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


Date of Report (date of earliest event reported):

                    February 11, 1998
- -----------------------------------------------------------------



                PENN VIRGINIA CORPORATION
- -----------------------------------------------------------------

  (Exact name of registrant as specified in its charter)



    Virginia             0-753                   23-1184320
- ----------------        -------------        -------------------
(State of other         (Commission           (I.R.S. Employer
jurisdiction of         File Number)         Identification No.)
incorporation)




               One Radnor Corporate Center, Suite 200
                     100 Matsonford Road
                      Radnor, PA 19087
- -----------------------------------------------------------------
             (Address of principal executive offices)




                     (610) 687-8900
   --------------------------------------------------
  (Registrant's telephone number, including area code)






ITEM 5.   Other Events.

     On February 11, 1998, the Board of Directors of Penn 
Virginia Corporation (the "Company") adopted a shareholder rights 
plan which contemplates the issuance of preferred stock purchase 
rights to the Company's common shareholders of record as of 
February 21, 1998, as set forth in the Rights Agreement between 
the Company and American Stock Transfer & Trust Company, as 
Rights Agent, attached hereto as Exhibit 4.1 and incorporated by 
reference herein.  


     On February 11, 1998, the Company's Board of Directors also 
adopted certain amendments to the Company's Bylaws which, among 
other things, eliminate the right of holders of 20% of the shares 
of the Company's issued and outstanding stock to call a special 
shareholders' meeting and which require shareholders to give 
advance notice, and follow certain procedures, in connection with 
the nomination of directors and other proposals to be voted on at 
shareholders meetings, as set forth in the Company's Bylaws 
attached hereto as Exhibit 3.2 and incorporated by reference 
herein.


Item 7(c).   Exhibits.

3.2 Bylaws of Penn Virginia Corporation, as amended 
        February 11, 1998.

4.1     Rights Agreement, dated as of February 11, 1998, 
        between Penn Virginia Corporation and American 
        Stock Transfer & Trust Company, as Rights Agent, 
        which includes as Exhibit B thereto the Form 
        of Right certificate, incorporated herein by 
        reference to Exhibit 1.1 to the Company's 
        Registration Statement on Form 8-A, dated 
        February 20, 1998.

20.1    Press Release of the company, dated February 11, 1998.

20.2    Form of Letter to the Company's shareholders describing 
        the Rights, dated February 25, 1998.






SIGNATURE


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

PENN VIRGINIA CORPORATION


     /S/ A. James Dearlove
BY:  -------------------------------------
     A. James Dearlove
     President and Chief Executive Officer


DATED:  February 23, 1998  

EX-3.2

                  PENN VIRGINIA CORPORATION
                          BYLAWS
                 AS AMENDED FEBRUARY 11, 1998



ARTICLE 1   SHAREHOLDERS

Section 1.   Meetings.

     A.   Annual Meeting.   Unless otherwise fixed by the board 
of directors the annual meeting of shareholders for the election 
of directors and for other business shall be held on the first 
Tuesday of May in each year or, if that day is a legal holiday, 
on the first subsequent business day.

     B.   Special Meetings.   Special meetings of the 
shareholders may be called at any time by the chief executive 
officer, or a majority of the board of directors.

     C.   Place.   Meetings of the shareholders shall be held at 
such place in Philadelphia, Pennsylvania or elsewhere, as may be 
fixed by the board of directors in the notice of meeting.

     D.   Adjournments.  A Public Announcement of an adjournment 
of an annual or special meeting shall not commence a new time 
period for the giving of shareholder notices provided herein.  
For purposes of these Bylaws, "Public Announcement" includes 
without limitation (i) a press release reported by the Dow Jones 
News, Associated Press or a comparable national news service, or 
(ii) a document filed with the Securities and Exchange 
Commission.

     E.   Organization.   The Chairman of the Board of 
Directors, or, in the absence of the Chairman of the Board of 
Directors, such other officer or board member as the Board of 
Directors may designate, shall preside at each meeting of 
shareholders and may adjourn the meeting from time to time.  The 
Secretary or an Assistant Secretary shall act as secretary of 
the meeting and keep a record of the proceedings thereof.  The 
Board of Directors of the Company shall be entitled to make such 
rules or regulations for the conduct of meetings of shareholders 
as it shall deem necessary, appropriate or convenient.  Subject 
to such rules and regulations of the Board of Directors, if any, 
the chairman of the meeting shall have the right and authority 
to prescribe such rules, regulations and procedures, and to do 
all such acts as, in the judgement of such chairman, are 
necessary, appropriate or convenient for the proper conduct of 
the meeting, including without limitation, establishing an 
agenda or order of business for the meeting, establishing rules 
and procedures for maintaining order at the meeting and the 
safety of those present, limiting the participation in such 
meeting to shareholders of record of the Company and their duly 
authorized and constituted proxies, and such other persons as 
the chairman shall permit, restricting entry to the meeting 
after the time fixed for the commencement thereof, limiting the 
time allotted to questions or comments by participants, and 
regulating the opening and closing of the polls for balloting on 
matters which are to be voted on by ballot.  Unless, and to the 
extent,



 determined by the Board of Directors or the chairman of the 
meeting, meetings of shareholders shall not be required to be 
held in accordance with the rules of parliamentary procedure.


Section 2.   Notice.

Written notice of the time and place of all meetings of 
shareholders and of the purpose of each special meeting of 
shareholders shall be given to each shareholder entitled to vote 
thereat at least ten days before the date of the meeting, unless 
a greater period of notice is required by law in a particular 
case.


Section 3.   Voting.

     A.   Voting Rights.  Except as otherwise provided herein, 
or in the Articles of Incorporation, or by law, every 
shareholder shall have the right at every shareholders' meeting 
to one vote for every share standing in his name on the books of 
the Company which is entitled to vote at such meeting.  Every 
shareholder may vote either in person or by proxy.

     B.   Election of Directors.  At each annual meeting the 
shareholders shall elect eight directors who shall constitute 
the entire Board.

     C.   Nomination of Directors.  Nominations for the election 
of directors may be made by the Board of Directors or by any 
shareholder (a "Nominator") entitled to vote in the election of 
directors.  Such nominations, other than those made by the Board 
of Directors, shall be made in writing pursuant to timely notice 
delivered to or mailed and received by the Secretary of the 
Company as set forth in this Section 3C.  To be timely in 
connection with an annual meeting of shareholders, a Nominator's 
notice, setting forth the name and address of the person to be 
nominated, shall be delivered to or mailed and received at the 
principal executive offices of the Company 



not less than 90 days nor more than 180 days prior to the 
earlier of the date of the meeting or the corresponding date on 
which the immediately preceding year's annual meeting of 
shareholders was held; provided, however, that with respect to 
the annual meeting of shareholders to be held in 1998, notice by 
the shareholder to be timely must be delivered not later than 
the tenth day following the day on which Public Announcement of 
the date of such meeting is first made by the Company.  To be 
timely in connection with any election of a director at a 
special meeting of the shareholders, a Nominator's notice, 
setting forth the name and address of the person to be 
nominated, shall be delivered to or mailed and received at the 
principal executive offices of the Company not later than the 
close of business on the tenth day following the day on which 
notice of the date of the meeting was mailed or Public 
Announcement of such meeting was made, whichever first occurs.  
At such time, the Nominator shall also submit written evidence, 
reasonably satisfactory to the Secretary of the Company, that 
the Nominator is a shareholder of the Company and shall identify 
in writing (i) the name and address of the Nominator, (ii) the 
number of shares of each class of capital stock of the Company 
of which the Nominator is the beneficial owner, (iii) the name 
and address of each of the persons, if any, with whom the 
Nominator is acting in concert and (iv) the number of shares of 
capital stock of which each such person with whom the Nominator 
is acting in concert is the beneficial owner pursuant to which 
the nomination or nominations are to be made.  At such time, the 
Nominator shall also submit in writing (i) the information with 
respect to each such proposed nominee that would be required to 
be provided in a proxy statement prepared in accordance with 
Regulation 14A under the Securities Exchange Act of 1934, as 
amended, and (ii) a notarized affidavit executed by each such 
proposed nominee to the effect that, if elected as a member of 
the Board of Directors, he will serve and that he is eligible 
for election as a member of the Board of Directors.  Within 30 
days (or such shorter time period that may exist prior to the 
date of the meeting) after the Nominator has submitted the 
aforesaid items to the Secretary of the Company, the Secretary 
of the Company shall determine whether the evidence of the 
Nominator's status as a shareholder submitted by the Nominator 
is reasonably satisfactory and shall notify the Nominator in 
writing of such determination.  If the Secretary of the Company 
finds that such evidence is not reasonably satisfactory, or if 
the Nominator fails to submit the requisite information in the 
form or within the time indicated, such nomination shall be 
ineffective for the election at the meeting at which such person 
is proposed to be nominated.  The presiding person at each 
meeting of shareholders shall, if the facts warrant, determine 
and declare at the meeting that a nomination was not made in 
accordance with the procedures prescribed by these Bylaws, and 
if he should so determine and so declare, the nomination shall 
be disregarded.  The requirements of this Section 3C shall be in 
addition to any other requirements imposed by these Bylaws, by 
the Company's Articles of Incorporation or by law and in no 
event shall the periods specified herein be in derogation of 
other time periods required by law.




Section 4.   Quorum.

The presence, in person or by proxy, of the holders of a 
majority of the outstanding shares of stock of the Company 
entitled to vote at a meeting shall constitute a quorum.  If a 
quorum is not present, no business shall be transacted except to 
adjourn to a future time.


Section 5.  Shareholder Proposals.  

No proposal by a shareholder may be voted upon at a meeting of 
shareholders unless the proposing shareholder shall have 
delivered or mailed in a timely manner (as set forth herein) and 
in writing to the Secretary of the Company (A) notice of such 
proposal, (B) the text of the proposed alteration, amendment or 
repeal, if such proposal relates to a proposed change to the 
Company's Articles of Incorporation or Bylaws, (C) evidence 
reasonably satisfactory to the Secretary of the Company of such 
shareholder's status as such and of the number of shares of each 
class of capital stock of the Company of which such shareholder 
is the beneficial owner, (D) a list of the names and addresses 
of other beneficial owners of shares of the capital stock of the 
Company, if any, with whom such shareholder is acting in 
concert, and the number of shares of each class of capital stock 
of the Company beneficially owned by each such beneficial owner 
and (E) an opinion of counsel, which counsel and the form and 
substance of which opinion shall be reasonably satisfactory to 
the Board of Directors of the Company, to the effect that the 
Articles of Incorporation or Bylaws resulting from the adoption 
of such proposal would not be in conflict with the laws of the 
Commonwealth of Virginia if such proposal relates to a proposed 
change to the Company's Articles of Incorporation or Bylaws.  To 
be timely in connection with an annual meeting of shareholders, 
a shareholder's notice and other aforesaid items shall be 
delivered to or mailed and received at the principal executive 
offices of the Company not less than 90 nor more than 180 days 
prior to the earlier of the date of the meeting or the 
corresponding date on which the immediately preceding year's 
annual meeting of shareholders was held; provided, however, that 
with respect to the annual meeting of shareholders to be held in 
1998, notice by the shareholder to be timely must be delivered 
not later than the tenth day following the day on which Public 
Announcement of the date of such meeting is first made by the 
Company.  To be timely in connection with the voting on any such 
proposal at a special meeting of the shareholders, a 
shareholder's notice and other aforesaid items shall be 
delivered to or mailed and received at the principal executive 
offices of the Company not later than the close of business on 
the tenth day following the day on which such notice of date of 
the meeting was mailed or Public Announcement was made whichever 
first occurs.  Within 30 days (or such shorter period that may 
exist prior to the date of the meeting) after such shareholder 
shall have submitted the aforesaid items to the Secretary of the 
Company, the Secretary shall determine whether the items to be 
ruled upon by the Secretary are reasonably satisfactory and 
shall notify such shareholder in writing of such determination. 
 If such shareholder fails to submit a required item in the form 
or within the time indicated, or if the Secretary  determines 
that the items to be ruled upon by the Secretary are 



not reasonably satisfactory, then such proposal by such 
shareholder may not be voted upon by the shareholders of the 
Company at such meeting of shareholders.  The presiding person 
at each meeting of shareholders shall, if the facts warrant, 
determine and declare at the meeting that a proposal was not 
made in accordance with the procedures prescribed by these 
Bylaws, and if he should so determine and so declare the 
proposal shall be disregarded.  The requirements of this Section 
5 shall be in addition to any other requirements imposed by 
these Bylaws, by the Company's Articles of Incorporation or by 
law and in no event shall the periods specified herein be in 
derogation of other time periods required by law.



ARTICLE 2   DIRECTORS

Section 1.   Term of Office.

Each director elected at an annual meeting of the shareholders 
shall hold office until the next annual meeting, unless properly 
removed or disqualified, and until such further time as his 
successor is elected and has qualified.


Section 2.    Powers.

The business of the Company shall be managed by the board of 
directors which shall have all powers conferred by law and these 
bylaws.  The board of directors shall elect, remove or suspend 
officers, determine their duties and compensations, and require 
security in such amounts as it may deem proper.


Section 3.   Meetings.

     A.   Regular Meetings.  Regular meetings shall be held at 
such times as the board shall designate by resolution.  Notice 
of regular meetings need not be given.

     B.   Special Meetings.  Special meetings of the board may 
be called at any time by the chief executive officer and shall 
be called by him upon the written request of one-third of the 
directors.  Written notice of the time, place and the general 
nature of the business to be transacted at each special meeting 
shall be given to each director at least three days before such 
meeting.

   C.   Place.  Meetings of the board of directors shall be held 
at such place as the board may designate or as may be designated 
in the notice calling the meeting.



Section 4.    Quorum.

A majority of the number of directors in office immediately 
before the meeting begins shall constitute a quorum for the 
transaction of business at any meeting and, except as provided 
in Article VII, the acts of a majority of the directors present 
at any meeting at which a quorum is present shall be the acts of 
the board of directors.


Section 5.   Vacancies.

Vacancies in the board of directors shall be filled by vote of a 
majority of the remaining members of the board though less than 
a quorum.  Such election shall be for the balance of the 
unexpired term or until a successor is duly elected by the 
shareholders and has qualified.



ARTICLE 3   BOARD COMMITTEES

Section 1.   Executive Committee.

The board of directors by resolution of a majority of the number 
of directors then in office may designate three or more 
directors to constitute an executive committee, which, to the 
extent provided in such resolution, shall have and may exercise 
all the authority of the board of directors except to approve an 
amendment of the Company's articles of incorporation or a plan 
of merger or consolidation.  If an executive committee is so 
designated it will elect one of its members to be its chairman.


Section 2.   Compensation and Benefits Committee.

The board of directors by resolution of a majority of the number 
of directors then in office may designate three or more outside 
directors to constitute a compensation and benefits committee, 
which shall have such power and authority as may be provided in 
such resolution.


Section 3.   Other Committees.

The board of directors by resolution of a majority of the number 
of directors then in office may create or disband other 
committees, as deemed to be proper.



ARTICLE 4   OFFICERS

Section 1.   Election.

At its first meeting after each annual meeting of the 
shareholders, the board of directors shall elect a president, 
treasurer and secretary, and such other officers as it deems 
advisable.  Any two or more offices may be held by the same 
person except the offices of president and secretary.


Section 2.   Chairman and President.

     A.   Chairman.  The chairman shall preside at all meetings 
of the board and of the shareholders.  If so designated by the 
board of directors, the chairman shall be the chief executive 
officer.

     B.   President.  The president shall be either the chief 
executive officer or the chief operating officer of the Company, 
as designated by the board of directors.  The president shall 
have such duties as the board of directors and the chairman of 
the Company shall prescribe.


Section 3.   Other Officers.

The duties of the other officers shall be those usually related 
to their offices, except as otherwise prescribed by resolution 
of the board of directors.


Section 4.   General.

In the absence of the chairman and president, the person who has 
served longest as vice president or any other officer designated 
by the board shall exercise the powers and perform the duties of 
the chief executive officer or chief operating officer or both.

The chief executive officer or any officer or employee 
authorized by him may appoint, remove or suspend agents or 
employees of the Company and may determine their duties and 
compensation.


ARTICLE 5  INDEMNIFICATION

Section 1.   Right to Indemnification.

Subject to Section 3, the Company shall indemnify any person who 
was or is a party or threatened to be a party to any threatened, 
pending or completed action, suit or proceeding, whether civil, 
criminal, administrative or investigative, and whether formal or 
informal, and whether or not by or in the right of the 
corporation, by reason of the fact that he is or was a director 
or officer of the Company, or, while a director or officer of 
the Company, is or was serving at the request of the Company as 
a director, officer, partner, trustee, administrator, employee 
or agent of another corporation, partnership, joint venture, 
trust, employee benefit plan or other enterprise, for expenses 
(including attorney's fees), judgments, fines, penalties, 
including any excise tax assessed with respect to an employee 
benefit plan, and amounts paid in settlement actually and 
reasonably incurred by him in connection with such action, suit 
or proceeding, to the fullest extent and manner permitted by the 
Virginia Corporation Law as the same exists or may hereafter be 
amended (but, in the case of any such amendment, only to the 
extent that such amendment permits the Company to provide 
broader indemnification rights than permitted prior to such 
amendment).


Section 2.    Advance of Expenses.

Subject to Section 3, expenses incurred by a director or officer 
of the Company in defending a civil or criminal action, suit or 
proceeding shall be paid by the Company in advance of the final 
disposition of such action, suit or proceeding upon receipt of 
an undertaking by or on behalf of the director or officer to 
repay such amount if it shall ultimately be determined that he 
is not entitled to be indemnified by the Company.


Section 3.    Procedure for Determining Permissibility.

The procedure for determining the permissibility of 
indemnification pursuant to Article 5 (including the advance of 
expenses), shall be that set forth in Section 13.1-701.B of the 
Virginia Corporation Law, provided that, if there has been a 
change in control of the Company between the time of the action 
or failure to act giving rise to the claim for indemnification 
and such claim, then at the option of the person seeking 
indemnification, the permissibility of indemnification shall be 
determined by special legal counsel selected jointly by the 
Company and the person seeking indemnification.  The reasonable 
expenses of any director or officer in prosecuting a successful 
claim for indemnification, and the fees and expenses of any 
special legal counsel engaged to determine permissibility of 
indemnification, shall be borne by the Company.


Section 4.   Contractual Obligation; Inuring of Benefit.

The obligations of the Company to indemnify a person under this 
Article V, including the obligation to advance expenses, shall 
be considered contractual obligations of the Company to such 
person, subject only to the determination of permissibility as 
set forth in the preceding Section, and no modification or 
repeal of any provision of this Article V shall affect, to the 
detriment of such person, the obligations of the Company in 
connection with a claim based on any act or failure to act 
occurring before such modification or repeal.  The obligations 
of the Company to indemnify a person under this Article V, 
including the obligation to advance expenses, shall inure to the 
benefit of the heirs, executors and administrators of such 
person.


Section 5.   Insurance and Other Indemnification.

The board of directors of the Company shall have the power but 
shall not be obliged to (a) purchase and maintain, at the 
Company expense, insurance on behalf of the Company and its 
director, officers, employees and agents against liabilities 
asserted against any of them, including the Company's 
obligations to indemnify and advance expenses, to the extent 
that power to do so is not prohibited by applicable law, and (b) 
give other indemnification to the extent not prohibited by 
applicable law.



ARTICLE 6  CERTIFICATES OF STOCK

Section 1.    Share Certificates.

Every shareholder of record shall be entitled to a share 
certificate representing the shares held by him. Every share 
certificate shall bear the corporate seal and the signature of 
the president or a vice president and the secretary or an 
assistant secretary or treasurer of the Company.


Section 2.    Transfers.

Shares of stock of the Company shall be transferable on the 
books of the Company only by the registered holder or by duly 
authorized attorney.  A transfer shall be made only upon 
surrender of the share certificate.  Any restrictions which are 
deemed to be imposed on the transfer of the Company's securities 
by the Shareholder Rights Agreement dated as of February 11, 
1998 between the Company and American Stock Transfer & Trust 
Company, as 


it may be amended from time to time, or by any successor or 
replacement rights plan or agreement, are hereby authorized.



ARTICLE 7  AMENDMENTS

These bylaws may be changed at any regular or special meeting of 
the board of directors by the vote of a majority of the number 
of directors in office immediately before the meeting or at any 
annual or special meeting of shareholders by the vote of the 
shareholders entitled to vote as required by law.  Notice of any 
such meeting of shareholders shall set forth the proposed change 
or a summary thereof.

EX-20.1

                  Penn Virginia Corporation

               One Radnor Corporate Center, Suite 200
                100 Matsonford Road, Radnor, PA 19087


FOR IMMEDIATE RELEASE

Contact:   Steven W. Tholen,
           Vice President and Chief Financial Officer
           (610) 687-8900  Fax: (610) 687-3688

    PENN VIRGINIA CORPORATION ADOPTS SHAREHOLDER RIGHTS PLAN
- ---------------------------------------------------------------


     RADNOR, PA, FEBRUARY 11, 1998.  Penn Virginia Corporation 
(NYSE: PVA) today announced that the Board of Directors adopted a 
shareholder rights plan as well as certain bylaw amendments.

     Pursuant to the plan, the Board declared a distribution of 
one right for each share of common stock which is outstanding on 
February 21 , 1998.  Common stock issued after February 21, 1998 
will be issued with an attached right.  Each right entitles the 
holder to purchase one one-thousandth of a share of preferred 
stock at an initial exercise price of $100 per share.

     Initially, the rights will be attached to the Company's 
common stock and will not be exercisable.  Rights become 
exercisable only after 10 days following the acquisition by a 
person or group of 15 percent or more of the outstanding common 
stock or 10 business days (or a later date following such 
announcement if determined by the Board of Directors in 
accordance with the plan) after the announcement of a tender 
offer or exchange offer to acquire 15 percent or more of the 
outstanding common stock.

     If such a person or group acquires 15 percent or more of the 
common stock, each right (other than such person's or group's 
rights, which will become void) will entitle the holder to 
purchase, at the exercise price, common stock having a market 
value equal to twice the exercise price.  The rights will have a 
similar effect if after they become exercisable the Company 
merges or effects certain other transactions.

     In certain circumstances, the rights may be redeemed by the 
Company at an initial redemption price of $.001 per right.  If 
not redeemed, they will expire on February 21, 2008.

     A summary of the rights plan will be provided to Penn 
Virginia's shareholders shortly after the record date.

     The bylaw amendments eliminate the ability of holders of 20% 
of the common stock to call shareholder meetings and require 
shareholders to give advance notice of director nominations and 
other proposals to be voted on at shareholders meetings.

     PVA is an energy company engaged primarily in the leasing of 
mineral rights, collection of royalties, and development and 
production of oil and natural gas.  PVA is headquartered in 
Radnor, PA.

EX-20.2

          [on Penn Virginia Corporation letterhead]





                       February 25, 1998


Dear Fellow Shareholders:

     Your Board of Directors has announced the adoption of a 
Shareholder Rights Plan (the "Plan").  I am enclosing a document 
called "Summary of Rights to Purchase Preferred Stock," which 
provides certain information about the Plan, and I urge you to 
read it carefully.  This letter explains some of the Board's 
reasons for adopting the Plan.

     The Plan is intended to assure that all of the Company's 
shareholders receive fair and equal treatment in the event of any 
proposed takeover of the Company and to protect shareholders' 
interests in the event the Company is confronted with partial 
tender offers or other coercive or unfair takeover tactics.

     Because I believe it is important that we communicate the 
purpose of this Plan and its effect on you as shareholders as 
clearly as possible, I am outlining below the primary elements of 
the Plan:

     The Plan provides for a dividend of Rights which initially 
enables the shareholders to purchase shares of a newly authorized 
series of the Company's Preferred Stock.  Each shareholder of 
record as of February 21, 1998 will receive one Right for each 
share of the Company's Common Stock owned.

     The Rights cannot be exercised until one of the following 
events occurs:

      -- An individual or group acquires 15% or more of 
         the Company's Common Stock (an "Acquiring Person"),

or

     -- an individual or group begins a tender offer for 15% 
        or more of the Company's Common Stock.

     Shortly after one or more of these events occurs, the 
Company will send each shareholder a separate Right Certificate.  
The shareholder may then sell this Right or transfer it 
independent of the share of Common Stock with which it was 
previously associated.

     If a person or group becomes an Acquiring Person, each Right 
will entitle its holder (other than such person or group) to 
purchase, for the exercise price in effect under the Plan, a 
number of shares of the Company's Common Stock having a market 
value of twice such price.

     In addition, if the Company is acquired in a merger or other 
business combination, each Right will entitle its holder (other 
than the acquiror) to purchase, for the exercise price in effect 
under the Plan, a number of shares of the acquiror's Common Stock 
having a market value of twice such price.

     The Rights can be redeemed by the Company at a price of 
$.001 per Right up to ten days after the public announcement that 
someone has become an Acquiring Person.  If, however, there has 
been a change in a majority of the Board as a result of a proxy 
contest, and a person who was a participant in the contest has 
indicated an intention to become (or the board determines that 
such person intends to become) an Acquiring Person, then the 
redemption of the Rights will require the approval of a majority 
of at least two Continuing Directors of the Company.  A 
"Continuing Director" is a member of the Board of Directors of 
the Company who is neither an Acquiring Person nor affiliated 
with an Acquiring Person and was either a member of the Board 
prior to the distribution of the Rights or subsequently became a 
member of the Board through recommendation or approval by a 
majority of the Continuing Directors of which there must be at 
least two then in office.  If the Rights are not redeemed by the 
Company, they will expire on February 11, 2008.

     The Plan is not intended, nor will it operate, to prevent an 
acquisition of the Company if the Board determines the terms are 
favorable and fair to all shareholders.  The Plan is designed to 
deal with the very serious problem of unilateral actions by 
hostile acquirors that are calculated to deprive your Board of 
the ability to determine the destiny of the Company.  The 
declaration of the Rights dividend should not affect any 
prospective offer at a fair price to all shareholders and 
certainly will not interfere with a merger or other business 
combination approved by your Board of Directors.

     One overriding objective of the adoption of this Plan is to 
see that the excellent progress we have made in building value 
for our shareholders continues.  While we are pleased with the 
progress we have made, there is still much to accomplish.  The 
Board believes that adoption of the Plan will permit the Company 
to continue to implement the strategies responsible for the 
progress made to date.

                    Sincerely,


                    /s/ A. James Dearlove
                    ----------------------
                    A. James Dearlove
                    President and Chief Executive Officer