MELLANOX TECHNOLOGIES, LTD.
THIRD AMENDED AND RESTATED GLOBAL SHARE INCENTIVE PLAN (2006)
 
 
1.
NAME AND PURPOSE.

1.1    This plan shall be known as the Mellanox Technologies, Ltd. Third Amended
and Restated Global Share Incentive Plan (2006) (the “Plan”).
The Board of Directors adopted the Mellanox Technologies, Ltd. Global Share
Incentive Plan (2006) (the “2006 Plan”) on October 26, 2006, and the 2006 Plan
was approved by the Company’s shareholders on December 5, 2006. The 2006 Plan
was amended and restated by the Board as of March 14, 2016 (the “First Restated
Plan”), and the First Restated Plan was approved by the Company’s shareholders
on May 9, 2016. The First Restated Plan was amended and restated by the Board of
Directors as of February 14, 2017 (the “Second Restated Plan”), and the Second
Restated Plan was approved by the Company’s shareholders on April 25, 2017. The
Second Restated Plan is hereby amended and restated by the Board effective as of
May 5, 2018 (the “Effective Date”), subject to the approval by the Company’s
shareholders within twelve months of the date it is approved by the Board of
Directors.
1.2    The purposes of the Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to Service Providers of the Company and its affiliates and
subsidiaries, if any, and to promote the Company’s business by providing such
individuals with opportunities to receive Awards pursuant to the Plan and to
strengthen the sense of common interest between such individuals and the
Company’s shareholders.
1.3    Awards granted under the Plan to Service Providers in various
jurisdictions may be subject to specific terms and conditions for such grants
may be set forth in one or more separate appendix to the Plan, as may be
approved by the Board of Directors of the Company from time to time.
 
 
2.
DEFINITIONS.

“Administrator” shall mean the Board of Directors or a Committee.
“Appendix” shall mean any appendix to the Plan adopted by the Board of Directors
containing country-specific or other special terms relating to Awards.
“Award” shall mean a grant of Options, Restricted Shares (or Restricted Stock),
Restricted Share Units, Performance Share Units or Other Equity-Based Awards or
allotment of Shares hereunder (including under any Appendix). All Awards shall
be confirmed by an Award Agreement, and subject to the terms and conditions of
such Award Agreement.
“Award Agreement” shall mean a written or electronic instrument setting forth
the terms applicable to a particular Award.
“Board of Directors” shall mean the board of directors of the Company.
“Cause” shall have the meaning ascribed to such term or a similar term as set
forth in the Participant’s employment agreement or the agreement governing the
provision of services by a non-employee Service Provider, or, in the absence of
such a definition: (i) conviction (or plea of nolo contendere) of any felony or
crime involving moral turpitude or affecting the Company; (ii) repeated and
unreasonable refusal to carry out a reasonable and lawful directive of the
Company or of Participant’s supervisor which involves the business of the
Company or its affiliates and was capable of being lawfully performed;
(iii) fraud or embezzlement of funds of the Company or its affiliates; (iv) any
breach by a director of his / her fiduciary duties or duties of care towards the
Company; and (v) any disclosure of confidential information of the Company or
breach of any obligation not to compete with the Company or not to violate a
restrictive covenant.
“Change in Control” shall mean and includes each of the following:
(a)    A transaction or series of transactions (other than an offering of Shares
to the general public through a registration statement filed under the laws of
any applicable jurisdiction) whereby any person or related group of

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persons (other than the Company, any of its subsidiaries, an employee benefit
plan maintained by the Company or any of its subsidiaries or a person that,
prior to such transaction, directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or indirectly acquires
beneficial ownership of securities of the Company possessing more than 50% of
the total combined voting power of the Company’s securities outstanding
immediately after such acquisition; or
(b)     During any period of two consecutive years, individuals who, at the
beginning of such period, constitute the Board of Directors together with any
new director(s) (other than a director designated by a person who shall have
entered into an agreement with the Company to effect a transaction described in
Subsections (a) or (c) hereof) whose election by the Board of Directors or
nomination for election by the Company’s shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or
(c)    The consummation by the Company (whether directly involving the Company
or indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the Company’s assets in any
single transaction or series of related transactions or (z) the acquisition of
assets or shares of another entity, in each case other than a transaction:
(i)    Which results in the Company’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding
or by being converted into voting securities of the Company or the person that,
as a result of the transaction, controls, directly or indirectly, the Company or
owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of
the combined voting power of the Successor Entity’s outstanding voting
securities immediately after the transaction, and
(ii)    After which no person or group beneficially owns voting securities
representing 50% or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of this
Subsection (c)(ii) as beneficially owning 50% or more of combined voting power
of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction; or
(d)    The Company’s shareholders approve a liquidation or dissolution of the
Company.
Notwithstanding the foregoing, if a Change in Control constitutes a payment
event with respect to any Award (or any portion of an Award) that provides for
the deferral of compensation that is subject to Section 409A, to the extent
required to avoid the imposition of additional taxes under Section 409A, the
transaction or event described in subsection (a), (b), (c) or (d) with respect
to such Award (or portion thereof) shall only constitute a Change in Control for
purposes of the payment timing of such Award if such transaction also
constitutes a “change in control event,” as defined in Treasury Regulation
Section 1.409A-3(i)(5).
The Administrator shall have full and final authority, which shall be exercised
in its discretion, to determine conclusively whether a Change in Control of the
Company has occurred pursuant to the above definition, and the date of the
occurrence of such Change in Control and any incidental matters relating
thereto; provided that any exercise of authority in conjunction with a
determination of whether a Change in Control is a “change in control event” as
defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with
such regulation.
“Code” shall mean the U.S. Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision and any Treasury Regulation promulgated thereunder.
“Committee” shall mean the compensation committee or other committee as may be
appointed and maintained by the Board of Directors, in its discretion, to
administer the Plan, to the extent permissible under applicable law, as amended
from time to time.
 
“Company” shall mean Mellanox Technologies, Ltd., an Israeli company, and its
successors and assigns.
“Companies Law” shall mean the Israeli Companies Law 5759-1999, as amended from
time to time.

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“Consultant” shall mean any natural person who (either directly or through his
or her employer) is an advisor or consultant providing bona fide services to the
Company or any affiliate thereof, other than an individual who provides services
in connection with the offer or sale of securities in a capital raising
transaction or who directly or indirectly promotes or maintains a market for the
Company’s securities.
“Corporate Charter” shall mean the Articles of Association of the Company, and
any subsequent amendments or replacements thereto.
“Disability” shall have the meaning ascribed to such term or a similar term in
the Participant’s employment agreement (where applicable), or in the absence of
such a definition, the inability of the Participant, in the opinion of a
qualified physician acceptable to the Company, to perform the major duties of
the Participant’s position with the Company because of the sickness or injury of
the Participant for a consecutive period of 180 days.
“Effective Date” shall have the meaning ascribed to it in Section 1.1 hereof.
“Equity Restructuring” shall mean a non-reciprocal transaction between the
Company and its shareholders, such as a share dividend, share split, spin-off,
rights offering or recapitalization through a large, nonrecurring cash dividend,
that affects the Shares (or other securities of the Company) or the share price
of Shares (or other securities) and causes a change in the per share value of
the Shares underlying outstanding Awards.
“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.
Any references to any section of the Exchange Act shall also be a reference to
any successor provision.
“Non-Employee Director” shall mean a member of the Board of Directors who is not
an employee of the Company or any of its affiliates.
“Options” shall mean options to purchase Shares awarded under the Plan.
“Other Equity-Based Award” shall mean any right that relates to or is valued by
reference to Shares that is not otherwise described by the terms of the Plan
(including the grant or offer for sale of unrestricted Shares) in such amounts
and subject to such terms and conditions as the Administrator shall determine,
including, without limitation, the attainment of Performance Goals.
“Outstanding Qualified Performance-Based Awards” shall mean any Awards granted
prior to and that are outstanding as of the Effective Date and that are intended
to constitute “qualified performance-based compensation” as described in
Section 162(m)(4)(C) of the Code prior to its amendment by the Tax Cuts and Jobs
Act, P.L. 115-97. For the avoidance of any doubt, all provisions of the Plan
governing Outstanding Qualified Performance Awards that were in effect prior to
the Effective Date shall continue in effect with respect to Outstanding
Qualified Performance-Based Awards, notwithstanding the elimination of such
provisions from the Plan as of the Effective Date.
“Participant” shall mean a recipient of an Award hereunder who executes an Award
Agreement.
“Performance Criteria” means the criteria that the Administrator selects for
purposes of establishing the Performance Goal or Performance Goals for a
Participant for a Performance Period. The Performance Criteria that will be used
to establish Performance Goals may include, but are not limited to, the
following: net earnings (either before or after interest, taxes, depreciation
and amortization), economic value-added, sales or revenue, net income (either
before or after taxes), operating earnings, cash flow (including, but not
limited to, operating cash flow and free cash flow), cash flow return on
capital, return on net assets, return on shareholders’ equity, return on assets,
return on capital, shareholder returns, return on sales, gross or net profit
margin, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings per Share, price per Share, and market
share, any of which may be measured either in absolute terms or as compared to
any incremental increase or as compared to results of a peer group.
“Performance Goals” means, for a Performance Period, the goals established by
the Administrator for the Performance Period based upon the Performance
Criteria. Depending on the Performance Criteria used to establish such
Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a division, a business or functional
unit, or an individual, or in any other manner determined appropriate by the
Administrator. The Administrator, in its sole discretion, may provide that one
or more adjustments shall be made to one or more of the Performance Goals. Such
adjustments may include, but are not limited to, one or more of the following:
(i) items related to a change in applicable accounting standards; (ii) items
relating to financing activities;

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(iii) expenses for restructuring or productivity initiatives; (iv) other
non-operating items; (v) items related to acquisitions; (vi) items attributable
to the business operations of any entity acquired by the Company during the
Performance Period; (vii) items related to the sale or disposition of a business
or segment of a business; (viii) items related to discontinued operations that
do not qualify as a segment of a business under applicable accounting standards;
(ix) items attributable to any share dividend, share split, combination or
exchange of shares occurring during the Performance Period; (x) any other items
of significant income or expense which are determined to be appropriate
adjustments; (xi) items relating to unusual or extraordinary corporate
transactions, events or developments, (xii) items related to amortization of
acquired intangible assets; (xiii) items that are outside the scope of the
Company’s core, on-going business activities; (xiv) items related to acquired
in-process research and development; (xv) items relating to changes in tax laws;
(xvi) items relating to major licensing or partnership arrangements;
(xvii) items relating to asset impairment charges; (xviii) items relating to
gains or losses for litigation, arbitration and contractual settlements;
(xix) items attributable to expenses incurred in connection with a reduction in
force or early retirement initiative; (xx) items relating to non-cash income or
expense or (xxi) items relating to any other unusual or nonrecurring events or
changes in applicable law, applicable accounting standards or business
conditions.
“Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which
the attainment of one or more Performance Goals will be measured for the purpose
of determining a Participant’s right to, and the payment of, an Award that is
subject to the attainment of Performance Goals.
“Performance Share Unit” means an Award that shall be evidenced by a bookkeeping
entry representing the equivalent of such number of Shares that may become
issuable under an Award pursuant to the terms and conditions of the Award and
that shall be subject to such terms, conditions, restrictions and vesting
requirements as determined by the Administrator, including, without limitation,
a Participant’s continued service for a specified period and/or the attainment
of Performance Goals or other performance conditions.
“Prior Plans” shall mean the Company 1999 United States Equity Incentive Plan,
the Company 1999 Israeli Share Option Plan, the Company 2003 Israeli Share
Option Plan, the Voltaire Ltd. 2007 Incentive Compensation Plan, the Voltaire
Ltd. Section 102 Stock Option/Stock Purchase Plan, the Voltaire, Ltd. 2001
Section 102 Stock Option/Stock Purchase Plan, the Voltaire Ltd. 2001 Stock
Option Plan, the Kotura, Inc. Second Amended and Restated 2003 Stock Plan, the
IPtronics, Inc. 2013 Restricted Stock Unit Plan, the EZchip Semiconductor Ltd.
2003 Amended and Restated Equity Incentive Plan, the EZchip Semiconductor Ltd.
2007 U.S. Equity Incentive Plan and the Amended and Restated EZchip
Semiconductor Ltd. 2009 Equity Incentive Plan, and the Company Global Share
Incentive Assumption Plan (2010).
“Restricted Share” or “Restricted Stock” means Shares awarded to a Participant
that are subject to certain restrictions and other terms as determined by the
Administrator, and that may be subject to a risk of forfeiture which may lapse
based on a Participant’s continued service for a specified period, the
attainment of Performance Goals or such other vesting conditions as determined
by the Administrator.
“Restricted Share Unit” means an Award that shall be evidenced by a bookkeeping
entry representing the equivalent of one Share and that shall be subject to such
terms, conditions, restrictions and vesting requirements as determined by the
Administrator, including, without limitation, a Participant’s continued service
for a specified period or the attainment of Performance Goals.
“Section 162(m)” means Section 162(m) of the Code as in effect prior to its
amendment by the Tax Cuts and Jobs Act, P.L. 115-97.
“Service Provider” shall mean an employee, member of the Board of Directors,
office holder or Consultant of the Company or any affiliate thereof.
“Shares” shall mean Ordinary Shares, nominal value NIS 0.01 per share, of the
Company.

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3.
ADMINISTRATION OF THE PLAN

3.1    The Plan shall be administered by the Administrator. If the Administrator
is a Committee, such Committee shall consist of such number of members of the
Board of Directors of the Company (not less than two in number), as may be
determined from time to time by the Board of Directors. The Board of Directors
shall appoint such members of the Committee, may from time to time remove
members from, or add members to, the Committee, and shall fill vacancies in the
Committee however caused.
3.2    To the extent necessary to comply with the requirements of Section 162(m)
of the Code (with respect to Outstanding Qualified Performance-Based Awards),
Rule 16b-3 promulgated under the Exchange Act or to the extent required by any
other applicable rule or regulation, the Plan shall be administered jointly by
the Board of Directors and a Committee consisting solely of two or more members
of the Board of Directors each of whom is an “outside director,” within the
meaning of Section 162(m) of the Code, a member of the Board of Directors who
qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) under the
Exchange Act or any successor rule and an “independent director” under The
NASDAQ Stock Market (“NASDAQ”) rules (or other principal securities market on
which Shares are traded). Without limiting the application of this Section 3.2,
to the extent necessary to comply with the requirements of Section 162(m) of the
Code (with respect to Outstanding Qualified Performance-Based Awards) and
Rule 16b-3 promulgated under the Exchange Act, Awards shall be granted by a
Committee consisting of members who satisfy the requirements specified in the
foregoing sentence and shall be ratified by the Board of Directors.
Notwithstanding the foregoing, but subject to Section 4.1 hereof, the full Board
of Directors, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to all Awards granted to a
member of the Board of Directors who is not an employee of the Company or any
affiliate thereof, and for purposes of such Awards the term “Committee” as used
in this Plan shall be deemed to refer to the Board of Directors. In its sole
discretion, the Board of Directors may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan except
with respect to matters which under Rule 16b-3 under the Exchange Act or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined in the sole discretion of the Committee.
3.3    The Committee, if appointed, shall select one of its members as its
Chairman and shall hold its meetings at such times and places as it shall
determine. Actions at a meeting of the Committee at which a majority of its
members are present or acts approved in writing by all members of the Committee,
shall be the valid acts of the Committee. The Committee shall appoint a
Secretary, who shall keep records of its meetings and shall make such rules and
regulations for the conduct of its business and the implementation of the Plan,
as it shall deem advisable, subject to the directives of the Board of Directors
and in accordance with applicable law.
3.4    Subject to the general terms and conditions of the Plan, and in
particular Section 3.5 below, the Administrator shall have full authority in its
discretion, from time to time and at any time, to determine (i) eligible
Participants, (ii) the number of Options or Shares to be covered by each Award,
(iii) the time or times at which the Award shall be granted, (iv) the vesting
schedule and other terms and conditions applying to Awards, including
accelerations or waivers of restrictions, (v) the form(s) of Award Agreements,
and (vi) any other matter which is necessary or desirable for, or incidental to,
the administration of the Plan. The Board of Directors may, in its sole
discretion, delegate some or all of the powers listed above to the Committee, to
the extent permitted by the Companies Law, its Corporate Charter or other
applicable law, rules or regulations to which the Company is subject.
3.5    In the event that the Administrator is a Committee, the Committee shall
not be entitled to grant Options to the Participants (unless permitted to do so
by the Companies Law). However, in the event that the Committee is authorized to
do so by the Board of Directors, it may issue Shares underlying Options which
have been granted by the Board of Directors and duly exercised pursuant to the
provisions hereof, in accordance with Sections 112(a)(5) and 288 of the
Companies Law.
3.6    No member of the Board of Directors or of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any Award granted hereunder. Subject to the Company’s decision and to

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all approvals legally required, each member of the Board of Directors or the
Committee shall be indemnified and held harmless by the Company against any cost
or expense (including counsel fees) reasonably incurred by him, or any liability
(including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with the Plan
unless arising out of such member’s own willful misconduct or bad faith, to the
fullest extent permitted by applicable law. Such indemnification shall be in
addition to any rights of indemnification the member may have as a director or
otherwise under the Company’s Corporate Charter, any agreement, any vote of
shareholders or disinterested directors, any insurance policy or otherwise.
3.7    The interpretation and construction by the Administrator of any provision
of the Plan or of any Option hereunder shall be final and conclusive. In the
event that the Board of Directors appoints a Committee, the interpretation and
construction by the Committee of any provision of the Plan or of any Option
hereunder shall upon ratification by the Board of Directors, be final and
conclusive unless otherwise determined by the Board of Directors. To avoid
doubt, subject to Section 3.2 hereof, the Board of Directors may at any time
exercise any powers of the Administrator, notwithstanding the fact that a
Committee has been appointed.
3.8    The Administrator shall have the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan and
perform all acts, including the delegation of its responsibilities (to the
extent permitted by applicable law and applicable stock exchange rules), as it
shall, from time to time, deem advisable; to construe and interpret the terms
and provisions of the Plan and any Award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
the Plan. The Administrator may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any agreement relating thereto in
the manner and to the extent it shall deem necessary to effectuate the purpose
and intent of the Plan. Notwithstanding the foregoing, no action of the
Administrator under this Section 3.8 shall reduce the rights of any Participant
without the Participant’s consent.
3.9    Without limiting the generality of the foregoing, the Administrator may
adopt special Appendices and/or guidelines and provisions for persons who are
residing in or employed in, or subject to, the taxes of, any domestic or foreign
jurisdictions, to comply with applicable laws, regulations, or accounting,
listing or other rules with respect to such domestic or foreign jurisdictions.
 
 
4.
ELIGIBLE PARTICIPANTS.

4.1    No Award may be granted pursuant to the Plan to any person serving as a
member of the Committee or to any other member of the Board of Directors at the
time of the grant, unless such grant is approved in the manner prescribed for
the approval of compensation of directors under Section 273 of the Companies
Law. To avoid doubt, such Awards require approval of the audit committee of the
Board of Directors, the Board of Directors and the shareholders of the Company.
4.2    Subject to the limitation set forth in Section 4.1 above and any
restriction imposed by applicable law, Awards may be granted to any Service
Provider of the Company, whether or not the Service Provider is a member of the
Board of Directors or a member of the board of directors of an affiliate of the
Company. The grant of an Award to a Participant hereunder shall neither entitle
such Participant to receive an additional Award or participate in other
incentive plans of the Company, nor disqualify such Participant from receiving
an additional Award or participating in other incentive plans of the Company.
 
 
5.
RESERVED SHARES.

5.1    Subject to Section 11.1 hereof, as of the Effective Date, the aggregate
number of Shares which may be issued or transferred pursuant to Awards under the
Plan shall be the sum of (i) 4,467,000 Shares and (ii) any Shares which as of
the effective date of the First Restated Plan are subject to awards outstanding
under the Prior Plans that expire, are cancelled or otherwise terminate
unexercised, or Shares that otherwise would have reverted to the share reserve
of the Prior Plans following the effective date of the First Restated Plan.
Anything to the contrary herein

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notwithstanding, the maximum aggregate number of Shares that may be issued or
transferred pursuant to Awards under the Plan or any Appendix thereto during the
term of the Plan, including pursuant to the exercise of “incentive stock
options” (within the meaning of Section 422 of the Code), shall not exceed
10,517,000 Shares, subject to Section 11.1 hereof. Subject to Section 13.2
hereof, the Company shall determine the number of Shares reserved hereunder from
time to time, and such number may be increased or decreased by the Company from
time to time.
5.2    Any Shares subject to an Award that shall for any reason terminate,
expire or otherwise lapse shall again be available for grant as Awards under the
Plan. Notwithstanding anything to the contrary contained herein, the following
Shares shall not be added to the Shares authorized for grant under Section 5.1
and shall not be available for future grants of Awards: (i) Shares tendered by a
Participant or withheld by the Company in payment of the exercise price of an
Option; (ii) Shares tendered by the Participant or withheld by the Company to
satisfy any tax withholding obligation with respect to an Award; and
(iii) Shares purchased on the open market with the cash proceeds from the
exercise of Options. Any Shares repurchased by the Company at the same price
paid by the Participant so that such Shares are returned to the Company shall
again be available for Awards. To the extent permitted by applicable law or any
exchange rule, Shares issued in assumption of, or in substitution for, any
outstanding awards of any entity acquired in any form of combination by the
Company or any affiliate (“Substitute Awards”) shall not be counted against
Shares available for grant pursuant to this Plan. Any Shares that remain
unissued and are not subject to Awards at the termination of the Plan shall
cease to be reserved for purposes of the Plan. Until termination of the Plan the
Company shall at all times reserve a sufficient number of Shares to meet the
requirements of the Plan.
 
5.3    Notwithstanding any provision in the Plan to the contrary, and subject to
Section 11.1 hereof, the maximum number of Shares with respect to one or more
Awards that may be granted to any one Participant during any calendar year
(measured from the date of any grant) shall be four million (4,000,000) Shares
(not including Substitute Awards). Notwithstanding any provision to the contrary
in the Plan, the grant date fair value of Awards granted to a Non-Employee
Director during any calendar year shall not exceed five hundred thousand dollars
($500,000) (the “Director Limit”).
5.4    Notwithstanding any provision in the Plan to the contrary, and subject to
Section 11.1 hereof, Awards granted under the Plan (other than Substitute
Awards) shall vest no earlier than the first anniversary of the date the Award
is granted and no Award Agreement shall reduce or eliminate such minimum vesting
requirement; provided, however, that, notwithstanding the foregoing, (i) Awards
that result in the issuance of an aggregate of up to 5% of the Shares available
pursuant to Section 5.1 may be granted to any one or more Participants without
respect to such minimum vesting provisions and (ii)  an Award may provide that
such minimum vesting restrictions may lapse or be waived upon the Participant’s
termination of status as a Service Provider. For purposes of Awards to
Non-Employee Directors, a vesting period will be deemed to be one year if it
runs from the date of one annual meeting of the Company’s shareholders to the
next annual meeting of the Company’s shareholders.
5.5    Notwithstanding any provision in the Plan to the contrary, except in
connection with a spin-off or other similar event or as otherwise permitted
under Section 11.1, dividends which are paid in respect of any Shares underlying
an Award prior to the vesting of such Award shall only be paid out to the
Participant to the extent that the vesting conditions are subsequently satisfied
and the Award vests.
 
 
6.
AWARD AGREEMENT.

6.1    The Board of Directors, and to the extent contemplated under Section 3.2
hereof, a Committee and the Board of Directors, in their discretion may award to
Participants Awards available under the Plan. The terms of the Award will be set
forth in the Award Agreement. The date of grant of each Award shall be the date
specified by the Board of Directors, and the Committee, as applicable, at the
time such award is made, or in the absence of such specification, the date of
approval of the award by the Board of Directors, and the Committee, as
applicable.
6.2    The Award Agreement shall state, inter alia, the number of Options or
Shares covered thereby, the type of Option or other Award, any special terms
applying to such Award (if any), including the terms of any country-specific or
other Appendix, as determined by the Board of Directors, and the Committee, as
applicable.

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7.
OPTION PRICES.

7.1    The exercise price for each Share to be issued upon exercise of an Option
shall be such price as is determined by the Board of Directors in its
discretion, provided that the price per Share is not less than Fair Market Value
(as defined in the applicable Appendix) (except in the case of Substitute
Awards), and subject to any further restrictions set forth in an applicable
Appendix.

8.    EXERCISE OF OPTION.
8.1    Options shall be exercisable pursuant to the terms under which they were
awarded and subject to the terms and conditions of the Plan and any applicable
Appendix, as specified in the Award Agreement.
8.2    An Option, or any part thereof, shall be exercisable by the Participant’s
signing and returning to the Company at its principal office (and to the
Trustee, where applicable), a “Notice of Exercise” in such form and substance as
may be prescribed by the Administrator from time to time, together with full
payment for the Shares underlying such Option.
8.3    Each payment for Shares under an Option shall be in respect of a whole
number of Shares, shall be effected in (i) cash, (ii) by check payable to the
order of the Company, (iii) Shares held for such period of time as may be
required by the Administrator in order to avoid adverse accounting consequences
and having a fair market value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof, or (iv) such other
method of payment acceptable to the Company as determined by the Administrator,
and shall be accompanied by a notice stating the number of Shares being paid for
thereby.
8.4    Until the Shares are issued (as evidenced by the appropriate entry in the
share register of the Company or of a duly authorized transfer agent of the
Company) a Participant shall have no right to vote or right to receive dividends
or any other rights as a shareholder shall exist with respect to such Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment
shall be made for a dividend or other right the record date for which is prior
to the date the Shares are issued, except as provided in Section 11.1 of the
Plan.
8.5    To the extent permitted by law, if the Shares are traded on a national
securities exchange, NASDAQ or quoted on a national quotation system or
otherwise publicly traded or quoted, payment for the Shares underlying an Option
may be made all or in part by the delivery (on a form prescribed by the Company)
of an irrevocable direction to a securities broker approved by the Company to
sell Shares and to deliver all or part of the sales proceeds to the Company in
payment of the exercise price (or the relevant portion thereof, as applicable)
and any withholding taxes, or on such other terms and conditions as may be
acceptable to the Administrator. No Shares shall be issued until payment
therefor, as provided herein, has been made or provided for.

9.    PROHIBITION ON REPRICING.
Subject to Section 11, the Administrator shall not, without the approval of the
shareholders of the Company, (a) authorize the amendment of any outstanding
Option to reduce its price per Share, or (b) cancel any Option in exchange for
cash or another Award when the Option price per Share exceeds the fair market
value of the underlying Shares (i.e., the Option is “underwater”). Furthermore,
for purposes of this Section 9, except in connection with a corporate
transaction involving the Company (including, without limitation, any share
dividend, share split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination or
exchange of shares), the terms of outstanding Options may not be amended to
reduce the exercise price per Share or cancel outstanding underwater Options in
exchange for cash, other Awards or Options with an exercise price per Share that
is less than the exercise price per Share of the original Options without the
approval of the shareholders of the Company.

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10.     TERMINATION OF RELATIONSHIP AS SERVICE PROVIDER.
10.1    Effect of Termination; Exercise After Termination.    Unless otherwise
determined by the Administrator, if a Participant ceases to be a Service
Provider, such Participant may exercise any outstanding Options within such
period of time as is specified in the Award Agreement or the Plan to the extent
that the Options are vested on the date of termination (but in no event later
than the expiration of the term of the Option as set forth in the Award
Agreement). If, on the date of termination, any Options or other Awards are
unvested, the Shares covered by the unvested portion of the Option or other
Award shall revert to the Plan. If, after termination, the Participant does not
exercise the vested Options within the time specified in the Award Agreement or
the Plan, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan. In the absence of a provision specifying otherwise in
the relevant Award Agreement, then:
(a)    in the event that the Participant ceases to be a Service Provider for any
reason other than termination for Cause or as a result of the Participant’s
death or Disability, the vested Options shall remain exercisable for a period of
three (3) months from the effective date of termination of the Participant’s
status as a Service Provider;
(b)    in the event that the Participant ceases to be a Service Provider for
Cause, any outstanding unexercised Option (whether vested or unvested) will
immediately expire and terminate, and the Participant shall not have any rights
in connection with such Options.
(c)    in the event that the Participant ceases to be a Service Provider as a
result of the Participant’s Disability, the Option shall remain exercisable for
twelve (12) months following the Participant’s date of termination for
Disability.
(d)    in the event that the Participant dies while a Service Provider, the
Option shall remain exercisable by the Participant’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance for twelve
(12) months following the Participant’s date of death.
10.2    Date of Termination.    For purposes of the Plan and any Option or
Option Agreement, the date of termination (whether for Cause or otherwise) shall
be the effective date of termination of the Participant’s employment or
engagement as a Service Provider.
10.3     Leave of Absence.    Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be suspended during any unpaid leave
of absence. A Service Provider shall not cease to be considered as such in the
case of any (a) leave of absence approved by the Company, or (b) transfers
between locations of the Company or between the Company, and its parent,
subsidiary, affiliate, or any successor thereof; or (c) changes in status
(employee to member of the Board of Directors, employee to Consultant, etc.),
provided that such change does not affect the specific terms applying to the
Service Provider’s Award.

11.    CHANGE IN CAPITAL STRUCTURE.
Upon the occurrence of any of the following described events, a Participant’s
rights to purchase Shares under the Plan shall be adjusted as hereinafter
provided:
11.1    Adjustments.
(a)    In the event of any dividend or other distribution, reorganization,
merger, consolidation, combination, repurchase, or exchange of Shares or other
securities of the Company, or other change in the corporate structure of the
Company affecting the Shares (other than an Equity Restructuring) occurs such
that an adjustment is determined by the Administrator (in its sole and absolute
discretion) to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Administrator shall, in such manner as it may deem equitable, adjust:
(a) the aggregate number and kind of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Section 5;
(b) the terms and conditions of any outstanding Awards (including, without
limitation, any applicable performance targets or criteria with respect
thereto); and (c) the grant or exercise price per share for any outstanding
Awards under the Plan.
(b)    In the event of any transaction or event described in Section 11.1(a)
hereof or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements

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of the Company or any affiliate, or of changes in applicable laws, regulations
or accounting principles, the Administrator, in its sole and absolute
discretion, and on such terms and conditions as it deems appropriate, either by
the terms of the Award or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Participant’s request,
is hereby authorized to take any one or more of the following actions whenever
the Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award under the Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:
(i)    To provide for either (A) termination of any such Award in exchange for
an amount of cash, if any, equal to the amount that would have been attained
upon the exercise of such Award or realization of the Participant’s rights (and,
for the avoidance of doubt, if as of the date of the occurrence of the
transaction or event described in this Section 11.1(b), the Administrator
determines in good faith that no amount would have been attained upon the
exercise of such Award or realization of the Participant’s rights, then such
Award may be terminated by the Company without payment) or (B) the replacement
of such Award with other rights or property selected by the Administrator in its
sole discretion;
(ii)    To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;
(iii)    To make adjustments in the number and type of Shares (or other
securities or property) subject to outstanding Awards, and/or in the terms and
conditions of (including the grant or exercise price), and the criteria included
in, outstanding options, rights and awards and options, rights and awards which
may be granted in the future;
(iv)    To provide that such Award shall be exercisable or payable or fully
vested with respect to all shares covered thereby, notwithstanding anything to
the contrary in the Plan or the applicable Award Agreement; and
(v)    To provide that the Award cannot vest, be exercised or become payable
after such event.
 
(c)    In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 11.1(a) or 11.1(b) hereof:
(i)    The number and type of securities subject to each outstanding Award and
the exercise price or grant price thereof, if applicable, will be
proportionately adjusted. The adjustments provided under this Section 11.1(c)
shall be nondiscretionary and shall be final and binding on the affected
Participant and the Company.
(ii)    The Administrator shall make such proportionate adjustment, if any, as
the Administrator in its discretion may deem appropriate to reflect such Equity
Restructuring with respect to the aggregate number and type of securities that
may be issued under the Plan (including, but not limited to, adjustment of the
limitations in Section 5).
11.2    Change in Control.
(a)    Anything to the contrary in Section 11.1 hereof notwithstanding, in the
event of a Change in Control, the unexercised or restricted portion of each
outstanding Award shall be assumed or an equivalent Award or right substituted,
by the successor corporation or an affiliate of the successor corporation, as
shall be determined by such entity, subject to the terms hereof. In the event
that the successor corporation or a parent or subsidiary of the successor
corporation does not provide for such an assumption or substitution of Awards
(in circumstances in which the Company is not the successor entity), all Awards
shall become exercisable in full and all forfeiture restrictions on such Awards
shall lapse, provided that unless otherwise determined by the Administrator, the
exercise of all Options that otherwise would not have been exercisable and the
lapsing of all forfeiture restrictions that would not have otherwise lapsed in
the absence of a Change in Control, shall be contingent upon the actual
consummation of the Change in Control. Upon, or in anticipation of, a Change in
Control, the Administrator may cause any and all Awards outstanding hereunder to
terminate at a specific time in the future, including but not limited to the
date of such Change in Control, and shall give each Participant the right to
exercise such Awards during a period of time as the Administrator, in its sole
and absolute discretion, shall determine.

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(b)    For the purposes of this Section 11.2, an Award shall be considered
assumed if, following a Change in Control, the option confers the right to
purchase or receive, for each Share subject to the Award immediately prior to
the Change in Control, the consideration (whether shares, cash, or other
securities or property) received in the merger or sale of assets by holders of
Shares of the Company for each Share held on the effective date of the Change in
Control (and if holders were offered a choice of consideration, the type of
consideration determined by the Administrator, at its sole discretion);
provided, however, that if the consideration received in the Change in Control
is not solely ordinary shares (or the equivalent) of the successor corporation
or its direct or indirect parent, the Administrator may, with the consent of the
successor corporation, provide for the per share consideration to be received
upon the exercise of the Option or upon the lapsing of the forfeiture
restrictions to be solely ordinary shares (or the equivalent) of the successor
corporation or its direct or indirect parent equal in fair market value to the
per share consideration received by holders of Shares in the Change in Control,
as determined by the Administrator.
(c)    In the event that the Board of Directors determines in good faith that,
in the context of a Change in Control, certain Options have no monetary value
and thus do not entitle the holders of such Options to any consideration under
the terms of the Change in Control, the Board of Directors may determine that
such Options shall terminate effective as of the effective date of the Change in
Control.
(d)    It is the intention that the Administrator’s authority to make
determinations, adjustments and clarifications in connection with the treatment
of Awards shall be interpreted as widely as possible, to allow the Administrator
maximal power and flexibility to interpret and implement the provisions of the
Plan in the event of Change in Control.

12.    NON-TRANSFERABILITY OF OPTIONS, OTHER AWARDS AND SHARES.
12.1    Except as may be permitted under an applicable Appendix, no Option or
other Award may be transferred other than by will or by the laws of descent and
distribution, and during the Participant’s lifetime an Option may be exercised
only by such Participant.
 
12.2    Except as may be permitted under an applicable Appendix, Shares for
which full payment has not been made, may not be assigned, transferred, pledged
or mortgaged, other than by will or laws of descent and distribution. For
avoidance of doubt, the foregoing shall not be deemed to restrict the transfer
of an Participant’s rights in respect of Options or Shares purchasable pursuant
to the exercise thereof upon the death of such Participant to such Participant’s
estate or other successors by operation of law or will, whose rights therein
shall be governed by Section 10.1(d) hereof, and as may otherwise be determined
by the Administrator.

13.    TERM AND AMENDMENT OF THE PLAN.
13.1    The Plan shall become effective as of the Effective Date. The Plan shall
expire on February 14, 2027 (except as to Options or other Awards outstanding on
that date). For avoidance of doubt, this third amendment and restatement of the
Plan shall not affect the terms or conditions of any Outstanding Qualified
Performance-Based Award to the extent that it would result in a material
modification of such Award within the meaning of P.L. 115-97, Section
13601(e)(2).
13.2    Notwithstanding any other provision of the Plan, the Board of Directors
(or a duly authorized Committee thereof) may at any time, and from time to time,
amend, in whole or in part, any or all of the provisions of the Plan (including
any amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement), or suspend or terminate it entirely, retroactively or
otherwise; provided, however, that (a) to the extent necessary and desirable to
comply with any applicable law, regulation, or stock exchange rule, or as
contemplated in any Appendix, the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as required, and
(b) shareholder approval is required for any amendment to the Plan that
(i) increases the number of Shares available under the Plan (other than any
adjustment as provided by Section 11.1 hereof), (ii) constitutes a prohibited

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action under Section 9 or (iii) permits the Administrator to extend the exercise
period for an Option beyond ten years from the date of grant; and provided
further, however, that, except (x) to correct obvious drafting errors or as
otherwise required to comply with or facilitate compliance with law or (y) as
specifically provided herein, the rights of a Participant with respect to Awards
granted prior to such amendment, suspension or termination, may not be reduced
without the consent of such Participant. The Administrator may amend the terms
of any Award theretofore granted, prospectively or retroactively, but except
(x) to correct obvious drafting errors or as otherwise required to comply with
or facilitate compliance with law or by applicable accounting rules, or (y) as
specifically provided herein, no such amendment or other action by the
Administrator shall reduce the rights of any Participant without the
Participant’s consent.

14.    TERM OF OPTION.
Anything herein to the contrary notwithstanding, but without derogating from the
provisions of Section 10 and Section 13.2(b)(iii) (reflecting the
Administrator’s ability to extend the term of an Option within a period of ten
years from the date of grant) hereof, if any Option, or any part thereof, has
not been exercised and the Shares covered thereby not paid for within seven
(7) years after the date on which the Option was granted, as set forth in the
Award Agreement (or any other period set forth in the instrument granting such
Option pursuant to Section 6 hereof), such Option, or such part thereof, and the
right to acquire such Shares shall terminate, all interests and rights of the
Participant in and to the same shall expire, and, in the event that in
connection therewith any Shares are held in trust as aforesaid, such trust shall
expire.

15.    CONTINUANCE OF ENGAGEMENT; ENTITLEMENT TO AWARDS.
15.1    Neither the Plan nor any offer of Shares or Awards to a Participant
shall impose any obligation on the Company or a related company thereof, to
continue the employment or engagement of any Participant as a Service Provider,
and nothing in the Plan or in any Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve as a Service Provider of the
Company or a related company thereof or restrict the right of the Company or a
related company thereof to terminate such employment or engagement at any time.
15.2    Neither the Plan nor any offer of Shares or Awards to a Participant
shall impose any obligation on the Company or a related company thereof, to make
any future offer of Shares or Awards to any Participant, and nothing in the Plan
or in any Award granted pursuant thereto shall confer upon any Participant any
right or entitlement to receive any future offer of shares or Awards under the
Plan, or any successor plan, by virtue of being a Service Provider to the
Company or a related company thereof.

 
16.    GOVERNING LAW.
The Plan and all instruments issued thereunder or in connection therewith, shall
be governed by, and interpreted in accordance with, the laws of the State of
Israel.

17.    APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Shares pursuant to Options
granted under the Plan will be used for general corporate purposes of the
Company or any related company thereof.

18.    TAXES.
18.1    Any tax consequences arising from the grant, vesting or exercise of any
Award, from the payment for Shares covered thereby, or from any other event or
act (of the Company, and/or its affiliates, or the Participant), hereunder

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shall be borne solely by the Participant. The Company and/or its affiliates
shall withhold taxes according to the requirements under the applicable laws,
rules, and regulations, including withholding taxes at source. Furthermore, the
Participant shall agree to indemnify the Company and/or its affiliates and hold
them harmless against and from any and all liability for any such tax or
interest or penalty thereon, including without limitation, liabilities relating
to the necessity to withhold, or to have withheld, any such tax from any payment
made to the Participant. The Company or any of its affiliates may make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of all taxes required by law to be withheld with respect to Awards
granted under the Plan and the exercise thereof, including, but not limited, to
(i) deducting the amount so required to be withheld from any other amount (or
Shares issuable) then or thereafter to be provided to the Participant, including
by deducting any such amount from a Participant’s salary or other amounts
payable to the Participant, to the maximum extent permitted under law and/or
(ii) requiring the Participant to pay to the Company or any of its affiliates
the amount so required to be withheld as a condition of the issuance, delivery,
distribution or release of any Shares and/or (iii) by causing the exercise and
sale of any Awards or Shares held by on behalf of the Participant to cover such
liability, up to the amount required to satisfy applicable statutory withholding
requirements, as determined by the Company. In addition, the Participant will be
required to pay any amount due in excess of the tax withheld and transferred to
the tax authorities, pursuant to applicable tax laws, regulations and rules.
18.2    The receipt of an Award and/or the acquisition of Shares issued upon the
exercise of the Options may result in tax consequences. The description of tax
consequences set forth in the Plan or any Appendix hereto does not purport to be
complete, up to date or to take into account any special circumstances relating
to a Participant.
18.3    THE PARTICIPANT IS ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO
THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING ANY AWARD IN LIGHT OF HIS OR HER
PARTICULAR CIRCUMSTANCES.

19.    CONDITIONS UPON ISSUANCE OF SHARES.
Shares shall not be issued pursuant to an Award unless 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. 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.

20.    MISCELLANEOUS.
Whenever applicable in the Plan, the singular and the plural, and the masculine,
feminine and neuter shall be freely interchangeable, as the context requires.
The Section headings or titles shall not in any way control the construction of
the language herein, such headings or titles having been inserted solely for the
purpose of simplified reference. Words such as “herein”, “hereof”, “hereto”,
“hereinafter”, “hereby”, and “hereinabove” when used in the Plan refer to the
Plan as a whole, including any applicable Appendices, unless otherwise required
by context.
* * *

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APPENDIX - ISRAELI TAXPAYERS
MELLANOX TECHNOLOGIES, LTD. THIRD AMENDED AND RESTATED GLOBAL SHARE INCENTIVE
PLAN (2006)

1.    SPECIAL PROVISIONS FOR ISRAELI TAX PAYERS
1.1    This Appendix (the “Appendix”) to the Third Amended and Restated Mellanox
Technologies, Ltd. Share Incentive Plan (2006) (the “Plan”) is effective as of
the date the Plan, as amended and restated, becomes effective (the “Effective
Date”).
1.2    The provisions specified hereunder apply only to persons who are deemed
to be residents of the State of Israel for tax purposes, or are otherwise
subject to taxation in Israel with respect to Awards.
1.3    This Appendix applies with respect to Awards granted under the Plan. The
purpose of this Appendix is to establish certain rules and limitations
applicable to Awards that may be granted or issued under the Plan from time to
time, in compliance with the securities and other applicable laws currently in
force in the State of Israel. Except as otherwise provided by this Appendix, all
grants made pursuant to this Appendix shall be governed by the terms of the
Plan. This Appendix is applicable only to grants made after the Effective Date.
This Appendix complies with, and is subject to the ITO and Section 102.
1.4    The Plan and this Appendix shall be read together. In any case of
contradiction, whether explicit or implied, between the provisions of this
Appendix and the Plan, the provisions of this Appendix shall govern.

2.    DEFINITIONS
Capitalized terms not otherwise defined herein shall have the meaning assigned
to them in the Plan. The following additional definitions will apply to grants
made pursuant to this Appendix:
“3(i) Option” means an Option, Restricted Share Unit or Performance Share Unit
which is subject to taxation pursuant to Section 3(i) of the ITO which has been
granted to any person who is not an Eligible 102 Participant.
“102 Capital Gains Track” means the tax alternative set forth in Section
102(b)(2) of the ITO pursuant to which income resulting from the sale of Shares
derived from Options, Restricted Share Units or Performance Share Units is taxed
as a capital gain.
“102 Capital Gains Track Grant” means a 102 Trustee Grant qualifying for the
special tax treatment under the 102 Capital Gains Track.
“102 Ordinary Income Track” means the tax alternative set forth in Section
102(b)(1) of the ITO pursuant to which income resulting from the sale of Shares
derived from Options, Restricted Share Units or Performance Share Unit is taxed
as ordinary income.
“102 Ordinary Income Track Grant” means a 102 Trustee Grant qualifying for the
ordinary income tax treatment under the 102 Ordinary Income Track.
“102 Trustee Grant” means an Award made pursuant to Section 102(b) of the ITO
and held in trust by a Trustee for the benefit of the Participant, and includes
both 102 Capital Gains Track Grants and 102 Ordinary Income Track Grants.
“Award” means an Option, a Restricted Share Unit award, Performance Share Unit
award or other award or allotment of Shares under the Plan and this Appendix.
“Affiliate” means any “employing company” within the meaning of Section 102(a)
of the ITO.
“Controlling Shareholder” as defined under Section 32(9) of the Ordinance, means
an employee who prior to the grant or as a result of the exercise of any Option
or grant or vesting of any Restricted Share Unit or Performance Share Unit or
Shares, holds or would hold, directly or indirectly, in his name or with a
relative (as defined in the Ordinance) (i) 10% of the outstanding shares of the
Company, (ii) 10% of the voting power of the Company, (iii) the right to hold or
purchase 10% of the outstanding equity or voting power, (iv) the right to obtain
10% of the “profit” of the Company (as defined in the Ordinance), or (v) the
right to appoint a director of the Company.
 

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“Election” means the Company’s choice of the type (as between capital gains
track or ordinary income track) of 102 Trustee Grants it will make under the
Plan, as filed with the ITA.
“Eligible 102 Participant” means a person who is employed by the Company or its
Affiliates, including an individual who is serving as a director or an office
holder, who is not a Controlling Shareholder.
“Fair Market Value” shall mean with respect to 102 Capital Gains Track Grants
only, for the sole purpose of determining tax liability pursuant to Section
102(b)(3) of the ITO, if at the date of grant the Company’s shares are listed on
any established stock exchange or a national market system or if the Company’s
shares will be registered for trading within ninety (90) days following the date
of grant, the fair market value of the Shares at the date of grant shall be
determined in accordance with the average value of the Company’s shares on the
thirty (30) trading days preceding the date of grant or on the thirty
(30) trading days following the date of registration for trading, as the case
may be.
“ITA” means the Israeli Tax Authorities.
“ITO” means the Israeli Income Tax Ordinance (New Version) 1961 and the rules,
regulations, orders or procedures promulgated thereunder and any amendments
thereto, including specifically the Rules, all as may be amended from time to
time.
“Non-Trustee Grant” means an Award granted to an Eligible 102 Participant
pursuant to Section 102(c) of the ITO and not held in trust by a Trustee.
“Performance Share Unit” means an Award granted pursuant to Section 4 hereof.
“Required Holding Period” means the requisite period prescribed by the ITO and
the Rules, or such other period as may be required by the ITA, with respect to
102 Trustee Grants, during which Options, Restricted Share Units, Performance
Share Units or Shares granted by the Company must be held by the Trustee for the
benefit of the person to whom it was granted.
“Restricted Share Unit” means an Award granted pursuant to Section 3 hereof.
“Rules” means the Income Tax Rules (Tax benefits in Stock Issuance to Employees)
5763-2003.
“Section 102” shall mean the provisions of Section 102 of the ITO, as amended
from time to time, including by the Law Amending the Income Tax Ordinance
(Number 132), 2002, effective as of January 1, 2003 and by the Law Amending the
Income Tax Ordinance (Number 147), 2005.
“Shares” means Ordinary Shares, nominal value NIS 0.01 per share, of the
Company, including restricted or unrestricted Shares issued upon exercise of
Options or the vesting of Restricted Share Units or Performance Share Units
granted pursuant to the Plan and this Appendix.
“Trustee” means a person or entity designated by the Board of Directors to serve
as a trustee and approved by the ITA in accordance with the provisions of
Section 102(a) of the ITO.

3.    SPECIAL TERMS FOR RESTRICTED SHARE UNITS
3.1    Grant of Restricted Share Units.    The Administrator is authorized to
make Awards of Restricted Share Units to any Participant selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator. At the time of grant, the Administrator shall
specify the date or dates on which the Restricted Share Units shall become fully
vested and nonforfeitable, and may specify such conditions to vesting as it
deems appropriate. At the time of grant, the Administrator shall specify the
maturity date applicable to each grant of Restricted Share Units which shall be
no earlier than the vesting date or dates of the Award and may be determined at
the election of the grantee. On the maturity date, the Company shall transfer to
either: (a) in the case of an Award that is not a 102 Trustee Grant, the
Participant of record as issued to the Participant in the books of the Company
(or, if applicable, its transfer agent or stock plan administrator), or (b) in
the case of a 102 Trustee Grant, the Trustee (for the benefit of such
Participant), pursuant to the provisions of Section 6 below, one unrestricted,
fully transferable Share for each Restricted Share Unit scheduled to be paid out
on such date and not previously forfeited.
3.2    Forfeiture.    Except as otherwise determined by the Administrator at the
time of the grant of the Award or thereafter, upon termination of employment or
status of Service Provider, any Restricted Share Units that have not fully

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vested shall be forfeited; provided, however, that the Administrator may provide
for the accelerated vesting of Restricted Share Units, in its sole discretion.

4.    SPECIAL TERMS FOR PERFORMANCE SHARE UNITS
4.1    Grant of Performance Share Units.    The Administrator is authorized to
make Awards of Performance Share Units to any Participant selected by the
Administrator in such amounts and subject to such terms and conditions as
determined by the Administrator. At the time of grant, the Administrator shall
such performance or other conditions to vesting as it deems appropriate,
including, without limitation, the achievement of one or more Performance Goals,
in each case on a specified date or dates or over any period or periods to be
determined by the Administrator. At the time of grant, the Administrator shall
specify the maturity date applicable to each grant of Performance Share Units
which shall be no earlier than the vesting date or dates of the Award and may be
determined at the election of the grantee. On the maturity date, the Company
shall transfer to either: (a) in the case of an Award that is not a 102 Trustee
Grant, the Participant of record as issued to the Participant in the books of
the Company (or, if applicable, its transfer agent or stock plan administrator),
or (b) in the case of a 102 Trustee Grant, the Trustee (for the benefit of such
Participant), pursuant to the provisions of Section 6 below, such number of
unrestricted, fully transferable Shares for each Performance Share Unit
determined pursuant to the applicable terms and conditions of the Award
scheduled to be paid out on such date and not previously forfeited.
4.2    Forfeiture.    Except as otherwise determined by the Administrator at the
time of the grant of the Award or thereafter, upon termination of employment or
status of Service Provider, any Performance Share Units that have not fully
vested shall be forfeited; provided, however, that the Administrator may provide
for the accelerated vesting of Performance Share Units, in its sole discretion.

5.    TYPES OF AWARDS AND SECTION 102 ELECTION
5.1    Awards made pursuant to Section 102, whether as grants of Options,
Restricted Share Units or Performance Share Units or as issuances of Shares
under the Plan shall be made pursuant to either (a) Section 102(b)(2) of the ITO
as 102 Capital Gains Track Grants or (b) Section 102(b)(1) of the ITO as 102
Ordinary Income Track Grants. The Company’s Election regarding the type of 102
Trustee Grant it chooses to make shall be filed with the ITA. Once the Company
has filed such Election, it may change the type of 102 Trustee Grant that it
chooses to make only after the passage of at least 12 months from the end of the
calendar year in which the first grant was made in accordance with the previous
Election, in accordance with Section 102. For the avoidance of doubt, such
Election shall not prevent the Company from granting Non-Trustee Grants to
Eligible 102 Participants at any time.
5.2    Eligible 102 Participants may receive only 102 Trustee Grants or
Non-Trustee Grants under this Appendix. Participants who are not Eligible 102
Participants may be granted only 3(i) Options under this Appendix.
5.3    No 102 Trustee Grants may be made effective pursuant to this Appendix
until 30 days after the requisite filings required by the ITO and the Rules have
been made with the ITA.
5.4    The Award Agreement evidencing the Award made pursuant to the Plan and
this Appendix shall indicate whether the Award is a 102 Trustee Grant, a
Non-Trustee Grant or a 3(i) Grant; and, if the grant is a 102 Trustee Grant,
whether it is a 102 Capital Gains Track Grant or a 102 Ordinary Income Track
Grant.

6.    TERMS AND CONDITIONS OF 102 TRUSTEE OPTIONS, RESTRICTED SHARE UNITS AND
PERFORMANCE SHARE UNITS
6.1    Each 102 Trustee Grant will be deemed granted on the date stated in a
written notice by the Company, provided that on or before such date (i) the
Company has provided such notice to the Trustee and (ii) the Participant has
signed all documents required pursuant to this Section 5.
6.2    Each 102 Trustee Grant granted to an Eligible 102 Participant and each
certificate for a Share acquired pursuant to the exercise of a Option, vesting
of a Restricted Share Unit or Performance Share Unit or issued directly as Share
shall be issued to and registered in the name of a Trustee and shall be held in
trust for the benefit of the

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Participant for the Required Holding Period. After termination of the Required
Holding Period, the Trustee may release such Option, Restricted Share Unit,
Performance Share Unit and any such Shares, provided that (i) the Trustee has
received an acknowledgment from the Israeli Income Tax Authority that the
Eligible 102 Participant has paid any applicable tax due pursuant to the ITO or
(ii) the Trustee and/or the Company or its Affiliate withholds any applicable
tax due pursuant to the ITO. The Trustee shall not release any 102 Trustee
Options, Restricted Share Units, Performance Share Units or shares issued upon
exercise of such Option or vesting of such Restricted Share Unit or Performance
Share Unit prior to the full payment of the Eligible 102 Participant’s tax
liabilities.
6.3    Each 102 Trustee Grant (whether a 102 Capital Gains Track Grant or a 102
Ordinary Income Track Grant, as applicable) shall be subject to the relevant
terms of Section 102 and the ITO, which shall be deemed an integral part of the
102 Trustee Option, Restricted Share Unit or Performance Share Unit and shall
prevail over any term contained in the Plan, this Appendix or any agreement that
is not consistent therewith. Any provision of the ITO and any approvals by the
Income Tax Commissioner not expressly specified in this Plan, Appendix or Award
Agreement which are necessary to receive or maintain any tax benefit pursuant to
the Section 102 shall be binding on the Eligible 102 Participant. The Trustee
and the Eligible 102 Participant granted a 102 Trustee Grant shall comply with
the ITO, and the terms and conditions of the Trust Agreement entered into
between the Company and the Trustee. For avoidance of doubt, it is reiterated
that compliance with the ITO specifically includes compliance with the Rules.
Further, the Eligible 102 Participant agrees to execute any and all documents
which the Company or the Trustee may reasonably determine to be necessary in
order to comply with the provision of any applicable law, and, particularly,
Section 102.
6.4    During the Required Holding Period, the Eligible 102 Participant shall
not require the Trustee to release or sell the Options, Restricted Share Units,
Performance Share Units or Shares and other shares received subsequently
following any realization of rights derived from Shares, Options, Restricted
Share Units or Performance Share Units (including share dividends) to the
Eligible 102 Participant or to a third party, unless permitted to do so by
applicable law. Notwithstanding the foregoing, the Trustee may, pursuant to a
written request and subject to applicable law, release and transfer such Shares
to a designated third party, provided that both of the following conditions have
been fulfilled prior to such transfer: (i) all taxes required to be paid upon
the release and transfer of the shares have been withheld for Transfer to the
tax authorities and (ii) the Trustee has received written confirmation from the
Company that all requirements for such release and transfer have been fulfilled
according to the terms of the Company’s corporate documents, the Plan, any
applicable agreement and any applicable law. To avoid doubt, such sale or
release during the Required Holding Period will result in different tax
ramifications to the Eligible 102 Participant under Section 102 of the ITO and
the Rules and/or any other regulations or orders or procedures promulgated
thereunder, which shall apply to and shall be borne solely by such Eligible 102
Participant.
6.5    In the event a share dividend is declared on Shares which derive from
Awards granted as 102 Trustee Grants, such dividend shall also be subject to the
provisions of this Section 6 and the Required Holding Period for such dividend
shares shall be measured from the commencement of the Required Holding Period
for the Options, Restricted Share Units, Performance Share Units or Shares with
respect to which the dividend was declared. In the event of a cash dividend on
Shares, the Trustee shall transfer the dividend proceeds to the Eligible 102
Participant after deduction of taxes and mandatory payments in compliance with
applicable withholding requirements.
6.6    If an Option, Restricted Share Unit or Performance Share Unit granted as
a 102 Trustee Grant is exercised or vests during the Required Holding Period,
the Shares issued upon such exercise or vesting shall be issued in the name of
the Trustee for the benefit of the Eligible 102 Participant. If such an Option,
Restricted Share Unit or Performance Share Unit is exercised or vests after the
Required Holding Period ends, the Shares issued upon such exercise or vesting
shall, at the election of the Eligible 102 Participant, either (i) be issued in
the name of the Trustee, or (ii) be transferred to the Eligible 102 Participant
directly, provided that the Participant first complies with all applicable
provisions of the Plan.
6.7    For as long as Shares are registered in the name of the Trustee for the
benefit of a Participant, the Trustee shall provide to the Participant prompt
written notice of all shareholder meetings or other communications to

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shareholders of the Company received by the Trustee, and if so requested in
writing by the Participant, the Trustee shall execute a proxy in a form
acceptable to the Company to enable the Participant to vote such Shares.

7.    ASSIGNABILITY
As long as Options, Restricted Share Units, Performance Share Units or Shares
are held by the Trustee on behalf of the Eligible 102 Participant, all rights of
the Eligible 102 Participant over the shares are personal, cannot be
transferred, assigned, pledged or mortgaged, other than by will or laws of
descent and distribution.

8.    TAX CONSEQUENCES
8.1    Any tax consequences arising from the grant, sale, vesting or exercise of
any Award, from the payment for Shares covered thereby, or from any other event
or act (of the Company, and/or its affiliates and/or the Trustee or the
Participant), hereunder shall be borne solely by the Participant. The Company
and/or its affiliates and/or the Trustee shall withhold taxes according to the
requirements under the applicable laws, rules, and regulations, including
withholding taxes at source. Furthermore, the Participant shall agree to
indemnify the Company and/or its affiliates and/or the Trustee and hold them
harmless against and from any and all liability for any such tax or interest or
penalty thereon, including without limitation, liabilities relating to the
necessity to withhold, or to have withheld, any such tax from any payment made
to the Participant. The Company an/or any of its affiliates and/or the Trustee
may make such provisions and take such steps as it may deem necessary or
appropriate for the withholding of all taxes required by law to be withheld with
respect to Awards granted under the Plan and the exercise thereof, including,
but not limited, to (i) deducting the amount so required to be withheld from any
other amount (or Shares issuable) then or thereafter to be provided to the
Participant, including by deducting any such amount from a Participant’s salary
or other amounts payable to the Participant, to the maximum extent permitted
under law and/or (ii) requiring the Participant to pay to the Company or any of
its affiliates the amount so required to be withheld as a condition of the
issuance, delivery, distribution or release of any Shares and/or (iii) by
causing the exercise and sale of any Options or Shares held by on behalf of the
Participant to cover such liability, up to the amount required to satisfy
minimum statutory withholding requirements. In addition, the Participant will be
required to pay any amount due in excess of the tax withheld and transferred to
the tax authorities, pursuant to applicable tax laws, regulations and rules.
8.2    With respect to Non-Trustee Grants, if the Participant ceases to be
employed by the Company or any Affiliate, the Eligible 102 Participant shall
extend to the Company and/or its Affiliate a security or guarantee for the
payment of tax due at the time of sale of Shares to the satisfaction of the
Company, all in accordance with the provisions of Section 102 of the ITO and the
Rules.

9.    GOVERNING LAW AND JURISDICTION
Notwithstanding any other provision of the Plan, with respect to Participants
subject to this Appendix, the Plan and all instruments issued thereunder or in
connection therewith shall be governed by, and interpreted in accordance with,
the laws of the State of Israel applicable to contracts made and to be performed
therein.
* * *

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APPENDIX-U.S. TAXPAYERS
MELLANOX TECHNOLOGIES, LTD.
THIRD AMENDED AND RESTATED GLOBAL SHARE INCENTIVE PLAN (2006)

1.     Special Provisions for Persons who are U.S. Taxpayers.
1.1    This Appendix (the “Appendix”) to the Mellanox Technologies, Ltd. Third
Amended and Restated Global Share Incentive Plan (2006) (the “Plan”) is
effective as of the date that the Plan becomes effective (the “Effective Date”).
1.2    The provisions specified hereunder apply only to persons who are subject
to U.S. federal income tax (any such person, a “U.S. Taxpayer”).
1.3    This Appendix applies with respect to Awards granted under the Plan. The
purpose of this Appendix is to establish certain rules and limitations
applicable to Awards that may be granted or issued under the Plan from time to
time, in compliance with applicable tax, securities and other applicable laws
currently in force. Except as otherwise provided by this Appendix, all grants
made pursuant to this Appendix shall be governed by the terms of the Plan
(including, without limitation, its provisions regarding adjustments). This
Appendix is applicable only to grants made after the Effective Date.
1.4    The Plan and this Appendix shall be read together. In any case of an
irreconcilable contradiction (as determined by the Administrator) between the
provisions of this Appendix and the Plan, the provisions of the Plan shall
govern unless expressly stated otherwise in this Appendix.
1.5    To the extent required by applicable law, the Plan and this Appendix
shall be submitted to the Company’s shareholders for approval within twelve
(12) months after the Effective Date.

2.    Definitions.
Capitalized terms not otherwise defined herein shall have the meaning assigned
to them in the Plan. The following additional definitions will apply to grants
made pursuant to this Appendix:

“Disability” means, with respect to Incentive Stock Options, a “permanent and
total disability” within the meaning of Section 22(e)(3) of the Code.
“Fair Market Value” means, for purposes of this Appendix, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, as of any date and except as provided below, (a) if the Shares are
listed on any established stock exchange or a national market system, the
closing sales price for such Shares (or the closing bid, if no sales were
reported) as quoted on such exchange or system for such date, or if no bids or
sales were reported for such date, then the closing sales price (or the closing
bid, if no sales were reported) on the trading date immediately prior to such
date during which a bid or sale occurred, in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; (b) if
the Shares are regularly quoted by a recognized securities dealer but selling
prices are not reported, the mean of the closing bid and asked prices for the
Shares on such date, or if no closing bid and asked prices were reported for
such date, the date immediately prior to such date during which closing bid and
asked prices were quoted for the Shares, in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
(c) in the absence of an established market for the Shares, the Fair Market
Value shall be determined in good faith by the Administrator. Notwithstanding
any provision herein to the contrary, with respect to Non-Qualified Stock
Options, the “Fair Market Value” of the Shares shall be determined in a manner
that satisfies the applicable requirements of Code Section 409A, and with
respect to Incentive Stock Options, such Fair Market Value shall be determined
in a manner that satisfies the applicable requirements of Code Section 422, and
subject to Code Section 422(c)(7).
 
“Family Member” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the employee’s household
(other than a tenant or employee),

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a trust in which these persons have more than 50% of the beneficial interest, a
foundation in which these persons (or the employee) control the management of
assets, and any other entity in which these persons (or the employee) own more
than 50% of the voting interests or in Section A(1)(a)(5) of the general
instructions of Form S-8, as applicable.
“Incentive Stock Option” means any Option awarded to an eligible Participant
under the Plan and this Appendix intended to be and designated in the Award
Agreement as an “incentive stock option” within the meaning of Section 422 of
the Code.
“Non-Qualified Stock Option” means any Option awarded under this Plan that is
not an Incentive Stock Option.
“Parent” means any parent corporation of the Company within the meaning of
Section 424(e) of the Code.
“Performance Share Unit” shall have the meaning set forth in the Plan and shall
include an Award granted pursuant to Section 8 hereof.
“Restricted Shares” or “Restricted Stock” shall have the meaning set forth in
the Plan and shall include Shares awarded to a Participant pursuant to Section 6
hereof.
“Restricted Share Unit” shall have the meaning set forth in the Plan and shall
include an Award granted pursuant to Section 7 hereof.
“Securities Act” means the U.S. Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder. Any reference to any section of
the Securities Act shall also be a reference to any successor provision.
“Subsidiary” means any subsidiary corporation of the Company within the meaning
of Section 424(f) of the Code.
“Ten Percent Shareholder” means a person owning shares possessing more than 10%
of the total combined voting power of all classes of shares of the Company, its
Subsidiaries or its Parent.

3.    Shares Reserved under Appendix for Incentive Stock Options.
The maximum aggregate number of Shares that may be issued pursuant to Incentive
Stock Options is 10,517,000 Shares, and such reserve of Shares for grants of
Incentive Stock Options shall not be increased without the approval of the
shareholders of the Company as required pursuant to Section 421 et seq. of the
Code. The number of Shares stated in this Section 3 shall be subject to
adjustment as provided in Section 11.1 of the Plan. To the extent that an
Incentive Stock Option terminates, expires, or lapses for any reason, any Shares
subject to the Award shall again be available for the grant of an Incentive
Stock Option pursuant to the Plan and this Appendix. Notwithstanding the
foregoing, any Shares tendered or withheld to satisfy the grant or exercise
price or tax withholding obligation pursuant to any Incentive Stock shall not
again be available for the grant of an Incentive Stock Option pursuant to the
Plan and this Appendix. In addition, Shares purchased on the open market with
cash proceeds from the exercise of Incentive Stock Options shall not be
available for the grant of an Incentive Stock Option pursuant to the Plan and
this Appendix. To the extent permitted by applicable law or any exchange rule,
Shares issued in assumption of, or in substitution for, any outstanding awards
of any entity acquired in any form of combination by the Company or any
affiliate shall not be counted against Shares available for grant as Incentive
Stock Options pursuant to the Plan and this Appendix. Notwithstanding the
provisions of this Section 3 hereof, no Shares may again be optioned, granted or
awarded if such action would cause an Incentive Stock Option to fail to qualify
as an incentive stock option under Section 422 of the Code.

4.     Grants of Options.
4.1    Generally.    The Administrator shall have full authority to grant
Options to Service Providers pursuant to the terms of this Appendix and the
Plan. All Options shall be granted by, confirmed by, and subject to the terms
of, an Award Agreement to be executed by the Company and the Participant. In
particular, the Administrator shall have the authority to determine whether an
Option is an Incentive Stock Option or a Non-Qualified Stock Option.
 
4.2    Eligibility.    All Service Providers are eligible to be granted
Non-Qualified Stock Options under this Appendix, and only employees of the
Company, a Subsidiary or a Parent are eligible to be granted Incentive Stock
Options under this Appendix, if so employed on the grant date of such Incentive
Stock Option, although it is anticipated

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that grants hereunder will be granted solely or primarily to U.S. Taxpayers.
Eligibility for the grant of an Option and actual participation in this Appendix
and the Plan shall be determined by the Administrator in its sole discretion.

5.    Special Terms for Incentive Stock Options.
5.1    Disqualification.     To the extent that any Option does not qualify as
an Incentive Stock Option (whether because of its provisions or the time or
manner of its exercise or otherwise), such Option or the portion thereof that
does not qualify shall constitute a separate Non-Qualified Stock Option.
5.2     Exercise Price.    The exercise price per Share subject to an Incentive
Stock Option shall be determined by the Administrator at the time of grant of
such Incentive Stock Option; provided that the per share exercise price of an
Option shall not be less than 100% of the Fair Market Value of the Share at the
time of grant of such Incentive Stock Option (except in the case of Substitute
Awards); and provided, further, that if an Incentive Stock Option is granted to
a Ten Percent Shareholder, the exercise price per Share shall be no less than
110% of the Fair Market Value of the Share at the time of the grant of such
Incentive Stock Option (except in the case of Substitute Awards).
5.3    Option Term.    The term of each Incentive Stock Option shall be fixed by
the Administrator; provided, however, that no Incentive Stock Option shall be
exercisable more than seven (7) years after the date such Incentive Stock Option
is granted; and further provided that the term of an Incentive Stock Option
granted to a Ten Percent Shareholder shall not exceed five (5) years.
5.4    Incentive Stock Option Limitations.    To the extent that the aggregate
Fair Market Value (determined as of the time of grant) of Shares with respect to
which Incentive Stock Options are exercisable for the first time by an employee
during any calendar year under this Plan and/or any other stock option plan of
the Company, any Subsidiary or any Parent exceeds $100,000, such Incentive Stock
Options shall be treated as Non-Qualified Stock Options. In addition, if an
employee does not remain employed by the Company, any Subsidiary or any Parent
at all times from the time an Incentive Stock Option is granted until three (3)
months prior to the date of exercise thereof (or such other period as required
by Section 422 of the Code), such Incentive Stock Option shall be treated as a
Non-Qualified Stock Option. Should any provision of this Appendix not be
necessary in order for the Options to qualify as Incentive Stock Options, or
should any additional provisions be required, the Administrator may amend this
Appendix accordingly, without the necessity of obtaining the approval of the
shareholders of the Company, unless required by applicable law.
5.5     Effect of Termination.    Notwithstanding anything to the contrary in
the Plan or this Appendix, and in the absence of a provision specifying
otherwise in the relevant Award Agreement, then with respect to Incentive Stock
Options, the following provisions must be met in order for the Award to qualify
as an Incentive Stock Option under the Code:
(a)    in the event that the Participant ceases to be an employee of the Company
or any Subsidiary or Parent for any reason other than the Participant’s death or
Disability, the vested Options must be exercised within three (3) months from
the effective date of termination of the Participant’s employment with the
Company, any Subsidiary or Parent;
(b)    in the event that the Participant’s employment with the Company, a
Subsidiary or Parent terminates as a result of the Participant’s death or
Disability, the Option must be exercised within twelve (12) months following the
Participant’s date of termination for death or Disability. To avoid doubt, the
provisions of Section 10 of the Plan shall remain in full force and effect and
apply to Awards granted as Incentive Stock Options. The restrictions set forth
above represent special additional limitations that apply to qualify as
Incentive Stock Options under the provisions of the Code. To avoid doubt, a
Participant may choose to exercise Options in accordance with the terms of
Section 10 of the Plan and the relevant Award Agreement, and not in compliance
with the provisions of the Code relating to “incentive stock options”. In that
case such Option will not qualify as an Incentive Stock Option and will be
treated as a Non-Qualified Stock Option.
5.6    Notice of Disposition.    The Participant shall give the Company prompt
notice of any disposition of Shares acquired by exercise of an Incentive Stock
Option within (i) two (2) years from the date of grant of such Incentive Stock
Option or (ii) one (1) year after the transfer of such Shares to the
Participant.

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5.7    Right to Exercise.    During a Participant’s lifetime, an Incentive Stock
Option may be exercised only by the Participant.

6.    Special Terms for Restricted Stock.
6.1    Grant of Restricted Stock.    The Administrator is authorized to make
Awards of Restricted Stock to any Participant selected by the Administrator in
such amounts and subject to such terms and conditions as determined by the
Administrator. All Awards of Restricted Stock shall be evidenced by an Award
Agreement.
6.2    Issuance and Restrictions.    Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Administrator may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the
Administrator determines at the time of the grant of the Award or thereafter.
6.3     Forfeiture.    Except as otherwise determined by the Administrator at
the time of the grant of the Award or thereafter, upon termination of employment
or status of Service Provider during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be
forfeited; provided, however, that the Administrator may (a) provide in any
Restricted Stock Award Agreement that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and (b) in other cases waive in
whole or in part restrictions or forfeiture conditions relating to Restricted
Stock.
6.4    Certificates for Restricted Stock.    Restricted Stock granted pursuant
to the Plan may be evidenced in such manner as the Administrator shall
determine. If certificates representing shares of Restricted Stock are
registered in the name of the Participant, certificates must bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical
possession of the certificate until such time as all applicable restrictions
lapse.
6.5     Taxes.    In accordance with the terms of the Code, a Participant shall
be responsible for payment of all taxes incurred in connection with the grant of
Restricted Stock. A Participant shall make provision for the payment of all
required withholding to the Company in accordance with Section 18.1 of the Plan.

7.    Restricted Share Units.
The Administrator is authorized to make Awards of Restricted Share Units to any
Participant selected by the Administrator in such amounts and subject to such
terms and conditions as determined by the Administrator. At the time of grant,
the Administrator shall specify the date or dates on which the Restricted Share
Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate. At the time of grant, the
Administrator shall specify the settlement date applicable to each grant of
Restricted Share Units which shall be no earlier than the vesting date or dates
of the Award and may be determined at the election of the grantee, subject to
compliance with Section 409A of the Code. On the settlement date, the Company
shall transfer to the Participant or record as issued to the Participant in the
books of the Company (or, if applicable, its transfer agent or stock plan
administrator) one unrestricted, fully transferable Share for each Restricted
Share Unit scheduled to be paid out on such date and not previously forfeited.

8.    Performance Share Units.
The Administrator is authorized to make Awards of Performance Share Units to any
Participant selected by the Administrator in such amounts and subject to such
terms and conditions as determined by the Administrator. At the time of grant,
the Administrator shall such performance or other conditions to vesting as it
deems appropriate, including, without limitation, the achievement of one or more
Performance Goals, in each case on a specified date or dates or over any period
or periods to be determined by the Administrator. At the time of grant, the
Administrator shall specify the settlement date applicable to each grant of
Performance Share Units which shall be no earlier than the vesting date or dates
of the Award and may be determined at the election of the grantee, subject to
compliance with Section 409A

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of the Code. On the settlement date, the Company shall transfer to the
Participant or record as issued to the Participant in the books of the Company
(or, if applicable, its transfer agent or stock plan administrator) such number
of unrestricted, fully transferable Shares for each Performance Share Unit
determined pursuant to the applicable terms and conditions of the Award
scheduled to be paid out on such date and not previously forfeited.

 
9.    Amendment of Appendix and Individual Awards.
9.1    This Appendix may be amended or terminated in accordance with the terms
governing the amendment or termination of the Plan; provided, however, that
without the approval of the shareholders of the Company entitled to vote in
accordance with applicable law, no amendment may be made that would:
(i) increase the aggregate number of Shares that may be issued under this
Appendix; (ii) change the classification of individuals eligible to receive
Incentive Stock Options under this Appendix; (iii) decrease the minimum exercise
price of any Option below the amounts specified herein; (iv) extend the term of
the Plan under Section 13.1 of the Plan or the maximum Option period under
Section 5.3 of this Appendix; or (v) require shareholder approval in order for
the Appendix to continue to comply with Section 422 of the Code to the extent
applicable to Incentive Stock Options or require shareholder approval to the
extent necessary and desirable to comply with applicable law, regulations or
under the rules of any exchange or system on which the Company’s securities are
listed or traded at the request of the Company.
9.2    The Administrator may, to the extent permitted by the Plan and this
Appendix, amend the terms of any Award theretofore granted, prospectively or
retroactively, but, subject to the Plan or as otherwise specifically provided
herein, no such amendment or other action by the Administrator shall materially
impair the previously accrued rights of any holder of such Award without the
holder’s consent.
9.3    Notwithstanding any other provisions of the Plan or this Appendix to the
contrary, (a) the Administrator may amend the Plan, this Appendix or any Award
without the consent of the holder thereof if the Administrator determines that
such amendment is required or advisable for the Company, the Plan, this Appendix
or any Award to satisfy, comply with or meet the requirements of any law,
regulation, rule or accounting standard, and (b) neither the Company nor the
Administrator shall take any action pursuant to Section 9 or Section 11 of this
Appendix or Section 13.2 of the Plan, or otherwise, that would cause an Award
that is otherwise exempt under Code Section 409A to become subject to Code
Section 409A, or that would cause an Award that is subject to Code Section 409A
to fail to satisfy the requirements of Code Section 409A.

10.    Limits on Transfer.
No Award shall be assigned, transferred or otherwise disposed of by a
Participant otherwise than by will or by the laws of descent and distribution,
and all Awards shall be exercisable, during the Participant’s lifetime, only by
the Participant. Notwithstanding the foregoing, the Administrator may determine,
in its sole discretion, at the time of grant or thereafter that an Award (other
than an Incentive Stock Option) granted under this Appendix that is otherwise
not transferable pursuant to this Section 10 is transferable to a Family Member
in whole or in part and in such circumstances, and under such conditions, as
specified by the Administrator. An Award that is transferred to a Family Member
pursuant to the preceding sentence (i) may not be subsequently transferred
otherwise than by will or by the laws of descent and distribution and
(ii) remains subject to the terms of the Plan, the Appendix and the applicable
Award Agreement. Any Shares acquired upon the exercise of an Award by a
permissible transferee of an Award or a permissible transferee pursuant to a
transfer after the exercise of, or issuance of Shares under, an Award shall be
subject to the terms of the Plan, the Appendix and the applicable Award
Agreement.

11.    Deferred Compensation.
To the extent that the Administrator determines that any Award granted under the
Plan and this Appendix is subject to Section 409A of the Code, the Award
Agreement evidencing such Award shall incorporate the terms and conditions
required by Section 409A of the Code. To the extent applicable, the Plan, this
Appendix and the Award Agreements shall be interpreted in accordance with
Section 409A of the Code and Department of Treasury regulations and other

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interpretive guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the Effective Date.
Notwithstanding any provision of the Plan or this Appendix to the contrary, in
the event that following the Effective Date the Administrator determines that
any Award may be subject to Section 409A of the Code and related Department of
Treasury guidance (including such Department of Treasury guidance as may be
issued after the Effective Date), the Administrator may adopt such amendments to
the Plan or the Appendix and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, that the Administrator
determines are necessary or appropriate to (a) exempt the Award from
Section 409A of the Code and/or preserve the intended tax treatment of the
benefits provided with respect to the Award, or (b) comply with the requirements
of Section 409A of the Code and related Department of Treasury guidance. The
Administrator may permit deferrals of compensation pursuant to the terms of a
Participant’s Award Agreement, a separate plan, or an Appendix that (in each
case) meets the requirements of Code Section 409A.
* * *

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