or lapse of time or both could become a default) under or pursuant to, result in the loss of amaterial benefit or give any right of termination, amendment, acceleration or cancellation under,or result in the imposition of any lien, charge or encumbrance upon any property or assets of Actelor any of its subsidiaries pursuant to any law, any order of any court or other agency ofgovernment, Actel’s Restated Articles of Incorporation (as amended January 3, 2003) (the“Restated Articles”), Actel’s Amended and Restated Bylaws (the “Bylaws”), or theterms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement orother agreement, obligation, condition, covenant or instrument to which Actel is a party or boundor to which its property or assets is subject or (2) trigger any “change of control” provisions inany agreement to which Actel is a party; and (c) no consent, approval, authorization, license orclearance of, or filing or registration with, or notification to, any court, legislative, executiveor regulatory authority or agency is required in order to permit Actel to perform its obligationsunder this Agreement, except for such as have been obtained.     ***3. Directorships.***          (a) Actel agrees that the Board and all applicable committees of the Board will take allactions necessary and appropriate to:               (1) nominate Patrick W. Little, Jeffrey C. Smith and Eric J. Zahler (collectively, with anyreplacement director appointed pursuant to Section 3(b) below as applicable (the “ReplacementAppointees,” the “2009 Settlement Directors”), for election to the Board at the 2010Annual Meeting (other than in the case of such person’s refusal to serve or if such person hascommitted an act that would be grounds for removal from the Board for cause, in which case theRamius Group will have the right to designate and substitute another person or persons, subject toprompt reasonable evaluation and determination by the Nominating Committee of the Board (the“Nominating Committee”) in good faith after exercising its fiduciary duties that suchcandidate has business experience in such areas as would reasonably be expected to enhance theBoard, consistent with Actel’s guidelines relating to director qualifications and Boardcomposition), together with up to five (5) other persons to be included in Actel’s slate ofnominees for director, with terms expiring at Actel’s 2011 annual shareholder meeting (the“2011 Annual Meeting”);               (2) recommend, and reflect such recommendation in Actel’s definitive proxy statement inconnection with the 2010 Annual Meeting, that the shareholders of Actel vote to elect the 2009Settlement Directors as directors of Actel at the 2010 Annual Meeting;               (3) use its reasonable efforts to solicit and obtain proxies in favor of the election of the2009 Settlement Directors at the 2010 Annual Meeting, in the same manner as for the othercandidates nominated for election at the 2010 Annual Meeting; and               (4) ensure that, while any of the 2009 Settlement Directors remains in office, the RamiusGroup will have the right to designate at least one 2009 Settlement Director, subject to compliancewith applicable Securities and Exchange Commission (the “SEC”) and Nasdaq corporategovernance rules, to serve on each committee and sub-committee of the Board (or any substitutestherefor) now in existence or created after the date hereof.          (b) Actel agrees that, during the term of this Agreement, if a 2009 Settlement Directorresigns or is otherwise unable to serve as a director or is removed for cause as a director, theRamius Group will have the right to designate and substitute a person or persons for
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appointment tothe Board as a replacement director, subject to evaluation and determination by the NominatingCommittee using thestandards described in Section 3(a)(1); provided, however, (i) the substitute persondesignated by the Ramius Group shall have experience consistent with the director being replacedand (ii) at no point shall the 2009 Settlement Directors consist of more than one (1) affiliate ofthe Ramius Group. The Nominating Committee will not unreasonably withhold acceptance of anyreplacement director(s) recommended by the Ramius Group. In the event the Nominating Committee doesnot accept a replacement director recommended by the Ramius Group, the Ramius Group will have theright to recommend additional replacement director(s) for consideration by the NominatingCommittee. The Board will appoint such replacement director to the Board no later than five (5)business days after the Nominating Committee’s recommendation of such replacement director.          (c) Each of the 2009 Settlement Directors will be governed by the same protections andobligations regarding confidentiality, conflicts of interests, fiduciary duties, trading anddisclosure policies and other governance guidelines, and shall have the same rights and benefits,including (but not limited to) with respect to insurance, indemnification, compensation and fees,as are generally applicable to any non-employee directors of Actel.          (d) Actel agrees that prior to the 2011 Annual Meeting, the Board and all applicablecommittees of the Board shall not (i) increase the size of the Board to more than eight (8)directors or (ii) or take any other action to materially limit or restrict the rights of or timeallotted to its shareholders to nominate persons for election to the Board (including but notlimited to by amending the Restated Articles or Bylaws).     ***4. Standstill Restrictions.***          (a) Subject to applicable law, including Section 13(d) and (g) of the Securities Exchange Actof 1934, as amended (the “Exchange Act”), except as permitted pursuant to the terms of thisAgreement, during the term of this Agreement, the Ramius Group shall not, and shall cause theirAffiliates and Associates (as defined below) under its control or direction not to, in any manner,directly or indirectly:               (i) solicit (as such term is used in the proxy rules of the Securities and Exchange Commission(the “SEC”)) proxies or consents to vote any securities of Actel, or make, or in any wayparticipate in, any “solicitation” of any “proxy” within the meaning of Rule 14a-1 promulgated bythe SEC under the Exchange Act to vote any shares of Common Stock with respect to any matter, orbecome a “participant” in any “contested solicitation” for the election of directors with respectto Actel (as such terms are defined or used in the Exchange Act and the rules promulgatedthereunder), other than solicitations or acting as a participant in support of all of Actel’snominees and proposals;               (ii) purchase or cause to be purchased or otherwise acquire or agree to acquire beneficialownership (as determined under Rule 13d-3 promulgated under the Exchange Act) of any Common Stockor other securities issued by Actel, if in any such case, immediately after the taking of suchaction, the Ramius Group would, in the aggregate, collectively beneficially own more than thegreater of (i) 14.9% of the then outstanding shares of Common Stock, or (ii) such percentage of thethen outstanding shares of Common Stock as is 0.1% less than the amount causing the Ramius Group tobecome an “Acquiring Person” under the Company’s Preferred Stock Rights Agreement, dated October17, 2003, as the same may be amended;
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               (iii) form, join or in any way participate in any “group” (within the meaning of Section13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a group comprised solelyof the Ramius Group);               (iv) deposit any Common Stock in any voting trust or subject any Common Stock to anyarrangement or agreement with respect to the voting of any Common Stock, other than any such votingtrust, arrangement or agreement solely among the Ramius Group;               (v) otherwise act, alone or in concert with others to (1) make any public statement criticalof Actel, its directors or management, other than as contemplated by Section 4(a)(vi)(3) below or(2) control or seek to control the Board, other than through non public communications with theofficers and directors of Actel;               (vi) other than as provided in this Agreement, make any public announcement with respect to,or offer to effect, seek or propose (with or without conditions) a merger, acquisition, dispositionor other business combination involving Actel, other than through non public communications withthe officers and directors of Actel; provided, however, that nothing herein willlimit the ability of (1) any member of the Ramius Group, or its respective Affiliates andAssociates, except as otherwise provided in Section 5, to vote its shares of Common Stock on anymatter submitted to a vote of the stockholders of the Company, (2) the 2009 Settlement Directorsto exercise their rights as members of the Board while serving as members of the Board or (3) theRamius Group to announce its opposition to any Board approved proposals related to a merger,acquisition, disposition of all or substantially all of the assets of Actel or other businesscombination involving Actel and not supported by Mr. Smith;               (vii) seek, alone or in concert with others, (1) to call a meeting of shareholders, or(2) representation on the Board, except as specifically contemplated in Section 3(a) and Section4(b), or (3) the removal of any member of the Board; or               (viii) publicly disclose any request to amend, waive or terminate any provision of thisAgreement.          (b) Notwithstanding anything contained herein to the contrary, any member of the Ramius Group,and any Affiliate or Associate of any such member, shall be entitled to:               (i) subject to Section 5, vote their shares in favor of the election of the 2009 SettlementDirectors at the 2010 Annual Meeting and on any other proposal duly brought before the 2010 AnnualMeeting, or otherwise vote as the Ramius Group determines in their sole discretion;               (ii) disclose, publicly or otherwise, how it intends to vote or act with respect to anysecurities of the Company, any stockholder proposal or other matter to be voted on by thestockholders of the Company (other than the election of directors) and the reasons therefor;               (iii) propose a slate of nominees for election as directors and/or one or more proposal(s) forconsideration or approval by shareholders at the 2011 Annual Meeting in order to comply with theadvance notice provisions or other requirements of the Restated Articles or the Bylaws; and
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               (iv) In the event a special meeting is called by a shareholder of Actel with respect to theremoval of directors, the Ramius Group may (A) cumulate the vote of the shares of Common Stock heldby the Ramius Group and vote in favor of the 2009 Settlement Directors and (B) solicit proxies tovote against the removal of the 2009 Settlement Directors; provided, however, that if Actelsolicits proxies to vote against the removal of all directors, the Ramius Group may only solicitproxies to vote against the removal of all directors and not just the 2009 Settlement Directors.          (c) As used in this Agreement, the terms “Affiliate” and “Associate” shall have the respectivemeanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act.     ***5. Actions by the Ramius Group.***          (a) At the 2010 Annual Meeting, the Ramius Group shall vote, and cause theirrespective officers, directors, employees and agents to vote, all of the shares of Common Stockbeneficially owned by him or them for (i) each of Actel’s nominees for election to the Board and(ii) the ratification of the appointment of Actel’s independent auditors.          (b) Upon execution of this Agreement by the Parties, the Ramius Group shall not submit anyproposals or nominations for election to the Board at the 2010 Annual Meeting;     ***6. Termination****.*This Agreement shall terminate and the obligations of the Parties under thisAgreement shall cease on the earlier of the following (the “Termination Date”):          (a) at the option of Actel, upon the earliest of a material breach by the Ramius Group of anyobligation hereunder which has not been cured within 14 days after the Ramius Group receives noticeof such breach from Actel          (b) at the option of the Ramius Group, upon a material breach by Actel of anyobligation hereunder which has not been cured within 14 days after Actel receives notice of suchbreach from the Ramius Group;          (c) seven days prior to the date that an Actel shareholder may first submit a nomination forthe election of directors at the 2011 Annual Meeting pursuant to the Bylaws;          (d) on the day that the Board publicly announces its nominees for election as directors at the2011 Annual Meeting; or          (e) at any time, upon the written consent of all of the Parties.     ***7. Public Announcement.***Actel and the Ramius Group shall promptly disclose the existence ofthis Agreement after its execution pursuant to a joint press release that is mutually acceptable tothe parties, including a description of the material terms of this Agreement. Subject to applicablelaw, none of the Parties shall disclose the existence of this Agreement until the joint pressrelease is issued. The Parties agree that, while this Agreement remains in effect, each Partyshall refrain from any disparagement, defamation, libel, or slander with respect to any other Partyor its affiliates or from publicly criticizing such other Party or its affiliates.     ***8. Nonpublic Information.***          (a) In connection with discussions between the Ramius Group and their representatives andActel and its representatives, or otherwise during the term of this Agreement, the Ramius Group ortheir representatives have obtained information about Actel or its securities
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that is confidential.Each member of the Ramius Group agrees, as set forth below, to treat confidentially any suchinformation (whether oral or written, provided that all written information shall have beenidentified as confidential) furnished to or otherwise obtained by the Ramius Group or theirrepresentatives from Actel or on their behalf together with those portions of analyses, summaries,notes or other documents prepared bythe Ramius Group or any of their representatives which contain or otherwise reflect suchinformation (herein collectively referred to as the “Confidential Information”). The RamiusGroup agrees that, except with Actel’s prior written consent, neither the Ramius Group nor theirrepresentatives will disclose any Confidential Information to any other person or use any of theConfidential Information for any purpose other than on Actel’s behalf. For purposes of thisAgreement, the phrase “Confidential Information” shall not include information which (i) becomeslawfully available to the public other than as a result of a disclosure by the Ramius Group ortheir representatives, (ii) was lawfully available to the Ramius Group on a nonconfidential basisprior to its disclosure to the Ramius Group or their representatives by Actel or on its behalf or(iii) lawfully becomes available to the Ramius Group on a nonconfidential basis from a source otherthan Actel or Actel’s representatives or agents, provided that to the knowledge of the RamiusGroup, such source is not bound by a confidentiality agreement with Actel. Actel has no obligationto furnish Confidential Information to the Ramius Group or their representatives by virtue of thisAgreement. In the event that any member of the Ramius Group is requested pursuant to, or requiredby, law, regulation, legal process or regulatory or civil authority to disclose any portion of theConfidential Information, the Ramius Group shall give prompt notice to Actel, to the extent suchnotice is legally permissible. The Ramius Group shall use all commercially reasonable efforts tolimit the scope of such required disclosure, and the Ramius Group shall be permitted to disclose,without any liability to Actel, only that portion of the Confidential Information which the RamiusGroup’ counsel advises that the Ramius Group are legally required to disclose.          (b) In connection with this Agreement and the ongoing relationship of the Ramius Group (andtheir affiliates) with Actel, there may be instances in which material nonpublic informationconcerning Actel will be divulged to them by Actel or its representatives or agents. The RamiusGroup expressly acknowledge, on behalf of themselves and their representatives and agents, thatfederal and state securities laws prohibit any person who misappropriates material nonpublicinformation about a company from purchasing or selling securities of such company, or fromcommunicating such information to any other person under circumstances in which it is reasonablyforeseeable that such person is likely to purchase or sell such securities, until such informationhas become public.     ***9. Releases.***          (a) The Ramius Group hereby agrees for the benefit of Actel, and each controlling person,officer, director, shareholder, agent, affiliate, employee, partner, attorney, heir, assign,executor, administrator, predecessor and successor, past and present, of Actel (Actel and each suchperson being an “Actel Released Person”) as follows:               (i) The Ramius Group, for themselves and for their members, officers, directors, assigns,agents and successors, past and present, hereby agrees and confirms that, effective from and afterthe date of this Agreement, they hereby acknowledge full and complete satisfaction of, and covenantnot to sue, and forever fully release and discharge each Actel
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Released Person of, and hold eachActel Released Person harmless from, any and all rights, claims, warranties, demands, debts,obligations, liabilities, costs, attorneys’ fees, expenses, suits, losses and causes of action ofany nature whatsoever, whether known or unknown, suspected or unsuspected (collectively,“Claims”) that the Ramius Group may have against the Actel Released Persons, in each casewith respect to events occurring prior to the date of the execution of this Agreement.               (ii) The Ramius Group understands and agree that the Claims released by the Ramius Group aboveinclude not only those Claims presently known but also include all unknown or unanticipated claims,rights, demands, actions, obligations, liabilities, and causes of action of every kindand character that would otherwise come within the scope of the Claims as described above. TheRamius Group understands that they may hereafter discover facts different from or in addition towhat they now believe to be true, which if known, could have materially affected this release ofClaims, but they nevertheless waive any claims or rights based on different or additional facts.          (b) The Ramius Group agrees that so long as any 2009 Settlement Director is a member of theBoard, (i) no member of the Ramius Group shall, without the consent of Actel, instigate, solicit,assist, intervene in, or otherwise voluntarily participate in any litigation or arbitration inwhich Actel or any of its officers or directors are named as parties; provided that the foregoingshall not prevent any member of the Ramius Group from responding to a validly issued legal processand (ii) the Ramius Group agrees to give Actel at least five (5) business days notice of thereceipt of any legal process requesting information regarding Actel or any of its officers ordirectors, to the extent that such notice is legally permissible.          (c) Actel hereby agrees for the benefit of the Ramius Group, and each controlling person,officer, director, stockholder, agent, affiliate, employee, partner, attorney, heir, assign,executor, administrator, predecessor and successor, past and present, thereof, as well as each 2009Settlement Director (the Ramius Group and each such person being a “ShareholderReleased Person”) as follows:               (i) Actel, for itself and for its affiliates, officers, directors, assigns, agents andsuccessors, past and present, hereby agrees and confirms that, effective from and after the date ofthis Agreement, it hereby acknowledges full and complete satisfaction of, and covenants not to sue,and forever fully releases and discharges each Shareholder Released Person of, and holds eachShareholder Released Person harmless from, any and all Claims of any nature whatsoever, whetherknown or unknown, suspected or unsuspected, that Actel may have against the Shareholder ReleasedPersons, in each case with respect to events occurring prior to the date of the execution of thisAgreement.               (ii) Actel understand and agree that the Claims released by Actel above include not only thoseClaims presently known but also include all unknown or unanticipated claims, rights, demands,actions, obligations, liabilities, and causes of action of every kind and character that wouldotherwise come within the scope of the Claims as described above. Actel understands that it mayhereafter discover facts different from or in addition to what it now believes to be true, which ifknown, could have materially affected this release of Claims, but it nevertheless waives any claimsor rights based on different or additional facts.          (d) The Parties do hereby expressly waive and relinquish all rights and benefits afforded byCalifornia Civil Code Section 1542, and do so understanding and
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acknowledging the significance andconsequences of such specific waiver of California Civil Code Section 1542. The Partiesacknowledge and understand that they are being represented in this matter by counsel of their ownchoice, and acknowledge that they are familiar with the provisions of California Civil Code Section1542, which provides as follows:**A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THEDEBTOR.**     Thus, notwithstanding these provisions of law, the Parties expressly acknowledge and agreethat this Section 9 is also intended to include in its effect, without limitation, all such claimswhich they do not know or suspect to exist at the time of the execution of this Agreement, andthat this Agreement contemplates the extinguishment of those claims.          (e) The Parties intend that the foregoing release be broad with respect to the matterreleased, provided, however, this release of Claims shall not include claims to enforce the termsof this Agreement; and provided further that nothing in the foregoing release shall be deemed orconstrued, now or hereafter, as limiting in any manner any right of indemnification inuring to thebenefit of any director or former director of Actel arising under the Restated Articles, the Bylawsor otherwise.     ***10. Remedies.***          (a) Each of the Parties acknowledges and agrees that a breach or threatened breach by anyParty may give rise to irreparable injury inadequately compensable in damages, and accordingly eachParty shall be entitled to injunctive relief to prevent a breach of the provisions hereof and toenforce specifically the terms and provisions hereof in any state or federal court havingjurisdiction, in addition to any other remedy to which such aggrieved Party may be entitled to atlaw or in equity.          (b) In the event a Party institutes any legal action to enforce such Party’s rights under, orrecover damages for breach of this Agreement, the prevailing party or parties in such action shallbe entitled to recover from the other party or parties all costs and expenses, including but notlimited to reasonable attorneys’ fees, court costs, witness fees, disbursements and any otherexpenses of litigation or negotiation incurred by such prevailing party or parties.     ***[11. Expenses***. Actel shall reimburse the Ramius Group for its reasonable, documentedout-of-pocket fees and expenses incurred (including legal expenses), not to exceed $5,000, inconnection with the filing of a Schedule 13D in connection with this Agreement, and any mattersrelated to the 2010 Annual Meeting and the negotiation and execution of this Agreement.     ***12. Notices****.*Any notice or other communication required or permitted to be given underthis Agreement will be sufficient if it is in writing, sent to the applicable address set forthbelow (or as otherwise specified by a Party by notice to the other Parties in accordance with thisSection 12) and delivered personally or sent by recognized overnight courier, postage prepaid, andwill be deemed given (a) when so delivered personally, or (b) if sent by recognized overnightcourier, one day after the date of sending.
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If to Actel:Actel Corporation