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                                                                     EXHIBIT 4.3


                                NETSILICON, INC.
                         1998 DIRECTOR STOCK OPTION PLAN

                             AS AMENDED AND RESTATED
                                 MARCH 10, 1999


1.   PURPOSES OF THE PLAN. The purposes of this 1998 Director Stock Option Plan
are to attract and retain the best available personnel for service as Outside
Directors (as defined herein) of the Company, to provide additional incentive to
the Outside Directors of the Company to serve as Directors, and to encourage
their continued service on the Board.

All options granted hereunder shall be nonstatutory stock options.

2.   DEFINITIONS. As used herein, the following definitions shall apply:

     a.   "BOARD" means the Board of Directors of the Company.

     b.   "CODE" means the Internal Revenue Code of 1986, as amended.

     c.   "COMMON STOCK" means the Common Stock of the Company.

     d.   "COMPANY" means NETsilicon, Inc., a Massachusetts corporation.

     e.   "DIRECTOR" means a member of the Board.

     f.   "EMPLOYEE" means any person, including officers and Directors,
          employed by the Company or any Parent or Subsidiary of the Company.
          The payment of a Director's fee by the Company shall not be sufficient
          in and of itself to constitute "employment" by the Company.

     g.   "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     h.   "FAIR MARKET VALUE" means, as of any date, the value of Common Stock
          determined as follows:

          i)   If the Common Stock is listed on any established stock exchange
               or a national market system, including without limitation the
               Nasdaq National Market or The Nasdaq SmallCap Market of The
               Nasdaq Stock Market, its Fair Market Value shall be the closing
               sales price for such stock (or the closing bid, if no sales were
               reported) as quoted on such exchange or system for the last
               market trading day prior to the time of determination, as
               reported in The Wall Street Journal or such other source as the
               Administrator deems reliable;


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          ii)  If the Common Stock is regularly quoted by a recognized
               securities dealer but selling prices are not reported, the Fair
               Market Value of a Share of Common Stock shall be the mean between
               the high bid and low asked prices for the Common Stock on the
               date of determination, as reported in The Wall Street Journal or
               such other source as the Board deems reliable, or;

          iii) In the absence of an established market for the Common Stock, the
               Fair Market Value thereof shall be determined in good faith by
               the Board.

     i.   "INSIDE DIRECTOR" means a Director who is an Employee.

     j.   "OPTION" means a stock option granted pursuant to the Plan.

     k.   "OPTIONED STOCK" means the Common Stock subject to an Option.

     l.   "OPTIONEE" means a Director who holds an Option.

     m.   "OUTSIDE DIRECTOR" means a Director who is not an Employee.

     n.   "PARENT" means a "parent corporation," whether now or hereafter
          existing, as defined in Section 424(e) of the Code.

     o.   "PLAN" means this 1998 Director Stock Option Plan.

     p.   "SHARE" means a share of the Common Stock, as adjusted in accordance
          with Section 10 of the Plan.

     q.   "SUBSIDIARY" means a "subsidiary corporation," whether now or
          hereafter existing, as defined in Section 424(f) of the Internal
          Revenue Code of 1986.

3.   STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10 of the
Plan, the maximum aggregate number of Shares which may be optionized and sold
under the Plan is 800,000 Shares of Common Stock (the "Pool"). The Shares may be
authorized, but unissued, or reacquired Common Stock.

If an Option expires or becomes unexercisable without having been exercised in
full, the unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated). Shares
that have actually been issued under the Plan shall not be returned to the Plan
and shall not become available for future distribution under the Plan.

4.   ADMINISTRATION AND GRANTS OF OPTIONS UNDER THE PLAN.

     a.   PROCEDURE FOR GRANTS. All grants of Options to Outside Directors under
          this Plan shall be automatic and nondiscretionary and shall be made
          strictly in accordance with the following provisions:


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          i)   No person shall have any discretion to select which Outside
               Directors shall be granted Options or to determine the number of
               Shares to be covered by Options granted to Outside Directors.

          ii)  Each Outside Director shall be automatically granted an Option to
               purchase 25,000 Shares on the effective date of the Initial
               Public Offering of the Company's common stock or the date on
               which such person first becomes an Outside Director, whether
               through election by the shareholders of the Company or
               appointment by the Board to fill a vacancy; provided, however,
               that an Inside Director who ceases to be an Inside Director but
               who remains a Director shall not receive a First Option.

          iii) Each Outside Director shall be automatically granted an Option to
               purchase 25,000 Shares on the day following the date of the
               Company's annual stock holder's meeting each year, provided he or
               she is then an Outside Director.

          iv)  Notwithstanding the provisions of subsections (ii) and (iii)
               hereof, any exercise of an Option granted before the Company has
               obtained stockholder approval of the Plan in accordance with
               Section 16 hereof shall be conditioned upon obtaining such
               stockholder approval of the Plan in accordance with Section 16
               hereof.

          v)   The terms of each Option granted hereunder shall be as follows:

               (a)  the term of the Option shall be ten (10) years.

               (b)  the exercise price per Share shall be 100% of the Fair
                    Market Value per Share on the date of grant of the Option.
                    In the event that the date of grant of the Option is not a
                    trading day, the exercise price per Share shall be the Fair
                    Market Value on the next trading day immediately following
                    the date of grant of the Option.

               (c)  subject to Section 10 hereof, the Option shall be six (6)
                    months from the date of grant exercisable as to 50% of the
                    Shares subject thereto and shall become exercisable as to
                    the balance of the Shares subject thereto twelve (12) months
                    from the date of grant, provided that the Optionee continues
                    to serve as a Director on such dates.

          vi)  In the event that any Option granted under the Plan would cause
               the number of Shares subject to outstanding Options plus the
               number of Shares previously purchased under Options to exceed the
               Pool, then the remaining Shares available for Option grant shall
               be granted under Options to the Outside Directors on a pro rata
               basis. No further grants shall be made until such time, if any,
               as additional Shares become available for grant under the Plan
               through action of the Board or the stockholders to increase the
               number of Shares which may be issued under the Plan or through
               cancellation or expiration of Options previously granted
               hereunder.


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5.   ELIGIBILITY. Options may be granted only to Outside Directors. All Options
shall be automatically granted in accordance with the terms set forth in Section
4 hereof.

The Plan shall not confer upon any Optionee any right with respect to
continuation of service as a Director or nomination to serve as a Director, nor
shall it interfere in any way with any rights which the Director or the Company
may have to terminate the Director's relationship with the Company at any time.

6.   TERM OF PLAN. The Plan shall become effective upon the earlier to occur of
its adoption by the Board or its approval by the stockholders of the Company as
described in Section 16 of the Plan. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 11 of the Plan.

7.   FORM OF CONSIDERATION. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) consideration received
by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (v) any combination of the foregoing methods of
payment.

8.   EXERCISE OF OPTION.

     a.   PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
          hereunder shall be exercisable at such times as are set forth in
          Section 4 hereof; provided, however, that no Options shall be
          exercisable until stockholder approval of the Plan in accordance with
          Section 16 hereof has been obtained.

          An Option may not be exercised for a fraction of a Share.

          An Option shall be deemed to be exercised when written notice of such
          exercise has been given to the Company in accordance with the terms of
          the Option by the person entitled to exercise the Option and full
          payment for the Shares with respect to which the Option is exercised
          has been received by the Company. Full payment may consist of any
          consideration and method of payment allowable under Section 7 of the
          Plan. Until the issuance (as evidenced by the appropriate entry on the
          books of the Company or of a duly authorized transfer agent of the
          Company) of the stock certificate evidencing such Shares, no right to
          vote or receive dividends or any other rights as a stockholder shall
          exist with respect to the Optioned Stock, notwithstanding the exercise
          of the Option. A share certificate for the number of Shares so
          acquired shall be issued to the Optionee as soon as practicable after
          exercise of the Option. No adjustment shall be made for a dividend or
          other right for which the record date is prior to the date the stock
          certificate is issued, except as provided in Section 10 of the Plan.


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          Exercise of an Option in any manner shall result in a decrease in the
          number of Shares which thereafter may be available, both for purposes
          of the Plan and for sale under the Option, by the number of Shares as
          to which the Option is exercised.

     b.   TERMINATION OF CONTINUOUS STATUS AS A DIRECTOR. Subject to Section 10
          hereof, in the event an Optionee's status as a Director terminates
          (other than upon the Optionee's death or total and permanent
          disability (as defined in Section 22(e)(3) Of the Code)), the Optionee
          may thereafter exercise his or her Option, but only to the extent that
          the Optionee was entitled to exercise it on the date of such
          termination (but in no event later than the expiration of its ten (10)
          year term). To the extent that the Optionee was not entitled to
          exercise an Option on the date of such termination, and to the extent
          that the Optionee does not exercise such Option (to the extent
          otherwise so entitled) within the time specified herein, the Option
          shall terminate.

     c.   DISABILITY OF OPTIONEE. In the event Optionee's status as a Director
          terminates as a result of total and permanent disability (as defined
          in Section 22(e)(3) of the Code), the Optionee may thereafter exercise
          his or her Option, but only to the extent that the Optionee was
          entitled to exercise it on the date of such termination (but in no
          event later than the expiration of its ten (10) year term). To the
          extent that the Optionee was not entitled to exercise an Option on the
          date of termination, or if he or she does not exercise such Option (to
          the extent otherwise so entitled) within the time specified herein,
          the Option shall terminate.

     d.   DEATH OF OPTIONEE. In the event of an Optionee's death, the Optionee's
          estate or a person who acquired the right to exercise the Option by
          bequest or inheritance may exercise the Option, but only to the extent
          that the Optionee was entitled to exercise it on the date of death
          (but in no event later than the expiration of its ten (10) year term).
          To the extent that the Optionee was not entitled to exercise an Option
          on the date of death, and to the extent that the Optionee's estate or
          a person who acquired the right to exercise such Option does not
          exercise such Option (to the extent otherwise to entitled) within the
          time specified herein, the Option shall terminate.

9.   NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.


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10.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
     SALE.

     a.   CHANGES IN CAPITALIZATION. Subject to any required action by the
          stockholders of the Company, the number of Shares covered by each
          Option, the number of Shares which have been authorized for issuance
          under the Plan but as to which no Options have yet been granted or
          which have been returned to the Plan upon cancellation or expiration
          of an Option, as well as the price per Share covered by each such
          outstanding Option, and the number of Shares issuable pursuant to the
          automatic grant provisions of Section 4 hereof shall be
          proportionately adjusted for any increase or decrease in the number of
          issued Shares resulting from a stock split, reverse stock split, stock
          dividend, combination or reclassification of the Common Stock, or any
          other increase or decrease in the number of issued Shares effected
          without receipt of consideration by the Company; provided, however,
          that conversion of any convertible securities of the Company shall not
          be deemed to have been "effected without receipt of consideration."
          Except as expressly provided herein, no issuance by the Company of
          shares of stock of any class, or securities convertible into shares of
          stock of any class, shall affect, and no adjustment by reason thereof
          shall be made with respect to, the number or price of Shares subject
          to an Option.

     b.   DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
          or liquidation of the Company, to the extent that an Option has not
          been previously exercised, it shall terminate immediately prior to the
          consummation of such proposed action.

     c.   MERGER OR ASSET SALE. In the event of a merger of the Company with or
          into another corporation or the sale of substantially all of the
          assets of the Company, outstanding Options may be assumed or
          equivalent options may be substituted by the successor corporation or
          a Parent or Subsidiary thereof (the "Successor Corporation"). If an
          Option is assumed or substituted for, the Option or equivalent option
          shall continue to be exercisable as provided in Section 4 hereof for
          so long as the Optionee serves as a Director or a director of the
          Successor Corporation. Following such assumption or substitution, if
          the Optionee's status as a Director or director of the Successor
          Corporation, as applicable, is terminated other than upon a voluntary
          resignation by the Optionee, the Option or option shall become fully
          exercisable, including as to Shares for which it would not otherwise
          be exercisable. Thereafter, the Option or option shall remain
          exercisable in accordance with Section 8(c) through (d) above.

          If the Successor Corporation does not assume an outstanding Option or
          substitute for it an equivalent option, the Option shall become fully
          vested and exercisable, including as to Shares for which it would not
          otherwise be exercisable. In such event the Board shall notify the
          Optionee that the Option shall be fully exercisable for a period of
          thirty (30) days from the date of such notice, and upon the expiration
          of such period the Option shall terminate.


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          For the purposes of this Section 10(c), an Option shall be considered
          assumed if, following the merger or sale of assets, the Option confers
          the right to purchase or receive, for each Share of Optioned Stock
          subject to the Option immediately prior to the merger or sale of
          assets, the consideration (whether stock, cash, or other securities or
          property) received in the merger or sale of assets by holders of
          Common Stock for each Share held on the effective date of the
          transaction (and if holders were offered a choice of consideration,
          the type of consideration chosen by the holders of a majority of the
          outstanding Shares). If such consideration received in the merger or
          sale of assets is not solely common stock of the successor corporation
          or its Parent, the Board may, with the consent of the successor
          corporation, provide for the consideration to be received upon the
          exercise of the Option, for each Share of Optioned Stock subject to
          the Option, to be solely common stock of the successor corporation or
          its Parent equal in fair market value to the per share consideration
          received by holders of Common Stock in the merger or sale of assets.

11.  AMENDMENT AND TERMINATION OF THE PLAN.

     a.   AMENDMENT AND TERMINATION. The Board may at any time amend, alter,
          suspend, or discontinue the Plan, but no amendment, alteration,
          suspension, or discontinuation shall be made which would impair the
          rights of any Optionee under any grant theretofore made, without his
          or her consent. In addition, to the extent necessary and desirable to
          comply with any applicable law, regulation or stock exchange rule, the
          Company shall obtain stockholder approval of any Plan amendment in
          such a manner and to such a degree as required.

     b.   EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or termination
          of the Plan shall not affect Options already granted and such Options
          shall remain in full force and effect as if this Plan had not been
          amended or terminated.

12.  TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for all
purposes, be the date determined in accordance with Section 4 hereof.

13.  CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
state securities laws, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.


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Inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company's counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.

14.  RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

15.  OPTION AGREEMENT. Options shall be evidenced by written option agreements
in such form as the Board shall approve.

16.  STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject to approval
by the stockholders of the Company at or prior to the first annual meeting of
stockholders held subsequent to the granting of an Option hereunder. Such
stockholder approval shall be obtained in the degree and manner required under
applicable state and federal law and any stock exchange rules.


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