Document:

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                                                                   Exhibit 4.b.3

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the
10 day of November, 1999, by and among Conexant Systems, Inc., a Delaware
corporation (the "Company"), and the Common Stock investors listed on the
signature page hereto (each an "Investor," and collectively, the "Investors)."

                                    RECITALS

         WHEREAS, the Company, the Investors, Istari Design, Inc., a California
corporation, and Istari Acquisition Corp., a Delaware corporation, are parties
to that certain Agreement and Plan of Reorganization dated November 10, 1999
(the "Merger Agreement"); and

         WHEREAS, the Merger Agreement grants the Investors registration rights
with respect to shares of the Company's Common Stock issuable to the Investors
under the terms of the Merger Agreement.

         NOW, THEREFORE, the parties hereby agree as follows:

1.       Registration Rights. The Company covenants and agrees as follows:

              1.1 Definitions. For purposes of this Agreement:

              (a) The term "Act" means the Securities Act of 1933, as amended.

              (b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.

              (c) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance with
Section 1.10 hereof.

              (d) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.

              (e) The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.

              (f) The term "Registrable Securities" means the Common Stock
issuable or issued to the Investors in accordance with the Merger Agreement and
any shares of Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in
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exchange for or in replacement of the shares referenced above, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which his rights under this Section 1 are not assigned.

              (g) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are held by the Holders and are Registrable Securities.

              (h) The term "SEC" shall mean the Securities and Exchange
Commission.

              1.2 Company Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
stock or other securities under the Act on a Form S-3 in connection with the
public offering of such securities solely for cash (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan, a registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities which are also being registered), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after the Company
provides such notice in accordance with Section 2.5, the Company shall, subject
to the provisions of Section 1.6, cause to be registered under the Act all of
the Registrable Securities that each such Holder has requested to be registered.

              1.3 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.

              1.4 Expenses of Company Registration. The Company shall bear and
pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.2 for each Holder (which right may be assigned as provided
in Section 1.10), including (without limitation) all registration, filing and
qualification fees, printers and accounting fees relating or apportionable
thereto and, in connection with an underwritten offering, the fees and
disbursements of counsel for the Company in its capacity as counsel to the
Company and the selling Holders hereunder (if Company counsel does not make
itself available for this purpose, the Company will pay the reasonable fees and
disbursements of counsel for the Company and one counsel for the selling Holders
selected by such selling Holders), but excluding underwriting discounts and
commissions relating to Registrable Securities.

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              1.5 Obligations of the Company. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, at its expense, as expeditiously as reasonably possible:

              (a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to sixty (60) days or until
the distribution contemplated in the Registration Statement has been completed;
provided, however, that (i) such 60-day period shall be extended for a period of
time equal to the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of Common Stock
(or other securities) of the Company; and (ii) in the case of any registration
of Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 60-day period shall be extended, if necessary,
to keep the registration statement effective until all such Registrable
Securities are sold, provided that Rule 415, or any successor rule under the
Act, permits an offering on a continuous or delayed basis, and provided further
that applicable rules under the Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
which (i) includes any prospectus required by Section 10(a)(3) of the Act or
(ii) reflects facts or events representing a material or fundamental change in
the information set forth in the registration statement, the incorporation by
reference of information required to be included in (i) and (ii) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the 1934
Act in the registration statement.

              (b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.

              (c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, or any amendments or supplements to the
prospectus, in conformity with the requirements of the Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them.

              (d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.

              (e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

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              (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.

              (g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.

              1.6 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock (including an
initial public offering), the Company shall not be required under Section 1.2 to
include any of the Holders' securities in such underwriting unless they accept
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the underwriters determine in
their sole discretion will not, jeopardize the success of the offering by the
Company. If the total amount of securities, including Registrable Securities,
requested by shareholders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling shareholders
according to the total amount of securities entitled to be included therein
owned by each selling shareholder or in such other proportions as shall mutually
be agreed to by such selling shareholders). For purposes of the preceding
parenthetical concerning apportionment, for any selling shareholder which is a
holder of Registrable Securities and which is a partnership or corporation, the
partners, retired partners and shareholders of such holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
shareholder," and any pro rata reduction with respect to such "selling
shareholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling shareholder," as defined in this sentence.

              1.7 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.

              1.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:

              (a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act,

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against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Act or the 1934 Act, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations (each a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will pay to each such Holder, underwriter or controlling person
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 1.8(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.

              (b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act or the 1934 Act, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will pay any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this Section 1.8(b), in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 1.8(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this Section 1.8(b) exceed the gross proceeds from the offering received
by such Holder.

              (c) Promptly after receipt by an indemnified party under this
Section 1.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the

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indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.8, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.8.

              (d) If the indemnification provided for in this Section 1.8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

              (e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.

              (f) The obligations of the Company and Holders under this Section
1.8 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1 and otherwise.

              1.9 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:

              (a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144; and

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              (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act.

              1.10 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities, provided: (a) the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and address
of such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 1.11 below;
and (c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act.

              1.11 Termination of Registration Rights. No Holder shall be
entitled to exercise any right provided for in this Section 1 upon the
expiration of two (2) years following the date any Registrable Securities are
first issued to the Investors pursuant to the Merger Agreement. Notwithstanding
the foregoing, no Holder shall be entitled to exercise any rights hereunder with
respect to any Registrable Securities that such Holder can sell pursuant to Rule
144 promulgated under the Act and any other rule or regulation of the SEC that
may at any time permit a Holder to sell securities of the Company to the public
without registration.

2.       Miscellaneous.

              2.1 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

              2.2 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California
applicable to agreements entered into, to be wholly performed in and among
residents exclusively of, California.

              2.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

              2.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

              2.5 Notices. Unless otherwise expressly provided herein, all
notices, requests, demands, instructions, documents and other communications to
be given hereunder by either

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party to the other shall be in writing, shall be sent to the address/fax number
set forth below (provided that any party may at any time change its address for
notice or other such information by giving written notice thereof in accordance
with this Section), and shall be deemed to be duly given upon the earliest of
(i) hand delivery, (ii) the first business day after sending by reputable
overnight delivery service for next-day delivery, (iii) the third business day
after sending by first class United States mail, properly addressed, postage
prepaid, certified or registered, (iv) the time of successful facsimile
transmission (or in the event the time of receipt of the fax in the city where
the fax is received is not during regular business hours on a business day, then
at the customary hour for the opening of business on the next business day), but
in either case only if a complete copy is also sent by first class United States
mail (postage prepaid) on the same day as facsimile transmission or on the next
business day, or (v) the date actually received by the other party. All notices
shall be properly addressed to the parties at the addresses set forth in the
signature pages hereto. Any party may change its address or fax number for the
purposes of this paragraph by giving notice of the new address to each of the
other parties hereto in the manner set forth above. Rejection or other refusal
to accept, or the inability to deliver because of a changed address of which no
notice was given, shall not affect the date of such notice sent in accordance
with this Section.

              2.6 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

              2.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.

              2.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.

              2.9 Entire Agreement; Amendment; Waiver. This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.

              2.10 Disputes. If the parties are unable, after good faith
negotiations, which each hereby covenants to undertake, to resolve any dispute
arising between them within fifteen (15) days after notice is given of such
dispute, then the dispute will be referred to arbitration (which the parties
agree is the exclusive means of resolving any such dispute) before one (1)
arbitrator in Orange County, California, or any other place mutually agreed upon
by the parties

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hereto, in accordance with the applicable rules then in effect of the Judicial
Arbitration and Mediation Service (the "JAMS Rules") (or any other form of
arbitration mutually acceptable to the parties). Such arbitrator shall be
selected by the mutual agreement of the Company and the holders of a majority of
the Registrable Securities who are parties to the dispute, or if no mutual
agreement can be reached within ten (10) days after the termination of the
fifteen day period referenced above, then such arbitrator shall be appointed by
the arbitration service. The civil discovery statutes of the State of California
shall apply to such arbitration. The determination made in accordance with the
rules of JAMS (or such other form of arbitration as the parties may mutually
agree) shall be delivered in writing to the parties hereto and shall be final,
binding and conclusive on the parties hereto, and the amount of the claim, if
any, determined to exist shall be a valid claim and no further remedy shall be
available to either party with respect to such dispute and judgment may be
entered upon such decision in accordance with applicable law in any court having
jurisdiction thereof. The arbitration award shall include (i) a provision that
the prevailing party in such arbitration recover its costs relating to the
arbitration and reasonable attorneys' fees from the other party, (ii) the amount
of such costs and fees, and (iii) an order that the losing party pay the fees
and expenses of the arbitrator.

              2.11 No Conflicts. The Company hereby represents and warrants that
the Company's obligations under this Agreement are not in conflict with its
obligations under any other agreement the Company has entered into with any
other party.

              2.12 Further Assurances. Each of the parties hereto shall,
following the date of this Agreement, and without charge to the other, take such
additional actions and execute, deliver and file such additional instruments as
may be reasonably requested by the other parties hereto that are necessary or
appropriate to give effect to the transactions contemplated by this Agreement.

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         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

COMPANY:                          CONEXANT SYSTEMS, INC.

                                  By: /s/ Matt Rhodes
                                      -------------------------------------
                                      Name:  Matt Rhodes
                                      Title: Senior Vice President & General
                                              Manager, Personal Computing
                                              Division

                                  Address:   4311 Jamboree Road, MC E10-005
                                             Newport Beach, CA 92660

                                  Telephone: (919) 483-4445
                                            -------------------------------
                                  Facsimile: (949) 483-6169
                                            -------------------------------

INVESTORS:

                                  /s/ Steven Gardner
                                  -----------------------------------------
                                  Steven Gardner

                                  Address:  4423 Alhambra St
                                            -------------------------------
                                            San Diego, CA 92107
                                            -------------------------------
                                  Telephone:
                                            -------------------------------
                                  Facsimile:
                                            -------------------------------

                                  /s/ James Petranovich
                                  -----------------------------------------
                                  James Petranovich

                                  Address:  1190 Encinitas Blvd F219
                                            -------------------------------
                                            Encinitas, CA 92024
                                            -------------------------------
                                  Telephone:
                                            -------------------------------
                                  Facsimile:
                                            -------------------------------
<PAGE>   11

                                  /s/ George Peponides
                                  -----------------------------------------
                                  George Peponides

                                  Address:  592 Crest Drive
                                            -------------------------------
                                            Encinitas, CA 92024
                                            -------------------------------
                                  Telephone:
                                            -------------------------------
                                  Facsimile:
                                            -------------------------------<PAGE>   1
                                                                 Exhibit 4.c.1

                            CONEXANT SYSTEMS, INC.

                       MICROCOSM COMMUNICATIONS LIMITED
                                STOCK OPTION PLAN

                  SECTION 1: PURPOSE

                  In connection with the purchase by Conexant Systems, Inc.
("Conexant") of all the issued and outstanding shares of Microcosm
Communications Limited ("Microcosm") pursuant to the Stock Purchase Agreement,
all Microcosm Options outstanding under the Microcosm Executive Share Option
Scheme will be surrendered and canceled and in exchange, Conexant Options will
be granted. In addition, as additional consideration for the surrender and
cancellation of their Microcosm Options, the holders of Microcosm Options will
be entitled receive additional Conexant Options upon the terms and conditions
set forth in the Stock Purchase Agreement. The purpose of the Plan is to provide
a means for Conexant to perform its obligations under the Stock Purchase
Agreement with respect to the holders of Microcosm Options.

                  SECTION 2:  DEFINITIONS

                  For the purpose of the Plan, the following terms shall have
the meanings set forth below:

                  Acquisition. The purchase by Conexant of all of the issued and
         outstanding ordinary, "A" ordinary and preference shares of Microcosm.

                  Option Agreement. An agreement entered into between Conexant
         and a Participant setting forth the terms and conditions applicable to
         a Conexant Option granted to the Participant.

                  Board of Directors.  The Board of Directors of Conexant.

                  Closing Date. The Closing Date as defined in the Stock
         Purchase Agreement.

                  Conexant.  Conexant Systems, Inc., a Delaware corporation.

                  Conexant Option. An option to purchase Conexant Shares granted
         under the Plan in connection with the Acquisition. All Conexant Options
         issued under
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         the Plan will be Non-qualified stock options, and are not intended to
         comply with the requirements of Section 422 of the Internal Revenue
         Code of 1986, as amended.

                  Conexant Shares. Shares of Common Stock, par value $1 per
         share, of Conexant.

                  Fair Market Value. The closing price of Conexant Stock as
         reported in the NASDAQ reporting system on the relevant date, or if no
         sale of Conexant Shares is reported for such date, the next preceding
         day for which there is a reported sale.

                  Microcosm. Microcosm Communications Limited, a corporation
         incorporated under the laws England and Wales.

                  Microcosm Option. An option to purchase Microcosm Shares
         granted pursuant to the Microcosm Executive Share Option Scheme.

                  Microcosm Shares.  Ordinary shares of Microcosm.

                  Participant. Any person who as at the opening of business on
         the Closing Date held one or more outstanding Microcosm Options and any
         transferee of the Conexant Options granted hereunder.

                  Plan. This Microcosm Communications Limited Stock Option Plan.

                  Securities Act. The Securities Act of 1933, and any successor
         statute, as it may be amended from time to time.

                  Stock Purchase Agreement. The Stock Purchase Agreement dated
         as of January 6, 2000 among Conexant and the Shareholders and Option
         Holders of Microcosm.

                  SECTION 3:  CONEXANT SHARES AVAILABLE UNDER PLAN

                  The total number of Conexant Shares which may be delivered
upon exercise of Conexant Options shall be that number of Conexant Shares as
shall be necessary to provide to the holders of Microcosm Options, in the form
of Conexant Options, their portion of the consideration paid or to be paid by
Conexant pursuant to Sections 2.2(b), 2.3(b), 2.3(d), 2.3(e), 2.4(b) or 2.5(b)
of the Stock Purchase Agreement, as adjusted from time to time as herein
provided. Conexant Shares which may be delivered upon exercise of Conexant
Options may consist in whole or in part of treasury or authorized but unissued
shares, or shares may be acquired, subsequently or in

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anticipation of the transaction, in the open market to satisfy the requirements
of the Plan. Conexant will at all times reserve a sufficient number of
authorized and unissued Conexant Shares to satisfy all outstanding Conexant
Options in full.

                  SECTION 4:  CONEXANT OPTION PROVISIONS

                  a. Option Agreements. Each Conexant Option under the Plan
shall be evidenced by a Stock Option Agreement. Each Stock Option Agreement
shall set forth the number of Conexant Shares subject to the Conexant Option,
which shall be determined in accordance with the provision of Sections 2.2(b),
2.3(b), 2.3(d), 2.3(e), 2.4(b) and 2.5(b) of the Stock Purchase Agreement, and
shall incorporate the Stock Option Terms and Conditions attached as Annex A
hereto. In the event of any conflict between a Stock Option Agreement and the
Plan, the terms of the Plan shall govern.

                  b. Exercising Options. (i) The Conexant Options will be
immediately exercisable and entitle the respective holders thereof to purchase
such number of Conexant Shares at such exercise price as shall be determined
pursuant to the terms of the Stock Purchase Agreement. The exercise price of
such Conexant Options shall be as determined pursuant to the Stock Purchase
Agreement and have been approved by the Chief Executive Officer of Conexant and
may be less than the Fair Market Value on the date of grant (but shall be not
less than $1 per share); provided, however, that the purchase price of the
Conexant Shares with respect to which a Conexant Option or portion thereof is
exercised shall be payable in full in cash or in Conexant Shares, in a
combination of cash and Conexant Shares or a cashless exercise. The value of any
Conexant Share delivered in payment of the exercise price shall be its Fair
Market Value on the date the Conexant Option is exercised. No fractional shares
of stock will be issued or accepted.

                  (ii) From and after the effective date of the resolutions of
the Board of Directors referred to in the immediately following sentence,
Participants may simultaneously exercise such Conexant Options and sell to
Conexant the number of Conexant Shares thereby acquired necessary to make
payment of the exercise price of the Conexant Options and any applicable
personal withholding taxes (a "cashless exercise"). Within 30 days after the
Closing Date, the Conexant Board of Directors will pass a resolution authorizing
the purchase by Conexant of that number of Conexant Shares issued upon exercise
of Conexant Options, at a price per share equal to the Fair Market Value of
Conexant Shares on the day Conexant the Conexant Option is exercised, as is
necessary so that the proceeds of such purchases would be sufficient to pay the
exercise price of the Conexant Options and any applicable personal withholding
taxes in connection with such exercise.

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<PAGE>   4
                  c. Rights as a Shareowner. A Participant shall have no rights
as a shareowner with respect to any shares covered by a Conexant Option until
the date the Participant becomes the holder of record with respect thereof.
Except as provided in Section 7, no adjustment shall be made for dividends or
other rights.

                  d. Withholding. Whenever the exercise of any option, or the
delivery of any Conexant Shares upon exercise of a Conexant Option or transfer
thereof, gives rise to any personal taxes required by law to be withheld from
the Participant, Conexant will have the right as a condition thereto to deduct
from any payment to be made by Conexant or ChaseMellon under the Plan (including
by retaining the notional proceeds received by Conexant on a cashless exercise
of Conexant Options by a sale to Conexant or the cash proceeds received by
ChaseMellon from a cashless exercise of Conexant Options and remitting the cash
or cash equivalent to Microcosm in order for Microcosm to withhold the
applicable personal taxes in connection with such cashless exercise) or to
require the Participant to remit to Conexant an amount sufficient to satisfy
such tax obligation. A Participant may satisfy the withholding obligation by
paying the amount of any taxes in cash or Conexant Shares may be delivered to
Conexant or deducted from the payment or, in accordance with Section 4(b)(ii),
sold to satisfy the obligation in full or in part. If such tax withholding
obligation is paid in Conexant Shares, tax amounts shall be limited to the
statutory minimum as required by law.

                  SECTION 5:  AMENDMENT AND TERMINATION

                  Except as provided in Section 7, (a) the Plan and the Conexant
Options subject thereto may not be amended, suspended or terminated without the
consent in writing of the holders of then outstanding Conexant Options
representing at least 75% of the Conexant Shares underlying such Conexant
Options and (b) without the approval of the shareowners of Conexant, (i) the
number of Shares provided in Section 3 may not be increased and (ii) the
exercise price of any Conexant Option may not be reduced; provided, however,
that no such amendment, suspension or termination shall impair the rights of any
holder of Conexant Options without such holder's consent.

                  SECTION 6:  PLAN ADMINISTRATION

                  The Board of Directors shall exercise all responsibilities,
powers and authority relating to the administration of the Plan.

                  SECTION 7:  ADJUSTMENTS

                  If there shall be any change in or affecting Conexant Shares
on account of any merger, consolidation, reorganization, recapitalization,
reclassification, stock

                                       4
<PAGE>   5
dividend, stock split or combination, or other distribution to holders of
Conexant Shares (other than a cash dividend), there shall be made or taken such
amendments to the Plan and such adjustments and actions thereunder as the Board
of Directors may deem appropriate under the circumstances, provided that such
adjustments and actions do not materially adversely affect the Participants or
any holder of Conexant Options granted hereunder, and provided further that in
the event of a recapitalization, reorganization or reclassification of Conexant,
the Conexant Options shall be exercisable for such consideration as that for
which the Conexant Shares are exchanged. Such amendments, adjustments and
actions may include, without limitation, changes in the number of Conexant
Shares which may be issued or transferred pursuant to the Plan, the number of
Conexant Shares subject to outstanding Conexant Options and the related exercise
price per share or a requirement that holders of Conexant Options to exercise
such Conexant Options and become holders of Conexant Shares upon the occurrence
of certain events. Without limiting the generality of the foregoing, (i) if any
such change in or affecting Conexant Shares shall result in an increase in the
number of outstanding Conexant Shares, the number of Conexant Shares remaining
subject to the Plan shall be proportionately increased and the price for each
Conexant Share then covered by an outstanding Conexant Option shall be
proportionately reduced, and (ii) if any such change in or affecting Conexant
Shares shall result in a decrease in the number of outstanding Conexant Shares,
the number of Conexant Shares remaining subject to the Plan shall be
proportionately decreased and the price for each Conexant Share then covered by
an outstanding Conexant Option shall be proportionately increased.

                  SECTION 8:  MISCELLANEOUS

                  a. Until a registration statement registering the Option
Shares has been declared effective by the Securities Exchange Commission, in
connection with the delivery of any Conexant Shares upon exercise of a Conexant
Option, Conexant shall have the right to require as a condition of such delivery
that the recipient represent the following:

                                       5
<PAGE>   6
                           (i) that he or she is an accredited investor as such
         term is defined in Rule 501(a) under the Securities Act and is
         acquiring the Conexant Shares issuable upon exercise of the Conexant
         Options for its own account for investment purposes only and not with a
         view to, or for sale or resale in connection with, any public
         distribution thereof or with any present intention of selling,
         distributing or otherwise disposing of any of such shares in violation
         of the Securities Act; or

                           (ii) that he or she is not a U.S. person within the
         meaning of Rule 902(k) of Regulation S under the Securities Act, which
         term includes: (i) a natural person resident in the United States; (ii)
         a partnership or corporation organized or incorporated under the laws
         of the United States; (iii) an estate of which any executor or
         administrator is a U.S. person; (iv) a trust of which any trustee is a
         U.S. person; (v) an agency or branch of a foreign entity located in the
         United States; (vi) a non-discretionary account or similar account
         (other than an estate or trust) held by a dealer or other fiduciary for
         the benefit or account of a U.S. person; (vii) a discretionary account
         or similar account (other than an estate or trust) held by a dealer or
         other fiduciary organized, incorporated or (if an individual) resident
         in the United States; and (viii) a partnership or corporation (A)
         organized or incorporated under the laws of any foreign jurisdiction
         and (B) formed by a U.S. person principally for the purpose of
         investing in securities not registered under the Securities Act, unless
         it is organized or incorporated, and owned, by accredited investors (as
         defined in Rule 501(a) under the Securities Act) who are not natural
         persons, estates or trusts; or

                           (iii) any other matters as Conexant may reasonably
         request of such Conexant Option holder in order to establish to the
         reasonable satisfaction of Conexant that another exemption from the
         registration requirements of the Securities Act is applicable.

                  b. Conexant shall bear all expenses and costs in connection
with the operation of the Plan, including costs related to the purchase, issue
or transfer of Conexant Shares, but excluding personal taxes imposed on any
person receiving a payment or delivery of Shares under the Plan.

                  SECTION 9:  INTERPRETATIONS AND DETERMINATIONS

                  The Board of Directors shall have the power from time to time
to interpret the Plan, to adopt, amend and rescind procedural rules and
regulations relating to the

                                       6
<PAGE>   7
exercise of Conexant Options under the Plan, and to take all other actions that
the Board of Directors shall deem necessary or appropriate for the
implementation and administration of the Plan.

                  SECTION 10:  EFFECTIVE DATE

                  The Plan shall become effective as of the Closing Date.

                  SECTION 11:  TERMS OF OPTIONS

                  Each Conexant Option granted under the Plan will be
exercisable for a period of two years from the date of grant.

                                       7

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