<SUBMISSION>
<ACCESSION-NUMBER>0000907687-03-000096
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20031017
<ITEMS>5
<ITEMS>7
<FILING-DATE>20031024
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ACTEL CORP
<CIK>0000907687
<ASSIGNED-SIC>3674
<IRS-NUMBER>770097724
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>0102
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-21970
<FILM-NUMBER>03956687
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>955 EAST ARQUES AVE
<CITY>SUNNYVALE
<STATE>CA
<ZIP>94086
<PHONE>4087391010
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>955 EAST ARQUES AVE
<STREET2>955 EAST ARQUES AVE
<CITY>SUNNYVALE
<STATE>CA
<ZIP>94086
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<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8-k.txt
<DESCRIPTION>CURRENT REPORT
<TEXT>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004



                                    FORM 8-K
                                 CURRENT REPORT
          Pursuant to Section 13 of the Securities Exchange Act of 1934





       Date of Report (date of earliest event reported): October 17, 2003



                                Actel Corporation
             (Exact name of Registrant as specified in its charter)

          California                     0-21970                 77-0097724
(State or other jurisdiction of   [Commission File Number]    (I.R.S. Employer
 incorporation or organization)                           Identification Number)




                               2061 Stierlin Court
                             Mountain View, CA 94043
                    (Address of principal executive offices)

                                 (650) 318-4200
              (Registrant's telephone number, including area code)



<PAGE>


ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE

     On October 17, 2003,  pursuant to a Preferred  Stock Rights  Agreement (the
"Rights  Agreement")  between Actel  Corporation (the "Company") and Wells Fargo
Bank, MN N.A.,  as Rights Agent (the "Rights  Agent"),  the  Company's  Board of
Directors  declared  a  dividend  of one  right  (a  "Right")  to  purchase  one
one-thousandth  (0.001)  of one share of the  Company's  Series A  Participating
Preferred  Stock  ("Series A Preferred")  for each  outstanding  share of Common
Stock,  par value  $0.001  per share  ("Common  Shares"),  of the  Company.  The
dividend is payable on November 10, 2003 (the "Record Date") to  shareholders of
record as of the  close of  business  on that  date.  Each  Right  entitles  the
registered holder to purchase from the Company one  one-thousandth  (0.001) of a
share of Series A  Preferred  at an  exercise  price of $220.00  (the  "Purchase
Price"), subject to adjustment.

     The following  summary of the principal terms of the Rights  Agreement is a
general  description only and is subject to the detailed terms and conditions of
the Rights  Agreement.  A copy of the Rights  Agreement  is  attached  hereto as
Exhibit 4.1 and is incorporated herein by reference.

     Rights Evidenced by Common Share Certificates

     The Rights will not be  exercisable  until the  Distribution  Date (defined
below).  Certificates for the Rights ("Rights Certificates") will not be sent to
shareholders  and the Rights  will  attach to and trade only  together  with the
Common Shares. Accordingly,  Common Share certificates outstanding on the Record
Date will evidence the Rights  related  thereto,  and Common Share  certificates
issued  after the Record Date will contain a notation  incorporating  the Rights
Agreement by reference.  Until the Distribution  Date (or earlier  redemption or
expiration  of the Rights),  the surrender or transfer of any  certificates  for
Common  Shares,  outstanding as of the Record Date,  even without  notation or a
copy of the Summary of Rights being attached  thereto,  also will constitute the
transfer of the Rights  associated  with the Common Shares  represented  by such
certificate.

     Distribution Date

     The Rights will be separate  from the Common  Shares,  Rights  Certificates
will be issued and the Rights  will become  exercisable  upon the earlier of (a)
the tenth day (or such later date as may be determined by the Company's Board of
Directors)  after  a  person  or  group  of  affiliated  or  associated  persons
("Acquiring Person") has acquired, or obtained the right to acquire,  beneficial
ownership of 15% or more of the Common Shares then outstanding, or (b) the tenth
business day (or such later date as may be determined by the Company's  Board of
Directors)  after a person or group  announces a tender or exchange  offer,  the
consummation  of which would  result in ownership by a person or group of 15% or
more of the Company's then outstanding  Common Shares. The earlier of such dates
is referred to as the "Distribution Date."

     Issuance of Rights Certificates; Expiration of Rights

     As  soon  as  practicable   following  the  Distribution   Date,  a  Rights
Certificate  will be mailed to holders of record of the Common  Shares as of the
close of business on the Distribution Date and such separate Rights  Certificate
alone will evidence the Rights from and after the Distribution  Date. The Rights
will expire on the earliest of (i) November  10,  2013,  (the "Final  Expiration
Date"), or (ii) redemption or exchange of the Rights as described below.

     Initial Exercise of the Rights

     Following  the  Distribution  Date,  and  until one of the  further  events
described  below,  holders of the  Rights  will be  entitled  to  receive,  upon
exercise and the payment of the Purchase Price, one one-thousandth  share of the
Series A  Preferred.  In the event  that the  Company  does not have  sufficient
Series A  Preferred  available  for all  Rights  to be  exercised,  or the Board
decides  that such action is  necessary  and not  contrary to the  interests  of
Rights  holders,  the  Company  may  instead  substitute  cash,  assets or other
securities  for the  Series A  Preferred  for which the  Rights  would have been
exercisable under this provision or as described below.

     Right to Buy Company Common Shares

     Unless the  Rights are  earlier  redeemed,  in the event that an  Acquiring
Person obtains 15% or more of the Company's then outstanding Common Shares, then
each  holder of a Right which has not  theretofore  been  exercised  (other than
Rights  beneficially  owned by the Acquiring  Person,  which will  thereafter be
void) will  thereafter have the right to receive,  upon exercise,  Common Shares
having a value equal to two times the Purchase Price. Rights are not exercisable
following the  occurrence of an event as described  above until such time as the
Rights are no longer redeemable by the Company as set forth below.

     Right to Buy Acquiring Company Shares

     Similarly, unless the Rights are earlier redeemed, in the event that, after
an Acquiring Person obtains 15% or more of the Company's then outstanding Common
Shares,  (i) the Company is acquired in a merger or other  business  combination
transaction, or (ii) 50% or more of the Company's consolidated assets or earning
power are sold (other than in  transactions in the ordinary course of business),
proper  provision  must be made so that  each  holder  of a Right  which has not
theretofore  been  exercised  (other  than  Rights  beneficially  owned  by  the
Acquiring Person,  which will thereafter be void) will thereafter have the right
to receive,  upon  exercise,  shares of common  stock of the  acquiring  company
having a value equal to two times the Purchase Price.

     Exchange Provision

     At any time after an Acquiring  Person obtains 15% or more of the Company's
then  outstanding  Common Shares and prior to the  acquisition by such Acquiring
Person of 50% or more of the Company's  outstanding  Common Shares, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by the
Acquiring Person), in whole or in part, at an exchange ratio of one Common Share
per Right.

     Redemption

     At any time on or prior to the Close of  Business on the earlier of (i) the
fifth  day  following  the  attainment  of 15% or  more  of the  Company's  then
outstanding  Common Shares by an Acquiring  Person (or such later date as may be
determined by action of the Company's Board of Directors and publicly  announced
by the Company),  or (ii) the Final  Expiration Date, the Company may redeem the
Rights in whole, but not in part, at a price of $0.001 per Right.

     Adjustments to Prevent Dilution

     The Purchase Price payable,  the number of Rights, and the number of Series
A Preferred  or Common  Shares or other  securities  or property  issuable  upon
exercise of the Rights are subject to adjustment from time to time in connection
with the dilutive issuances by the Company as set forth in the Rights Agreement.
With certain  exceptions,  no adjustment in the Purchase  Price will be required
until  cumulative  adjustments  require  an  adjustment  of at  least 1% in such
Purchase Price.

     Cash Paid Instead of Issuing Fractional Shares

     No fractional Common Shares will be issued upon exercise of a Right and, in
lieu  thereof,  an  adjustment in cash will be made based on the market price of
the Common Shares on the last trading date prior to the date of exercise.

     No Shareholders' Rights Prior to Exercise

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a shareholder  of the Company  (other than any rights  resulting  from
such holder's ownership of Common Shares),  including,  without limitation,  the
right to vote or to receive dividends.

     Amendment of Rights Agreement

     The terms of the  Rights  and the  Rights  Agreement  may be amended in any
respect  without  the  consent  of  the  Rights  holders  on  or  prior  to  the
Distribution Date; thereafter,  the terms of the Rights and the Rights Agreement
may be amended  without the  consent of the Rights  holders in order to cure any
ambiguities  or to make changes which do not  adversely  affect the interests of
Rights holders (other than the Acquiring Person).

     Rights and Preferences of the Series A Preferred

     Each one  one-thousandth  of a share of Series A  Preferred  has rights and
preferences substantially equivalent to those of one Common Share.

     No Voting Rights

     Rights will not have any voting rights.

     Certain Anti-Takeover Effects

     The Rights  approved by the Board of Directors  are designed to protect and
maximize  the value of the  outstanding  equity  interests in the Company in the
event of an  unsolicited  attempt by an  acquirer  to take over the Company in a
manner or on terms not  approved by the Board of  Directors.  Takeover  attempts
frequently  include coercive tactics to deprive the Company's Board of Directors
and its  shareholders  of any real  opportunity  to determine the destiny of the
Company.  The  Rights  have been  declared  by the Board in order to deter  such
tactics, including a gradual accumulation of shares in the open market of 15% or
greater  position to be  followed  by a merger or a partial or  two-tier  tender
offer  that does not treat all  shareholders  equally.  These  tactics  unfairly
pressure shareholders,  squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their shares.

     The Rights are not  intended  to prevent a takeover of the Company and will
not do so.  Subject  to the  restrictions  described  above,  the  Rights may be
redeemed  by  the  Company  at  $0.001  per  Right  at  any  time  prior  to the
Distribution Date. Accordingly,  the Rights should not interfere with any merger
or business combination approved by the Board of Directors.

     However,  the Rights may have the effect of  rendering  more  difficult  or
discouraging  an acquisition  of the Company deemed  undesirable by the Board of
Directors.  The Rights may cause substantial  dilution to a person or group that
attempts  to acquire  the  Company on terms or in a manner not  approved  by the
Company's Board of Directors,  except pursuant to an offer  conditioned upon the
negation, purchase or redemption of the Rights.

     Issuance of the Rights does not in any way weaken the financial strength of
the Company or  interfere  with its business  plans.  The issuance of the Rights
themselves has no dilutive effect,  will not affect reported earnings per share,
should not be taxable to the Company or to its shareholders, and will not change
the way in which the Company's shares are presently traded.  The Company's Board
of Directors  believes that the Rights represent a sound and reasonable means of
addressing  the  complex  issues of  corporate  policy  created  by the  current
takeover environment.

<PAGE>

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

   (c) Exhibits.    Exhibit 4.1 Preferred  Stock Rights  Agreement,  dated as of
                    October 17, 2003,  between the Company and Wells Fargo Bank,
                    MN  N.A.,   including  the   Certificate   of  Amendment  to
                    Certificate of Determination, the form of Rights Certificate
                    and the Summary of Rights attached thereto as Exhibits A, B,
                    and C, respectively.

       Exhibit 99.1 Actel Corporation Press Release issued October 17, 2003.


<PAGE>


                                    SIGNATURE

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

                                          ACTEL CORPORATION
                                             (Registrant)

Date:  October 24, 2003

                                          By:      /s/ Jon A. Anderson
                                             --------------------------------

                                          Jon A. Anderson
                                          Vice President of Finance and Chief
                                          Financial Officer



<PAGE>


                                  EXHIBIT INDEX

Exhibit
Number

4.1  Preferred Stock Rights Agreement, dated as of October 17, 2003, between the
Company and Wells Fargo Bank, MN N.A.  including the Certificate of Amendment to
Certificate of Determination,  the form of Rights Certificate and the Summary of
Rights attached thereto as Exhibits A, B, and C, respectively.

99.1 Actel Corporation Press Release issued October 17, 2003.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>exhibit4-1.txt
<DESCRIPTION>PREFERRED STOCK RIGHTS AGREEMENT
<TEXT>




                                ACTEL CORPORATION

                                       and

                            WELLS FARGO BANK, MN N.A.









                        PREFERRED STOCK RIGHTS AGREEMENT

                          Dated as of October 17, 2003











<PAGE>



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                   Page
                                                                                                                   ----


<S>               <C>                                                                                                <C>
Section 1.        Certain Definitions.................................................................................1
                  -------------------


Section 2.        Appointment of Rights Agent.........................................................................7
                  ---------------------------


Section 3.        Issuance of Rights Certificates.....................................................................7
                  -------------------------------


Section 4.        Form of Rights Certificates.........................................................................9
                  ---------------------------


Section 5.        Countersignature and Registration..................................................................10
                  ---------------------------------


Section 6.        Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
                  --------------------------------------------------------------------------------
                  Destroyed, Lost or Stolen Rights Certificates......................................................10
                  ---------------------------------------------


Section 7.        Exercise of Rights; Exercise Price; Expiration Date of Rights......................................11
                  -------------------------------------------------------------


Section 8.        Cancellation and Destruction of Rights Certificates................................................13
                  ---------------------------------------------------


Section 9.        Reservation and Availability of Preferred Shares...................................................14
                  ------------------------------------------------


Section 10.       Record Date........................................................................................15
                  -----------


Section 11.       Adjustment of Exercise Price, Number of Shares or Number of Rights.................................15
                  ------------------------------------------------------------------


Section 12.       Certificate of Adjusted Exercise Price or Number of Shares.........................................22
                  ----------------------------------------------------------


Section 13.       Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............................22
                  --------------------------------------------------------------------


Section 14.       Fractional Rights and Fractional Shares............................................................26
                  ---------------------------------------


Section 15.       Rights of Action...................................................................................27
                  ----------------


Section 16.       Agreement of Rights Holders........................................................................27
                  ---------------------------


Section 17.       Rights Certificate Holder Not Deemed a Shareholder.................................................28
                  --------------------------------------------------


Section 18.       Concerning the Rights Agent........................................................................28
                  ---------------------------


Section 19.       Merger or Consolidation or Change of Name of Rights Agent..........................................29
                  ---------------------------------------------------------


Section 20.       Duties of Rights Agent.............................................................................29
                  ----------------------


Section 21.       Change of Rights Agent.............................................................................32
                  ----------------------


Section 22.       Issuance of New Rights Certificates................................................................32
                  -----------------------------------


Section 23.       Redemption.........................................................................................33
                  ----------


Section 24.       Exchange...........................................................................................33
                  --------


Section 25.       Notice of Certain Events...........................................................................35
                  ------------------------


Section 26.       Notices............................................................................................36
                  -------


Section 27.       Supplements and Amendments.........................................................................36
                  --------------------------


Section 28.       Successors.........................................................................................37
                  ----------


Section 29.       Determinations and Actions by the Board of Directors, etc..........................................37
                  ---------------------------------------------------------


Section 30.       Benefits of this Agreement.........................................................................37
                  --------------------------


Section 31.       Severability.......................................................................................37
                  ------------


Section 32.       Governing Law......................................................................................38
                  -------------


Section 33.       Counterparts.......................................................................................38
                  ------------


Section 34.       Descriptive Headings...............................................................................38
                  --------------------


EXHIBITS

Exhibit A.........Form of Certificate of Amendment to Certificate of Determination

Exhibit B.........Form of Rights Certificate

Exhibit C.........Summary of Rights
</TABLE>



<PAGE>





                        PREFERRED STOCK RIGHTS AGREEMENT




     This  Preferred  Stock  Rights  Agreement  is dated as of October 17, 2003,
between Actel Corporation, a California corporation,  (the "Company"), and Wells
Fargo Bank, MN N.A. (the "Rights Agent").

     On October 17, 2003, (the "Rights Dividend Declaration Date"), the Board of
Directors of the Company  authorized  and  declared a dividend of one  Preferred
Share Purchase Right (a "Right") for each Common Share (as hereinafter  defined)
of the Company outstanding as of the Close of Business (as hereinafter  defined)
on November 10, 2003 (the "Record Date"),  each Right  representing the right to
purchase  one  one-thousandth  (0.001)  of a share  of  Series  A  Participating
Preferred  Stock (as such number may be adjusted  pursuant to the  provisions of
this Agreement),  having the rights, preferences and privileges set forth in the
form of Certificate of Amendment to the Certificate of  Determination of Rights,
Preferences  and Privileges of Series A  Participating  Preferred Stock attached
hereto as Exhibit A, upon the terms and  subject  to the  conditions  herein set
forth,  and further  authorized  and directed the issuance of one Right (as such
number may be  adjusted  pursuant  to the  provisions  of this  Agreement)  with
respect to each Common  Share that shall become  outstanding  between the Record
Date and the earlier of the  Distribution  Date and the Expiration Date (as such
terms  are  hereinafter  defined),   and  in  certain  circumstances  after  the
Distribution Date.

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

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

          (a) "Acquiring Person" shall mean any Person,  who or which,  together
     with all Affiliates and Associates of such Person,  shall be the Beneficial
     Owner of 15% or more of the Common Shares then  outstanding,  but shall not
     include the Company,  any Subsidiary of the Company or any employee benefit
     plan of the  Company or of any  Subsidiary  of the  Company,  or any entity
     holding  Common  Shares  for or  pursuant  to the  terms of any such  plan.
     Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
     Person as the  result of an  acquisition  of Common  Shares by the  Company
     which,  by  reducing  the  number  of  shares  outstanding,  increases  the
     proportionate  number of shares beneficially owned by such Person to 15% or
     more of the  Common  Shares  of the  Company  then  outstanding;  provided,
     however,  that if a Person shall become the Beneficial Owner of 15% or more
     of the Common  Shares of the Company  then  outstanding  by reason of share
     purchases  by the  Company  and shall,  after such share  purchases  by the
     Company, become the Beneficial Owner of any additional Common Shares of the
     Company (other than pursuant to a dividend or distribution  paid or made by
     the Company on the  outstanding  Common Shares in Common Shares or pursuant
     to a split or  subdivision of the  outstanding  Common  Shares),  then such
     Person shall be deemed to be an Acquiring  Person  unless upon becoming the
     Beneficial  Owner of such  additional  Common  Shares of the  Company  such
     Person does not  beneficially  own 15% or more of the Common  Shares of the
     Company  then  outstanding.  Notwithstanding  the  foregoing,  (i)  if  the
     Company's  Board of  Directors  determines  in good faith that a Person who
     would  otherwise  be an  "Acquiring  Person,"  as defined  pursuant  to the
     foregoing  provisions of this paragraph (a), has become such  inadvertently
     (including, without limitation, because (A) such Person was unaware that it
     beneficially  owned a percentage of the Common Shares that would  otherwise
     cause such Person to be an "Acquiring  Person," as defined  pursuant to the
     foregoing provisions of this paragraph (a), or (B) such Person was aware of
     the extent of the  Common  Shares it  beneficially  owned but had no actual
     knowledge  of the  consequences  of such  beneficial  ownership  under this
     Agreement) and without any intention of changing or influencing  control of
     the  Company,  and if such  Person  divested  or  divests  as  promptly  as
     practicable a sufficient  number of Common Shares so that such Person would
     no longer be an  "Acquiring  Person," as defined  pursuant to the foregoing
     provisions of this  paragraph  (a), then such Person shall not be deemed to
     be or to  have  become  an  "Acquiring  Person"  for any  purposes  of this
     Agreement including,  without limitation Section 1(gg) hereof; and (ii) if,
     as of the date hereof, any Person is the Beneficial Owner of 15% or more of
     the  Common  Shares  outstanding,  such  Person  shall  not be or become an
     "Acquiring Person," as defined pursuant to the foregoing provisions of this
     paragraph  (a),  unless and until such time as such Person shall become the
     Beneficial  Owner of  additional  Common  Shares  (other than pursuant to a
     dividend or  distribution  paid or made by the  Company on the  outstanding
     Common Shares in Common Shares or pursuant to a split or subdivision of the
     outstanding Common Shares),  unless,  upon becoming the Beneficial Owner of
     such additional Common Shares, such Person is not then the Beneficial Owner
     of 15% or more of the Common Shares then outstanding.

          (b) "Adjustment  Fraction" shall have the meaning set forth in Section
     11(a)(i) hereof.

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

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

               (i) which  such  Person  or any of such  Person's  Affiliates  or
          Associates beneficially owns, directly or indirectly,  for purposes of
          Section  13(d) of the Exchange Act and Rule 13d-3  thereunder  (or any
          comparable or successor law or regulation);

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

               (iii) which are beneficially  owned,  directly or indirectly,  by
          any other Person (or any  Affiliate or Associate  thereof)  with which
          such Person or any of such Person's  Affiliates or Associates  has any
          agreement,  arrangement  or  understanding,  whether or not in writing
          (other than customary  agreements  with and between  underwriters  and
          selling group  members with respect to a bona fide public  offering of
          securities) for the purpose of acquiring,  holding,  voting (except to
          the extent  contemplated  by the  proviso to Section  1(d)(ii)(B))  or
          disposing of any securities of the Company; provided, however, that in
          no case shall an officer or  director of the Company be deemed (x) the
          Beneficial  Owner of any  securities  beneficially  owned  by  another
          officer  or  director  of the  Company  solely by  reason  of  actions
          undertaken by such persons in their  capacity as officers or directors
          of the  Company  or (y) the  Beneficial  Owner of  securities  held of
          record by the trustee of any  employee  benefit plan of the Company or
          any  Subsidiary  of the Company for the benefit of any employee of the
          Company or any  Subsidiary  of the Company,  other than the officer or
          director, by reason of any influence that such officer or director may
          have over the voting of the securities held in the plan.

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

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

          (g)  "Common  Stock  Equivalents"  shall have the meaning set forth in
     Section 11(a)(iii) hereof.  "Common Shares" when used with reference to the
     Company shall mean the shares of Common Stock of the Company,  par value at
     $0.001 per share.  Common  Shares  when used with  reference  to any Person
     other than the Company  shall mean the capital  stock (or equity  interest)
     with the  greatest  voting  power of such  other  Person  or, if such other
     Person is a  Subsidiary  of another  Person,  the  Person or Persons  which
     ultimately control such first-mentioned Person.

          (h) "Company" shall mean Actel Corporation,  a California corporation,
     subject to the terms of Section 13(a)(iii)(C) hereof.

          (i) "Current Per Share Market Price" of any security (a "Security" for
     purposes of this  definition),  for all computations  other than those made
     pursuant to Section 11(a)(iii) hereof,  shall mean the average of the daily
     closing  prices per share of such Security for the thirty (30)  consecutive
     Trading  Days  immediately   prior  to  such  date,  and  for  purposes  of
     computations made pursuant to Section  11(a)(iii)  hereof,  the Current Per
     Share  Market  Price of any  Security on any date shall be deemed to be the
     average of the daily closing  prices per share of such Security for the ten
     (10)  consecutive  Trading Days immediately  prior to such date;  provided,
     however,  that in the event that the Current Per Share  Market Price of the
     Security is determined  during a period  following the  announcement by the
     issuer of such Security of (i) a dividend or  distribution on such Security
     payable in shares of such  Security  or  securities  convertible  into such
     shares or (ii) any  subdivision,  combination or  reclassification  of such
     Security, and prior to the expiration of the applicable thirty (30) Trading
     Day or ten (10)  Trading Day period,  after the  ex-dividend  date for such
     dividend  or  distribution,  or  the  record  date  for  such  subdivision,
     combination or  reclassification,  then, and in each such case, the Current
     Per Share  Market  Price  shall be  appropriately  adjusted  to reflect the
     current  market price per share  equivalent of such  Security.  The closing
     price for each day shall be the last sale price,  regular  way, or, in case
     no such sale takes  place on such day,  the  average of the closing bid and
     asked  prices,  regular  way, in either  case as reported in the  principal
     consolidated transaction reporting system with respect to securities listed
     or admitted to trading on the New York Stock  Exchange  or, if the Security
     is not listed or  admitted  to trading on the New York Stock  Exchange,  as
     reported in the principal  consolidated  transaction  reporting system with
     respect to securities listed on the principal national  securities exchange
     on which the  Security is listed or admitted to trading or, if the Security
     is not listed or admitted to trading on any national  securities  exchange,
     the last  sale  price or, if such  last  sale  price is not  reported,  the
     average  of the  high  bid and low  asked  prices  in the  over-the-counter
     market,  as reported by Nasdaq or such other  system then in use, or, if on
     any such date the  Security  is not  quoted by any such  organization,  the
     average of the closing bid and asked prices as furnished by a  professional
     market  maker  making a market  in the  Security  selected  by the Board of
     Directors of the  Company.  If on any such date no market maker is making a
     market  in the  Security,  the fair  value of such  shares  on such date as
     determined  in good faith by the Board of Directors of the Company shall be
     used.  If the  Preferred  Shares are not publicly  traded,  the Current Per
     Share Market Price of the Preferred Shares shall be conclusively  deemed to
     be (x)  the  Current  Per  Share  Market  Price  of the  Common  Shares  as
     determined  pursuant to this Section  1(j),  as  appropriately  adjusted to
     reflect any stock split,  stock dividend or similar  transaction  occurring
     after the date  hereof,  multiplied  by (y) 1,000.  If the  Security is not
     publicly held or so listed or traded,  Current Per Share Market Price shall
     mean the fair value per share as  determined  in good faith by the Board of
     Directors  of the  Company,  whose  determination  shall be  described in a
     statement  filed  with the  Rights  Agent and shall be  conclusive  for all
     purposes.

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

          (k)  "Distribution  Date"  shall mean the  earlier of (i) the Close of
     Business  on the tenth  (10th)  Business  day (or such later date as may be
     determined by action of the Company's Board of Directors)  after the Shares
     Acquisition  Date (or, if the tenth  (10th)  business  day after the Shares
     Acquisition  Date occurs  before the Record Date,  the Close of Business on
     the Record Date) or (ii) the Close of Business on the tenth (10th) Business
     Day (or such later  date as may be  determined  by action of the  Company's
     Board of Directors)  after the date that a tender or exchange  offer by any
     Person (other than the Company, any Subsidiary of the Company, any employee
     benefit plan of the Company or of any  Subsidiary  of the  Company,  or any
     Person or entity organized,  appointed or established by the Company for or
     pursuant to the terms of any such plan) is first published or sent or given
     within the meaning of Rule  14d-2(a) of the General  Rules and  Regulations
     under the Exchange Act, if, assuming the successful  consummation  thereof,
     such Person would be an Acquiring Person.

          (l)  "Equivalent  Shares"  shall mean  Preferred  Shares and any other
     class or series of capital  stock of the  Company  which is entitled to the
     same rights, privileges and preferences as the Preferred Shares.

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

          (n) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
     hereof.

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

          (p)  "Expiration  Date"  shall mean the  earliest to occur of: (i) the
     Close of Business on the Final  Expiration  Date, (ii) the Redemption Date,
     or (iii) the time at which the Board of  Directors  orders the  exchange of
     the Rights as provided in Section 24 hereof.

          (q) "Final Expiration Date" shall mean November 10, 2013.

          (r) "Nasdaq" shall mean The Nasdaq Stock Market, Inc.

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

          (t)  "Post-Event  Transferee"  shall  have the  meaning  set  forth in
     Section 7(e) hereof.

          (u)  "Preferred  Shares"  shall mean shares of Series A  Participating
     Preferred Stock, par value $0. 001 per share, of the Company.

          (v) "Pre-Event Transferee" shall have the meaning set forth in Section
     7(e) hereof.

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

          (x) "Record  Date" shall have the meaning set forth in the recitals at
     the beginning of this Agreement.

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

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


          (aa) "Rights Agent" shall mean (i) Wells Fargo Bank, MN N.A., (ii) its
     successor or  replacement as provided in Sections 19 and 21 hereof or (iii)
     any additional Person appointed pursuant to Section 2 hereof.

          (bb) "Rights  Certificate"  shall mean a certificate  substantially in
     the form attached hereto as Exhibit B.

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

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

          (ee) "Section 13 Event" shall mean any event  described in clause (i),
     (ii) or (iii) of Section 13(a) hereof.

          (ff)  "Securities  Act"  shall  mean the  Securities  Act of 1933,  as
     amended.

          (gg)  "Shares  Acquisition  Date"  shall mean the first date of public
     announcement  (which,  for  purposes  of this  definition,  shall  include,
     without  limitation,  a  report  filed  pursuant  to  Section  13(d) of the
     Exchange  Act) by the  Company or an  Acquiring  Person  that an  Acquiring
     Person has become such;  provided that, if such Person is determined not to
     have become an Acquiring  Person  pursuant to Section 1(a) hereof,  then no
     Shares  Acquisition Date shall be deemed to have occurred by virtue of such
     event.

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

          (ii)  "Subsidiary"  of any Person shall mean any  corporation or other
     entity  of which an  amount  of  voting  securities  sufficient  to elect a
     majority of the  directors  or Persons  having  similar  authority  of such
     corporation or other entity is beneficially owned,  directly or indirectly,
     by such Person, or any corporation or other entity otherwise  controlled by
     such Person.

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

          (kk)  "Summary  of  Rights"  shall  mean a summary  of this  Agreement
     substantially in the form attached hereto as Exhibit C.

          (ll)  "Total  Exercise  Price"  shall  have the  meaning  set forth in
     Section 4(a) hereof.

          (mm) "Trading  Day" shall mean a day on which the  principal  national
     securities exchange on which a referenced security is listed or admitted to
     trading  is open  for the  transaction  of  business  or,  if a  referenced
     security is not listed or admitted  to trading on any  national  securities
     exchange, a Business Day.

          (nn) A  "Triggering  Event" shall be deemed to have  occurred upon any
     Person becoming an Acquiring Person.

     Section 2.  Appointment of Rights Agent.  The Company  hereby  appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof,  shall prior to the Distribution  Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof,  and the Rights Agent hereby accepts such  appointment.  The Company may
from time to time  appoint  such  co-Rights  Agents as it may deem  necessary or
desirable,  upon ten (10) days' prior written  notice to the Rights  Agent.  The
Rights  Agent shall have no duty to  supervise,  and shall in no event be liable
for, the acts or omissions of any co-Rights Agent.

     Section 3. Issuance of Rights Certificates.

          (a) Until the  Distribution  Date,  (i) the Rights  will be  evidenced
     (subject  to the  provisions  of  Sections  3(b)  and 3(c)  hereof)  by the
     certificates  for  Common  Shares  registered  in the names of the  holders
     thereof (which certificates shall also be deemed to be Rights Certificates)
     and not by  separate  Rights  Certificates  and (ii) the  right to  receive
     Rights  Certificates  will be  transferable  only in  connection  with  the
     transfer of Common Shares.  Until the earlier of the  Distribution  Date or
     the Expiration  Date, the surrender for transfer of certificates for Common
     Shares  shall also  constitute  the  surrender  for  transfer of the Rights
     associated  with  the  Common  Shares  represented   thereby.  As  soon  as
     practicable  after the  Distribution  Date,  the Company  will  prepare and
     execute,  the Rights Agent will  countersign,  and the Company will send or
     cause  to be sent  (and the  Rights  Agent  will,  if  requested,  send) by
     first-class,  postage-prepaid  mail, to each record holder of Common Shares
     as of the Close of Business  on the  Distribution  Date,  at the address of
     such  holder  shown on the  records of the  Company,  a Rights  Certificate
     evidencing  one Right for each Common Share so held,  subject to adjustment
     as provided herein. In the event that an adjustment in the number of Rights
     per Common Share has been made  pursuant to Section 11 hereof,  then at the
     time of distribution of the Rights Certificates, the Company shall make the
     necessary and appropriate  rounding adjustments (in accordance with Section
     14(a) hereof) so that Rights  Certificates  representing only whole numbers
     of Rights are distributed and cash is paid in lieu of any fractional Rights
     (in accordance with Section 14(a) hereof). As of the Distribution Date, the
     Rights  will be  evidenced  solely by such Rights  Certificates  and may be
     transferred by the transfer of the Rights Certificates as permitted hereby,
     separately and apart from any transfer of Common Shares, and the holders of
     such  Rights  Certificates  as listed in the  records of the Company or any
     transfer  agent or  registrar  for the Rights  shall be the record  holders
     thereof.

          (b) On the  Record  Date  or as soon as  practicable  thereafter,  the
     Company  will  send a  copy  of  the  Summary  of  Rights  by  first-class,
     postage-prepaid  mail,  to each  record  holder of Common  Shares as of the
     Close of Business on the Record  Date,  at the address of such holder shown
     on the records of the Company's transfer agent and registrar.  With respect
     to certificates for Common Shares  outstanding as of the Record Date, until
     the  Distribution  Date, the Rights will be evidenced by such  certificates
     registered in the names of the holders thereof together with the Summary of
     Rights.

          (c) Unless the Board of Directors by  resolution  adopted at or before
     the time of the  issuance  of any Common  Shares  after the Record Date but
     prior to the earlier of the  Distribution  Date or the Expiration Date (or,
     in  certain  circumstances   provided  in  Section  22  hereof,  after  the
     Distribution  Date)  specifies to the  contrary,  Rights shall be issued in
     respect  of  all  Common  Shares  that  are  so  issued,  and  Certificates
     representing such Common Shares shall also be deemed to be certificates for
     Rights, and shall bear the following legend:

     THIS  CERTIFICATE  ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
     RIGHTS AS SET FORTH IN A RIGHTS  AGREEMENT  BETWEEN ACTEL  CORPORATION  AND
     WELLS FARGO BANK,  MN N.A.,  AS THE RIGHTS  AGENT,  DATED AS OF OCTOBER 17,
     2003 (THE "RIGHTS  AGREEMENT"),  THE TERMS OF WHICH ARE HEREBY INCORPORATED
     HEREIN  BY  REFERENCE  AND A COPY OF  WHICH  IS ON  FILE  AT THE  PRINCIPAL
     EXECUTIVE OFFICES OF ACTEL CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET
     FORTH IN THE RIGHTS  AGREEMENT,  SUCH RIGHTS WILL BE  EVIDENCED BY SEPARATE
     CERTIFICATES  AND WILL NO  LONGER BE  EVIDENCED  BY THIS  CERTIFICATE.  THE
     COMPANY  WILL MAIL TO THE HOLDER OF THIS  CERTIFICATE  A COPY OF THE RIGHTS
     AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER
     CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT,  RIGHTS ISSUED TO,
     OR HELD BY, ANY PERSON  WHO IS, WAS OR BECOMES AN  ACQUIRING  PERSON OR ANY
     AFFILIATE  OR  ASSOCIATE  THEREOF  (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
     AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
     SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

With respect to such  certificates  containing the foregoing  legend,  until the
earlier of the Distribution  Date or the Expiration Date, the Rights  associated
with the Common Shares  represented by such  certificates  shall be evidenced by
such certificates  alone, and the surrender for transfer of any such certificate
shall also  constitute  the  transfer of the Rights  associated  with the Common
Shares represented thereby.

          (d) In the event that the Company  purchases  or  acquires  any Common
     Shares after the Record Date but prior to the Distribution Date, any Rights
     associated  with such Common Shares shall be deemed canceled and retired so
     that the Company  shall not be entitled to exercise  any Rights  associated
     with the Common Shares which are no longer outstanding.

     Section4. Form of Rights Certificates.

          (a) The Rights  Certificates  (and the forms of  election  to purchase
     Common Shares and of assignment to be printed on the reverse thereof) shall
     be substantially in the form of Exhibit B hereto and may have such marks of
     identification  or designation and such legends,  summaries or endorsements
     printed   thereon  as  the  Company  may  deem   appropriate  and  are  not
     inconsistent  with the provisions of this Agreement,  or as may be required
     to  comply  with any  applicable  law or with any rule or  regulation  made
     pursuant  thereto or with any rule or regulation of any stock exchange or a
     national market system, on which the Rights may from time to time be listed
     or included,  or to conform to usage.  Subject to the provisions of Section
     11 and Section 22 hereof, the Rights  Certificates,  whenever  distributed,
     shall be dated as of the Record Date (or in the case of Rights  issued with
     respect to Common Shares issued by the Company after the Record Date, as of
     the date of issuance of such Common Shares) and on their face shall entitle
     the holders thereof to purchase such number of one-thousandths (0.001) of a
     Preferred  Share as shall be set  forth  therein  at the  price  set  forth
     therein (such exercise price per one one-thousandth  (0.001) of a Preferred
     Share  being  hereinafter  referred  to as the  "Exercise  Price"  and  the
     aggregate  Exercise Price of all Preferred Shares issuable upon exercise of
     one Right being hereinafter referred to as the "Total Exercise Price"), but
     the number and type of  securities  purchasable  upon the  exercise of each
     Right and the  Exercise  Price shall be subject to  adjustment  as provided
     herein.

          (b) Any Rights  Certificate issued pursuant to Section 3(a) or Section
     22 hereof that represents  Rights  beneficially  owned by: (i) an Acquiring
     Person  or any  Associate  or  Affiliate  of an  Acquiring  Person,  (ii) a
     Post-Event Transferee,  (iii) a Pre-Event Transferee or (iv) any subsequent
     transferee receiving  transferred Rights from a Post-Event  Transferee or a
     Pre-Event  Transferee,  either directly or through one or more intermediate
     transferees,  and any Rights  Certificate  issued  pursuant to Section 6 or
     Section 11 hereof upon transfer, exchange, replacement or adjustment of any
     other Rights  Certificate  referred to in this sentence,  shall contain (to
     the extent feasible) the following legend:

     THE RIGHTS  REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
     OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING  PERSON OR AN AFFILIATE OR
     ASSOCIATE OF AN  ACQUIRING  PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
     AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
     HEREBY MAY BECOME NULL AND VOID IN THE  CIRCUMSTANCES  SPECIFIED IN SECTION
     7(e) OF THE RIGHTS AGREEMENT.

     Section 5. Countersignature and Registration.

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

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

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

          (a) Subject to the provisions of Sections  7(e), 14 and 24 hereof,  at
     any time after the Close of Business on the  Distribution  Date,  and at or
     prior  to  the  Close  of  Business  on the  Expiration  Date,  any  Rights
     Certificate or Rights  Certificates may be transferred,  split up, combined
     or  exchanged  for  another  Rights  Certificate  or  Rights  Certificates,
     entitling   the   registered   holder  to   purchase   a  like   number  of
     one-thousandths  (0.001) of a Preferred  Share (or,  following a Triggering
     Event,  other securities,  cash or other assets, as the case may be) as the
     Rights  Certificate or Rights  Certificates  surrendered then entitled such
     holder to purchase.  Any registered holder desiring to transfer,  split up,
     combine or exchange any Rights  Certificate  or Rights  Certificates  shall
     make such  request in writing  delivered  to the  Rights  Agent,  and shall
     surrender the Rights Certificate or Rights  Certificates to be transferred,
     split  up,  combined  or  exchanged  at  the  office  of the  Rights  Agent
     designated for such purpose. Neither the Rights Agent nor the Company shall
     be obligated to take any action  whatsoever with respect to the transfer of
     any such surrendered  Rights  Certificate until the registered holder shall
     have  completed  and  signed  the  certificate  contained  in the  form  of
     assignment  on the reverse side of such Rights  Certificate  and shall have
     provided such additional  evidence of the identity of the Beneficial  Owner
     (or former  Beneficial  Owner) or Affiliates  or Associates  thereof as the
     Company shall reasonably request. Thereupon the Rights Agent shall, subject
     to Sections 7(e), 14 and 24 hereof,  countersign  and deliver to the person
     entitled thereto a Rights Certificate or Rights  Certificates,  as the case
     may  be,  as so  requested.  The  Company  may  require  payment  from  the
     registered  holder of a sum  sufficient  to cover  any tax or  governmental
     charge  that may be  imposed in  connection  with any  transfer,  split up,
     combination or exchange of Rights Certificates.

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

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

          (a) Subject to Sections 7(e),  23(b) and 24(b) hereof,  the registered
     holder of any Rights  Certificate may exercise the Rights evidenced thereby
     (except as otherwise provided herein) in whole or in part at any time after
     the Distribution  Date and prior to the Close of Business on the Expiration
     Date by surrender of the Rights  Certificate,  with the form of election to
     purchase on the reverse side thereof duly executed,  to the Rights Agent at
     the office of the Rights Agent  designated for such purpose,  together with
     payment  of  the  Exercise  Price  for  each  one-thousandth  (0.001)  of a
     Preferred Share (or, following a Triggering Event,  other securities,  cash
     or other assets as the case may be) as to which the Rights are exercised.

          (b) The Exercise Price for each one-thousandth  (0.001) of a Preferred
     Share  issuable  pursuant to the  exercise of a Right  shall  initially  be
     $220.00,  shall be subject to  adjustment  from time to time as provided in
     Sections  11 and 13 hereof  and  shall be  payable  in lawful  money of the
     United States of America in accordance with paragraph (c) below.

          (c) Upon  receipt  of a Rights  Certificate  representing  exercisable
     Rights, with the form of election to purchase duly executed, accompanied by
     payment of the Exercise Price for the number of one-thousandths  (0.001) of
     a Preferred Share (or, following a Triggering Event, other securities, cash
     or other assets as the case may be) to be purchased  and an amount equal to
     any  applicable  transfer  tax  required  to be paid by the  holder of such
     Rights Certificate in accordance with Section 9(e) hereof, the Rights Agent
     shall,  subject  to  Section  20(k)  hereof,  thereupon  promptly  (i)  (A)
     requisition  from any  transfer  agent  of the  Preferred  Shares  (or make
     available,  if the Rights  Agent is the  transfer  agent for the  Preferred
     Shares) a certificate  or  certificates  for the number of  one-thousandths
     (0.001) of a Preferred  Share (or,  following  a  Triggering  Event,  other
     securities,  cash or other assets as the case may be) to be  purchased  and
     the Company hereby irrevocably authorizes its transfer agent to comply with
     all such  requests or (B) if the Company  shall have elected to deposit the
     total number of one-thousandths (0.001) of a Preferred Share (or, following
     a Triggering Event, other securities,  cash or other assets as the case may
     be) issuable upon exercise of the Rights hereunder with a depository agent,
     requisition from the depository agent depository receipts representing such
     number of  one-thousandths  (0.001) of a Preferred  Share (or,  following a
     Triggering Event,  other  securities,  cash or other assets as the case may
     be) as are to be purchased  (in which case  certificates  for the Preferred
     Shares (or, following a Triggering Event,  other securities,  cash or other
     assets as the case may be)  represented by such receipts shall be deposited
     by the transfer  agent with the  depository  agent) and the Company  hereby
     directs  the  depository  agent to  comply  with  such  request,  (ii) when
     appropriate,  requisition from the Company the amount of cash to be paid in
     lieu of issuance of fractional shares in accordance with Section 14 hereof,
     (iii) after receipt of such certificates or depository receipts,  cause the
     same to be delivered to or upon the order of the registered  holder of such
     Rights  Certificate,  registered in such name or names as may be designated
     by such holder and (iv) when  appropriate,  after receipt thereof,  deliver
     such cash to or upon the  order of the  registered  holder  of such  Rights
     Certificate.  The  payment  of the  Exercise  Price (as such  amount may be
     reduced  (including to zero) pursuant to Section  11(a)(iii) hereof) and an
     amount  equal to any  applicable  transfer  tax  required to be paid by the
     holder of such Rights  Certificate in accordance  with Section 9(e) hereof,
     may be made in cash or by  certified  bank check,  cashier's  check or bank
     draft payable to the order of the Company. In the event that the Company is
     obligated to issue  securities of the Company other than Preferred  Shares,
     pay cash and/or distribute other property pursuant to Section 11(a) hereof,
     the  Company  will  make all  arrangements  necessary  so that  such  other
     securities,  cash and/or other property are available for  distribution  by
     the Rights Agent, if and when appropriate.

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

          (e) Notwithstanding  anything in this Agreement to the contrary,  from
     and  after  the  first  occurrence  of  a  Triggering   Event,  any  Rights
     beneficially  owned by (i) an Acquiring Person or an Associate or Affiliate
     of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
     such Associate or Affiliate)  who becomes a transferee  after the Acquiring
     Person becomes such (a "Post-Event  Transferee"),  (iii) a transferee of an
     Acquiring  Person (or of any such  Associate  or  Affiliate)  who becomes a
     transferee prior to or concurrently with the Acquiring Person becoming such
     and receives such Rights pursuant to either (A) a transfer  (whether or not
     for consideration) from the Acquiring Person to holders of equity interests
     in such  Acquiring  Person or to any Person with whom the Acquiring  Person
     has any continuing  agreement,  arrangement or understanding  regarding the
     transferred Rights or (B) a transfer which the Company's Board of Directors
     has determined is part of a plan, arrangement or understanding which has as
     a  primary  purpose  or  effect  the  avoidance  of  this  Section  7(e) (a
     "Pre-Event   Transferee")  or  (iv)  any  subsequent  transferee  receiving
     transferred Rights from a Post-Event  Transferee or a Pre-Event Transferee,
     either  directly or through  one or more  intermediate  transferees,  shall
     become  null and void  without  any  further  action  and no holder of such
     Rights  shall  have any rights  whatsoever  with  respect  to such  Rights,
     whether  under any provision of this  Agreement or  otherwise.  The Company
     shall use all  reasonable  efforts to ensure  that the  provisions  of this
     Section 7(e) and Section 4(b) hereof are complied  with,  but shall have no
     liability to any holder of Rights  Certificates or to any other Person as a
     result  of its  failure  to make  any  determinations  with  respect  to an
     Acquiring Person or any of such Acquiring Person's  Affiliates,  Associates
     or transferees hereunder.

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

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

     Section 9. Reservation and Availability of Preferred Shares.

          (a) The Company covenants and agrees that it will use its best efforts
     to cause  to be  reserved  and kept  available  out of its  authorized  and
     unissued Preferred Shares not reserved for another purpose (and,  following
     the  occurrence of a Triggering  Event,  out of its authorized and unissued
     Common  Shares  and/or other  securities),  the number of Preferred  Shares
     (and,  following the  occurrence  of the  Triggering  Event,  Common Shares
     and/or other  securities) that will be sufficient to permit the exercise in
     full of all outstanding Rights.

          (b) If the Company shall hereafter list any of its Preferred Shares on
     a national securities exchange,  then so long as the Preferred Shares (and,
     following the occurrence of a Triggering Event,  Common Shares and/or other
     securities)  issuable and  deliverable  upon  exercise of the Rights may be
     listed on such  exchange,  the Company shall use its best efforts to cause,
     from and after such time as the Rights become  exercisable (but only to the
     extent that it is reasonably likely that the Rights will be exercised), all
     shares  reserved  for such  issuance  to be  listed on such  exchange  upon
     official notice of issuance upon such exercise.

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

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

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

     Section 10. Record Date.  Each Person in whose name any  certificate  for a
number of  one-thousandths  (0.001) of a Preferred Share (or other securities of
the  Company) is issued upon the  exercise of Rights  shall for all  purposes be
deemed  to have  become  the  holder of record  of  Preferred  Shares  (or other
securities of the Company) represented thereby on, and such certificate shall be
dated,  the date upon which the Rights  Certificate  evidencing  such Rights was
duly  surrendered  and payment of the Total Exercise Price with respect to which
the Rights have been  exercised (and any  applicable  transfer  taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the transfer books of the Company are closed,  such Person shall be deemed
to have become the record holder of such shares on, and such  certificate  shall
be dated,  the next  succeeding  Business Day on which the transfer books of the
Company are open.  Prior to the exercise of the Rights  evidenced  thereby,  the
holder of a Rights  Certificate  shall not be entitled to any rights of a holder
of Preferred  Shares (or other  securities  of the Company) for which the Rights
shall be  exercisable,  including,  without  limitation,  the right to vote,  to
receive dividends or other  distributions or to exercise any preemptive  rights,
and shall not be  entitled  to  receive  any  notice of any  proceedings  of the
Company, except as provided herein.

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

               (a)   (i)   Anything   in   this   Agreement   to  the   contrary
          notwithstanding, in the event that the Company shall at any time after
          the date of this  Agreement  (A) declare a dividend  on the  Preferred
          Shares  payable in Preferred  Shares,  (B) subdivide  the  outstanding
          Preferred  Shares,  (C) combine the outstanding  Preferred  Shares (by
          reverse stock split or otherwise)  into a smaller  number of Preferred
          Shares,   or  (D)  issue  any  shares  of  its  capital   stock  in  a
          reclassification   of  the  Preferred   Shares   (including  any  such
          reclassification in connection with a consolidation or merger in which
          the Company is the continuing or surviving corporation), then, in each
          such  event,  except as  otherwise  provided  in this  Section  11 and
          Section 7(e) hereof:  (1) the Exercise  Price in effect at the time of
          the record  date for such  dividend or of the  effective  date of such
          subdivision, combination or reclassification shall be adjusted so that
          the  Exercise  Price  thereafter  shall  equal the result  obtained by
          dividing the Exercise Price in effect  immediately  prior to such time
          by a fraction  (the  "Adjustment  Fraction"),  the  numerator of which
          shall be the total  number of  Preferred  Shares (or shares of capital
          stock  issued  in  such  reclassification  of  the  Preferred  Shares)
          outstanding  immediately  following  such time and the  denominator of
          which  shall be the  total  number  of  Preferred  Shares  outstanding
          immediately prior to such time;  provided,  however,  that in no event
          shall the  consideration  to be paid upon the exercise of one Right be
          less than the  aggregate  par value of the shares of capital  stock of
          the Company  issuable upon exercise of such Right;  and (2) the number
          of  one-thousandths  (0.001)  of a  Preferred  Share (or share of such
          other  capital  stock)  issuable upon the exercise of each Right shall
          equal the number of  one-thousandths  (0.001) of a Preferred Share (or
          share of such other capital  stock) as was issuable upon exercise of a
          Right  immediately  prior to the occurrence of the event  described in
          clauses (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment
          Fraction;  provided,  however,  that, no such adjustment shall be made
          pursuant to this Section  11(a)(i) to the extent that there shall have
          simultaneously  occurred an event described in clause (A), (B), (C) or
          (D) of  Section  11(n)  with a  proportionate  adjustment  being  made
          thereunder.  Each Common Share that shall become  outstanding after an
          adjustment has been made pursuant to this Section  11(a)(i) shall have
          associated  with it the number of Rights,  exercisable at the Exercise
          Price and for the number of  one-thousandths  (0.001)  of a  Preferred
          Share (or shares of such other capital  stock) as one Common Share has
          associated with it immediately  following the adjustment made pursuant
          to this Section 11(a)(i).

               (ii) Subject to Section 24 of this Agreement, in the event that a
          Triggering  Event shall have  occurred,  then promptly  following such
          Triggering Event each holder of a Right, except as provided in Section
          7(e)  hereof,  shall  thereafter  have the right to  receive  for each
          Right,  upon  exercise  thereof in  accordance  with the terms of this
          Agreement  and  payment of the  Exercise  Price in effect  immediately
          prior to the occurrence of the Triggering  Event,  in lieu of a number
          of one-thousandths (0.001) of a Preferred Share, such number of Common
          Shares of the Company as shall equal the quotient obtained by dividing
          (A) the product  obtained by  multiplying  (1) the  Exercise  Price in
          effect  immediately prior to the occurrence of the Triggering Event by
          (2) the number of  one-thousandths  (0.001) of a  Preferred  Share for
          which a Right was exercisable  (or would have been  exercisable if the
          Distribution  Date  had  occurred)  immediately  prior  to  the  first
          occurrence  of a Triggering  Event,  by (B) fifty percent (50%) of the
          Current  Per  Share  Market  Price  for  Common  Shares on the date of
          occurrence  of the  Triggering  Event;  provided,  however,  that  the
          Exercise  Price  and the  number of Common  Shares of the  Company  so
          receivable  upon  exercise  of a Right  shall be  subject  to  further
          adjustment as appropriate  in accordance  with Section 11(e) hereof to
          reflect any events  occurring  in respect of the Common  Shares of the
          Company after the occurrence of the Triggering Event.

               (iii) In lieu of issuing Common Shares in accordance with Section
          11(a)(ii) hereof, the Company may, if the Company's Board of Directors
          determines  that  such  action is  necessary  or  appropriate  and not
          contrary  to the  interest of holders of Rights and, in the event that
          the number of Common  Shares  which are  authorized  by the  Company's
          Amended and Restated  Articles of Incorporation but not outstanding or
          reserved for issuance  for  purposes  other than upon  exercise of the
          Rights  are not  sufficient  to  permit  the  exercise  in full of the
          Rights, or if any necessary  regulatory approval for such issuance has
          not been obtained by the Company, the Company shall: (A) determine the
          excess  of (1) the  value  of the  Common  Shares  issuable  upon  the
          exercise of a Right (the "Current  Value") over (2) the Exercise Price
          (such excess,  the "Spread") and (B) with respect to each Right,  make
          adequate provision to substitute for such Common Shares, upon exercise
          of the Rights,  (1) cash, (2) a reduction in the Exercise  Price,  (3)
          other equity securities of the Company (including, without limitation,
          shares or units of shares of any series of  preferred  stock which the
          Company's  Board of  Directors  has  deemed to have the same  value as
          Common  Shares (such shares or units of shares of preferred  stock are
          herein called "Common Stock Equivalents")),  except to the extent that
          the Company has not obtained any necessary  shareholder  or regulatory
          approval for such issuance, (4) debt securities of the Company, except
          to the  extent  that  the  Company  has  not  obtained  any  necessary
          shareholder or regulatory approval for such issuance, (5) other assets
          or (6) any  combination  of the foregoing,  having an aggregate  value
          equal to the  Current  Value,  where  such  aggregate  value  has been
          determined by the Company's  Board of Directors  based upon the advice
          of a nationally  recognized  investment  banking firm  selected by the
          Company's Board of Directors;  provided,  however, that if the Company
          shall not have made adequate  provision to deliver  value  pursuant to
          clause (B) above within  thirty (30) days  following  the later of (x)
          the first  occurrence of a Triggering  Event and (y) the date on which
          the Company's  right of  redemption  pursuant to Section 23(a) expires
          (the  later of (x) and (y) being  referred  to herein as the  "Section
          11(a)(ii)  Trigger  Date"),  then the Company  shall be  obligated  to
          deliver,  upon the  surrender  for  exercise  of a Right  and  without
          requiring payment of the Exercise Price,  Common Shares (to the extent
          available), except to the extent that the Company has not obtained any
          necessary  shareholder or regulatory  approval for such issuance,  and
          then, if necessary,  cash,  which shares and/or cash have an aggregate
          value equal to the Spread.  If the Company's  Board of Directors shall
          determine in good faith that it is likely that  sufficient  additional
          Common Shares could be  authorized  for issuance upon exercise in full
          of the  Rights  or that any  necessary  regulatory  approval  for such
          issuance will be obtained,  the thirty (30) day period set forth above
          may be extended to the extent necessary, but not more than ninety (90)
          days  after the  Section  11(a)(ii)  Trigger  Date,  in order that the
          Company may seek  shareholder  approval for the  authorization of such
          additional  shares or take action to obtain such  regulatory  approval
          (such period, as it may be extended,  the "Substitution  Period").  To
          the extent that the Company  determines that some action need be taken
          pursuant  to  the  first  and/or  second  sentences  of  this  Section
          11(a)(iii),  the Company (x) shall  provide,  subject to Section  7(e)
          hereof,  that such action  shall apply  uniformly  to all  outstanding
          Rights and (y) may suspend the  exercisability of the Rights until the
          expiration   of  the   Substitution   Period  in  order  to  seek  any
          authorization of additional  shares,  to take any action to obtain any
          required  regulatory approval and/or to decide the appropriate form of
          distribution  to be  made  pursuant  to  such  first  sentence  and to
          determine the value thereof. In the event of any such suspension,  the
          Company   shall  issue  a  public   announcement   stating   that  the
          exercisability of the Rights has been temporarily  suspended,  as well
          as a public  announcement  at such time as the suspension is no longer
          in effect. For purposes of this Section  11(a)(iii),  the value of the
          Common  Shares  shall be the  Current  Per Share  Market  Price of the
          Common Shares on the Section  11(a)(ii)  Trigger Date and the value of
          any Common Stock  Equivalent shall be deemed to have the same value as
          the Common Shares on such date.

          (b) In case the  Company  shall,  at any time  after  the date of this
     Agreement,  fix a record  date  for the  issuance  of  rights,  options  or
     warrants to all holders of Preferred  Shares  entitling such holders (for a
     period  expiring  within  forty-five  (45)  calendar days after such record
     date) to subscribe for or purchase Preferred Shares or Equivalent Shares or
     securities  convertible  into  Preferred  Shares or Equivalent  Shares at a
     price per share (or  having a  conversion  price per  share,  if a security
     convertible into Preferred Shares or Equivalent  Shares) less than the then
     Current Per Share Market Price of the Preferred Shares or Equivalent Shares
     on such record date,  then, in each such case,  the Exercise Price to be in
     effect  after such  record  date shall be  determined  by  multiplying  the
     Exercise  Price  in  effect  immediately  prior  to such  record  date by a
     fraction,  the  numerator of which shall be the number of Preferred  Shares
     and Equivalent  Shares (if any)  outstanding on such record date,  plus the
     number of Preferred Shares or Equivalent  Shares, as the case may be, which
     the  aggregate  offering  price of the total number of Preferred  Shares or
     Equivalent  Shares, as the case may be, to be offered or issued (and/or the
     aggregate  initial  conversion  price of the  convertible  securities to be
     offered or issued) would  purchase at such current  market  price,  and the
     denominator of which shall be the number of Preferred Shares and Equivalent
     Shares  (if any)  outstanding  on such  record  date,  plus the  number  of
     additional Preferred Shares or Equivalent Shares, as the case may be, to be
     offered  for  subscription  or  purchase  (or into  which  the  convertible
     securities so to be offered are initially convertible);  provided, however,
     that in no event shall the  consideration  to be paid upon the  exercise of
     one Right be less than the  aggregate  par value of the  shares of  capital
     stock of the Company  issuable  upon  exercise  of one Right.  In case such
     subscription  price  may be paid in a  consideration  part or all of  which
     shall be in a form other than cash, the value of such  consideration  shall
     be as determined in good faith by the Company's  Board of Directors,  whose
     determination shall be described in a statement filed with the Rights Agent
     and shall be  binding on the Rights  Agent and the  holders of the  Rights.
     Preferred Shares and Equivalent  Shares owned by or held for the account of
     the  Company  shall not be deemed  outstanding  for the purpose of any such
     computation.  Such adjustment  shall be made  successively  whenever such a
     record  date is  fixed,  and in the  event  that such  rights,  options  or
     warrants are not so issued,  the Exercise Price shall be adjusted to be the
     Exercise  Price  which  would then be in effect if such record date had not
     been fixed.

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

          (d) Anything herein to the contrary notwithstanding,  no adjustment in
     the Exercise Price shall be required unless such  adjustment  would require
     an increase or decrease of at least one percent (1%) of the Exercise Price;
     provided,  however,  that any  adjustments  which by reason of this Section
     11(d) are not  required to be made shall be carried  forward and taken into
     account in any subsequent  adjustment.  All calculations under this Section
     11  shall  be made to the  nearest  cent or to the  nearest  ten-thousandth
     (0.0001)  of a  Common  Share  or  other  share  or one  hundred-thousandth
     (0.00001) of a Preferred  Share,  as the case may be.  Notwithstanding  the
     first  sentence of this  Section  11(d),  any  adjustment  required by this
     Section 11 shall be made no later  than the  earlier of (i) three (3) years
     from the date of the transaction which requires such adjustment or (ii) the
     Expiration Date.

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

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

          (g) Unless the Company  shall have  exercised its election as provided
     in Section 11(h), upon each adjustment of the Exercise Price as a result of
     the  calculations  made in Section  11(b) and (c),  each Right  outstanding
     immediately  prior  to the  making  of  such  adjustment  shall  thereafter
     evidence the right to purchase, at the adjusted Exercise Price, that number
     of  Preferred  Shares  (calculated  to the nearest  one  hundred-thousandth
     (0.00001)  of a  share)  obtained  by (i)  multiplying  (x) the  number  of
     Preferred Shares covered by a Right  immediately  prior to this adjustment,
     by (y) the Exercise Price in effect immediately prior to such adjustment of
     the  Exercise  Price,  and (ii)  dividing  the  product so  obtained by the
     Exercise Price in effect  immediately after such adjustment of the Exercise
     Price.

          (h) The  Company may elect on or after the date of any  adjustment  of
     the Exercise Price as a result of the calculations made in Section 11(b) or
     (c) to adjust the number of Rights,  in substitution  for any adjustment in
     the number of Preferred  Shares  purchasable  upon the exercise of a Right.
     Each of the  Rights  outstanding  after  such  adjustment  of the number of
     Rights shall be exercisable for the number of one-thousandths  (0.001) of a
     Preferred Share for which a Right was exercisable immediately prior to such
     adjustment.  Each  Right  held of record  prior to such  adjustment  of the
     number of Rights  shall  become  that number of Rights  (calculated  to the
     nearest one hundred-thousandth (0.00001)) obtained by dividing the Exercise
     Price in effect  immediately  prior to adjustment of the Exercise  Price by
     the Exercise Price in effect  immediately  after adjustment of the Exercise
     Price.  The Company  shall make a public  announcement  of its  election to
     adjust the number of Rights, indicating the record date for the adjustment,
     and, if known at the time,  the amount of the  adjustment to be made.  This
     record date may be the date on which the Exercise  Price is adjusted or any
     day thereafter,  but, if any Rights Certificates have been issued, shall be
     at least ten (10) days later than the date of the public  announcement.  If
     Rights Certificates have been issued, upon each adjustment of the number of
     Rights  pursuant to this Section 11(h),  the Company shall,  as promptly as
     practicable,  cause to be  distributed  to  holders  of  record  of  Rights
     Certificates on such record date Rights Certificates evidencing, subject to
     Section 14 hereof,  the  additional  Rights to which such holders  shall be
     entitled as a result of such adjustment,  or, at the option of the Company,
     shall cause to be distributed to such holders of record in substitution and
     replacement for the Rights  Certificates  held by such holders prior to the
     date of adjustment, and upon surrender thereof, if required by the Company,
     new Rights  Certificates  evidencing  all the Rights to which such  holders
     shall be  entitled  after such  adjustment.  Rights  Certificates  so to be
     distributed  shall be  issued,  executed  and  countersigned  in the manner
     provided  for  herein  (and may bear,  at the  option of the  Company,  the
     adjusted  Exercise  Price)  and  shall be  registered  in the  names of the
     holders of record of Rights  Certificates  on the record date  specified in
     the public announcement.

          (i)  Irrespective of any adjustment or change in the Exercise Price or
     the number of Preferred  Shares  issuable  upon the exercise of the Rights,
     the Rights  Certificates  theretofore and thereafter issued may continue to
     express the Exercise  Price per one  one-thousandth  (0.001) of a Preferred
     Share and the number of one-thousandths  (0.001) of a Preferred Share which
     were expressed in the initial Rights Certificates issued hereunder.

          (j) Before taking any action that would cause an  adjustment  reducing
     the Exercise Price below the par or stated value,  if any, of the number of
     one-thousandths  (0.001) of a Preferred Share issuable upon exercise of the
     Rights,  the  Company  shall take any  corporate  action  which may, in the
     opinion of its counsel,  be necessary in order that the Company may validly
     and  legally  issue as fully paid and  nonassessable  shares such number of
     one-thousandths  (0.001) of a  Preferred  Share at such  adjusted  Exercise
     Price.

          (k) In any  case in  which  this  Section  11  shall  require  that an
     adjustment in the Exercise  Price be made effective as of a record date for
     a specified  event,  the Company may elect to defer until the occurrence of
     such  event the  issuing to the  holder of any Right  exercised  after such
     record date of the number of  one-thousandths  (0.001) of a Preferred Share
     and other capital stock or securities of the Company, if any, issuable upon
     such  exercise  over and above the number of  one-thousandths  (0.001) of a
     Preferred  Share and other capital  stock or securities of the Company,  if
     any,  issuable  upon such  exercise on the basis of the  Exercise  Price in
     effect prior to such adjustment;  provided, however, that the Company shall
     deliver  to  such  holder  a  due  bill  or  other  appropriate  instrument
     evidencing   such  holder's  right  to  receive  such   additional   shares
     (fractional or otherwise)  upon the occurrence of the event  requiring such
     adjustment.

          (l) Anything in this Section 11 to the contrary notwithstanding, prior
     to the  Distribution  Date,  the  Company  shall be  entitled  to make such
     reductions  in  the  Exercise  Price,  in  addition  to  those  adjustments
     expressly  required by this Section 11, as and to the extent that it in its
     sole  discretion  shall  determine  to be  advisable  in order that any (i)
     consolidation  or  subdivision  of the  Preferred  or Common  Shares,  (ii)
     issuance wholly for cash of any Preferred or Common Shares at less than the
     current market price, (iii) issuance wholly for cash of Preferred or Common
     Shares  or  securities  which  by  their  terms  are  convertible  into  or
     exchangeable  for Preferred or Common Shares,  (iv) stock  dividends or (v)
     issuance  of rights,  options or warrants  referred to in this  Section 11,
     hereafter  made by the Company to holders of its Preferred or Common Shares
     shall not be taxable to such shareholders.

          (m) The Company  covenants  and agrees  that,  after the  Distribution
     Date,  it will not,  except as  permitted  by Sections 23, 24 or 27 hereof,
     take (or permit to be taken) any action if at the time such action is taken
     it is reasonably  foreseeable that such action will diminish  substantially
     or otherwise  eliminate the benefits intended to be afforded by the Rights.
     (n) In the event that the Company  shall at any time after the date of this
     Agreement  (A)  declare a dividend on the Common  Shares  payable in Common
     Shares,  (B)  subdivide  the  outstanding  Common  Shares,  (C) combine the
     outstanding  Common  Shares (by reverse  stock split or  otherwise)  into a
     smaller  number of Common  Shares,  or (D) issue any shares of its  capital
     stock  in a  reclassification  of the  Common  Shares  (including  any such
     reclassification  in connection with a consolidation or merger in which the
     Company is the  continuing  or surviving  corporation),  then, in each such
     event,  except as otherwise provided in this Section 11(a) and Section 7(e)
     hereof:  (1) each Common  Share (or shares of capital  stock issued in such
     reclassification  of the Common Shares) outstanding  immediately  following
     such  time  shall  have  associated  with it the  number  of Rights as were
     associated with one Common Share immediately prior to the occurrence of the
     event described in clauses (A)-(D) above;  (2) the Exercise Price in effect
     at the time of the record date for such dividend or of the  effective  date
     of such subdivision,  combination or reclassification  shall be adjusted so
     that the  Exercise  Price  thereafter  shall  equal the result  obtained by
     multiplying the Exercise Price in effect  immediately prior to such time by
     a fraction,  the  numerator  of which  shall be the total  number of Common
     Shares  outstanding  immediately  prior to the event  described  in clauses
     (A)-(D)  above,  and the  denominator of which shall be the total number of
     Common Shares outstanding immediately after such event; provided,  however,
     that in no event shall the  consideration  to be paid upon the  exercise of
     one Right be less than the  aggregate  par value of the  shares of  capital
     stock of the Company  issuable  upon  exercise  of such Right;  and (3) the
     number of  one-thousandths  (0.001) of a Preferred Share (or shares of such
     other capital stock)  issuable upon the exercise of each Right  outstanding
     after such event  shall  equal the number of  one-thousandths  (0.001) of a
     Preferred  Share (or shares of such other  capital  stock) as were issuable
     with  respect to one Right  immediately  prior to such  event.  Each Common
     Share that  shall  become  outstanding  after an  adjustment  has been made
     pursuant to this Section 11(n) shall have  associated with it the number of
     Rights,   exercisable   at  the  Exercise  Price  and  for  the  number  of
     one-thousandths  (0.001)  of a  Preferred  Share (or  shares of such  other
     capital  stock) as one  Common  Share has  associated  with it  immediately
     following the adjustment  made pursuant to this Section 11(n).  If an event
     occurs which would require an adjustment  under both this Section 11(n) and
     Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(n)
     shall be in  addition  to,  and  shall be made  prior  to,  any  adjustment
     required pursuant to Section 11(a)(ii) hereof.

     Section 12.  Certificate  of Adjusted  Exercise  Price or Number of Shares.
Whenever an  adjustment  is made as  provided in Sections 11 and 13 hereof,  the
Company shall promptly (a) prepare a certificate  setting forth such  adjustment
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof.  Notwithstanding the foregoing
sentence,  the  failure of the Company to make such  certification  or give such
notice shall not affect the validity of such  adjustment  or the force or effect
of the  requirement  for  such  adjustment.  The  Rights  Agent  shall  be fully
protected in relying on any such  certificate  and on any  adjustment  contained
therein and shall not be deemed to have knowledge of such adjustment  unless and
until it shall have received such certificate.

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

          (a) In the event  that,  following  a  Triggering  Event,  directly or
     indirectly:

               (i) the Company shall  consolidate  with, or merge with and into,
          any other Person (other than a wholly-owned  Subsidiary of the Company
          in a transaction the principal purpose of which is to change the state
          of  incorporation of the Company and which complies with Section 11(m)
          hereof);

               (ii) any Person shall consolidate with the Company, or merge with
          and into the  Company  and the  Company  shall  be the  continuing  or
          surviving   corporation  of  such  consolidation  or  merger  and,  in
          connection with such merger, all or part of the Common Shares shall be
          changed into or exchanged  for stock or other  securities of any other
          person (or the Company); or

               (iii) the Company  shall sell or  otherwise  transfer  (or one or
          more of its Subsidiaries shall sell or otherwise transfer),  in one or
          more  transactions,  assets or earning power aggregating fifty percent
          (50%) or more of the assets or earning  power of the  Company  and its
          Subsidiaries  (taken as a whole) to any other Person or Persons (other
          than the Company or one or more of its wholly  owned  Subsidiaries  in
          one or more  transactions,  each of which  individually (and together)
          complies with Section 11(m) hereof),

                  then, concurrent with and in each such case,

                    (A) each  holder of a Right  (except as  provided in Section
               7(e) hereof) shall thereafter have the right to receive, upon the
               exercise  thereof at a price  equal to the Total  Exercise  Price
               applicable  immediately prior to the occurrence of the Section 13
               Event in accordance with the terms of this Agreement, such number
               of validly authorized and issued,  fully paid,  nonassessable and
               freely  tradeable  Common  Shares  of  the  Principal  Party  (as
               hereinafter defined), free of any liens, encumbrances,  rights of
               first refusal or other adverse  claims,  as shall be equal to the
               result  obtained  by  dividing  such Total  Exercise  Price by an
               amount  equal to fifty  percent  (50%) of the  Current  Per Share
               Market Price of the Common Shares of such Principal  Party on the
               date of consummation of such Section 13 Event, provided, however,
               that the Exercise  Price and the number of Common  Shares of such
               Principal  Party so receivable  upon exercise of a Right shall be
               subject to further  adjustment as appropriate in accordance  with
               Section 11(e) hereof;

                    (B) such Principal Party shall thereafter be liable for, and
               shall  assume,  by  virtue  of such  Section  13  Event,  all the
               obligations and duties of the Company pursuant to this Agreement;

                    (C) the term "Company"  shall  thereafter be deemed to refer
               to such Principal Party, it being specifically  intended that the
               provisions  of  Section  11  hereof  shall  apply  only  to  such
               Principal  Party  following the first  occurrence of a Section 13
               Event;

                    (D) such Principal  Party shall take such steps  (including,
               but not limited to, the reservation of a sufficient number of its
               Common Shares) in connection  with the  consummation  of any such
               transaction  as may be  necessary  to ensure that the  provisions
               hereof shall  thereafter be  applicable,  as nearly as reasonably
               may be, in relation to its Common Shares  thereafter  deliverable
               upon the exercise of the Rights; and

                    (E) upon the  subsequent  occurrence  of any  consolidation,
               merger,  sale  or  transfer  of  assets  or  other  extraordinary
               transaction in respect of such Principal Party,  each holder of a
               Right shall thereupon be entitled to receive,  upon exercise of a
               Right and payment of the Total Exercise Price as provided in this
               Section  13(a),  such cash,  shares,  rights,  warrants and other
               property  which such holder  would have been  entitled to receive
               had such  holder,  at the  time of such  transaction,  owned  the
               Common Shares of the Principal Party receivable upon the exercise
               of such Right pursuant to this Section 13(a),  and such Principal
               Party  shall  take such steps  (including,  but not  limited  to,
               reservation of shares of stock) as may be necessary to permit the
               subsequent  exercise of the Rights in  accordance  with the terms
               hereof  for  such  cash,  shares,  rights,   warrants  and  other
               property.

                    (F) For purposes hereof,  the "earning power" of the Company
               and its  Subsidiaries  shall be  determined  in good faith by the
               Company's Board of Directors on the basis of the operating income
               of each  business  operated by the  Company and its  Subsidiaries
               during  the  three  fiscal  years  preceding  the  date  of  such
               determination  (or, in the case of any  business  not operated by
               the Company or any  Subsidiary  during  three full  fiscal  years
               preceding such date, during the period such business was operated
               by the Company or any Subsidiary).

          (b) For purposes of this Agreement,  the term "Principal  Party" shall
     mean:

               (i) in the case of any  transaction  described  in clause  (i) or
          (ii) of Section 13(a) hereof: (A) the Person that is the issuer of the
          securities  into which the Common  Shares are converted in such merger
          or  consolidation,  or,  if there is more  than one such  issuer,  the
          issuer the Common Shares of which have the greatest  aggregate  market
          value of shares  outstanding,  or (B) if no securities  are so issued,
          (x) the Person that is the other  party to the merger,  if such Person
          survives said merger,  or, if there is more than one such Person,  the
          Person the Common Shares of which have the greatest  aggregate  market
          value of shares  outstanding  or (y) if the  Person  that is the other
          party to the merger does not survive the merger,  the Person that does
          survive the merger  (including  the Company if it survives) or (z) the
          Person resulting from the consolidation; and

               (ii) in the case of any transaction  described in clause (iii) of
          Section  13(a)  hereof,  the Person  that is the party  receiving  the
          greatest portion of the assets or earning power  transferred  pursuant
          to such transaction or transactions,  or, if more than one Person that
          is a party  to such  transaction  or  transactions  receives  the same
          portion of the assets or earning  power so  transferred  and each such
          portion would,  were it not for the other equal  portions,  constitute
          the greatest portion of the assets or earning power so transferred, or
          if the Person  receiving the greatest portion of the assets or earning
          power cannot be determined, whichever of such Persons is the issuer of
          Common  Shares  having the greatest  aggregate  market value of shares
          outstanding; provided that in any such case described in the foregoing
          clause (b)(i) or (b)(ii),  if the Common Shares of such Person are not
          at such time or have not been continuously over the preceding 12-month
          period  registered  under  Section 12 of the Exchange Act, then (1) if
          such Person is a direct or indirect  Subsidiary of another  Person the
          Common  Shares  of which  are and have  been so  registered,  the term
          "Principal  Party"  shall refer to such other  Person,  or (2) if such
          Person  is a  Subsidiary,  directly  or  indirectly,  of more than one
          Person,  the Common  Shares of which are and have been so  registered,
          the term "Principal Party" shall refer to whichever of such Persons is
          the issuer of Common Shares having the greatest aggregate market value
          of shares  outstanding,  or (3) if such  Person is owned,  directly or
          indirectly,  by a joint venture formed by two or more Persons that are
          not owned,  directly or indirectly  by the same Person,  the rules set
          forth in clauses  (1) and (2) above  shall apply to each of the owners
          having an interest in the venture as if the Person  owned by the joint
          venture was a Subsidiary of both or all of such joint  venturers,  and
          the Principal  Party in each such case shall bear the  obligations set
          forth in this  Section 13 in the same  ration as its  interest in such
          Person bears to the total of such interests.

          (c) The Company shall not  consummate  any Section 13 Event unless the
     Principal Party shall have a sufficient  number of authorized Common Shares
     that have not been issued or reserved  for  issuance to permit the exercise
     in full of the Rights in  accordance  with this Section 13 and unless prior
     thereto the Company and such issuer shall have  executed  and  delivered to
     the Rights Agent a supplemental  agreement  confirming  that such Principal
     Party  shall,  upon  consummation  of such  Section 13 Event,  assume  this
     Agreement in  accordance  with Sections  13(a) and 13(b)  hereof,  that all
     rights of first refusal or preemptive  rights in respect of the issuance of
     Common Shares of such Principal  Party upon exercise of outstanding  Rights
     have been  waived,  that  there are no  rights,  warrants,  instruments  or
     securities outstanding or any agreements or arrangements which, as a result
     of the consummation of such  transaction,  would eliminate or substantially
     diminish the  benefits  intended to be afforded by the Rights and that such
     transaction  shall not result in a default by such  Principal  Party  under
     this Agreement,  and further  providing that, as soon as practicable  after
     the date of such Section 13 Event, such Principal Party will:

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

               (ii) use its best  efforts to list (or  continue  the listing of)
          the Rights and the securities  purchasable upon exercise of the Rights
          on  a  national   securities  exchange  or  to  meet  the  eligibility
          requirements for quotation on Nasdaq and list (or continue the listing
          of) the Rights and the  securities  purchasable  upon  exercise of the
          Rights on Nasdaq; and

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

     In the event that at any time after the  occurrence  of a Triggering  Event
some or all of the  Rights  shall  not  have  been  exercised  at the  time of a
transaction  described in this Section 13, the Rights which have not theretofore
been  exercised  shall  thereafter  be  exercisable  in the manner  described in
Section  13(a)  (without  taking into account any prior  adjustment  required by
Section 11(a)(ii)).

          (d) In case the "Principal Party" for purposes of Section 13(b) hereof
     has provision in any of its authorized  securities or in its certificate of
     incorporation  or  by-laws  or other  instrument  governing  its  corporate
     affairs,  which  provision  would  have  the  effect  of (i)  causing  such
     Principal  Party to issue  (other  than to  holders of Rights  pursuant  to
     Section  13  hereof),  in  connection  with,  or as a  consequence  of, the
     consummation of a Section 13 Event,  Common Shares or Equivalent  Shares of
     such  Principal  Party at less than the then Current Per Share Market Price
     thereof or securities  exercisable for, or convertible  into, Common Shares
     or Equivalent Shares of such Principal Party at less than such then Current
     Per Share Market Price, or (ii) providing for any special  payment,  tax or
     similar  provision in connection  with the issuance of the Common Shares of
     such Principal Party pursuant to the provisions of Section 13 hereof, then,
     in such event, the Company hereby agrees with each holder of Rights that it
     shall not consummate any such transaction  unless prior thereto the Company
     and such  Principal  Party shall have  executed and delivered to the Rights
     Agent a supplemental  agreement providing that the provision in question of
     such Principal Party shall have been canceled,  waived or amended,  or that
     the  authorized  securities  shall  be  redeemed,  so that  the  applicable
     provision  will have no effect in connection  with or as a consequence  of,
     the consummation of the proposed transaction.

          (e) The  Company  covenants  and agrees that it shall not, at any time
     after the  Distribution  Date,  effect or  permit to occur any  Section  13
     Event, if (i) at the time or immediately  after such Section 13 Event there
     are any rights,  warrants or other instruments or securities outstanding or
     agreements  in effect  which  would  substantially  diminish  or  otherwise
     eliminate  the benefits  intended to be afforded by the Rights,  (ii) prior
     to,  simultaneously  with or immediately  after such Section 13 Event,  the
     shareholders  of the  Person  who  constitutes,  or would  constitute,  the
     "Principal  Party" for purposes of Section 13(b) hereof shall have received
     a  distribution  of Rights  previously  owned by such  Person or any of its
     Affiliates or Associates or (iii) the form or nature of organization of the
     Principal Party would preclude or limit the exercisability of the Rights.

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

     Section 14. Fractional Rights and Fractional Shares.

          (a) The Company shall not be required to issue  fractions of Rights or
     to distribute Rights Certificates which evidence fractional Rights. In lieu
     of such fractional Rights, there shall be paid to the registered holders of
     the Rights  Certificates  with regard to which such fractional Rights would
     otherwise be issuable,  an amount in cash equal to the same fraction of the
     current  market  value of a whole  Right.  For the purposes of this Section
     14(a), the current market value of a whole Right shall be the closing price
     of the Rights for the  Trading Day  immediately  prior to the date on which
     such fractional  Rights would have been otherwise  issuable,  as determined
     pursuant to the second sentence of Section 1(j) hereof.

          (b) The Company shall not be required to issue  fractions of Preferred
     Shares  (other  than   fractions   that  are  integral   multiples  of  one
     one-thousandth (0.001) of a Preferred Share) upon exercise of the Rights or
     to distribute  certificates  which  evidence  fractional  Preferred  Shares
     (other than  fractions  that are integral  multiples of one  one-thousandth
     (0.001) of a Preferred  Share).  Interests in fractions of Preferred Shares
     in integral  multiples of one  one-thousandth  (0.001) of a Preferred Share
     may, at the election of the Company,  be evidenced by depository  receipts,
     pursuant to an appropriate  agreement  between the Company and a depository
     selected  by it;  provided,  that such  agreement  shall  provide  that the
     holders of such depository  receipts shall have all the rights,  privileges
     and  preferences  to which they are  entitled as  beneficial  owners of the
     Preferred  Shares  represented  by  such  depository  receipts.  In lieu of
     fractional  Preferred  Shares  that  are  not  integral  multiples  of  one
     one-thousandth  (0.001) of a Preferred  Share, the Company shall pay to the
     registered  holders  of Rights  Certificates  at the time such  Rights  are
     exercised as herein  provided an amount in cash equal to the same  fraction
     of the current  market  value of a Preferred  Share.  For  purposes of this
     Section 14(b),  the current market value of a Preferred  Share shall be (x)
     one  thousand  multiplied  by (y) the closing  price of a Common  Share (as
     determined  pursuant to the second sentence of Section 1(j) hereof) for the
     Trading Day immediately prior to the date of such exercise.

          (c) The Company  shall not be required  to issue  fractions  of Common
     Shares or to  distribute  certificates  which  evidence  fractional  Common
     Shares upon the exercise or exchange of Rights.  In lieu of such fractional
     Common Shares,  the Company shall pay to the  registered  holders of Rights
     Certificates  at the time such Rights are  exercised as herein  provided an
     amount in cash equal to the same fraction of the current  market value of a
     Common Share.  For purposes of this Section 14(c), the current market value
     of a  Common  Share  shall be the  closing  price  of a  Common  Share  (as
     determined  pursuant to the second sentence of Section 1(j) hereof) for the
     Trading Day immediately prior to the date of such exercise.

          (d) The  holder of a Right by the  acceptance  of the Right  expressly
     waives his or her right to receive any fractional  Rights or any fractional
     shares  (other  than   fractions   that  are  integral   multiples  of  one
     one-thousandth (0.001) of a Preferred Share) upon exercise of a Right.

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

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

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

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

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

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

     Section 18.  Concerning the Rights Agent.

          (a)  The  Company  agrees  to  pay  to  the  Rights  Agent  reasonable
     compensation  for all services  rendered by it hereunder  and, from time to
     time, on demand of the Rights Agent,  its  reasonable  expenses and counsel
     fees and other  disbursements  incurred in the administration and execution
     of this Agreement and the exercise and performance of its duties hereunder.
     The Company also agrees to  indemnify  the Rights Agent for, and to hold it
     harmless against,  any loss,  liability or expense,  incurred without gross
     negligence,  bad  faith or  willful  misconduct  on the part of the  Rights
     Agent,  for anything done or omitted by the Rights Agent in connection with
     the acceptance and  administration  of this Agreement,  including the costs
     and expenses of defending  against any claim of liability in the  premises.
     In no event  will  the  Rights  Agent  be  liable  for  special,  indirect,
     incidental or consequential loss or damage of any kind whatsoever,  even if
     the  Rights  Agent  has been  advised  of the  possibility  of such loss or
     damage.

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

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

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

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

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

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

          (b) Whenever in the performance of its duties under this Agreement the
     Rights Agent shall deem it  necessary or desirable  that any fact or matter
     (including,  without  limitation,  the identity of any Acquiring Person and
     the  determination  of  Current  Per  Share  Market  Price)  be  proved  or
     established  by the  Company  prior  to  taking  or  suffering  any  action
     hereunder, such fact or matter (unless other evidence in respect thereof be
     herein specifically prescribed) may be deemed to be conclusively proved and
     established  by a  certificate  signed  by any one of the  Chairman  of the
     Board, the Chief Executive Officer, the President,  any Vice President, the
     Chief Financial  Officer,  the Secretary or any Assistant  Secretary of the
     Company and delivered to the Rights Agent;  and such  certificate  shall be
     full  authorization to the Rights Agent for any action taken or suffered in
     good faith by it under the  provisions  of this  Agreement in reliance upon
     such certificate.

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

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

          (e) The Rights Agent shall not be under any  responsibility in respect
     of the validity of this  Agreement  or the  execution  and delivery  hereof
     (except the due execution  hereof by the Rights Agent) or in respect of the
     validity   or   execution   of   any   Rights   Certificate   (except   its
     countersignature  thereof);  nor shall it be responsible  for any breach by
     the Company of any covenant or condition  contained in this Agreement or in
     any Rights  Certificate;  nor shall it be responsible for any change in the
     exercisability  of the Rights or any  adjustment in the terms of the Rights
     (including the manner,  method or amount thereof)  provided for in Sections
     3, 11, 13, 23 or 24, or the  ascertaining  of the  existence  of facts that
     would  require any such change or  adjustment  (except  with respect to the
     exercise of Rights  evidenced by Rights  Certificates  after receipt by the
     Rights Agent of a certificate  furnished  pursuant to Section 12 describing
     such change or adjustment);  nor shall it by any act hereunder be deemed to
     make any  representation or warranty as to the authorization or reservation
     of any  Preferred  Shares to be issued  pursuant to this  Agreement  or any
     Rights Certificate or as to whether any Preferred Shares will, when issued,
     be validly authorized and issued, fully paid and nonassessable.

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

          (g) The  Rights  Agent is hereby  authorized  and  directed  to accept
     instructions  with respect to the performance of its duties  hereunder from
     any one of the  Chairman of the Board,  the Chief  Executive  Officer,  the
     President,  any Vice President,  the Chief Financial Officer, the Secretary
     or any  Assistant  Secretary of the Company,  and to apply to such officers
     for advice or instructions in connection with its duties,  and it shall not
     be  liable  for  any  action  taken  or  suffered  by it in good  faith  in
     accordance with instructions of any such officer or for any delay in acting
     while waiting for those  instructions.  Any application by the Rights Agent
     for written  instructions from the Company may, at the option of the Rights
     Agent,  set forth in writing any action  proposed to be taken or omitted by
     the Rights Agent under this Rights  Agreement  and the date on and/or after
     which such action shall be taken or such omission  shall be effective.  The
     Rights  Agent shall not be liable for any action  taken by, or omission of,
     the  Rights  Agent  in  accordance  with a  proposal  included  in any such
     application on or after the date specified in such application  (which date
     shall not be less than five (5)  Business  Days after the date on which any
     officer of the Company actually receives such application,  unless any such
     officer shall have  consented in writing to an earlier date) unless,  prior
     to  taking  any  such  action  (or the  effective  date  in the  case of an
     omission),  the Rights Agent shall have received  written  instructions  in
     response to such application specifying the action to be taken or omitted.

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

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

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

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

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon  thirty  (30) days'  notice in writing  mailed to the  Company  and to each
transfer  agent of the  Preferred  Shares and the Common Shares by registered or
certified  mail,  and to the holders of the Rights  Certificates  by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days'  notice in writing,  mailed to the Rights  Agent or  successor
Rights Agent,  as the case may be, and to each  transfer  agent of the Preferred
Shares and the Common Shares by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become  incapable of acting,  the Company shall
appoint a successor to the Rights Agent.  If the Company shall fail to make such
appointment  within a period of thirty  (30) days  after  giving  notice of such
removal  or  after  it has been  notified  in  writing  of such  resignation  or
incapacity by the resigning or incapacitated  Rights Agent or by the holder of a
Rights  Certificate  (who  shall,  with such  notice,  submit  his or her Rights
Certificate  for inspection by the Company),  then the registered  holder of any
Rights  Certificate  may apply to any court of  competent  jurisdiction  for the
appointment of a new Rights Agent. After appointment, the successor Rights Agent
shall be vested with the same powers,  rights, duties and responsibilities as if
it had been  originally  named as Rights Agent without  further act or deed; but
the predecessor  Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance,  conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such  appointment,  the Company shall file notice
thereof in writing with the predecessor  Rights Agent and each transfer agent of
the Preferred Shares and the Common Shares, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided  for in this  Section 21,  however,  or any defect  therein,  shall not
affect the  legality  or validity  of the  resignation  or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary,  the Company may,
at its option,  issue new Rights Certificates  evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Exercise Price and the number or kind or class of shares or other securities
or property  purchasable  under the Rights  Certificates made in accordance with
the provisions of this Agreement.  In addition,  in connection with the issuance
or sale of  Common  Shares  following  the  Distribution  Date and  prior to the
redemption or expiration of the Rights,  the Company (a) shall,  with respect to
Common  Shares so issued or sold  pursuant to the  exercise of stock  options or
under any employee  plan or  arrangement  or upon the  exercise,  conversion  or
exchange of other  securities of the Company  outstanding  at the date hereof or
upon the exercise,  conversion or exchange of securities  hereinafter  issued by
the Company and (b) may, in any other case, if deemed  necessary or  appropriate
by the Board of Directors of the Company, issue Rights Certificates representing
the  appropriate  number of Rights in  connection  with such  issuance  or sale;
provided,  however, that (i) no such Rights Certificate shall be issued and this
sentence  shall be null and void ab initio  if,  and to the  extent  that,  such
issuance  or this  sentence  would  create a  significant  risk of or  result in
material  adverse  tax  consequences  to the  Company or the Person to whom such
Rights  Certificate  would be issued or would  create a  significant  risk of or
result in such options' or employee plans' or  arrangements'  failing to qualify
for  otherwise   available  special  tax  treatment  and  (ii)  no  such  Rights
Certificate shall be issued if, and to the extent that,  appropriate  adjustment
shall otherwise have been made in lieu of the issuance thereof.

     Section 23. Redemption.

          (a) The Company  may, at its option and with the approval of the Board
     of Directors,  at any time prior to the Close of Business on the earlier of
     (i) the fifth day following the Shares Acquisition Date (or such later date
     as may be  determined  by action of the  Company's  Board of Directors  and
     publicly  announced  by the Company)  and (ii) the Final  Expiration  Date,
     redeem  all  but not  less  than  all  the  then  outstanding  Rights  at a
     redemption price of $0.001 per Right, appropriately adjusted to reflect any
     stock split, stock dividend or similar transaction occurring after the date
     hereof (such  redemption  price being herein referred to as the "Redemption
     Price") and the Company may, at its option, pay the Redemption Price either
     in Common  Shares  (based on the Current Per Share Market Price  thereof at
     the time of  redemption)  or cash.  Such  redemption  of the  Rights by the
     Company  may be made  effective  at such time,  on such basis and with such
     conditions as the Board of Directors in its sole  discretion may establish.
     The date on which the  Board of  Directors  elects  to make the  redemption
     effective shall be referred to as the "Redemption Date."

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

Section 24.  Exchange.

          (a) Subject to applicable laws, rules and regulations,  and subject to
     subsection  24(c) below,  the Company may, at its option,  by action of the
     Board of Directors, at any time after the occurrence of a Triggering Event,
     exchange all or part of the then outstanding and exercisable  Rights (which
     shall not include  Rights that have become void pursuant to the  provisions
     of Section  7(e)  hereof)  for Common  Shares at an  exchange  ratio of one
     Common Share per Right,  appropriately adjusted to reflect any stock split,
     stock dividend or similar transaction occurring after the date hereof (such
     exchange  ratio being  hereinafter  referred to as the  "Exchange  Ratio").
     Notwithstanding  the  foregoing,  the  Board  of  Directors  shall  not  be
     empowered to effect such  exchange at any time after any Person (other than
     the Company,  any Subsidiary of the Company,  any employee  benefit plan of
     the Company or any such Subsidiary, or any entity holding Common Shares for
     or pursuant to the terms of any such plan),  together  with all  Affiliates
     and Associates of such Person,  becomes the Beneficial Owner of 50% or more
     of the Common Shares then outstanding.

          (b) Immediately upon the action of the Board of Directors ordering the
     exchange of any Rights pursuant to subsection  24(a) of this Section 24 and
     without  any further  action and without any notice,  the right to exercise
     such Rights shall  terminate  and the only right  thereafter of a holder of
     such Rights shall be to receive  that number of Common  Shares equal to the
     number of such Rights held by such holder multiplied by the Exchange Ratio.
     The  Company  shall  give  public  notice of any such  exchange;  provided,
     however,  that the failure to give, or any defect in, such notice shall not
     affect the validity of such  exchange.  The Company  shall mail a notice of
     any such  exchange  to all of the  holders  of such  Rights  at their  last
     addresses as they appear upon the registry  books of the Rights Agent.  Any
     notice which is mailed in the manner herein provided shall be deemed given,
     whether or not the holder receives the notice. Each such notice of exchange
     will state the method by which the exchange of the Common Shares for Rights
     will be effected and, in the event of any partial  exchange,  the number of
     Rights which will be exchanged.  Any partial exchange shall be effected pro
     rata based on the number of Rights  (other  than  Rights  which have become
     void pursuant to the provisions of Section 7(e) hereof) held by each holder
     of Rights.

          (c) In the event  that there  shall not be  sufficient  Common  Shares
     issued  but not  outstanding  or  authorized  but  unissued  to permit  any
     exchange of Rights as contemplated  in accordance  with Section 24(a),  the
     Company  shall  either take such action as may be  necessary  to  authorize
     additional  Common  Shares  for  issuance  upon  exchange  of the Rights or
     alternatively,  at the option of a majority of the Board of Directors, with
     respect to each Right (i) pay cash in an amount equal to the Current  Value
     (as  hereinafter  defined),  in lieu of issuing  Common  Shares in exchange
     therefor, or (ii) issue debt or equity securities or a combination thereof,
     having a value equal to the Current Value, in lieu of issuing Common Shares
     in exchange for each such Right,  where the value of such securities  shall
     be determined by a nationally  recognized  investment banking firm selected
     by  majority  vote  of  the  Board  of  Directors,  or  (iii)  deliver  any
     combination of cash, property, Common Shares and/or other securities having
     a value equal to the Current Value in exchange for each Right. For purposes
     of this Section 24(c) only, the Current Value shall mean the product of the
     Current  Per  Share  Market  Price  of  Common  Shares  on the  date of the
     occurrence of the event described  above in subsection  (a),  multiplied by
     the  number  of Common  Shares  for  which  the  Right  otherwise  would be
     exchangeable if there were sufficient shares available.  To the extent that
     the Company  determines  that some action need be taken pursuant to clauses
     (i),  (ii) or (iii) of this  Section  24(c),  the  Board of  Directors  may
     temporarily  suspend the exercisability of the Rights for a period of up to
     sixty (60) days following the date on which the event  described in Section
     24(a) shall have occurred, in order to seek any authorization of additional
     Common Shares and/or to decide the  appropriate  form of distribution to be
     made pursuant to the above provision and to determine the value thereof. In
     the  event  of any  such  suspension,  the  Company  shall  issue a  public
     announcement  stating  that  the  exercisability  of the  Rights  has  been
     temporarily suspended.

          (d) The Company  shall not be required  to issue  fractions  of Common
     Shares or to  distribute  certificates  which  evidence  fractional  Common
     Shares.  In lieu of such fractional  Common Shares,  there shall be paid to
     the registered holders of the Rights Certificates with regard to which such
     fractional  Common  Shares would  otherwise be issuable,  an amount in cash
     equal to the same  fraction of the current  market  value of a whole Common
     Share (as  determined  pursuant  to the second  sentence  of  Section  1(j)
     hereof).

          (e) The Company may, at its option,  by majority  vote of the Board of
     Directors,  at any time before any Person has become an  Acquiring  Person,
     exchange  all  or  part  of the  then  outstanding  Rights  for  rights  of
     substantially  equivalent  value,  as determined  reasonably  and with good
     faith by the  Board of  Directors  based  upon  the  advice  of one or more
     nationally recognized investment banking firms.

          (f) Immediately upon the action of the Board of Directors ordering the
     exchange of any Rights pursuant to subsection  24(e) of this Section 24 and
     without  any further  action and without any notice,  the right to exercise
     such Rights shall  terminate  and the only right  thereafter of a holder of
     such Rights shall be to receive that number of rights in exchange  therefor
     as has  been  determined  by the  Board of  Directors  in  accordance  with
     subsection  24(e) above.  The Company  shall give public notice of any such
     exchange;  provided,  however,  that the failure to give, or any defect in,
     such notice  shall not affect the  validity of such  exchange.  The Company
     shall  mail a notice of any such  exchange  to all of the  holders  of such
     Rights at their last  addresses as they appear upon the  registry  books of
     the transfer  agent for the Common Shares of the Company.  Any notice which
     is mailed in the manner herein  provided shall be deemed given,  whether or
     not the holder receives the notice. Each such notice of exchange will state
     the method by which the exchange of the Rights will be effected.

     Section 25. Notice of Certain Events.

          (a) In case the Company shall propose to effect or permit to occur any
     Triggering Event or Section 13 Event, the Company shall give notice thereof
     to each  holder of Rights in  accordance  with  Section  26 hereof at least
     twenty  (20) days  prior to  occurrence  of such  Triggering  Event or such
     Section 13 Event.

          (b) In case any  Triggering  Event or  Section 13 Event  shall  occur,
     then, in any such case, the Company shall as soon as practicable thereafter
     give to each holder of a Rights Certificate,  in accordance with Section 26
     hereof,  a notice of the occurrence of such event,  which shall specify the
     event and the consequences of the event to holders of Rights under Sections
     11(a)(ii) and 13 hereof.

     Section 26. Notices.  Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights  Certificate to
or on the Company  shall be  sufficiently  given or made if sent by  first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:


                                    Actel Corporation
                                    955 East Arques Ave.
                                    Sunnyvale, CA 94086


                                    with a copy to:
                                    Wilson Sonsini Goodrich & Rosati
                                    Professional Corporation
                                    650 Page Mill Road
                                    Palo Alto, California 94304-1050
                                    Attention:  Henry P. Massey, Jr.

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

                                    Wells Fargo Bank, MN N.A.
                                    161 N. Concord Exchange
                                    South St. Paul, MN 55075

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

     Section  27.  Supplements  and  Amendments.  Prior to the  occurrence  of a
Distribution  Date,  the Company may  supplement or amend this  Agreement in any
respect  without  the  approval  of any  holders of Rights and the Rights  Agent
shall, if the Company so directs, execute such supplement or amendment. From and
after the  occurrence of a  Distribution  Date, the Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any  holders  of  Rights in order to (i) cure any  ambiguity,  (ii)  correct  or
supplement any provision contained herein which may be defective or inconsistent
with any other  provisions  herein,  (iii)  shorten or lengthen  any time period
hereunder or (iv) to change or supplement the provisions hereunder in any manner
that the Company may deem  necessary or desirable  and that shall not  adversely
affect the interests of the holders of Rights (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person);  provided, this Agreement may
not be  supplemented  or amended to  lengthen,  pursuant to clause (iii) of this
sentence,  (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then  redeemable  or (B) any other time period unless
such  lengthening is for the purpose of protecting,  enhancing or clarifying the
rights  of,  and/or  the  benefits  to, the  holders  of Rights  (other  than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).  Upon the
delivery of a certificate from an appropriate officer of the Company that states
that the proposed  supplement  or amendment is in  compliance  with the terms of
this Section 27, the Rights Agent shall  execute such  supplement  or amendment.
Prior to the Distribution  Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.

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

     Section 29. Determinations and Actions by the Board of Directors,  etc. For
all purposes of this  Agreement,  any calculation of the number of Common Shares
outstanding at any particular  time,  including for purposes of determining  the
particular  percentage of such outstanding  Common Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i)  of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the  exclusive  power and authority
to administer this Agreement and to exercise all rights and powers  specifically
granted to the Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement,  including,  without limitation, the right and
power (i) to interpret  the  provisions  of this  Agreement and (ii) to make all
determinations  deemed  necessary or advisable  for the  administration  of this
Agreement  (including a  determination  to redeem or not redeem the Rights or to
amend  the  Agreement).  All such  actions,  calculations,  interpretations  and
determinations  (including, for purposes of clause (y) below, all omissions with
respect  to the  foregoing)  which are done or made by the Board in good  faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates and all other parties and (y) with respect to
claims  specifically  arising from the  Agreement,  not subject the Board to any
liability to the holders of the Rights.

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

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

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

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

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





                  [Remainder of page left blank intentionally.]



<PAGE>



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



"COMPANY"                          Actel Corporation

                                   By:       /s/ Jon A. Anderson
                                   ---------------------------------------------

                                   Name:     Jon A. Anderson

                                   Title:    Vice   President   of  Finance
                                   and  Chief Financial Officer




"RIGHTS AGENT"                     Wells Fargo Bank, MN N.A.

                                   By:
                                   ---------------------------------------------

                                   Name:     John Baker

                                   Title:    Vice President



<PAGE>



                                    EXHIBIT A

                           CERTIFICATE OF AMENDMENT TO
                         CERTIFICATE OF DETERMINATION OF
                      RIGHTS, PREFERENCES AND PRIVILEGES OF
                  SERIES A PREFERRED STOCK OF ACTEL CORPORATION

  The undersigned, David L. Van De Hey and David E. Foster, do hereby certify:


     A. That they are the duly elected and acting Vice  President  and Assistant
Secretary of Actel Corporation, a California corporation (the "Corporation").

     B. That,  immediately prior to the filing of this Certificate of Amendment,
the  Corporation was authorized to issue  5,000,000  shares of Preferred  Stock,
1,000,000 shares of which were designated as "Series A Preferred  Stock," and no
shares of Series A Preferred Stock were outstanding.

     C. That pursuant to the authority  conferred upon the Board of Directors by
the Amended and Restated Articles of Incorporation of the said Corporation,  the
said Board of  Directors  of the  Corporation  on October 17,  2003  adopted the
following  resolutions  decreasing by 500,000 the number of shares designated as
"Series A Preferred Stock":

"Decrease in Authorized Number of Shares of Series A Preferred Stock
--------------------------------------------------------------------

     RESOLVED:  That pursuant to Article 3 of the Amended and Restated  Articles
     of  Incorporation of the Corporation and Section 401(c) of the Corporations
     Code of California,  the Board of Directors hereby decreases by 500,000 the
     number of shares  designated  as  "Series A  Preferred  Stock," so that the
     number of shares designated as Series A Preferred Stock equals 500,000.

     RESOLVED FURTHER:  That pursuant to Section 3.2 of the Amended and Restated
     Articles  of  Incorporation   of  the   Corporation,   the  500,000  shares
     constituting  the decrease in the number of shares  designated as "Series A
     Preferred Stock" shall resume the status which such shares had prior to the
     adoption of the resolution  originally  fixing the number of shares of such
     series, so that the number of shares of undesignated Preferred Stock equals
     4,500,000.

     RESOLVED  FURTHER:  That  the  President  or any  Vice  President  and  the
     Secretary  or any  Assistant  Secretary  of this  corporation  be, and they
     hereby are,  authorized  and directed to prepare and file a Certificate  of
     Amendment to the Certificate of  Determination  of Rights,  Preferences and
     Privileges in accordance  with the foregoing  resolutions  (relating to the
     decrease in the  authorized  number of shares of Series A Preferred  Stock)
     and the  following  resolutions  (relating  to the  creation  of a Series A
     Participating  Preferred Stock) and the applicable provisions of California
     law and to take such actions as they may deem  necessary or  appropriate to
     carry out the intent of the foregoing resolution.

     RESOLVED  FURTHER:   That  the  proper  officers  of  the  Corporation  are
     authorized  and  directed  to take any action that they deem  necessary  or
     advisable to carry out the intent of the above resolutions."

     D. That pursuant to the authority  conferred upon the Board of Directors by
the Amended and Restated Articles of Incorporation of the said Corporation,  the
said Board of  Directors  of the  Corporation  on October 17,  2003  adopted the
following  resolutions  altering  the  rights,   preferences,   privileges,  and
restrictions of Series A Preferred Stock of the Corporation,  redesignating such
series "Series A Participating Preferred Stock":

"Alteration of Rights, Preferences, and Privileges
--------------------------------------------------

     RESOLVED:  That pursuant to Article 3 of the Amended and Restated  Articles
     of  Incorporation of the Corporation and Section 401(b) of the Corporations
     Code of California,  the Board of Directors does hereby alter and amend the
     designations, powers, preferences and relative and other special rights and
     the qualifications,  limitations and restrictions of the Series A Preferred
     Stock  of the  Corporation,  to be  redesignated  "Series  A  Participating
     Preferred Stock,"  initially  consisting of 500,000 shares, to read in full
     as set forth below:

     1. Designation and Amount. The shares of such series shall be designated as
"Series A Participating  Preferred Stock." The Series A Participating  Preferred
Stock  shall  have a par value of $0.001  per  share,  and the  number of shares
constituting such series shall be 500,000.

     2. Proportional Adjustment.  In the event that the Corporation shall at any
time  after the  issuance  of any  share or  shares  of  Series A  Participating
Preferred  Stock (i) declare any  dividend  on Common  Stock of the  Corporation
payable in shares of Common Stock,  (ii) subdivide the outstanding  Common Stock
or (iii) combine the  outstanding  Common Stock into a smaller number of shares,
then  in  each  such  case  the  Corporation  shall   simultaneously   effect  a
proportional  adjustment  to the  number  of  outstanding  shares  of  Series  A
Participating Preferred Stock.

     3. Dividends and Distributions.

          (a)  Subject  to the prior and  superior  right of the  holders of any
     shares of any series of Preferred  Stock  ranking prior and superior to the
     shares of Series A Participating Preferred Stock with respect to dividends,
     the holders of shares of Series A  Participating  Preferred  Stock shall be
     entitled to receive  when, as and if declared by the Board of Directors out
     of funds legally available for the purpose,  quarterly dividends payable in
     cash on the last day of March,  June,  September  and December in each year
     (each such date being referred to herein as a "Quarterly  Dividend  Payment
     Date"),  commencing on the first Quarterly  Dividend Payment Date after the
     first issuance of a share or fraction of a share of Series A  Participating
     Preferred Stock, in an amount per share (rounded to the nearest cent) equal
     to 1,000 times the  aggregate per share amount of all cash  dividends,  and
     1,000  times  the  aggregate  per  share  amount  (payable  in kind) of all
     non-cash dividends or other  distributions other than a dividend payable in
     shares of Common Stock or a subdivision of the outstanding shares of Common
     Stock (by  reclassification  or  otherwise),  declared on the Common  Stock
     since the immediately  preceding  Quarterly Dividend Payment Date, or, with
     respect  to the first  Quarterly  Dividend  Payment  Date,  since the first
     issuance  of any share or  fraction  of a share of  Series A  Participating
     Preferred Stock.

          (b) The  Corporation  shall declare a dividend or  distribution on the
     Series A  Participating  Preferred Stock as provided in paragraph (a) above
     simultaneously  with its  declaration of a dividend or  distribution on the
     Common Stock (other than a dividend payable in shares of Common Stock).

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

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

          (a) Each share of Series A Participating Preferred Stock shall entitle
     the holder thereof to 1,000 votes on all matters submitted to a vote of the
     Shareholders of the Corporation.

          (b) Except as  otherwise  provided  herein or by law,  the  holders of
     shares of Series A Participating  Preferred Stock and the holders of shares
     of Common Stock shall vote  together as one class on all matters  submitted
     to a vote of Shareholders of the Corporation.

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

     5. Certain Restrictions.

          (a) The  Corporation  shall not  declare  any  dividend  on,  make any
     distribution   on,  or  redeem  or  purchase  or   otherwise   acquire  for
     consideration  any shares of Common  Stock  after the first  issuance  of a
     share or  fraction  of a share of Series A  Participating  Preferred  Stock
     unless  concurrently  therewith it shall declare a dividend on the Series A
     Participating Preferred Stock as required by Section 3 hereof.

          (b) Whenever  quarterly  dividends or other dividends or distributions
     payable  on the  Series A  Participating  Preferred  Stock as  provided  in
     Section 3 are in  arrears,  thereafter  and until all  accrued  and  unpaid
     dividends and distributions, whether or not declared, on shares of Series A
     Participating Preferred Stock outstanding shall have been paid in full, the
     Corporation shall not

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

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

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

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

          (c) The Corporation shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the Corporation  unless the Corporation  could, under paragraph (a) of this
     Section 5,  purchase or  otherwise  acquire such shares at such time and in
     such manner.

     6. Reacquired Shares. Any shares of Series A Participating  Preferred Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and canceled promptly after the acquisition  thereof.  All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock and may be reissued as part of a new series of Preferred  Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and  restrictions on issuance set forth herein and in the Amended
and Restated Articles of Incorporation, as then amended.

     7.   Liquidation,   Dissolution  or  Winding  Up.  Upon  any   liquidation,
dissolution or winding up of the Corporation,  the holders of shares of Series A
Participating  Preferred Stock shall be entitled to receive an aggregate  amount
per share equal to 1,000 times the aggregate  amount to be distributed per share
to holders of shares of Common  Stock plus an amount  equal to any  accrued  and
unpaid dividends on such shares of Series A Participating Preferred Stock.

     8. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation,  merger,  combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or  securities,  cash
and/or  any  other  property,  then in any such  case  the  shares  of  Series A
Participating  Preferred Stock shall at the same time be similarly  exchanged or
changed  in an amount per share  equal to 1,000  times the  aggregate  amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be,  into  which or for which  each  share of  Common  Stock is  changed  or
exchanged.

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

     10. Ranking.  The Series A Participating  Preferred Stock shall rank junior
to all other series of the  Corporation's  Preferred  Stock as to the payment of
dividends and the  distribution  of assets,  unless the terms of any such series
shall provide otherwise.

     11.  Amendment.  The Amended and Restated  Articles of Incorporation of the
Corporation  shall not be further  amended in any manner which would  materially
alter or change  the  powers,  preference  or  special  rights  of the  Series A
Participating  Preferred  Stock  so as to  affect  them  adversely  without  the
affirmative  vote of the  holders of a  majority  of the  outstanding  shares of
Series A Participating Preferred Stock, voting separately as a series.

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

     RESOLVED  FURTHER:  That  the  President  or any  Vice  President  and  the
     Secretary  or any  Assistant  Secretary  of this  Corporation  be, and they
     hereby are,  authorized  and directed to prepare and file a Certificate  of
     Amendment  to the  Certificate  of  Determination  in  accordance  with the
     foregoing resolutions and the provisions of California law and to take such
     actions as they may deem  necessary or  appropriate to carry out the intent
     of the foregoing resolutions."

     E.  That  the  authorized  number  of  shares  of  Preferred  Stock  of the
Corporation  is  5,000,000,   the  number  of  shares   constituting   Series  A
Participating  Preferred Stock is 500,000,  and no such Preferred Stock has been
issued.

     We further  declare  under penalty of perjury that the matters set forth in
the foregoing  Certificate of Amendment to the Certificate of Determination  are
true and correct of our own knowledge.

     Executed at Mountain View, California on October 17, 2003.




                                                 -----------------------------
                                                 David L. Van De Hey
                                                 Vice President




                                                 -----------------------------
                                                 David E. Foster
                                                 Assistant Secretary


<PAGE>



                                    EXHIBIT B

                           FORM OF RIGHTS CERTIFICATE



Certificate No. R-                                             _________ Rights


     NOT  EXERCISABLE  AFTER THE EARLIER OF (i) NOVEMBER 10, 2013, (ii) THE DATE
     TERMINATED  BY THE  COMPANY  OR (iii) THE DATE THE  COMPANY  EXCHANGES  THE
     RIGHTS  PURSUANT  TO THE  RIGHTS  AGREEMENT.  THE  RIGHTS  ARE  SUBJECT  TO
     REDEMPTION,  AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS
     SET FORTH IN THE RIGHTS  AGREEMENT.  UNDER  CERTAIN  CIRCUMSTANCES,  RIGHTS
     BENEFICIALLY  OWNED BY AN ACQUIRING  PERSON OR AN AFFILIATE OR ASSOCIATE OF
     AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
     ANY SUBSEQUENT  HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
     REPRESENTED BY THIS RIGHTS  CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
     PERSON WHO WAS OR BECAME AN  ACQUIRING  PERSON OR AN AFFILIATE OR ASSOCIATE
     OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
     ACCORDINGLY,  THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
     BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
     RIGHTS AGREEMENT.]*

(* The portion of the legend in bracket shall be inserted only if applicable and
shall replace the preceding sentence.)


                               RIGHTS CERTIFICATE

                                Actel Corporation


     This certifies that ______________________________,  or registered assigns,
is the registered  owner of the number of Rights set forth above,  each of which
entitles the owner thereof,  subject to the terms,  provisions and conditions of
the Rights  Agreement  dated as of October 17, 2003,  (the "Rights  Agreement"),
between Actel Corporation,  a California corporation (the "Company"),  and Wells
Fargo Bank,  MN N.A. (the "Rights  Agent"),  to purchase from the Company at any
time  after  the  Distribution  Date  (as such  term is  defined  in the  Rights
Agreement)  and prior to 5:00 P.M.,  New York time,  on November 10, 2013 at the
office of the Rights Agent designated for such purpose,  or at the office of its
successor  as Rights  Agent,  one  one-thousandth  (0.001)  of a fully  paid and
non-assessable share of Series A Participating Preferred Stock, par value $0.001
per share (the  "Preferred  Shares"),  of the Company,  at an Exercise  Price of
$220.00 per one-thousandth  (0.001) of a Preferred Share (the "Exercise Price"),
upon  presentation  and  surrender of this Rights  Certificate  with the Form of
Election to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one-thousandths  (0.001)
of a Preferred  Share which may be  purchased  upon  exercise  hereof) set forth
above are the number and  Exercise  Price as of  November  10, 2003 based on the
Preferred  Shares  as  constituted  at such  date.  As  provided  in the  Rights
Agreement,  the Exercise  Price and the number and kind of  Preferred  Shares or
other  securities  which  may be  purchased  upon  the  exercise  of the  Rights
evidenced by this Rights  Certificate are subject to modification and adjustment
upon the happening of certain events.

     This  Rights  Certificate  is subject to all of the terms,  provisions  and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by  reference  and made a part  hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights  Agent,  the Company and the  holders of the Rights  Certificates,  which
limitations of rights include the temporary  suspension of the exercisability of
such Rights under the specific  circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office of the Rights Agent.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this Rights Certificate (i) may be redeemed by the Company,  at its option, at a
redemption  price of $0.001 per Right or (ii) may be exchanged by the Company in
whole or in part for Common  Shares,  substantially  equivalent  rights or other
consideration as determined by the Company.

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

     No  fractional  portion  of  less  than  one  one-thousandth  (0.001)  of a
Preferred  Share  will be  issued  upon the  exercise  of any  Right  or  Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.

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

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

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


ATTEST:                                       Actel Corporation


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

                                              Its:
                                              ----------------------------------

Countersigned:

Wells Fargo Bank, MN N.A.
as Rights Agent

By:
   --------------------------------

Its:
    -------------------------------




<PAGE>



                   Form of Reverse Side of Rights Certificate

                               FORM OF ASSIGNMENT
                               ------------------
                (To be executed by the registered holder if such
               holder desires to transfer the Rights Certificate)

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


Dated: _______________, ____



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



Signature Medallion Guaranteed:

     Signatures must be guaranteed by an "Eligible Guarantor  Institution" (with
membership in an approved  signature  guarantee  medallion  program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.



<PAGE>



                                   CERTIFICATE
                                   -----------
     The undersigned hereby certifies by checking the appropriate boxes that:

          (1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
     transferred by or on behalf of a Person who is or was an Acquiring  Person,
     or an  Affiliate or Associate of any such Person (as such terms are defined
     in the Rights Agreement);

          (2) after due inquiry and to the best knowledge of the undersigned, it
     [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
     from any Person who is, was or subsequently  became an Acquiring  Person or
     an Affiliate or Associate of any such Person.


Dated: _______________, ____



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



Signature Medallion Guaranteed:

     Signatures must be guaranteed by an "Eligible Guarantor  Institution" (with
membership in an approved  signature  guarantee  medallion  program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.



<PAGE>



             Form of Reverse Side of Rights Certificate -- continued

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------
                      (To be executed if holder desires to
                        exercise the Rights Certificate)


To:___________________________

     The     undersigned     hereby     irrevocably     elects    to    exercise
_________________________  Rights  represented  by this  Rights  Certificate  to
purchase the number of  one-thousandths  (0.001) of a Preferred  Share  issuable
upon the exercise of such Rights and requests that  certificates for such number
of one-thousandths (0.001) of a Preferred Share issued in the name of:

Please insert social security
or other identifying number

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

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

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)
--------------------------------------------------------------------------------
Dated: _______________, ____


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

Signature Medallion Guaranteed:

     Signatures must be guaranteed by an "Eligible Guarantor  Institution" (with
membership in an approved  signature  guarantee  medallion  program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.



<PAGE>



                                   CERTIFICATE
                                   -----------

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) the Rights  evidenced  by this Rights  Certificate  [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an  Affiliate  or Associate of any such Person (as such terms are defined in the
Rights Agreement);

     (2) after due inquiry and to the best knowledge of the undersigned,  it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.

Dated: _______________, ____



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



Signature Medallion Guaranteed:

     Signatures must be guaranteed by an "Eligible Guarantor  Institution" (with
membership in an approved  signature  guarantee  medallion  program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.



<PAGE>



             Form of Reverse Side of Rights Certificate -- continued

                                     NOTICE
                                     ------

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



<PAGE>




                                    EXHIBIT C
                                    ---------
                             SHAREHOLDER RIGHTS PLAN
                                Actel Corporation

                                Summary of Rights

Distribution and    The Board of Directors  has declared a dividend of one Right
Transfer of Rights; for each  share of Common  Stock of Actel  Corporation  (the
Rights Certificate: "Company")  outstanding.  Prior  to  the  Distribution  Date
                    referred to below, the Rights will be evidenced by and trade
                    with  the  certificates  for the  Common  Stock.  After  the
                    Distribution Date, the Company will mail Rights certificates
                    to the  Company's  shareholders  and the Rights  will become
                    transferable apart from the Common Stock.


Distribution        Rights  will  separate  from the  Common  Stock  and  become
Date:               exercisable  following  (a) the tenth  business day (or such
                    later date as may be determined  by the  Company's  Board of
                    Directors)  after a  person  or  group  acquires  beneficial
                    ownership  of 15% or more of the  Company's  Common Stock or
                    (b) the tenth  business  day (or such  later  date as may be
                    determined  by the  Company's  Board of  Directors)  after a
                    person or group  announces a tender or exchange  offer,  the
                    consummation  of which would result in ownership by a person
                    or group of 15% or more of the Company's Common Stock.


Preferred Stock     After the  Distribution  Date,  each Right will  entitle the
Purchasable Upon    holder to purchase for $220.00  (the  "Exercise  Price"),  a
Exercise of         fraction of a share of the  Company's  Preferred  Stock with
Rights:             economic terms similar to that of one share of the Company's
                    Common Stock.


Flip-In:            If an acquirer (an "Acquiring  Person")  obtains 15% or more
                    of the Company's  Common Stock,  then each Right (other than
                    Rights owned by an Acquiring  Person or its affiliates) will
                    entitle the holder  thereof to  purchase,  for the  Exercise
                    Price,  a number  of shares of the  Company's  Common  Stock
                    having a  then-current  market  value of twice the  Exercise
                    Price.


Flip-Over:          If,  after an  Acquiring  Person  obtains 15% or more of the
                    Company's  Common Stock, (a) the Company merges into another
                    entity,  (b) an acquiring  entity merges into the Company or
                    (c) the Company sells more than 50% of the Company's  assets
                    or earning  power,  then each Right (other than Rights owned
                    by an Acquiring  Person or its affiliates)  will entitle the
                    holder thereof to purchase, for the Exercise Price, a number
                    of shares  of Common  Stock of the  person  engaging  in the
                    transaction  having a then current market value of twice the
                    Exercise Price.


Exchange Provision: At any time  after  the date on  which an  Acquiring  Person
                    obtains 15% or more of the Company's  Common Stock and prior
                    to the  acquisition  by the  Acquiring  Person of 50% of the
                    outstanding  Common  Stock,  the Board of  Directors  of the
                    Company may exchange the Rights  (other than Rights owned by
                    the  Acquiring  Person  or its  affiliates),  in whole or in
                    part,  for  shares  of  Common  Stock of the  Company  at an
                    exchange  ratio  of one  share of  Common  Stock  per  Right
                    (subject to adjustment).


Redemption of the   Rights will be redeemable at the Company's option for $0.001
Rights:             per  Right at any time on or prior to the fifth day (or such
                    later date as may be determined  by the  Company's  Board of
                    Directors)  after  public  announcement  that a  Person  has
                    acquired  beneficial   ownership  of  15%  or  more  of  the
                    Company's Common Stock (the "Shares Acquisition Date").


Expiration of the   The Rights  expire on the  earliest of (a) November 10, 2013
Rights:             or (b)  exchange or  redemption  of the Rights as  described
                    above.


Amendment of Terms  The terms of the  Rights  and the  Rights  Agreement  may be
of Rights:          amended in any  respect  without  the  consent of the Rights
                    holders on or prior to the  Distribution  Date;  thereafter,
                    the terms of the  Rights  and the  Rights  Agreement  may be
                    amended  without the consent of the Rights  holders in order
                    to cure  any  ambiguities  or to make  changes  which do not
                    adversely affect the interests of Rights holders (other than
                    the Acquiring Person).


Voting Rights:      Rights will not have any voting rights.


Anti-Dilution       Rights   will  have  the   benefit  of   certain   customary
Provisions:         anti-dilution provisions.


Taxes:              The Rights  distribution  should not be taxable  for federal
                    income  tax  purposes.  However,  following  an event  which
                    renders the Rights  exercisable  or upon  redemption  of the
                    Rights, shareholders may recognize taxable income.

The foregoing is a summary of certain principal terms of the Shareholder  Rights
Plan only and is qualified in its entirety by reference to the  Preferred  Stock
Rights  Agreement  dated as of October  17,  2003  between the Company and Wells
Fargo  Bank,  MN N.A.  as Rights  Agent  (the  "Rights  Agreement").  The Rights
Agreement  may be amended from time to time. A copy of the Rights  Agreement was
filed  with  the  Securities  and  Exchange   Commission  as  an  Exhibit  to  a
Registration  Statement on Form 8-A dated October 24, 2003. A copy of the Rights
Agreement is available free of charge from the Company.







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>exhibit99-1.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
Contact:  Jon Anderson, Actel Corporation (650) 318-4445

For Immediate Release
---------------------

                      ACTEL ADOPTS SHAREHOLDER RIGHTS PLAN


     Mountain View, CA, October 17, 2003--Actel  Corporation  (NASDAQ:  ACTL), a
provider of innovative programmable logic solutions, announced that its board of
directors today adopted a Shareholder  Rights Plan.  Under the plan,  Actel will
issue a  dividend  of one  right  for each  share of its  common  stock  held by
shareholders of record as of the close of business on November 10, 2003.

     The  shareholder  rights plan is designed to guard against  partial  tender
offers  and other  coercive  tactics  to gain  control  of the  company  without
offering a fair and adequate price and terms to all of Actel's shareholders. The
plan was not adopted in response to any efforts to acquire the company,  and the
company is not aware of any such efforts.

     Each right will  initially  entitle  shareholders  to purchase a fractional
share of the company's preferred stock for $220.00.  However, the rights are not
immediately  exercisable and will become exercisable only upon the occurrence of
certain events. If a person or group acquires, or announces a tender or exchange
offer  that  would  result in the  acquisition  of 15 percent or more of Actel's
common stock while the shareholder  rights plan remains in place,  then,  unless
the rights are  redeemed  by Actel for $0.001 per right,  the rights will become
exercisable  by all  rights  holders  except the  acquiring  person or group for
shares of Actel or shares of the third  party  acquirer  having a value of twice
the  right's  then-current  exercise  price.  Further  details  of the  plan are
outlined in a letter that will be mailed to shareholders as of the record date.



<PAGE>


ACTEL ADOPTS SHAREHOLDER RIGHTS PLAN                                       2-2-2

About Actel
-----------

Actel  Corporation  is a supplier of innovative  programmable  logic  solutions,
including  field-programmable  gate arrays  (FPGAs)  based on antifuse and flash
technologies,   high-performance  intellectual  property  (IP)  cores,  software
development   tools  and   design   services,   targeted   for  the   high-speed
communications,  application-specific  integrated circuit (ASIC) replacement and
radiation-tolerant  markets.  Founded in 1985, Actel employs  approximately  500
people worldwide.  The Company is traded on the Nasdaq National Market under the
symbol  ACTL  and is  headquartered  at  2061  Stierlin  Court,  Mountain  View,
California, 94043. Telephone: 888-99-ACTEL (992-2835). Internet:
http://www.actel.com

                                      # # #


</TEXT>
</DOCUMENT>
</SUBMISSION>
