INTEGRATED SILICON SOLUTION INC, DEF 14A, 2000-12-22

INTEGRATED SILICON SOLUTION INC
DEF 14A, 2000-12-22
SEMICONDUCTORS & RELATED DEVICES

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant X
Filed by a Party other than the Registrant

Check the appropriate box: CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
Preliminary Proxy Statement (AS PERMITTED BY RULE 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

Integrated Silicon Solution, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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No fee required.

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Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

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[ISSI LOGO]

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 6, 2001

TO THE STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Integrated Silicon Solution, Inc., a Delaware corporation (the "Company"), will
be held on Tuesday, February 6, 2001 at 3:00 p.m., local time, at the Silicon
Valley Capital Club, Fairmont Plaza, 50 West San Fernando, 17th Floor, San Jose,
California, for the following purposes:

1. To elect six (6) directors to serve for the ensuing year and until
their successors are duly elected and qualified.

2. To approve an amendment to the Company's 1998 Stock Plan to
increase the number of shares available thereunder by 500,000.

3. To approve an amendment to the Company's 1993 Employee Stock
Purchase Plan to increase the number of shares available thereunder by
250,000 shares.

4. To ratify the appointment of Ernst & Young, LLP as independent
auditors for the Company for the 2001 fiscal year.

5. To transact such other business as may properly come before the
meeting or any adjournment thereof.

The foregoing matters are more fully described in the Proxy Statement
accompanying this Notice.

Only stockholders of record at the close of business on December 12, 2000
are entitled to vote at the Annual Meeting.

All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope for that purpose. Any stockholder attending the meeting
may vote in person even if he or she has returned a proxy.

FOR THE BOARD OF DIRECTORS

[/s/ GARY L. FISCHER]

Gary L. Fischer
Secretary

Santa Clara, California
January 6, 2001

IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
<PAGE> 3

INTEGRATED SILICON SOLUTION, INC.
2231 LAWSON LANE
SANTA CLARA, CALIFORNIA 95054-3311
(408) 588-0800
------------------------

PROXY STATEMENT FOR 2001
ANNUAL MEETING OF STOCKHOLDERS
------------------------

The enclosed Proxy is solicited on behalf of the Board of Directors of
Integrated Silicon Solution, Inc. (the "Company") for use at the Annual Meeting
of Stockholders to be held on Tuesday, February 6, 2001 at 3:00 p.m., local
time, or at any adjournment thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be held at the Silicon Valley Capital Club, Fairmont Plaza, 50 West San
Fernando, 17th Floor, San Jose, California.

These proxy solicitation materials were mailed on or about January 6, 2001
to all stockholders of record on December 12, 2000 (the "Record Date").

INFORMATION CONCERNING SOLICITATION AND VOTING

REVOCABILITY OF PROXIES

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company at the above address of the Company, written notice of revocation or a
duly executed proxy bearing a later date, or by attending the meeting and voting
in person.

VOTING AND SOLICITATION

Proxies properly executed, duly returned to the Company and not revoked,
will be voted in accordance with the specifications made. Where no
specifications are given, such proxies will be voted as the management of the
Company may propose. If any matter not described in this Proxy Statement is
properly presented for action at the meeting, the persons named in the enclosed
form of proxy will have discretionary authority to vote according to their best
judgment.

Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the meeting. The required quorum for the transaction of
business at the Annual Meeting is a majority of the votes eligible to be cast by
holders of shares of Common Stock issued and outstanding on the Record Date.
Shares that are voted "FOR," "AGAINST," "WITHHELD" OR "ABSTAIN" are treated as
being present at the meeting for purposes of establishing a quorum and are also
treated as shares entitled to vote at the Annual Meeting (the "Votes Cast") with
respect to such matter. Abstentions will have the same effect as a vote against
a proposal. Broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business, but such
non-votes will not be counted for purposes of determining the number of Votes
Cast with respect to the particular proposal on which a broker has expressly not
voted. Thus, a broker non-vote will not effect the outcome of the voting on a
proposal.

The cost of soliciting proxies will be borne by the Company. The Company
may also reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and employees, without additional compensation, personally
or by telephone or telegram.

RECORD DATE

Stockholders of record at the close of business on December 12, 2000 are
entitled to notice of the meeting and to vote at the meeting.
<PAGE> 4

PRINCIPAL SHARE OWNERSHIP

At the Record Date, 25,833,848 shares of the Company's Common Stock, $.0001
par value per share, were issued and outstanding and no shares of the Company's
Preferred Stock, $.0001 par value per share, were issued and outstanding. As of
December 12, 2000, the following entities were known by the Company to be the
beneficial owners of more than 5% of the Company's Common Stock:

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
------------------------------------
NAME OF 5% BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF TOTAL
--------------------------- ---------------- ----------------
<S> <C> <C>
Pilgrim Baxter & Associates................................. 1,515,600 5.9%
825 Duportail Road
Wayne, PA 19087-5525
Dreyfus Corporation......................................... 1,401,525 5.4%
200 Park Avenue
New York, NY 10166
</TABLE>

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

Stockholders of the Company may submit proper proposals for inclusion in
the Company's proxy statement and for consideration at the next annual meeting
of its stockholders by submitting their proposals in writing to the Secretary of
the Company in a timely manner. In order to be included in the Company's proxy
materials for the annual meeting of stockholders to be held in the year 2002,
stockholder proposals must be received by the Secretary of the Company no later
than October 9, 2001, and must otherwise comply with the requirements of Rule
14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Stockholders of the Company may nominate directors for election at the
annual meeting by submitting their nominations, along with specified information
concerning their nominees, in writing to the Secretary of the Company in a
timely manner. In order to be included in the Company's proxy materials for the
annual meeting of stockholders to be held in the year 2002, stockholder
nominations must be received by the Secretary of the Company no later than
October 9, 2001.

A copy of the full text of the Bylaw provisions governing the notice
requirements set forth above may be obtained by writing to the Secretary of the
Company. All notices of proposals and nominations by stockholders, whether or
not included in the Company's proxy materials, should be sent to Integrated
Silicon Solution, Inc., 2231 Lawson Lane, Santa Clara, California 95054,
Attention: Corporate Secretary.

The attached proxy card grants the proxy holders discretionary authority to
vote on any matter raised at the Annual Meeting. If a stockholder intends to
submit a proposal at the Company's 2002 Annual Meeting which is not eligible for
inclusion in the proxy statement and form of proxy relating to that meeting, the
stockholder must do so no later than November 22, 2001. If such a stockholder
fails to comply with the foregoing notice provision, the proxy holders will be
allowed to use their discretionary voting authority when the proposal is raised
at the 2002 Annual Meeting.

PROPOSAL ONE:

ELECTION OF DIRECTORS

NOMINEES

A board of six (6) directors is to be elected at the Annual Meeting of
Stockholders. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's six (6) nominees named below, all of
whom are presently directors of the Company. If any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for the nominee designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominees will be
unable or will decline to serve as a director. The term of office of each person
elected as a director will continue until the next Annual Meeting of
Stockholders or until the director's successor has been elected and qualified.

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<PAGE> 5

VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS

The six (6) candidates receiving the highest number of "FOR" votes shall be
elected to the Company's Board of Directors. An abstention will have the same
effect as a vote withheld for the election of directors.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE NOMINEES
LISTED BELOW:

<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION
--------------- --- --------------------
<S> <C> <C>
Jimmy S. M. Lee............. 45 Chief Executive Officer and Chairman of the Board of the
Company
Thomas C. Endicott.......... 60 President and Chief Operating Officer of the Company
Pauline Lo Alker............ 58 President and Chief Executive Officer, Amplify.net, Inc.
Lip-Bu Tan.................. 41 General Partner of Walden Group
Hide L. Tanigami............ 50 President and Chief Executive Officer, Marubun USA Corporation
Chun Win Wong............... 65 Chairman, Wearnes Technology Pte., Ltd.
</TABLE>

Except as set forth below, each nominee has been engaged in his or her
principal occupation described above during the past five (5) years. There are
no family relationships among any directors or executive officers of the
Company.

Jimmy S.M. Lee has served as Chairman of the Board and as Chief Executive
Officer and a director of the Company since he co-founded the Company in October
1988. In addition, he served as President of the Company until May 1, 2000. He
has also served as a director of Integrated Circuit Solution, Inc. ("ICSI"), a
semiconductor company, since September 1990. From 1985 to 1988, Mr. Lee was an
engineering manager at International CMOS Technology, Inc., a semiconductor
company, and from 1983 to 1985, he was a design manager at Signetics
Corporation, a semiconductor company. Prior thereto, Mr. Lee was a project
manager at Toshiba Semiconductor Corporation and a design engineer at National
Semiconductor Corporation. Mr. Lee holds an M.S. degree in electrical
engineering from Texas Tech University and a B.S. degree in electrical
engineering from National Taiwan University. Mr. Lee has also served as Chairman
of the Board of NexFlash Technologies, Inc., ("NexFlash"), a flash memory
company, since October 1998 and as Chairman of the Board of GetSilicon.Net, Inc.
("GetSilicon.Net"), a supply chain management solution company, since July 2000.

Thomas C. Endicott has served as President and Chief Operating Officer and
as a director of the Company since May 1, 2000. Mr. Endicott served as Vice
President of Sales and Marketing at Chartered Semiconductor Manufacturing from
1997 until April 2000. Previously, he was Vice President of US Sales for S-Mos
Systems, Inc., a semiconductor foundry company, from 1989 until 1997. In
addition, he has held managerial positions at Signetics/Philips and Texas
Instruments. Mr. Endicott holds a Ph.D. in chemistry from Georgia Tech
University and a B.S. in chemistry from Duke University.

Pauline Lo Alker was appointed to serve as a director of the Company in
April 1997. Since June 1998, Ms. Alker has been President, Chief Executive
Officer and Chairman of the Board of Amplify.net, Inc., a company specializing
in software solutions for internet/intranet providers. From 1991 until 1998, Ms.
Alker was President and Chief Executive Officer of Network Peripherals, Inc., a
workgroup networking solutions company. In 1984 she founded Counterpoint
Computers, Inc., a developer and manufacturer of high-performance UNIX
multiprocessor computers, which was acquired by Acer, Inc. in 1987. She served
first as President of Acer's Network Computing Division Counterpoint, then
became President of Acer America's Sales and Marketing. Ms. Alker holds B.A.
degrees in mathematics and music from Arizona State University. She also serves
as a director of Tektronix Corporation, a test equipment company, and as a
director of Sensomatic Electronics Corporation, a security surveillance company.

Lip-Bu Tan has served as a director of the Company since March 1990. Mr.
Tan was also a director of ICSI from July 1992 until July 1993. Mr. Tan has been
a General Partner in the Walden Group of Venture Capital Funds since 1984 and
serves as President of International Venture Capital Investment Corporation
("IVCIC"). Mr. Tan holds an M.S. degree in business administration from the
University of San Francisco

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<PAGE> 6

and a B.S. degree from Nanyang University. He has also served as a director of
Creative Technology Ltd. since 1990, of Centillium Technology Ltd. since 1997,
and of Accelerated Networks, Inc. since 1999.

Hide L. Tanigami has served as a director of the Company since December
1997. Since January 1996, Mr. Tanigami has been President and Chief Executive
Officer of Marubun USA Corporation, an electronic components trading company. He
also has been the Chairman and Chief Executive Officer of Marubun/ Arrow USA,
LLC since August 2000. Since July 1998, he has been President and Chief
Executive Officer of Global Technology Sourcing, Inc., a consulting company.
From October 1985 until March 1994, Mr. Tanigami was a co-founder and Vice
President of Corporate Development at Catalyst Semiconductor, Inc. He also
served as a director of Nexcom Technology, Inc. until its acquisition by ISSI in
December 1997. Mr. Tanigami has also served as a director of NexFlash
Technologies, Inc. and as a director of ICSI since October 1998. Mr. Tanigami
holds an M.A. degree in applied linguistics from San Francisco State University
and a B.A. degree from Kansai University of Foreign Studies.

Chun Win Wong has served as a director of the Company since December 1994.
Mr. Wong was also a director of the Company from March 1991 to May 1994 and a
director of ICSI from March 1991 until July 1993. Since April 1994, Mr. Wong has
been Chairman of Wearnes Technology Pte, Ltd. ("Wearnes") and, since 1983 he has
been Group General Manager of Wearnes Brothers, Limited, Singapore, the parent
company of Wearnes, both of which are multinational electronics companies. He
was also Managing Director of Wearnes from 1983 to 1994. From 1970 to 1980, Mr.
Wong was Chief Executive Officer of Industrial Electronics and Engineers
Limited, an electronics company which he founded. Mr. Wong holds a degree in
electrical and control engineering from the Royal Melbourne Institution of
Technology in Australia and a degree from the Manchester College of Science &
Technology in England. He has also served as a director of Advanced Logic
Research, Inc. since 1985.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth the beneficial ownership of the Company's
Common Stock as of December 12, 2000 (i) by each director of the Company, (ii)
by the Company's Chief Executive Officer and the four other executive officers
of the Company during fiscal 2000 (such officers are collectively referred to as
the "Named Executive Officers"), and (iii) by all current directors and Named
Executive Officers as a group:

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------
NAME NUMBER PERCENT
---- --------- -------
<S> <C> <C>
Jimmy S.M. Lee(1)........................................... 417,008 1.6
Thomas C. Endicott.......................................... -- --
Gary L. Fischer(2).......................................... 26,330 *
Tom Doczy(3)................................................ 50,520 *
Paul Jei-Zen Song(4)........................................ 75,034 *
Pauline Lo Alker(5)......................................... 27,917 *
Lip-Bu Tan(6)............................................... 265,256 1.0
Hide L. Tanigami(7)......................................... 16,279 *
Chun Win Wong(8)............................................ 358,336 1.4
All directors and executive officers as a group (9
persons)(9)............................................... 1,236,680 4.7
</TABLE>

---------------
* Less than 1%

(1) Includes 141,209 shares issuable upon exercise of options which are
exercisable within 60 days of December 12, 2000. Also includes 51,000 shares
held by Mr. Lee as custodian for his minor children.

(2) Includes 20,735 shares issuable upon exercise of options which are
exercisable within 60 days of December 12, 2000.

(3) Includes 49,896 shares issuable upon exercise of options which are
exercisable within 60 days of December 12, 2000.

4
<PAGE> 7

(4) Includes 39,124 shares issuable upon exercise of options which are
exercisable within 60 days of December 12, 2000.

(5) Represents 27,917 shares issuable upon exercise of options which are
exercisable within 60 days of December 12, 2000.

(6) Includes 19,791 shares issuable upon exercise of options held by Mr. Tan
which are exercisable within 60 days of December 12, 2000. Also includes
152,100 shares held by Walden Capital Partners II and 83,333 shares held by
IVCIC. Mr. Tan is a General Partner of Walden Group and President of IVCIC
and may be deemed to be a beneficial owner of the shares held by such
entity.

(7) Includes 10,000 shares issuable upon exercise of options which are
exercisable within 60 days of December 12, 2000.

(8) Includes 13,958 shares issuable upon exercise of options held by Mr. Wong
which are exercisable within 60 days of December 12, 2000. Also includes an
aggregate of 337,378 shares held by Wearnes Technology Pte. Ltd. and United
Wearnes Technology Pte. Ltd. Mr. Wong is the Managing Director of Wearnes
and may be deemed to be a beneficial owner of the shares held by such
entities.

(9) Includes 322,630 shares issuable upon the exercise of options which are
exercisable within 60 days of December 12, 2000. See notes 1 through 8
above.

BOARD MEETINGS AND COMMITTEES

The Board of Directors of the Company held eight (8) meetings during fiscal
2000.

The Audit Committee, consisting of Messrs. Tanigami and Wong and Ms. Alker,
held three (3) meetings during fiscal 2000. The Audit Committee reviews the
financial statements and the internal financial reporting system and controls of
the Company with the Company's management and independent auditors, recommends
resolutions for any dispute between the Company's management and its auditors,
and reviews other matters relating to the relationship of the Company with its
auditors.

The Compensation Committee, consisting of Mr.Tan and Ms. Alker, held two
(2) meetings during fiscal 2000. The Compensation Committee makes
recommendations to the Board of Directors regarding the Company's executive
compensation policies and administers the Company's stock option plans and
employee stock purchase plan.

The Board of Directors currently has no nominating committee or committee
performing a similar function.

Each director, except for Mr. Wong, attended at least 75% of the aggregate
of (i) the total number of meetings of the Board of Directors held during fiscal
2000 and (ii) the total number of meetings held by all committees of the Board
of Directors during fiscal 2000 on which such director served. Mr. Wong attended
38% of the total number of meetings of the Board of Directors and 33% of the
total number of meetings of committees on which he served during fiscal 2000.

COMPENSATION OF DIRECTORS

Non-employee directors receive $1,000 for attendance at each Board meeting
and are reimbursed for all reasonable expenses incurred by them in attending
Board and Committee meetings. In addition, each non-employee director is
eligible to participate in the Company's 1995 Director Stock Option Plan (the
"Director Plan"). Under the Director Plan, each non-employee director is
automatically granted a nonstatutory option to purchase 10,000 shares of Common
Stock upon the date upon which such person first becomes a non-employee
director. In addition, each director who has been a non-employee director for at
least six (6) months will automatically receive a nonstatutory option to
purchase 2,500 shares of Common Stock upon such director's annual reelection to
the Board by the stockholders. Options granted under the Director Plan have a
term of ten (10) years unless terminated sooner upon termination of the
optionee's status as a director or otherwise pursuant to the Director Plan. The
exercise price of each option granted under the Director Plan is equal to the
fair market value of the Common Stock on the date of grant. Options granted
under the

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Director Plan are subject to cumulative monthly vesting over a twelve (12) month
period commencing at the date of grant. On February 7, 2000, Messrs. Tan, Wong
and Tanigami and Ms. Alker were each granted an option under the Director Plan
to purchase 2,500 shares of Common Stock at an exercise price of $15.875 per
share. The options expire upon the earlier of ten (10) years from the date of
grant unless terminated sooner upon termination of the optionee's status as a
director.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board of Directors currently consists of
Mr. Tan and Ms. Alker, neither of whom has been or is an officer or an employee
of the Company. No member of the Compensation Committee or executive officer of
the Company has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

The members of the Compensation Committee of the board of Directors are Mr.
Tan and Ms. Alker. All such members are non-employee directors. The Compensation
Committee reviews compensation levels of senior management and recommends
salaries and other compensation paid to senior management to the Company's Board
of Directors for approval.

Compensation Philosophy. The Company's executive pay programs are designed
to attract and retain executives who will contribute to the Company's long-term
success, to reward executives for achieving both short and long-term strategic
Company goals, to link executive and stockholder interests through equity-based
plans, and to provide a compensation package that recognizes individual
contributions and Company performance. A meaningful portion of each executive's
total compensation is intended to be variable and to relate to and be contingent
upon Company performance. The Company's compensation philosophy is that cash
compensation must be competitive with other semiconductor companies of
comparable size in order to help motivate and retain existing staff and provide
a strong incentive to achieve specific Company goals. The Company believes that
the use of stock options as a long-term incentive links the interests of the
employees to that of the stockholders and motivates key employees to remain with
the Company to a degree that is critical to the Company's long-term success.

Components of Executive Compensation. The two key components of the
Company's senior management compensation program in fiscal 2000 were base salary
and long-term incentives, represented by the Company's stock option program. The
Compensation Committee utilizes an industry recognized independent annual survey
of companies to determine whether the Company's senior management compensation
is within the competitive range. Base salary is set for each senior manager
commensurate with that person's level of responsibility and within the
parameters of companies of comparable size within the semiconductor industry.
Messrs. Lee, Fischer, and Doczy received no salary adjustment in fiscal 2000.
Mr. Song's base annual salary was increased by $3,317 to $150,737 in October
1999. Mr. Endicott was hired in May 2000 at an annual base salary of $240,000.

In addition to the above components of compensation, it is the policy of
the Company to offer financial incentives for certain positions. For fiscal
2000, Mr. Doczy, Senior Vice President of Sales and Marketing, was paid
incentive compensation of $66,288 and Mr. Endicott, President and Chief
Operating Officer, was paid incentive compensation of $134,977 in connection
with his offer letter.

Stock options are generally granted when an employee joins the Company and
additional options may be granted from time-to-time thereafter. The options
granted to each employee generally vest over a four (4) year period. In addition
to the stock option program, employees are eligible to participate in the
Company's 1993 Employee Stock Purchase Plan.

Other elements of executive compensation include participation in
Company-wide medical and dental benefits, the ability to defer compensation
pursuant to a 401(k) plan, and a non-qualified deferred compensation program.
The Company does not match annual contributions under the 401(k) plan at this
time.

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<PAGE> 9

The Compensation Committee has considered the potential impact of Section 162(m)
of the Internal Revenue Code of 1986, as amended, and the regulations thereunder
(the "Section"). The Section disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1 million in any taxable year
for any of the Named Executive Officers, unless such compensation is
performance-based. Since the cash compensation of each of the Named Executive
Officers is below the $1 million threshold and the Compensation Committee
believes that any options granted under the Company's stock option plan will
meet the requirements of being performance-based, the Compensation Committee
believes that the Section will not reduce the tax deduction available to the
Company. The Company's policy is to qualify, to the extent reasonable, its
executive officers' compensation for deductibility under applicable tax laws.
However, the Compensation Committee believes that its primary responsibility is
to provide a compensation program that will attract, retain and reward the
executive talent necessary to the Company's success. Consequently, the
Compensation Committee recognizes that the loss of a tax deduction could be
necessary in some circumstances.

Mr. Jimmy Lee receives no other material compensation or benefits not
provided to all executive officers.

Compensation Committee of the Board of
Directors

Lip-Bu Tan
Pauline Alker

PROPOSAL TWO:

APPROVAL OF AMENDMENT TO 1998 STOCK PLAN

The Company's Board of Directors and stockholders have previously adopted
and approved the Company's 1998 Stock Plan (the "Stock Plan"). In October 2000,
the Board of Directors approved an amendment to the Stock Plan, subject to
stockholder approval, to increase the shares reserved for issuance thereunder by
500,000 shares. With this amendment, the maximum aggregate number of shares that
may be optioned and sold under the Stock Plan will be (a) 1,000,000 shares, plus
(b) any shares which have been reserved but not issued under the Company's 1989
Stock Plan, and (c) any shares returned to the Company's 1989 Stock Plan as a
result of the termination of options under the 1989 Stock Plan. As of December
12, 2000, prior to the proposed amendment, 620,218 shares were available for
future issuance under the Stock Plan.

At the Annual Meeting, the stockholders are being requested to consider and
approve the proposed amendment to the Stock Plan to increase the number of
shares of Common Stock reserved for issuance thereunder by 500,000 shares. The
Board believes that the amendment will enable the Company to continue its policy
of widespread employee stock ownership as a means to motivate high levels of
performance and to recognize key employee accomplishments.

For a description of the principal features of the Stock Plan, see
"Appendix A -- Description of the 1998 Stock Plan."

VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS

The approval of the amendment to the Stock Plan requires the affirmative
vote of a majority of the Votes Cast on the proposal at the Annual Meeting.

THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
AMENDMENT TO THE STOCK PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCE THEREUNDER.

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<PAGE> 10

PROPOSAL THREE:

APPROVAL OF AMENDMENT TO 1993 EMPLOYEE STOCK PURCHASE PLAN

The Company's Board of Directors and stockholders have previously adopted
and approved the Company's 1993 Employee Stock Purchase Plan (the "ESPP"). A
total of 1,700,000 shares of Common Stock are presently reserved for issuance
under the ESPP. In October 2000, the Board of Directors approved an amendment to
the ESPP, subject to stockholder approval, to increase the shares reserved for
issuance thereunder by 250,000 shares, bringing the total number of shares
issuable under the ESPP to 1,950,000 shares. As of December 12, 2000, prior to
the proposed amendment, 721,859 shares were available for future issuance under
the ESPP.

At the Annual Meeting, the stockholders are being requested to consider and
approve the proposed amendment to the ESPP to increase the number of shares of
Common Stock reserved for issuance thereunder by 250,000 shares, bringing the
total number of shares issuable under the ESPP to 1,950,000. The Board believes
that the amendment will enable the Company to provide employees with an
opportunity to purchase Common Stock of the Company through accumulated payroll
deductions.

For a description of the principal features of the ESPP, see "Appendix
B -- Description of the 1993 Employee Stock Purchase Plan."

VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS

The approval of the amendment to the ESPP requires the affirmative vote of
a majority of the Votes Cast on the proposal at the Annual Meeting.

THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
AMENDMENT TO THE ESPP TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE
THEREUNDER.

PROPOSAL FOUR:

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors has selected Ernst & Young, LLP, independent
auditors, to audit the financial statements of the Company for the 2001 fiscal
year. This nomination is being presented to the stockholders for ratification at
the meeting. Ernst & Young, LLP has audited the Company's financial statements
since 1990. A representative of Ernst & Young, LLP is expected to be present at
the meeting, will have the opportunity to make a statement, and is expected to
be available to respond to appropriate questions.

VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS

The affirmative vote of a majority of the Votes Cast on the proposal at the
Annual Meeting is required to ratify the Board's selection. If the stockholders
reject the nomination, the Board will reconsider its selection.

THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE 2001 FISCAL YEAR.

8
<PAGE> 11

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth all compensation received for services
rendered to the Company and the Company's subsidiaries in all capacities during
the last three fiscal years by (i) the Company's Chief Executive Officer and
(ii) the Company's four other Named Executive Officers:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
---------------------------------------------- ------------
FISCAL OTHER ANNUAL AWARDS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(2) COMPENSATION OPTIONS
--------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Jimmy S.M. Lee...................... 2000 $267,800 -- -- 72,000
Chief Executive Officer 1999 258,267 -- -- 176,390
1998 257,395 -- -- --
Thomas C. Endicott.................. 2000 96,923 134,977 3,000 240,000
President and Chief Operating
Officer 1999 -- -- -- --
1998 -- -- -- --
Gary L. Fischer..................... 2000 190,000 -- -- 32,000
Executive Vice President and Chief 1999 184,885 -- -- 109,750
Financial Officer 1998 185,554 -- -- --
Thomas Doczy........................ 2000 157,539 66,288 -- 24,000
Senior Vice President Sales and 1999 152,930 -- -- 108,500
Marketing
Paul Jei-Zen Song................... 2000 150,686 5,500 1,524 29,000
Senior Vice President Engineering 1999 146,661 -- -- 78,044
</TABLE>

---------------
(1) Excludes perquisites and other personal benefits which for each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus for such officer.

(2) Includes incentive awards earned for performance in the fiscal year noted
even though such amounts are payable in subsequent years. Excludes incentive
awards paid in the fiscal year noted but earned in prior years.

9
<PAGE> 12

OPTION GRANTS IN FISCAL YEAR 2000

The following table sets forth information concerning grants of stock
options to each of the Named Executive Officers during the fiscal year ended
September 30, 2000.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
----------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ANNUAL RATES
OPTIONS OF STOCK PRICE
GRANTED TO EXERCISE APPRECIATION FOR
EMPLOYEES OR BASE OPTION TERM(2)
OPTIONS IN FISCAL PRICE PER EXPIRATION -----------------------
NAME GRANTED YEAR SHARE DATE 5% 10%
---- ------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jimmy S.M. Lee.................. 35,000 2.2% $ 6.375 10/18/09 $ 140,322 $ 355,604
12,000 0.8% 13.8125 02/01/10 104,239 264,163
25,000 1.6% 18.5625 04/14/10 291,846 739,596
Thomas C. Endicott.............. 240,000 15.5% $ 24.875 05/26/10 $3,754,501 $9,514,642
Gary L. Fischer................. 10,000 0.6% $ 6.375 10/18/09 $ 40,092 $ 101,601
10,000 0.6% 13.8125 02/01/10 86,086 220,136
12,000 0.8% 18.5625 04/14/10 140,086 355,006
Thomas Doczy.................... 12,000 0.8% $ 5.875 10/26/09 $ 44,337 $ 112,359
7,000 0.4% 13.8125 02/01/10 60,806 154,095
5,000 0.3% 18.5625 04/14/10 58,369 147,919
Paul Jei-Zen Song............... 12,000 0.8% $ 5.875 10/26/09 $ 44,337 $ 112,359
8,000 0.5% 13.8125 02/01/10 69,493 176,109
9,000 0.6% 18.5625 04/14/10 105,065 266,255
</TABLE>

---------------
(1) Each of these options was granted pursuant to the authorized stock plans and
is subject to the terms of such plans. These options were granted at an
exercise price equal to the fair market value of the Company's Common Stock
as determined by the Board of Directors of the Company on the date of grant
and, as long as the optionee maintains continuous employment with the
Company, generally vest over a four year period at the rate of one-fourth of
the shares on the first anniversary of the date of grant and 1/48 of the
remaining shares per month thereafter.

(2) In accordance with the rules of the Securities and Exchange Commission (the
"Commission"), shown are the hypothetical gains or "option spreads" that
would exist for the respective options. These gains are based on assumed
rates of annual compounded stock price appreciation of 5% and 10% from the
date the option was granted over the full option term. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Commission
and do not represent the Company's estimate or projection of future
increases in the price of its Common Stock.

10
<PAGE> 13

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following table sets forth certain information concerning options
exercised by the Named Executive Officers in fiscal 2000, and exercisable and
unexercisable stock options held by each of the Named Executive Officers as of
September 30, 2000.

<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION VALUES
---------------------------------------------------------
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR END FISCAL YEAR END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jimmy S.M. Lee.............. 13,390 $198,339 133,375 101,625 $1,462,088 $622,492
Thomas C. Endicott.......... -- -- -- 240,000 -- --
Gary L. Fischer............. 24,060 617,407 2,628 56,312 18,209 368,952
Thomas Doczy................ 38,750 777,683 35,104 48,646 384,805 389,752
Paul Jei-Zen Song........... -- -- 21,937 49,687 238,935 348,098
</TABLE>

---------------
(1) The value of an "in the money" option represents the difference between the
exercise price of such option and the fair market value of the Company's
Common Stock at September 30, 2000, multiplied by the total number of shares
subject to the option.

11
<PAGE> 14

COMPARISON OF TOTAL CUMULATIVE STOCKHOLDER RETURN

The following graph sets forth the Company's total cumulative stockholder
return compared to the Standard & Poor's 500 Index, the Standard & Poor's
Semiconductor Index, and the Philadelphia Semiconductor Index for the period
February 3, 1995 (the date of the Company's initial public offering) through
September 30, 2000. Total stockholder return assumes $100 invested at the
beginning of the period in the Common Stock of the Company, the stocks
represented in the Standard & Poor's 500 Index, the stocks represented in the
Standard & Poor's Semiconductor Index, and the stocks represented in the
Philadelphia Semiconductor Index, respectively. Total return also assumes
reinvestment of dividends; the Company has paid no dividends on its Common
Stock.

Historical stock price performance should not be relied upon as indicative
of future stock price performance.
[PERFORMANCE GRAPH]

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely on its review of copies of filings under Section 16(a) of the
Securities Exchange Act of 1934, as amended, received by it, or written
representations from certain reporting persons, the Company believes that during
fiscal 2000, all Section 16 filing requirements were met, except that Thomas E.
Endicott, President and Chief Operating Officer, Thomas C. Doczy, Senior Vice
President of Sales and Marketing, and Paul Jei-Zen Song, Senior Vice President
of Engineering each filed a late Form 3.

CERTAIN TRANSACTIONS

For the year ended September 30, 2000 and the nine months ended September
30, 1999, the Company sold approximately $921,000 and $1,412,000, respectively,
of memory products to ICSI. The Company currently owns approximately 39% of
ICSI. Jimmy S.M. Lee, Chairman of the Board and Chief Executive Officer of ISSI,
is a director of ICSI. At September 30, 2000 and 1999, the Company had an
accounts receivable balance from ICSI of approximately $709,000 and $1,915,000,
respectively.

12
<PAGE> 15

The Company also purchases goods and contract manufacturing services from
ICSI. For the year ended September 30, 2000 and the nine months ended September
30, 1999, purchases of goods and services from ICSI were approximately
$74,001,000 and $55,840,000, respectively. At September 30, 2000 and 1999, the
Company had an accounts payable balance to ICSI of approximately $12,997,000 and
$9,231,000, respectively.

For the year ended September 30, 2000 and the eleven months ended September
30, 1999, the Company sold approximately $208,000 and $1,542,000, respectively,
of memory products to NexFlash. The Company currently owns approximately 32% of
NexFlash. Jimmy S.M. Lee is Chairman of the Board of NexFlash. In addition, the
Company received approximately $180,000 and $167,000 in sublease income from
NexFlash in the years ended September 30, 2000 and 1999, respectively. At
September 30, 2000 and 1999, the Company had an accounts receivable balance from
NexFlash of approximately $343,000 and $1,291,000, respectively.

The Company also purchases goods and services from NexFlash. For the year
ended September 30, 2000 and the eleven months ended September 30, 1999,
purchases of goods and services were approximately $391,000 and $0,
respectively. At September 30, 2000 and 1999, the Company had an accounts
payable balance to NexFlash of approximately $46,000 and $0, respectively.

For the year ended September 30, 2000, the Company provided goods and
services to GetSilicon.Net of approximately $595,000. The Company currently owns
approximately 32% of GetSilicon.Net. Jimmy S.M. Lee is Chairman of the Board of
GetSilicon.Net. At September 30, 2000, the Company had an accounts receivable
balance from GetSilicon.Net of approximately $474,000.

As of September 30, 2000, the Company owned approximately 2.67% of
WaferTech, LLC, a wafer fabrication facility. In November 2000, the Company
agreed to sell its interest in WaferTech to TSMC for approximately $40.0
million. The transaction is expected to close by December 31, 2000. Jimmy S.M.
Lee is a director of WaferTech.

OTHER MATTERS

The Company knows of no other matters to be submitted at the Annual
Meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent as the Board of Directors of the Company may recommend.

THE BOARD OF DIRECTORS

Santa Clara, California
January 6, 2001

13
<PAGE> 16

APPENDIX A

DESCRIPTION OF THE 1998 STOCK PLAN

General. The Company's 1998 Stock Plan (the "Stock Plan") was adopted by
the Board of Directors on October 29, 1998 and approved by the Company's
stockholders in February 1999. The Stock Plan authorizes the Board, or one or
more committees which the Board may appoint from among its members (the
"Committee"), to grant stock options or stock purchase rights ("SPRs"). Options
granted under the Stock Plan may be either Incentive Stock Option ("ISOs") as
defined in Section 422 of the Code, or Nonstatutory Stock Options ("NSOs"), as
determined by the Board or the Committee.

Prior to the proposed amendment to the Stock Plan to be voted on at the
Annual Meeting, the maximum aggregate number of shares of Common Stock which may
be optioned and sold under the Stock Plan is 500,000 shares plus any shares
which have been reserved but unissued under the 1989 Stock Option Plan (the
"Option Plan") and any shares returned to the Option Plan as a result of the
termination of options under the Option Plan. The shares reserved under the
Stock Plan may be authorized, but unissued, or reacquired Common Stock. In
October 2000, the Board of Directors approved an amendment to the Stock Plan,
subject to stockholder approval, to increase the shares reserved for issuance
thereunder by 500,000 shares.

Purpose. The general purpose of the Stock Plan is 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.

Administration. The Stock Plan may be administered by the Board or the
Committee. Subject to the other provisions of the Stock Plan, the Board or the
Committee has the authority to: (i) interpret the Stock Plan and apply its
provisions; (ii) prescribe, amend or rescind rules and regulations relating to
the Stock Plan; (iii) select the persons to whom Options and SPRs are to be
granted; (iv) determine the number of shares to be made subject to each Option
and SPR; (v) determine whether and to what extent Options and SPRs are to be
granted; and (vi) prescribe the terms and conditions of each Option and SPR
(including the exercise price, whether an Option will be classified as an ISO or
a NSO and the provisions of the Stock Option or Stock Purchase Agreement to be
entered into between the Company and the grantee). All decisions,
interpretations and other actions of the Board or Committee shall be final and
binding on all holders of Options and SPRs and on all persons deriving their
rights therefrom.

Eligibility. The Stock Plan provides that Options and Stock Purchase Rights
may be granted to the Company's Employees, Directors, and Consultants (as such
terms are defined in the Stock Plan). ISOs may be granted only to Employees. Any
Optionee who owns more than 10% of the combined voting power of all classes of
outstanding stock of the Company or any Parent or Subsidiary is not eligible for
the grant of an ISO unless the Exercise Price of the Option is at least 110% of
the fair market value of the Common Stock on the date of grant.

The Stock Plan provides that no employee shall be granted, in any fiscal
year of the Company, options to purchase more than 250,000 shares of Common
Stock. In connection with an employee's initial employment, the employee may be
granted options to purchase up to an additional 250,000 shares of Common Stock.

Terms and Conditions of Options. Each Option granted under the Stock Plan
is evidenced by a written stock option agreement between the Optionee and the
Company and is subject to the following terms and conditions:

(a) Exercise Price. The Board determines the exercise price of Options
to purchase shares of Common Stock at the time the Options are granted.
However, excluding Options issued to 10% Stockholders, the exercise price
under an ISO must not be less than 100% of the fair market value of the
Common Stock on the date the Option is granted. Generally, the fair market
value shall be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on the Nasdaq National Market on the
last market trading day prior to the date of determination.

A-1
<PAGE> 17

(b) Form of Consideration. The means of payment for shares issued upon
exercise of an Option is specified in each stock option agreement and
generally may be made by cash, check, promissory note, other shares of
Common Stock of the Company owned by the Optionee, delivery of an exercise
notice together with irrevocable instructions to a broker to deliver the
exercise price to the Company from the sale or loan proceeds, reduction in
the amount of any Company liability to the Optionee, or by a combination
thereof, or such other consideration and method of payment for the issuance
of shares to the extent permitted by applicable laws.

(c) Exercise of the Option. Each stock option agreement will specify
the term of the Option and the date when the Option is to become
exercisable. However, in no event shall an Option granted under the Stock
Plan be exercised more than ten (10) years after the date of grant.
Moreover, in the case of an ISO granted to a 10% Stockholder, the term of
the Option shall be for no more than five (5) years from the date of grant.

(d) Termination of Continuous Status. In the event of termination of
an Optionee's Continuous Status as an Employee, Director, or Consultant
with the Company (as the case may be), such Optionee may, but only within
three (3) months following the Optionee's termination (or within such other
period of time as is determined by the Board, with such determination in
the case of an Incentive Stock Option being made at the time of grant of
the Option and such time period not exceeding ninety (90) days) after the
date of such termination (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), exercise his
Option to the extent that Optionee was entitled to exercise it at the date
of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of such termination, or if Optionee does
not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

(e) Disability. In the even of termination of an Optionee's Continuous
Status as an Employee, Director, or Consultant as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee
may, but only within twelve (12) months (or within such other period of
time as is determined by the Board) from the date of such termination (but
in no event later than the expiration date of the term of such Option as
set forth in the Option Agreement), exercise the Option to the extent
otherwise entitled to exercise it at the date of such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

(f) Death. In the event of the death of an Optionee while Optionee is
an Employee, Director, or Consultant, the Option may be exercised at any
time within twelve (12) months following the date of death (but in no event
later than the expiration date of the term of such Option as set forth in
the Option Agreement), by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent the Optionee was entitled to exercise the Option at the date of
death. To the extent that Optionee was not entitled to exercise the Option
at the date of death, or if Optionee's estate does not exercise such Option
to the extent so entitled within the time specified herein, the Option
shall terminate.

(g) Termination of Options. Each stock option agreement will specify
the term of the Option and the date when all or any installment of the
Option is to become exercisable. Notwithstanding the foregoing, however,
the term of an ISO shall not exceed ten (10) years from the date of grant.
No Options may be exercised by any person after the expiration of its term.

(h) Nontransferability 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.

(i) Value Limitation. If the aggregate Fair Market Value of all shares
of Common Stock subject to an Optionee's ISO which are exercisable for the
first time during any calendar year under all plans of

A-2
<PAGE> 18

the Company or any Parent or Subsidiary exceeds $100,000, such excess
Options shall be treated as NSOs.

(j) Buyout Provisions. The Board or Committee 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 Board or Committee shall
establish and communicate to the Optionee at the time that such offer is
made.

Stock Purchase Rights. The Stock Plan permits the Company to grant rights
to purchase Common Stock either alone or in combination with other awards
granted under the Stock Plan or in combination with cash awards made outside of
the Stock Plan. After the Board or Committee determines that it will offer Stock
Purchase Rights under the Stock Plan, it shall advise the offeree in writing or
electronically, by means of a Notice of Grant, of the terms, conditions and
restrictions related to the offer, including the number of shares that the
offeree shall be entitled to purchase, the price to be paid and the time within
which the offeree must accept such offer. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Board or Committee.

Unless the Board or Committee determines otherwise, the Restricted Stock
purchase agreement shall grant the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser's service with the
Company for any reason (including death or disability). The purchase price for
shares repurchased pursuant to the Restricted Stock purchase agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at such rate as the Board or Committee may determine.

Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option or SPR, and the number of shares
of Common Stock which have been authorized for issuance under the Stock Plan but
as to which no Options or SPRs have yet been granted or which have been returned
to the Stock Plan upon cancellation or expiration of an Option or SPR, as well
as the price per share of Common Stock covered by each such outstanding Option
or SPR, shall be proportionately adjusted for an 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 or SPR.

In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee, as soon as practicable prior to the effective
date of such proposed action. To the extent it has not been previously
exercised, the Option will terminate immediately prior to the consummation of
such proposed action.

In the event of a merger of the Company with or into another corporation,
the Option or SPR may be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation. In the event that such successor corporation does not agree to
assume the Option or SPR or to substitute an equivalent option, the Board shall,
in lieu of such assumption or substitution, provide for the Optionee to have the
right to exercise the Option or SPR as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. If the Board
makes an Option or SPR fully exercisable in lieu of assumption or substitution
in the event of a merger, the Board shall notify the Optionee that the Option or
SPR shall be fully exercisable for a period of fifteen (15) days from the date
of such notice, and the Option or SPR will terminate upon the expiration of such
period.

Amendments, Suspensions and Termination of the Option Plan. The Board may
amend, alter, suspend or discontinue the Stock Plan at any time, but no
amendment, alteration, suspension or discontinuation shall

A-3
<PAGE> 19

be made which would impair the rights of any Optionee unless mutually agreed
otherwise between the Optionee and the Board in a writing signed by the Optionee
and the Company. The Company shall obtain stockholder approval for any Stock
Plan amendment to the extent necessary to comply with applicable laws. In any
event, the Stock Plan will terminate automatically in 2008.

Federal Tax Information for Stock Plan. Options granted under the Stock
Plan may be either ISOs or NSOs.

An Optionee who is granted an ISO will not recognize taxable income either
at the time the Option is granted or upon its exercise, although the exercise
may subject the Optionee to the alternative minimum tax. Upon the sale or
exchange of the shares more than two (2) years after grant of the Option and one
(1) year after exercise of the Option, any gain or loss will be treated as
long-term capital gain or loss. If these holding periods are not satisfied, the
Optionee will recognize ordinary income at the time of sale or exchange equal to
the difference between the exercise price and the lower of (i) the fair market
value of the shares on the date of exercise and (ii) the sale price of the
shares. A different rule for measuring ordinary income upon such premature
disposition may apply if the Optionee is also an Officer, Director, or 10%
Stockholder of the Company. The Company will be entitled to a deduction in the
same amount as the ordinary income recognized by the Optionee. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income will be characterized as long-term or short-term
capital gain or loss, depending on the holding period.

All Options which do not qualify as ISOs are referred to as NSOs. An
Optionee will not recognize any taxable income at the time he or she is granted
an NSO. However, upon its exercise, the Optionee will recognize ordinary income
generally measured as the excess of the then Fair Market Value of the shares
purchased over the purchase price. Any ordinary income recognized in connection
with an Option exercise by an Optionee who is also an employee of the Company
will be subject to tax withholding by the Company. Upon resale of such shares by
the Optionee, any difference between the sales price and the Optionee's purchase
price, to the extent not recognized as ordinary income as described above, will
be treated as long-term or short-term capital gain or loss, depending on the
holding period. The Company will be entitled to a tax deduction in the same
amount as the ordinary income recognized by the Optionee with respect to shares
acquired upon exercise of an NSO.

Stock purchase rights will generally be taxed in the same manner as
nonstatutory stock options. However, restricted stock is generally purchased
upon the exercise of a stock purchase right. At the time of purchase, restricted
stock is subject to a "substantial risk of forfeiture" within the meaning of
Section 83 of the Code. As a result, the purchaser will not recognize ordinary
income at the time of purchase. Instead, the purchaser will recognize ordinary
income on the dates when a stock ceases to be subject to a substantial risk of
forfeiture. The stock will generally cease to be subject to a substantial risk
of forfeiture when it is no longer subject to the Company's right to repurchase
the stock upon the purchaser's termination of employment with the Company. At
such times, the purchaser will recognize ordinary income measured as the
difference between the purchase price and the fair market value of the stock on
the date the stock is no longer subject to a substantial risk of forfeiture.

The purchaser may accelerate to the date of purchase his or her recognition
of ordinary income, if any, and the beginning of any capital gain holding period
by timely filing an election pursuant to Section 83(b) of the Code. In such
event, the ordinary income recognized, if any, is measured as the difference
between the purchase price and the fair market value of the stock on the date of
purchase, and the capital gain holding period commences on such date. The
ordinary income recognized by a purchaser who is an employee will be subject to
tax withholding by the Company. Different rules may apply if the purchaser is
also an officer, director, or 10% shareholder of the Company.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON THE OPTIONEE AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF
OPTIONS UNDER THE STOCK PLAN, DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT
DISCUSS THE TAX CONSEQUENCES OF THE OPTIONEE'S

A-4
<PAGE> 20

DEATH OR THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN
WHICH THE OPTIONEE MAY RESIDE.

Stock Plan Benefits. The Company is unable to predict the amount of
benefits that will be received by or allocated to any particular participant
under the Stock Plan. The following table sets forth the dollar amount and the
number of shares granted under the Option Plan during the last fiscal year to
(i) each of the Company's Named Executive Officers, (ii) all executive officers
as a group, (iii) all non-employee directors as a group and (iv) all employees
other than executive officers as a group.

STOCK PLAN BENEFITS TABLE

<TABLE>
<CAPTION>
NUMBER OF
SHARES DOLLAR VALUE
NAME AND POSITION GRANTED(1) OF GRANTS
----------------- ---------- ------------
<S> <C> <C>
Jimmy S.M. Lee.............................................. 72,000 $ 852,938
Chief Executive Officer
Thomas C. Endicott.......................................... 240,000 5,970,000
President and Chief Operating Officer
Gary L. Fischer............................................. 32,000 424,625
Executive Vice President and Chief Financial Officer
Thomas Doczy................................................ 24,000 260,000
Senior Vice President, Sales and Marketing
Paul Jei-Zen Song........................................... 29,000 348,062
Senior Vice President, Engineering
All Executive Officers as a Group (5 persons)............... 397,000 7,855,625
All Non-employee Directors as a Group (4 persons)........... 10,000 158,750
All Employees other than Executive Officers as a Group...... 1,143,099 17,107,952
</TABLE>

---------------
(1) The dollar value of option grants under the Option Plan was computed by
multiplying the number of shares subject to the option times the exercise
price of the option. All options granted under the Option Plan were granted
at an exercise price equal to the fair market value of the Common Stock on
the date of grant.

A-5
<PAGE> 21

APPENDIX B

DESCRIPTION OF THE 1993 EMPLOYEE STOCK PURCHASE PLAN

General. The 1993 Employee Stock Purchase Plan (the "ESPP") was adopted by
the Board of Directors in March 1993 and was activated in February 1995 in
connection with the Company's initial public offering. Prior to the proposed
amendment to the ESPP to be voted on at the Annual Meeting, a total of 1,700,000
shares of Common Stock have been reserved for issuance under the ESPP. In
October 2000, the Board of Directors approved an amendment to the ESPP, subject
to stockholder approval, to increase the shares reserved for issuance thereunder
by 250,000 shares, bringing the total number of shares issuable under the ESPP
to 1,950,000 shares. The purpose of the ESPP is to provide employees with an
opportunity to purchase Common Stock of the Company through accumulated payroll
deductions.

Administration. The ESPP may be administered by the Board or a committee
appointed by the Board. All questions of interpretation or application of the
ESPP are determined by the Board or its appointed committee, and its decisions
are final, conclusive and binding upon all participants.

Eligibility. Each Employee of the Company (including officers), who works
at least 20 hours per week and more than five (5) months in any calendar year,
is eligible to participate in the ESPP if so employed on the first day of an
Offering Period; provided, however, that certain limitations imposed by Section
423(b) of the Code and limitations on stock ownership as set forth in the ESPP
may apply. Eligible Employees become participants in the ESPP by filing with the
Company a subscription agreement authorizing payroll deductions prior to the
first day of each Offering Period unless a different time for filing the
subscription agreement has been set by the Board. Participation in an Offering.
The ESPP has consecutive and overlapping twenty-four month offering periods that
begin every six months (the "Offering Periods"). Each twenty-four month Offering
Period includes four six-month purchase periods (each a "Purchase Period"),
during which payroll deductions are accumulated and, at the end of which, shares
of Common Stock are purchased with a participant's accumulated payroll
deductions. The Board has the power to change the duration of future Offering
Periods, if such change is made at least five days prior to the scheduled
beginning of the first Offering Period to be affected. To participate in the
ESPP, an eligible Employee must authorize payroll deductions pursuant to the
ESPP. Such payroll deductions may not exceed 10% of a participant's compensation
during the Offering Period. Once an Employee becomes a participant in the ESPP,
the Employee will automatically participate in each successive Offering Period
until such time as the Employee withdraws from the ESPP or the Employee's
employment with the Company terminates. At the beginning of each Offering
Period, each participant is automatically granted an option to purchase shares
of the Company's Common Stock. The option expires at the end of the Offering
Period or upon termination of employment, whichever is earlier, but is exercised
at the end of each Purchase Period to the extent of the payroll deductions
accumulated during such Purchase Period. In no event shall a participant be
permitted to purchase during each Purchase Period more than a number of Shares
determined by dividing $12,500 by the Fair Market Value of a share of the
Company's Common Stock on the first day of the Offering Period, subject to
exceptions and limitations stated in the ESPP.

Purchase Price, Shares Purchased. Shares of Common Stock may be purchased
under the ESPP at a Purchase Price not less than 85% of the lesser of the Fair
Market Value of the Common Stock on (i) the first day of the Offering Period or
(ii) the last day of the Purchase Period. The Fair Market Value of the Common
Stock on any relevant date will be the closing price per share as reported on
the Nasdaq National Market (or the mean of the closing bid and asked prices, if
no sales were reported) as quoted on such exchange or reported in The Wall
Street Journal. The number of shares of Common Stock a participant purchases in
each Offering Period is determined by dividing the total amount of payroll
deductions withheld from the participant's compensation prior to the last day of
the Purchase Period by the Purchase Price.

Termination of Employment. Termination of a participant's employment for
any reason, including disability or death, or the failure of the participant to
remain in the continuous scheduled employ of the Company for at least 20 hours
per week, cancels his or her option and participation in the ESPP immediately.

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<PAGE> 22

In such event, the payroll deductions credited to the participant's account will
be returned to him or her or, in the case of death, to the person or persons
entitled thereto as provided in the ESPP.

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

Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares reserved under the ESPP as
well as the price per share of Common Stock covered by each option under the
ESPP which has not yet been exercised 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 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.

Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period will terminate immediately prior
to the consummation of such proposed action, unless otherwise provided by the
Board.

Merger or Asset Sale. In the event of any merger, consolidation,
acquisition of assets or like occurrence involving the Company, each option
under the ESPP shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation. In the event the successor corporation refuses to assume or
substitute for the options, the Board shall shorten any Purchase Periods and
Offering Periods then in progress by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods shall end on the New Exercise Date. The
New Exercise Date shall be prior to the merger, consolidation or asset sale. If
the Board shortens any Purchase Periods and Offering Periods then in progress,
the Board shall notify each participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date has been changed to
the New Exercise Date and that all options will be exercised automatically on
the New Exercise Date, unless the participant has already withdrawn from the
Offering Period.

Amendment and Termination of the Plan. The Board of Directors may at any
time terminate or amend the ESPP. An Offering Period may be terminated by the
Board of Directors at the end of any Purchase Period if the Board determines
that termination of the ESPP is in the best interests of the Company and its
stockholders. Generally, no such termination can affect options previously
granted. No amendment shall be effective unless it is approved by the holders of
a majority of the votes cast at a duly held stockholders' meeting, if such
amendment would require stockholder approval in order to comply with Section 423
of the Code. The ESPP will terminate in 2003.

Withdrawal. Generally, a participant may withdraw from an Offering Period
at any time by written notice without affecting his or her eligibility to
participate in future Offering Periods. However, once a participant withdraws
from a particular Offering Period, that participant may not participate again in
the same Offering Period. To participate in a subsequent Offering Period, the
participant must deliver to the Company a new subscription agreement.

Federal Tax Information for ESPP. The ESPP, and the right of participants
to make purchases thereunder, is intended to qualify under the provisions of
Sections 421 and 423 of the Code. Under these provisions, no income will be
taxable to a participant until the shares purchased under the ESPP are sold or
otherwise disposed of. Upon sale or other disposition of the shares, the
participant will generally be subject to tax and the amount of the tax will
depend upon the holding period. If the shares are sold or otherwise disposed of
more than two (2) years from the first day of the Offering Period, the
participant will recognize ordinary income measured as the lesser of (i) the
excess of the fair market value of the shares at the time of such sale or
disposition over the purchase price, or (ii) an amount equal to 15% of the fair
market value of the shares as
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of the first day of the Offering Period. Any additional gain will be treated as
long-term capital gain. If the shares are sold or otherwise disposed of before
the expiration of this holding period, the participant will recognize ordinary
income generally measured as the excess of the fair market value of the shares
on the date the shares are purchased over the purchase price. Any additional
gain or loss on such sale or disposition will be long-term or short-term capital
gain or loss, depending on the holding period. The Company is not entitled to a
deduction for amounts taxed as ordinary income or capital gain to a participant
except to the extent of ordinary income recognized by participants upon a sale
or disposition of shares prior to the expiration of the holding period(s)
described above.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON THE PARTICIPANT AND THE COMPANY WITH RESPECT TO THE SHARES PURCHASED UNDER
THE ESPP. REFERENCE SHOULD BE MADE TO THE APPLICABLE PROVISIONS OF THE CODE. IN
ADDITION, THE SUMMARY DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT'S
DEATH OR THE INCOME TAX LAWS OF ANY STATE OR FOREIGN COUNTRY IN WHICH THE
PARTICIPANT MAY RESIDE.

ESPP Benefits. The Company is unable to predict the amount of benefits that
will be received by or allocated to any particular participant under the ESPP.
The following table sets forth the dollar amount and the number of shares
purchased under the ESPP during the last fiscal year to (i) each of the
Company's Named Executive Officers, (ii) all executive officers as a group,
(iii) all non-employee directors as a group and (iv) all employees other than
executive officers as a group.

ESPP BENEFITS TABLE

<TABLE>
<CAPTION>
NUMBER VALUE OF SHARES
NAME OF SHARES PURCHASED(1)
---- --------- ---------------
<S> <C> <C>
Jimmy S.M. Lee.............................................. 6,557 $ 109,296
Thomas C. Endicott.......................................... -- --
Gary L. Fischer............................................. 5,864 102,987
Thomas Doczy................................................ 5,162 89,881
Paul Jei-Zen Song........................................... 4,634 81,439
All executive officers as a group (5 persons)............... 22,217 383,603
All non-employee directors as a group (4 persons)........... -- --
All employees other than executive officers as a group...... 212,746 3,785,673
</TABLE>

---------------
(1) The dollar value of shares purchased under the ESPP was computed by
multiplying the number of shares purchased times the market price of the
Common Stock on the purchase date. In accordance with the terms of the ESPP,
the shares of Common Stock were purchased at a price equal to 85% of the
lesser of the fair market value of the Common Stock on the first day of the
Offering Period or the last day of the Purchase Period.

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<PAGE> 24
INTEGRATED SILICON SOLUTION, INC.

1998 STOCK PLAN

1. Purposes of the Plan. The purposes of this 1998 Stock Plan are:

- to attract and retain the best available personnel for
positions of substantial responsibility,
- 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. Stock Purchase Rights may also be granted under the Plan.

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 or Stock Purchase Rights are,
or will be, granted under the Plan.

(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 Integrated Silicon Solution, Inc., a Delaware
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.

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

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<PAGE> 25

(k) "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 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, on the 181st 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.

(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; or

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

(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

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

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<PAGE> 26

(q) "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.

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

(s) "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.

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

(u) "Optioned Stock" means the Common Stock subject to an Option
or Stock Purchase Right.

(v) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

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

(x) "Plan" means this 1998 Stock Plan.

(y) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.

(z) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.

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

(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

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<PAGE> 27

(ff) "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 13 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is (a) One Million (1,000,000) Shares, plus (b) any Shares which
have been reserved but unissued under the Company's 1989 Stock Plan (the "1989
Plan") as of the date of stockholder approval of this Plan, and (c) any Shares
returned to the 1989 Plan after the date of stockholder approval of this Plan as
a result of the termination of options under the 1989 Plan. The Shares may be
authorized, but unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right 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); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, 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 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) Procedure.

(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

(iv) Other Administration. Other than as provided above, the
Plan shall be administered by (A) the Board or (B) 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:

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<PAGE> 28

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;

(iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

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

(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights 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 Stock Purchase Right or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

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

(vii) to institute an Option Exchange Program;

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

(ix) 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;

(x) to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) 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;

(xi) 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 or Stock Purchase Right 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 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;

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<PAGE> 29

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

(xiii) 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 or Stock Purchase Rights.

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

6. Limitations.

(a) 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) Neither the Plan nor any Option or Stock Purchase Right 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.

(i) No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 250,000 Shares.

(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 250,000 Shares
which shall not count against the limit set forth in subsection (i) above.

(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

(iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in

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<PAGE> 30

subsections (i) and (ii) above. For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.

7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.

8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant 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 pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

(i) In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time the Incentive
Stock 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 per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, 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, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% 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 of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.

(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.

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<PAGE> 31

(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. 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;

(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) any combination of the foregoing methods of payment; or

(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

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. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled 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
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or

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<PAGE> 32

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 13 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
or Disability, the Optionee may exercise his or her Option within such period of
time as is 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 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
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 Notice of Grant), 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.

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<PAGE> 33

(e) 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. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.

(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right 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 or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

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

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<PAGE> 34

(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 Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, 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 or Stock
Purchase Right.

(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 or Stock Purchase Right 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 or Stock Purchase Right 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 and Stock Purchase Right 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 or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right 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 or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or

-11-
<PAGE> 35

Stock Purchase Right 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 subject to the Option or Stock Purchase Right
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 or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, 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.

14. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, 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.

15. 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 Company 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.

16. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right 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 or Stock Purchase Right, the Company may require the person exercising
such

-12-
<PAGE> 36

Option or Stock Purchase Right 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.

17. 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.

18. 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.

19. 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 manner and to the
degree required under Applicable Laws.

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<PAGE> 37
INTEGRATED SILICON SOLUTION, INC.

1993 EMPLOYEE STOCK PURCHASE PLAN

The following constitute the provisions of the 1993 Employee Stock
Purchase Plan of Integrated Silicon Solution, Inc.

1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

2. Definitions.

(a) "Affiliate Employee" shall mean any Employee who is an
officer or director of the Company.

(b) "Board" shall mean the Board of Directors of the Company.

(d) "Common Stock" shall mean the Common Stock of the Company.

(e) "Company" shall mean Integrated Silicon Solution, Inc., and
any Designated Subsidiary of the Company.

(f) "Compensation" shall mean all base straight time gross
earnings, including commissions, but exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses, and other
compensation.

(g) "Designated Subsidiaries" shall mean the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
<PAGE> 38

(h) "Employee" shall mean any individual who is an employee of
the Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
91st day of such leave.

(i) "Enrollment Date" shall mean the first day of each Offering
Period.

(j) "Exercise Date" shall mean the last day of each Purchase
Period.

(k) "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:

(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sale
price for the Common Stock (or the mean of the closing bid and asked prices, if
no sales were reported), as quoted on such exchange (or the exchange with the
greatest volume of trading in Common Stock) or system on the date of such
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable, or;

(2) If the Common Stock is quoted on the NASDAQ system
(but not on the National Market thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;

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

(l) "Non-Affiliate Employee" shall mean any Employee who is not
an officer or director of the Company.

(m) "Offering Period" shall mean, for Non-Affiliate Employees,
the period of approximately twenty-four (24) months during which an option
granted pursuant to the Plan may be exercised, commencing on the first Trading
Day on or after February 1 and August 1 of each year and terminating on the last
Trading Day in the period ending twenty-four (24) months later. For Affiliate
Employees, Offering Period shall mean the period of approximately twelve (12)
months during which an option granted pursuant to the Plan may be exercised,
commencing on the first Trading Day on or after February 1 or August 1 of each
<PAGE> 39

year and terminating on the last Trading Day in the period ending twelve (12)
months later. The duration and timing of Offering Periods may be changed
pursuant to Section 4 of this Plan.

(n) "Plan" shall mean this Employee Stock Purchase Plan.

(o) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

(p) "Purchase Period" shall mean the approximately six month
period commencing after one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end with the next Exercise Date.

(q) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

(r) "Subsidiary" shall mean a corporation, domestic or foreign,
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

(s) "Trading Day" shall mean a day on which national stock
exchanges and the NASDAQ System are open for trading.

3. Eligibility.

(a) Any Employee (as defined in Section 2(h)), who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.

(b) Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) if, immediately after
the grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own capital stock of
the Company and/or hold outstanding options to purchase such stock possessing
five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Subsidiary, or (ii) which
permits his or her rights to purchase stock under all employee stock purchase
plans of the Company and its subsidiaries to accrue at a rate which exceeds
twenty-five thousand dollars ($25,000) worth of stock (determined at the fair
market value of the shares at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
<PAGE> 40

4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after February 1 and August 1 each year, or on such other
dates as the Board shall determine, and continuing thereafter until terminated
in accordance with Section 19 hereof. The Board shall have the power to change
the duration of Offering Periods (including the commencement and termination
dates thereof) with respect to future offerings without stockholder approval if
such change is announced at least five (5) days prior to the scheduled beginning
of the first Offering Period to be affected thereafter.

5. Participation.

(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.

(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

6. Payroll Deductions.

(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding ten percent (10%) of the
Compensation which he or she receives on each pay day during the Offering
Period, and the aggregate of such payroll deductions during the Offering Period
shall not exceed ten percent (10%) of the participant's Compensation during said
Offering Period.

(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and will be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

(c) A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.
<PAGE> 41

(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to 0% at such time during any
Purchase Period which is scheduled to end during the current calendar year (the
"Current Purchase Period") that the aggregate of all payroll deductions which
were previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Purchase Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Purchase Period which is scheduled to
end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.

(e) At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.

7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than a
number of Shares determined by dividing $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date (except if there is
only one Purchase Period in a calendar year, in which case the dollar limit in
the preceding equation shall be $25,000 instead of $12,500), and provided
further that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof, and shall expire on the last day of the Offering Period.

8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned
<PAGE> 42

to the participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

10. Withdrawal; Termination of Employment.

(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

(b) Upon a participant's ceasing to be an Employee (as defined in
Section 2(h) hereof), for any reason, including by virtue of him or her having
failed to remain an Employee of the Company for at least twenty (20) hours per
week during an Offering Period in which the Employee is a participant, he or she
will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option will be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under
Section 14 hereof, and such participant's option will be automatically
terminated.

11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

12. Stock.

(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be One Million Nine
Hundred Fifty Thousand (1,950,000) shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 18 hereof. If, on a given
Exercise Date, the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

(b) The participant will have no interest or voting right in
shares covered by his or her option until such option has been exercised.
<PAGE> 43

(c) Shares to be delivered to a participant under the Plan will
be registered in the name of the participant or in the name of the participant
and his or her spouse.

13. Administration.

(a) Administrative Body. The Plan shall be administered by the
Board or a committee of members of the Board appointed by the Board. The Board
or its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all parties. Members of the
Board who are eligible Employees are permitted to participate in the Plan,
provided that:

(1) Members of the Board who are eligible to participate in
the Plan may not vote on any matter affecting the administration of the Plan or
the grant of any option pursuant to the Plan.

(2) If a Committee is established to administer the Plan, no
member of the Board who is eligible to participate in the Plan may be a member
of the Committee.

(b) Rule 16b-3 Limitations. Notwithstanding the provisions of
Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any successor provision ("Rule 16b-3") provides specific requirements for the
administrators of plans of this type, the Plan shall be only administered by
such a body and in such a manner as shall comply with the applicable
requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion
concerning decisions regarding the Plan shall be afforded to any committee or
person that is not "disinterested" as that term is used in Rule 16b-3.

14. Designation of Beneficiary.

(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

<PAGE> 44

(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

16. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

17. Reports. Individual accounts will be maintained for each participant
in the Plan. Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

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

(a) Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised 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 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.

<PAGE> 45

(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Periods will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.

(c) Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each option under the Plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board determines,
in the exercise of its sole discretion and in lieu of such assumption or
substitution, to shorten the Offering Periods then in progress by setting a new
Exercise Date (the "New Exercise Date") or to cancel each outstanding right to
purchase and refund all sums collected from participants during the Offering
Period then in progress. If the Board shortens the Offering Periods then in
progress in lieu of assumption or substitution in the event of a merger or sale
of assets, the Board shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for his
option has been changed to the New Exercise Date and that his option will be
exercised automatically on the New Exercise Date, unless prior to such date he
has withdrawn from the Offering Periods as provided in Section 10 hereof. For
purposes of this paragraph, an option granted under the Plan shall be deemed to
be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board may, with the consent of the successor corporation and
the participant, provide for the consideration to be received upon exercise of
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 and the sale of assets or merger.

The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event the
Company effects one or more reorganizations, recapitalization, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.

19. Amendment or Termination.

(a) The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 18 hereof,
no such termination can affect options previously granted, provided that an
Offering Period may be
<PAGE> 46

terminated by the Board of Directors on any Exercise Date if the Board
determines that the termination of the Plan is in the best interests of the
Company and its stockholders. Except as provided in Section 18 hereof, no
amendment may make any change in any option theretofore granted which adversely
affects the rights of any participant. To the extent necessary to comply with
Rule 16b-3 or under Section 423 of the Code (or any successor rule or provision
or any other applicable law or regulation), the Company shall obtain stockholder
approval in such a manner and to such a degree as required.

(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.

20. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

22. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.
<PAGE> 47

23. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3
to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

24. Automatic Transfer to Low Price Offering Period. To the extent
permitted by Rule 16b-3 of the Exchange Act, if the Fair Market Value of the
Common Stock on any Exercise Date in an Offering Period is lower than the Fair
Market Value of the Common Stock on the Enrollment Date of such Offering Period,
then all participants in such Offering Period shall be automatically withdrawn
from such Offering Period immediately after the exercise of their option on such
Exercise Date and automatically re-enrolled in the immediately following
Offering Period as of the first day thereof.

<PAGE> 48

EXHIBIT A

INTEGRATED SILICON SOLUTION, INC.
1993 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT

_____ Original Application Enrollment Date:
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1. ____________________________ (name) hereby elects to participate in the
Integrated Silicon Solution, Inc. 1993 Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Subscription Agreement
and the Employee Stock Purchase Plan.

2. I hereby authorize payroll deductions from each paycheck in the amount
of _____________% of my Compensation on each payday (1-10%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(Please note that no fractional percentages are permitted.)

3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise my
option.

4. I have received a copy of the complete "Integrated Silicon Solution,
Inc. 1993 Employee Stock Purchase Plan." I understand that my
participation in the Employee Stock Purchase Plan is in all respects
subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to
obtaining stockholder approval of the Employee Stock Purchase Plan.

5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and spouse
only):_________________

6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after
the Exercise Date, I will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an
amount equal to the excess of the fair market value of the shares at the
time such shares were purchased over the price which I paid for the
shares. I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS
AFTER THE DATE OF ANY DISPOSITION OF MY SHARES AND I WILL MAKE ADEQUATE
PROVISION FOR FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF
ANY, WHICH ARISE UPON THE DISPOSITION OF THE COMMON STOCK. The Company
may, but will not be obligated to, withhold from my compensation the
amount necessary to meet any applicable withholding obligation including
any withholding necessary to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of
Common Stock by me. If I dispose of such shares at any time after the
expiration of the 2-year and 1-year holding periods, I understand that I
will be treated for federal income tax purposes as having received
income only at the time of such disposition, and that such income will
be taxed as ordinary income only to the extent of an amount equal to the
lesser of (1) the excess of the fair market value of the shares at the
time of such disposition over the purchase price which I paid for the
shares, or (2) 15% of the fair market value of the shares on the first
day of the Offering Period. The remainder of the gain, if any,
recognized on such disposition will be taxed as capital gain.

7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon
my eligibility to participate in the Employee Stock Purchase Plan.

8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:

<PAGE> 49

NAME: (Please print)___________________________________________________________
(First) (Middle) (Last)

-------------------------- ------------------------------------
Relationship

------------------------------------
(Address)
Employee's Social
Security Number:
------------------------------------

Employee's Address:
------------------------------------

------------------------------------

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
----------------------- ------------------------------------
Signature of Employee

-----------------------------------
Spouse's Signature (If beneficiary
is other than spouse)

<PAGE> 50

EXHIBIT B

INTEGRATED SILICON SOLUTION, INC.

1993 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

The undersigned participant in the Offering Period of the Integrated
Silicon Solution, Inc. 1993 Employee Stock Purchase Plan which began on
____________, 19____ (the "Enrollment Date") hereby notifies the Company that he
or she hereby withdraws from the Offering Period. He or she hereby directs the
Company to pay to the undersigned as promptly as practicable all the payroll
deductions credited to his or her account with respect to such Offering Period.
The undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated. The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.

Name and Address of Participant:

--------------------------------

Signature:

--------------------------------

Date:
---------------------------

<PAGE> 51
INTEGRATED SILICON SOLUTION, INC.

PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints JIMMY S.M. LEE and GARY L. FISCHER, jointly and
severally, proxies, with full power of substitution, to vote all shares of
Common Stock of Integrated Silicon Solution, Inc., a Delaware corporation, which
the undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held at the Silicon Valley Capital Club, Fairmont Plaza, 50 West San Fernando,
17th Floor, San Jose, California, on February 6, 2001, at 3:00 p.m., local time,
or any adjournment thereof. THE PROXIES ARE BEING DIRECTED TO VOTE AS SPECIFIED
BELOW OR, IF NO SPECIFICATION IS MADE, FOR THE ELECTION OF DIRECTORS, FOR THE
PROPOSAL TO AMEND THE COMPANY'S 1998 STOCK PLAN, FOR THE PROPOSAL TO AMEND THE
COMPANY'S 1993 EMPLOYEE STOCK PURCHASE PLAN, FOR THE APPOINTMENT OF ERNST &
YOUNG, LLP AS INDEPENDENT AUDITORS AND IN ACCORDANCE WITH THEIR DISCRETION ON
SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.

The directors recommend a FOR vote on each item.

(Continued and to be signed on reverse side.)
<PAGE> 52
FOR WITHHELD AUTHORITY
all nominees to vote for
listed (except nominees listed
as withheld)

1. ELECTION OF DIRECTORS
(Instruction: To withhold
authority to vote for any [ ] [ ]
individual nominees, strike that
nominee's name below.)
Nominees: Jimmy S.M. Lee Lip-Bu Tan
Thomas C. Endicott Hide Tanigami
Pauline Lo Alker Chun Win Wong

FOR AGAINST ABSTAIN

2. Proposal to amend the Company's
1998 Stock Plan to increase the
number of shares available for [ ] [ ] [ ]
issuance thereunder by 500,000
shares:

3. Proposal to amend the Company's
1993 Employee Stock Purchase Plan
to increase the number of shares [ ] [ ] [ ]
available for issuance thereunder
by 250,000 shares:

4. Proposal to ratify the appointment
of Ernst & Young, LLP as independent [ ] [ ] [ ]
auditors for the 2001 fiscal year:

YES NO
I plan to attend the Meeting: [ ] [ ]

Signature(s)_____________________________________________ Date ______________
(Signature(s) must be exactly as name(s) appear on this Proxy. If signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such, and, if signing for a corporation, please give your title. When shares
are in the names of more than one person, each should sign this Proxy.)