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                                                                   EXHIBIT 10.16

                         MAXIM INTEGRATED PRODUCTS, INC.

                            1996 STOCK INCENTIVE PLAN

                             Adopted August 16, 1996
                   Approved by Shareholders November 14, 1996

 As further amended by the Board of Directors on April 16, 1997 and May 15, 1997
                   Approved by Shareholders November 13, 1997

         As further amended by the Board of Directors on March 10, 1998,
                        May 14, 1998, and August 13, 1998
                   Approved by Shareholders November 19, 1998

        As further amended by the Board of Directors on August 12, 1999.
                   Approved by Shareholders November 18, 1999

         As further amended by the Board of Directors on June 8, 2000,
                              and August 17, 2000.
                   Approved by Shareholders November 16, 2000

         As further amended by the Board of Directors on August 23, 2001

         1. Purposes of the Plan. The purposes of this Stock Incentive Plan are
to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business.

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

              (a) "Administrator" means the Board or any of the Committees
appointed to administer the Plan.

              (b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

              (c) "Applicable Laws" means the legal requirements relating to the
administration of stock incentive plans, if any, under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules
of any foreign jurisdiction applicable to Options granted to residents therein.

              (d) "Board" means the Board of Directors of the Company.

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              (e) "Change in Control" means a change in ownership or control of
the Company effected through either of the following transactions:

                  (i) the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which a
majority of the Continuing Directors who are not Affiliates or Associates of the
offeror do not recommend such stockholders accept, or

                  (ii) a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are
Continuing Directors.

              (f) "Code" means the Internal Revenue Code of 1986, as amended.

              (g) "Committee" means any committee appointed by the Board to
administer the Plan.

              (h) "Common Stock" means the common stock of the Company.

              (i) "Company" means Maxim Integrated Products, Inc., a Delaware
corporation.

              (j) "Consultant" means any person who is a consultant, advisor,
independent contractor, vendor, customer or other person having a past, current
or prospective business relationship with the Company or any Parent or
Subsidiary.

              (k) "Continuing Directors" means members of the Board who either
(i) have been Board members continuously for a period of at least thirty-six
(36) months or (ii) have been Board members for less than thirty-six (36) months
and were elected or nominated for election as Board members by at least a
majority of the Board members described in clause (i) who were still in office
at the time such election or nomination was approved by the Board.

              (l) "Continuous Status as an Employee, Director or Consultant"
means that the employment, director or consulting relationship with the Company,
any Parent, or Subsidiary, is not interrupted or terminated. Continuous Status
as an Employee, Director or Consultant shall not be considered interrupted in
the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave approved by an
authorized representative of the Company. For purposes of Incentive Stock
Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract.

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              (m) "Corporate Transaction" means any of the following
stockholder-approved transactions to which the Company is a party:

                  (i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated,

                  (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) in connection with complete liquidation
or dissolution of the Company, or

                  (iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.

              (n) "Covered Employee" means any person who is a "covered
employee" under Section 162(m)(3) of the Code.

              (o) "Director" means a member of the Board.

              (p) "Employee" means any person, including an Officer or Director,
who is an employee of the Company or any Parent or Subsidiary of the Company for
purposes of Section 422 of the Code. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.
Except for purposes of grants of Incentive Stock Options, "Employee" also
includes any person whom an officer identifies as a prospective employee of the
Company or any Parent or Subsidiary of the Company.

              (q) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

              (r) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (i) Where there exists a public market for the Common Stock,
the Fair Market Value of a share of Common Stock shall be (A) the closing sale
price of the Common Stock for the last market trading day prior to the date of
the determination or on the date of the determination, as determined by the
Administrator at the time of the determination (or, if no sales were reported on
either such date, on the last trading date on which sales were reported) on the
stock exchange determined by the Administrator to be the primary market for the
Common Stock or the Nasdaq National Market, whichever is applicable or (B) if
the Common Stock is not traded on any such exchange or national market system,
the closing price of a Share on the Nasdaq Small Cap Market for the day prior to
the time of the determination (or, if no such price was reported on that date,
on the last date on which such price was reported), in each case, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable; or

                  (ii) In the absence of an established market of the type
described in (i), above, for the Common Stock, the Fair Market Value thereof
shall be determined by the Administrator in good faith.

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              (s) "Grantee" means an Employee, Director or Consultant who
receives an Option under the Plan.

              (t) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

              (u) "Non-Qualified Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

              (v) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

              (w) "Option" means a stock option granted pursuant to the Plan.

              (x) "Option Agreement" means the written agreement evidencing the
grant of an Option executed by the Company and the Grantee, including any
amendments thereto.

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

              (z) "Performance-Based Compensation" means compensation qualifying
as "performance-based compensation" under Section 162(m) of the Code.

              (aa) "Plan" means this 1996 Stock Incentive Plan.

              (bb) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor thereto.

              (cc) "Share" means a share of the Common Stock.

              (dd) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

              (ee) "Subsidiary Disposition" means the disposition by the Company
of its equity holdings in any subsidiary corporation effected by a merger or
consolidation involving that subsidiary corporation, the sale of all or
substantially all of the assets of that subsidiary corporation or the Company's
sale or distribution of substantially all of the outstanding capital stock of
such subsidiary corporation.

         3. Stock Subject to the Plan.

              (a) Subject to the provisions of Section 10 below, the maximum
aggregate number of Shares which may be issued pursuant to this Plan is
81,200,000 Shares [adjusted to reflect the stock dividend effective December 5,
1997, and November 30, 1999]; provided, however, that such maximum aggregate
number of Shares shall be increased by the number of Shares or options returned
to the Company's Incentive Stock Option Plan, 1987 Employee Stock Participation
Plan, and Supplemental Nonemployee Stock Option Plan. Notwithstanding the
foregoing, the maximum aggregate number of Shares available for grant of
Incentive Stock Options shall be 81,200,000 Shares, and such number shall not be
subject to increase as a result

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of return of Shares or options to the Company's Incentive Stock Option Plan,
1987 Employee Stock Participation Plan, and 1987 Supplemental Nonemployee Stock
Option Plan. The Shares to be issued pursuant to the Plan may be authorized, but
unissued, or reacquired Common Stock.

              (b) If an Option expires or becomes unexercisable without having
been exercised in full, or is surrendered pursuant to an Option exchange
program, or if any unissued Shares are retained by the Company upon exercise of
an Option in order to satisfy the exercise price for such Option or any
withholding taxes due with respect to such Option, such unissued or retained
Shares shall become available for future grant under the Plan (unless the Plan
has terminated). Shares that actually have been issued under the Plan pursuant
to an Option shall not be returned to the Plan and shall not become available
for future distribution under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.

         4. Administration of the Plan.

              (a) Plan Administrator.

                  (i) Administration with Respect to Directors and Officers.
With respect to grants of Options to Directors or Employees who are also
Officers or Directors of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws and to permit
such grants and related transactions under the Plan to be exempt from Section
16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board.

                  (ii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or Consultants who are
neither Directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. The Board may authorize one or more
Officers to grant such Options and may limit such authority by requiring that
such Options must be reported to and ratified by the Board or a Committee within
six (6) months of the grant date, and if so ratified, shall be effective as of
the grant date.

                  (iii) Administration With Respect to Covered Employees.
Notwithstanding the foregoing, grants of Options to any Covered Employee
intended to qualify as Performance-Based Compensation shall be made only by a
Committee (or subcommittee of a Committee) which is comprised solely of two or
more Directors eligible to serve on a committee making Options qualifying as
Performance-Based Compensation. In the case of such Options granted to Covered
Employees, references to the "Administrator" or to a "Committee" shall be deemed
to be references to such Committee or subcommittee.

                  (iv) Administration Errors. In the event an Option is granted
in a manner inconsistent with the provisions of this subsection (a), such Option
shall be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

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              (b) Powers of the Administrator. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:

                  (i) to select the Employees, Directors and Consultants to whom
Options may be granted from time to time hereunder;

                  (ii) to determine whether and to what extent Options are
granted hereunder;

                  (iii) to determine the number of Shares or the amount of other
consideration to be covered by each Option granted hereunder;

                  (iv) to determine the Fair Market Value of the Common Stock in
accordance with Section 2(r) of the Plan;

                  (v) to approve forms of Option Agreement for use under the
Plan;

                  (vi) to determine the terms and conditions of any Option
granted hereunder;

                  (vii) to amend the terms of any outstanding Option granted
under the Plan in any lawful way, provided that any amendment that would
adversely affect the Grantee's rights under an outstanding Option shall not be
made without the Grantee's written consent and provided, further, that any
provision of the Plan to the contrary notwithstanding, the Administrator shall
not have the authority to reprice any outstanding option, it being understood
that "reprice" shall mean to amend any outstanding Option to reduce the exercise
price;

                  (viii) to construe and interpret the terms of the Plan and
Options granted pursuant to the Plan;

                  (ix) Notwithstanding any provision of the Plan to the
contrary, in order to facilitate compliance with the tax, securities, foreign
exchange, probate or other applicable provisions of the laws in other countries
in which the Company or its Affiliates operate or have key employees or
non-employee directors, the Committee, in its discretion, shall have the power
and authority to (A) determine which (if any) Employees, Directors, and/or
Consultants rendering services or employed outside the U.S. are eligible to
participate in the Plan or to receive any type of award hereunder; (B) determine
which non-U.S.-based Affiliates or operations (e.g., branches, representative
offices) participate in the Plan or any type of award hereunder; (C) modify the
terms and conditions of any awards made to such Employees, Directors, and/or
Consultants, or with respect to such non-U.S.-based Affiliates or operations;
and (D) establish sub-plans, modify methods of exercise, modify payment
restrictions on sale or transfer of shares and other terms and procedures to the
extent deemed necessary or desirable by the Committee to comply with applicable
laws of the non-U.S. jurisdiction. The Committee shall not, however, have the
power or authority to amend the Plan with respect to the maximum aggregate
number of Shares that may be issued under the Plan as set forth in Section
3.(a);

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increase the Individual Option Limit as set forth in Section 6.(c); or lengthen
the Term of the Option set forth in Section 6.(d). and

                  (x) to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.

              (c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be conclusive and
binding on all persons.

         5. Eligibility. Non-Qualified Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees. An Employee, Director or Consultant who has been granted an
Option may, if otherwise eligible, be granted additional Options. Options may be
granted to such Employees of the Company and its subsidiaries who are residing
in foreign jurisdictions as the Administrator may determine from time to time.

         6. Terms and Conditions of Options.

              (a) Designation of Option. Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Non-Qualified Stock
Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by a Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is granted.

              (b) Conditions of Option. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms and conditions of each
Option including, but not limited to, the Option vesting schedule, form of
payment upon exercise of the Option and satisfaction of any performance
criteria.

              (c) Individual Option Limit. The maximum number of Shares with
respect to which Options may be granted to any individual in any fiscal year of
the Company shall be 12,000,000 [adjusted to reflect the stock dividend
effective December 5, 1997 and November 30, 1999]. The foregoing limitation
shall be adjusted proportionately in connection with any change in the Company's
capitalization pursuant to Section 10, below. To the extent required by Section
162(m) of the Code or the regulations thereunder, in applying the foregoing
limitation with respect to an individual, if any Option is canceled, the
canceled Option shall continue to count against the maximum number of Shares
with respect to which Options may be granted to the individual. For this
purpose, the repricing of an Option shall be treated as the cancellation of the
existing Option and the grant of a new Option.

              (d) Term of Option. The term of each Option shall be ten (10)
years from the date of grant for all Grantees other than Directors who are not
Employees, in whose case the term shall be five (5) years from the date of
grant. However, in the case of an Incentive Stock Option granted to a Grantee
who, at the time the Option is granted, owns stock representing more than

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ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant thereof or such shorter term as may be provided
in the Option Agreement.

              (e) Transferability of Options. Incentive Stock Options 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 Grantee only by the Grantee. Non-Qualified
Stock Options shall be transferable to the extent provided in the Option
Agreement.

              (f) Time of Granting Options. The date of grant of an Option shall
for all purposes be the date on which the Administrator makes the determination
to grant such Option, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.

              (g) Vesting During Leave of Absence. During any leave of absence
from employment, directorship or consulting arrangement with the Company or any
Parent or Subsidiary, vesting of such Grantee's Options shall cease, and shall
resume upon the Grantee's return to his or her relationship with the Company,
Parent or Subsidiary. The dates on which such Grantee's Options vest shall
thereafter be adjusted by the duration of the leave of absence.

         7. Option Exercise Price, Consideration and Taxes.

              (a) Exercise Price. The exercise price for an Option shall be as
follows:

                  (i) In the case of an Incentive Stock Option:

                       (A) granted to an Employee who, at the time of the grant
of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be not less than one hundred
ten percent (110%) of the Fair Market Value per Share on the date of grant.

                       (B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.

                  (ii) In the case of a Non-Qualified Stock Option, the per
Share exercise price shall be not less than eighty-five percent (85%) of the
Fair Market Value per Share on the date of grant unless otherwise determined by
the Administrator; provided, however, that in the case the per Share exercise
price is less than one hundred percent (100%) of the Fair Market Value per Share
on the date of the grant, the Administrator determines in writing and in good
faith that (A) such grants are made infrequently, (B) there is a good business
reason for the grant that outweighs the normal presumption of a per Share
exercise price of not less than one hundred percent (100%) of the Fair Market
Value per Share on the date of grant, and (C) the aggregate number of Shares
subject to such Options does not exceed five percent (5%) of the aggregate
maximum number of Shares under Section 3(a), above, as amended from time to
time.

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                  (iii) In the case of Options intended to qualify as
Performance-Based Compensation, the per Share exercise price shall be not less
than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant.

              (b) Consideration. Subject to Applicable Laws, the consideration
to be paid for the Shares to be issued upon exercise of an Option including the
method of payment, shall be determined by the Administrator (and, in the case of
an Incentive Stock Option, shall be determined at the time of grant). In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares issued
under the Plan the following:

                  (i) cash;

                  (ii) check;

                  (iii) delivery of Grantee's promissory note with such
recourse, interest, security, and redemption provisions as the Administrator
determines as appropriate;

                  (iv) surrender of Shares (including withholding of Shares
otherwise deliverable upon exercise of the Option) which 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 (but only to the extent that
such exercise of the Option would not result in an accounting compensation
charge with respect to the Shares used to pay the exercise price unless
otherwise determined by the Administrator);

                  (v) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price; or

                  (vi) any combination of the foregoing methods of payment.

              (c) Taxes. In connection with each option granted pursuant to this
Plan, at any time when the Company could have any withholding obligation
(whether for Federal, state, local or foreign income, disability, Medicare,
employment or other taxes or otherwise) as a result of exercise of an option,
the lapse of any substantial risk of forfeiture to which the shares are subject
at the time of exercise, or the disposition of shares acquired upon such
exercise, the Company shall have no obligation to permit exercise of such option
or to issue any shares upon exercise of the option unless and until either the
exercise of the option is accompanied by sufficient payment, as determined by
the Company in its absolute discretion, to meet those withholding obligations on
such exercise, lapse or disposition or other arrangements are made that are
satisfactory to the Company in its absolute discretion to provide otherwise for
such payment. The Company shall have no liability to any optionee or transferee
for exercising the foregoing right not to permit exercise or issue shares.

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         8. Exercise of Option.

              (a) Procedure for Exercise; Rights as a Stockholder.

                  (i) Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Option Agreement.

                  (ii) 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. 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 Shares subject to an Option, notwithstanding the exercise of an Option. The
Company shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option. No adjustment will 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 the Option Agreement or Section 10, below.

              (b) Exercise of Option Following Termination of Employment,
Director or Consulting Relationship.

                  (i) An Option may not be exercised after the termination date
of such Option set forth in the Option Agreement and may be exercised following
the termination of a Grantee's Continuous Status as an Employee, Director or
Consultant only to the extent that the Grantee was entitled to exercise it at
the date of such termination (but in no event later than the expiration of the
term of such option as set forth in the Option Agreement). Options shall be
exercisable for a period of ninety (90) days following termination generally,
and for a period of five hundred forty-seven (547) days following termination
due to death of the Grantee or three hundred sixty-five (365) days following
termination due to the disability of the Grantee (or, in each case, such other
period of time as is determined by the Administrator, which such determination
in the case of an Incentive Stock Option shall be made at the time of grant of
the Option).

                  (ii) All Options shall terminate to the extent not exercised
on the last day of the period specified in paragraph (i) above or the last day
of the original term of the Option, whichever occurs first.

                  (iii) Any Option designated as an Incentive Stock Option to
the extent not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee's Continuous
Status as an Employee, Director or Consultant shall convert automatically to a
Non-Qualified Stock Option and thereafter shall be exercisable as such to the
extent exercisable by its terms for the period specified in the Option
Agreement.

              (c) Exercise of Option Following Termination of Employment,
Director or Consulting Relationship. In the event of termination of a Grantee's
Continuous Status as an Employee, Director or Consultant with the Company for
any reason other than disability or death

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(but not in the event of an Grantee's change of status from Employee to
Consultant or from Consultant to Employee), such Grantee may, but only within
ninety (90) days after the date of such termination (but in no event later than
the expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that the Grantee was
entitled to exercise it at the date of such termination or to such other extent
as may be determined by the Administrator. If the Grantee should die within
ninety (90) days after the date of such termination, the Grantee's estate or the
person who acquired the right to exercise the Option by bequest or inheritance
may exercise the Option to the extent that the Grantee was entitled to exercise
it at the date of such termination within five hundred forty-seven (547) days of
the Grantee's date of death, but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement. In the event of an
Grantee's change of status from Employee to Consultant, an Employee's Incentive
Stock Option shall convert automatically to a Non-Qualified Stock Option on the
ninety-first (91st) day following such change of status. If the Grantee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

              (d) Disability of Grantee. In the event of termination of a
Grantee's Continuous Status as an Employee, Director or Consultant as a result
of his or her disability, Grantee may, but only within three hundred sixty-five
(365) days from the date of such termination (and in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination; provided, however, that if such disability is
not a "disability" as such term is defined in Section 22(e)(3) of the Code, in
the case of an Incentive Stock Option such Incentive Stock Option shall
automatically convert to a Non-Qualified Stock Option on the day three (3)
months and one day following such termination. To the extent that Grantee is not
entitled to exercise the Option at the date of termination, or if Grantee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.

              (e) Death of Grantee. In the event of the death of a Grantee, the
Option may be exercised at any time within five hundred forty-seven (547) days
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement), by the Grantee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Grantee was entitled to exercise
the Option at the date of death. If, at the time of death, the Grantee was not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after death, the Grantee's estate or a person who acquired the right to exercise
the Option by bequest or inheritance does not exercise the Option within the
time specified herein, the Option shall terminate.

              (f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Grantee at the time that such offer is made.

         9. Conditions Upon Issuance of Shares.

              (a) 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

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all Applicable Laws, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.

              (b) 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
Applicable Laws.

         10. Adjustments Upon Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of Shares covered by each
outstanding Option, and 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, as well as the price per share of Common
Stock covered by each such outstanding Option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other similar event resulting in
an increase or decrease in the number of issued shares of Common Stock. 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 hereof shall be made with respect to, the
number or price of Shares subject to an Option.

         11. Corporate Transactions/Changes in Control/Subsidiary Dispositions.

              (a) The Administrator shall have the authority, exercisable either
in advance of any actual or anticipated Corporate Transaction, Change in Control
or Subsidiary Disposition or at the time of an actual Corporate Transaction,
Change in Control or Subsidiary Disposition and exercisable at the time of the
grant of an Option under the Plan or any time while an Option remains
outstanding, to provide for the full automatic vesting and exercisability of one
or more outstanding unvested Options under the Plan and the release from
restrictions on transfer and repurchase or forfeiture rights of such Options in
connection with a Corporate Transaction, Change in Control or Subsidiary
Disposition, on such terms and conditions as the Administrator may specify. The
Administrator also shall have the authority to condition any such Option vesting
and exercisability or release from such limitations upon the subsequent
termination of the Continuous Status as an Employee or Consultant of the Grantee
within a specified period following the effective date of the Change in Control
or Subsidiary Disposition. The Administrator may provide that any Options so
vested or released from such limitations in connection with a Change in Control
or Subsidiary Disposition, shall remain fully exercisable until the expiration
or sooner termination of the Option. Effective upon the consummation of a
Corporate Transaction, all outstanding Options under the Plan shall terminate
unless assumed by the successor company or its Parent.

              (b) The portion of any Incentive Stock Option accelerated under
this Section 11 in connection with a Corporate Transaction, Change in Control or
Subsidiary Disposition shall remain exercisable as an Incentive Stock Option
under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. To the extent such dollar

                                       12
<PAGE>   13

limitation is exceeded, the accelerated excess portion of such Option shall be
exercisable as a Non-Qualified Stock Option.

         12. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated.

         13. Amendment, Suspension or Termination of the Plan.

              (a) The Board may at any time amend, suspend or terminate the
Plan. To the extent required to comply with Applicable Laws, the Company shall
obtain stockholder approval of any Plan amendment in such manner and to such a
degree as required.

              (b) No Option may be granted during any suspension of the Plan or
after termination of the Plan.

              (c) Any amendment, suspension or termination of the Plan shall not
affect Options already granted, and such Options shall remain in full force and
effect as if the Plan had not been amended, suspended or terminated, unless
mutually agreed otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the Company.

         14. Reservation of Shares.

              (a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

              (b) The 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.

         15. No Effect on Terms of Employment. The Plan shall not confer upon
any Grantee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.

                                       13<PAGE>   1
                                                                   Exhibit 10.17

AS APPROVED BY THE STOCKHOLDERS ON APRIL 25, 2000

                        DALLAS SEMICONDUCTOR CORPORATION

                            1993 OFFICER AND DIRECTOR
                          STOCK OPTION PLAN, AS AMENDED

      1.    Purpose. The Dallas Semiconductor Corporation 1993 Officer and
Director Stock Option Plan (the "Plan") is intended to advance the interests of
Dallas Semiconductor Corporation, a Delaware corporation (the "Company"), and
its stockholders, by encouraging and enabling selected officers, directors and
employees, upon whose judgment, initiative and effort the Company is largely
dependent for the successful conduct of its business, to acquire and retain a
proprietary interest in the Company by ownership of its stock. It is intended
that options which do not qualify for treatment as "incentive stock options"
under Section 422A of the Internal Revenue Code of 1986, as amended, and
applicable regulations and rulings promulgated thereunder (collectively the
"Code"), may be granted under the Plan.

      2.    Definitions.

            (a)   "Board" means the Board of Directors of the Company or a
      Committee of the Board to whom its authority has been delegated.

            (b)   "Change of Control" means a change in control of a nature that
      would be required to be reported in response to Item 6(e) of Schedule 14A
      of Regulation 14A promulgated under the Exchange Act, whether or not the
      Company is then subject to such reporting requirement; provided that,
      without limitation, such a Change of Control shall be deemed to have
      occurred if (i) any "person" (as such term is used in Sections 13(d) and
      14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      securities of the Company representing 15% or more of the combined voting
      power of the Company's then outstanding securities; (ii) during any period
      of two consecutive years (not including any period prior to the effective
      date of the Plan, as hereby amended), individuals who at the beginning of
      such period constitute the Board and any new director, whose election to
      the Board or nomination for election to the Board by the Company's
      stockholders was approved by a vote of at least two-thirds (2/3) of the
      directors then still in office who either were directors at the beginning
      of the period or whose election or nomination for election was previously
      so approved, cease for any reason to constitute a majority of the Board;
      (iii) the stockholders of the Company approve a merger or consolidation of
      the Company with any other corporation, other than a merger or
      consolidation which would result in the voting

<PAGE>   2

      securities of the Company outstanding immediately prior thereto continuing
      to represent (either by remaining outstanding or by being converted into
      voting securities of the surviving entity) more than 80% of the combined
      voting power of the voting securities of the Company or such surviving
      entity outstanding immediately after such merger or consolidation, except
      that a merger or consolidation effected to implement a recapitalization of
      the Company (or similar transaction) in which no "person" (as hereinabove
      defined) acquires more than 15% of the combined voting power of the
      Company's then outstanding securities shall not constitute a Change of
      Control of the Company; (iv) the stockholders of the Company approve a
      plan of complete liquidation of the Company or an agreement for the sale
      or disposition by the Company of all or substantially all of the Company's
      assets; or (v) the election of any person other than C. V. Prothro as
      Chief Executive Officer of the Company.

            (c)   "Common Stock" means the Company's Common Stock, $.02 par
      value per share.

            (d)   "Date of Grant" means the date on which an Option is granted
      under the Plan, which will be the date the Board authorizes the Option
      unless the Board specifies a later date.

            (e)   "Date of Exercise" means the date on which an Option is
      validly exercised pursuant to the Plan.

            (f)   "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            (g)   "Fair Market Value" of the Company's Common Stock means, as
      long as the Company's Common Stock is traded on the New York Stock
      Exchange, the closing price of such stock on the New York Stock Exchange
      on such date (or if such date is not a trading day, on the last trading
      day immediately preceding such date) or, if not so traded, on the NASDAQ
      National Market System or another national exchange upon which the
      Company's Common Stock is traded or as otherwise determined by the Board,
      based on any reasonable valuation method.

            (h)   "Option" means an option granted under the Plan.

            (i)   "Optionee" means a person to whom an Option, which has not
      expired, has been granted under the Plan.

            (j)   "Successor" means the legal representative of the estate of a
      deceased optionee or the person or persons who acquire the right to
      exercise an Option by bequest or inheritance or by reason of the death of
      an Optionee.

<PAGE>   3

            (k)   "Stock Option Agreement" means the agreement between the
      Company and the Optionee, in such form as may from time to time be adopted
      by the Board, under which the Optionee may purchase Common Stock pursuant
      to the terms of an Option granted under the Plan.

      3.    Administration and Interpretation of Plan. The Plan shall be
administered by the Board. The Board shall have full and final authority in its
discretion, subject to the provisions of the Plan: (i) to determine the
individuals to whom, and the time or times at which, Options shall be granted
and the number of shares of Common Stock covered by each Option; (ii) to
construe and interpret the Plan; and (iii) to make all other determinations and
take all other actions deemed necessary or advisable for the proper
administration of the Plan. All such actions and determinations by the Board
shall be final and conclusively binding for all purposes and upon all persons.

      4.    Common Stock Subject to Options. The maximum number of shares of the
Company's Common Stock which may be issued upon the exercise of Options granted
under the Plan is 6,600,000, increased on and as of January 1 of each calendar
year from and including January 1, 1994, by a number of shares equal to
one-percent (1%) of the number of shares of Common Stock outstanding on December
31 of the preceding year; subject to adjustment by the Board to reflect, as
deemed appropriate by the Board, any stock dividend, stock split, reverse stock
split, share combination, reorganization, recapitalization or the like, of or by
the Company. The shares of Common Stock to be issued upon the exercise of
Options may be authorized but unissued shares, shares issued and reacquired by
the Company or shares bought on the open market for the purposes of the Plan. In
the event any Option shall, for any reason, terminate or expire or be canceled
or surrendered without having been exercised in full, the shares subject to such
Option, but not purchased thereunder, shall again be available for Options to be
granted under the Plan.

      5.    Participants. Options may be granted under the Plan to any person
who is an officer or director of the Company or an employee of the Company
designated by the Board whose responsibilities are functionally equivalent to
those of the Company's officers.

      6.    Terms and Conditions of Options. Any Option granted under the Plan
shall be evidenced by a Stock Option Agreement executed by the Company and the
Optionee. Such agreement shall be subject to the following limitations and
conditions:

            (a)   Option Price. The option price per share with respect to each
      Option shall be determined by the Board but in no instance shall the
      option price for an Option be less than 100% of the Fair Market Value of a
      share of the Common Stock on the Date of Grant.

            (b)   Payment of Option Price. Full payment for shares purchased
      upon exercising an Option shall be made in cash or by check, or by
      delivery of previously owned shares of Common Stock, or partly in cash or
      by check and

<PAGE>   4

      partly in such stock. The value of shares of Common Stock delivered in
      connection with the payment of the option price shall be the Fair Market
      Value of such shares on the Date of Exercise of the Option.

            (c)   Term of Option. The expiration date of each Option shall not
      be more than ten (10) years from the Date of Grant.

            (d)   Vesting of Stockholder Rights. Neither an Optionee nor his
      Successor shall have any of the rights of a stockholder of the Company
      until the certificate or certificates evidencing the shares purchased
      pursuant to the exercise of an Option are properly delivered to such
      Optionee or his Successor.

            (e)   Exercise of an Option. Each Option shall be exercisable at any
      time, and from time to time, and in no particular order if the Optionee
      holds more than one Option, throughout a period commencing on or after the
      Date of Grant, as specified by the Board, and ending upon the earliest of
      the expiration, cancellation, surrender or termination of the Option.
      Furthermore, the exercise of each Option shall be subject to the condition
      that if at any time the Company shall determine in its discretion that the
      satisfaction of withholding tax or other withholding liabilities, or that
      the listing, registration, or qualification of any share otherwise
      deliverable upon such exercise upon any securities exchange or under any
      state or federal law, or that the report to, or consent or approval of,
      the Company's stockholders or any regulatory body, is necessary or
      desirable as a condition of, or in connection with, such exercise or the
      delivery or purchase of shares pursuant thereto, then in any such event,
      such exercise shall not be effective unless such withholding, listing,
      registration, qualification, report, consent or approval shall have been
      effected or obtained free of any conditions not acceptable to the Company.

            (f)   Tax Offset Bonus. The Board may grant a Tax Offset Bonus to
      such Optionees and on such bases as the Board shall determine, and a
      provision relating thereto shall be included in the stock option
      agreement. A Tax Offset Bonus may be granted concurrently with or after
      the grant of an Option. A Tax Offset Bonus shall entitle an Optionee to
      receive from the Company an amount in cash no greater than the then
      existing maximum statutory Federal income tax rate (including any surtax
      or similar charge or assessment) for individuals multiplied by the amount
      of ordinary income, if any, realized by the Optionee for Federal income
      tax purposes as a result of the exercise of the Option. The Board may
      cancel or place a limit on the term of, or the amount payable for, any Tax
      Offset Bonus at any time. The Board shall determine all other terms and
      provisions of any Tax Offset Bonus grant. The Company shall not be
      required to fund such Tax Offset Bonus prior to the due date for such
      taxes, and the proceeds of such Tax Offset Bonus shall be advanced to the
      Optionee in the form of a check payable to the Internal Revenue Service
      for the account of the Optionee or such other method as the Board may
      determine. The Board shall have the right to require an Optionee to
      present reasonable proof of the amount of such taxes as a condition

<PAGE>   5

      precedent to the making of such payment. The Company shall be under no
      obligation of any nature to grant any Tax Offset Bonus to any Optionee at
      any time.

            (g)   Company Loans. The Company may make stock purchase loans in
      connection with Option exercises upon the following terms and conditions:

                  (i)   Upon the exercise by an Optionee of an Option, or any
            part thereof, and the Optionee's request for a loan pursuant hereto,
            the Company, upon approval by the Board, may loan said Optionee, for
            the sole purpose of purchasing Common Stock from the Company
            pursuant to the exercise of such Option, an amount equal to the
            excess of the exercise price of the Option over the aggregate par
            value of the Common Stock which the Optionee has elected to purchase
            pursuant to such exercise; provided, however, that the Optionee
            shall execute concurrently a promissory note in form satisfactory to
            the Board for such amount payable to the order of the Company;

                  (ii)  The Company shall have no obligation to make any loan to
            any Optionee at any time;

                  (iii) The promissory note referenced hereinbefore shall
            provide for interest to be payable upon the outstanding principal
            balance thereof at such rate and times as the Board may determine.
            Such note shall also provide that the Board may require the Optionee
            to secure the payment thereof at any time with collateral deemed
            adequate by the Board in its sole discretion. Such note shall
            mature, and all outstanding principal and interest shall become
            immediately due and payable in installments or in lump sum at such
            time or times as the Board shall provide. The note will provide for
            prepayment of principal and accrued interest in whole or in part
            from time to time without premium or penalty and may be extended or
            modified, from time to time, at the Board's discretion. The note
            shall provide for acceleration of maturity by the Company upon the
            happening of any events determined appropriate by the Board.

            (h)   Transferability of Option. Other than by will or by laws of
      descent and distribution, an option granted under the Plan shall be
      transferable or assignable by an Optionee only if and under terms and
      conditions approved by the Board in its sole discretion. No Option or the
      shares covered thereby shall be pledged or hypothecated in any way and no
      Option or the shares covered thereby shall be subject to execution,
      attachment, or similar process except with the prior express written
      consent of the Board.

            (i)   Termination of Employment or Directorship. Unless otherwise
      specified by the Board, upon termination of an Optionee's employment with
      the Company for any reason other than retirement, permanent disability or
      death, or

<PAGE>   6

      upon removal of a non-employee director of the Company from office, any
      and all outstanding Option(s) of such Optionee shall immediately thereupon
      be null and void. Unless otherwise specified by the Board, upon
      termination of an Optionee's employment with the Company by reason of his
      retirement or permanent disability, but excluding his death, his option
      privileges shall be limited to the shares which were immediately
      purchasable by him at the date of its expiration or three (3) months after
      the date of such termination, whichever occurs first. Upon the resignation
      or retirement of a non-employee director who has served as a director of
      the Company for more than three (3) years, any unvested options shall
      immediately accelerate, so that all unexercised options shall become
      immediately exercisable, and such option privileges will expire unless
      exercised by him or (in the event of his subsequent death) his Successor,
      on or before the date any such Option expires by its own terms. Upon the
      resignation or retirement of a non-employee director who has served as a
      director of the Company for less than three (3) years, such Optionee or
      (in the event of his subsequent death) his Successor, will be entitled to
      exercise all unexercised option privileges exercisable by the Optionee at
      the time of his resignation or retirement on or before the date any such
      Option expires by its own terms. Neither the adoption of this Plan nor the
      grant of an Option to an eligible person shall alter in any way the
      Company's rights to terminate such person's employment or directorship at
      any time with or without cause nor does it confer upon such person any
      rights or privileges to continued employment, or any other rights and
      privileges, except as specifically provided in the Plan.

            (j)   Death of Optionee. Unless otherwise specified by the Board, if
      an Optionee (other than a non-employee director) dies while in the employ
      of the Company, his option privileges shall be limited to the shares which
      were immediately purchasable by him at the date of death and such option
      privileges shall expire unless exercised by his Successor prior to the
      date of its expiration or one (1) year from the date of the Optionee's
      death, whichever occurs first. If a non-employee director who is an
      Optionee dies while a director of the Company, any vesting of his option
      privileges shall immediately accelerate, so that all unexercised option
      privileges shall become immediately exercisable, and such option
      privileges shall expire unless exercised by his Successor, on or before
      the such option expires by its terms.

            (k)   Other Terms. Each Stock Option Agreement may contain such
      other provisions as the Board in its discretion may determine, including,
      without limitation:

                  (i)   any provision which shall condition the exercise of all
            or part of an Option upon such matters as the Board may deem
            appropriate (if any) such as the passage of time, or the attainment
            of certain performance goals, appropriate to reflect the
            contribution of the Optionee to the performance of the Company;

<PAGE>   7

                  (ii)  any provision which shall accelerate the exercisability
            of an Option upon the occurrence of a Change of Control or under
            such other circumstances as the Board may deem appropriate in spite
            of any provision contained in an Option pursuant to clause (i) above
            or otherwise; and

                  (iii) the manner in which an Option is to be exercised.

      7.    Allotment of Shares. The Board shall, in its discretion, determine
the number of shares of Common Stock to be offered from time to time by grant of
Options to officers, directors and other selected employees of the Company as
provided in Section 5, provided that during any three-year period, options may
not be granted under this Plan for an aggregate number of shares of Common Stock
in excess of 2,500,000 shares, in the case of the Company's chief executive
officer, and 1,000,000 shares, in the case of any other officer, subject to
adjustment by the Board to reflect, as deemed appropriate by the Board, any
stock dividend, stock split, reverse stock split, share combination,
reorganization or the like, of or by the Company. The grant of an Option shall
not be deemed either to entitle the Optionee to, or disqualify the Optionee
from, participation in any other grant of options under this Plan or any other
stock option plan of the Company.

      8.    Adjustments. The number of shares of Common Stock covered by each
outstanding Option granted under the Plan and the option price shall be adjusted
to reflect, as deemed appropriate by the Board in its discretion, any stock
dividend, stock split, reverse stock split, share combination, exchange of
shares, recapitalization, merger, consolidation, separation, reorganization,
liquidation or the like of or by the Company. Decisions by the Board as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive on all Optionees.

      9.    Notices. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered on the date which it is personally delivered, or, whether actually
received or not, on the third business day after it is deposited in the United
States mail, certified or registered, postage prepaid, addressed to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith. The Company or an Optionee
may change, at any time and from time to time, by written notice to the other,
the address which it or he had theretofore specified for receiving notices.
Until changed in accordance herewith, the Company and each Optionee shall
specify as its and his address for receiving notices the address set forth in
the option agreement pertaining to the shares to which such notice relates.

      10.   Amendment or Discontinuance. This Plan may be amended or
discontinued by the Board without the approval of the stockholders of the
Company, provided that the Board may not, except as expressly provided in the
Plan, increase the aggregate number of shares which may be issued under Options
granted pursuant to the Plan, materially amend the eligibility requirements of
the Plan or materially increase the

<PAGE>   8

benefits which may accrue to participants under the Plan, without such approval
(if any) as may be required by applicable law or the requirements of any
national stock exchange upon which the Company's Common Stock is traded.

      11.   Effect of the Plan. Neither the adoption of this Plan nor any action
of the Board shall be deemed to give any officer, director or employee any right
to be granted an option to purchase Common Stock of the Company or any other
rights except as may be evidenced by a stock option agreement, or any amendment
thereto, duly authorized by the Board and executed on behalf of the Company and
then only to the extent and on the terms and conditions expressly set forth
therein.

      12.   Stock Split. The share numbers set forth in Sections 4 and 7 hereof
have been adjusted to reflect the two-for-one split of the Company's Common
Stock in the form of a 100% stock dividend, declared by the Board of Directors
on January 25, 2000, and distributable on February 28, 2000, to stockholders of
record on February 7, 2000. Such share numbers are subject to further adjustment
as provided for in said Sections.

<PAGE>   9

                        DALLAS SEMICONDUCTOR CORPORATION

                     AMENDMENT TO 1993 OFFICER AND DIRECTOR
                          STOCK OPTION PLAN, AS AMENDED
            (ADOPTED BY THE BOARD OF DIRECTORS ON NOVEMBER 18, 2000)

      RESOLVED, that, effective immediately, clause (v) of Section 2(b) of the
Corporation's 1993 Officer and Director Stock Option Plan be, and the same
hereby is, deleted.

<PAGE>   10

                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
this ___ day of __________, 199_ (the "Date of Grant"), by and between DALLAS
SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Company"), and
__________, an officer of the Company ("Optionee").

      WHEREAS, the Company's 1993 Officer and Director Stock Option Plan (the
"Plan") provides that certain officers of the Company may from time to time be
granted an option to purchase shares of the Company's Common Stock, par value
$.02 per share (the "Common Stock"), as therein provided, in furtherance of the
purposes of the Plan;

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby grants to Optionee, pursuant to
Section 7(a) of the Plan, the terms and provisions of which Plan are
incorporated herein by reference, an option (the "Option") to purchase all or
any part of __________ shares of the Common Stock of the Company on the terms
and conditions herein set forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be __________ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the

<PAGE>   11

"Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option. Subject to the provisions of Paragraph 14
hereof, this Option shall be exercisable in installments (subject to the right
of accumulation described below) so that this Option shall be exercisable for
25% of the aggregate number of shares provided in Paragraph 1 hereof at the end
of first year of the term hereof and thereafter shall be exercisable for 6.25%
of such aggregate number of shares during each calendar quarter during the term
hereof (until it shall become fully vested at the end of sixteen (16) calendar
quarters from the Date of Grant); provided, however, that this Option, or any
unexercised portion hereof, shall become immediately exercisable in full upon
the occurrence of a Change of Control. To the extent an installment is not
exercised during the time stated, such installment shall accumulate and be
exercisable, in whole or in part, in any subsequent period during the term of
this Option. No fractional shares may be issued pursuant to the exercise of this
Option. Furthermore, the exercise of this Option shall be subject to the
condition that if at any time the Company shall determine in its sole discretion
that the satisfaction of withholding tax or other withholding liabilities, or
that the listing, registration, or qualification of any share otherwise
deliverable upon such exercise upon any national securities exchange or under
any state or federal law, or that the report to, or consent or approval of, any
regulatory body, is necessary or desirable as a condition of, or in connection
with, such exercise or the delivery or purchase of shares pursuant hereto, then
in any such event, such exercise shall not be effective unless such withholding,

                                       2
<PAGE>   12

listing, registration, qualification, report, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option shall have
been exercised shall be registered as designated in the notice. In the event the
Option shall be exercised, pursuant to Paragraph 10 hereof, by any person or
persons other than the Optionee, such notice shall be accompanied by proof
deemed appropriate by the Company of the right of such person or persons to
exercise the Option. All shares that shall be purchased upon the exercise of
this Option as provided herein shall be fully paid and non-assessable.

      6.    Tax Benefit Right. The Board may in its sole discretion at any time
prior to the exercise of this Option grant to Optionee a bonus in an amount in
cash not to exceed the then existing maximum statutory Federal income tax rate
(including any surtax or similar charge or assessment) for individual taxpayers
multiplied by the amount of income, if any, realized by Optionee for Federal
income tax purposes as a result of the exercise of this Option. Any such
payment, if granted, shall be made by the Company upon the due date for such
taxes in the form of a check payable to the Internal Revenue Service for the
account of Optionee, or in such other manner as the Board in its sole discretion
may determine. Any such payment shall otherwise be

                                       3
<PAGE>   13

made upon such terms and conditions as may from time to time be determined by
the Board and such right shall be subject to limitation (as to term, amount, or
otherwise) and to cancellation at any time by the Board in its sole discretion.

      7.    Company Loan. (a) Subject to the provisions of subparagraph (b)
below, upon request of Optionee made at least three (3) business days prior to
the intended exercise date, the Board may (on such exercise date) loan to
Optionee an amount equal to the excess of the aggregate option price of the
Common Stock which Optionee is then electing to purchase pursuant to the
exercise of this Option, or any part hereof, over the aggregate par value of
such Common Stock, less any other consideration delivered by Optionee upon such
exercise, provided that Optionee shall execute a promissory note for such
amount, payable to the order of the Company, in such form as is in accordance
with the provisions of the Plan and as is otherwise satisfactory to the Board.

      (b)   The Company shall have an obligation to make a loan to Optionee only
if the Board shall have determined in its sole discretion prior to the exercise
date that such loan should be made, but shall have no such obligation if the
Board shall have thereafter canceled or suspended the operation of the loan
provisions of the Plan, or if the loan and/or other loans to be made at such
time would exceed any limit on the maximum amount of loans that may be made
under the Plan established from time to time by the Board in its discretion.

      (c)   Such loan shall further be conditioned upon the delivery by Optionee
of such collateral as may be required by the Board and the execution by Optionee
of such stock powers or other instruments which the Board may deem necessary or
advisable in connection with such loan and creation of such security interest.

                                       4
<PAGE>   14

      8.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      9.    Termination of Employment. In the event that Optionee shall at any
time hereafter cease to be an employee of the Company for any reason other than
his death or retirement, any part of the Option granted hereunder which has not
been exercised by the date of such cessation shall immediately terminate on the
date of such cessation. In the event that Optionee's employment by the Company
shall terminate by reason of his retirement or permanent disability, the Option
may be exercised, to the extent of the shares with respect to which the Option
could have been exercised by Optionee on the date of such termination prior to
the date of its expiration or three (3) months after the date of such
termination, whichever occurs first.

      10.   Death of Option. If Optionee dies prior to the termination of his
right to exercise this Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option could have been exercised by
Optionee on the date of Optionee's death, by the Optionee's Successor, provided
the Option is exercised prior to the date of its expiration or one (1) year from
the date of the Optionee's death, whichever occurs first.

      11.   Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its

                                       5
<PAGE>   15

discretion, any stock dividend, stock split, share combination, exchange of
shares, recapitalization, merger, consolidation, separation, reorganization,
liquidation or the like of or by the Company. Decisions by the Board as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive on Optionees.

      12.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a stockholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
shall not confer on Optionee any continued right of employment or tenure as an
officer of the Company or any additional rights other than as expressly provided
for herein. There is no obligation upon Optionee to exercise this Option or any
part thereof.

      13.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1993 Officer & Director Stock Option Plan (and as
amended if the Plan is amended hereafter). In the event of any conflict between
such terms and conditions and those set forth herein, the terms of the Plan
shall govern and be determinative.

      14.   Stockholder Approval. This Option has been granted subject to the
approval of the Plan by stockholders of the Company. Notwithstanding the
provisions of Paragraph 4 hereof, this Option may not be exercised unless and
until the Plan has been duly approved by the stockholders of the Company.

      15.   Shareholders Agreement. The shares of Common Stock issued to
Optionee upon the exercise of this Option shall be deemed to be issued pursuant
to a "fully vested stock option" under the terms of any Shareholder's Agreement
previously entered into between the Company and Optionee.

                                       6
<PAGE>   16

      16.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Stock Option Agreement as of the date first above written.

Address for Notices:                      DALLAS SEMICONDUCTOR CORPORATION

4401 South Beltwood Parkway
Dallas, Texas 75244                       By:    ______________________________

                                          Title: ______________________________

______________________________________           ______________________________
                                                 Optionee

______________________________________

                                       7
<PAGE>   17

                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
this ______ day of ________________, 19___ (the "Date of Grant"), by and between
DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the "Company"), and
_______________, a director of the Company ("Optionee").

      WHEREAS, the Company's 1993 Officer and Director Stock Option Plan (the
"Plan") provides for the automatic grant of an option to purchase shares of the
Company's Common Stock, par value $.02 per share (the "Common Stock") to each of
the Company's non-employee directors in office on the date of adoption of the
Plan or subsequently elected, as therein provided, in furtherance of the
purposes of the Plan;

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby confirms the automatic grant to
Optionee, pursuant to Section 7(b) of the Plan, the terms and provisions of
which Plan are incorporated herein by reference, of an option (the "Option") to
purchase all or any part of ______________ shares of the Common Stock of the
Company on the terms and conditions herein set forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall $______________ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the

<PAGE>   18

Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option. Subject to the provisions of Paragraph 14
hereof, this Option shall be exercisable in installments (subject to the right
of accumulation described below) so that this Option shall be exercisable for
25% of the aggregate number of shares provided in Paragraph 1 hereof at the end
of first year of the term hereof and thereafter shall be exercisable for 6.25%
of such aggregate number of shares during each calendar quarter during the term
hereof (until it shall become fully vested at the end of sixteen (16) calendar
quarters from the Date of Grant); provided, however, that this Option, or any
unexercised portion hereof, shall become immediately exercisable in full upon
the occurrence of a Change of Control. To the extent an installment is not
exercised during the time stated, such installment shall accumulate and be
exercisable, in whole or in part, in any subsequent period during the term of
this Option. No fractional shares may be issued pursuant to the exercise of this
Option. Furthermore, the exercise of this Option shall be subject to the
condition that if at any time the Company shall determine in its sole discretion
that the satisfaction of withholding tax or other withholding liabilities, or
that the listing, registration, or qualification of any share otherwise
deliverable upon such exercise upon any national securities exchange or under
any state or federal law, or that the report to, or consent or approval of, any
regulatory body, is necessary or desirable as a condition of, or in connection
with, such exercise or the delivery or purchase of shares pursuant hereto, then
in any such event, such exercise shall not be effective unless such

                                       2
<PAGE>   19

withholding, listing, registration, qualification, report, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee, may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option shall have
been exercised shall be registered as designated in the notice. In the event the
Option shall be exercised, pursuant to Paragraph 10 hereof, by any person or
persons other than the Optionee, such notice shall be accompanied by proof
deemed appropriate by the Company of the right of such person or persons to
exercise the Option. All shares that shall be purchased upon the exercise of
this Option as provided herein shall be fully paid and non-assessable.

      6.    Tax Benefit Right. The Board may in its sole discretion at any time
prior to the exercise of this Option grant to Optionee a bonus in an amount in
cash not to exceed the then existing maximum statutory Federal income tax rate
(including any surtax or similar charge or assessment) for individual taxpayers
multiplied by the amount of income, if any, realized by Optionee for Federal
income tax purposes as a result of the exercise of this Option. Any such
payment, if granted, shall be made by the Company upon the due date for such
taxes in the form of a check payable to the Internal Revenue Service for the
account of Optionee, or in such other manner as the Board in its sole discretion
may determine. Any such payment shall otherwise be

                                       3
<PAGE>   20

made upon such terms and conditions as may from time to time be determined by
the Board and such right shall be subject to limitation (as to term, amount, or
otherwise) and to cancellation at any time by the Board in its sole discretion.
Any grant of such a bonus to Optionee shall be on such terms and conditions, if
any, as may be permitted under Rule l6b-3 without adversely affecting any
requirement of such rule that the Plan be administered by disinterested persons.

      7.    Company Loan. (a) Subject to the provisions of subparagraph (b)
below, upon request of Optionee made at least three (3) business days prior to
the intended exercise date, the Board may (on such exercise date) loan to
Optionee an amount equal to the excess of the aggregate option price of the
Common Stock which Optionee is then electing to purchase pursuant to the
exercise of this Option, or any part hereof, over the aggregate par value of
such Common Stock, less any other consideration delivered by Optionee upon such
exercise, provided that Optionee shall execute a promissory note for such
amount, payable to the order of the Company, in such form as is in accordance
with the provisions of the Plan and as is otherwise satisfactory to the Board.

            (b)   The Company shall have an obligation to make a loan to
Optionee only if the Board shall have determined in its sole discretion prior to
the exercise date that such loan should be made, but shall have no such
obligation if the Board shall have thereafter canceled or suspended the
operation of the loan provisions of the Plan, if the loan and/or other loans to
be made at such time would exceed any limit on the maximum amount of loans that
may be made under the Plan established from time to time by the Board in its
discretion. Any loan hereunder to Optionee shall be on such terms and
conditions, if any, as may be permitted by Rule 16b-3 without adversely
affecting any requirement of such rule that the Plan be administered by
disinterested persons.

                                       4
<PAGE>   21

            (c)   Such loan shall further be conditioned upon the delivery by
Optionee of such collateral as may be required by the Board and the execution by
Optionee of such stock powers or other instruments which the Board may deem
necessary or advisable in connection with such loan and creation of such
security interest.

      8.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      9.    Termination of Directorship. In the event that Optionee shall at any
time hereafter cease to be a director of the Company by reason of his removal
from office, any part of the Option granted hereunder which has not been
exercised by the date of such removal shall immediately terminate on the date of
such removal. In the event that Optionee's services as a director of the Company
shall terminate by reason of his resignation or retirement and Optionee shall
have then served as a director of the Company for more than three (3) years, the
vesting of any unexercised portion of this Option shall immediately accelerate,
so that any such unexercised portion of this Option may thereafter be exercised
by Optionee (or in the event of his subsequent death, by his Successor), at any
time prior to the date of its expiration. In the event Optionee has not served
as a director of the Company for more than three (3) years at the time of his
resignation or retirement, he (or, in the event of his subsequent death, his
Successor) shall be entitled to exercise, at any time prior to the date of
expiration of this Option, any

                                       5
<PAGE>   22

unexercised portion of this Option exercisable by Optionee at the time of his
resignation or retirement.

      10.   Death of Optionee. If Optionee dies prior to the termination of his
right to exercise this Option in accordance with the provisions hereof without
having fully exercised the Option, the vesting of any unexercised portion of
this Option shall immediately accelerate, so that any such unexercised portion
of this Option may thereafter be exercised by the Optionee's Successor, provided
this Option is exercised prior to the date of its expiration.

      11.   Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionees.

      12.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a stockholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
shall not confer on Optionee any continued right of service or tenure as a
director of the Company or any additional rights other than as expressly
provided for herein. There is no obligation upon Optionee to exercise this
Option or any part thereof.

      13.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1993 Officer & Director Stock Option Plan (and as
amended if the Plan is amended hereafter). In the event of any conflict between
such terms and conditions and those set forth herein, the terms of the Plan
shall govern and be determinative.

                                       6
<PAGE>   23

      14.   Stockholder Approval. This Option has been granted subject to the
approval of the Plan by stockholders of the Company. Notwithstanding the
provisions of Paragraph 4 hereof, this Option may not be exercised unless and
until the Plan has been duly approved by the stockholders of the Company.

      15.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Stock Option Agreement as of the date first above written.

Address for Notices:                      DALLAS SEMICONDUCTOR CORPORATION

4401 South Beltwood Parkway               By:    ______________________________
Dallas, Texas 75244
                                          Title: ______________________________

______________________________________

______________________________________           ______________________________
                                                 Optionee

                                       7
<PAGE>   24

                      NON-QUALIFIED STOCK OPTION AGREEMENT

      THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into this _____ day of __________, 19__ (the "Date of Grant"), by and
between DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company"), and __________, an employee of the Company ("Optionee").

      WHEREAS, the Company desires, by affording Optionee an opportunity to
purchase shares of its Common Stock, par value $.02 per share (the "Common
Stock"), as hereinafter provided, to carry out the purposes of the Dallas
Semiconductor Corporation 1987 Stock Option Plan (the "Plan");

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby grants to Optionee, pursuant to
the Plan, the terms and provisions of which are incorporated herein by
reference, an option (the "Option") to purchase all or any part of
__________shares of the Common Stock of the Company on the terms and conditions
herein set forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be $______ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the
"Board") and such

                                       1
<PAGE>   25

determinations shall be binding upon the Optionee. No shares may be issued until
full payment of the purchase price therefor has been made.

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option. This Option shall be exercisable in full or
in part at any time, and from time to time, during the term hereof, at any time
after the Date of Grant. No fractional shares may be issued pursuant to the
exercise of this Option. Furthermore, the exercise of this Option shall be
subject to the condition that if at any time the Company shall determine in its
sole discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any national securities exchange
or under any state or federal law, or that the report to, or consent or approval
of, any `regulatory body, is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares pursuant
hereto, then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, report, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and

                                       2
<PAGE>   26

payment shall be received. The certificate or certificates for the shares as to
which the Option shall have been exercised shall be registered as designated in
the notice. In the event the Option shall be exercised, pursuant to Paragraph 8
hereof, by any person or persons other than the Optionee, such notice shall be
accompanied by proof deemed appropriate by the Company of the right of such
person or persons to exercise the Option. All shares that shall be purchased
upon the exercise of this Option as provided herein shall be fully paid and
non-assessable.

      6.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by the laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      7.    Termination of Employment. In the event that Optionee shall at any
time hereafter cease to be an employee of the Company or its subsidiaries for
any reason other than his death, retirement or permanent disability, any part of
the Option granted hereunder which has not been exercised by the date of such
cessation shall immediately terminate on the date of such cessation. In the
event that Optionee's employment with the Company or its subsidiary shall
terminate by reason of his retirement or permanent disability, the Option may be
exercised, to the extent of the shares with respect to which the Option could
have been exercised by Optionee on the date of such termination prior to the
date of its expiration or three (3) months after the date of such termination,
whichever occurs first.

      8.    Death of Optionee. If Optionee dies prior to the termination of his
right to exercise the Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option

                                       3
<PAGE>   27

could have been exercised by Optionee on the date of Optionee's death, by the
Optionee's estate or by the person who acquires the right to exercise the Option
by bequest, inheritance, or by reason of the death of the Optionee, provided the
Option is exercised prior to the date of its expiration or one (1) year from the
date of the Optionee's death, whichever occurs first.

      9.    Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionees.

      10.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a shareholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
does not confer on Optionee any continued right of employment or directorship
with the Company or any additional rights other than as expressly provided for
herein. There is no obligation upon Optionee to exercise this Option or any part
thereof.

      11.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1987 Stock Option Plan (and as amended hereafter if
the Plan is amended hereafter). In the event of any conflict between such terms
and conditions and those set forth herein, the terms of the Plan shall govern
and be determinative.

      12.   Incentive Stock Option. This option is not intended to qualify as an
"incentive stock option" under the Internal Revenue Code of 1986, as amended,
and applicable regulations and rulings promulgated thereunder, and shall not be
so construed.

                                       4
<PAGE>   28

      13.   Amendment. The Board shall have the right, without the consent or
approval of the Optionee, to amend, modify, limit or terminate this Option or
any term or provision hereof. Any such action by the Board shall be final and
binding on Optionee.

      14.   Shareholder's Agreement. The exercise of this Option is expressly
conditioned upon the prior or contemporaneous execution by the Optionee and the
Company of a Shareholder's Agreement, as provided in the Plan. All rights of the
Optionee and his heirs, successors and assigns shall be determined by such
agreement and the Optionee and his heirs, successors and assigns shall be bound
thereby. The shares of Common Stock issued pursuant to the exercise hereof shall
not be deemed to be issued vested stock option" and shall be subject to the
repurchase rights as provided in such agreement.

      15.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Non-Qualified Stock Option Agreement as of the date first above
written.

 Address for Notices:                     DALLAS SEMICONDUCTOR CORPORATION

4350 Beltwood Parkway South
Dallas, Texas 75244                       By:    ______________________________

                                          Title: ______________________________

______________________________________    _____________________________________

______________________________________

                                       5
<PAGE>   29

                      NON-QUALIFIED STOCK OPTION AGREEMENT

      THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into this _____ day of __________, 19__ (the "Date of Grant"), by and
between DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company"), and __________, an employee of the Company ("Optionee").

      WHEREAS, the Company desires, by affording Optionee an opportunity to
purchase shares of its Common Stock, par value $.02 per share (the "Common
Stock"), as hereinafter provided, to carry out the purposes of the Dallas
Semiconductor Corporation 1987 Stock Option Plan (the "Plan");

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby grants to Optionee, pursuant to
the Plan, the terms and provisions of which are incorporated herein by
reference, an option (the "Option") to purchase all or any part of __________
shares of the Common Stock of the Company on the terms and conditions herein set
forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be $______ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the
"Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.

<PAGE>   30

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option. This Option shall be exercisable in full or
in part at any time, and from time to time, during the term hereof, at any time
commencing on the last day of the first completed calendar quarter following the
Date of Grant. No fractional shares may be issued pursuant to the exercise of
this Option. Furthermore, the exercise of this Option shall be subject to the
condition that if at any time the Company shall determine in its sole discretion
that the satisfaction of withholding tax or other withholding liabilities, or
that the listing, registration, or qualification of any shares otherwise
deliverable upon such exercise upon any national securities exchange or under
any state or federal law, or that the report to, or consent or approval of, any
regulatory body, is necessary or desirable as a condition of, or in connection
with, such exercise or the delivery or purchase of shares pursuant hereto, then
in any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, report, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or. certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option

                                       2
<PAGE>   31

shall have been exercised shall be registered as designated in the notice. In
the event the Option shall be exercised, pursuant to Paragraph 10 hereof, by any
person or persons other than the Optionee, such notice shall be accompanied by
proof deemed appropriate by the Company of the right of such person or persons
to exercise the Option. All shares that shall be purchased upon the exercise of
this Option as provided herein shall be fully paid and non-assessable.

      6.    Tax Benefit Right. The Compensation Committee (the "Committee") of
the Board may in its sole discretion at any time prior to the exercise of this
Option grant to Optionee a bonus in an amount in cash not to exceed the then
existing maximum statutory Federal income tax rate (including any surtax or
similar charge or assessment) for individual taxpayers multiplied by the amount
of ordinary income, if any, realized by Optionee for Federal income tax purposes
as a result of the exercise of this Option. Any such payment, if granted, shall
be made by the Company upon the due date for such taxes in the form of a check
payable to the Internal Revenue Service for the account of Optionee, or in such
other manner as the Committee in its sole discretion may determine. Any such
payment shall otherwise be made upon such terms and conditions as may from time
to time be determined by the Committee and such right shall be subject to
limitation (as to term, amount, or otherwise) and to cancellation at any time by
the Committee in its sole discretion.

      7.    Company Loan. (a) Subject to the provisions of subparagraph (b)
below, upon request of Optionee made at least three (3) business days prior to
the intended exercise date, the Company may (on such exercise date) loan to
Optionee an amount equal to the excess of the aggregate option price of the
Common Stock which Optionee is then electing to purchase pursuant to the
exercise of this Option, or any part hereof, over the aggregate par value of
such Common Stock, less any other consideration delivered by Optionee upon such
exercise, provided that Optionee shall execute a promissory note for such
amount, payable to the order of the

                                       3
<PAGE>   32

Company, in such form as is in accordance with the provisions of the Plan and as
is otherwise satisfactory to the Committee.

      (b)   The Company shall have an obligation to make a loan to Optionee only
if the Committee shall have determined in its sole discretion prior to the
exercise date that such loan should be made, but shall have no such obligation
if the Committee shall have thereafter cancelled or suspended the operation of
the loan provisions of the Plan, or if the loan and/or other loans to be made at
such time would exceed any limit on the maximum amount of loans that may be made
under the Plan established from time to time by the Committee in its discretion.

      (c)   Such loan shall further be conditioned upon the delivery by Optionee
of such collateral as may be required by the Committee and the execution by
Optionee of such stock powers or other instruments which the Committee may deem
necessary or advisable in connection with such loan and creation of such
security interest.

      8.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by the laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      9.    Termination of Employment. In the event that Optionee shall at any
time hereafter cease to be an employee of the Company or its subsidiaries for
any reason other than his death, retirement or permanent disability, any part of
the Option granted hereunder which has not been exercised by the date of such
cessation shall immediately terminate on the date of such cessation. In the
event that Optionee's employment with the Company or its subsidiary shall
terminate by reason of his retirement or permanent disability, the Option may be
exercised, to the extent of the

                                       4
<PAGE>   33

shares with respect to which the Option could have been exercised by Optionee on
the date of such termination prior to the date of its expiration or three (3)
months after the date of such termination, whichever occurs first.

      10.   Death of Optionee. If Optionee dies prior to the termination of his
right to exercise the Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option could have been exercised by
Optionee on the date of Optionee's death, by the Optionee's estate or by the
person who acquires the right to exercise the Option by bequest, inheritance, or
by reason of the death of the Optionee, provided the Option is exercised prior
to the date of its expiration or one (1) year from the date of the Optionee's
death, whichever occurs first.

      11.   Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionees.

      12.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a shareholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
does not confer on Optionee any continued right of employment or directorship
with the Company or any additional rights other than as expressly provided for
herein. There is no obligation upon Optionee to exercise this Option or any part
thereof.

      13.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1987 Stock Option Plan (and as amended hereafter if
the Plan is amended hereafter).

                                       5
<PAGE>   34

In the event of any conflict between such terms and conditions and those set
forth herein, the terms of the Plan shall govern and be determinative.

      14.   Incentive Stock Option. This option is not intended to qualify as an
"incentive stock option" under the Internal Revenue Code of 1986, as amended,
and applicable regulations and rulings promulgated thereunder, and shall not be
so construed.

      15.   Amendment. The Board shall have the right, without the consent or
approval of the Optionee, to amend, modify, limit or terminate this Option or
any term or provision hereof. Any such action by the Board shall be final and
binding on Optionee.

      16.   Shareholder's Agreement. The exercise of this Option is expressly
conditioned upon the prior or contemporaneous execution by the Optionee and the
Company of a Shareholder's Agreement, as provided in the Plan. All rights of the
Optionee and his heirs, successors and assigns shall be determined by such
agreement and the Optionee and his heirs, successors and assigns shall be bound
thereby. The shares of Common Stock issued pursuant to the exercise hereof shall
not be deemed to be issued pursuant to a "fully vested stock option" and shall
be subject to the repurchase rights as provided in such agreement.

      17.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Non-Qualified Stock Option Agreement as of the date first above
written.

                                       6
<PAGE>   35

Address for Notices:                      DALLAS SEMICONDUCTOR CORPORATION

4350 Beltwood Parkway South
Dallas, Texas 75244                       By:    ______________________________

                                          Title: ______________________________

______________________________________    _____________________________________

______________________________________

                                       7
<PAGE>   36

                      NON-QUALIFIED STOCK OPTION AGREEMENT

      THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into this _____ day of __________, 19__ (the "Date of Grant"), by and
between DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company"), and __________, an employee of the Company ("Optionee").

      WHEREAS, the Company desires, by affording Optionee an opportunity to
purchase shares of its Common Stock, par value $.02 per share (the "Common
Stock"), as hereinafter provided, to carry out the purposes of the Dallas
Semiconductor Corporation 1987 Stock Option Plan (the "Plan");

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby grants to Optionee, pursuant to
the Plan, the terms and provisions of which are incorporated herein by
reference, an option (the "Option") to purchase all or any part of __________
shares of the Common Stock of the Company on the terms and conditions herein set
forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be $______ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the
"Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.

<PAGE>   37

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option This Option shall be exercisable in
installments (subject to the right of accumulation described below) so that this
Option shall be exercisable for 6.25% of the aggregate number of shares provided
in Paragraph 1 hereof during each calendar quarter during the term hereof
commencing at the end of the first completed calendar quarter (until it shall
become fully vested at the end of sixteen (16) calendar quarters). To the extent
an installment is not exercised during the time stated, such installment shall
accumulate and be exercisable, in whole or in part, in any subsequent period
during the term of this Option. No fractional shares may be issued pursuant to
the exercise of this Option. Furthermore, the exercise of this Option shall be
subject to the condition that if at any time the Company shall determine in its
sole discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any national securities exchange
or under any state or federal law, or that the report to, or consent or approval
of, any regulatory body, is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares pursuant
hereto, then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, report, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and

                                       2
<PAGE>   38

shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option shall have
been exercised shall be registered as designated in the notice. In the event the
Option shall be exercised, pursuant to Paragraph 10 hereof, by any person or
persons other than the Optionee, such notice shall be accompanied by proof
deemed appropriate by the Company of the right of such person or persons to
exercise the Option. All shares that shall be purchased upon the exercise of
this Option as provided herein shall be fully paid and non-assessable.

      6.    Tax Benefit Right. The Compensation Committee (the "Committee") of
the Board may in its sole discretion at any time prior to the exercise of this
Option grant to Optionee a bonus in an amount in cash not to exceed the then
existing maximum statutory Federal income tax rate (including any surtax or
similar charge or assessment) for individual taxpayers multiplied by the amount
of ordinary income, if any, realized by Optionee for Federal income tax purposes
as a result of the exercise of this Option. Any such payment, if granted, shall
be made by the Company upon the due date for such taxes in the form of a check
payable to the Internal Revenue Service for the account of Optionee, or in such
other manner as the Committee in its sole discretion may determine. Any such
payment shall otherwise be made upon such terms and conditions as may from time
to time be determined by the Committee and such right shall be subject to
limitation (as to term, amount, or otherwise) and to cancellation at any time by
the Committee in its sole discretion.

      7.    Company Loan. (a) Subject to the provisions of subparagraph (b)
below, upon request of Optionee made at least three (3) business days prior to
the intended exercise date, the Company may (on such exercise date) loan to
Optionee an amount equal to the excess of the aggregate option price of the
Common Stock which Optionee is then electing to purchase pursuant to the
exercise of this Option,

                                       3
<PAGE>   39

or any part hereof, over the aggregate par value of such Common Stock, less any
other consideration delivered by Optionee upon such exercise, provided that
Optionee shall execute a promissory note for such amount, payable to the order
of the Company, in such form as is in accordance with the provisions of the Plan
and as is otherwise satisfactory to the Committee.

      (b)   The Company shall have an obligation to make a loan to Optionee only
if the Committee shall have determined in its sole discretion prior to the
exercise date that such loan should be made, but shall have no such obligation
if the Committee shall have thereafter cancelled or suspended the operation of
the loan provisions of the Plan, or if the loan and/or other loans to be made at
such time would exceed any limit on the maximum amount of loans that may be made
under the Plan established from time to time by the Committee in its discretion.

      (c)   Such loan shall further be conditioned upon the delivery by Optionee
of such collateral as may be required by the Committee and the execution by
Optionee of such stock powers or other instruments which the Committee may deem
necessary or advisable in connection with such loan and creation of such
security interest.

      8.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by the laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      9.    Termination of Employment. In the event that Optionee shall at any
time hereafter cease to be an employee of the Company or its subsidiaries for
any reason other than his death, retirement or permanent disability, any part of
the Option granted hereunder which has not been exercised by the date of such
cessation shall immediately terminate on the date of such cessation.

                                       4
<PAGE>   40

In the event that Optionee's employment with the Company or its subsidiary shall
terminate by reason of his retirement or permanent disability, the Option may be
exercised, to the extent of the shares with respect to which the Option could
have been exercised by Optionee on the date of such termination prior to the
date of its expiration or three (3) months after the date of such termination,
whichever occurs first.

      10.   Death of Optionee. If Optionee dies prior to the termination of his
right to exercise the Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option could have been exercised by
Optionee on the date of Optionee's death, by the Optionee's estate or by the
person who acquires the right to exercise the Option by bequest, inheritance, or
by reason of the death of the Optionee, provided the Option is exercised prior
to the date of its expiration or one (1) year from the date of the Optionee's
death, whichever occurs first.

      11.   Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange or shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionees.

      12.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a shareholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
does not confer on Optionee any continued right of employment or directorship
with the Company or any additional rights other than as expressly provided for
herein. There is no obligation upon Optionee to exercise this Option or any part
thereof.

                                       5
<PAGE>   41

      13.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1987 Stock Option Plan (and as amended hereafter if
the Plan is amended hereafter). In the event of any conflict between such terms
and conditions and those set forth herein, the terms of the Plan shall govern
and be determinative.

      14.   Incentive Stock Option. This option is not intended to qualify as an
"incentive stock option" under the Internal Revenue Code of 1986, as amended,
and applicable regulations and rulings promulgated thereunder, and shall not be
so construed.

      15.   Amendment. The Board shall have the right, without the consent or
approval of the Optionee, to amend, modify, limit or terminate this Option or
any term or provision hereof. Any such action by the Board shall be final and
binding on Optionee.

      16.   Shareholder's Agreement. The exercise of this Option is expressly
conditioned upon the prior or contemporaneous execution by the Optionee and the
Company of a Shareholder's Agreement, as provided in the Plan. All rights of the
Optionee and his heirs, successors and assigns shall be determined by such
agreement and the Optionee and his heirs, successors and assigns shall be bound
thereby. The shares of Common Stock issued pursuant to the exercise hereof shall
be deemed to be issued pursuant to a "fully vested stock option" and shall not
be subject to the repurchase rights as provided in such agreement.

      17.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Non-Qualified Stock Option Agreement as of the date first above
written.

                                       6
<PAGE>   42

Address for Notices:                      DALLAS SEMICONDUCTOR CORPORATION

4350 Beltwood Parkway South
Dallas, Texas 75244                       By:    ______________________________

                                          Title: ______________________________

______________________________________    _____________________________________

______________________________________

                                       7
<PAGE>   43

                      NON-QUALIFIED STOCK OPTION AGREEMENT

      THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into this _____ day of __________, 19__ (the "Date of Grant"), by and
between DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company"), and __________, an employee of the Company ("Optionee").

      WHEREAS, the Company desires, by affording Optionee an opportunity to
purchase shares of its Common Stock, par value $.02 per share (the "Common
Stock"), as hereinafter provided, to carry out the purposes of the Dallas
Semiconductor Corporation 1987 Stock Option Plan (the "Plan");

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby grants to Optionee, pursuant to
the Plan, the terms and provisions of which are incorporated herein by
reference, an option (the "Option") to purchase all or any part of ________
shares of the Common Stock of the Company on the terms and conditions herein set
forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be $_____ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the
"Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.

<PAGE>   44

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option. This Option shall be exercisable in full or
in part at any time, and from time to time, during the term hereof, at any time
commencing on the last day of the first completed calendar quarter following the
Date of Grant. No fractional shares may be issued pursuant to the exercise of
this Option. Furthermore, the exercise of this Option shall be subject to the
condition that if at any time the Company shall determine in its sole discretion
that the satisfaction of withholding tax or other withholding liabilities, or
that the listing, registration, or qualification of any shares otherwise
deliverable upon such exercise upon any national securities exchange or under
any state or federal law, or that the report to, or consent or approval of, any
regulatory body, is necessary or desirable as a condition of, or in connection
with, such exercise or the delivery or purchase of shares pursuant hereto, then
in any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, report, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option

                                       2
<PAGE>   45

shall have been exercised shall be registered as designated in the notice. In
the event the Option shall be exercised, pursuant to Paragraph 10 hereof, by any
person or persons other than the Optionee, such notice shall be accompanied by
proof deemed appropriate by the Company of the right of such person or persons
to exercise the Option. All shares that shall be purchased upon the exercise of
this Option as provided herein shall be fully paid and non-assessable.

      6.    Tax Benefit Right. The Compensation Committee (the "Committee") of
the Board may in its sole discretion at any time prior to the exercise of this
Option grant to Optionee a bonus in an amount in cash not to exceed the then
existing maximum statutory Federal income tax rate (including any surtax or
similar charge or assessment) for individual taxpayers multiplied by the amount
of ordinary income, if any, realized by Optionee for Federal income tax purposes
as a result of the exercise of this Option. Any such payment, if granted, shall
be made by the Company upon the due date for such taxes in the form of a check
payable to the Internal Revenue Service for the account of Optionee, or in such
other manner as the Committee in its sole discretion may determine. Any such
payment shall otherwise be made upon such terms and conditions as may from time
to time be determined by the Committee and such right shall be subject to
limitation (as to term, amount, or otherwise) and to cancellation at any time by
the Committee in its sole discretion.

      7.    Company Loan. (a) Subject to the provisions of subparagraph (b)
below, upon request of Optionee made at least three (3) business days prior to
the intended exercise date, the Company may (on such exercise date) loan to
Optionee an amount equal to the excess of the aggregate option price of the
Common Stock which Optionee is then electing to purchase pursuant to the
exercise of this Option, or any part hereof, over the aggregate par value of
such Common Stock, less any other consideration delivered by Optionee upon such
exercise, provided that Optionee shall execute a promissory note for such
amount, payable to the order of the

                                       3
<PAGE>   46

Company, in such form as is in accordance with the provisions of the Plan and as
is otherwise satisfactory to the Committee.

      (b)   The Company shall have an obligation to make a loan to Optionee only
if the Committee shall have determined in its sole discretion prior to the
exercise date that such loan should be made, but shall have no such obligation
if the Committee shall have thereafter cancelled or suspended the operation of
the loan provisions of the Plan, or if the loan and/or other loans to be made at
such time would exceed any limit on the maximum amount of loans that may be made
under the Plan established from time to time by the Committee in its discretion.

      (c)   Such loan shall further be conditioned upon the delivery by Optionee
of such collateral as may be required by the Committee and the execution by
Optionee of such stock powers or other instruments which the Committee may deem
necessary or advisable in connection with such loan and creation of such
security interest.

      8.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by the laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      9.    Termination of Employment. In the event that Optionee shall at any
time hereafter cease to be an employee of the Company or its subsidiaries for
any reason other than his death, retirement or permanent disability, any part of
the Option granted hereunder which has not been exercised by the date of such
cessation shall immediately terminate on the date of such cessation. In the
event that Optionee's employment with the Company or its subsidiary shall
terminate by reason of his retirement or permanent disability, the Option may be
exercised, to the extent of the

                                       4
<PAGE>   47

shares with respect to which the Option could have been exercised by Optionee on
the date of such termination prior to the date of its expiration or three (3)
months after the date of such termination, whichever occurs first.

      10.   Death of Optionee. If Optionee dies prior to the termination of his
right to exercise the Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option could have been exercised by
Optionee on the date of Optionee's death, by the Optionee's estate or by the
person who acquires the right to exercise the Option by bequest, inheritance, or
by reason of the death of the Optionee, provided the Option is exercised prior
to the date of its expiration or one (1) year from the date of the Optionee's
death, whichever occurs first.

      11.   Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionees.

      12.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a shareholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
does not confer on Optionee any continued right of employment or directorship
with the Company or any additional rights other than as expressly provided for
herein. There is no obligation upon Optionee to exercise this Option or any part
thereof.

      13.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1987 Stock Option Plan (and as amended hereafter if
the Plan is amended hereafter).

                                       5
<PAGE>   48

In the event of any conflict between such terms and conditions and those set
forth herein, the terms of the Plan shall govern and be determinative.

      14.   Incentive Stock Option. This option is not intended to qualify as an
"incentive stock option" under the Internal Revenue Code of 1986, as amended,
and applicable regulations and rulings promulgated thereunder, and shall not be
so construed.

      15.   Amendment. The Board shall have the right, without the consent or
approval of the Optionee, to amend, modify, limit or terminate this Option or
any term or provision hereof. Any such action by the Board shall be final and
binding on Optionee.

      16.   Shareholder's Agreement. The exercise of this Option is expressly
conditioned upon the prior or contemporaneous execution by the Optionee and the
Company of a Shareholder's Agreement, as provided in the Plan. All rights of the
Optionee and his heirs, successors and assigns shall be determined by such
agreement and the Optionee and his heirs, successors and assigns shall be bound
thereby. The shares of Common Stock issued pursuant to the exercise hereof shall
not be deemed to be issued pursuant to a "fully vested stock option" and shall
be subject to the repurchase rights as provided in such agreement.

      17.   Stockholder Approval. This Option has been granted pursuant to an
amendment to the Plan adopted by the Board of Directors and subject to the
approval of the stockholders of the Company. Notwithstanding the provisions of
Section 4 hereof, this Option may not be exercised unless and until such
amendment to the Plan has been duly approved by the stockholders of the Company.

      18.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Non-Qualified Stock Option Agreement as of the date first above
written.

                                       6
<PAGE>   49

Address for Notices:                      DALLAS SEMICONDUCTOR CORPORATION

4350 Beltwood Parkway South
Dallas, Texas 75244                       By:    ______________________________

                                          Title: ______________________________

______________________________________    _____________________________________

______________________________________

                                       7
<PAGE>   50

                      NON-QUALIFIED STOCK OPTION AGREEMENT

      THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made and
entered into this _____ day of __________ 19__ (the "Date of Grant"), by and
between DALLAS SEMICONDUCTOR CORPORATION, a Delaware corporation (the
"Company"), and __________, an employee of the Company ("Optionee").

      WHEREAS, the Company desires, by affording Optionee an opportunity to
purchase shares of its Common Stock, par value $.02 per share (the "Common
Stock"), as hereinafter provided, to carry out the purposes of the Dallas
Semiconductor Corporation 1987 Stock Option Plan (the "Plan");

      NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:

      1.    Grant of Option. The Company hereby grants to Optionee, pursuant to
the Plan, the terms and provisions of which are incorporated herein by
reference, an option (the "Option") to purchase all or any part of ________
shares of the Common Stock of the Company on the terms and conditions herein set
forth.

      2.    Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be $_____ per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash or by check, or by
delivery of previously owned shares of Common Stock, or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered in
connection with the payment of the option price shall be the fair market value
of such shares as determined by the Board of Directors of the Company (the
"Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.

<PAGE>   51

      3.    Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein and in the Plan.

      4.    Exercise of the Option. This Option shall be exercisable in fun or
in part at any time, and from time to time, during the term hereof, at any time
after the Date of Grant. No fractional shares may be issued pursuant to the
exercise of this Option. Furthermore, the exercise of this Option shall be
subject to the condition that if at any time the Company shall determine in its
sole discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any national securities exchange
or under any state or federal law, or that the report to, or consent or approval
of, any regulatory body, is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares pursuant
hereto, then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, report, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.

      5.    Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option shall have
been exercised shall be registered as designated in the notice. In the event the
Option

                                       2
<PAGE>   52

shall be exercised, pursuant to Paragraph 8 hereof, by any person or persons
other than the Optionee, such notice shall be accompanied by proof deemed
appropriate by the Company of the right of such person or persons to exercise
the Option. All shares that shall be purchased upon the exercise of this Option
as provided herein shall be fully paid and non-assessable.

      6.    Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by the laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to the execution, attachment, or
similar process except with the prior written consent of the Board.

      7.    Termination of Employment. In the event that Optionee shall at any
time hereafter cease to be an employee of the Company or its subsidiaries for
any reason other than his death, retirement or permanent disability, any part of
the Option granted hereunder which has not been exercised by the date of such
cessation shall immediately terminate on the date of such cessation. In the
event that Optionee's employment with the Company or its subsidiary shall
terminate by reason of his retirement or permanent disability, the Option may be
exercised, to the extent of the shares with respect to which the Option could
have been exercised by Optionee on the date of such termination prior to the
date of its expiration or three (3) months after the date of such termination,
whichever occurs first.

      8.    Death of Optionee. If Optionee dies prior to the termination of his
right to exercise the Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option could have been exercised by
Optionee on the date of Optionee's death, by the Optionee's estate or by the
person who acquires the right to exercise the Option by bequest, inheritance, or
by

                                       3
<PAGE>   53

reason of the death of the Optionee, provided the Option is exercised prior to
the date of its expiration or one (1) year from the date of the Optionee's
death, whichever occurs first.

      9.    Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionees.

      10.   No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a shareholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
does not confer on Optionee any continued right of employment or directorship
with the Company or any additional rights other than as expressly provided for
herein. There is no obligation upon Optionee to exercise this Option or any part
thereof.

      11.   Subject to Plan. This option is subject to all of the terms and
conditions of the Company's 1987 Stock Option Plan (and as amended hereafter if
the Plan is amended hereafter). In the event of any conflict between such terms
and conditions and those set forth herein, the terms of the Plan shall govern
and be determinative.

      12.   Incentive Stock Option. This option is not intended to qualify as an
"incentive stock option" under the Internal Revenue Code of 1986, as amended,
and applicable regulations and rulings promulgated thereunder, and shall not be
so construed.

      13.   Amendment. The Board shall have the right, without the consent or
approval of the Optionee, to amend, modify, limit or terminate this Option or
any term or provision hereof. Any such action by the Board shall be final and
binding on Optionee.

                                       4
<PAGE>   54

      14.   Shareholder's Agreement. The exercise of this Option is expressly
conditioned upon the prior or contemporaneous execution by the Optionee and the
Company of a Shareholder's Agreement, as provided in the Plan. All rights of the
Optionee and his heirs, successors and assigns shall be determined by such
agreement and the Optionee and his heirs, successors and assigns shall be bound
thereby. The shares of Common Stock issued pursuant to the exercise hereof shall
not be deemed to be issued pursuant to a "fully vested stock option" and shall
be subject to the repurchase rights as provided in such agreement.

      15.   Stockholder Approval. This Option has been granted pursuant to an
amendment to the Plan adopted by the Board of Directors and subject to the
approval of the stockholders of the Company. Notwithstanding the provisions of
Section 4 hereof, this Option may not be exercised unless and until such
amendment to the Plan has been duly approved by the stockholders of the Company.

      16.   Defined Terms. Unless otherwise defined herein, the capitalized
terms used herein shall have the same meaning given to such terms in the Plan.

      IN WITNESS WHEREOF, Dallas Semiconductor Corporation and Optionee have
executed this Non-Qualified Stock Option Agreement as of the date first above
written.

Address for Notices:                      DALLAS SEMICONDUCTOR CORPORATION

4350 Beltwood Parkway South
Dallas, Texas 75244                       By:    ______________________________

                                          Title: ______________________________

______________________________________    _____________________________________

______________________________________

                                       5

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