Document:

Exhibit 4.1

	

     EXHIBIT
4.1  

SILICON
PACKETS, INC. 

2000 STOCK
OPTION PLAN 

(As Amended
on February 9, 2000) 

     1. Purposes of the Plan.
The purposes of this Stock Option Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the Company’s
business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant.   

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

	 	     (a)
“Administrator” means the Board or any of its Committees as shall be
administering the Plan in accordance with Section 4 hereof. (b) “Applicable
Laws” means the requirements relating to the administration of stock option plans
under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where Options are granted under the
Plan.  

	 	     (c)
“Board” means the Board of Directors of the Company. 

	 	     (d)
“Change in Control” means the occurrence of any of the following events: 

	 	 	 	 	(i)   	 	Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes
the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s then outstanding voting securities; or   

	 	 	 	 	(ii)   	 	The
consummation of the sale or disposition by the Company of all or substantially all of the
Company’s assets; or   

	 	 	 	 	(iii)   	 	The
consummation of 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 voting securities of the surviving
entity or its parent) at least fifty percent (50%) of the total voting power represented
by the voting securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or consolidation.   

	

	 	     (e)
“Code” means the Internal Revenue Code of 1986, as amended. 

	 	     (f)
“Committee” means a committee of Directors appointed by the Board in accordance with
Section 4 hereof. 

	 	     (g)
“Common Stock” means the Common Stock of the Company. 

	 	     (h)
“Company” means Silicon Packets, Inc., a Delaware corporation. 

	 	     (i)
“Consultant” means any natural person who is engaged by the Company or
any Parent or Subsidiary to render consulting or advisory services to such entity and who
satisfies the requirements of subsection (c)(1) of Rule 701 under the Securities Act of
1933, as amended.  

	 	     (j)
“Director” means a member of the Board. 

	 	     (k)
“Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code. (l) “Employee” means any person, including officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. For purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed, then three
(3) months following the 91st day of such leave, any Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for
tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of
a director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.  

	 	     (m)
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 

	 	     (n)
“Fair Market Value” means, as of any date, the value of Common Stock determined as
follows: 

	 	 	 	 	(i)   	 	If
the Common Stock is listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange or
system on the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; 

	

	 	 	 	 	(ii)   	 	If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices
are not reported, its Fair Market Value shall be the mean between the high bid and low
asked prices for the Common Stock on the day of determination; or  

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

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

	 	     (p)
“Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option. 

	 	     (q)
“Option” means a stock option granted pursuant to the Plan. 

	 	     (r)
“Option Agreement” means a written or electronic agreement between the
Company and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.  

	 	     (s)
“Optioned Stock” means the Common Stock subject to an Option. 

	 	     (t)
“Optionee” means the holder of an outstanding Option granted under the Plan. 

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

	 	     (v)
“Plan” means this 2000 Stock Option Plan. 

	 	     (w)
“Service Provider” means an Employee, Director or Consultant. 

	 	     (x)
“Share” means a share of the Common Stock, as adjusted in accordance with Section 12
below. 

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

	

     3. Stock Subject to the Plan.
Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of
Shares that may be subject to option and sold under the Plan is 2,590,000 Shares.
The Shares may be authorized but unissued, or reacquired Common Stock.   

	 	
If  an  Option   expires  or  becomes   unexercisable
without   having   been   exercised   in  full,   the
unpurchased  Shares which were subject  thereto shall
become  available  for future grant or sale under the
Plan  (unless  the  Plan  has  terminated).  However,
Shares  that  have  actually  been  issued  under the
Plan,  upon  exercise  of an  Option,  shall  not  be
returned  to the Plan and shall not become  available
for future  distribution  under the Plan, except that
if Shares of restricted  stock issued  pursuant to an
Option  are  repurchased  by  the  Company  at  their
original  purchase  price,  such Shares  shall become
available for future grant under the Plan.  

	

     4.
Administration of the Plan.  

	 	     (a)
Administrator. The Plan shall be administered by the Board or a Committee
appointed by the Board, which Committee shall be constituted to comply with Applicable
Laws.  

	 	     (b) Powers of the Administrator.
Subject to the provisions of the Plan and, in the case of a Committee, the specific
duties delegated by the Board to such Committee, and subject to the approval of any
relevant authorities, the Administrator shall have the authority in its discretion: 

	 	 	 	 	(i)   	 	to
determine the Fair Market Value;  

	 	 	 	 	(ii)   	 	to
select the Service Providers to whom Options may from time to time be granted hereunder;   

	 	 	 	 	(iii)   	 	to
determine the number of Shares to be covered by each such Option granted hereunder;   

	 	 	 	 	(iv)   	 	to
approve forms of agreement for use under the Plan;   

	 	 	 	 	(v)   	 	to
determine the terms and conditions of any Option granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or the Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;  

	 	 	 	 	(vi)   	 	to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules
and regulations relating to sub-plans established for the purpose of satisfying
applicable foreign laws;  

	 	 	 	 	(vii)   	 	to
allow Optionees to satisfy withholding tax obligations by electing to have the Company
withhold from the Shares to be issued upon exercise of an Option that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that the amount
of tax to be withheld is to be determined. All elections by Optionees to have Shares
withheld for this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and  

	

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

	 	     (c)
Effect of Administrator’s Decision. All decisions, determinations and interpretations of
the Administrator shall be final and binding on all Optionees. 

	

     5.
Eligibility. Nonstatutory Stock Options may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees.  

     6.
Limitations.  

	 	     (a)
Incentive Stock Option Limit. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of
the Shares with respect to which Incentive Stock Options are exercisable for the first
time by the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory
Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market Value of the
Shares shall be determined as of the time the Option with respect to such Shares is
granted.  

	 	     (b)
At-Will Employment. Neither the Plan nor any Option shall confer upon any Optionee
any right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall it interfere in any way with his or her right or the
Company’s right to terminate such relationship at any time, with or without cause,
and with or without notice.  

	

     7. Term of Plan.
Subject to shareholder approval in accordance with Section 18, the Plan shall become
effective upon its adoption by the Board. Unless sooner terminated under Section 14, it
shall continue in effect for a term of ten (10) years from the later of (i) the
effective date of the Plan, or (ii) the date of the most recent Board approval of an
increase in the number of shares reserved for issuance under the Plan.   

     8. Term
of Option. The term of each Option shall be stated in the Option Agreement; provided,
however, that the term shall be no more than ten (10) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time
the Option is granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.  

	

     9.
Option Exercise Price and Consideration.  

	 	     (a)
Exercise Price. The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator, but
shall be subject to the following:   

	 	 	 	 	(i)   	 	In
the case of an Incentive Stock Option   

	 	     (1)
granted to an Employee who, at the time of grant of such Option, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.  

	 	     (2)
granted to any other Employee, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant. 

	 	 	 	 	(ii)   	 	In
the case of a Nonstatutory Stock Option  

	 	     (1)
granted to a Service Provider who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.  

	 	     (2)
granted to any other Service Provider, the per Share exercise price shall be no less than
85% of the Fair Market Value per Share on the date of grant. 

	 	 	 	 	(iii)   	 	Notwithstanding
the foregoing, Options may be granted with a per Share exercise price other than as
required above pursuant to a merger or other corporate transaction.  

	 	     (b)
Forms of Consideration. The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be determined at the
time of grant). Such consideration may consist of, without limitation, (1) cash, (2) check,
(3) promissory note, (4) other Shares, provided Shares acquired directly from the
Company (x) have been owned by the Optionee for more than six (6) months on the date of
surrender, and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration
received by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company. Notwithstanding the foregoing, the Administrator may
permit an Optionee to exercise his or her Option by delivery of a full-recourse
promissory note secured by the purchased Shares. The terms of such promissory note shall
be determined by the Administrator in its sole discretion.  

	

     10.
Exercise of Option.  

	 	     (a)
Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms hereof at such times and under such
conditions as determined by the Administrator and set forth in the Option Agreement.
Except in the case of Options granted to officers, Directors and Consultants, Options
shall become exercisable at a rate of no less than 20% per year over five (5) years
from the date the Options are granted. Unless the Administrator provides otherwise,
vesting of Options granted hereunder to officers and Directors shall be suspended during
any unpaid leave of absence. An Option may not be exercised for a fraction of a Share.  

	 	     An
Option shall be deemed exercised when the Company receives (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the Optionee or,
if requested by the Optionee, in the name of the Optionee and his or her spouse. Until
the Shares are issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be
issued) such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the Shares
are issued, except as provided in Section 12 of the Plan.  

	 	     Exercise
of an Option in any manner shall result in a decrease in the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.  

	 	     (b)
Termination of Relationship as a Service Provider. If an Optionee ceases to
be a Service Provider, such Optionee may exercise his or her Option within thirty (30)
days of termination, or such longer period of time as specified in the Option Agreement,
to the extent that the Option is vested on the date of termination (but in no event later
than the expiration of the term of the Option as set forth in the Option Agreement). If,
on the date of termination, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.  

	 	     (c)
Disability of Optionee. If an Optionee ceases to be a Service Provider as a result
of the Optionee’s Disability, the Optionee may exercise his or her Option within six
(6) months of termination, or such longer period of time as specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.  

	

	 	     (d)
Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within six (6) months following Optionee’s death, or such
longer period of time as specified in the Option Agreement, to the extent that the Option
is vested on the date of death (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement) by the Optionee’s designated
beneficiary, provided such beneficiary has been designated prior to Optionee’s death
in a form acceptable to the Administrator. If no such beneficiary has been designated by
the Optionee, then such Option may be exercised by the personal representative of the
Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to
the Optionee’s will or in accordance with the laws of descent and distribution. If,
at the time of death, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall immediately revert to the
Plan. If the Option is not so exercised within the time specified herein, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.  

	

     11. Limited
Transferability of Options. Unless determined otherwise by the
Administrator, Options may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or the laws of descent and distribution, and
may be exercised during the lifetime of the Optionee, only by the Optionee. If the
Administrator in its sole discretion makes an Option transferable, such Option may only
be transferred by (i) will, (ii) the laws of descent and distribution, (iii) instrument
to an inter vivos or testamentary trust in which the Option is to be passed to
beneficiaries upon the death of the Optionee, or (iv) gift to a member of Optionee’s
immediate family (as such term is defined in Rule 16a-1(e) of the Exchange Act). In
addition, any transferable Option shall contain additional terms and conditions as the
Administrator deems appropriate.   

     12.
Adjustments Upon Changes in Capitalization, Merger or Change in Control.  

	 	     (a)
Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number and type of Shares which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option, and the number and type of Shares
covered by each outstanding Option, as well as the price per Share covered by each such
outstanding Option, shall be proportionately adjusted for any increase or decrease in the
number or type of issued Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.” Such
adjustment shall be made by the Board, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number, type or price of Shares subject to an Option.  

	

	 	     (b)
Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The Administrator
in its discretion may provide for an Optionee to have the right to exercise his or her
Option until fifteen (15) days prior to such transaction as to all of the Optioned
Stock covered thereby, including Shares as to which the Option would not otherwise be
exercisable. In addition, the Administrator may provide that any Company repurchase
option applicable to any Shares purchased upon exercise of an Option shall lapse as to
all such Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed action.  

	 	     (c)
Merger or Change in Control. In the event of a merger of the Company with or into
another corporation, or a Change in Control, each outstanding Option shall be assumed or
an equivalent option substituted by the successor corporation or a Parent or Subsidiary
of the successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the merger or
Change in Control. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or Change in Control, the Option confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the merger or Change in Control by holders of
Common Stock for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the holders
of a majority of the outstanding Shares); provided, however, that if such consideration
received in the merger or Change in Control is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of the
Option, for each Share of Optioned Stock subject to the Option, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of common stock in the merger or Change in Control.  

	

     13. Time of Granting Options.
The date of grant of an Option shall, for all purposes, be the date on which the
Administrator makes the determination granting such Option, or such later date as is
determined by the Administrator. Notice of the determination shall be given to each
Service Provider to whom an Option is so granted within a reasonable time after the date
of such grant.  

     14.
Amendment and Termination of the Plan.  

	 	     (a)
Amendment and Termination. The Board may at any time amend, alter, suspend or terminate
the Plan. 

	 	     (b)
Shareholder Approval. The Board shall obtain shareholder approval of any Plan amendment
to the extent necessary and desirable to comply with Applicable Laws. 

	 	     (c)
Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which agreement
must be in writing and signed by the Optionee and the Company. Termination of the Plan
shall not affect the Administrator’s ability to exercise the powers granted to it
hereunder with respect to Options granted under the Plan prior to the date of such
termination.  

	

     15.
Conditions Upon Issuance of Shares.

	 	     (a)
Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of counsel for
the Company with respect to such compliance.  

	 	     (b)
Investment Representations. As a condition to the exercise of an Option, the
Administrator may require the person exercising such Option to represent and warrant at
the time of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.  

	

     16.
Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel
to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.  

     17.
Reservation of Shares. The Company, during the term of this Plan, shall at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.  

     18.
Shareholder Approval. The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted. Such shareholder
approval shall be obtained in the degree and manner required under Applicable Laws.  

     19. Information
to Optionees. The Company shall provide to each Optionee and to each individual who
acquires Shares pursuant to the Plan, not less frequently than annually during the period
such Optionee has one or more Options outstanding, and, in the case of an individual who
acquires Shares pursuant to the Plan, during the period such individual owns such Shares,
copies of annual financial statements. The Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure their
access to equivalent information.<PAGE>

                                                                     EXHIBIT 4.1

                                   XICOR, INC.

                       1998 NONSTATUTORY STOCK OPTION PLAN
                   (AS AMENDED AND RESTATED OCTOBER 16, 2001)

        1. Purposes of the Plan. The purposes of this Nonstatutory Stock Option
Plan are:

            o     to attract and retain the best available personnel for
                  positions of substantial responsibility,

            o     to provide additional incentive to Employees and Consultants,
                  and

            o     to promote the success of the Company's business.

                Options granted under the Plan will be Nonstatutory Stock
Options.

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

                (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

                (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

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

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

                (e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

                (f) "Common Stock" means the Common Stock of the Company.

                (g) "Company" means Xicor, Inc., a California corporation.

                (h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.

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

<PAGE>

                (j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.

                (k) "Employee" means any person, excluding Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

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

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

                      (i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                      (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

                      (iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

                (n) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.

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

                (p) "Option" means a nonstatutory stock option granted pursuant
to the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

                (q) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

                                      -2-
<PAGE>

                (r) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.

                (s) "Optioned Stock" means the Common Stock subject to an
Option.

                (t) "Optionee" means the holder of an outstanding Option granted
under the Plan.

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

                (v) "Plan" means this 1998 Nonstatutory Stock Option Plan.

                (w) "Retirement" means a termination of an Optionee's status as
a Service Provider when the Optionee is age 55 or over and has continuously been
a Service Provider for at least ten (10) years on the date of such termination.

                (x) "RIF" means a termination of an Optionee's status as a
Service Provider resulting from a work force reduction or job elimination.

                (y) "Service Provider" means an Employee, Director or
Consultant.

                (z) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

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

        3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 4,750,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

                If an Option expires or becomes unexercisable without having
been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).

        4. Administration of the Plan.

                (a) Administration. The Plan shall be administered by (i) the
Board or (ii) a Committee, which committee shall be constituted to satisfy
Applicable Laws.

                (b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                                      -3-
<PAGE>

                      (i) to determine the Fair Market Value of the Common
Stock;

                      (ii) to select the Service Providers to whom Options may
be granted hereunder;

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

                      (iv) to determine the number of shares of Common Stock to
be covered by each Option granted hereunder;

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

                      (vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                      (vii) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;

                      (viii) to institute an Option Exchange Program;

                      (ix) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                      (x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                      (xi) to modify or amend each Option (subject to Section
14(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                      (xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                      (xiii) to determine the terms and restrictions applicable
to Options;

                      (xiv) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be

                                      -4-
<PAGE>

withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and

                      (xv) to make all other determinations deemed necessary or
advisable for administering the Plan.

                (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

        5. Eligibility. Options may be granted to Service Providers.

        6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

        7. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for ten (10) years, unless sooner
terminated under Section 14 of the Plan.

        8. Term of Option. The term of each Option shall be stated in the Option
Agreement.

        9. Option Exercise Price and Consideration.

                (a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator.

                (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

                (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                      (i) cash;

                      (ii) check;

                      (iii) promissory note;

                      (iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                                      -5-
<PAGE>

                      (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                      (vi) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                      (vii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws; or

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

        10. Exercise of Option.

                (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.

                      AN OPTION SHALL BE DEEMED EXERCISED WHEN THE COMPANY
RECEIVES: (i) WRITTEN OR ELECTRONIC NOTICE OF EXERCISE (IN ACCORDANCE WITH THE
OPTION AGREEMENT) FROM THE PERSON ENTITLED TO EXERCISE THE OPTION, AND (ii) FULL
PAYMENT FOR THE SHARES WITH RESPECT TO WHICH THE OPTION IS EXERCISED. FULL
PAYMENT MAY CONSIST OF ANY CONSIDERATION AND METHOD OF PAYMENT AUTHORIZED BY THE
ADMINISTRATOR AND PERMITTED BY THE OPTION AGREEMENT AND THE PLAN. SHARES ISSUED
UPON EXERCISE OF AN OPTION SHALL BE ISSUED IN THE NAME OF THE OPTIONEE OR, IF
REQUESTED BY THE OPTIONEE, IN THE NAME OF THE OPTIONEE AND HIS OR HER SPOUSE.
UNTIL THE SHARES ARE ISSUED (AS EVIDENCED BY THE APPROPRIATE ENTRY ON THE BOOKS
OF THE COMPANY OR OF A DULY AUTHORIZED TRANSFER AGENT OF THE COMPANY), NO RIGHT
TO VOTE OR RECEIVE DIVIDENDS OR ANY OTHER RIGHTS AS A SHAREHOLDER SHALL EXIST
WITH RESPECT TO THE OPTIONED STOCK, NOTWITHSTANDING THE EXERCISE OF THE OPTION.
THE COMPANY SHALL ISSUE (OR CAUSE TO BE ISSUED) SUCH SHARES PROMPTLY AFTER THE
OPTION IS EXERCISED. NO ADJUSTMENT WILL BE MADE FOR A DIVIDEND OR OTHER RIGHT
FOR WHICH THE RECORD DATE IS PRIOR TO THE DATE THE SHARES ARE ISSUED, EXCEPT AS
PROVIDED IN SECTION 12 OF THE PLAN.

                      EXERCISING AN OPTION IN ANY MANNER SHALL DECREASE THE
NUMBER OF SHARES THEREAFTER AVAILABLE, BOTH FOR PURPOSES OF THE PLAN AND FOR
SALE UNDER THE OPTION, BY THE NUMBER OF SHARES AS TO WHICH THE OPTION IS
EXERCISED.

                (b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death,
Disability or as a result of a RIF or Retirement, the Optionee may exercise his
or her Option, but only within such period of time as is specified in the Option
Agreement, and only to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for three (3)
months following the Optionee's termination. If, on the date of

                                      -6-
<PAGE>

termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                (c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement, to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

                (d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Option Agreement), by the Optionee's estate
or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

                (e) Reduction in Force. If the Optionee ceases to be a Service
Provider as a result of a RIF, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement, to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                (f) Retirement of Optionee. For purposes of Options granted
after January 26, 2000, if the Optionee ceases to be a Service Provider as a
result of his or her Retirement, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement, to the
extent the Option is vested on the date of Retirement (but in no event later
than

                                      -7-
<PAGE>

the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for twelve (12) months following the Optionee's termination.
If, on the date of Retirement, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after his or her Retirement, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

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

        11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

        12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

                (a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

                (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall

                                      -8-
<PAGE>

lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.

                (c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option, the Optionee shall
fully vest in and have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option shall be fully vested and exercisable for a period of fifteen (15) days
from the date of such notice, and the Option shall terminate upon the expiration
of such period. For the purposes of this paragraph, the Option shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned
Stock, immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

        13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

        14. Amendment and Termination of the Plan.

                (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

                (b) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to options
granted under the Plan prior to the date of such termination.

                                      -9-
<PAGE>

        15. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares shall comply with Applicable Laws and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.

        16. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

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

                                      -10-
<PAGE>

                                   XICOR, INC.
                    1998 NONSTATUTORY STOCK OPTION AGREEMENT
                   (AS AMENDED AND RESTATED OCTOBER 16, 2001)

I.      NOTICE OF STOCK OPTION GRANT

        NAME

You have been granted a Nonstatutory Stock Option to purchase Common Stock of
Xicor, Inc., (the "Company"), subject to the terms and conditions of the 1998
Nonstatutory Stock Option Plan (the "Plan") and this Agreement, as follows:

        Date of Grant                      _____________________________

        Vesting Commencement Date          _____________________________

        Exercise Price per Share           $____________________________

        Total Number of Shares Underlying
               Options Granted             _____________________________

        Expiration Date                    _____________________________

        Vesting Schedule:

        This Option may be exercised, in whole or in part, in accordance with
the following schedule:

        25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/36th of the remaining Shares subject to the
Option shall vest each month thereafter on the same day of the month as the
Vesting Commencement Date, subject to the Optionee continuing to be a Service
Provider on such dates.

        Termination Period:

This Option may be exercised for three (3) months after Optionee ceases to be a
Service Provider; provided, however, that upon death, Disability or termination
as a result of a RIF or Retirement of the Optionee, this Option may be exercised
for one year after the date of such termination. In no event shall this Option
be exercised later than the Expiration Date as provided above.

II.     AGREEMENT

                                      -2-
<PAGE>

        1. Grant of Option. The Board hereby grants to the Optionee named in the
Notice of Grant attached as Part I of this Agreement the Option to purchase the
number of Shares, as set forth in the Notice of Grant, at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions of the Plan and this Agreement.

        2. Exercise of Option.

                (a) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Agreement.

                (b) Method of Exercise. This Option is exercisable by delivery
of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company. The Exercise Notice shall be completed by the Optionee and
delivered to the Corporate Controller of the Company or any third party
administering the Plan on behalf of the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
or the third party administrator of such fully executed Exercise Notice
accompanied by such aggregate Exercise Price.

                (c) Legal Compliance. No Shares shall be issued pursuant to the
exercise of this Option unless such issuance and exercise complies with
Applicable Laws. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

        3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:

                (a) cash; or

                (b) check; or

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

        4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

                                      -3-
<PAGE>

        5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

        6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

        7. Exercising the Option. The Optionee may incur regular federal income
tax liability upon exercise of a Nonstatutory Stock Option (an "NSO"). The
Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise
Price. If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage
of this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

        8. Disposition of Shares. If the Optionee holds NSO Shares for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

        9. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.

        10. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

                                      -4-
<PAGE>

        By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Agreement. Optionee has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of the Plan and this Agreement. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions relating to the Plan and this
Agreement. Optionee further agrees to notify the Company upon any change in the
residence address indicated below.

OPTIONEE                                           XICOR, INC.

_____________________________                      ____________________________
Signature                                          By

_____________________________                      ____________________________
Print Name                                         Title

_____________________________
Residence Address

_____________________________

                                      -5-
<PAGE>

                                    EXHIBIT A
                                   XICOR, INC.
                    1998 NONSTATUTORY STOCK OPTION AGREEMENT
                                 EXERCISE NOTICE

Xicor, Inc.
1511 Buckeye Drive
Milpitas, CA  95035

Attention:  Corporate Controller

        1. Exercise of Option. Effective as of today, ________________, the
undersigned ("Optionee"), a Service Provider of Xicor, Inc. (the "Company"),
hereby elects to purchase ______________ shares (the "Shares") of the Common
Stock of the Company under and pursuant to the 1998 Nonstatutory Stock Option
Plan (the "Plan") and the Stock Option Agreement (the "Option Agreement") dated
____________________. The purchase price for the Shares shall be $ ______, as
required by the Option Agreement.

        2. Delivery of Payment. Optionee herewith delivers to the Company the
full purchase price for the Shares, plus any federal or state taxes required to
be withheld.

        3. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.

        4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.

        5. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

<PAGE>

        6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

Submitted by:                                      Accepted by:

_____________________________                      ____________________________
Signature                                          By

_____________________________                      ____________________________
Print Name                                         Title

_____________________________                      Xicor, Inc.
Residence Address                                  1511 Buckeye Drive
                                                   Milpitas, CA  95035

_____________________________

                                      -2-

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