Exhibit 4.1


                            ARTISAN COMPONENTS, INC.

                                       and

                          EQUISERVE TRUST COMPANY, N.A.









                        PREFERRED STOCK RIGHTS AGREEMENT

                          Dated as of December 12, 2001











<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

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 .............................................11

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 Stockholder...............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

                                      -ii-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

                                                                            Page
                                                                            ----

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

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

Section 24.  Exchange.........................................................34

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.....................................................38

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

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

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

EXHIBITS

Exhibit A....Form of Certificate of Designation

Exhibit B....Form of Rights Certificate

Exhibit C....Summary of Rights

                                     -iii-

<PAGE>


                        PREFERRED STOCK RIGHTS AGREEMENT

     This  Preferred  Stock  Rights  Agreement is dated as of December 12, 2001,
between Artisan Components,  Inc., a Delaware  corporation,  and Equiserve Trust
Company, N.A.

         On December  12, 2001 (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 January 8, 2002 (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  Designations  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 Company's 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; provided,  however, that the State of Wisconsin Investment Board
     and its affiliates ("SWIB") shall not be deemed an "Acquiring Person" until
     such  time as SWIB  shall  be the  Beneficial  Owner  of 18% or more of the
     Company's  Common  Shares then  outstanding  or announces a tender offer to
     acquire 18% or more of the  Company's  Common Shares then  outstanding,  or
     until such time as SWIB shall be  required  to file a report of  beneficial
     ownership on Schedule 13D with the Securities and Exchange  Commission with
     respect to SWIB's holdings of the Company's Common Stock (collectively, the
     "Limitations"). 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  (or with
     respect  to SWIB,  increases  such  number  of shares to 18% 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



<PAGE>


     of the Common  Shares of the Company then  outstanding  (or with respect to
     SWIB, shall become the Beneficial Owner of 18% 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 (or with respect to SWIB, does not beneficially own 18% 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;  and (ii) if, as of the date hereof, any Person
     is the Beneficial Owner of 15% or more of the Common Shares outstanding (or
     with respect to SWIB, is the Beneficial  Owner of 18% 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 (or with respect to SWIB,
     is not then the  Benefical  Owner of 18% 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:

                                                                             -2-

<PAGE>


               (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.

                                                                             -3-

<PAGE>


          (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  Artisan  Components,   Inc.,  a  Delaware
     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

                                                                             -4-

<PAGE>


     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) 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) 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 January 8, 2012.

          (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.

                                                                             -5-

<PAGE>


          (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) EquiServe Trust Company,  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

                                                                             -6-

<PAGE>


     Acquiring   Person  pursuant  to  Section  1(a)  hereof,   then  no  Shares
     Acquisition Date shall be deemed to have occurred.

          (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

                                                                             -7-

<PAGE>


     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  ARTISAN
          COMPONENTS,  INC. AND  EQUISERVE  TRUST  COMPANY,  N.A., AS THE RIGHTS
          AGENT,  DATED AS OF DECEMBER  12, 2001 (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  ARTISAN
          COMPONENTS, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH

                                                                             -8-

<PAGE>


          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.

     Section 4. 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  as are  not
     inconsistent  with the provisions of this Agreement,  or as may be required
     to  comply  with any  applicable  law or with any rule or  regulation  made
     pursuant  thereto or with any rule or regulation of any stock exchange or 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.

                                                                             -9-

<PAGE>


          (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.

                                                                            -10-

<PAGE>


     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

                                                                            -11-

<PAGE>


     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 One
     Hundred and Fifteen  Dollars  ($115),  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.

                                                                            -12-

<PAGE>


          (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

                                                                            -13-

<PAGE>

Rights  Certificates  to the Company,  or shall,  at the written  request of the
Company,  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.

                                                                            -14-

<PAGE>


     (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,

                                                                            -15-

<PAGE>


          (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.

                                                                            -16-

<PAGE>


               (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
          Certificate  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  stockholder or regulatory approval for
          such  issuance,  (4) debt  securities  of the  Company,  except to the
          extent that the Company has not obtained any necessary  stockholder 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  stockholder 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  stockholder  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

                                                                            -17-

<PAGE>


          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

                                                                            -18-

<PAGE>


     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

                                                                            -19-

<PAGE>


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

                                                                            -20-

<PAGE>


     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 stockholders.

          (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

                                                                            -21-

<PAGE>


     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

                                                                            -22-

<PAGE>


               (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.

                                                                            -23-

<PAGE>

                    (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

                                                                            -24-

<PAGE>


     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

                                                                            -25-

<PAGE>


     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
     stockholders  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

                                                                            -26-

<PAGE>

     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;

                                                                            -27-

<PAGE>


          (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 Stockholder.  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 stockholder of the Company
or any right to vote for the election of directors or upon any matter  submitted
to stockholders at any meeting  thereof,  or to give or withhold  consent to any
corporate  action,  or to receive notice of meetings or other actions  affecting
stockholders  (except as  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

                                                                            -28-

<PAGE>


     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.

                                                                            -29-

<PAGE>


          (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

                                                                            -30-

<PAGE>


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

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

          (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.

                                                                            -31-

<PAGE>


     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. Any successor Rights Agent, whether appointed
by the Company or by such a court,  shall be a  corporation  organized and doing
business  under the laws of the  United  States  or of any  state of the  United
States,  in good  standing,  which is  authorized  under  such laws to  exercise
corporate trust or stockholder  services powers and is subject to supervision or
examination  by  federal  or state  authority  and  which has at the time of its
appointment  as Rights  Agent a combined  capital  and  surplus of at least $100
million. After appointment,  the successor Rights Agent shall be vested with the
same powers,  rights,  duties and  responsibilities as if it had been originally
named as Rights Agent without  further act or deed; but the  predecessor  Rights
Agent shall deliver and transfer to the  successor  Rights Agent any property at
the time held by it  hereunder,  and execute and deliver any further  assurance,
conveyance,  act or deed necessary for the purpose. Not later than the effective
date of any such  appointment,  the Company shall file notice 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;

                                                                            -32-

<PAGE>


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.

                                                                            -33-

<PAGE>


     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

                                                                            -34-

<PAGE>


     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

                                                                            -35-

<PAGE>


     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:

                   Artisan Components, Inc.
                   141 Caspian Court
                   Sunnyvale, California 94089-1013

                   with a copy to:
                   Wilson Sonsini Goodrich & Rosati
                   Professional Corporation
                   650 Page Mill Road
                   Palo Alto, California 94304-1050
                   Attention:  David J. Berger and Robert P. Latta

     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:

                   EquiServe Trust Company, N.A.
                   150 Royall Street
                   Canton, MA 02021
                   Attn: Client Administration

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

                                                                            -36-

<PAGE>


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) 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

                                                                            -37-

<PAGE>


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  Delaware  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.

                                                                            -38-

<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"                     Artisan Components, Inc.

                              By:    /s/ Joy E. Leo
                                     -------------------------------------------

                              Name:  Joy E. Leo

                              Title: Vice President, Finance and Administration,
                              Chief Financial Officer and Corporate Secretary




"RIGHTS AGENT"                EquiServe Trust Company, N.A.

                              By:    /s/ Carol Mulvey-Eori
                                     -------------------------------------------

                              Name:  Carol Mulvey-Eori
                                     -------------------------------------------

                              Title: Managing Director
                                     -------------------------------------------

                                                                            -39-

<PAGE>


                                    EXHIBIT A

                              (to Rights Agreement)

                          CERTIFICATE OF DESIGNATION OF
                      RIGHTS, PREFERENCES AND PRIVILEGES OF
                    SERIES A PARTICIPATING PREFERRED STOCK OF
                            ARTISAN COMPONENTS, INC.

     The undersigned, Joy E. Leo, does hereby certify:

     1. That she is duly  elected  and acting  Vice  President  of  Finance  and
Administration,  Chief  Financial  Officer and Secretary of Artisan  Components,
Inc., a Delaware corporation (the "Corporation").

     2. That pursuant to the authority  conferred upon the Board of Directors by
the Amended and Restated  Certificate of Incorporation of the said  Corporation,
the said Board of Directors of the  Corporation on December 12, 2001 adopted the
resolutions  attached  hereto as Exhibit A creating a series of 50,000 shares of
Preferred Stock designated as Series A Participating Preferred Stock.

     I further  declare  under  penalty of perjury that the matters set forth in
the  foregoing  Certificate  of  Designation  are  true  and  correct  of my own
knowledge.

     Executed at Sunnyvale, California on December __, 2001.




                                 -----------------------------------------------
                                 Joy E. Leo
                                 V.P. of Finance and Administration,
                                 Chief Financial Officer and Corporate Secretary


<PAGE>


                                    EXHIBIT A
                         (to Certificate of Designation)

                      Resolutions of the Board of Directors

Creation of Series A Participating Preferred Stock

          NOW, THEREFORE,  BE IT RESOLVED: That pursuant to the authority vested
     in the Board of  Directors  of the  Company  by the  Amended  and  Restated
     Certificate  of  Incorporation,  the Board of Directors does hereby provide
     for the issuance of a series of Preferred Stock of the Corporation and does
     hereby  fix  and  herein  state  and  express  the  designations,   powers,
     preferences  and relative and other special rights and the  qualifications,
     limitations and restrictions of such series of Preferred Stock as set forth
     on Exhibit A hereto.

          RESOLVED  FURTHER:  That the  President or any Vice  President and the
     Secretary  or any  Assistant  Secretary  of the Company be, and they hereby
     are,  authorized  and  directed  to  prepare  and  file  a  Certificate  of
     Designation of Rights,  Preferences  and Privileges in accordance  with the
     foregoing  resolution  and the  provisions of Delaware law and to take such
     actions as they may deem  necessary or  appropriate to carry out the intent
     of the foregoing resolution.

Declaration of Rights Dividend

          RESOLVED  FURTHER:  That the Board of Directors hereby declares that a
     dividend of one Right for each share of Common  Share be paid on January 8,
     2002 to  Stockholders  of record of the Common Stock issued and outstanding
     at the close of business on such date, each Right representing the right to
     purchase one  one-thousandth  of a share of Preferred  Stock upon the terms
     and subject to the conditions set forth in the form of the Preferred  Stock
     Rights  Agreement  presented to this  meeting,  a copy of which is attached
     hereto as Exhibit B (the  "Rights  Agreement"),  which  agreement is hereby
     approved in all respects.

          RESOLVED:  That the exercise  price of the Rights shall be $115.00 per
     Right, and that the redemption price therefor shall be $0.001 per Right.

          RESOLVED  FURTHER:  That the proper officers of the Company are hereby
     authorized  in the name and on behalf of the  Company to execute the Rights
     Agreement, with such modifications as the officers executing the same shall
     approve,  and to deliver  the same to the  Rights  Agent  thereunder,  such
     execution and delivery  conclusively to evidence the due  authorization and
     approval thereof by the Company.

                                                                             -2-

<PAGE>


Rights Certificates

          RESOLVED FURTHER: That certificates evidencing the Rights (the "Rights
     Certificates")  shall be  substantially in the form set forth in the Rights
     Agreement and shall be issued and delivered as provided therein.

          RESOLVED FURTHER:  That the Rights Certificates shall be signed by the
     Chairman of the Board,  the Chief Executive  Officer,  the President or any
     Vice  President  and by the  Secretary  or an  Assistant  Secretary  of the
     Company under its  corporate  seal (which may be in the form of a facsimile
     of the seal of the  Company),  provided  that the  signature of any of said
     officers  of the  Company  may,  but  need not be,  a  facsimile  signature
     imprinted or otherwise reproduced on the Rights Certificates,  and that the
     Company  hereby  adopts for such  purpose the  facsimile  signature  of the
     present  or any future  Chairman  of the Board,  Chief  Executive  Officer,
     President,  Vice  President,  Secretary,  and Assistant  Secretary,  of the
     Company,  notwithstanding the fact that at the time the Rights Certificates
     shall be  authenticated  and  delivered or disposed of he or she shall have
     ceased to be such officer.

          RESOLVED  FURTHER:  That the proper officers of the Company are hereby
     authorized to execute on behalf of the Company and under its corporate seal
     (which may be in the form of a facsimile of the seal of the Company) Rights
     Certificates issued to replace lost, stolen,  mutilated or destroyed Rights
     Certificates, and such Rights Certificates as may be required for exchange,
     substitution or transfer as provided in the Rights  Agreement in the manner
     and form to be required in, or contemplated by, the Rights Agreement.

          RESOLVED  FURTHER:  That the  Rights  Certificates  shall be  manually
     countersigned  by the Rights Agent under the Rights Agreement and books for
     the  registration  and  transfer  of  the  Rights   Certificates  shall  be
     maintained by such Rights Agent at its principal offices.

Authorization and Reservation of Shares of Preferred Stock

          RESOLVED FURTHER: That the minimum number of shares of Preferred Stock
     sufficient to permit the exercise in full of all outstanding  Rights at any
     time is hereby  reserved for  issuance  upon  exercise of the Rights,  such
     number to be subject to adjustment from time to time in accordance with the
     Rights Agreement,  and subject to the limitation that in no event shall the
     number of shares of Preferred Stock reserved  hereunder,  when added to the
     number of shares of Preferred Stock then otherwise reserved for issuance by
     the Company,  exceed the total number of authorized but unissued  shares of
     Preferred Stock of the Company at any time.

Appointment of Rights Agent

          RESOLVED  FURTHER:  That Equiserve  Trust  Company,  N.A. (the "Rights
     Agent") is hereby  appointed Rights Agent under the Rights  Agreement,  and
     that  upon  presentation  to it of  Rights  Certificates  for  exercise  in
     accordance with the Rights

                                                                             -3-

<PAGE>


     Agreement, the Rights Agent is authorized,  as Transfer Agent and Registrar
     for the  Common  Stock,  to issue  originally,  countersign,  register  and
     deliver the shares of Preferred  Stock  issuable  upon such exercise of the
     Rights.

Registration and Listing

          RESOLVED:  That the proper  officers of the Company are authorized for
     and on behalf of the Company to execute  personally or by  attorney-in-fact
     and to cause to be filed with the  Securities  and  Exchange  Commission  a
     registration  statement  under  the  Securities  Exchange  Act of 1934,  as
     amended (the  "Exchange  Act"),  for the  registration  of the Rights,  and
     thereafter  to  execute  and  cause to be filed  any  amended  registration
     statement  or  registration  statements,  and to  cause  such  registration
     statement and any amendments thereto to become effective in accordance with
     the Exchange Act and the General Rules and  Regulations  of the  Securities
     and Exchange Commission thereunder.

          RESOLVED  FURTHER:  That the proper officers of the Company are hereby
     authorized,  jointly  and  severally,  in the  name  and on  behalf  of the
     Company, to take all such further actions and to execute all such documents
     as they may deem necessary or  appropriate in connection  with the issuance
     of the Rights and the shares of Preferred  Stock  issuable upon exercise of
     the Rights in order to comply with the  Securities  Act of 1933, as amended
     and the Exchange Act, as amended.

          RESOLVED  FURTHER:  That the proper officers of the Company are hereby
     authorized,  jointly  and  severally,  in the  name  and on  behalf  of the
     Company,  to  execute  and  file  such  application  or  applications,  and
     amendments and  supplements  thereto,  and take such other action as may be
     necessary to list the Rights (and,  if in the judgment of such  officers it
     is  appropriate  to do so, the shares of Common  Stock or  Preferred  Stock
     issuable upon exercise thereof) on the Nasdaq National Market, and that the
     proper  officers of the Company are hereby  authorized to appear before the
     Securities and Exchange  Commission and the Nasdaq Stock Market,  Inc. (the
     "NASD"),  and to execute such papers and  agreements as may be necessary to
     conform with the  requirements  of the Securities and Exchange  Commission,
     and the NASD, and to effectuate such listing and registration.

Subsequent Issuance of Rights

          RESOLVED  FURTHER:  That so long as the  Rights  are  attached  to the
     Common Stock as provided in the Rights  Agreement  and subject to the other
     provisions of the Rights Agreement, one additional Right shall be delivered
     with each share of Common Stock issued after January 8, 2002  including but
     not limited to the shares of Common  Stock  issued upon  conversion  of any
     convertible  securities  of the  Company  and the  exercise  of  options or
     warrants to purchase shares of Common Stock granted by the Company.

                                                                             -4-

<PAGE>

General Resolutions

          RESOLVED  FURTHER:  That the Board of Directors  hereby adopts,  as if
     expressly  set forth  herein,  the form of any  resolution  required by the
     Rights  Agent or by any  authority  in  connection  with any  applications,
     consents to service,  issuer's  covenants or other  documents if (i) in the
     opinion of the officers of the Company  executing the same, the adoption of
     such  resolutions  is necessary or desirable  and (ii) the Secretary of the
     Company evidences such adoption by inserting in the minutes of this meeting
     copies of such resolutions, which will thereupon be deemed to be adopted by
     the Board of  Directors  with the same force and effect as if  presented at
     this meeting.

          RESOLVED FURTHER: That the proper officers of the Company be, and each
     of them hereby is, authorized and directed,  jointly and severally, for and
     on  behalf  of the  Company,  to  execute  and  deliver  all  certificates,
     agreements and other documents, take all steps and do all things which they
     may deem  necessary or advisable in order to effectuate the purposes of the
     foregoing resolutions.

                                                                             -5-

<PAGE>



                                    EXHIBIT A

                          (to Resolutions of the Board)

                       RIGHTS AND LIMITATIONS OF SERIES A
                          PARTICIPATING PREFERRED STOCK

     Section 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 50,000.

     Section 2. Proportional Adjustment.  In the event that the Company 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 Company ("Common
Stock") 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  Company  shall  simultaneously  effect a
proportional  adjustment  to the  number  of  outstanding  shares  of  Series  A
Participating Preferred Stock.

     Section 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 Company shall declare a dividend or distribution on the Series
     A  Participating  Preferred  Stock  as  provided  in  paragraph  (a)  above
     immediately  after it  declares a dividend  or  distribution  on the Common
     Stock (other than a dividend payable in shares of Common Stock).

                                                                             -6-

<PAGE>


          (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.

     Section 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
     stockholders of the Company.

          (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 stockholders of the Company.

          (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.

     Section 5. Certain Restrictions.

          (a)  The  Company   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
     Company shall not:

                                                                             -7-

<PAGE>


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

     Section  6.  Reacquired  Shares.  Any  shares  of  Series  A  Participating
Preferred  Stock  purchased or  otherwise  acquired by the Company 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 Restated Certificate of Incorporation, as then amended.

     Section 7.  Liquidation,  Dissolution or Winding Up. Upon any  liquidation,
dissolution  or winding  up of the  Company,  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-

<PAGE>


     Section 8. Consolidation, Merger, etc. In case the Company 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.

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

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

     Section  11.   Amendment.   The  Amended  and   Restated   Certificate   of
Incorporation  of the Company  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.

     Section 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.

                                                                             -9-

<PAGE>



                                    EXHIBIT B

                              (to Rights Agreement)

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                              _________ Rights

     NOT  EXERCISABLE  AFTER THE EARLIER OF (i)  JANUARY 8, 2012,  (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.]*

                               RIGHTS CERTIFICATE

                            ARTISAN COMPONENTS, INC.

     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 December 12, 2001,  (the "Rights  Agreement"),
between Artisan Components,  Inc., a Deleware  corporation (the

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

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


<PAGE>


"Company"),  and EquiServe Trust Company, 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
January 8, 2002 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 $115 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 January
8, 2002 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

                                                                             -2-

<PAGE>


rights of a stockholder  of the Company or any right to vote for the election of
directors or upon any matter  submitted to stockholders at any meeting  thereof,
or to give or withhold consent to any corporate  action, or to receive notice of
meetings  or other  actions  affecting  stockholders  (except as provided in 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:                                    Artisan Components, Inc.

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

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

Countersigned:

EquiServe Trust Company, N.A.
as Rights Agent

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


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

                                                                             -3-

<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 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 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 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 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

                              (to Rights Agreement)

                             STOCKHOLDER RIGHTS PLAN
                            ARTISAN COMPONENTS, INC.

                                Summary of Rights

Distribution and Transfer of            The Board of  Directors  has  declared a
Rights; Rights Certificate:             dividend  of one Right for each share of
                                        Common Stock of Artisan Components, Inc.
                                        (the  "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
                                        stockholders  and the Rights will become
                                        transferable   apart   from  the  Common
                                        Stock.

Distribution Date:                      Rights  will  separate  from the  Common
                                        Stock and become  exercisable  following
                                        (a) the  tenth  business  day  (or  such
                                        later date as may be  determined  by the
                                        Company's  Board  of  Directors)   after
                                        public  announcement  that a  person  or
                                        group has acquired beneficial  ownership
                                        of 15% or more of the  Company's  Common
                                        Stock (the "Shares Acquisition Date") 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.  However,  with
                                        respect to State of Wisconsin Investment
                                        Board  ("SWIB"),  no  Distribution  Date
                                        will  occur  until  such  time  as  SWIB
                                        acquires beneficial  ownership of 18% or
                                        more of the  Company's  Common  Stock or
                                        announces a tender  offer to acquire 18%
                                        or more of the  Company's  Common Stock,
                                        or  until  such  time as SWIB  shall  be
                                        required to file a report of  beneficial
                                        ownership   on  Schedule  13D  with  the
                                        Securities and Exchange  Commission with
                                        respect to its holdings of the Company's
                                        Common    Stock    (collectively,    the
                                        "Limitations").

Preferred Stock Purchasable             After the Distribution  Date, each Right
Upon Exercise of Rights:                will  entitle the holder to purchase for
                                        $  115  (the  "Exercise   Price"),   one
                                        one-thousandths   of  a  share   of  the
                                        Company's  Series A Preferred Stock with
                                        economic  terms  similar  to that of one
                                        share of the Company's Common Stock.

Flip-In:                                If an acquiror (an  "Acquiring  Person")
                                        obtains  15% or  more  of the  Company's
                                        Common  Stock (or with  respect to SWIB,
                                        SWIB   fails   to   comply    with   the
                                        Limitations),  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  (or with  respect  to SWIB,  SWIB
                                        fails to comply  with the  Limitations),
                                        (a)  the  Company  merges  into  another
                                        entity,  (b) an acquiring  entity merges
                                        into  the  Company  or (c)  the  Company
                                        sells more than 50%


<PAGE>


                                        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  (or  with
                                        respect  to SWIB,  SWIB  fails to comply
                                        with the  Limitations)  and prior to the
                                        acquisition  by the Acquiring  Person of
                                        50% of the  outstanding  Common Stock, a
                                        majority of the Board of  Directors  and
                                        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:               Rights   will  be   redeemable   at  the
                                        Company's option for $0.001 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
                                        (or with respect to SWIB,  SWIB fails to
                                        comply   with  the   Limitations)   (the
                                        "Shares Acquisition Date").

Expiration of the Rights:               The Rights expire on the earliest of (a)
                                        January  8,  2012  or  (b)  exchange  or
                                        redemption  of the  Rights as  described
                                        above.

Amendment of Terms of Rights:           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).

Voting Rights:                          Rights will not have any voting rights.

Anti-Dilution Provisions:               Rights  will have the benefit of certain
                                        customary 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,  stockholders
                                        may recognize taxable income.

     The foregoing is a summary of certain  principal  terms of the  Stockholder
Rights Plan only and is qualified in its entirety by reference to the  Preferred
Stock  Rights  Agreement  dated as of December  12, 2001 between the Company and
Equiserve  Trust  Company,  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  December  27, 2001. A copy of the
Rights Agreement is available free of charge from the Company.