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                                                                   EXHIBIT 10.18

                                                   As Amended Effective 10-26-99

                        DALLAS SEMICONDUCTOR CORPORATION

                         AMENDED 1987 STOCK OPTION PLAN

        1. Purpose. The Dallas Semiconductor Corporation 1987 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, consultants, agents 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 may 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"), as
well as options which may not so qualify, may be granted under the Plan.

        2. Definitions.

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

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

           (3) "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.

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

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

           (6) "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.

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

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

           (9) "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
        corporations of the Company as defined in Section 425(f) of the Code.

           (10) "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.

           (11) "Incentive Stock Option" means an option that qualifies as an
        incentive stock option under all of the requirements of the Code.

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           (12) "Incentive 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 Incentive Stock Option granted under the
        Plan.

           (13) "Non-Qualified Stock Option" means an option to purchase Common
        Stock granted pursuant to the provisions of the Plan that does not
        qualify as an Incentive Stock Option.

           (14) "Non-Qualified 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 a Non-Qualified Stock 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.

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        4. Common Stock Subject to Options. The maximum number of shares of
Common Stock of the Company which may be issued upon the exercise of Options
granted under the Plan is 6,797,339, computed from the date of the adoption of
the Company's 1987 Stock Option Plan through the effective date of this amended
Plan (which number includes 850,000 shares authorized by the Board of Directors
on October 26, 1999, for issuance upon the exercise of Options under the Plan),
increased on and as of January 1 of each calendar year from and including
January 1, 2000, 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 appropriate adjustment by the Board to reflect 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, director, employee or consultant of the Company or any of its
Subsidiaries.

        6. Terms and Conditions of Options. Any Option granted under the Plan
shall be evidenced by either an Incentive Stock Option Agreement or a Non-

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Qualified Stock Option Agreement executed by the Company and the Optionee. Such
agreement shall be subject to the following limitations and conditions:

           (1) 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 which is intended to qualify as an Incentive
        Stock Option be less than 100% of the Fair Market Value of a share of
        the Common Stock on the Date of Grant.

           (2) 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 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.

           (3) Term of Option. The expiration date of each Incentive Stock
        Option shall not be more than ten (10) years from the Date of Grant. The
        expiration date of each Non-Qualified Stock Option shall not be more
        than eleven (11) years from the Date of Grant.

           (4) 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.

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           (5) 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; provided however, that no Option shall be exercisable in
        whole or in part prior to the date of stockholder approval of the Plan.
        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, 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.

           (6) Stock Appreciation Rights. Any Option may include a Stock
        Appreciation Right, either at the Date of Grant or later by amendment
        approved by the Board, and provision therefor shall be included in the
        stock option agreement at such time consistent with the terms hereof.
        Such Stock Appreciation Right shall be subject to such terms and
        conditions not

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        inconsistent with the Plan as the Board shall impose, including the
        following:

                (1) It shall be exercisable only when and to the extent the
            Option is exercisable and only at such time as the value of the
            Company's Common Stock is equal to or greater than the option price
            specified in such Option.

                (2) It shall entitle the Optionee to surrender unexercised the
            Option in which the Stock Appreciation Right is included (or any
            portion of such Option) to the Company and to receive from the
            Company in exchange therefor that number of shares of Common Stock
            having an aggregate value equal to the excess of the Fair Market
            Value of one share, on the day immediately preceding the date on
            which the Stock Appreciation Right is exercised, over the purchase
            price per share specified in such option, times the number of shares
            called for by the Option, or portion thereof, which is so
            surrendered. The Company, in its discretion, shall be entitled to
            elect to settle its obligation arising out of the exercise of a
            Stock Appreciation Right by the payment of cash equal to the
            aggregate value of the shares it would otherwise be obligated to
            deliver. The Company may also elect to settle such obligation partly
            in cash and partly in Common Stock. In lieu thereof, the Company
            shall have the right, in its discretion, to the extent it shall deem
            advisable to consent to or disapprove the

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            election of the Optionee to receive cash in full or partial
            settlement of a Stock Appreciation Right.

                (3) No fractional shares shall be delivered pursuant to exercise
            of a Stock Appreciation Right but in lieu thereof a cash adjustment
            shall be made.

                (4) Notwithstanding the other provisions hereof, to the extent
            that a Stock Appreciation Right included in an Option is exercised,
            such Option shall be deemed to have been exercised to the extent of
            the number of shares of Common Stock called for by the Option or
            portion thereof which is surrendered on exercise of the Stock
            Appreciation Right, so that such shares shall no longer be reserved
            for issuance upon the exercise of Options to be granted under the
            Plan.

                (5) The Board shall have the right, without the consent or
            approval of the Optionee, at any time after the grant of a Stock
            Appreciation Right to limit the time within or extent to which such
            Stock Appreciation Right may be exercisable, to limit the maximum
            amount of appreciation that may be recognized in connection with the
            exercise thereof or to in any other manner it, in its discretion,
            shall deem advisable amend or terminate such Stock Appreciation
            Right.

                (6) A Stock Appreciation Right granted pursuant to the Plan
            shall not be exercisable unless and until the Optionee shall have

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            completed one (1) continuous year of full time employment with the
            Company subsequent to the time of grant of such Stock Appreciation
            Right. For the purposes hereof, full time employment shall be such
            as may be established by the Board.

                (7) The Company shall have the right at any time to amend this
            provision of the Plan dealing with Stock Appreciation Rights, and
            the provisions of any stock option agreement pursuant to the Plan
            dealing with a Stock Appreciation Right, to the extent that it, in
            its discretion, shall deem to be necessary in order to comply with
            the provisions of Rule 16b-3.

            (7) Non-ISO Tax Offset Bonus. The Board may grant a Tax Offset Bonus
        to such Optionees and on such bases as the Board shall determine,
        including, but not limited to, a Tax Offset Bonus which becomes
        exercisable only upon an Optionee's being subject to the restrictions of
        Section 16 of the Exchange Act. A Tax Offset Bonus may be granted only
        with respect to a Non-Qualified Stock Option under the Plan, and may be
        granted concurrently with or after the grant of the Non-Qualified Stock
        Option. A Tax Offset Bonus shall entitle an Optionee to receive from the
        Company or a Subsidiary 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 Non-Qualified
        Stock Option. The Board may cancel or

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        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 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.

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

                (1) Upon the exercise by an Optionee of his 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

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            execute concurrently a promissory note in form satisfactory to the
            Board for such amount payable to the order of the Company;

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

                (3) 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, including without
            limitation, any of the following events:

                        (1) failure of the Optionee to pay or perform any term
                    or provision thereof; or

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                        (2) termination of the Optionee's employment with the
                    Company or a Subsidiary for any reason, except retirement,
                    disability or death; or

                        (3) if the Optionee shall execute an assignment for the
                    benefit of creditors, or admit in writing his ability to pay
                    his debts generally as they become due, or voluntarily seek
                    the benefit of, or have a petition filed against him seeking
                    the benefit of, a judgment, order or decree filed against
                    him pursuant to any bankruptcy, insolvency, reorganization,
                    or similar debtor relief law affecting the rights of
                    creditors generally; or

                        (4) failure of the Optionee to have discharged within a
                    period of thirty (30) days after the commencement thereof
                    any attachment, sequestration, or similar proceeding against
                    any of the assets of the Optionee; or

                        (5) failure of the Optionee to pay any money judgment
                    against him at least thirty (30) days prior to the date on
                    which any of his assets may be lawfully sold to satisfy such
                    judgment; or

                        (6) failure or refusal of the Optionee to comply with
                    any of the terms and conditions of his stock option
                    agreement or any other oral or written agreement with the
                    Company; or

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                        (7) failure or refusal of the Optionee to provide
                    adequate security for payment of the promissory note
                    immediately upon request for collateral by the Board; or

                        (8) the divorce of the Optionee, unless arrangements
                    satisfactory to the Board are agreed to prior to the entry
                    of the divorce decree.

                (9) Nontransferability 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.
            Subject to the foregoing sentence, each Option shall be exercisable,
            during the Optionee's lifetime, only by him. 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.

                (10) Termination of Employment. Except as may otherwise be
            authorized by the Board, upon termination of an Optionee's
            employment with the Company or with any of its Subsidiaries for any
            reason other than retirement, permanent disability or death, any and
            all outstanding Option(s) of such Optionee shall immediately
            thereupon be null and void. Neither the adoption of this Plan nor
            the grant of an Option to an eligible person shall alter in any way
            the Company's or the relevant Subsidiary's rights to terminate such
            person's employment or directorship at any time with or

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            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.

                (11) Death of Optionee. Except as may otherwise be authorized by
            the Board, if an Optionee dies while in the employ of the Company or
            any Subsidiary, 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.

                (12) Ten Percent Stockholder. Notwithstanding anything herein to
            the contrary, an Option which is intended to qualify as an Incentive
            Stock Option shall be granted hereunder to any Optionee who,
            immediately before such Option is granted, beneficially owns,
            directly or indirectly, more than 10% of the total voting power of
            all classes of stock of the Company only if both of the following
            conditions are met:

                        (1) The option price per share shall be no less than
                    110% of the Fair Market Value of a share of Common Stock on
                    the Date of Grant; and

                        (2) The expiration date of the Option shall be not more
                    than five (5) years from the Date of Grant.

                (13) Other Terms. Each Incentive Stock Option Agreement or
            Non-Qualified Stock Option Agreement, as the case may be, may
            contain such

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        other provisions as the Board in its discretion may determine,
        including, without limitation:

               (1) in the event that an Option shall be immediately exercisable,
           any provision which shall provide that the shares acquired pursuant
           thereto shall not be deemed to have been issued pursuant to a fully
           vested stock option and thereby subject to repurchase rights (if any)
           contained in the shareholder's agreement with the Optionee, entered
           into pursuant to Paragraph 10 hereof;

               (2) 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;

               (3) any provision which would accelerate the exercisability of an
           Option in spite of any provision contained in an Option pursuant to
           clause (2) above or otherwise, under such circumstances as the Board
           may deem appropriate; and

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

        7. Allotment of Shares. 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. The number of shares allotted to each Optionee shall
be determined as follows: The Board shall, in its discretion, determine the
number of shares of

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Common Stock to be offered from time to time by grant of Options to officers,
key employees and consultants of the Company or its Subsidiaries; provided that
the aggregate Fair Market Value (determined as of the time the option is
granted) of the Common Stock with respect to which Options which are intended to
qualify as Incentive Stock Options are exercisable for the first time by such
Optionee during any calendar year (under all such plans of the Optionee's
employer corporation and its parent and subsidiary corporations) shall not
exceed $100,000.

        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. Designation of Incentive Stock Options. The Board shall cause each
Option granted hereunder to be clearly designated in the agreement evidencing
such Option, at the time of grant, as to whether or not it is intended to
qualify as an Incentive Stock Option.

        10. Execution of Shareholder's Agreement. Options may only be exercised
hereunder by employees who have executed a Shareholder's Agreement in such form
as the Board may adopt from time to time.

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        11. 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.

        12. Amendment or Discontinuance. The Plan and any Option outstanding
hereunder may be amended or discontinued by the Board without the approval of
the stockholders of the Company, except 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 benefits which
may accrue to participants under the Plan, without such approval (if any) as may
be required pursuant to applicable law or the requirements of any national stock
exchange upon which the Company's Common Stock is traded.

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        13. Effect of the Plan. Neither the adoption of this Plan nor any action
of the Board shall be deemed to give any officer or employee any right to be
granted an option to purchase Common Stock of the Company or any of its
Subsidiaries, 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.

        14. Grant of Incentive Stock Options. No Incentive Stock Options shall
be granted pursuant to this Plan after the expiration of ten years from the date
of the earlier of: (i) the date the Plan is adopted, or (ii) the date the Plan
is approved by the stockholders of the Company.

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                        DALLAS SEMICONDUCTOR CORPORATION

                                  AMENDMENT TO
                         AMENDED 1987 STOCK OPTION PLAN
            (Adopted by the Board of Directors on November 27, 2000)

        RESOLVED, that, subject to such approval (if any) as may be required
pursuant to the provisions of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended, or applicable law or the requirements of the
New York Stock Exchange, the Amended 1987 Stock Option Plan of the Corporation
be, and the same hereby is further amended, effective November 27, 2000, so as
to increase the number of shares of Common Stock available for the grant of
options thereunder by 1,250,000 shares.<PAGE>   1
                                                                   EXHIBIT 10.19

                              ASSUMPTION AGREEMENT

        THIS ASSUMPTION AGREEMENT is executed and delivered pursuant to that
certain Agreement and Plan of Merger, dated as of January 28, 2001 (the "Merger
Agreement"), by and among Maxim Integrated Products, Inc., a Delaware
corporation (the "Company"), MI Acquisition Sub, Inc., a Delaware corporation,
and Dallas Semiconductor Corporation, a Delaware corporation ("Dallas
Semiconductor"), pursuant to which Dallas Semiconductor will become a wholly
owned subsidiary of the Company. Pursuant to Section 6.3(c) of the Merger
Agreement, the Company is required to expressly assume the obligations of that
certain Split-Dollar Insurance Agreement, dated as of January 23, 2001, by and
between Alan Hale and Dallas Semiconductor, as amended ("Split-Dollar
Agreement"), a copy of which is attached hereto as Exhibit A.

        For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, in accordance with the provisions of Section 14(a)
of the Split-Dollar Agreement, the Company hereby assumes and agrees to pay,
perform and discharge in accordance with the terms thereof, all of the duties,
liabilities and obligations of Dallas Semiconductor under the Split-Dollar
Agreement.

        This Assumption Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, each party hereto has caused this instrument to be
executed by its duly authorized officer this the 11th day of April, 2001.

                                        MAXIM INTEGRATED PRODUCTS, INC.

                                        By: /s/ Carl W. Jasper
                                            ------------------------------------
                                        Name:  Carl W. Jasper
                                        Title: Chief Financial Officer

                                        DALLAS SEMICONDUCTOR CORPORATION

                                        By: /s/ Chao C. Mai
                                            ------------------------------------
                                        Name:  Chao C. Mai
                                        Title: President

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                                    EXHIBIT A

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                        DALLAS SEMICONDUCTOR CORPORATION
                        SPLIT-DOLLAR INSURANCE AGREEMENT

        THIS AGREEMENT is entered into as of this 20th day of July, 2000, by
and between Alan Hale ("Participant"), whose address is 5616 Walnut Spring
Court, Dallas, Texas 75252, and Dallas Semiconductor Corporation, a Delaware
corporation ("Company"), having its principal office and place of business
located at 4401 South Beltwood Parkway, Dallas, Texas 75244.

        WHEREAS, the Company by resolution of the Board of Directors duly
adopted on December 17, 1993 ("Date of Adoption") has adopted the Dallas
Semiconductor Corporation Split-Dollar Insurance Plan to promote the interests
of the Company in retaining the officers and directors of the Company who have
made, and are capable of continuing to make, valuable contributions to the
Company's performance by providing life insurance protection; and

        WHEREAS, Participant is a director of the Company who had completed at
least five (5) years of service as a director of the Company on the Date of
Adoption and has expressed a willingness to continue his services as a director
of the Company, or is an officer of the Company at the Vice President level or
above on the Date of Adoption; and

        WHEREAS, Participant entered into an agreement with the Company dated
the 15th day of February, 1994, concerning a split-dollar life insurance
arrangement with the Company (the "Prior Agreement"); and

        WHEREAS, this Agreement amends, restates and supersedes in its entirety
the terms of the Prior Agreement, effective the date of this Agreement;

        NOW, THEREFORE, the parties hereto agree as follows:

        1. Policy. Participant has applied for, and the Company has caused to be
issued, a policy or policies of permanent life insurance described on Exhibit
"A" attached hereto, with the attributes described in Section 2 hereof (such
policy or policies, together with any additional policy or policies issued with
the consent of Participant in substitution or replacement for any such policy or
policies, are collectively referred to herein as the "Policy") from an insurance
company selected by the Company as described on Exhibit "A" ("Insurer"). The
Company will take all such action as may be necessary or appropriate to cause
the Policy to be maintained in force at all times, so as to provide Participant
with all of the benefits of the Policy and this Agreement.

        2. Benefits. The Policy has been structured, based on a specified
interest rate, mortality and other assumptions, to provide Participant (over and
above benefits payable to the Company) with the benefits, during each year in
which the Policy is in force, provided in the

<PAGE>   5

Policy and those benefits described on Exhibit "A" attached hereto. The Company
assumes no responsibility or liability with respect to the actual performance of
the Policy.

        3. Ownership of Policy. With respect to any Policy, the Participant (or
if Participant so elects, an individual or entity designated by Participant)
shall be the owner of the Policy, and the Participant, subject to the limited
collateral assignment of such Policy to the Company as provided in Section 7
hereof, may exercise all the rights of ownership with respect to the Policy,
including, but not limited to: (a) the right to designate, or change the
designation of, any beneficiary or beneficiaries of the Policy, (b) the right to
pledge the Policy as security for a loan or to obtain from the Insurer a loan
against the surrender or cash value, and in accordance with the terms, of the
Policy, (c) the right to assign or transfer the Policy, in whole or in part, and
(d) the right to sell, surrender or terminate the Policy.

        4. Payment of Premiums. All premiums on the Policy shall be paid by the
Company (or in the discretion of the Company, on behalf of the Company by the
trustee [the "Trustee"] of the Dallas Semiconductor Corporation Executive
Split-Dollar Insurance Trust [the "Trust"]). The Company shall never permit the
Policy to lapse. Premium payments paid by the Trustee shall be considered as
payments by the Company for all purposes under this Agreement. While all
premiums on the Policy shall be paid by or on behalf of the Company, that
portion of the premium equal to the amount of income imputed to Participant for
federal and state income tax purposes on the value of the economic benefit of
the life insurance protection provided to Participant shall be deemed to have
been paid by the Company to the Participant and immediately paid by Participant
to the Insurer. If the Company elects to pay the premiums to the Trust, such
payment shall constitute sufficient funds to pay all premiums which may become
due on each such Policy.

        5. Change of Control. In the event of the occurrence of a Change of
Control (as hereinafter defined): (a) the Company (or if so directed by the
Company, the Trustee) shall immediately pay to the Insurer all remaining
premiums on the Policy, regardless of whether such premiums are then due, and
(b) the collateral assignment of the Policy to the Company, as provided in
Section 7 hereof shall immediately and fully terminate, and the Participant
shall become fully vested in the entire cash value and death benefit payable
under the Policy. For purposes of this Agreement, a "Change in Control" shall
mean 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
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Company is then subject to such reporting requirement; provided that,
without limitation, such a Change in 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) at any time following the date of execution of this
Agreement individuals who are directors of the Company at such date cease for
any reason to constitute a majority of the Board of Directors; (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 securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into

                                       2
<PAGE>   6

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 in 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 Chairman of the Board and Chief Executive Officer of
the Company.

        6. Tax Offset Payments. To the extent that the Participant may be deemed
to have realized gross income in any year for federal and state income tax
purposes or gift tax purposes by reason of this Agreement, including the value
of the insurance protection or other benefits thereunder provided by the Policy
or otherwise as a consequence of the Plan (including, but not limited to the
vesting of benefits to the Participant upon the occurrence of a Change of
Control or otherwise), the Company shall pay to Participant an additional amount
such that the after-tax cost to the Participant is zero.

        7. Collateral Assignment of Policy. The Participant shall, and does
hereby, collaterally assign to the Company an interest in the cash values and
death benefit of the Policy as follows:

               (a) If the Participant surrenders or sells the Policy, he shall
        pay the Company, out of the proceeds of the Policy, an amount equal to
        the lesser of (i) the cash value of the Policy, or (ii) the aggregate
        amount of premiums paid by the Company with respect to the Policy;

               (b) The Company shall be entitled to receive the cumulative
        premiums paid for the Policy (the amount indicated in the column headed
        Death Benefits Payable to the Company shown on Exhibit "A" attached
        hereto) from the death benefits under the Policy. All death benefits
        payable under the Policy that exceed the amount paid to the Company
        under the preceding sentence shall be paid to the beneficiary or
        beneficiaries of the Participant. The amount payable to such beneficiary
        or beneficiaries is indicated in the column headed Death Benefit Payable
        to Participant's Beneficiary: Individual Coverage shown on Exhibit "A"
        attached hereto. If the death benefits payable under this Agreement
        exceed the aggregate amount of premiums paid by the Company as set forth
        on Exhibit "A," such excess death benefits shall be payable to the
        Participant's beneficiary or beneficiaries.

        The collateral assignment of the Policy shall not be altered or changed
without the consent of the Company and the Participant.

        8. Adjustment of Benefits; Additional Policy Benefits or Riders. The
Company and the Participant may from time to time enter into agreements which
may adjust the value of each party's interests in the Policy. The Participant
may add any rider or endorsement to the Policy.

                                       3
<PAGE>   7

If any such rider or endorsement is added upon the written request of the
Company, all premiums with respect to such rider or endorsement shall be paid by
the Company. A Participant shall not be required to withdraw any benefits
payable under the Policy and may elect to apply the value attributable to such
benefits to the purchase of additional benefits payable to the beneficiary or
beneficiaries named by Participant under the Policy, if the Participant so
elects, or to treat such benefits as additional insurance payable to the
beneficiary or beneficiaries of such Policy upon the death of the Participant.

        9. Amendment. This Agreement may be amended by the Board of Directors of
the Company; provided, however, that no such amendment shall diminish, abrogate
or change any rights or benefits of the Participant under the Policy or this
Agreement without the Participant's prior written consent, and no amendment of
the Policy or this Agreement shall be made upon or after the occurrence of a
Change of Control without the prior written consent of each Participant.

        10. Benefits Cumulative. The benefits to the Participant under this
Agreement shall be cumulative with, and shall not reduce or be deemed to be in
substitution of, any benefits, payments or compensation to which Participant may
otherwise be entitled under any other compensation, benefit, welfare, savings,
retirement or compensation plan of, or for the employees, officers or directors
of, the Company.

        11. Further Assurances. The Company and Participant shall enter into,
execute and deliver all such documents, instruments, and other agreements as the
other party may reasonably request, or as the Insurer or Participant may
reasonably require, in order to carry out the intent and purposes of this
Agreement.

        12. ERISA Requirements.

        (a) Funding Policy. All premiums on the Policy shall be remitted by, or
on behalf of, the Company to the Insurer. The benefits provided by the Policy
shall be paid by the Insurer in accordance with the terms of the Policy and this
Agreement. The payment of such benefits is predicated on the payment of the
required premiums.

        (b) Claims and Review Procedures. The following claims procedure shall
apply for purposes of this Agreement. The claims procedure in subparagraph
(b)(1) below shall be followed with respect to benefits provided by the Insurer
under the terms of the Policy. The claims procedure in subparagraph (b)(2) below
shall be followed with respect to benefits, if any, provided directly by the
Company. The Participant (or the other owner of the Policy designated by the
Participant) that owns the Policy (the "Policy Owner") and the Policy Owner's
successors, beneficiaries or representatives, as appropriate (individually or
collectively, "Claimant"), must follow both procedures, if necessary.

               (i) Filing a Claim for Insurance Benefits. A Claimant shall make
        a claim for benefits provided by the Insurer by submitting a written
        claim and proof of claim to the Insurer in accordance with procedures
        and guidelines established from time to time by the Insurer. On written
        request, the Company, acting as the "Plan Administrator," shall provide
        copies of any claim forms or instructions, or advise the Claimant how to
        obtain

                                       4
<PAGE>   8

        such forms or instructions. The Insurer shall decide whether the claim
        shall be allowed. If a claim is denied in whole or in part, the Insurer
        shall notify the Claimant and explain the procedure for reviewing a
        denied claim.

               (ii) Filing a Claim for Any Other Benefit. The following claims
        procedure shall apply with respect to all benefits other than those
        provided by the Insurer:

                      (A) Filing a Claim; Notification to Claimant of Decision:
               The Claimant shall make a claim in writing in accordance with
               procedures and guidelines established from time to time by the
               Plan Administrator, which claim shall be delivered to the Plan
               Administrator. The Plan Administrator shall review and make the
               decision with respect to any claim. If a claim is denied in whole
               or in part, written notice thereof shall be furnished to the
               Claimant within thirty days after the claim has been filed. Such
               notice shall set forth:

                             (1) the specific reason or reasons for the denial;

                             (2) specific reference to the provisions of this
                      Agreement on which denial is based;

                             (3) a description of any additional material or
                      information necessary for the Claimant to perfect a claim
                      and an explanation of why such material or information is
                      necessary; and

                             (4) an explanation of the procedure for review of
                      the denied claim.

                      (B) Procedure for Review: Any Claimant whose claim has
               been denied in full or in part may individually, or through the
               Claimant's duly authorized representative, request a review of
               the claim denial by delivering a written application for review
               to the Plan Administrator at any time within sixty days after
               receipt by the Claimant of written notice of the denial of the
               claim. Such request shall set forth in reasonable detail:

                             (1) the grounds upon which the request for review
                      is based and any facts in support thereof; and

                             (2) any issues or comments which the Claimant
                      considers pertinent to the claim.

                      Following such request for review, the Plan Administrator
               fully and fairly shall review the decision denying the claim.
               Prior to the decision of the Plan Administrator, the Claimant
               shall be given an opportunity to review pertinent documents.

                                       5
<PAGE>   9

                      (C) Decision on Review: A decision on the review of a
               claim denied in whole or in part shall be made in the following
               manner:

                             (1) The decision on review shall be made by the
                      Plan Administrator, which shall consider the application
                      and any written materials submitted by the Claimant in
                      connection therewith. The Plan Administrator, in its sole
                      discretion, may require the Claimant to submit such
                      additional documents or evidence as the Plan Administrator
                      may deem necessary or advisable in making such review.

                             (2) The Plan Administrator will render a decision
                      upon a review of a denied claim within sixty days after
                      receipt of a request for review. If special circumstances
                      (such as the need to hold a hearing on any matter
                      pertaining to the denied claim) warrant additional time,
                      the decision will be rendered as soon as possible, but not
                      later than one hundred twenty days after receipt of a
                      request for review. Written notice of any such extension
                      will be furnished to the Claimant prior to the
                      commencement of the extension.

                             (3) The decision on review shall be in writing and
                      shall include specific reasons for the decision, written
                      in a manner calculated to be understood by the Claimant,
                      and specific references to the provisions of this
                      Agreement on which the decision is based. The decision of
                      the Plan Administrator on review shall be final and
                      conclusive upon all persons. If the decision on review is
                      not furnished to the Claimant within the time limits
                      prescribed in subparagraph (c)(2) above, the claim will be
                      deemed denied on review.

        13. Legal Fees. The Company shall pay to the Participant and his
beneficiary or beneficiaries upon demand all legal fees and expenses incurred by
the Participant or his beneficiary or beneficiaries in seeking to obtain or
enforce any right or benefit provided by the Policy and this Agreement.

        14. Successors; Binding Agreement.

        (a) In addition to the requirements of Section 5 of this Agreement, the
Company will, upon the request of Participant, require any proposed successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession were to take place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Participant to all rights,
compensation and other benefits from the Company in the same amount and on the
same terms as the Participant would otherwise be entitled hereunder. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
such successor to its business and/or assets as aforesaid, by operation of law,
or otherwise.

                                       6
<PAGE>   10

        (b) Subject to the provisions of Section 14(a) above, the terms and
provisions of this Agreement shall inure to the benefit of and be binding upon
(a) the Company and its successors and assigns and (b) the Participant and his
respective heirs, executors, administrators and legal representatives.

        15. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

        16. Miscellaneous. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Delaware. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. The obligations of the Company under this Agreement shall survive
the expiration of this Agreement.

        17. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Chief
Executive Officer with a copy to the Chief Financial Officer, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

        18. Indemnification.

        (a) The Company hereby agrees to indemnify and hold harmless the
Participant and any beneficiary or beneficiaries of Participant against any and
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by Participant or any beneficiary
or beneficiaries or Participant in connection with any threatened, pending or
completed action, suit, or proceeding, whether formal or informal, or civil,
criminal, administrative, legislative, arbitrative or investigative (hereinafter
a "Proceeding") to which the Participant or any beneficiary or beneficiaries of
Participant is, was, or at any time becomes a party, or is threatened to be made
a party, in any way arising out of, based upon or incident to this Agreement or
any of the rights, benefits and obligations provided for herein.

        (b) The expenses (including attorneys' fees) incurred by Participant or
any beneficiary or beneficiaries of Participant in defending any Proceeding
shall be advanced by the Company at the request of the Participant or any such
beneficiary or beneficiaries. Any

                                       7
<PAGE>   11

judgments, fines or amounts to be paid in settlement shall also be advanced by
the Company to the Participant or any beneficiary or beneficiaries of
Participant upon request.

        19. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.

        20. Headings. Headings in this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this Agreement.

        21. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

        IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the 20th day of July , 2000.

                                        DALLAS SEMICONDUCTOR CORPORATION

                                        By:     /s/ C. V. Prothro
                                            ------------------------------------

                                               /s/ Alan Hale
                                            ------------------------------------
                                                   Alan Hale, Participant

                                       8
<PAGE>   12

                                   EXHIBIT "A"

NAME OF PARTICIPANT:    Alan Hale

NAME OF INSURED:        Alan Hale

INSURER:                Nationwide Policy No. N056104180

<TABLE>
<CAPTION>
                    Death Benefit
                    Payable to Participant's  Death Benefit
Policy Year         Beneficiary:              Payable to
Ending, April 15    Individual Coverage       Company
----------------    -------------------       -------
<S>                 <C>                       <C>
2001                3,434,000                 194,462
2002                3,434,000                 284,683
2003                3,434,000                 284,683
2004                3,434,000                 284,683
2005                3,434,000                 284,683
2006                3,434,000                 284,683
2007                3,434,000                 284,683
2008                3,434,000                 284,683
2009                3,434,000                 284,683
2010                3,434,000                 284,683
2011                3,434,000                 284,683
2012                3,434,000                 284,683
2013                3,434,000                 284,683
2014                3,434,000                 284,683
2015                3,434,000                 284,683
2016                3,434,000                 284,683
2017                3,434,000                 284,683
2018                3,434,000                 284,683
2019                3,434,000                 284,683
2020                3,434,000                 284,683
</TABLE>

                                       9
<PAGE>   13

                                  AMENDMENT TO
                        DALLAS SEMICONDUCTOR CORPORATION
                        SPLIT-DOLLAR INSURANCE AGREEMENT

        THIS AMENDMENT TO DALLAS SEMICONDUCTOR CORPORATION SPLIT-DOLLAR
INSURANCE AGREEMENT is entered into as of this 23rd day of January, 2001, by and
between Alan Hale ("Participant") and Dallas Semiconductor Corporation, a
Delaware corporation ("Company").

        WHEREAS, Participant entered into a Split-Dollar Insurance Agreement
with the Company dated July 20, 2000 ("Agreement"); and

        WHEREAS, the Company desires to amend the Agreement in the manner set
forth below and has requested the consent of Participant to such amendment;

        NOW, THEREFORE, in consideration of the payment by the Company to
Participant of the sum of $10.00 and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Participant,
Participant and the Company agree as follows:

        1. Section 4. Section 4 is divided into subsections (a) and (b).
Existing Section 4 entitled "Payment of Premiums" is designated as Section 4(a),
and the following language is inserted as Section 4(b):

               "(b) All premiums on the Policy shall be paid upon request or
        demand by Participant or Participant's Insurer without regard to whether
        or not the Participant is an employee or director of the Company, the
        Participant's responsibilities to the Company or any other circumstance,
        such obligation to pay to be absolute, continuing, irrevocable and
        unconditional and not subject to any set-off, counterclaim, recoupment,
        reduction, diminution or any defense of any kind or nature whatsoever."

        2. Section 5. Section 5 is deleted in its entirety and the following is
substituted in its place:

               "Reserved."

        3. Section 6. The words "(including, but not limited to the vesting of
benefits to the Participant upon the occurrence of a Change of Control or
otherwise)" appearing in lines 4, 5 and 6 of Section 6 are deleted.

        4. Section 9. The words "and no amendment of the Policy or this
Agreement shall be made upon or after the occurrence of a Change of Control
without the prior written consent of each Participant" found in lines 4 and 5 of
Section 9 are deleted.

        5. Section 14. Subsection (a) of Section 14 is amended to delete the
words "In addition to the requirements of Section 5 of this Agreement" appearing
in line 1 thereof.

<PAGE>   14

        IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the 23rd day of January, 2001.

                                        DALLAS SEMICONDUCTOR CORPORATION

                                        By:    /s/ Chao C. Mai
                                            ------------------------------------

                                               /s/ Alan P. Hale
                                            ------------------------------------
                                                   Alan Hale, Participant

                                       2

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