RESTATED EMPLOYEE STOCK PURCHASE PLAN

RESTATED MICROCHIP TECHNOLOGY INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
----------------------------


AS AMENDED THROUGH APRIL 25, 1997
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I. PURPOSE
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The Microchip Technology Incorporated Employee Stock Purchase
Plan (the "Plan") is intended to provide eligible employees of the Company and
one or more of its Corporate Affiliates with the opportunity to acquire a
proprietary interest in the Company through participation in a plan designed to
qualify as an employee stock purchase plan under Section 423 of the Code.

II. DEFINITIONS
-----------

For purposes of administration of the Plan, the following
terms shall have the meanings indicated:

Board means the Board of Directors of the Company.

Code means the Internal Revenue Code of 1986, as amended from
time to time.

Company means Microchip Technology Incorporated, a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Microchip Technology Incorporated which shall by
appropriate action adopt the Plan.

Common Stock means shares of the Company's common stock, par
value $0.001 per share.

Corporate Affiliate means any parent or subsidiary corporation
of the Company (as determined in accordance with Code Section 424) which is
incorporated in the United States, including any parent or subsidiary
corporation which becomes such after the Effective Date.

Earnings means the sum of the following items of compensation
paid to a Participant by one or more Participating Companies during such
individual's period of participation in the Plan: (i) regular base salary, plus
(ii) any pre-tax contributions made by the Participant to any Code Section
401(k) salary deferral plan or any Code Section 125 cafeteria benefit program
now or hereafter established by the Company or any Corporate Affiliate plus
(iii) all overtime payments, bonuses, commissions, profit-sharing distributions
and other incentive-type payments. There shall, however, be excluded from the
calculation of such Earnings any and all contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant's behalf by
the Company or one or more Corporate Affiliates under any employee benefit or
welfare plan now or hereafter established.
Effective Date means March 17, 1993, the start date of the
first offering period under the Plan. However, for any Corporate Affiliate which
becomes a Participating Company in the Plan after such date, a subsequent
Effective Date shall be designated with respect to participation by its Eligible
Employees.

Eligible Employee means any person who is engaged, on a
regularly-scheduled basis of more than twenty (20) hours per week for more than
five (5) months per calendar year, in the rendition of personal services to the
Company or any other Participating Company for earnings considered wages under
Section 3121(a) of the Code.

Entry Date means the date an Eligible Employee first joins the
offering period in effect under the Plan. The earliest Entry Date under the Plan
shall be the Effective Date.

Fair Market Value means the fair market value of the Common
Stock on any relevant date under the Plan and shall, for any date following the
initial March 17, 1993 Effective Date, be deemed to be equal to the closing
selling price per share of Common Stock on the date in question, as officially
quoted on the Nasdaq National Market. If there is no quoted selling price for
the date in question, then the closing selling price per share of Common Stock
on the next preceding day for which there does exist such a quotation shall be
determinative of Fair Market Value.

Participant means any Eligible Employee of a Participating
Company who is actively participating in the Plan.

Participating Company means the Company and such Corporate
Affiliate or Affiliates as may be designated from time to time by the Board to
extend the benefits of the Plan to their Eligible Employees.

Semi-Annual Entry Date means the first business day of each
March and September within an offering period in effect under the Plan. However,
the earliest Semi-Annual Entry Date under the Plan shall be the March 17, 1993
Effective Date.

Semi-Annual Period of Participation means each semi-annual
period for which the Participant actually participates in an offering period in
effect under the Plan. There shall be a maximum of four (4) semi-annual periods
of participation within each offering period. Except as otherwise designated by
the Plan Administrator, the first such semi-annual period (which may actually be
less than six (6) months for the initial offering period) shall extend from the
start date of the offering period through the last business day in August;
subsequent semi-annual periods shall then be measured from the first business
day of September and March thereafter to the last business day of February and
August, respectively.

Semi-Annual Purchase Date means the last business day of each
February and August within an offering period on which shares of Common Stock
are automatically purchased for Participants under the Plan.
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Service means the period during which an individual performs
services as an Eligible Employee and shall be measured from his or her hire
date, whether that date is before or after the Effective Date of the Plan.

III. ADMINISTRATION
--------------

The Plan shall be administered by a committee (the "Plan
Administrator") comprised of two (2) or more non-employee Board members
appointed from time to time by the Board. The Plan Administrator shall have full
authority to administer the Plan, including authority to interpret and construe
any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Section 423 of the Code. Decisions of the Plan Administrator
shall be final and binding on all parties who have an interest in the Plan.

IV. OFFERING PERIODS
----------------

A. Shares of Common Stock shall be offered for purchase under
the Plan through a series of successive offering periods until such time as (i)
the maximum number of shares of Common Stock available for issuance under the
Plan shall have been purchased or (ii) the Plan shall have been sooner
terminated in accordance with Article IX.

B. The Plan shall be implemented in a series of successive
offering periods, each to be of a duration of twenty-four (24) months or less as
designated by the Plan Administrator prior to the start date. The initial
offering period will begin on the Effective Date and will end on the last
business day in February 1995. The next offering period shall commence on the
first business day in March 1995, and subsequent offering periods shall commence
as designated by the Plan Administrator.

C. Under no circumstances shall any offering period commence
under the Plan, nor shall any shares of Common Stock be issued hereunder, until
such time as (i) the Plan shall have been approved by the Company's stockholders
and (ii) the Company shall have complied with all applicable requirements of the
Securities Act of 1933 (as amended), all applicable listing requirements of any
securities exchange on which shares of the Common Stock are listed and all other
applicable statutory and regulatory requirements.

D. The Participant shall be granted a separate purchase right
for each offering period in which he/she participates. The purchase right shall
be granted on the Entry Date on which such individual first joins the offering
period in effect under the Plan and shall be automatically exercised in
successive semi-annual installments on the last business day of each February
and August within the remainder of the offering period. Accordingly, each
purchase right may be exercised up to two (2) times each calendar year it
remains outstanding.

E. The acquisition of Common Stock through plan participation
for any offering period shall neither limit nor require the acquisition of
Common Stock by the Participant in
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any subsequent offering period.

V. ELIGIBILITY AND PARTICIPATION
-----------------------------

A. Each Eligible Employee of a Participating Company shall be
eligible to participate in the Plan in accordance with the following provisions:

- An individual who is an Eligible Employee with at least
thirty (30) days of Service prior to the start date of the offering
period may enter that offering period on the Semi-Annual Entry Date
coincident with such start date or on any subsequent Semi-Annual Entry
Date within that offering period on which he/she remains an Eligible
Employee. The Semi-Annual Entry Date on which such individual first
joins the offering period shall become such individual's Entry Date for
the offering period, and on that date such individual shall be granted
his/her purchase right for the offering period.

- An individual who is not an Eligible Employee with at least
thirty (30) days of Service on the start date of the offering period
may subsequently enter that offering period on the first Semi-Annual
Entry Date on which he/she is an Eligible Employee with thirty (30) or
more days of Service or on any subsequent Semi-Annual Entry Date within
that offering period on which he/she remains an Eligible Employee. The
Semi-Annual Entry Date on which such individual first joins the
offering period shall become such individual's Entry Date for that
offering period, and on that date such individual shall be granted
his/her purchase right for the offering period.

B. To participate for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his/her scheduled Entry Date.

C. The payroll deduction authorized by the Participant for
purposes of acquiring shares of Common Stock under the Plan may be any multiple
of one percent (1%) of the Earnings paid to the Participant during each
Semi-Annual Period of Participation within the offering period, up to a maximum
of ten percent (10%). The deduction rate so authorized shall continue in effect
for the remainder of the offering period, except to the extent such rate is
changed in accordance with the following guidelines:

- The Participant may, at any time during a Semi-Annual Period
of Participation, reduce his/her rate of payroll deduction. Such
reduction shall become effective as soon as possible after the filing
of the requisite reduction form with the Plan Administrator (or its
designate), but the Participant may not effect more than one (1) such
reduction during the same Semi-Annual Period of Participation.

- The Participant may not increase his/her rate of payroll
deduction following
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his/her Entry Date into the offering period. However, the Participant
may, prior to his/her Entry Date into any new offering period, increase
the rate of his/her payroll deduction by filing the appropriate form
with the Plan Administrator (or its designate). The new rate (which may
not exceed the ten percent (10%) maximum) shall become effective as of
the Participant's Entry Date into the first offering period following
the filing of such form.

Payroll deductions will automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of Section VII below.

VI. STOCK SUBJECT TO PLAN
---------------------

A. The Common Stock purchasable under the Plan shall, solely
in the discretion of the Plan Administrator, be made available from either
authorized but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Company, including shares of Common Stock purchased on the
open market. The total number of shares which may be issued over the term of the
Plan shall not exceed 3,306,000 shares1 (subject to adjustment under Section
VI.B below). However, not more than 990,0002 shares may be issued under the Plan
from and after March 1, 1995, subject to adjustment under Section VI.B below.

B. In the event any change is made to the outstanding Common
Stock by reason of any stock dividend, stock split, combination of shares or
other change affecting such outstanding Common Stock as a class without the
Company's receipt of consideration, appropriate adjustments shall be made by the
Plan Administrator to (i) the class and maximum number of securities issuable
over the term of the Plan and from and after the March 1, 1995 effective date of
this restatement, (ii) the class and maximum number of securities purchasable
per Participant during any one (1) Semi-Annual Period of Participation and (iii)
the class and number of securities and the price per share in effect under each
purchase right at the time outstanding under the Plan. Such adjustments shall be
designed to preclude the dilution or enlargement of rights and benefits under
the Plan.

VII. PURCHASE RIGHTS
---------------

An Eligible Employee who participates in the Plan for a
particular offering period shall have the right to purchase shares of Common
Stock, in a series of successive semi-annual installments during such offering
period, upon the terms and conditions set forth below and shall execute a
purchase agreement embodying such terms and conditions (not inconsistent with
the Plan) as the Plan Administrator may deem advisable.

Purchase Price. Common Stock shall be issuable at the end of
each Semi-Annual Period of Participation within the offering period at a
purchase price equal to eighty-five percent

- ----------------------------
(1) Adjusted to reflect (i) the 300,000 share increase authorized by the Board
on April 25, 1997, subject to stockholder approval at the 1997 Annual Meeting.
Should this proposed increase not be approved, then the total number of shares
which may be issued over the term of the Plan shall not exceed 3,006,000.
(2) Adjusted to reflect (i) the 300,000 share increase authorized by the Board
on April 25, 1997, subject to stockholder approval at the 1997 Annual Meeting.
Should the proposed increase not be approved then the total number of shares
that may be issued under the Plan from and after March 1, 1995, subject to
adjustment under Section VI.B, below may not exceed 690,000.
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(85%) of the lower of (i) the Fair Market Value per share on the Participant's
Entry Date into that offering period or (ii) the Fair Market Value per share on
the Semi-Annual Purchase Date on which such Semi-Annual Period of Participation
ends. However, for each Participant whose Entry Date is other than the start
date of the offering period, the clause (i) amount shall in no event be less
than the Fair Market Value of the Common Stock on the start date of that
offering period.

Payment. Payment for the Common Stock purchased under the Plan
shall be effected by means of the Participant's authorized payroll deductions.
Such deductions shall begin with the first full payroll period beginning with or
immediately following the Participant's Entry Date into the offering period and
shall (unless sooner terminated by the Participant) continue through the pay day
ending with or immediately prior to the last day of the offering period. The
amounts so collected shall be credited to the Participant's book account under
the Plan, but no interest shall be paid on the balance from time to time
outstanding in such account. The amounts collected from a Participant may be
commingled with the general assets of the Company and may be used for general
corporate purposes.

Number of Purchasable Shares. The number of shares purchasable
per Participant for each Semi-Annual Period of Participation during the offering
period shall be the number of whole shares obtained by dividing the payroll
deductions collected from the Participant during that Semi-Annual Period of
Participation by the purchase price in effect for the Participant for such
period. No Participant may purchase more than Thirteen Thousand Five Hundred
(13,500) shares of Common Stock per Semi-Annual Period of Participation, subject
to periodic adjustment under Section VI.B.

Under no circumstances shall purchase rights be granted under
the Plan to any Eligible Employee if such individual would, immediately after
the grant, own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or any of its Corporate Affiliates.

Termination of Purchase Right. The following provisions shall
govern the termination of outstanding purchase rights:

(i) A Participant may, at any time prior to the last
five (5) business days of the Semi-Annual Period of Participation,
terminate his/her outstanding purchase right under the Plan by filing
the prescribed notification form with the Plan Administrator (or its
designate). No further payroll deductions shall be collected from the
Participant with respect to the terminated purchase right, and any
payroll deductions collected for the Semi-Annual Period of
Participation in which such termination occurs shall, at the
Participant's election, be immediately refunded or held for the
purchase of shares on the next Semi-Annual Purchase Date. If no such
election is made at the time the purchase right is terminated, then the
deductions collected with respect to the terminated right shall be
refunded as soon as possible.
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(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right was granted. In
order to resume participation in any subsequent offering period, such
individual must re-enroll in the Plan (by making a timely filing of a
new purchase agreement and payroll deduction authorization) on or
before his/her scheduled Entry Date into the new offering period.

(iii) If the Participant ceases to remain an Eligible
Employee while his/her purchase right remains outstanding, then such
purchase right shall immediately terminate, and the payroll deductions
collected from such Participant for the Semi-Annual Period of
Participation in which the purchase right so terminates shall be
promptly refunded to the Participant. However, in the event the
Participant's cessation of Eligible Employee status occurs by reason of
his/her death or permanent disability, then such individual (or the
personal representative of the estate of a deceased Participant) shall
have the following election, exercisable at any time prior to the last
five (5) business days of the Semi-Annual Period of Participation in
which such cessation of Eligible Employee status occurs:

- to withdraw all of the Participant's
payroll deductions for such Semi-Annual Period of Participation, or

- to have such funds held for the purchase
of shares on the Semi-Annual Purchase Date immediately following such
cessation of Eligible Employee status.

If a timely election is not made, then the payroll deductions
shall be refunded as soon as possible after the close of such Semi-Annual Period
of Participation. In no event, however, may any payroll deductions be made on
the Participant's behalf following his/her cessation of Eligible Employee
status.

Stock Purchase. Shares of Common Stock shall automatically be
purchased on behalf of each Participant (other than Participants whose payroll
deductions have previously been refunded in accordance with the Termination of
Purchase Right provisions above) on each Semi-Annual Purchase Date. The purchase
shall be effected by applying each Participant's payroll deductions for the
Semi-Annual Period of Participation ending on such Semi-Annual Purchase Date
(together with any carryover deductions from the preceding Semi-Annual Period of
Participation) to the purchase of whole shares of Common Stock (subject to the
limitation on the maximum number of purchasable shares set forth above) at the
purchase price in effect for the Participant for such Semi-Annual Period of
Participation. Any payroll deductions not applied to such purchase because they
are not sufficient to purchase a whole share shall be held for the purchase of
Common Stock in the next Semi-Annual Period of Participation. However, any
payroll deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable by the Participant during
the Semi-Annual Period of Participation shall be promptly refunded to the
Participant.
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Proration of Purchase Rights. Should the total number of
shares of Common Stock which are to be purchased pursuant to outstanding
purchase rights on any particular date exceed the number of shares then
available for issuance under the Plan, the Plan Administrator shall make a
pro-rata allocation of the available shares on a uniform and nondiscriminatory
basis, and the payroll deductions of each Participant, to the extent in excess
of the aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded to such Participant.

Rights as Stockholder. A Participant shall have no stockholder
rights with respect to the shares subject to his/her outstanding purchase right
until the shares are actually purchased on the Participant's behalf in
accordance with the applicable provisions of the Plan. No adjustments shall be
made for dividends, distributions or other rights for which the record date is
prior to the date of such purchase.

A Participant shall be entitled to receive, as soon as
practicable after each Semi-Annual Purchase Date, a stock certificate for the
number of shares purchased on the Participant's behalf. Such certificate may,
upon the Participant's request, be issued in the names of the Participant and
his/her spouse as community property or as joint tenants with right of
survivorship. Alternatively, the Participant may request the issuance of such
certificate in "street name" for immediate deposit in a designated brokerage
account.

Assignability. No purchase right granted under the Plan shall
be assignable or transferable by the Participant other than by will or by the
laws of descent and distribution following the Participant's death, and during
the Participant's lifetime the purchase right shall be exercisable only by the
Participant.

Change in Ownership. Should any of the following transactions
(a "Change in Ownership") occur during the offering period:

(i) a merger or other reorganization in which the
Company will not be the surviving corporation (other than a
reorganization effected primarily to change the State in which the
Company is incorporated), or

(ii) a sale of all or substantially all of the Company's
assets in liquidation or dissolution of the Company, or

(iii) a reverse merger in which the Company is the
surviving corporation but in which more than fifty percent (50%) of the
Company's outstanding voting stock is transferred to person or persons
different from those who held the stock immediately prior to such
merger, or

then all outstanding purchase rights under the Plan shall
automatically be exercised immediately prior to the effective date of such
Change in Ownership by applying the payroll deductions of each Participant for
the Semi-Annual Period of Participation in which such Change in Ownership occurs
to the purchase of whole shares of Common Stock at eighty-five percent (85%) of
the lower of (i) the Fair Market Value per share of Common Stock on the
Participant's Entry
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Date into the offering period in which such Change in Ownership occurs or (ii)
the Fair Market Value per share of Common Stock immediately prior to the
effective date of such Change in Ownership. However, the applicable share
limitations of Articles VII and VIII shall continue to apply to any such
purchase, and the clause (i) amount above shall not, for any Participant whose
Entry Date for the offering period is other than the start date of that offering
period, be less than the Fair Market Value per share of Common Stock on such
start date.

The Company shall use its best efforts to provide at least ten
(10)-days advance written notice of the occurrence of any such Change in
Ownership, and Participants shall, following the receipt of such notice, have
the right to terminate their outstanding purchase rights in accordance with the
applicable provisions of this Article VII.

VIII. ACCRUAL LIMITATIONS
-------------------

A. No Participant shall be entitled to accrue rights to
acquire Common Stock pursuant to any purchase right outstanding under this Plan
if and to the extent such accrual, when aggregated with (I) rights to purchase
Common Stock accrued under any other purchase right outstanding under this Plan
and (II) similar rights accrued under other employee stock purchase plans
(within the meaning of Section 423 of the Code) of the Company or its Corporate
Affiliates, would otherwise permit such Participant to purchase more than
$25,000 worth of stock of the Company or any Corporate Affiliate (determined on
the basis of the value of such stock on the date or dates such rights are
granted the Participant) for each calendar year such rights are at any time
outstanding.

B. For purposes of applying such accrual limitations, the
right to acquire Common Stock pursuant to each purchase right outstanding under
the Plan shall accrue as follows:

(i) The right to acquire Common Stock under each such
purchase right shall accrue in a series of successive semi-annual
installments as and when the purchase right first becomes exercisable
for each such installment on the last business day of each Semi-Annual
Period of Participation for which the right remains outstanding.

(ii) No right to acquire Common Stock under an
outstanding purchase right shall accrue to the extent the Participant
has already accrued in the same calendar year the right to acquire
Common Stock under one or more other purchase rights at the rate of
Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
(determined on the basis of the Fair Market Value on the date or dates
such rights are granted) for each calendar year those rights are at any
time outstanding.

(iii) If by reason of such accrual limitations, any
purchase right of a Participant does not accrue for a particular
Semi-Annual Period of Participation, then the payroll deductions which
the Participant made during that Semi-Annual Period of Participation
with respect to such purchase right shall be promptly
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refunded.

C. In the event there is any conflict between the provisions
of this Article VIII and one or more provisions of the Plan or any instrument
issued thereunder, the provisions of this Article VIII shall be controlling.

IX. AMENDMENT AND TERMINATION
-------------------------

A. The Board may alter, amend, suspend or discontinue the Plan
following the close of any Semi-Annual Period of Participation. However, the
Board may not, without the approval of the Company's stockholders:

(i) materially increase the number of shares issuable
under the Plan or the maximum number of shares purchasable per
Participant during any one Semi-Annual Period of Participation, except
that the Plan Administrator shall have the authority, exercisable
without such stockholder approval, to effect adjustments to the extent
necessary to reflect changes in the Company's capital structure
pursuant to Section VI.B;

(ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares issuable under the Plan; or

(iii) materially increase the benefits accruing to
Participants under the Plan or materially modify the requirements for
eligibility to participate in the Plan.

B. The Company shall have the right, exercisable in the sole
discretion of the Plan Administrator, to terminate all outstanding purchase
rights under the Plan immediately following the close of any Semi-Annual Period
of Participation. Should the Company elect to exercise such right, then the Plan
shall terminate in its entirety. No further purchase rights shall thereafter be
granted or exercised, and no further payroll deductions shall thereafter be
collected, under the Plan.

X. DISPOSITION OF SHARES
---------------------

A. The Plan Administrator may, in its absolute discretion,
impose, as a condition to the issuance of the shares of Common Stock purchased
under the Plan, the requirement that each Participant provide the Company with
prompt notice of any transfer or other disposition of those shares which is
effected within two (2) years after Participant's Entry Date into the offering
period in which the shares were purchased or within one year after the
Semi-Annual Purchase Date on which those shares were in fact purchased. The Plan
Administrator may further require the certificate evidencing such shares to be
endorsed with a legend indicating the existence of such notice requirement and
impose appropriate stop transfer orders with respect to such certificate in the
absence of such notice.
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B. The Company shall not record on its books of record any
transfer or other disposition of the shares of Common Stock issued under the
Plan which is not effected in compliance with the foregoing notice requirement.
Moreover, the Company may impose, as a condition to the recordation of such
transfer or disposition, the requirement that the Participant satisfy all
Federal, state and local income and employment tax withholding obligations
applicable to such transfer or disposition.

XI. GENERAL PROVISIONS
------------------

A. The Plan became effective on the March 17, 1993 Effective
Date.

B. The March 1, 1995 restatement incorporated a series of
amendments to the Plan authorized by the Board in January, 1995 to effect the
following changes to the Plan: (i) allow Eligible Employees to join an offering
period on any Semi-Annual Entry Date within that offering period, (ii) prohibit
Participants from increasing their rate of payroll deduction under the Plan
after their Entry Date into a particular offering period, (iii) obligate
Participants to notify the Company of any disqualifying disposition (as defined
in Code Section 423) of the shares they acquire under the Plan and (iv) and
increase in the number of shares of Common Stock available for issuance over the
term of the Plan.

C. The Plan shall terminate upon the earlier of (i) the last
business day in February 2003 or (ii) the date on which all shares available for
issuance under the Plan shall have been sold pursuant to purchase rights
exercised under the Plan.

D. All costs and expenses incurred in the administration of
the Plan shall be paid by the Company.

E. Neither the action of the Company in establishing the Plan,
nor any action taken under the Plan by the Board or the Plan Administrator, nor
any provision of the Plan itself shall be construed so as to grant any person
the right to remain in the employ of the Company or any of its Corporate
Affiliates for any period of specific duration, and such person's employment may
be terminated at any time, with or without cause.

F. The provisions of the Plan shall be governed by the laws of
the State of Arizona without resort to that State's conflict-of-laws rules.
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Schedule A
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Companies Participating in
Employee Stock Purchase Plan
As of April 25, 1997
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Microchip Technology Incorporated
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