ACTEL CORPORATION

                           DEFERRED COMPENSATION PLAN
















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                                TABLE OF CONTENTS
                                                                          Page


ARTICLE I DEFINITIONS........................................................1

         1.1      "Board of Directors".......................................1
         1.2      "Committee"................................................1
         1.3      "Compensation".............................................1
         1.4      "Credited Investment Return (Loss)"........................1
         1.5      "Deferral Account".........................................1
         1.6      "Deferral Amount"..........................................1
         1.7      "Deferral Election"........................................1
         1.8      "Disability"...............................................1
         1.9      "Earnings Indices".........................................1
         1.10     "Effective Date"...........................................2
         1.11     "Employee".................................................2
         1.12     "Hardship".................................................2
         1.13     "Year".....................................................2
         1.14     "Plan".....................................................2
         1.15     "Plan Year"................................................2
         1.16     "Supplemental Employee Benefits"...........................2

ARTICLE II ELIGIBILITY.......................................................2

         2.1      Eligible Persons...........................................2
         2.2      Commencement of Participation..............................3
         2.3      Termination of Participation...............................3

ARTICLE III STOCK OPTION GAIN DEFERRALS......................................3

         3.1      Stock Option Gain Deferrals................................3
         3.2      Compensation Deferrals
         3.3      No Withdrawal..............................................4

ARTICLE IV CREDITED INVESTMENT RETURN (LOSS) ON DEFERRAL ACCOUNTS............4

         4.1      Deferral Accounts..........................................4
         4.2      Credited Investment Return (Loss)..........................5

ARTICLE V BENEFITS...........................................................5

         5.1      Distribution of Benefits...................................5
         5.2      Change of Distribution Election............................5
         5.3      Payment After Death........................................5
         5.4      Early Withdrawals..........................................6
         5.5      Disability
         5.6      Automatic Lump-Sum Distribution for Accounts below $25,000.6
         5.7      Tax Withholding............................................7

ARTICLE VI OBLIGATION TO PAY SUPPLEMENTAL EMPLOYEE BENEFITS..................7

         6.1      Benefits Paid From General Corporate Assets;  Payment in
                    Cash or Stock............................................7
         6.2      No Secured Interest........................................7

ARTICLE VII ADMINISTRATION...................................................7

         7.1      Administration of the Plan.................................7
         7.2      Indemnification............................................7

ARTICLE VIII MISCELLANEOUS...................................................7

         8.1      Nontransferaility..........................................7
         8.2      Binding Effect.............................................7
         8.3      No Rights as Employee......................................7
         8.4      Reimbursement of Costs.....................................8
         8.5      Arbitration................................................8
         8.6      Applicable Law.............................................8
         8.7      Entire Agreement...........................................8
         8.8      Termination or Amendment of Plan...........................8


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                                ACTEL CORPORATION

                           DEFERRED COMPENSATION PLAN


       This Actel  Corporation  Deferred  Compensation Plan is adopted effective
July 21,  2000.  Throughout  the  Plan,  the term  "Company"  shall  mean  Actel
Corporation, but shall also include wherever applicable (with such applicability
determined  solely  in the  discretion  of the  Committee)  any  entity  that is
directly  or  indirectly  controlled  by the  Company or any entity in which the
Company has a significant equity or investment interest.

                                    ARTICLE I

                                   DEFINITIONS

       Whenever used herein,  the  masculine  pronoun shall be deemed to include
the feminine,  and the singular to include the plural, unless the context dearly
indicates  otherwise,  and the  following  definitions  shall  govern  the Plan:

       1.1    "Board of  Directors"  or "Board"  means the Board of Directors of
              Actel Corporation.

       1.2    "Compensation"  means the salary, bonus and commissions payable to
              an Employee  during the Plan Year and considered to be "wages" for
              purposes of federal income tax  withholding,  before reduction for
              amounts deferred under this Plan,  salary reduction  contributions
              under IRC  Section  401(k),  or amounts  deferred  under any other
              deferral  arrangements.  Compensation  does  not  include  expense
              reimbursements, severance pay, any form of noncash compensation or
              benefits, group life insurance premiums,  income from the exercise
              of stock options or other receipt of company  stock,  or any other
              payments or benefits other than salary, bonus, or commissions.

       1.3    "Committee" means an independent  Committee appointed by the Board
              to  administer  this Plan and to take such other actions as may be
              specified herein.

       1.4    "Credited   Investment   Return  (Loss)"  means  the  hypothetical
              investment  return which shall be credited to Employee's  Deferral
              Accounts pursuant to Article IV.

       1.5    "Deferral  Account" means the two book entry accounts  established
              under  the Plan for each  Employee  to which  shall be  separately
              credited (or debited) the Employee's Stock Option Deferral Amounts
              and Compensation Deferral Amounts made pursuant to Article III and
              Employee's  Credited  Investment  Return (Loss)  determined  under
              Article IV and which shall be reduced by any distributions made to
              Employee  and any  charges  which may be imposed on such  Deferral
              Accounts pursuant to the terms of the Plan.

       1.6    "Deferral  Amount"  means the Stock  Option  Deferral  Amount  and
              Compensation  Deferral  Amount which Employee elects to contribute
              for Supplemental Employee Benefits pursuant to Article III.

       1.7    "Deferral  Election"  means  the  form of  Stock  Option  Deferral
              Election and/or  Compensation  Deferral  Election as prescribed by
              the Committee, as modified from time to time.

       1.8    "Disability" means the Employee qualifies for a disability benefit
              under the Company's Long Term Disability Plan.

       1.9    "Earnings  Indices"  means the portfolios or funds selected by the
              Committee to be used in calculating the Credited Investment Return
              (Loss)  to be  credited  (debited)  to the  Compensation  Deferral
              Account under Article IV.

       1.10   "Effective Date" means July 21, 2000.

       1.11   "Employee" means a highly  compensated or key management  employee
              who  has  been   designated   by  the  Committee  as  eligible  to
              participate in this Plan.

       1.12   "Hardship"  means a  severe  financial  hardship  to the  Employee
              resulting from:

              (a)    Sudden or  unexpected  illness  or  accident  of either the
                     Employee or dependent of same, or

              (b)    Loss of the  Employee's  property  due to casualty or other
                     extraordinary  and unforeseeable  circumstances  beyond the
                     control of the Employee.

              A severe financial  hardship shall not constitute a Hardship under
       the Plan to the extent that it is, or may be, relieved by:

                     (i)    Reimbursement  or  compensation,   by  insurance  or
                            otherwise;

                     (ii)   Liquidation of the  Employee's  assets to the extent
                            that the liquidation of such assets would not itself
                            cause severe financial hardship.

              A Hardship under the Plan does not include:

                     (iii)  Sending a child to college; or

                     (iv)   Purchasing a home, per IRS Rev. Proc. 95-64.

       1.13   "Year" means the Company's fiscal year unless otherwise noted.

       1.14   "Plan"  shall mean this Actel  Corporation  Deferred  Compensation
              Plan, as it may be amended from time to time.

       1.15   "Plan Year" means the 12-month period  commencing on January 1 and
              ending on December 31.

       1.16   "Supplemental  Employee  Benefits"  means the benefits  payable to
              Employee under this Plan.


                                   ARTICLE II

                                   ELIGIBILITY

       2.1    Eligible Persons.  Eligibility for participation in the Plan shall
              be limited to employees of the Company on its U.S. payroll who, at
              all times,  have a base salary of at least  $150,000 per annum and
              who are  designated  as  eligible  by the  Committee,  in its sole
              discretion,  to  participate  in the  Plan.  Individuals  who  are
              eligible shall be notified by the Company as to their  eligibility
              to participate in the Plan.

       2.2    Commencement of Participation. An Employee may begin participation
              in the Plan  immediately  following the date he or she is notified
              of  eligibility  to  participate,  subject to the  submission of a
              Deferral  Election at such time period  prior to the exercise of a
              stock option or payment of  Compensation  as the  Committee  shall
              designate.

       2.3    Termination of  Participation.  Active  participation  in the Plan
              shall end when an Employee's employment terminates for any reason.
              No  contributions  to the Plan shall be made with respect to stock
              options  exercised  after such  termination  date or  Compensation
              payable  after such  termination  date,  and any election to defer
              stock  option  gain or  Compensation  under the Plan that was made
              prior to such  termination of employment  shall be without further
              force and effect.  Upon  termination  of  employment,  an Employee
              shall remain an inactive  participant in the Plan until all of the
              benefits to which he or she is entitled  thereunder have been paid
              in full.


                                   ARTICLE III

             STOCK OPTION GAIN DEFERRALS AND COMPENSATION DEFERRALS

       3.1    Stock Option Gain Deferrals.

              (a)    Upon submitting a Stock Option Gain Deferral  Election with
                     the  Company,  Employee  agrees to  irrevocably  exercise a
                     nonstatutory  stock  option  at a  specified  time  in  the
                     future,  with the  minimum  length  of such time set by the
                     Committee,  using for such exercise  Company stock that has
                     been held by Employee  for at least six months.  Instead of
                     receiving   shares  of  Company   stock  upon  such  option
                     exercise, Employee's Deferral Account under this Plan shall
                     be credited with an amount equal to the difference  between
                     the closing  sales price of the  Company's  common stock on
                     the date of  exercise  minus the per share  exercise  price
                     multiplied  by the total  number of shares  exercised  (the
                     "Stock Option  Deferral  Amount").  The Employee  agrees to
                     satisfy   the   Company's    employment   tax   withholding
                     obligations arising from the option exercise separately, by
                     check,  payroll  withholding  or such  other  means  as the
                     Committee, in its sole discretion, provides.

              (b)    Employee's  Deferral  Election shall be irrevocable  unless
                     Employee  terminates  employment  with the Company prior to
                     the date of exercise,  in which case the Deferral  Election
                     shall be without further force and effect.


       3.2    Compensation Deferrals.

              (a)    Employee may elect to defer  Compensation  by  submitting a
                     Compensation  Deferral  Election  with  the  Company.  Such
                     deferred    Compensation   shall   be   credited   to   the
                     Participant's   Compensation   Deferral   Account   as  the
                     corresponding  Compensation  becomes or would  have  become
                     payable. Any withholding of taxes or other amounts which is
                     required  by state,  federal  or local law with  respect to
                     deferred Compensation shall be withheld from the Employee's
                     nondeferred  Compensation  to the maximum  extent  possible
                     with  any   excess   reducing   the  amount   deferred.   A
                     Compensation Deferral Election shall allow for the deferral
                     of salary, bonus, and/or commissions as follows:

                     (i)    Salary Deferral Election. A Salary Deferral Election
                            shall  be  related  to  the  salary  payable  by the
                            Company  to the  Employee  during  the Plan  Year to
                            which the election relates.  The amount of salary to
                            be deferred  shall be stated as a  percentage,  as a
                            flat dollar amount, or in such other form as allowed
                            by the Committee.

                     (ii)   Bonus Deferral  Election.  A Bonus Deferral Election
                            shall  be  related  to  the  bonus  payable  to  the
                            Employee  during the Plan Year to which the election
                            relates.  The amount to be deferred  shall be stated
                            as a  percentage  of such  bonus,  as a flat  dollar
                            amount,  or in such  other  form as  allowed  by the
                            Committee.

                     (iii)  Commission Deferral Election.  A Commission Deferral
                            Election shall be related to the commissions payable
                            to the  Employee  during  the Plan Year to which the
                            election relates. The amount to be deferred shall be
                            stated as a  percentage  of such  commissions,  as a
                            flat dollar amount, or in such other form as allowed
                            by the Committee.

              (b)    Limitations  on  Compensation   Deferral   Elections.   The
                     following  limits  shall  apply  to  Compensation  Deferral
                     Elections:

                     (i)    Minimum.  The minimum cumulative deferral amount for
                            a Salary,  Bonus and Commission Deferral Election is
                            $5,000 per Plan Year.

                     (ii)   Maximum.  The  maximum  deferral  amounts for Salary
                            Deferral Elections shall be fifty percent (50%). The
                            maximum  deferral  amounts for Bonus and  Commission
                            Deferral  Elections  shall  be one  hundred  percent
                            (100%).  Bonus and Commission  Deferral elections of
                            100% shall be adjusted as  necessary  to reflect any
                            required   or   elective   withholdings   from   the
                            Employee's bonus or commission payments.

                     (iii)  Changes in Minimum or  Maximum.  The  Committee  may
                            amend  the plan to change  the  minimum  or  maximum
                            deferral amounts from time to time by giving written
                            notice  to all  Employees  of such  change.  No such
                            change may affect a Deferral  Election made prior to
                            the Committee's action.

              (c)    Allocation  of  Accounts.  An Employee  shall  allocate the
                     Compensation  Deferral  Account  among the Earning  Indices
                     selected by the  Committee.  The  Committee  may change the
                     Earnings  Indices at any time.  The  Compensation  Deferral
                     Account  shall be treated as if  invested  in the  Earnings
                     Indices  chosen by the  Employee.  The  Employee's  initial
                     Account  allocation  shall be set forth in the Compensation
                     Deferral  Election.  A change in  allocation  among Earning
                     Indices will be allowed once each day and will be effective
                     the day after  notice  of the  change  is  received  by the
                     Committee.

              (d)    Revocation or Reduction of Compensation  Deferral Election.
                     Upon application of an Employee,  the Committee may, in its
                     discretion,  allow an Employee to  prospectively  reduce or
                     revoke a Salary, Bonus, or Commission Deferral Election. In
                     the event an  Employee  is granted a Hardship  Distribution
                     under Section  5.4(b) the Employee's  current  Compensation
                     Deferral Election shall be revoked for the remainder of the
                     Plan  Year.  In the  event  that the  Committee  grants  an
                     Employee's  application  to revoke a  current  Compensation
                     Deferral  Election  for reasons  other than  Hardship,  the
                     Employee shall not be allowed to defer  Compensation  until
                     the following Plan Year.

       3.3    No  Withdrawal.  Except as  provided  in Section  5.4  below,  the
              Deferral  Amounts may not be  withdrawn  by Employee  and shall be
              paid only in accordance with the provisions of this Plan.


                                   ARTICLE IV

             CREDITED INVESTMENT RETURN (LOSS) ON DEFERRAL ACCOUNTS

       4.1    Deferral Accounts.  Two separate Deferral Accounts, a Stock Option
              Deferral  Account and a Compensation  Deferral  Account,  shall be
              established and maintained for each Employee. The Employee's Stock
              Option  Deferral  Amounts  shall  be  credited  (debited)  to  the
              Employee's   Stock  Option   Deferral   Account.   The  Employee's
              Compensation  Deferral Amounts shall be credited to the Employee's
              Compensation  Deferral  Account.  Each  account  shall be credited
              (debited) with the Account's Credited  Investment Return (Loss) as
              determined under this Article IV. The Employee's Deferral Accounts
              shall be charged  with the amount of any  distributions  made from
              the Accounts pursuant to the Plan.

       4.2    Credited   Investment  Return  (Loss).  Each  Employee's  Deferral
              Accounts shall be credited (debited) with the Credited  Investment
              Return (Loss) as follows:

              (a)    Stock Option Deferral Account.  The Employee's Stock Option
                     Deferral Account shall be credited  (debited)  monthly with
                     the Credited  Investment Return (Loss)  attributable to his
                     or  her  Stock  Option  Deferral   Account.   The  Credited
                     Investment  Return (Loss)  attributable to the Stock Option
                     Deferral  Account is the amount which the Employee's  Stock
                     Option  Deferral  Account  would have earned if the amounts
                     credited to the Stock Option Deferral Account had, in fact,
                     been  invested  in  the  Company  Stock,  purchased  at the
                     closing  sales  price on the date of option  exercise,  and
                     assuming  reinvestment  of all  dividends  back  into  such
                     Company  Stock at the Company  Stock closing sales price on
                     the date of the dividend distribution.

              (b)    Compensation Deferral Account. The Employee's  Compensation
                     Deferral Account shall be credited (debited) daily with the
                     Credited  Investment  Return (Loss)  attributable to his or
                     her Compensation  Deferral Account. The Credited Investment
                     Return (Loss)  attributable  to the  Compensation  Deferral
                     Account is the  amount  which the  Employee's  Compensation
                     Deferral  Account would have earned if the amounts credited
                     to the  Compensation  Deferral  Account had, in fact,  been
                     invested in the Earnings Indices,  purchased at the closing
                     sale  price  on  the  date  of   deferral,   and   assuming
                     reinvestment  of all  dividends and capital gains back into
                     such  Earnings  Indices at the  closing  sales price on the
                     date of the distribution of dividends and capital gains.

                                   ARTICLE V

                                    BENEFITS

       5.1    Distribution  of  Benefits.   Benefits  shall  be  distributed  in
              accordance with the elections specified within an Employee's Stock
              Option Deferral Election and Compensation Deferral Election.

       5.2    Change of Distribution  Election. The Employee may file an amended
              election to change the distribution  election at any time which is
              more than one (1) year  prior to the  applicable  specified  fixed
              date at which elections must commence. For example, if an Employee
              elects  to  have   distributions   commence   at  the  earlier  of
              termination of employment or three years following the date of the
              Deferral  Election,  the Employee may file an amended  election at
              any time  prior to two years  following  the date of the  Deferral
              Election.  Such  amended  election  may  either (i)  increase  the
              duration of the  specified  fixed  period at which  elections  may
              commence  (e.g.,  from  three to five  years) or the  distribution
              period (e.g.  from 20 to 40 quarterly  installments).  Any amended
              election  which is  filed  within  one (1) year of the  applicable
              specified date at which elections shall commence shall be void and
              without  effect and the most  recently  effective  election  shall
              control instead.


       5.3    Payments after Death

              (a)    Stock Option Deferral  Account.  In the event Employee dies
                     after  installment  payments from  Employee's  Stock Option
                     Deferral   Account   have  begun  but  before  all  of  the
                     installments are paid, the undistributed installments shall
                     be paid to his or her estate as they become due.


              (b)    Compensation Deferral Account.

                     (i)    In the event  Employee  dies while  employed  by the
                            Company,  the  Company  shall pay to the  Employee's
                            Beneficiary,  as indicated by the Employee on his or
                            her most recent  Compensation  Deferral Election the
                            balance in the Compensation  Deferral Account in the
                            form  elected by the  Employee in the most  recently
                            filed  Compensation  Deferral  Election.  Investment
                            Earnings  (Losses)  shall  continue  to be  credited
                            (debited)  to  the  Compensation   Deferral  Account
                            during the payment  period on the unpaid  portion of
                            the Account.

                     (ii)   In  the  event   Employee  dies  after   installment
                            payments  from  Employee's   Compensation   Deferral
                            Account   have   begun   but   before   all  of  the
                            installments    are    paid,    the    undistributed
                            installments    shall   be   paid   to    Employee's
                            Beneficiary,  as indicated by Employee on his or her
                            most recent  Compensation  Deferral  Election.  Such
                            Beneficiary  shall receive the remaining  balance in
                            the Employee's  Compensation Deferral Account in the
                            same manner as the  Employee was being paid prior to
                            Employee's death, provided however that any benefits
                            payable hereunder to a trust or estate shall be paid
                            in a lump sum.  Investment  Earnings  (Losses) shall
                            continue to be credited  (debited)  to the  Accounts
                            during the payment  period on the unpaid  portion of
                            the Account.

       5.4    Early Withdrawals.

              (a)    Notwithstanding  any other provision of this Plan, Employee
                     may, upon thirty (30) days prior written  notice,  withdraw
                     up  to  ninety-two  percent  (92%)  of  the  vested  amount
                     credited to his or her Stock Option Deferral Account and/or
                     Compensation  Deferral  Account  determined  at the time of
                     such withdrawal.  Upon such withdrawal,  eight percent (8%)
                     of the amount  requested from Employee's  Deferral  Account
                     shall be forfeited and Employee shall have no further right
                     thereto. If the Employee withdraws some or all of the Stock
                     Option Deferral Account under this section,  Employee shall
                     be  prohibited  from making any further  stock  option gain
                     deferrals  pursuant to this Plan for the  remainder  of the
                     Plan  Year in which  the  withdrawal  occurred  and for the
                     following Plan Year. If the Employee  withdraws some or all
                     of the  Compensation  Deferral  Account under this section,
                     Employee  shall  be  prohibited  from  making  any  further
                     Compensation  deferrals  pursuant  to  this  Plan  for  the
                     remainder of the Plan Year in which the withdrawal occurred
                     and for the following  Plan Year. An Employee may only make
                     a maximum of two early withdrawals pursuant to this Section
                     5.4(a).

              (b)    Notwithstanding  any other provision of this Plan, Employee
                     may  request to  withdraw  any or all of the vested  amount
                     credited to his or her Deferral  Accounts in the event of a
                     Hardship.  The  determination  of whether such a withdrawal
                     request shall be approved shall be made by the Committee in
                     its  sole   discretion.   Employee  shall  be  required  to
                     demonstrate  to  the  Committee's   satisfaction  that  the
                     financial burden imposed by the Hardship cannot  reasonably
                     be satisfied out of Employee's  other financial  resources.
                     Withdrawals  pursuant to a Hardship  request  shall only be
                     permitted,  if at all, to the extent reasonably required to
                     satisfy Employee's need.

       5.5    Disability.  In the event that the  Employee  suffers a Disability
              under the terms of the Company's  long term  disability  plan, the
              Employee shall receive payment of his or her Compensation Deferral
              Account at such time as the  Employee's  employment  is terminated
              pursuant to terms of such plan.  Payment of the Account will be in
              accordance   with  the  elections   specified  in  the  Employee's
              Compensation Deferral Election.

       5.6    Automatic  Lump-Sum   Distribution  for  Accounts  below  $25,000.
              Notwithstanding   any  other   provisions  of  this  Plan  or  the
              provisions of an Employee's  deferral election,  in the event that
              an Employee has less than twenty-five  thousand dollars  ($25,000)
              credited  to  his  or  her  Stock  Option   Deferral   Account  or
              Compensation  Deferral  Account  as of  the  date  of  his  or her
              termination of employment with the Company,  100% of such Deferral
              Account(s)shall  be distributed to him or her in a single lump-sum
              payment  within a reasonable  amount of time following the date of
              such termination of employment.

       5.7    Tax Withholding.  All payments under this Plan shall be subject to
              all applicable withholding for state and federal income tax and to
              any other  federal,  state or local  tax  which may be  applicable
              thereto.

                                   ARTICLE VI

                OBLIGATION TO PAY SUPPLEMENTAL EMPLOYEE BENEFITS

       6.1    Benefits Paid From General  Corporate  Assets;  Payment in Cash or
              Stock. All benefits payable to Employee hereunder shall be paid by
              the  Company  out of its  general  corporate  assets.  Payment  of
              benefits from the Stock Option Deferral Account hereunder shall be
              made in shares of Company  common stock.  Payment of benefits from
              the Compensation Deferral Account hereunder shall be made in cash.


       6.2    No Secured  Interest.  Deferral  Accounts  shall be subject to the
              claims  of  creditors  of  the  Company.  Employee  is  a  general
              unsecured  creditor of the Company with respect to the promises of
              the Company made herein.

                                  ARTICLE VII

                                 ADMINISTRATION

       7.1    Administration  of the Plan. The Plan shall be administered by the
              Committee.  The Committee shall have full power and  discretionary
              authority to  administer,  construe  and  interpret  the Plan,  to
              establish  procedures  for  administering  the Plan,  to prescribe
              forms,  and take any and all  necessary  or  desirable  actions in
              connection  with the  Plan.  The  Committee's  interpretation  and
              construction  of the Plan shall be  conclusive  and binding on all
              persons.  The  Committee may appoint a plan  administrator  or any
              other  agent  and  delegate  to them  such  powers  and  duties in
              connection  with the  administration  of the Plan as the Committee
              may from time to time prescribe.

       7.2    Indemnification.  The  Committee  and  each  of  its  members  are
              indemnified  by  the  Company  against  any  and  all  liabilities
              incurred by reason of any action  taken in good faith  pursuant to
              the provisions of the Plan.

                                  ARTICLE VIII

                                  MISCELLANEOUS

       8.1    Nontransferaility.  The right of Employee  or any other  person to
              the payment of any benefits under this Plan shall not be assigned,
              transferred, pledged or encumbered.

       8.2    Binding  Effect.  This Plan shall be binding upon and inure to the
              benefit of the Company,  its  successors  and assigns and Employee
              and   his    heirs,    executors,    administrators    and   legal
              representatives.

       8.3    No Rights as Employee. Nothing contained herein shall be construed
              as  conferring  upon any  Employee  the right to  continue  in the
              employ of the Company as an employee.

       8.4    Reimbursement of Costs. If the Company, Employee or a successor in
              interest  to  either  of the  foregoing,  brings  legal  action to
              enforce any of the provisions of this Plan,  the prevailing  party
              in such legal action shall be reimbursed  by the other party,  the
              prevailing  party's costs of such legal action including,  without
              limitation,  reasonable fees of attorneys, accountants and similar
              advisors and expert witnesses.

       8.5    Arbitration.  Any  dispute or claim  relating to or arising out of
              this  Plan  shall  be  fully  and  finally   resolved  by  binding
              arbitration  conducted by the American Arbitration  Association in
              Santa Clara County, California.

       8.6    Applicable  Law. This Plan shall be construed in  accordance  with
              and governed by the laws of the State of California.

       8.7    Entire Agreement.  This Plan and any applicable  deferral election
              forms  constitute  the entire  understanding  and  agreement  with
              respect to the Plan, and there are no agreements,  understandings,
              restrictions, representations or warranties among Employee and the
              Company other than those as set forth or provided for therein.

       8.8    Termination or Amendment of Plan.

              (a)    This Plan may be amended by the  Company at any time in its
                     sole  discretion  by  resolution  by its  Board;  provided,
                     however,  that no  amendment  may be made which would alter
                     the irrevocable nature of a Stock Option Deferral Election,
                     reduce  the  amount  credited  to  an  Employee's  Deferral
                     Account on the date of such  amendment,  or change the form
                     of the  distribution  specified in the Employee's  Deferral
                     Election.

              (b)    Notwithstanding   the  foregoing  paragraph  or  any  other
                     provision  in  this  Plan  to  the  contrary,  the  Company
                     reserves the right to terminate the Plan in its entirety at
                     any time upon fifteen (15) days notice to Employees. If the
                     Plan  is   terminated,   all  benefits  shall  be  paid  in
                     accordance  with the elections  specified in the Employee's
                     Deferral Election.