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                             SPECIAL RETENTION BONUS PLAN
                              OF SILICONIX INCORPORATED

                           Effective as of January 1, 1998

INTRODUCTION

This Special Retention Bonus Plan was established by Siliconix incorporated
effective as of January 1, 1998.  The purpose of the Plan is to provide one or
more retention bonuses to key employees who remain in employment in good
standing through June 30, 1998.  A monthly bonus is payable and, for those who
remain employed in good standing at the end of the Plan's term, an additional
lump-sum deferred bonus.

SELECTION AS A PARTICIPANT IN THE SPECIAL RETENTION BONUS

You have been selected by the Siliconix Board of Directors to participate in the
Special Retention Bonus Plan.

Monthly bonuses are potentially payable for each month from January 1998 through
June 1998.  To be eligible for a monthly bonus, you must be a Siliconix employee
for the entire month.  You will be eligible to receive a deferred portion of
your bonus provided that you are a Siliconix employee on June 30, 1998.  

WHO IS NOT ELIGIBLE TO RECEIVE A RETENTION BONUS

If you are not employed in good standing on the last day of a calendar month,
you will not receive a bonus for that month.  Similarly, if you are not employed
in good standing on June 30, 1998, you will not receive the deferred portion of
your bonus.  "In good standing" means that you are either actively at work or on
an approved vacation or leave of absence on the last scheduled workday on or
before the last day of the calendar month; provided, however, that you do not
have any pending written disciplinary actions in your personnel file. 
Notwithstanding the foregoing, however, if your employment is terminated by the
Company without "Cause" (see next paragraph) after a "Change in Control" (see
OTHER INFORMATION below) has occurred and before June 30, 1998, you will be
considered employed through that date, for retention bonus calculation only.

In addition, if your employment is terminated by the Company for "Cause," you
will not receive any bonus payments that have not already been paid at the time
your employment ends.  "Cause" means an employee's willful failure to
substantially perform the employee's job duties, other than a failure resulting
from the employee's complete or partial incapacity due to physical or mental
illness or impairment, a willful act by the employee that constitutes gross
misconduct and 


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that is harmful to the Company or a material and willful violation of a federal
or state law or regulation applicable to the business of the Company.

AMOUNT OF THE RETENTION BONUS

All bonuses payable under this Plan are based on a percentage of your annual
base salary rate in effect as of January 1, 1998.  See the attached Bonus
Payment Worksheet, which illustrates the percentage of your annual base salary
rate on which your bonuses are based, as well as a payment schedule.

TIME AND FORM OF PAYMENT

Each monthly bonus you earn will be paid to you in a single cash sum as soon as
reasonably practicable after the close of the month.  If you earn the deferred
portion of your bonus, it will be paid to you as soon as reasonably practicable
after June 30, 1998.


DEATH

If you die before your employment terminates and before June 30, 1998, then you
will be deemed to have continued employment in good standing until the end of
the month in which your death occurs, so that you will earn a monthly bonus for
that month.  In addition, you will be deemed to have earned a deferred bonus
equal to 100% of the total monthly bonuses you earned, including the monthly
bonus deemed earned for the month of your death.

All earned bonuses that had not been paid to you before your death will be paid
to your surviving spouse or, if you leave no surviving spouse, to your estate.

TAXES

Before paying bonuses, Siliconix will withhold all appropriate federal, state,
local and foreign income and employment taxes.

PARACHUTE PAYMENT LIMITATIONS

In the unlikely event that the Company determines that any payment of any type
to or for the benefit of an employee, under this Plan or otherwise, by the
Company or any of its subsidiaries, parent companies, affiliates or successors,
would be deemed an "excess parachute payment" under Internal Revenue Code
section 280G, then the Company (or any of its subsidiaries, parent companies,
affiliates or successors) may reduce such payments to the extent it deems


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necessary to avoid having payments characterized as excess parachute payments. 
As a general rule, payments that are deemed to be contingent upon a change in
control are considered to be excess parachute payments once the sum of all
contingent payments reaches three times an employee's average annual
compensation.

BONUS RIGHTS CANNOT BE ASSIGNED

The rights of any person to bonus payments under this Plan may be not be made
subject to option or assignment, either by voluntary or involuntary assignment
or by operation of law, including bankruptcy, garnishment, attachment or other
creditor's process, and any act in violation of this rule shall be void.

OTHER INFORMATION

The Company has established the Plan for the benefit of eligible employees of
the Company.  The Company reserves the right to modify, suspend or terminate
this Plan at any time; provided, however, that if a "Change in Control" is
consummated before June 30, 1998, the Plan may not be modified, suspended or
terminated in any respect whatsoever after the consummation of said Change in
Control.  "Change in Control" is any corporate transaction that results in
Daimler-Benz AG owning, directly or indirectly, less than 50% of the voting
common stock of Siliconix incorporated.

All bonuses are paid from the general assets of the Company.

Nothing in the Plan may be deemed to give any individual a right to remain in
the employ of Siliconix or affect the right of Siliconix to terminate an
individual's employment at any time with or without cause.

Any dispute or controversy in connection with this Plan shall be settled
exclusively by arbitration in Santa Clara County, California, in accordance with
the rules of the American Arbitration Association.  Judgment may be entered on
the arbitrator's award in any court having jurisdiction.  Punitive damages shall
not be awarded.

This document is a complete statement of this Plan and supersedes all prior
plans, representations and proposals, written or oral, relating specifically to
this Plan.  Neither the Company nor its subsidiaries, parent companies,
affiliates or successors shall be bound by or liable to any person for any
representation, promise or inducement made by any employee or agent that is not
embodied in this document.  This document shall be construed and enforced in
accordance with California law.


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