<PAGE>
                                       1


     ALL SECTIONS MARKED WITH TWO ASTERISKS  ("**") REFLECT  PORTIONS WHICH HAVE
BEEN REDACTED AND FILED  SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION
BY ROSS TECHNOLOGY, INC. AS PART OF A REQUEST FOR CONFIDENTIAL TREATMENT.

                              SEPARATION AGREEMENT


         This Separation  Agreement  (hereafter the "Agreement"),  made this 5th
day of December,  1997 (the "Effective  Date"), is entered into by Roger D. Ross
(hereinafter  "Ross"),  an  individual,  and ROSS  Technology,  Inc., a Delaware
corporation (the "Company").

                                    RECITALS

A.   WHEREAS,  Ross has been  employed by the Company,  has held the position of
     Chairman  of the  Board,  President  and  Chief  Executive  Officer  of the
     Company,  and has  served as an  officer  and  director  of  various of its
     subsidiaries;

B.   WHEREAS,  effective  March 3, 1997, Ross resigned his positions as Chairman
     of the Board,  President and Chief Executive Officer of the Company, and as
     a member of the Executive  Committee of the  Company's  Board of Directors,
     but not his positions as a Director and as an employee of the Company;

C.   WHEREAS,  Ross ceased to be a Director  of the Company on August 11,  1997;
     and

D.   WHEREAS,  Ross and the Company now wish to finally and forever  resolve all
     existing  matters  between  them,   including  matters  relative  to  Ross'
     employment,   and  to  provide  for  the   termination  of  the  employment
     relationship;

          NOW,  THEREFORE,  in consideration of the aforementioned  recitals and
     the mutual  covenants and conditions set forth below and in full settlement
     of any and all claims arising out of Ross' employment or the termination of
     that employment  which were or could have been raised by either party prior
     to the  date of this  Agreement,  Ross  and the  Company  hereby  agree  as
     follows:

                                    AGREEMENT

1.   Resignation and  Termination of Employment.  Ross has resigned as Chairman,
     President and Chief  Executive  Officer of the Company  effective  March 3,
     1997, and by this Agreement further resigns from any and all positions with
     any subsidiary or related company of the Company (including any position as
     an officer,  board or committee member or nominal or statutory  shareholder
     of any subsidiary or related  companies,  including without  limitation his
     positions with ROSS Semiconductors  (Israel) Ltd.) effective as of December
     5, 1997  (the  "Termination  Date"),  and the  Company  has  accepted  such
     resignations.  Ross  agrees to execute  such  documents  as the Company may
     reasonably  request  in  order  to  document  or  further  effectuate  such
<PAGE>
                                       2

    
    resignations.  Ross hereby  further  resigns as an employee of the Company,
     and his employment by the Company will be deemed terminated effective as of
     the Termination Date.

2.   Board of Directors.  Ross hereby acknowledges that he ceased to be a member
     of the Board of Directors of the Company (the "Board") effective August 11,
     1997.

3.   Salary, Bonus, Vacation and Non-Competition Payments.

     a.   Ross  acknowledges  that he has  received  all  unpaid  salary due him
          through the Termination Date.

     b.   Following the execution of this Agreement,  the Company shall commence
          payments to Ross in the gross amount of $234,926.66,  representing the
          unpaid  portion of Ross'  fiscal 1996 bonus  entitlement  of $281,912,
          plus  interest on the amount of said bonus from July 31, 1996  through
          the date of payment at the rate of 9% per  annum,  in full  payment of
          Ross' 1996 bonus  entitlement.  Ross  acknowledges that no other bonus
          remains  unpaid.  He further  acknowledges  that he is  entitled to no
          further or additional  bonuses or consideration for bonus for any year
          or portion thereof.

     c.   Following  the  execution of this  Agreement,  the Company  shall also
          commence  payments  to Ross  in the  gross  amount  of  $44,000,  plus
          interest on the portion of said amount  remaining  unpaid from time to
          time, computed from the Effective Date through the date of payment, at
          the rate of 9% per annum,  representing a settlement and compromise of
          Ross' claims for unpaid vacation pay.

     d.   Payment of the amounts set forth in subparagraphs  3(b) and 3(c) above
          shall be made to Ross as follows:  (i)  $92,975.55  (plus  interest as
          provided  above)  in a lump  sum on  December  18,  1997  and (ii) the
          balance of  $185,951.11  (plus  interest as  provided  above) in equal
          bi-weekly  installments  (at the same  time as the  Company's  regular
          payroll payments) over a period of 8 months commencing January 1, 1998
          and ending August 31, 1998.

     e.   From the gross  amounts set forth  above,  there shall be withheld all
          governmentally-mandated withholding amounts. From the initial lump sum
          payment  pursuant  to  subparagraph  3(d)  above,  there shall also be
          deducted an amount equal to $27,917 to  reimburse  the Company for the
          cost of  equipment,  including  two  Micron  computers,  purchased  at
          Company  expense  for use by Ross,  which  computers  (and  any  other
          equipment  for  which  the  Company  is  so  reimbursed)   are  hereby
          transferred and assigned to Ross.

     f.   As  additional  compensation  to Ross  for  his  compliance  with  the
          provisions  of paragraph 12 and  subparagraphs  16(a) and 16(b) hereof
          for the  period  from  March 3, 1997  through  December  4,  1997,  on
          December  18,  1997  the  Company  shall  
<PAGE>
                                       3


          pay to Ross the lump sum  of$75,000.  Ross  acknowledges  that no
          other amount is due him for such period.

4.   Consultancy. Ross shall render services to the Company as a consultant on a
     non-exclusive  and non-full-time  basis as an independent  contractor for a
     term  commencing  on the  Effective  Date and  ending on May 15,  2000 (the
     "Consultancy  Period").  During such  consultancy Ross shall be paid at the
     rate  of  $10,842.77  bi-weekly,  from  which  all  governmentally-mandated
     withholding amounts shall be deducted, with the first payment to be made on
     the Company's  first regular payroll payment date occurring on or after the
     date of execution of this Agreement.  Ross shall render services during the
     consultancy as follows:

     a.   Ross shall make himself  reasonably  available for consulting with the
          Company at such times as the Company may reasonably  require,  subject
          to Ross' prior business and professional  commitments,  prior vacation
          plans and absences due to illness or injury. Ross shall not, except in
          connection with Ross'  obligations under paragraph 19, be obligated to
          provide  an  aggregate  of more than 120 hours of  service  during any
          twelve (12) month  period.  On or before the 15th day of each calendar
          month, commencing December 15, 1997, Ross shall provide to the Company
          a written  report (the  "Monthly  Report")  setting forth the services
          performed  hereunder by him during the preceding  calendar month.  The
          Monthly  Report shall be forwarded to the  Company's  Chief  Financial
          Officer at the address set forth in paragraph  42 and shall  include a
          daily  log  showing  the  number  of hours  of  service  performed,  a
          description of the services  performed in reasonable  detail,  and the
          name of the Company  official  requesting  such services.  The Company
          shall have ten (10)  business  days from its  receipt  of the  Monthly
          Report within which to review and object to Ross' calculation of hours
          of service performed. If the Company does not object to such report by
          written  notice  sent to Ross by the  last day of the  review  period,
          Ross' report shall become  conclusive  for the month at issue.  If the
          Company does object to such report,  by written notice sent to Ross by
          the last day of the  review  period,  the  parties  shall  attempt  to
          resolve the issue through  negotiation and/or mediation.  In the event
          the matter  remains  unresolved  for sixty (60) days after the date of
          the  Company's  objection,  either  party may seek  final and  binding
          resolution through arbitration pursuant to paragraph 37.

     b.   Ross  shall  provide  consulting  services  in the  manner and at such
          location (including by telephone, or in person at the Company offices)
          as the  Company  reasonably  determines  in  good  faith,  subject  to
          subparagraph 4(a) and based on the nature and urgency of the matter(s)
          on which Ross' services are sought.

     c.   The  existence of this  consultancy  shall not be deemed to create any
          duty of  loyalty  or any  non-competition  obligations  of Ross to the
          Company other than as provided in paragraph 12. It is anticipated that
          the  consultancy  will be limited to historical and technical  matters
          and will not  involve  or  relate  to  future  long-term  plans of the
          Company.
<PAGE>
                                       4


     d.   Ross shall be reimbursed  for all  reasonable  out-of-pocket  expenses
          incurred in connection with any consulting  services rendered pursuant
          to this paragraph 4, including but not limited to reasonable  expenses
          incurred for travel to the location of any consulting services outside
          of the Austin, Texas area. Such expenses shall be incurred, documented
          and  reimbursed  in  accordance  and  consistent  with  the  Company's
          then-existing  policies for  consultants.  No travel expenses shall be
          incurred without the Company's prior written consent.

     e.   It is expressly contemplated that Ross may accept full time employment
          during the  consultancy.  There shall be deducted  from the  aggregate
          consultant's  compensation  set forth in this paragraph 4 and the lump
          sum payment described in subparagraph  3(f) a "Mitigation  Adjustment"
          in an amount equal to fifty percent  (50%) of any amounts  received by
          Ross as "cash"  compensation  (essentially  the aggregate of all wage,
          salary,  commission  and bonus  compensation)  as an  employee  of, or
          consultant,  adviser or independent contractor to, another employer or
          from  self-employment  (excluding  amounts  payable  to him under this
          Agreement)  in which he is  engaged  during  the  Consultancy  Period;
          provided, however, that should Ross be employed by, or render services
          to, an entity or venture in which he becomes an investor, stockholder,
          optionholder, proprietor, partner or other participant, in, his annual
          cash  compensation  from such  venture or entity for  purposes of this
          paragraph  shall be deemed to be the  greater of (i) his  actual  cash
          compensation  or (ii)  $225,000,  and further  provided that no amount
          earned  during the first three  months  following  the initial date of
          such  employment  or  provision  of services  shall be included in the
          amount of the Mitigation  Adjustment,  it being  understood and agreed
          for  purposes of such  exception  that the amount  earned  during this
          period  will not be  disproportionately  high as  compared  with Ross'
          earnings during the balance of the Consultancy  Period. In the Monthly
          Report for each  calendar  month Ross shall  report to the Company any
          amounts  described in this subparagraph 4(e) that he earned during the
          preceding  calendar  month,  and the Company shall apply the resulting
          Mitigation  Adjustment to reduce the next payment(s) due Ross from the
          Company hereunder.  Should the remaining  payments,  if any, due under
          this Agreement be insufficient to offset any Mitigation  Adjustment in
          full, Ross shall promptly refund the net difference to the Company. In
          no  event  shall  the  aggregate  Mitigation   Adjustment  under  this
          subparagraph  4(e)  exceed the  aggregate  amount of the  consultant's
          compensation  payable under this paragraph 4 plus the lump sum payment
          described in subparagraph 3(f).

     f.   In the event the Company  believes that Ross has failed to comply with
          his obligations under this paragraph 4, the Company shall provide Ross
          with written  notice and the  reasonable  opportunity to cure prior to
          initiating any action with regard to any alleged breach.

5.   Benefits.  The  Company  shall pay the  Company's  share of the cost of the
     Company's  group medical  program for Ross for the period through March 31,
     1999, or such shorter period as may be required  under the Company's  group
     medical  plan,  provided  that  Ross  makes a timely  COBRA  election.  The
     Company's  obligation to continue to pay the Company's share of the cost of
     these group medical  benefits shall 
<PAGE>
                                       5


     cease upon Ross' obtaining  employment with another  employer  offering
     group medical coverage.  In the Monthly Report for each calendar month Ross
     shall report to the Company any such other employment obtained by him.

6.   Stock Options.  The parties  acknowledge that Ross has unexercised,  vested
     options  covering  59,259 shares of Common Stock of the Company as of March
     31, 1997.  The exercise  price of such  options is $3.125  share.  No other
     options will be vested in Ross,  and all unvested  options shall be treated
     as having been  cancelled and shall be of no further force or effect.  Ross
     may exercise his vested  options in accordance  with their terms during the
     ninety (90) day period  following the date of execution of this  Agreement.
     If such  options  have not been  exercised  within  such 90 day term,  then
     automatically, without any need for further action by Ross, the time within
     which to  exercise  such  options  shall be  extended  to March  31,  2000;
     provided,  however, that Ross understands that this modification  regarding
     the time within  which to exercise  the vested  options  will  deprive such
     options of any status they may have had as incentive stock options, and the
     options  shall be treated as  nonqualified  options for tax  purposes,  and
     provided,  further,  that, in the event payments to Ross under  paragraph 4
     are terminated at any time pursuant to paragraph  12(e) of this  Agreement,
     Ross must  exercise his options,  if at all, no later than ninety (90) days
     following the date of  termination of such  payments.  The options,  if not
     exercised within the applicable  foregoing exercise period, shall expire as
     of the end of such period and be of no further force or effect  thereafter.
     Ross agrees to bear all taxes and other costs  resulting  from the exercise
     of his stock options.

7.   Company Computer and Country Club Membership.

     a.   The Company  hereby  transfers to Ross on the  Effective  Date of this
          Agreement,   its  ownership   interest  in  the  computer  system  and
          commercial  personal  computer  software  Ross has  been  using at his
          residence.  Ross,  however,  shall promptly  return to the Company the
          originals and any copies of any custom or enterprise  software and all
          computer  software  and  computer  files  containing   proprietary  or
          confidential information of, or concerning,  the Company or certify to
          the  Company  due  destruction  of same.  Ross shall pay any  software
          license fees, upgrade costs, etc. due or incurred after March 31, 1997
          with respect to all hardware and software retained by him.

     b.   Ross has assigned or will assign to the  Company,  or to a designee of
          the Company,  the membership  standing in his name (and all membership
          rights including any right to any membership deposit or investment) at
          the Barton Creek Country Club.

8.   Office and Secretarial Support.

     a.   The  Company  will  continue  to lease and  provide  to Ross an office
          through  February 28, 1998;  provided,  however,  that if Ross secures
          alternative  employment or fails to use the office on a regular basis,
          Ross agrees to vacate said office  promptly and the Company shall have
          the right to  terminate  such lease or sublet such   
<PAGE>
                                       6


               space.  The  Company  shall be  responsible  only  for the  lease
          payments  and shall not be  responsible  for  utility  payments or any
          other  payments in  connection  with such office.  Upon the earlier of
          vacating the office or February 28, 1998,  Ross shall  promptly  allow
          the Company to take possession of the office furniture, file cabinets,
          etc. owned by the Company located at such premises.

     b.   The Company  will pay to Ross a  secretarial  allowance  of $5,000 per
          month for the twelve month period  commencing  when Ross has delivered
          to the Company a release (in favor of the  Company,  its  subsidiaries
          and their respective officers, directors, shareholders,  employees and
          agents) in a form  reasonably  satisfactory  to the  Company  from all
          persons  who have been  providing  secretarial  support  to Ross since
          March 3, 1997.  This  subparagraph  8(b) shall become null and void if
          the release is not provided to the Company prior to December 31, 1997.

9.   Sole  Entitlement.  Ross agrees that his sole  entitlement to compensation,
     payments  of  any  kind,  monetary  and/or  non-monetary   benefits  and/or
     perquisites  with respect to his employment with and his services  rendered
     to,  and  all  other  matters   between  Ross  and,  the  Company  and  the
     subsidiaries or affiliated corporations of the Company, is as expressly set
     forth in this Agreement.  Payment by a third party of any consideration due
     to Ross under this Agreement shall be treated for all purposes hereunder as
     a payment of such consideration by the Company.

10.  Releases by Ross.  Ross does hereby and forever  release and  discharge the
     Company and any subsidiary and  affiliated  corporations  of the Company as
     well as the successors,  shareholders (including without limitation Fujitsu
     Limited ("Fujitsu")),  officers,  directors, heirs, predecessors,  assigns,
     agents,  employees,  attorneys and representatives of each of them, past or
     present  (collectively,  the "Company Parties"),  from any and all cause or
     causes of action, actions, judgments, liens, indebtedness, damages, losses,
     claims, liabilities,  and demands of whatsoever kind or character, known or
     unknown,  suspected to exist or not suspected to exist,  anticipated or not
     anticipated,  whether or not heretofore brought before any state or federal
     court or before any state or federal agency or other  governmental  entity,
     whether  statutory or common law,  heretofore or hereafter  arising out of,
     connected  with or incidental to any dealings  between the parties prior to
     the date of execution of this Agreement,  including  without  limitation on
     the generality of the foregoing,  any and all claims,  demands or causes of
     action  attributable to, connected with, or incidental to the employment of
     Ross by the Company,  the separation of that  employment,  and any dealings
     between Ross and any of the Company Parties  concerning the Company,  Ross'
     employment or any other matter  existing  prior to the date of execution of
     this Agreement,  excepting only those obligations of the Company created by
     this  Agreement.  This  release is intended to apply to any claims  arising
     from  federal,   state  or  local  laws,  including  those  which  prohibit
     discrimination on the basis of race, national origin,  sex, religion,  age,
     marital status, pregnancy,  handicap,  perceived handicap, ancestry, sexual
     orientation,  family or personal leave or any other form of discrimination,
     any  common  law  claims  of any kind  whatever,  any  claims  for  salary,
     severance  pay,  sick leave,  family leave,  vacation pay, life  insurance,
     bonuses, stock, stock options,  incentive  compensation,  health insurance,
<PAGE>
                                       7

 
     disability   or  medical   insurance  or  any  other   fringe   benefit  or
     compensation,  and  all  rights  and  claims  arising  under  the  Employee
     Retirement  Income Security Act of 1974  ("ERISA"),  or pertaining to ERISA
     regulated benefits. In the event any shareholder released by this Agreement
     shall bring an action  against  Ross with  regard to any matters  occurring
     before the Effective  Date of this  Agreement,  Ross' release of such party
     pursuant to this  paragraph  shall be null and void from the Effective Date
     of this Agreement. This release is not intended to affect any interest Ross
     may  have as the  incidental  beneficiary  of any  judgment  or  settlement
     secured  by (or  for  the  benefit  of)  the  Company  as a  result  of any
     shareholder's derivative action; provided, however, Ross agrees he will not
     instigate, initiate or assist any such action.

11.  Releases  by the  Company.  The  Company  does  hereby  release and forever
     discharge  Ross  from  any and all  cause or  causes  of  action,  actions,
     judgments, liens, indebtedness,  damages, losses, claims, liabilities,  and
     demands of  whatsoever  kind or character,  known or unknown,  suspected to
     exist or not suspected to exist, anticipated or not anticipated, whether or
     not  heretofore  brought  before any state or  federal  court or before any
     state or federal agency or other governmental entity,  whether statutory or
     common law,  heretofore  or  hereafter  arising out of,  connected  with or
     incidental  to any  dealings  between  the  parties  prior  to the  date of
     execution of this Agreement, including without limitation on the generality
     of the  foregoing,  any  and  all  claims,  demands  or  causes  of  action
     attributable to, connected with, or incidental to the employment of Ross by
     the Company,  the separation of that  employment,  and any dealings between
     the parties  concerning the Company,  Ross'  employment or any other matter
     existing prior to the date of execution of this  Agreement,  excepting only
     those  obligations  of Ross to be performed  hereunder  and any claim which
     arises  out  of  any  intentional  and  dishonest  act  by  Ross,  such  as
     embezzlement,  discovered by the Company or its auditors  after the date of
     execution of this Agreement,  by which act Ross enriched himself improperly
     through  material  misappropriation  of  Company  assets.  This  release is
     intended to apply to any claims  arising from federal,  state or local laws
     including  those  which  prohibit  discrimination  on the  basis  of  race,
     national origin, sex, religion, age, marital status,  pregnancy,  handicap,
     perceived handicap, ancestry, sexual orientation,  family or personal leave
     or any other form of  discrimination,  or any common law claims of any kind
     whatever,  any claims for salary,  severance pay, sick leave, family leave,
     vacation pay, life  insurance,  bonuses,  stock,  stock options,  incentive
     compensation,  health  insurance,  disability  or medical  insurance or any
     other fringe  benefit or  compensation,  and all rights and claims  arising
     under the ERISA or pertaining to ERISA regulated benefits.

12.  Non-Competition.

     a.   In consideration of the compensation and other benefits being provided
          to him hereunder, Ross agrees that he will not directly or indirectly,
          at any time during the period  commencing  on March 3, 1997 and ending
          on May 15,  2000 (the  "Non-Competition  Period"),  without  the prior
          written  consent of the  Company,  except as provided  below,  compete
          with,  or render  financial or other  assistance to or assist or offer
          personal or professional  services  (whether as an employee,  officer,
          director,  
<PAGE>
                                       8

          consultant, advisor or otherwise) anywhere in the world and
          for payment or otherwise  to, any entity or  individual  to the extent
          that  such   assistance  or  services   relate  to  such  entity's  or
          individual's  competition  with,  or efforts  to compete  with (each a
          "Competitor"),  any product or service offered or under development by
          the  Company  at such time or  intended  to be  offered  in the future
          pursuant to the Company's then-applicable Board-approved business plan
          or a documented project plan approved by the Company's Chief Executive
          Officer.  Without limiting the definition of "assistance" for purposes
          of this  paragraph  12,  Ross  shall  be  considered  to be  providing
          assistance  to a  Competitor  if Ross or a Ross  Entity (as defined in
          subparagraph 16(b)) provides a product to the Competitor for resale or
          provides  a  product  design  to  the   Competitor  for   manufacture,
          distribution or sale. The prohibitions set forth in this  subparagraph
          12(a) shall be  interpreted  as provided  in  subparagraphs  12(b) and
          12(i).

     b.   The  parties  understand  that Ross will most  likely  find  executive
          employment in a business associated with the microprocessor  industry.
          It is not the intention of the parties to be overly broad in generally
          defining  competitive  activity by Ross as described  in  subparagraph
          12(a).  However, a very broad specific  restriction is intended by the
          parties on any  activities by Ross  involving (i)  microprocessors  or
          other chips or logical units supporting the SPARC architecture or (ii)
          embedded  microcontrollers  or other embedded  control  products based
          upon  any  32 bit  architecture  (the  activities  described  in  this
          sentence being collectively termed "Special Activities").  The parties
          agree that, at the  commencement of this Agreement,  any activities of
          Ross with regard to (i) the MIPS  architecture,  (ii)  digital  signal
          processors  (DSPs) that do not include a SPARC  floating point unit or
          co-processor,  or (iii) I/O or graphics  peripheral chips for embedded
          control applications will not violate the prohibitions of subparagraph
          12(a),  or result in the  termination  of payments to Ross pursuant to
          subparagraph 12(e) below, provided that such activities do not violate
          the restrictions  with respect to Special  Activities set forth in the
          preceding sentence.

     c.   In the event the Company chooses to modify its business  emphasis with
          additional products or services (other than Special Activities,  which
          are  generally  prohibited by  subparagraph  12(a) and as to which the
          Company  shall not be obligated to comply with the  provisions of this
          subparagraph  12(c))  based  upon  architectures  other than the SPARC
          architecture   (including   without  limitation  a  modification  that
          encompasses activities previously permitted to Ross under subparagraph
          (a) or (b)),  then from and after the earlier of (i) the date that the
          Company actually commences  development of such additional products or
          services or (ii) the date that the Company's Board approves a business
          plan or the Company's  Chief Executive  Officer  approves a documented
          project plan to implement a modified  business  emphasis  (the earlier
          date being herein termed a "New  Activity  Date"),  any  activities by
          Ross  relating to such modified  business  emphasis will be considered
          competitive within the scope of the provisions of subparagraph  12(a),
          provided  that no activity  engaged in by Ross as of the New  Activity
          Date that is not  otherwise  competitive  will be  deemed  competitive
          pursuant to this  sentence.  For purposes of the  preceding  sentence,
          Ross shall be considered to be engaged in a particular  activity if he
          or a Ross Entity has actually  commenced  development  of a product or
          service  implementing,  or the Board of Directors of a Ross 
<PAGE>
                                       9


          Entity has approved a business plan or documented project plan to
          implement,  the activity.  Ross acknowledges and agrees that as of the
          date  of  execution  of this  Agreement  (i)  the  Company's  business
          emphasis has been modified to include  microprocessors,  co-processors
          and chipsets that either (A) execute the Java programming  language in
          native mode or (B) are designed or integrated,  and marketed,  as more
          efficient,  enhanced  performance  or lower cost  solutions to execute
          Java  applications  natively or through the Java virtual  machine (the
          activities  in  "(A)"  and  "(B)"  being  collectively   termed  "Java
          Activities"),  (ii)  neither  Ross nor any Ross  Entity  is  presently
          engaged in Java Activities, and (iii) consequently any Java Activities
          engaged in by Ross or a Ross  Entity  will be  considered  competitive
          within the scope of subparagraph 12(a).

     d.   In the event  Ross  shall  seek to engage in  activities  which  could
          arguably fall within the  prohibitions  of  subparagraph  12(a),  Ross
          shall first make a written  disclosure of such proposed  activities to
          the Company.  Such disclosure  shall be made at least 30 calendar days
          in  advance  of Ross'  intended  commencement  date and shall  provide
          sufficient detail to permit the Company to make the judgments required
          in this paragraph 12. Within 15 calendar days after its receipt of the
          disclosure, the Company shall respond to Ross in writing advising Ross
          whether the Company does or does not consider his proposed  activities
          to be within the scope of the  prohibitions of subparagraph  12(a). If
          the Company does not consider the proposed activities to be within the
          scope of the prohibitions of subparagraph  12(a), Ross may pursue such
          activities  subject to any other  applicable  restrictions  under this
          Agreement.  If the Company does consider the proposed activities to be
          within the  prohibitions  of  subparagraph  12(a),  the parties  shall
          attempt to resolve the issue through negotiation and/or mediation.  In
          the event the matter remains unresolved for thirty (30) days after the
          date of the  Company's  response to Ross,  either party may seek final
          and binding resolution through  arbitration  pursuant to paragraph 37.
          If Ross  suspends  his  proposed  activities  and is not  entitled  to
          current or deferred  compensation  therefrom during the course of such
          negotiation,   mediation  and/or  arbitration  proceedings,  then  the
          payments   described  in  paragraph  4  shall  continue   during  such
          proceedings.  If Ross does not suspend his proposed  activities  or is
          entitled  to current or  deferred  compensation  therefrom  during the
          course of such negotiation,  mediation and/or arbitration proceedings,
          then the payments  described in paragraph 4 shall be suspended  during
          such proceedings.

     e.   Ross may at any time elect to engage in activities, other than Special
          Activities,  that are  competitive  within the meaning of subparagraph
          12(a), and the Company shall have no right or power to seek damages or
          injunctive  relief  with  respect  to any  such  non-Special  Activity
          competition.  If Ross so elects,  or shall  acknowledge or be found to
          have engaged in  competitive  activities  during the Non-  Competition
          Period  prohibited by subparagraph  12(a):  (i) all obligations of the
          Company  pursuant to paragraph 4 of this Agreement to make payments to
          Ross  shall  cease as of the date Ross  first so  elects or  otherwise
          undertook such  competitive  activities  and be forever  extinguished,
          (ii) Ross shall be  obligated  to  promptly  refund to the Company any
          such  amounts  paid to Ross after such date,  (iii) Ross shall have no
          further  non-
<PAGE>
                                       10

          competition  obligations  to the Company  with respect to
          activities other than Special  Activities  (although his agreement not
          to engage in  Special  Activities  shall  continue  in full  force and
          effect),  and  (iv)  so long as  such  competitive  activities  do not
          constitute Special Activities,  Ross' obligation to provide consulting
          services  under  paragraph  4  shall  cease  and  forever   terminate;
          provided,  however,  that all other obligations of the parties to this
          Agreement  (including without limitation the obligations of Ross under
          paragraphs  13, 14, 16 and 19) shall  remain in full force and effect.
          In the  event  that such  competitive  activities  constitute  Special
          Activities,  Ross shall also be liable to the  Company for any damages
          it incurs as a result of such Special Activities.

     f.   Ross  represents  and  warrants  that  he is  not  in  breach  of  the
          provisions of  subparagraph  12(a) as of the date of execution of this
          Agreement.  In addition  to the  remedies  set forth in  subparagraphs
          12(d) and 12(e), the Company shall be entitled to injunctive relief to
          specifically enforce the provisions of subparagraph 12(a) with respect
          to any breach  thereof to the extent and only to the extent  that such
          breach consists of Ross'  engagement in Special  Activities and occurs
          during the  Non-Competition  Period. The Company shall not be entitled
          to  injunctive  relief  to  specifically  enforce  the  provisions  of
          subparagraph  12(a) with  respect to any breach  thereof that does not
          arise by reason of Special Activities.

     g.   Except as may  reasonably be required to implement  the  provisions of
          this Agreement (including without limitation paragraphs 12, 13, 14, 16
          and 19),  neither  party shall be obligated at any time to disclose to
          the other, or to any third party,  confidential  information regarding
          its then-current or prospective  business or project plans or products
          or  services  then-existing  or  planned  or  under  development.  All
          communications  between the parties under this  Agreement that involve
          confidential   information   shall  be  subject   to  an   appropriate
          non-disclosure and confidentiality agreement.

     h.   Nothing  contained in this paragraph 12 shall affect Ross'  obligation
          at all times to comply with the  provisions of  paragraphs  13, 14, 16
          and 19.

     i.   Notwithstanding  the  provisions  of this  paragraph 12, Ross shall be
          entitled  to  engage  in  the  activities  described  in  subparagraph
          16(b)(iii) to the extent provided therein.

13.  Confidential Information.

     a.   Ross  recognizes  and  understands  that the  Company  is  engaged  in
          businesses  in which it is crucial to develop  and retain  proprietary
          technology  and  other   confidential   information.   Accordingly  in
          furtherance of his prior  confidentiality  agreements with the Company
          and in  consideration  of the  compensation  and other  benefits being
          provided to him  hereunder,  Ross agrees that he will not at any time,
          either  directly  or  indirectly,  divulge,  or convey to any  person,
          except as may be  expressly  authorized  by the  Company  or  required
          during and in the course of his consultancy or required by court order
          or applicable law, or use for his own benefit or
<PAGE>
                                       11


           the  benefit of anyone  else but the  Company,  any  confidential
          information  obtained  by him  in the  course  of  his  employment  or
          consultancy  with the Company,  whether  concerning the Company or any
          aspect  thereof,  or  concerning  a third  party;  provided  that  the
          foregoing restrictions shall not apply with respect to any information
          that  becomes  generally  available  to the public  other than through
          Ross' unauthorized  disclosure or fault, and provided,  further,  that
          the  foregoing  restrictions  shall  lapse  seven (7) years  after the
          Effective   Date   except  as  to   details   of   relationships   and
          communications between or among the Company, its employees, directors,
          and shareholders, which details Ross shall not divulge at any time.

     b.   The confidential information to which Ross has had or will or may have
          access includes,  but is not limited to, matters of a technical nature
          such as  inventions,  designs,  software,  improvements,  processes of
          discovery,  techniques,  methods,  ideas,  discoveries,  developments,
          know-how, formulae, compounds, compositions, product plans, technology
          roadmaps,   specifications,   trade  secrets,   design  methodologies,
          specialized knowledge, internal affairs of the Company,  relationships
          and  communications  between  or among  the  Company,  its  employees,
          directors and  shareholders,  and matters of a business nature such as
          information  about  costs and  profits,  records,  customer  lists and
          customer contact  information,  customer data, sales data, or product,
          marketing or business plans.

14.  Ownership of Ideas.

     a.   The Company will own, and Ross hereby transfers and assigns to it, all
          rights  in and to any  material  and/or  ideas  and  all  results  and
          proceeds of Ross'  services as an employee of the Company prior to May
          1,  1997,   conceived  of  or  produced  during  the  period  of  such
          employment.  Ross agrees to execute  and  deliver to the Company  such
          assignments,  certificates  of  authorship,  or other  instruments  in
          accordance  with standard  industry  practice,  and otherwise  provide
          proper  assistance,  at the Company's  request and expense and for its
          benefit or that of its nominees,  during and after Ross' employment by
          the  Company  in order to more fully  vest in the  Company  all right,
          title  and  interest  in and to  such  material,  ideas,  results  and
          proceeds or to obtain patents,  copyrights,  or other legal protection
          for inventions or innovations in any country;

     b.   Ross'  agreement  to assign to the  Company  any of his  rights as set
          forth above does not apply to any  materials,  ideas or inventions (i)
          developed  by Ross  entirely  upon  his own  time  without  using  the
          Company's equipment,  supplies, facilities or confidential information
          and (ii)  which do not,  at the time of  conception  or  reduction  to
          practice,  relate to the Company's present or anticipated business, or
          to actual or demonstrably  anticipated  research or development of the
          Company,  and (iii)  which do not result  from any work or  consulting
          services performed by Ross for the Company.

15.  Return of  Property of the  Company.  Except as and then only to the extent
     specifically  provided above in subparagraphs 3(e) and 7(a), and except for
     the personal  automobile  previously  provided to Ross by the Company,  all
     memoranda,  notes,  records,  
<PAGE>
                                       12

     papers,  data and documents  concerning the business of the Company or
     any of its  subsidiaries  or affiliates,  whether in tangible or intangible
     form (including all information  stored in electronic  form),  all computer
     programs  and  software,  and all  copies  of any of the  foregoing,  made,
     obtained,  compiled by or made  available  to Ross during the period of his
     employment  with the Company  through the  Effective  Date,  all  equipment
     (including  personal computers and other computer equipment) made available
     to or  obtained  by Ross from the  Company,  and all other  property of the
     Company  or  any of  its  subsidiaries  or  affiliates  (including  without
     limitation   identification  and  access  cards,  keys,   personal  digital
     assistants,  pagers,  cellular phones, airline tickets and travel vouchers,
     but excluding  personal  diaries and memorabilia) in the possession of Ross
     (collectively  referred to as "Company  Property"),  will be and remain the
     exclusive property of the Company, subsidiary or affiliate during and after
     the  termination  of Ross'  employment  with the Company.  Ross will within
     seven days of the date of execution  of this  Agreement  return (and,  with
     regard to intangible  property or  documents,  return a copy to the Company
     and destroy all  originals and copies in Ross'  possession)  any and all of
     the Company  Property  that he may have taken off the  Company's  premises,
     and,  if  requested  by the  Company  to do so,  will  execute a  statement
     confirming compliance with this paragraph.

          All memoranda,  notes, records,  papers, data and documents concerning
     the  business  of the  Company or any of its  subsidiaries  or  affiliates,
     whether in tangible or intangible form (including all information stored in
     electronic form), all computer programs and software, and all copies of any
     of the  foregoing,  made,  obtained,  compiled by or made available to Ross
     during the period of his  consultancy  with the Company,  and all equipment
     (including  personal computers and other computer  equipment) and all other
     property of the Company or any of its subsidiaries or affiliates (including
     without limitation  identification and access cards, keys, personal digital
     assistants,  pagers,  cellular phones, airline tickets and travel vouchers,
     but  excluding  personal  diaries and  memorabilia)  made  available  to or
     obtained by Ross from the Company during the period of his consultancy with
     the Company (collectively referred to as "Consultancy  Property"),  will be
     and remain the exclusive  property of the Company,  subsidiary or affiliate
     during and after the  termination  of Ross'  consultancy  with the Company.
     Upon termination of his consultancy for any reason,  Ross will within seven
     days return (and, with regard to intangible property or documents, return a
     copy  to the  Company  and  destroy  all  originals  and  copies  in  Ross'
     possession)  any and all  Consultancy  Property  to the  Company,  and,  if
     requested  by the  Company to do so, will  execute a  statement  confirming
     compliance with this paragraph.

16.  Interference  with Ross, Its Employees and Customers.  In  consideration of
     the compensation  and other benefits being provided to him hereunder,  Ross
     agrees  that he will not,  without the  Company's  prior  written  consent,
     whether  for his own  benefit or for the  benefit of any other  individual,
     partnership,  firm,  corporation or other business organization (other than
     the Company), directly or indirectly:

     a.   At any time prior to March 31, 2000, solicit or discuss the employment
          services of, hire, or otherwise interfere with the relationship of the
          
<PAGE>
                                       13

          Company  with any person who is either then  employed by or  otherwise
          engaged to perform services for the Company or has been so employed or
          engaged by the  Company  within  the four  months  preceding  any such
          solicitation,  discussion  or hire.  In the event that for purposes of
          complying with this  subparagraph  16(a) Ross shall seek  confirmation
          from the  Company  with  regard to any  person who Ross  believes  has
          ceased to be an employee of the Company,  the Company  shall  promptly
          provide Ross with  written  confirmation  of the  person's  employment
          status and termination date.

     b.   (i) At any  time  prior to March 1,  1999,  solicit  business  from or
          otherwise  call upon any person or entity with whom the  Company  then
          has or has had a customer  relationship  (collectively,  "Solicitation
          Activities").  On the date of execution of this Agreement, the Company
          has  provided  to Ross a list of its past and present  customers  with
          respect  to which the  parties  agree  that the  prohibitions  of this
          subparagraph  16(b) will  apply (the  "Customer  List").  The  parties
          further  agree  that  the  Customer  List  is a  complete  list of all
          customers with respect to which the prohibitions of this  subparagraph
          16(b) apply as of the date hereof,  and that the  prohibitions of this
          subparagraph  16(b) will not apply to any customers or other  entities
          that are not either (i) on the Customer  List as of the date hereof or
          (ii)  subsequently   added  to  the  Customer  List  pursuant  to  the
          provisions  of this  subparagraph.  The  Company  shall be entitled to
          update the Customer  List from time to time by written  notice to Ross
          to include new customers of the Company,  and the restrictions of this
          subparagraph  16(b) shall apply with respect to such new customers for
          the period  from the date of Ross's  receipt of the  updated  Customer
          List  through  February  28,  1999;   provided,   however,   that  the
          restrictions of this  subparagraph  16(b) shall not apply with respect
          to any such new  customers  that have been  identified as customers of
          Ross or a Ross Entity (as  hereinafter  defined)  in a written  notice
          delivered to the present  Chairman of the Company's Board of Directors
          (or a successor to such Chairman  reasonably  agreed to by the parties
          hereto) prior to the date of Ross's receipt of notice from the Company
          designating such new customer as a Company  customer.  For purposes of
          this  subparagraph  16(b),  (A) a  "customer"  of a party shall mean a
          person or entity that has purchased  product from the party,  signed a
          purchase  order for  product of the party,  or entered  into a written
          memorandum of understanding for the purchase of product from the party
          and  (B)  contacts  with  employees  and  other  representatives  of a
          customer shall be subject to the same restrictions as those applicable
          to the customer itself.

          (ii) Nothing in this subparagraph  16(b) shall be applied or construed
               to limit or preclude ** and its affiliates (other than any entity
               controlled or managed by Ross or in which Ross owns more than two
               percent (2%) of the stock, profits interests,  capital interests,
               units, or other equity  ownership  interests  (including  without
               limitation  stock options and  convertible  securities)  (a "Ross
               Entity"),   which   Ross   Entities   shall  be  subject  to  the
               restrictions  of this  subparagraph  16(b) to the same  extent as
               Ross) from  engaging in  Solicitation  Activities  provided  that
               neither Ross nor any Ross Entity provides advice or assistance to
               such  activities or divulges to ** or any of its  affiliates  the
               names of any Company  customers  (or the names of any contacts at
               customers)  set forth on the Customer List in effect from time to
               time.
<PAGE>
                                       14


          (iii)Nothing in this subparagraph  16(b) shall be applied or construed
               to limit or preclude  Ross,  or any other person or entity,  from
               engaging in  Solicitation  Activities with respect to the sale of
               embedded  microcontrollers,  and other embedded control products,
               based upon the MIPS 64 bit  architecture  with  respect to any of
               the following companies or their affiliates: **.

     c.   At any time,  interfere with the  relationship of the Company with any
          person  or  entity  with  whom  the   Company   then  has  a  business
          relationship or a prospective business relationship.

     d.   At any time, instigate, initiate, participate in (except to the extent
          required  by  law,  including   compulsory   process)  or  assist  any
          litigation or arbitration  proceeding  brought  against the Company or
          any of  the  Company  Parties  attributable  to,  connected  with,  or
          incidental  to any  claim,  liability,  action,  failure to act or any
          other matter existing prior to the Effective Date,  including  without
          limitation any such matters that may be continuing after the Effective
          Date and any matters released by Ross pursuant to paragraph 10 of this
          Agreement.

17.  Injunctive  and Other  Relief.  Subject to the  provisions of paragraph 12,
     including without  limitation  subparagraphs  12(d) and 12(e), Ross and the
     Company  acknowledge that any action taken by Ross constituting a breach of
     any of his  obligations  under  paragraphs  12 through 16 of the  Agreement
     would leave the Company  without an adequate  remedy and would  entitle the
     Company to seek relief in any court of competent  jurisdiction  in the form
     of an injunction or temporary restraining order prohibiting any such breach
     in addition to any other applicable remedies.  In addition, in the event of
     a  material  breach by Ross of  paragraphs  13 or 16,  the  Company  may in
     addition to any other remedy  terminate Ross'  consultancy and cease making
     the payments described in paragraph 4.

18.  Prohibition Against Defamation and Willful  Disparagement and Provision for
     Favorable References. **.
<PAGE>
                                       15


19.  Cooperation.  Subject to the provisions of subparagraph 4(a) concerning his
     reasonable  availability,  Ross agrees to cooperate  fully with the Company
     and to assist  the  Company  in  connection  with any  future or  currently
     pending  disputes,  litigation  or  arbitration  proceedings  based upon or
     arising  out of acts,  omissions,  events  or  circumstances  occurring  or
     existing  during the period from  January 1, 1988  through  April 30, 1997,
     including without limitation the Cherukuri,  Megatest and Vorm disputes and
     any actions brought by creditors of the Company.  Such  cooperation by Ross
     shall include,  but not be limited to, making himself reasonably  available
     for  interviews  by  Company  counsel  and  to  testify  in any  action  as
     reasonably  requested  by  the  Company.   Ross  shall  not  be  separately
     compensated  for such  cooperation  and  assistance  but his reasonable and
     documented  out-of-pocket expenses shall be reimbursed.  The obligations of
     Ross set forth in this  paragraph  19 shall  continue  during and after the
     Consultancy Period and notwithstanding any early termination of payments to
     Ross pursuant to the  provisions of paragraphs 12 or 17 or any  termination
     of the parties' other obligations pursuant to paragraph 36. With respect to
     any such  action,  in the event Ross is named 
<PAGE>
                                       16

          as a defendant  by any party  thereto,  the Company  shall  indemnify,
     defend and hold  harmless  Ross, to the extent the Company was obligated as
     of March 2, 1997 to indemnify,  defend and hold harmless Ross,  against all
     losses, claims, damages, costs, expenses, liabilities, judgments or amounts
     of  or  in  connection  with  any  claim,  action,   suit,   proceeding  or
     investigation  based in whole or in part on or  arising in whole or in part
     out of Ross'  actions as a director,  officer or  employee of the  Company,
     whether  pertaining to any matter existing at March 2, 1997 or occurring at
     or prior to such date, and whether asserted prior to, at, or after March 2,
     1997.

20.  Legal Advice. Each party has received  independent legal advice from his or
     its attorneys  with respect to the  advisability  of making the  settlement
     provided for herein and with respect to the  advisability of executing this
     Agreement.

21.  Factual  Investigation.   Each  party  to  this  Agreement  has  made  such
     investigation  of the facts  pertaining  to the  matters  resolved  by this
     Agreement  and of all the  matters  pertaining  thereto  as he or it  deems
     necessary.

22.  Later  Discovered  Facts.  Each  party  hereto  is aware  that he or it may
     hereafter  discover  claims or facts in addition to or different from those
     he or it now knows or  believes  to be true  with  respect  to the  matters
     resolved herein. Nevertheless,  it is the intention of each party to fully,
     finally  and forever  settle and  release  all such  matters and all claims
     relative  thereto which may exist or may  heretofore  have existed  between
     them,  whether  known or unknown,  to the extent  provided in the  releases
     contained herein.

23.  Confidentiality.  Except as may be required to satisfy the Company's public
     disclosure or financial or accounting  requirements  or as may be compelled
     by court order, neither the Company nor Ross shall disclose or publicize to
     any person,  firm or corporation the terms of this Agreement  except (a) as
     otherwise  specifically  provided in this Agreement or (b) with the written
     consent of the other party. As reasonably necessary,  Ross may discuss this
     Agreement  with his  wife,  attorney,  assistant,  financial  advisor,  tax
     advisor,  benefit  advisor or  compensation  advisor  and the  Company  may
     discuss this Agreement with its attorneys, accountants, officers, directors
     and managers,  provided,  however, that each such recipient of confidential
     information  agrees to be bound by the terms of this  paragraph to keep the
     information  confidential.  Ross  shall  advise any  employer,  prospective
     employer or Competitor, and may advise any financial institution with which
     he does business,  of the limitations set forth in paragraphs 12 through 16
     above.

24.  Assignment.  Each of the parties  represents and warrants that he or it has
     not  heretofore  assigned,  transferred  or granted or purported to assign,
     transfer or grant any claims,  matters,  demands or causes of action herein
     released,  disclaimed,  discharged or terminated,  and agrees to indemnify,
     defend  and hold  harmless  the other  party from and  against  any and all
     costs,  expense,  loss or liability  incurred as a consequence  of any such
     actual or purported assignment, transfer or grant.
<PAGE>
                                       17

25.  Recitals and Paragraph Headings. Each term of this Agreement is contractual
     and not merely a recital. All recitals are hereby incorporated by reference
     into this  Agreement.  Captions and paragraph  headings are used herein for
     convenience  only,  are not part of this Agreement and shall not be used in
     interpreting or construing it.

26.  Additional  Documents.  The  parties  will  execute  all such  further  and
     additional  documents  and  undertake  all such  other  actions as shall be
     reasonable, convenient, necessary or desirable to more fully effectuate and
     carry out the provisions of this Agreement.

27.  No Admissions.  This  Agreement  effects the settlement of claims which are
     denied,  disputed and/or  contested,  and nothing contained herein shall be
     construed as an admission by any party hereto of any  liability of any kind
     to any other party or to any third party. Each of the parties hereto denies
     any and all liability  whatsoever in connection  with any claim and intends
     merely to avoid the  uncertainties  and costs of litigation  and buy his or
     its peace.

28.  Texas Law. This  Agreement  was executed and delivered  within the State of
     Texas,  and the rights  and  obligations  of the  parties  hereto  shall be
     construed and enforced in  accordance  with and governed by the laws of the
     State of Texas  applicable to agreements made and to be performed  entirely
     within Texas.  Should any litigation  arise  concerning this Agreement,  it
     will be filed only in a court in Austin, Texas, and then only if consistent
     with the  parties'  obligations  under  paragraph  37 hereof with regard to
     arbitration.

29.  Entire Agreement.  This Agreement  constitutes a single integrated contract
     expressing the entire  agreement of the parties with respect to the subject
     matter hereof and supersedes all prior and contemporaneous oral and written
     agreements and discussions with respect to the subject matter hereof. There
     are no other agreements,  written or oral, express or implied,  between the
     parties hereto,  concerning the subject matter hereof,  except as set forth
     herein. This Agreement may be amended only by an agreement in writing.

30.  Binding  Effect.  This  Agreement  is binding  upon and shall  inure to the
     benefit  of the  parties  hereto,  their  heirs,  permitted  assignees  and
     successors  in interest  (including  successors  in any  reorganization  or
     merger with any other entity).

31.  Construction  of Agreement.  Each party has  cooperated in the drafting and
     preparation of this Agreement,  and,  accordingly,  in any  construction or
     interpretation  of this Agreement,  the same shall not be construed against
     any party by reason of the source of drafting.

32.  Costs and Attorneys'  Fees.  Each party is to bear his or its own costs and
     attorneys'  fees incurred in connection  with the matters  resolved by this
     Agreement and in connection  with the  negotiation  and the  preparation of
     this Agreement. However, in the 
<PAGE>
                                       18


          event of litigation or arbitration  relating to or for the enforcement
     of this  Agreement,  the  prevailing  party shall be entitled to reasonable
     attorneys' fees and costs actually incurred.

33.  Taxes. Ross acknowledges his  responsibility for any and all taxes due with
     respect to the sums paid to him under this  Agreement,  represents  that he
     has received independent advice concerning his tax obligations,  and states
     that he has not  relied  upon  representations  or advice,  if any,  of the
     Company or its  accountants  or legal  counsel  concerning  the  taxable or
     nontaxable  nature of the  consideration  received by him  hereunder or any
     other  consideration  received  from the Company.  Ross agrees that he will
     indemnify, defend and hold the Company harmless from any and all claims for
     taxes, penalties and/or interest related to the foregoing consideration.

34.  Counterparts.  This  Agreement may be executed in  counterparts.  When each
     party  has  signed  and  delivered  at  least  one such  counterpart,  each
     counterpart  shall be deemed an original,  and,  when taken  together  with
     other signed  counterparts,  shall  constitute one Agreement which shall be
     binding  upon and  effective  as to all parties.  No  counterpart  shall be
     effective  until all parties hereto have executed and exchanged an executed
     counterpart hereof.

35.  No Waiver. The failure to enforce at any time any of the provisions of this
     Agreement,  or to require at any time performance by the other party of any
     of the  provisions  hereof,  shall in no way be construed to be a waiver of
     such  provisions or to affect either the validity of this  Agreement or any
     part hereof or the right of either  party  thereafter  to enforce  each and
     every provision in accordance with the terms of this Agreement.

36.  Non-performance by the Company.

     a.   The Company  agrees that all payments due to Ross under this Agreement
          shall be paid when due.  If the  Company is unable to make any payment
          because of the Company's financial condition,  the Company shall treat
          Ross no less favorably than other  unsecured  creditors.  In addition,
          any sum unpaid  shall bear  interest  at the rate of 9% per annum from
          the due date  until  the date of  actual  payment,  and Ross  shall be
          entitled  to  reasonable  attorney's  fees in the  event  he  brings a
          successful  action to collect any amounts due but unpaid. In the event
          of an alleged non-payment by the Company,  Ross shall also be entitled
          to an expedited arbitration in which the arbitrator shall, in addition
          to any other  authority,  have the right to issue a preliminary  order
          requiring payment by the Company. In addition to, and not in exclusion
          of, any other remedies Ross may have under this Agreement or otherwise
          with  respect to any  failure by the  Company to pay amounts due under
          this Agreement in a timely  fashion,  in the event that such a failure
          continues  and is not cured by the later of (i) ninety (90) days after
          the payment due date  (provided  that the  Company's  payments to Ross
          under this Agreement during the preceding 365 day period have not been
          more  than  thirty  (30) days  late) or (ii)  thirty  (30) days  after
          delivery of written notice of such failure by Ross to the Company (the
          later date being termed herein the "Notice Date"), then:
<PAGE>
                                       19


               1.   If,  after  the  Notice  Date,  any  of  the  gross  amounts
                    described in  subparagraphs  3(b) (bonus) and 3(c) (vacation
                    pay) have not yet been paid to Ross,  and  amounts due under
                    this Agreement remain late and unpaid,  Ross may in his sole
                    discretion  elect by written notice to the Company to do any
                    one or more of the  following:  (i)  accelerate  all amounts
                    remaining due under  paragraph 3, (ii)  terminate all future
                    obligations of the parties under  paragraphs 4, 5, 8, 12, 16
                    and  18,  and  (iii)  rescind  the  releases  set  forth  in
                    paragraph  10. If Ross  rescinds  the  releases set forth in
                    paragraph  10, the  releases set forth in paragraph 11 shall
                    also be automatically rescinded. In all other respects, this
                    Agreement shall remain in full force and effect.

               2.   If,  after  the  Notice  Date,  all  of  the  gross  amounts
                    described in  subparagraphs  3(b) (bonus) and 3(c) (vacation
                    pay) have been paid in full to Ross,  but other  amounts due
                    under this Agreement remain late and unpaid, Ross may in his
                    sole discretion elect by written notice to the Company to do
                    any one or more of the following: (i) accelerate all amounts
                    remaining  due under  paragraph  3, and (ii)  terminate  all
                    future  obligations of the parties under paragraphs 4, 5, 8,
                    12, 16 and 18. In all other  respects,  this Agreement shall
                    remain in full force and effect.

               3.   Under either  clause (1) or clause (2) above,  Ross shall be
                    entitled  to  retain  all  amounts  paid  to him  under  the
                    Agreement prior to his election of such remedies (except for
                    any  amounts  subject to refund to the  Company  pursuant to
                    subparagraphs 4(e) or 12(e)).

     b.   In the event that the  Company's  continued  failure to make a payment
          described in this  paragraph 36 after the Notice Date is the result of
          a dispute in good faith between the parties or a bankruptcy  filing by
          or against the Company, then Ross shall have the remedies described in
          subparagraph  36(a)(2) but not the  additional  remedies  described in
          subparagraph  36(a)(1), and in the case of a bankruptcy filing against
          the Company  Ross shall be entitled to exercise  remedies  only if the
          failure to pay continues ninety (90) days after the bankruptcy filing.
          If a dispute in good faith is resolved in the Company's  favor, at the
          Company's election any acceleration or termination by Ross pursuant to
          subparagraph  36(a)(2)  shall be set  aside and the  parties  shall be
          restored  to  their  respective  positions  existing  prior  to  Ross'
          exercise of such remedies.

     c.   If Ross elects to accelerate  amounts  remaining due under paragraph 3
          or to terminate certain future  obligations of the parties as provided
          in  subparagraphs  36(a)(1) and 36(a)(2) above, the Company shall have
          the right in its sole  discretion to terminate  any  remaining  future
          obligations of the parties under  paragraphs 4, 5, 8(a), 12, 16 and 18
          by written notice to Ross. In all other respects, this Agreement shall
          remain in full force and effect.

     d.   Nothing  contained in this paragraph 36 or elsewhere in this Agreement
          nor the  Company's  failure to make any  payment due  hereunder  shall
          affect  
<PAGE>
                                       20


               the validity or finality of any release described in subparagraph
          8(b) that may have been  delivered  to the  Company at any time or the
          obligations of Ross under paragraphs 13, 14, 15 or 19.

37.  Arbitration. Except in connection with an action by the Company or Ross for
     injunctive or other equitable  relief pursuant to paragraphs 12 through 17,
     any controversy, dispute, or claim between the parties to this Agreement or
     any party released pursuant to it, including  without  limitation any claim
     arising out of, in connection  with, or in relation to the  interpretation,
     performance or breach of this Agreement,  shall be finally resolved, at the
     request of either party, by confidential  binding arbitration  conducted in
     Austin,  Texas in  accordance  with the then most  applicable  rules of the
     American Arbitration  Association,  and judgment upon any award rendered by
     the  arbitrator  may be  entered  by any  state  or  federal  court  having
     jurisdiction  thereof.  In any such arbitration,  the arbitrator shall have
     the  jurisdiction  and authority to issue any remedy (but only such remedy)
     that a court of competent  jurisdiction  could have provided based upon the
     facts found by the  arbitrator.  After  soliciting the views of each party,
     the  arbitrator  shall  order  such  discovery  as he or she  may  consider
     reasonable and appropriate given the subject matter of the dispute.  At the
     conclusion of the proceeding,  the arbitrator shall issue a written opinion
     setting  forth the legal  analysis  and basis for his or her  decision  and
     material  findings of fact.  In the event  either  party shall  suspend its
     performance  on the  basis  that  its  performance  has been  excused  by a
     material  breach by the other party,  either party seeking  performance may
     request  preliminary  relief from the  arbitrator and both parties agree to
     cooperate to have such issue heard on an expedited  basis.  The  arbitrator
     may hear such issue on a preliminary  basis and may grant such  preliminary
     relief,  and under  such  conditions,  as the  arbitrator  shall deem to be
     appropriate  and  equitable.  In the event the  parties are unable to agree
     upon an  arbitrator,  the parties shall select a single  arbitrator  from a
     list  designated  by  the  nearest  office  of  the  American   Arbitration
     Association of seven  arbitrators,  all of whom shall be retired judges who
     have had  experience in the  employment  law, who are actively  involved in
     hearing  private cases and who are resident in the greater  Austin area. If
     the parties are unable to select an  arbitrator  from the list  provided by
     the American  Arbitration  Association,  then the parties shall each strike
     names  alternatively  from  the  list,  with  the  first  to  strike  being
     determined by lot. After each party has used three  strikes,  the remaining
     name on the list shall be the  arbitrator.  The  parties  intend  that this
     agreement to arbitrate be valid,  enforceable  and  irrevocable and that it
     provide the exclusive remedy with respect to all disputes within its scope.
     The fees and expenses of the arbitrator  shall  initially be divided evenly
     between the parties.  Thereafter they shall be treated as costs pursuant to
     paragraph 32.

38.  Ross'  Understanding.  Ross  represents  and warrants that he has carefully
     read  this  Agreement,  that  it has  been  fully  explained  to him by his
     attorney,  that he fully  understands  its final  and  binding  effect  and
     understands that he is releasing certain rights and entitlements,  that the
     only promises made to him to sign the Agreement are those stated above, and
     that he is signing this Agreement voluntarily.
<PAGE>
                                       21


39.  Age  Discrimination  in  Employment  Act Waiver.  The waiver given below is
     given only in exchange for  consideration  in addition to anything of value
     to which Ross is  already  entitled.  The  waiver set forth  below does not
     waive  rights or claims which may arise after the date of execution of this
     Agreement. Ross acknowledges that (i) this paragraph is written in a manner
     calculated to be understood by Ross,  (ii) that by reviewing this paragraph
     or drafts  thereof  he has been  advised  in  writing  to  consult  with an
     attorney before executing this Agreement, (iii) he was given a period of 21
     days within  which to consider  this  paragraph,  and (iv) to the extent he
     executes this Agreement, including this paragraph, before the expiration of
     the 21 day period,  he does so  knowingly  and  voluntarily  and only after
     consulting with an attorney. Ross shall have the right to cancel and revoke
     this paragraph during a period of seven days following his execution of the
     Agreement and this paragraph shall not become effective, and no money shall
     be paid  hereunder,  until the  expiration of such 7-day period.  All other
     provisions of this Agreement shall become  effective upon  execution.  Ross
     shall notify the Company's  counsel in writing of the date of the execution
     of this  Agreement  by faxing to the  Company's  counsel a signed and dated
     copy of the  signature  page signed by him. The 7-day period of  revocation
     shall commence upon the date of Ross' execution of this  Agreement.  Within
     the 7-day  revocation  period,  Ross or his  counsel  shall  forward to the
     Company and the Company's  counsel a copy of this Agreement  fully executed
     by Ross.  In order to revoke  this  paragraph,  Ross  shall  deliver to the
     Company,  prior to the expiration of said 7-day period, a written notice of
     cancellation.

          In  addition to the release  set forth in  paragraph  10 hereof,  Ross
     hereby  voluntarily and knowingly waives all rights or claims arising under
     the Federal Age  Discrimination  in Employment Act. The  consideration  for
     this paragraph shall be the compensation due Ross with respect to the final
     month of the Consultancy Period.

40.  Effectiveness  of Agreement.  This Agreement  shall be a binding  agreement
     upon its  execution  except that the  provisions  of  paragraph 39 shall be
     effective, if at all, only in accordance with its provisions.

41.  Severability  and  Reformation.  In the event that any of the provisions of
     this  Agreement,  as  applied  to  either  Ross  or the  Company  or to any
     circumstances,  shall be found to be  impermissibly  broad (with  regard to
     scope,  period of time, or geographic reach) or otherwise  adjudged void or
     unenforceable,  or in conflict with any applicable  law, the parties intend
     such provisions to be enforced to the greatest extent legally possible, and
     the body adjudicating such provisions void,  unenforceable,  or in conflict
     with any applicable  law, shall be vested with the authority to reform such
     provisions in any manner necessary to effectuate the parties' intent to the
     greatest extent allowable by law.

42.  Notices.  Any notice  that a party  shall  desire or be required to provide
     under this Agreement shall be in writing and shall be delivered by personal
     delivery (including  confirmed delivery by a reputable messenger or courier
     service),  by confirmed facsimile  transmission or by deposit in the United
     States Mail, registered and return receipt requested, as follows:
<PAGE>
                                       22


         Notices to Ross:           Mr. Roger D. Ross
                                    **

                                    with a copy by the same means to:
                                    ---------------------------------

                                    **

         Notices to the Company:    ROSS Technology, Inc.
                                    5316 Highway 290 West, Suite 500
                                    Austin, Texas  78735
                                    Attention: President
                                    Facsimile No.: (512) 892-3402

                                    with a copy by the same means to:
                                    ---------------------------------

                                    Irell & Manella LLP
                                    1800 Avenue of the Stars, Suite 900
                                    Los Angeles, CA 90067
                                    Attention: David A. Dull, Esq.
                                    Facsimile No.: (310) 203-7199

          Such  addresses  may be changed  from time to time by  written  notice
     provided  hereunder.  Any notice delivered  hereunder shall be deemed to be
     delivered  on the  date  of  actual  delivery  (in  the  case  of  personal
     delivery), on the next regular business day in the recipient's locality (in
     the case of facsimile transmission),  or five (5) days after deposit in the
     United States Mail (in the case of registered mail).

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
     of the day and year first written above.



<PAGE>
                                       23


EXECUTION AND ACKNOWLEDGMENT BY ROGER D. ROSS:

          I received this Separation Agreement on December 5, 1997. I understand
     that I have  twenty-one  (21)  days  thereafter  within  which to  consider
     paragraph 39 of this Agreement with my legal counsel.  I have freely chosen
     to sign this  Separation  Agreement on the date shown  below.  I understand
     that I will  have  seven  (7) days  thereafter  within  which to  revoke my
     acceptance  of  paragraph  39 of this  Separation  Agreement  and that such
     paragraph of the  Separation  Agreement  shall not be  effective  under the
     expiration  of that  seven  (7) day  period.  I  understand  that all other
     provisions  of  this  Separation  Agreement  will be  effective,  as of the
     Effective Date, upon its execution by both parties.

         Executed at Austin, Texas, this 5th day of December, 1997.



                                                      /s/ Roger D. Ross
                                                      -----------------
                                                      Roger D. Ross



<PAGE>
                                       24




              EXECUTION AND ACKNOWLEDGMENT BY ROSS TECHNOLOGY, INC:


                                                   ROSS TECHNOLOGY, INC.



Date: December 5, 1997                     By:  /s/ Jack W. Simpson, Sr.
                                              --------------------------
                                             Jack W. Simpson, Sr.
                                          President and Chief Executive Officer



<PAGE>
                                       25


                                    EXHIBIT A

                                       **