NOTICE OF GRANT

MICROCHIP TECHNOLOGY INCORPORATED
NOTICE OF GRANT OF STOCK OPTION
1997 NONSTATUTORY STOCK OPTION PLAN

Notice is hereby given of the following nonstatutory stock option grant (the
"Option") to purchase shares of the Common Stock of Microchip Technology
Incorporated, a Delaware corporation (the "Company"):

Optionee: _____________________________________________________

Grant Date: ______________________________________________, 199__

Date Vesting Begins: ______________________________________________, 199__

Vesting Period: _____________________________________________________

Option Price: _____________________________________________________

Number of Option Shares: _____________________________________________________

Expiration Date: ______________________________________________, 200__

Type of Option: Nonstatutory Stock Option

Exercise/Vesting Schedule: The Option may be exercised for any or all of the
Vested Option shares. If the Grant Date and the Date Vesting Begins are the
same, then the monthly installments for the first year of the Vesting Period
will vest only in a lump sum upon the Optionee's completion of twelve months of
Service measured from the Grant Date, the balance will vest over the remainder
of the vesting period on a monthly basis. However, if the Date Vesting Begins is
not the same as the Grant Date, then the Option Shares will vest in equal
monthly installments (12 x the number of years in the Vesting Period) over the
Optionee's period of Service, beginning one month after the Date Vesting Begins.
In no event will the Optionee vest in any additional shares following the
Optionee's cessation of Service (as defined in the attached Plan).

Optionee understands that the Option is granted subject to and in accordance
with the express terms and conditions of the Microchip Technology Incorporated
1997 Nonstatutory Stock Option Plan (the "Plan"). Optionee agrees to be bound by
the terms and conditions of the Plan and the terms and conditions of the Option
as set forth in the Stock Option Agreement attached hereto as Exhibit A.

Optionee hereby acknowledges receipt of a copy of the official Plan prospectus
in the form attached hereto as Exhibit B.

NO EMPLOYMENT OF SERVICE CONTRACT. NOTHING IN THE OPTION AGREEMENT OR THE PLAN
SHALL CONFER UPON THE OPTIONEE THE RIGHT TO CONTNUE IN THE EMPLOY OR SERVICE OF
THE COMPANY FOR ANY PERIOD OF SPECIFIC DURATION OR INTERFERE WITH OR OTHERWISE
RESTRICT IN ANYWAY THE RIGHTS OF THE COMPANY OR THE OPTIONEE, WHICH RIGHTS ARE
HEREBY EXPRESSLY RESERVED BY EACH, TO TERMINATE OPTIONEE'S SERVICE AT ANY TIME
FOR ANY REASON WHATSOEVER, WITH OR WITHOUT CAUSE.

Dated:____________, 199___ MICROCHIP TECHNOLOGY INCORPORATED

By:_______________________________
Steve Sanghi, President and CEO

Optionee: ________________________

Address: _________________________
Exhibit A
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STOCK OPTION AGREEMENT

1997 NONSTATUTORY STOCK OPTION PLAN

THIS AGREEMENT is made by and between Microchip Technology
Incorporated, a Delaware corporation (the "Company"), and the Optionee listed on
the Notice of Grant of Stock Option (the "Grant Notice") to which this Agreement
is attached as Exhibit A.

Optionee is a key person associated with the Company, and the
Company considers it desirable and its best interest that Optionee be given an
inducement to acquire a proprietary interest in the Company and added incentive
to advance the interest of the Company by possessing an option to purchase the
Company's Common Stock, subject to the terms and conditions of the Company's
1997 Nonstatutory Stock Option Plan (the "Plan") which is attached to the Grant
Notice as Exhibit B.

Now, therefore, it is agreed by and between the parties as
follows:

1. Grant of Option. The Company hereby grants to Optionee, as
of the Grant Date specified in the Grant Notice, the right, privilege and option
to purchase shares of Common Stock as set forth in the Grant Notice (the
"Optioned Shares"), subject in all respects to the terms, conditions and
provisions of this Agreement and the Plan, which is attached to the Grant Notice
as Exhibit B and incorporated by reference in this Agreement. The Optionee
acknowledges having received and carefully reviewed a copy of the Plan.

2. Option Price. The option price (the "Option Price") as
determined by the Administrator is set forth in the Grant Notice which has been
determined by the Administrator in accordance with Sections 1.2(m) and 1.4(c)(i)
of the Plan.

3. Vesting of Option.

(a) Vesting Schedule. The time at which the Optioned
Shares vest and the optionholder may exercise this option with respect to such
Optioned Shares shall be as set forth in the Grant Notice. Optioned Shares that
have vested may be acquired at any time, and from time to time, in whole or in
part, until the option expires as provided in Section 6 hereof.

(b) Acceleration. The Optioned Shares may vest on an
accelerated basis only as provided in the Plan. In addition, the Administrator
may, by resolution adopted after the Grant Date, allow the option to be
exercised on an accelerated basis.

4. Exercise of Option.

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

(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Schedule A (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be completed by the Optionee and delivered to Human Resources,
ATTN: Stock Administration. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price. No Shares shall be
issued pursuant to the exercise of this Option unless such issuance and exercise
complies with Applicable Laws. Assuming such compliance, for income tax purposes
the Exercised Shares shall be considered transferred to the Optionee on the date
the Option is exercised with respect to such Exercised Shares.

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

(a) cash;

(b) check drawn to the Company's order; or

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

6. Termination of Option. This Option, to the extent not
previously exercised, shall terminate upon the first to occur of the tenth
anniversary of the Grant Date or as otherwise set forth in the Plan.

7. No Privilege of Stock Ownership. The holder of the Option
granted hereunder shall not have any of the rights of a stockholder with respect
to the Optioned Shares until such Optionee shall have exercised the option, paid
the Option Price, and received a stock certificate for the purchased shares of
Common Stock.

8. Compliance with Applicable Laws. The exercise of this
Option and the issuance of the Shares upon such exercise shall be subject to
compliance by the Company and the Optionee with all Applicable Laws. In
connection with the exercise of this Option, Optionee shall execute and deliver
to the Company such representations in writing as may be requested by the
Company in order for it to comply with applicable requirements of federal and
state securities laws.

9. Liability of the Company. The inability of the Company to
obtain approval 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 pursuant to this Agreement shall relieve the Company of any
liability with respect to the nonissuance or sale of the Shares as to which such
approval shall not have been obtained. The Company, however, shall use its best
efforts to obtain all such approvals.

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

11. Assignability. Neither this Option nor any rights or
privileges conferred thereby shall be assignable or transferable by the Optionee
other than by will or by the laws of descent and distribution, and this Option
shall be exercisable only by Optionee during the Optionee's lifetime. Upon the
death of Optionee, the rights of the successors to Optionee shall be limited as
set forth in the Plan.

12. Binding Affect. This Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.

13. Securities Matters.

(a) Exercise of Option. The option granted hereunder
may be exercised by the Optionee only if (i) the Shares which are to be issued
upon such execution are registered under the Securities Act of 1933, as amended
(the "1933 Act"), the Arizona Securities Act, as amended (the "Arizona Act"),
and the securities laws of any other applicable jurisdiction, or (ii) the
Company, upon advice of counsel, determines that the issuance of the Shares upon
the exercise of the Optionee is exempt from registration requirements.

(b) Restriction of Shares. The Company is under no
obligation to register, under the 1933 Act, the Arizona Act or the securities
laws of any other jurisdiction, any of the Shares to be issued to the Optionee
upon the exercise of any option or to take any action which would make available
any exemption from registration. If the Shares to be issued to the Optionee upon
the exercise of any option have not been registered under the 1933 Act, the
Arizona Act or the securities laws of any other jurisdiction, those Shares will
be "restricted securities" within the meaning of Rule 144 under the 1933 Act and
must be held indefinitely without any transfer, sale or other disposition unless
(a) the shares are subsequently registered under the 1933 Act, the Arizona Act
and the securities laws of any other applicable jurisdiction, or (b) the
Optionee obtains an opinion of counsel which is satisfactory to counsel for the
Company that the Shares may be sold in reliance on an exemption from
registration requirements.

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

(a) Exercising the Option. The Optionee may incur
regular federal income tax liability upon exercise of a nonstatutory stock
option. The Optionee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their
aggregate Exercise Price.

(b) Withholding. If the Optionee is an Employee or a
former Employee, the Company will be required to withhold from his or her
compensation or collect from Optionee and pay to
the applicable taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise. Optionee hereby agrees to make appropriate
arrangements with the Company for the satisfaction of any applicable federal,
state or local income tax withholding requirements relating to the exercise of
the Option or the payment of any employment taxes due as a result of the
exercise of such Option.

(c) Disposition of Shares. If the Optionee holds
Shares acquired upon the exercise of a nonstatutory stock option for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

(d) Reporting of Disposition of Shares. The Optionee
shall, at the Company's request, promptly complete and return any and all
informational requests regarding the Optionee's disposition of Shares acquired
upon exercise of the Options covered by this Agreement.

15. Defined Terms. All capitalized terms herein which are not
otherwise defined herein shall have the same meaning ascribed to such terms in
the Plan.

16. Notices. Except as set forth in Section 4 of this Option
Agreement, any notice required to be given or delivered to the Company under the
terms of this Option Agreement shall be in writing and addressed to the Company
in care of the Corporate Secretary at its principal corporate offices. Any
notice required to be given or delivered to Optionee at the address indicated in
the Grant Notice. All notices shall be deemed to have been given or delivered
upon personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.

17. Construction. This Option Agreement and the Option
evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions of the Plan.
Subject to Section 3.1(b) of the Plan, in the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Option
Agreement, the terms and conditions of the Plan shall prevail. All decisions of
the Administrator with respect to any question or issue arising under the Plan
or this Agreement shall be conclusive and binding on all persons having an
interest in this option.

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

Initials of Optionee: ________________________
SCHEDULE A

FORM OF EXERCISE NOTICE UNDER THE

1997 NONSTATUTORY STOCK OPTION PLAN

MICROCHIP TECHNOLOGY INCORPORATED
2355 West Chandler Boulevard
Chandler, Arizona 85224
Attention: Human Resources, Stock Administration

Exercise of Option. Effective as of today, _____________, 19__, the
undersigned ("Purchaser") hereby elects to purchase shares (the "Shares") of the
Common Stock of Microchip Technology Incorporated (the "Company") under and
pursuant to the 1997 Nonstatutory Stock Option Plan (the "Plan") for the
grant(s) specified in the Stock Option Exercise Instruction Form accompanying
this Exercise Notice. The purchase price for the Shares shall be as required by
the individual Grant Notice(s) and Option Agreement(s).

Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

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

Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Sections 2.2 and
2.3 of the Plan.

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

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

Submitted by: Accepted by:

PURCHASER: MICROCHIP TECHNOLOGY INCORPORATED

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Signature By

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