8-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934




                                 March 24, 1999
- --------------------------------------------------------------------------------
                Date of Report (Date of earliest event reported)



                            Harvard Industries, Inc.
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             (Exact name of registrant as specified in its charter)



         Delaware                        0-21362                21-0715310
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(State or other jurisdiction           (Commission             (IRS Employer
      of incorporation)                File Number)         Identification No.)



     3 Werner Way,  Lebanon, New Jersey                            08833
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  (Address of principal executive offices)                       (Zip Code)



Registrant's telephone number, including area code:              (908) 437-4100
                                                                 --------------






Item 5.  Other Events.

         On March 24, 1999, the Board of Directors of Harvard Industries, Inc.,
a Delaware corporation (the "Company"), declared a dividend of one preferred
share purchase right ("Right") on each outstanding share of the Company's common
stock, par value $0.01 per share (the "Common Shares"), payable to stockholders
of record on April 5, 1999 (the "Record Date"). Except as described below, each
Right, when exercisable, entitles the holder thereof to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the "Preferred Shares"), of the Company at an
exercise price of $30 per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and State Street
Bank and Trust Company, a Massachusetts trust company, as Rights Agent.

         Until the earlier to occur of (i) 10 days following a public
announcement that a person or group has become an "Acquiring Person" (as defined
below) or (ii) 10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or group
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of which
would result in a person or group becoming an Acquiring Person (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced
by Common Share certificates.

         An "Acquiring Person" is a person or group of affiliated or associated
persons who have acquired beneficial ownership of 20% or more of the outstanding
Common Shares, other than the Company, any subsidiary of the Company, and any
employee benefit plan of the Company or its subsidiaries, and certain persons
affiliated or associated with or related to the foregoing. Notwithstanding the
foregoing, (i) no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number of the
Company's Common Shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 20% or more of the Common Shares
then outstanding, provided, however, that if a Person shall become the
beneficial owner of 20% or more of the Common Shares of the Company then
outstanding by reason of share acquisitions by the Company and shall, after such
share acquisitions by the Company, (A) acquire beneficial ownership of any
additional Common Shares and (B) beneficially own after such acquisition 20% or
more of the aggregate number of Common Shares of the Company then outstanding,
then such Person shall be deemed to be an "Acquiring Person"; (ii) Franklin
shall not be deemed to be an "Acquiring Person" for purposes of the
Rights Agreement; provided, however, that if at any time Franklin 
shall (A) acquire beneficial ownership of any additional Common Shares 
and (B) beneficially own after such acquisition 27.5% or more of the 
aggregate number of Common Shares of the Company then outstanding, then 
Franklin shall be deemed to be an "Acquiring Person"; provided, further, 
that if at any time Franklin (C) shall acquire beneficial ownership of any 
additional Common Shares, (D) shall beneficially own after such acquisition 
more than 2,512,769 Common Shares, but less than 27.5% of the aggregate 
number of Common Shares of the Company at the time outstanding, and (E) 
shall not have duly signed, dated and delivered to the Company, on or
prior to the date such acquisition is effected, an irrevocable proxy
substantially in the form of Exhibit D hereto with respect to all Common Shares
of the Company beneficially owned by Franklin immediately after such acquisition
in excess of 2,512,769, then Franklin shall be deemed to be an "Acquiring
Person"; and provided, yet further, that this clause (ii) shall be inapplicable
at all times on and after the first date on which Franklin shall not


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beneficially own at least 20.0% of the Common Shares of the Company at
the time outstanding; (iii) no Qualifying Franklin Transferee shall be
deemed to be an "Acquiring Person" for purposes of the Rights Agreement;
provided, however,  that if after becoming a Qualifying Franklin
Transferee, such Qualifying Franklin Transferee shall (A) acquire
beneficial ownership of any additional Common Shares and (B)
beneficially own after such acquisition more than the lesser of (x)
2,512,769 Common Shares, or (y) the number of Common Shares of the
Company owned by such Qualifying Franklin Transferee immediately after
it first became a Qualifying Franklin Transferee, then such Qualifying
Franklin Transferee shall be deemed to be an "Acquiring Person";
provided, further, that this clause (iii) shall be inapplicable to any
Qualifying Franklin Transferee at all times on and after the first date
on which such Qualifying Franklin Transferee shall not beneficially own
at least 20.0% of the Common Shares of the Company at the time
outstanding; (iv) Contrarian shall not be deemed to be an "Acquiring
Person" for purposes of the Rights Agreement; provided, however, that if at
any time Contrarian shall (A) acquire beneficial ownership of any
additional Common Shares and (B) beneficially own after such acquisition
30.0% or more of the aggregate number of Common Shares of the Company
then outstanding, then Contrarian shall be deemed to be an "Acquiring
Person"; provided, further, that if at any time Contrarian (C) shall
acquire beneficial ownership of any additional Common Shares, (D) shall
beneficially own after such acquisition more than 2,859,529 Common
Shares, but less than 30.0% of the aggregate number of Common Shares of
the Company at the time outstanding, and (E) shall not have duly signed,
dated and delivered to the Company, on or prior to the date such
acquisition is effected, an irrevocable proxy substantially in the form
of Exhibit D hereto with respect to all Common Shares of the Company
beneficially owned by Contrarian immediately after such acquisition in
excess of 2,859,259, then Contrarian shall be deemed to be an "Acquiring
Person"; and provided, yet further, that this clause (iv) shall be
inapplicable at all times on and after the first date on which
Contrarian shall not beneficially own at least 20.0% of the Common
Shares of the Company at the time outstanding; (v) no Qualifying
Contrarian Transferee shall be deemed to be an "Acquiring Person" for
purposes of the Rights Agreement; provided, however, that if after becoming a
Qualifying Contrarian Transferee, such Qualifying Contrarian Transferee
shall (A) acquire beneficial ownership of any additional Common Shares
and (B) beneficially own after such acquisition more than the lesser of
(x) 2,859,529 Common Shares, or (y) the number of Common Shares of the
Company owned by such Qualifying Contrarian Transferee immediately after
it first became a Qualifying Contrarian Transferee, then such Qualifying
Contrarian Transferee shall be deemed to be an "Acquiring Person";
provided, further, that this clause (v) shall be inapplicable to any
Qualifying Contrarian Transferee at all times on and after the first
date on which such Qualifying Contrarian Transferee shall not
beneficially own at least 20.0% of the Common Shares of the Company at
the time outstanding; and (vi) if the 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, has
become such inadvertently, and such Person 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, then such Person shall not
be deemed to be an "Acquiring Person" for any purposes of the Rights
Agreement. As used herein, (1) "Contrarian" means collectively, at any
time of determination, Contrarian Capital Advisors, L.L.C., Contrarian
Capital Management, L.L.C. and Contrarian Capital Fund II, L.P., and
their respective affiliates and associates (as such terms are defined in
SEC Rule 12b-2) at such time; (2) "Franklin" means collectively, at any
time of determination, Franklin Advisers, Inc., Franklin Resources,
Inc., Charles B. Johnson and Rupert H. Johnson, and their respective
affiliates and associates at such time; (3) "Qualifying Contrarian
Transferee" means any Person (including such Person's affiliates and
associates) other than


                                     - 3 -


Contrarian which acquires in a single transaction, either from Contrarian or
from a Qualifying Contrarian Transferee, not more than 2,859,529 Common Shares
of the Company, provided that immediately following such transaction, the
aggregate number of Common Shares beneficially owned by such acquiring Person
and its affiliates and associates (x) constitutes 20.0% or more of the Common
Shares of the Company outstanding at the time of such transaction and (y) does
not exceed the lesser of (i) 2,859,529 Common Shares or (ii) the aggregate
number of Common Shares beneficially owned immediately prior to such transaction
by the transferor and its Affiliates and Associates; provided, further, that
within ten (10) calendar days after the date of such transaction, such acquiring
Person shall deliver a written notice to the Company at its principal executive
office, stating that such Person is a Qualifying Contrarian Transferee, and
setting forth (A) the date of such transaction, (B) the aggregate number of
Common Shares acquired in such transaction, (C) the name and address of each
Person from whom Common Shares were acquired in such transaction, and (D) the
aggregate number of Common Shares beneficially owned immediately following such
transaction by such acquiring Person and its affiliates and associates; and (4)
"Qualifying Franklin Transferee" means any Person (including such Person's
Affiliates and Associates) other than Franklin who acquires in a single
transaction, either from Franklin or from a Qualifying Franklin Transferee, not
more than 2,512,769 Common Shares of the Company, provided that immediately
following such transaction, the aggregate number of Common Shares beneficially
owned by such acquiring Person and its Affiliates and Associates (x) constitutes
20.0% or more of the Common Shares of the Company outstanding at the time of
such transaction and (y) does not exceed the lesser of (i) 2,512,769 Common
Shares or (ii) the aggregate number of Common Shares beneficially owned
immediately prior to such transaction by the transferor and its Affiliates and
Associates; provided, further, that within ten (10) calendar days after the date
of such transaction, such acquiring Person shall deliver a written notice to the
Company at its principal executive office, stating that such Person is a
Qualifying Franklin Transferee, and setting forth (A) the date of such
transaction, (B) the aggregate number of Common Shares acquired in such
transaction, (C) the name and address of each Person from whom Common Shares
were acquired in such transaction, and (D) the aggregate number of Common Shares
beneficially owned immediately following such transaction by such acquiring
Person and its affiliates and associates.

         The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for Common Shares
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.

         The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 24, 2009 (the "Final Expiration Date"), unless the Rights
are earlier redeemed or exchanged by the Company, as described below.

         The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution 


                                     - 4 -


(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for or purchase
Preferred Shares at a price, or securities convertible into Preferred Shares
with a conversion price, less than the then-current market price of the
Preferred Shares or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness, assets or capital stock (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Preferred Shares) or of subscription rights or warrants (other than
those referred to above). With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. The Company will not be required to issue
fractional Common Shares or Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash may be made based on the market price of the
Common Shares or Preferred Shares on the last trading day prior to the date of
exercise.

         Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share. Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to the greater of (1) a
preferential quarterly dividend payment of $1.00 per share, or (2) an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a
preferential liquidation payment of $100 per share, plus an amount equal to 100
times the aggregate amount to be distributed per share of common stock of 100
times the payment made per Common Share. Each Preferred Share will have 100
votes, voting together with the Common Shares except as otherwise required by
law. Finally, in the event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.

         If any person or group becomes an Acquiring Person, then each holder of
a Right (other than Rights beneficially owned by the Acquiring Person, any
Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement), and certain transferees thereof, which will be void) will have the
right to receive upon exercise of such Right that number of Common Shares (or,
in certain circumstances, cash, property or other securities of the Company)
having a market value of two times the exercise price of the Right.

         If at any time after the time that any person or group becomes an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
(other than Rights beneficially owned by the Acquiring Person, any Associate or
Affiliate thereof, and certain transferees thereof, which will be void) will
thereafter have the right to receive, upon the exercise thereof at the
then-current exercise price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right.

         At any time after the time that any person or group becomes an
Acquiring Person and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Shares, the Board 


                                     - 5 -


of Directors of the Company may exchange the Rights (other than Rights
beneficially owned by such person or group, any Associate or Affiliate thereof,
and certain transferees thereof, which will be void), in whole or in part, at an
exchange ratio equal to the greater of (i) one Common Share per Right (subject
to adjustment), or (ii) a number of Common Shares per Right equal to the result
obtained by (x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) the then-current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d) of the Rights
Agreement). The Board in making such exchange may, at its option, substitute
Preferred Shares for Common Shares at the initial rate of one one-hundredth of a
Preferred Share for each Common Share.

         At any time prior to the time that any person becomes an Acquiring
Person, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right, subject to adjustment (the
"Redemption Price"), which may (at the option of the Company) be paid in cash,
Common Shares or other consideration deemed appropriate by the Board of
Directors. The redemption of the Rights 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; provided, however, that no redemption will be
permitted or required after the time that any person becomes an Acquiring
Person. Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will be to
receive the Redemption Price.

         The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
make the Rights redeemable if the Rights are not then redeemable in accordance
with the terms of the Rights Agreement or may adversely affect the interests of
the holders of the Rights.

         Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.

         The Rights will have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors.

A copy of the Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the Form of
Certificate of Designations, as Exhibit B the Form of Rights Certificate, as
Exhibit C the Summary of Rights to Purchase Preferred Stock, and as Exhibit D
the form of irrevocable proxy, is filed as Exhibit 1 to the Company's
Registration Statement on Form 8-A dated March 24, 1999, filed with the
Commission, and is incorporated herein by reference. The foregoing description
of the Rights is qualified by reference to such exhibit.




                                     - 6 -


Item 7.  Financial Statements and Exhibits.

         1.       Rights Agreement, dated as of March 24, 1999, between Harvard
                  Industries, Inc. and State Street Bank and Trust Company as
                  Rights Agent, which includes (i) as Exhibit A thereto the form
                  of Certificate of Designation of the Series A Junior
                  Participating Preferred Stock, (ii) as Exhibit B thereto the
                  form of Right certificate (separate certificates for the
                  Rights will not be issued until after the Distribution Date),
                  (iii) as Exhibit C thereto the Summary of Stockholder Rights
                  Agreement, and (iv) as Exhibit D thereof the form of
                  Irrevocable Proxy.(1)

         2.       Press Release, dated March 24, 1999.

         3.       Form of Letter to Harvard Industries, Inc. stockholders, dated
                  March 24, 1999.

                                   SIGNATURES

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

Date:  March 24, 1999                   HARVARD INDUSTRIES, INC.


                                        By:   /s/ Roger G. Pollazzi

                                             Name:  Roger G. Pollazzi
                                             Title: Chairman and Chief Executive
                                                    Officer




- -------------------------
(1) Incorporated by reference to the Registrant's Registration Statement on Form
8-A, dated March 24, 1999 and filed by the Registrant with the Commission
(Commission File No. 0-21362).




                                     - 7 -



                                  EXHIBIT INDEX

     Exhibit                          Description
     Number                           -----------
     ------

        1         Rights Agreement, dated as of March 24, 1999, between Harvard
                  Industries, Inc. and State Street Bank and Trust Company as
                  Rights Agent, which includes (i) as Exhibit A thereto the form
                  of Certificate of Designation of the Series A Junior
                  Participating Preferred Stock, (ii) as Exhibit B thereto the
                  form of Right certificate (separate certificates for the
                  Rights will not be issued until after the Distribution Date),
                  (iii) as Exhibit C thereto the Summary of Stockholder Rights
                  Agreement, and (iv) as Exhibit D thereto the form of
                  Irrevocable Proxy.(1)

        2         Press Release, dated March 24, 1999.

        3         Form of Letter to Harvard Industries, Inc. stockholders, dated
                  March 24, 1999.












- -------------------
(1) Incorporated by reference to the Registrant's Registration Statement on Form
8-A, dated March 24, 1999 and filed by the Registrant with the Commission
(Commission File No. 0-21362).




                                     - 8 -

EX-99.2

                                                                       EXHIBIT 2


                   HARVARD INDUSTRIES, INC. DECLARES DIVIDEND
                 DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS

         LEBANON, NJ - March 24, 1999 -- The Board of Directors of Harvard
Industries, Inc. today announced the adoption of a stockholder rights agreement
and declared a dividend distribution of one Preferred Share Purchase Right on
each outstanding share of Harvard Industries, Inc. common stock. The Rights are
designed to assure that all of Harvard Industries, Inc.'s stockholders receive
fair and equal treatment in the event of a proposed takeover of the Company and
to guard against partial tender offers, squeeze-outs, open market accumulations
and other abusive tactics to gain control of Harvard Industries, Inc. without
paying all stockholders a control premium.

         Each Right will entitle stockholders to buy one one-hundredth of a
share of a new series of junior participating preferred stock at an exercise
price of $30. The Rights will be exercisable only if a person or group (other
than certain excepted persons, including certain current stockholders and their
affiliates and transferees) acquires 20% or more of Harvard Industries, Inc.'s
common stock or announces a tender offer the consummation of which would result
in ownership by a person or group of 20% or more of the common stock.

         If a person or group (other than the excepted persons) acquires 20% or
more of Harvard Industries, Inc.'s outstanding common stock, each Right will
entitle its holder (other than such person or members of such group) to
purchase, at the Right's then-current exercise price, a number of Harvard
Industries, Inc.'s common shares having a market value of twice the Right's
exercise price. In addition, if at any time after a person or group (other than
the excepted persons) acquires 20% or more of the Company's common stock, the
Company is acquired in a merger or other business combination transaction, each
Right will entitle its holder to purchase, at a Right's then-current exercise
price, a number of the acquiring company's common shares having market value at
the time of twice the Right's exercise price.

         Following the acquisition by a person or group (other than the excepted
persons) of beneficial ownership of 20% or more of the Company's common stock
and prior to an acquisition of 50% or more of the common stock, the Board of
Directors may exchange the Rights (other than Rights owned by such person or
group), in whole or in part, at an exchange ratio equal to the greater of (i)
one share of the Company's common stock per Right (subject to adjustment), or
(ii) a number of shares of the Company's common stock per Right equal to the
result obtained by (x) multiplying the then-current exercise price of the Right
by the number of one one-hundredths of a Preferred Share for which a Right is
then exercisable and dividing that product by (y) the then-current per share
market price of the Company's common stock.

         Prior to the acquisition by a person or group of beneficial ownership
of 20% or more of the Company's common stock, the Rights are redeemable for one
cent per Right at the option of the Board of Directors.

         The Rights are intended to enable all Harvard Industries, Inc.
stockholders to realize the long-term value of their investment in the Company.
The Rights will not prevent a takeover, but should 


                                     - 9 -


encourage anyone seeking to acquire the Company to negotiate with the Board
prior to attempting a takeover.

         The dividend distribution will be issued to stockholders of record as
of the close of business on April 5, 1999, and the Rights will expire on March
24, 2009 unless earlier redeemed or exchanged. The Rights distribution is not
taxable to stockholders.

         Details of the Rights distribution are contained in a letter which is
being mailed to the Company's stockholders.

         Harvard Industries, Inc., designs, develops and manufactures a broad
range of components for automotive original equipment manufacturers, the
automotive aftermarket and industrial and construction equipment applications
worldwide. Headquartered in Lebanon, N.J., Harvard's 4,500-plus employees at 15
plants in the United States and Canada produce total vehicle sealing systems, a
variety of polymer products, high-strength steel assemblies and a wide array of
high-strength aluminum, magnesium and iron products.




                                     - 10 -

EX-99.3

                                                                       EXHIBIT 3



                                 March 24, 1999

To Our Stockholders:

         Your Board of Directors today declared a dividend of Preferred Share
Purchase Rights. The Rights will be issued to stockholders of record as of the
close of business on April 5, 1999 and will expire in ten years. This letter,
along with the enclosed Summary of Stockholder Rights Agreement, describes the
Rights Agreement and explains the Board's reasons for adopting it.

         Many other companies have issued Rights similar to the kind we approved
today. We consider these Rights to be the best means currently available of
protecting the full value of your investment in the Company. The Rights
Agreement contains provisions designed to protect stockholders from the unfair
and coercive tactics that have been used in takeovers and open market stock
accumulations. The Board determined that the adoption of the Rights Agreement
would be beneficial to the Company and its stockholders because it helps assure
that the Board has adequate time to evaluate inquiries from third parties
regarding possible transactions involving the Company, and if the Board
determines that pursuing any such inquiry is in the best interests of the
Company's stockholders, to negotiate favorable terms on behalf of the
stockholders.

         Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights has no dilutive effect, will not affect reported earnings per share,
is not taxable to the Company or to you, and will not change the way in which
you can trade the Company's Common Stock. While the Rights dividend will not be
taxable to you or the Company, stockholders may, depending upon their individual
circumstances, recognize taxable income when the Rights become exercisable.

         In addition to authorizing the purchase rights, your Board today
authorized a new series of junior participating preferred stock which could be
issued in the event that the Rights become exercisable. The dividend,
liquidation and voting rights, as well as the non-redemption feature, of the
junior participating preferred shares are designed so that the value of a one
one-hundredth interest in a preferred share will approximate the economic value
of one share of the Company's Common Stock.

         These actions are more fully described in the enclosed Summary of
Stockholder Rights Agreement. As the Summary indicates, the Rights will
initially trade together with the Company's Common Stock, will be represented by
Company Common Stock certificates, do not have any voting power, are not
currently exercisable and do not become exercisable unless certain acquisition
events occur.




                                     - 11 -



         In declaring the Rights dividend, we have expressed our confidence in
the Company's future and our commitment to giving you, our stockholders, every
opportunity to participate fully in that future.

                                       On behalf of the Board of Directors,



                                       Roger G. Pollazzi
                                       Chairman and Chief Executive Officer




                                     - 12 -