the date of grant, subject to the
               provisions  set  forth in  Section 9 below.  Notwithstanding  the
               foregoing,   with  respect  to  a  Subsequent   Option  that  was
               outstanding  before May 23, 2003,  and has an exercise price less
               than 75% of the fair market value of the  Company's  Common Stock
               on May 23,  2003,  such  Subsequent  Option shall vest and become
               exercisable  as to 100% of the Shares  subject to the  Subsequent
               Option on the date of the Company's annual  shareholder  meetings
               occurring in the fourth calendar year following the calendar year
               in which the date of grant  occurred,  subject to the  provisions
               set forth in Sections 9 and 11 below.

          (c) Powers of the Board. Subject to the provisions and restrictions of
     the Plan, the Board shall have the  authority,  in its  discretion:  (i) to
     grant discretionary stock options to Outside Directors,  upon such terms as
     are  determined by the Board in its  discretion,  (ii) to  determine,  upon
     review of relevant  information  and in accordance with Section 8(b) of the
     Plan,  the fair market value of the Common  Stock;  (iii) to determine  the
     exercise  price per share of Options to be granted,  which  exercise  price
     shall be determined in  accordance  with Section 8(a) of the Plan;  (iv) to
     interpret  the  Plan  and  to  prescribe,   amend  and  rescind  rules  and
     regulations relating to the Plan; (v) to authorize any person to execute on
     behalf of the Company any instrument required to effectuate the grant of an
     Option  previously   granted   hereunder;   and  (vi)  to  make  all  other
     determinations  deemed necessary or advisable for the administration of the
     Plan.  Notwithstanding  anything  in this Plan to the  contrary,  the Board
     shall have not have the power or authority  without  obtaining  shareholder
     approval to substitute new Options for previously granted Options or reduce
     the price of any Option if such  substitution  or reduction would result in
     variable award accounting.

          (d) Effect of Board's  Decision.  All  decisions,  determinations  and
     interpretations  of the Board shall be final and  binding on all  Optionees
     and any other holders of any Options granted under the Plan.

          (e) Suspension or  Termination  of Option.  If the President or his or
     her designee  reasonably  believes that an Optionee has committed an act of
     misconduct,  the President may suspend the Optionee's right to exercise any
     option  pending a  determination  by the Board of Directors  (excluding the
     Outside  Director  accused of such  misconduct).  If the Board of Directors
     (excluding the Outside Director  accused of such misconduct)  determines an
     Optionee  has  committed  an  act  of  embezzlement,   fraud,   dishonesty,
     nonpayment of an obligation  owed to the Company,  breach of fiduciary duty
     or deliberate  disregard of the Company rules resulting in loss,  damage or
     injury to the Company,  or if an Optionee makes an unauthorized  disclosure
     of any Company  trade secret or  confidential  information,  engages in any
     conduct  constituting unfair  competition,  induces any Company customer to
     breach a contract  with the Company or induces any  principal  for whom the
     Company acts as agent to terminate  such agency  relationship,  neither the
     Optionee  nor his or her estate  shall be entitled  to exercise  any option
     whatsoever. In making such determination, the Board of Directors (excluding
     the Outside Director accused of such misconduct) shall act fairly and shall
     give the  Optionee  an  opportunity  to  appear  and  present  evidence  on
     Optionee's  behalf at a hearing  before  the  Board or a  committee  of the
     Board.

     5.  Eligibility.  Options  may be  granted  only to Outside  Directors.  An
Outside  Director  who has been granted an Option may, if he or she is otherwise
eligible, be granted an additional Option or Options.

     The Plan  shall not confer  upon any  Optionee  any right  with  respect to
continuation of service as a Director or nomination to serve as a Director,  nor
shall it  interfere in any way with any rights which the Director or the Company
may have to terminate his or her directorship at any time.

     6. Term of Plan;  Effective  Date.  The Plan shall become  effective on the
date on which the Company's registration statement on Form S-1 (or any successor
form thereof) is declared  effective by the Securities  and Exchange  Commission
(the "Effective Date"). It shall continue in effect until August 2, 2013, unless
sooner  terminated under Section 13 of the Plan,  subject to the limitations set
forth in this Plan.

     7. Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof.

     8. Exercise Price and Consideration.

          (a) Exercise Price.  The per Share exercise price for the Shares to be
     issued  pursuant to exercise of an Option  shall be 100% of the fair market
     value per Share on the date of grant of the Option.

          (b) Fair Market  Value.  The fair market  value per Share shall be the
     mean  of  the  bid  and   asked   prices  of  the   Common   Stock  in  the
     over-the-counter  market  on the date of  grant,  as  reported  in The Wall
     Street  Journal  (or,  if not so  reported,  as  otherwise  reported by the
     National  Association of Securities Dealers Automated Quotation  ("NASDAQ")
     System)  or, in the event  that the  Common  Stock is traded on the  NASDAQ
     National Market System or listed on a stock exchange, the fair market value
     per Share shall be the closing price on such system or exchange on the date
     of grant of the Option,  as reported in The Wall Street Journal,  provided,
     however, that if such market or exchange is closed on the date of the grant
     of the Option  then the fair  market  value per Share shall be based on the
     most recent date on which such trading  occurred  immediately  prior to the
     date of the grant of the Option;  provided,  further,  that for purposes of
     First  Options  granted on the  Effective  Date,  the fair market value per
     share shall be the initial public  offering price as set forth in the final
     prospectus  filed with the Securities and Exchange  Commission  pursuant to
     Rule 424 under the Securities Act of 1933, as amended.

          (c) Form of Consideration. The consideration to be paid for the Shares
     to be issued upon  exercise of an Option  shall  consist  entirely of cash,
     check,  other  Shares  having a fair market  value on the date of surrender
     equal to the aggregate exercise price of the Shares as to which said Option
     shall be exercised  (which,  if acquired from the Company,  shall have been
     held for at least six  months),  delivery of a properly  executed  exercise
     notice together with  instructions  to a broker to deliver  promptly to the
     Company the amount of sale proceeds  required to pay the exercise price, or
     any  combination of such methods of payment and/or any other  consideration
     or method of payment as shall be permitted under applicable corporate law.

     9. Exercise of Option.

          (a)  Procedure  for  Exercise;  Rights as a  Shareholder.  Any  Option
     granted  hereunder  shall be  exercisable at such times as are set forth in
     Section 4(b) hereof or, with respect to a  discretionary  grant, as decided
     by the Board in its discretion; provided, however, that no Options shall be
     exercisable  until  shareholder  approval  of the Plan in  accordance  with
     Section 17 hereof has been obtained.

          An Option may not be exercised for a fraction of a Share.

          An Option shall be deemed to be exercised  when written notice of such
     exercise has been given to the Company in accordance  with the terms of the
     Option by the person  entitled to exercise  the Option and full payment for
     the Shares with respect to which the Option is exercised  has been received
     by the Company. Full payment may consist of any consideration and method of
     payment  allowable  under Section 8(c) of the Plan.  Until the issuance (as
     evidenced by the appropriate entry on the books of the Company or of a duly
     authorized  transfer  agent  of  the  Company)  of  the  stock  certificate
     evidencing such Shares,  no right to vote or receive dividends or any other
     rights as a  shareholder  shall exist with respect to the  Optioned  Stock,
     notwithstanding  the exercise of the Option.  A share  certificate  for the
     number of Shares so  acquired  shall be issued to the  Optionee  as soon as
     practicable  after exercise of the Option. No adjustment will be made for a
     dividend  or other right for which the record date is prior to the date the
     stock certificate is issued, except as provided in Section 11 of the Plan.

          Exercise of an Option in any manner  shall result in a decrease in the
     number of Shares which  thereafter  may be available,  both for purposes of
     the Plan and for sale under the Option, by the number of Shares as to which
     the Option is exercised.

          (b) Termination of Status as a Director. If an Outside Director ceases
     to serve as a Director on or after May 23,  2003,  he or she may,  but only
     within four (4) years (or such other period of time as is determined by the
     Board)  after the date he or she  ceases to be a Director  of the  Company,
     exercise  his or her Option to the extent  that he or she was  entitled  to
     exercise it at the date of such termination. Notwithstanding the foregoing,
     in no event may the Option be exercised after its term set forth in Section
     7 has expired. To the extent that such Outside Director was not entitled to
     exercise an Option at the date of such  termination,  or does not  exercise
     such  Option  (which he or she was  entitled to  exercise)  within the time
     specified  herein,   the  Option  shall  terminate.   Notwithstanding   the
     foregoing,  with respect to an Option that was  outstanding  before May 23,
     2003,  and has an exercise  price less than 75% of the fair market value of
     the Company's  Common Stock on May 23, 2003, an Outside Director shall have
     only three (3) months (or such other period of time not  exceeding  six (6)
     months as is  determined  by the Board) to exercise  such Option  after the
     date he or she  ceases to be a  Director  of the  Company,  but only to the
     extent  that he or she was  entitled  to  exercise  it at the  date of such
     termination.

          (c) Disability of Optionee.  Notwithstanding the provisions of Section
     9(b)  above,  in the event a  Director  is unable  to  continue  his or her
     service as a Director  with the Company as a result of his or her total and
     permanent  disability  (as  defined in  Section  22(e)(3)  of the  Internal
     Revenue Code) on or after May 23, 2003, he or she may, but only within four
     (4) years (or such other period of time as is determined by the Board) from
     the date of such  termination,  exercise his or her Option to the extent he
     or she was  entitled  to  exercise  it at the  date  of  such  termination.
     Notwithstanding  the  foregoing,  in no event may the  Option be  exercised
     after its term set forth in Section 7 has expired. To the extent that he or
     she was not entitled to exercise the Option at the date of termination,  or
     if he or she does not exercise such Option (which he or she was entitled to
     exercise)  within the time specified  herein,  the Option shall  terminate.
     Notwithstanding  the  foregoing,   with  respect  to  an  Option  that  was
     outstanding before May 23, 2003, and has an exercise price less than 75% of
     the fair market value of the  Company's  Common  Stock on May 23, 2003,  an
     Outside  Director  shall have only six (6) months (or such other  period of
     time not  exceeding  twelve (12) months as is  determined  by the Board) to
     exercise  such  Option  after the date he or she ceases to be a Director of
     the Company, but only to the extent that he or she was entitled to exercise
     it at the date of such termination.

          (d) Death of Optionee. In the event of the death of an Optionee:

               (i)  during  the term of the Option who is, at the time of his or
          her  death,  a  Director  of the  Company  and who shall  have been in
          Continuous Status as a Director since the date of grant of the Option,
          the Option may be exercised in full, at any time within four (4) years
          (or  such  lesser  period  of  time  as is  determined  by the  Board)
          following the date of death,  by the Optionee's  estate or by a person
          who   acquired  the  right  to  exercise  the  Option  by  bequest  or
          inheritance,  whether  or not the right to  exercise  that  would have
          accrued  had  the  Optionee  continued  living.   Notwithstanding  the
          foregoing,  in no event may the Option be exercised after its term set
          forth in Section 7 has expired.  Notwithstanding  the foregoing,  with
          respect to an Option that was outstanding before May 23, 2003, and has
          an  exercise  price  less  than  75% of the fair  market  value of the
          Company's  Common Stock on May 23, 2003,  such Option may be exercised
          in full only for six (6) months (or such lesser time as is  determined
          by the Board) following the date of death.

               (ii) within  four (4) years (or such lesser  period of time as is
          determined by the Board) after the termination of Continuous Status as
          a Director, the Option may be exercised by the Optionee's estate or by
          a person who  acquired  the right to exercise the Option by bequest or
          inheritance,  but only to the extent of the right to exercise that had
          accrued at the date of termination.  Notwithstanding the foregoing, in
          no event  may the  option  be  exercised  after  its term set forth in
          Section 7 has expired.  Notwithstanding the foregoing, with respect to
          an  Option  that  was  outstanding  before  May 23,  2003,  and has an
          exercise price less than 75% of the fair market value of the Company's
          Common  Stock on May 23,  2003,  such Option may be  exercised in full
          only for six (6) months  following the date of death and only if death
          occurs within three (3) months after  termination of Continuous Status
          as a Director.

     10.  Nontransferability  of Options.  The Option may not be sold,  pledged,
assigned, hypothecated,  transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution. The designation of a beneficiary
by an Optionee does not constitute a transfer. An Option may be exercised during
the lifetime of an Optionee  only by the  Optionee or a transferee  permitted by
this Section.

     11.  Adjustments Upon Changes in Capitalization  or Merger.  Subject to any
required  action by the  shareholders  of the  Company,  the number of shares of
Common Stock  covered by each  outstanding  Option,  and the number of shares of
Common Stock which have been  authorized  for issuance  under the Plan but as to
which no Options have yet been  granted or which have been  returned to the Plan
upon  cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding  Option,  shall be proportionately
adjusted for any  increase or decrease in the number of issued  shares of Common
Stock  resulting  from a stock  split,  reverse  stock  split,  stock  dividend,
combination or  reclassification  of the Common Stock,  or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of  consideration  by the Company;  provided,  however,  that  conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of  consideration."  Such adjustment shall be made by the Board,
whose  determination  in that respect  shall be final,  binding and  conclusive.
Except as  expressly  provided  herein,  no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

     In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate  immediately  prior to the  consummation  of such proposed
action,  unless otherwise  provided by the Board. The Board may, in the exercise
of its  sole  discretion  in such  instances,  declare  that  any  Option  shall
terminate  as of a date fixed by the Board and give each  Optionee  the right to
exercise  his  or her  Option  as to all or  any  part  of the  Optioned  Stock,
including Shares as to which the Option would not otherwise be exercisable.

     In the event of a proposed sale of all or  substantially  all of the assets
of the Company,  or the merger of the Company with or into another  corporation,
each  outstanding  Option  shall be assumed  or an  equivalent  option  shall be
substituted  by the  successor  corporation  or a Parent  or  Subsidiary  of the
successor  corporation.  In the event that such successor corporation refuses to
assume such Option or to  substitute an  equivalent  option,  such Options shall
become fully vested and exercisable as to all of the Optioned  Stock,  including
the  Shares  as  to  which  the  Options  would  not  otherwise  be  vested  and
exercisable.  If  Options  become  fully  vested  and  exercisable  in  lieu  of
assumption or substitution in the event of a merger or sale of assets, the Board
shall  notify the  Optionee  that the Option  shall be fully  exercisable  for a
period of thirty  (30) days from the date of such  notice,  and the Option  will
terminate upon the expiration of such period.

     12. Time of Granting Options. The date of grant of an Option shall, for all
purposes,  be the date determined in accordance with Section 4(b) hereof. Notice
of the  determination  shall be given to each Outside Director to whom an Option
is so granted within a reasonable time after the date of such grant.

     13. Amendment and Termination of the Plan

          (a)  Amendment and  Termination.  The Board may amend or terminate the
     Plan from time to time in such  respects  as the Board may deem  advisable;
     provided  that,  to the extent  necessary and desirable to comply with Rule
     16b-3 under the Exchange Act (or any other  applicable law or  regulation),
     the Company  shall obtain  approval of the  shareholders  of the Company to
     Plan  amendments  to the extent and in the manner  required  by such law or
     regulation.

          (b)  Effect  of  Amendment  or  Termination.  Any  such  amendment  or
     termination  of the Plan that would impair the rights of any Optionee shall
     not affect Options  already granted to such Optionee and such Options shall
     remain in full  force and  effect as if this Plan had not been  amended  or
     terminated,  unless mutually agreed otherwise  between the Optionee and the
     Board,  which  agreement  must be in writing and signed by the Optionee and
     the Company.

     14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and  delivery of such Shares  pursuant  thereto  shall  comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended,  the Exchange Act, the rules and  regulations  promulgated  thereunder,
state securities laws, and the requirements of any stock exchange upon which the
Shares may then be  listed,  and shall be further  subject  to the  approval  of
counsel for the Company with respect to such compliance.

     As a condition  to the  exercise of an Option,  the Company may require the
person  exercising  such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  Shares,  if, in the opinion of
counsel  for  the  Company,  such a  representation  is  required  by any of the
aforementioned relevant provisions of law.

     Inability  of the  Company to obtain  authority  from any  regulatory  body
having  jurisdiction,  which authority is deemed by the Company's  counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the  Company of any  liability  in respect of the  failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

     15. Reservation of Shares. The Company,  during the term of this Plan, will
at all  times  reserve  and keep  available  such  number  of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     16.  Option  Agreement.  Options  shall  be  evidenced  by  written  option
agreements in such form as the Board shall approve.

     17. Shareholder Approval.

          (a)  Continuance  of the Plan  shall be  subject  to  approval  by the
     shareholders  of the  Company  at or prior to the first  annual  meeting of
     shareholders  held  subsequent to the granting of an Option  hereunder.  If
     such shareholder approval is obtained at a duly held shareholders' meeting,
     it may be obtained by the affirmative  vote of the holders of a majority of
     the  outstanding  shares of the Company present or represented and entitled
     to vote  thereon.  If such  shareholder  approval  is  obtained  by written
     consent,  it may be  obtained  by the  written  consent of the holders of a
     majority of the outstanding shares of the Company.

          (b) Any required  approval of the shareholders of the Company shall be
     solicited  substantially  in accordance  with Section 14(a) of the Exchange
     Act and the rules and regulations promulgated thereunder.

     18.  Information to Optionees.  The Company shall provide to each Optionee,
during the period for which such  Optionee has one or more Options  outstanding,
copies  of all  annual  reports  to  shareholders,  proxy  statements  and other
information provided to all shareholders of the Company.




