Exhibit 10.1

 

VYYO INC.

 

THIRD AMENDED AND RESTATED

2000 EMPLOYEE AND CONSULTANT EQUITY INCENTIVE PLAN

 

Section 1. General Purpose of Plan; Definitions.

 

The name of this plan is the Vyyo Inc. Amended and Restated 2000 Employee and
Consultant Equity Incentive Plan (the “Plan”). The Plan was adopted by the Board
(defined below) and approved by the stockholders of the Company (defined below)
on November 22, 1999. The Board subsequently amended and restated the Plan in
its entirety on February 2, 2000 (the “First Amendment”), again amended and
restated the Plan on January 17, 2001 (the “Second Amendment”), and again
amended and restated the Plan on January 20, 2005 (the “Third Amendment”, and
together with the First Amendment and the Second Amendment, the “Amendments”).
The First Amendment was approved by the stockholders of the Company on February
2, 2000. The Second Amendment was approved by the stockholders of the Company on
May 8, 2001. The Third Amendment was approved by the stockholders of the Company
on March 14, 2005. The purpose of the Plan is to enable the Company to attract
and retain highly qualified personnel who will contribute to the Company’s
success and to provide incentives to Participants (defined below) that are
linked directly to increases in stockholder value and will therefore inure to
the benefit of all stockholders of the Company. The Company wishes the issuance
of Awards (defined below) to its employees in Israel to conform with the
requirements of the Israeli Income Tax Ordinance, and for this purpose the
appended document Appendix A amends this Plan to so conform.

 

For purposes of the Plan, the following terms shall be defined as set forth
below:

 

(a) “Administrator” means the Board, or if and to the extent the Board does not
administer the Plan, the Committee in accordance with Section 2 below.

 

(b) “Affiliate” means any corporation that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, another corporation, where “control” (including the terms “controlled by”
and “under common control with”) means the possession, direct or indirect, of
the power to cause the direction of the management and policies of the
corporation, whether through the ownership of voting securities, by contract or
otherwise.

 

(c) “Award” means any award under the Plan.

 

(d) “Award Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.

 

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

 

(f) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.

 

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(g) “Committee” means any committee the Board may appoint to administer the
Plan. To the extent necessary and desirable, the Committee shall be composed
entirely of individuals who meet the qualifications referred to in Section
162(m) of the Code and Rule 16b-3 under the Exchange Act. If at any time or to
any extent the Board shall not administer the Plan, then the functions of the
Board specified in the Plan shall be exercised by the Committee.

 

(h) “Common Stock” means the common stock, par value $0.0001 per share, of the
Company.

 

(i) “Company” means Vyyo Inc., a Delaware corporation (or any successor
corporation).

 

(j) “Deferred Stock” means the right to receive Shares at the end of a specified
deferral period granted pursuant to Section 8 below.

 

(k) “Disability” means the inability of a Participant to perform substantially
his or her duties and responsibilities to the Company or to any Parent or
Subsidiary by reason of a physical or mental disability or infirmity (i) for a
continuous period of six months, or (ii) at such earlier time as the Participant
submits medical evidence satisfactory to the Administrator that the Participant
has a physical or mental disability or infirmity that will likely prevent the
Participant from returning to the performance of the Participant’s work duties
for six months or longer. The date of such Disability shall be the last day of
such six-month period or the day on which the Participant submits such
satisfactory medical evidence, as the case may be.

 

(l) “Eligible Recipient” means an officer, director, employee, consultant or
advisor of the Company or of any Parent or Subsidiary.

 

(m) “Employee Director” means any director of the Company who is also an
employee of the Company or of any Parent or Subsidiary.

 

(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

 

(o) “Exercise Price” means the per share price at which a holder of an Award may
purchase the Shares issuable upon exercise of the Award.

 

(p) “Fair Market Value” as of a particular date shall mean the fair market value
of a share of Common Stock as determined by the Administrator in its sole
discretion; provided, however, that (i) if the Common Stock is admitted to
trading on a national securities exchange, fair market value of a share of
Common Stock on any date shall be the closing sale price reported for such share
on such exchange on such date or, if no sale was reported on such date, on the
last date preceding such date on which a sale was reported, (ii) if the Common
Stock is admitted to quotation on the National Association of Securities Dealers
Automated Quotation (“Nasdaq”) System or other comparable quotation system and
has been designated as a National Market System (“NMS”) security, fair market
value of a share of Common Stock on any date shall be the closing sale price
reported for such share on such system on such date or, if no sale was reported
on such date, on the last date preceding such date on which a sale was reported,
(iii) if the Common Stock is admitted to quotation on the Nasdaq System but has
not been designated as an NMS security, fair market value of a share of Common
Stock

 

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on any date shall be the average of the highest bid and lowest asked prices of
such share on such system on such date or, if no bid and ask prices were
reported on such date, on the last date preceding such date on which both bid
and ask prices were reported; (iv) in the case of a Limited Stock Appreciation
Right, the fair market value of a share of Common Stock shall be the “Change in
Control Price” (as defined in the Award Agreement evidencing such Limited Stock
Appreciation Right) of a share of Common Stock as of the date of exercise.

 

(q) “Incentive Stock Option” means any Option intended to be designated as an
“incentive stock option” within the meaning of Section 422 of the Code.

 

(r) “Limited Stock Appreciation Right” means a Stock Appreciation Right that can
be exercised only in the event of a “Change in Control” (as defined in the Award
Agreement evidencing such Limited Stock Appreciation Right).

 

(s) “Non-Employee Director” means a director of the Company who is not an
employee of the Company or of any Parent or Subsidiary.

 

(t) “Non-Qualified Stock Option” means any Option that is not an Incentive Stock
Option, including any Option that provides (as of the time such Option is
granted) that it will not be treated as an Incentive Stock Option.

 

(u) “Option” means an option to purchase Shares granted pursuant to Section 6
below.

 

(v) “Parent” means any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company, if each of the corporations in the
chain (other than the Company) owns stock possessing 50% or more of the combined
voting power of all classes of stock in one of the other corporations in the
chain.

 

(w) “Participant” means (i) any Eligible Recipient selected by the
Administrator, pursuant to the Administrator’s authority in Section 2 below, to
receive grants of Options, Stock Appreciation Rights, Limited Stock Appreciation
Rights, awards of Restricted Stock, Deferred Stock, or Performance Shares or any
combination of the foregoing, or (ii) any Non-Employee Director who is eligible
to receive grants of Options pursuant to Section 6(i) below.

 

(x) “Performance Shares” means Shares that are subject to restrictions based
upon the attainment of specified performance objectives granted pursuant to
Section 8 below.

 

(y) “Registration Statement” means the registration statement on Form S-1 filed
with the Securities and Exchange Commission for the initial underwritten public
offering of the Common Stock.

 

(z) “Restricted Stock” means Shares subject to certain restrictions granted
pursuant to Section 8 below.

 

(aa) “Shares” means shares of Common Stock reserved for issuance under the Plan,
as adjusted pursuant to Sections 3 and 4, and any successor security.

 

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(bb) “Stock Appreciation Right” means the right pursuant to an Award granted
under Section 7 below to receive an amount equal to the excess, if any, of (i)
the Fair Market Value, as of the date such Stock Appreciation Right or portion
thereof is surrendered, of the Shares covered by such right or such portion
thereof, over (ii) the aggregate Exercise Price of such right or such portion
thereof.

 

(cc) “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations
(other than the last corporation) in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in the chain.

 

Section 2. Administration.

 

The Plan shall be administered in accordance with the requirements of Section
162(m) of the Code (but only to the extent necessary and desirable to maintain
qualification of Awards under the Plan under Section 162(m) of the Code) and, to
the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3”), by the
Board or, at the Board’s sole discretion, by the Committee, which shall be
appointed by the Board, and which shall serve at the pleasure of the Board.

 

Pursuant to the terms of the Plan, the Administrator shall have the power and
authority to grant to Eligible Recipients Options, Stock Appreciation Rights or
Limited Stock Appreciation Rights, Awards of Restricted Stock, Deferred Stock or
Performance Shares or any combination of the foregoing; provided, however, that
automatic, nondiscretionary grants of Options shall be made to Non-Employee
Directors pursuant to and in accordance with the terms of Section 6(i) below.
Except as otherwise provided in Section 6(i) below, the Administrator shall have
the authority:

 

(a) to select those Eligible Recipients who shall be Participants;

 

(b) to determine whether and to what extent Options, Stock Appreciation Rights,
Limited Stock Appreciation Rights, Awards of Restricted Stock, Deferred Stock or
Performance Shares or a combination of any of the foregoing, are to be granted
hereunder to Participants;

 

(c) to determine the number of Shares to be covered by each Award granted
hereunder;

 

(d) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of each Award granted hereunder (including, but not limited to, (i)
the restrictions applicable to Awards of Restricted Stock or Deferred Stock and
the conditions under which restrictions applicable to such Awards of Restricted
Stock or Deferred Stock shall lapse, and (ii) the performance goals and periods
applicable to Awards of Performance Shares);

 

(e) to determine the terms and conditions, not inconsistent with the terms of
the Plan, which shall govern all written instruments evidencing Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Awards of Restricted
Stock, Deferred Stock or Performance Shares or any combination of the foregoing
granted hereunder;

 

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(f) to reduce the Exercise Price of any Option to the then current Fair Market
Value if the Fair Market Value of the Shares covered by such Option has declined
since the date such Option was granted; and

 

(g) the Committee may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The
Committee may at any time buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant shall agree.

 

The Administrator shall have the authority, in its sole discretion, to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; to interpret the terms
and provisions of the Plan and any Award issued under the Plan (and any Award
Agreement relating thereto); and to otherwise supervise the administration of
the Plan.

 

All decisions made by the Administrator pursuant to the provisions of the Plan
shall be final, conclusive and binding on all persons, including the Company and
the Participants.

 

Section 3. Shares Subject to Plan.

 

The total number of shares of Common Stock reserved and available for issuance
under the Plan shall be 8,340,088 shares, plus an annual increase to be added on
the first day of the Company’s fiscal year (beginning 2006) equal to the lesser
of (i) 1,000,000 shares or (ii) ten percent (10%) of the number of outstanding
shares of Common Stock on the last day of the immediately preceding fiscal year.
Such shares may consist, in whole or in part, of authorized and unissued shares
or treasury shares. The aggregate number of Shares as to which Options, Stock
Appreciation Rights, and Awards of Restricted Stock, Deferred Stock and
Performance Shares may be granted to any Participant during any calendar year
may not, subject to adjustment as provided in this Section 3, exceed 80% of the
Shares reserved for the purposes of the Plan.

 

Consistent with the provisions of Section 162(m) of the Code, as from time to
time applicable, to the extent that (i) an Option expires or is otherwise
terminated without being exercised, or (ii) any Shares subject to any Award of
Restricted Stock, Deferred Stock or Performance Shares granted hereunder are
forfeited, such Shares shall again be available for issuance in connection with
future Awards granted under the Plan. If any Shares have been pledged as
collateral for indebtedness incurred by a Participant in connection with the
exercise of an Option and such Shares are returned to the Company in
satisfaction of such indebtedness, such Shares shall again be available for
issuance in connection with future Awards granted under the Plan.

 

In the event of any stock dividend, recapitalization, stock split, reverse stock
split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, an equitable
substitution or proportionate adjustment shall be made in (i) the aggregate
number of Shares reserved for issuance under the Plan, (ii) the kind, number and
Exercise Prices of Shares subject to outstanding Options, and (iii) the kind,
number and Exercise Prices of Shares subject to outstanding Awards of Restricted
Stock, Deferred Stock and Performance Shares, in each case as may be determined
by the Administrator, in its sole discretion, subject to any required action by
the Board or the stockholders of the Company and in compliance with applicable
securities

 

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laws; provided, however, that fractions of a Share shall not be issued but shall
either be paid in cash at Fair Market Value or shall be rounded up to the
nearest whole share, as determined by the Committee. An adjusted Exercise Price
shall also be used to determine the amount payable by the Company upon the
exercise of any Stock Appreciation Right or Limited Stock Appreciation Right
related to any Option.

 

Section 4. Corporate Transactions

 

(a) Assumption or Replacement of Awards by Successor. In the event of (i) a
merger or consolidation in which the Company is not the surviving corporation
(other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the stockholders of the Company and
the Awards granted under the Plan are assumed or replaced by the successor
corporation, which assumption shall be binding on all Participants); (ii) a
dissolution or liquidation of the Company; (iii) the sale of substantially all
of the assets of the Company; or (iv) any other transaction which qualifies as a
“corporate transaction” under Section 424(a) of the Code wherein the
stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may be assumed
or replaced by the successor corporation (if any) or Parent thereof, which
assumption or replacement shall be binding on all Participants. In the
alternative, the successor corporation or Parent thereof may substitute
equivalent awards or provide substantially similar consideration to Participants
as was provided to stockholders of the Company (after taking into account the
existing provisions of the Awards). The successor corporation or Parent thereof
may also issue, in place of outstanding shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) or Parent thereof does not assume or substitute
awards, as provided above, pursuant to a transaction described in this Section
4(a), such Awards shall automatically become fully vested and exercisable and be
released from any restrictions on transfer and repurchase or forfeiture rights,
immediately prior to the specified effective date of such transaction, for all
the Shares at the time represented by such Awards. In such event, effective upon
the consummation of the transaction, or at such other time and on such
conditions as the Board shall determine, all outstanding Awards under the Plan
shall terminate and cease to remain outstanding, except to the extent assumed by
the successor corporation or its Parent.

 

(b) Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 4, in the event of
the occurrence of any transaction described in Section 4(a), any outstanding
Awards shall be treated as provided in the applicable Award Agreement or plan of
merger, consolidation, dissolution, liquidation, sale of assets or other
“corporate transaction.”

 

(c) Assumption of Awards by the Company. The Company, from time to time, also
may substitute or assume outstanding awards granted by another company, whether
in connection with an acquisition of such other company or otherwise, by either
(i) granting an Award under the Plan in substitution of such other company’s
award; or (ii) assuming such award as if it had been granted under the Plan if
the terms of such assumed award could be applied to an award granted under the
Plan. Such substitution or assumption shall be permissible if the holder of the
substituted or assumed award would have been eligible to be granted an Award
under the Plan if the other company had applied the rules of the Plan to such
grant. In the event the Company assumes an award granted by another company, the

 

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terms and conditions of such award shall remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of any
such option will be adjusted approximately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.

 

Section 5. Eligibility.

 

Eligible Recipients shall be eligible to be granted Options, Stock Appreciation
Rights, Limited Stock Appreciation Rights, Awards of Restricted Stock, Deferred
Stock or Performance Shares or any combination of the foregoing hereunder. The
Participants under the Plan shall be selected from time to time by the
Administrator, in its sole discretion, from among the Eligible Recipients, and
the Administrator shall determine, in its sole discretion, the number of Shares
covered by each such Award.

 

Section 6. Options.

 

Options may be granted alone or in addition to other Awards granted under the
Plan. Any Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of each Option
need not be the same with respect to each Participant. Participants who are
granted Options shall enter into an Award Agreement with the Company, in such
form as the Administrator shall determine, which Award Agreement shall set
forth, among other things, the Exercise Price of the Option, the term of the
Option and provisions regarding exercisability of the Option granted thereunder.

 

The Options granted under the Plan may be of two types: (i) Incentive Stock
Options and (ii) Non-Qualified Stock Options.

 

The Administrator shall have the authority to grant to any officer or employee
of the Company or of any Parent or Subsidiary (including directors who are also
officers of the Company) Incentive Stock Options, Non-Qualified Stock Options,
or both types of Options (in each case with or without Stock Appreciation Rights
or Limited Stock Appreciation Rights). Directors who are not also officers of
the Company or of any Parent or Subsidiary, consultants or advisors to the
Company or to any Parent or Subsidiary may only be granted Non-Qualified Stock
Options (with or without Stock Appreciation Rights or Limited Stock Appreciation
Rights). To the extent that any Option does not qualify as an Incentive Stock
Option, it shall constitute a separate Non-Qualified Stock Option. More than one
Option may be granted to the same Participant and be outstanding concurrently
hereunder.

 

Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

 

(a) Option Exercise Price. The per share Exercise Price of Shares purchasable
under an Option shall be determined by the Administrator in its sole discretion
at the time of grant but shall not, (i) in the case of Incentive Stock Options,
be less than 100% of the Fair Market Value of the Common Stock on such date,
(ii) in the case of Non-Qualified Stock Options intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, be less than 100% of the Fair Market Value of the Common Stock on such
date and (iii) in any event, be less than

 

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the par value (if any) of the Common Stock. If a Participant owns or is deemed
to own (by reason of the attribution rules applicable under Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of stock of
the Company or of any Parent or Subsidiary and an Incentive Stock Option is
granted to such Participant, the per share Exercise Price of such Incentive
Stock Option (to the extent required at the time of grant by the Code shall be
no less than 110% of the Fair Market Value of the Common Stock on the date such
Incentive Stock Option is granted.

 

(b) Option Term. The term of each Option shall be fixed by the Administrator,
but no Option shall be exercisable more than ten years after the date such
Option is granted; provided, however, that if an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or of
any Parent or Subsidiary and an Incentive Stock Option is granted to such
employee, the term of such Incentive Stock Option (to the extent required by the
Code at the time of grant) shall be no more than five years from the date of
grant.

 

(c) Exercisability. Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Administrator
at or after the time of grant. The Administrator may provide at the time of
grant, in its sole discretion, that any Option shall be exercisable only in
installments, and the Administrator may waive such installment exercise
provisions at any time, in whole or in part, based on such factors as the
Administrator may determine, in its sole discretion, including but not limited
to in connection with any “change in control” of the Company (as defined in the
Award Agreement evidencing such Option).

 

(d) Method of Exercise. Subject to Section 6(c), Options may be exercised in
whole or in part at any time during the Option period, by giving written notice
of exercise to the Company specifying the number of Shares to be purchased,
accompanied by payment in full of the aggregate Exercise Price of the Shares so
purchased in cash or its equivalent, as determined by the Administrator. In
addition, payment for Shares purchased pursuant to the Plan may be made, where
expressly approved for the Participant by the Committee and where permitted by
law:

 

(i) by cancellation of indebtedness of the Company to the Participant;

 

(ii) by surrender of shares of Common Stock that either (1) have been owned by
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Company by
use of a promissory note, such note has been fully paid with respect to such
Shares); or (2) were obtained by Participant in the public market;

 

(iii) by waiver of compensation due or accrued to Participant for services
rendered;

 

(iv) by tender of property;

 

(v) with respect only to purchases upon exercise of an Option, and provided that
a public market for the Common Stock exists: (i) through a “same day sale”
commitment from Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an “NASD Dealer”) whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased

 

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to pay for the aggregate Exercise Price of the Shares so purchased, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward such
Exercise Price directly to the Company; or (ii) through a “margin” commitment
from Participant and an NASD Dealer whereby Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the aggregate Exercise Price of the Shares so purchased, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward such Exercise
Price directly to the Company;

 

(vi) in the case of the exercise of a Non-Qualified Stock Option, in the form of
Restricted Stock or Performance Shares subject to an Award hereunder (based, in
each case, on the Fair Market Value of the Common Stock on the date the Option
is exercised); provided, however, that in the case of an Incentive Stock Option,
the right to make payment in the form of already owned shares of Common Stock
may be authorized only at the time of grant. If payment of the Exercise Price of
a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock or Performance Shares, the Shares received upon the exercise of
such Option shall be restricted in accordance with the original terms of the
Restricted Stock Award or Performance Shares Award in question, except that the
Administrator may direct that such restrictions shall apply only to that number
of Shares equal to the number of shares surrendered upon the exercise of such
Option.

 

(vii) by any combination of the foregoing or

 

(viii) by any other form of consideration permitted by applicable law.

 

A Participant shall generally have the rights to dividends and any other rights
of a stockholder with respect to the Shares subject to the Option only after the
Participant has given written notice of exercise, has paid in full for such
Shares, and, if requested, has given the representation described in Section
11(b).

 

The Administrator may require the surrender of all or a portion of any Option
granted under the Plan as a condition precedent to the grant of a new Option.
Subject to the provisions of the Plan, such new Option shall be exercisable at
the Exercise Price, during such period and on such other terms and conditions as
are specified by the Administrator at the time the new Option is granted.
Consistent with the provisions of Section 162(m), to the extent applicable, upon
their surrender, Options shall be canceled and the Shares previously subject to
such canceled Options shall again be available for future grants of Options and
other Awards hereunder.

 

(e) Loans. The Company or any Parent or Subsidiary may make loans available to
Option holders in connection with the exercise of outstanding Options, as the
Administrator, in its sole discretion, may determine. Such loans shall (i) be
evidenced by promissory notes entered into by the Option holders in favor of the
Company or any Parent or Subsidiary, (ii) be subject to the terms and conditions
set forth in this Section 6(e) and such other terms and conditions, not
inconsistent with the Plan, as the Administrator shall determine, (iii) bear
interest at the applicable Federal interest rate or such other rate as the
Administrator shall determine, and (iv) be subject to Board approval (or to
approval by the Administrator to the extent the Board may delegate such
authority). In no event may the principal amount of any such loan exceed the sum
of (x) the aggregate Exercise Price less the par value (if any) of the Shares
covered by the Option, or portion thereof, exercised by the holder, and (y)

 

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any Federal, state, and local income tax attributable to such exercise. The
initial term of the loan, the schedule of payments of principal and interest
under the loan, the extent to which the loan is to be with or without recourse
against the holder with respect to principal and/or interest and the conditions
upon which the loan will become payable in the event of the holder’s termination
of service to the Company or to any Parent or Subsidiary shall be determined by
the Administrator. Unless the Administrator determines otherwise, when a loan is
made, Shares having an aggregate Fair Market Value at least equal to the
principal amount of the loan shall be pledged by the holder to the Company as
security for payment of the unpaid balance of the loan, and such pledge shall be
evidenced by a pledge agreement, the terms of which shall be determined by the
Administrator, in its sole discretion; provided, however, that each loan shall
comply with all applicable laws, regulations and rules of the Board of Governors
of the Federal Reserve System and any other governmental agency having
jurisdiction.

 

(f) Non-Transferability of Options. Except under the laws of descent and
distribution, the Participant shall not be permitted to sell, transfer, pledge
or assign any Option, and all Options shall be exercisable, during the
Participant’s lifetime, only by the Participant; provided, however, that the
Participant shall be permitted to transfer one or more Non-Qualified Stock
Options to a trust controlled by the Participant during the Participant’s
lifetime for estate planning purposes.

 

(g) Termination of Employment or Service. If a Participant’s employment with or
service as a director, consultant or advisor to the Company or to any Parent or
Subsidiary terminates by reason of his or her death, Disability or for any other
reason, the Option may thereafter be exercised to the extent provided in the
Award Agreement evidencing such Option, or as otherwise determined by the
Administrator.

 

(h) Annual Limit on Incentive Stock Options. To the extent that the aggregate
Fair Market Value (determined as of the date the Incentive Stock Option is
granted) of Shares with respect to which Incentive Stock Options granted to a
Participant under this Plan and all other option plans of the Company or of any
Parent or Subsidiary become exercisable for the first time by the Participant
during any calendar year exceeds $100,000 (as determined in accordance with
Section 422(d) of the Code), the portion of such Incentive Stock Options in
excess of $100,000 shall be treated as Non-Qualified Stock Options.

 

(i) Automatic Grants of Options to Non-Employee Directors. The Company shall
grant Non-Qualified Stock Options to Non-Employee Directors pursuant to this
Section 6(i), which grants shall be automatic and nondiscretionary and otherwise
subject to the terms and conditions set forth in this subsection (i) and the
terms of the Plan (the “Automatic Non-Employee Director Options”). Each
Non-Employee Director who first becomes a director of the Company following the
Effective Date (as defined in Section 12) shall be automatically granted a
Non-Qualified Stock Option to purchase 25,000 Shares (an “Initial Option”). Each
Non-Employee Director shall be automatically granted a Non-Qualified Stock
Option to purchase 7,500 Shares (the “Annual Options”) on the date immediately
following the Company’s annual meeting of stockholders; provided, however, that
he or she is then a director of the Company and, provided, further, that as of
such date, such director shall have served on the Board for at least the
preceding six (6) months.

 

The term of each Automatic Non-Employee Director Option shall be ten (10) years,
and the Exercise Price purchasable under an Automatic Non-Employee Director
Option shall be no less than 100% of the Fair Market Value of the Common Stock
on the date of grant, provided, however, in no event shall the Exercise Price
purchasable under an Automatic Non-Employee Director Option be

 

10

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less than the par value (if any) of the Common Stock. The Initial Options shall
vest and become exercisable in four equal annual installments on each of the
first four anniversaries of the date of grant. The Annual Options shall be 100%
vested and fully exercisable as of the date of grant.

 

In the event that the number of Shares available for grant under the Plan is not
sufficient to accommodate the Automatic Non-Employee Director Options, then the
remaining Shares available for Automatic Non-Employee Director Options shall be
granted to Non-Employee Directors on a pro-rata basis. No further grants shall
be made until such time, if any, as additional Shares become available for grant
under the Plan through action of the Board and/or the stockholders of the
Company to increase the number of Shares that may be issued under the Plan or
through cancellation or expiration of Awards previously granted hereunder.

 

Section 7. Stock Appreciation Rights and Limited Stock Appreciation Rights.

 

Stock Appreciation Rights and Limited Stock Appreciation Rights may be granted
either alone (“Free Standing Rights”) or in conjunction with all or part of any
Option granted under the Plan (“Related Rights”). In the case of a Non-Qualified
Stock Option, Related Rights may be granted either at or after the time of the
grant of such Option. In the case of an Incentive Stock Option, Related Rights
may be granted only at the time of the grant of the Incentive Stock Option. The
Administrator shall determine the Eligible Recipients to whom, and the time or
times at which, grants of Stock Appreciation Rights or Limited Stock
Appreciation Rights shall be made; the number of Shares to be awarded, the
Exercise Price (or, in the case of a Limited Stock Appreciation Right, the
“Change in Control” price), and all other conditions of Stock Appreciation
Rights and Limited Stock Appreciation Rights. The provisions of Stock
Appreciation Rights and Limited Stock Appreciation Rights need not be the same
with respect to each Participant.

 

Stock Appreciation Rights and Limited Stock Appreciation Rights granted under
the Plan shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Administrator shall deem desirable:

 

(a) Awards. The prospective recipient of a Stock Appreciation Right or Limited
Stock Appreciation Right shall not have any rights with respect to such Award,
unless and until such recipient has executed an Award Agreement evidencing the
Award (a “Stock Appreciation Right Agreement” or “Limited Stock Appreciation
Right Agreement,” as appropriate) and delivered a fully executed copy thereof to
the Company, within a period of sixty days (or such other period as the
Administrator may specify) after the award date. Participants who are granted
Stock Appreciation Rights or Limited Stock Appreciation Rights shall have no
rights as stockholders of the Company with respect to the grant or exercise of
such rights.

 

(b) Exercisability.

 

(i) Stock Appreciation Rights that are Free Standing Rights (“Free Standing
Stock Appreciation Rights”) shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Administrator
at or after grant; provided, however, that no Free Standing Stock Appreciation
Right shall be exercisable during the first six months of its term, except that
this additional limitation shall not apply in the event of a Participant’s death
or Disability prior to the expiration of such six-month period.

 

11

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(ii) Stock Appreciation Rights that are Related Rights (“Related Stock
Appreciation Rights”) shall be exercisable only at such time or times and to the
extent that the Options to which they relate shall be exercisable in accordance
with the provisions of Section 6 above and this Section 7 of the Plan; provided,
however, that a Related Stock Appreciation Right granted in connection with an
Incentive Stock Option shall be exercisable only if and when the Fair Market
Value of the Common Stock subject to the Incentive Stock Option exceeds the
Exercise Price of such Option; provided, further, that no Related Stock
Appreciation Right shall be exercisable during the first six months of its term,
except that this additional limitation shall not apply in the event of a
Participant’s death or Disability prior to the expiration of such six-month
period.

 

(iii) Limited Stock Appreciation Rights shall only be exercised within the
30-day period following a “Change in Control” (as defined by the Administrator
in the Limited Stock Appreciation Right Agreement evidencing such right) and,
with respect to Limited Stock Appreciation Rights that are Related Rights
(“Related Limited Stock Appreciation Rights”), only to the extent that the
Options to which they relate shall be exercisable in accordance with the
provisions of Section 6 above and this Section 7 of the Plan.

 

(c) Payment Upon Exercise.

 

(i) Upon the exercise of a Free Standing Stock Appreciation Right, the
Participant shall be entitled to receive up to, but not more than, an amount in
cash or that number of Shares (or any combination of cash and Shares) equal in
value to the excess of the Fair Market Value as of the date of exercise over the
per share Exercise Price specified in the Free Standing Stock Appreciation Right
(which Exercise Price shall be no less than 100% of the Fair Market Value of the
Common Stock on the date of grant) multiplied by the number of Shares in respect
of which the Free Standing Stock Appreciation Right is being exercised, with the
Administrator having the right to determine the form of payment.

 

(ii) A Related Right may be exercised by a Participant by surrendering the
applicable portion of the related Option. Upon such exercise and surrender, the
Participant shall be entitled to receive up to, but not more than, an amount in
cash or that number of Shares (or any combination of cash and Shares) equal in
value to the excess of the Fair Market Value as of the date of exercise over the
per share Exercise Price specified in the related Option multiplied by the
number of Shares in respect of which the Related Stock Appreciation Right is
being exercised, with the Administrator having the right to determine the form
of payment. Options which have been so surrendered, in whole or in part, shall
no longer be exercisable to the extent the Related Rights have been so
exercised.

 

(iii) Upon the exercise of a Limited Stock Appreciation Right, the Participant
shall be entitled to receive an amount in cash equal in value to the excess of
the “Change in Control Price” (as defined in the Award Agreement evidencing such
Limited Stock Appreciation Right) of a share of Common Stock Share as of the
date of exercise over (A) the per share Exercise Price specified in the related
Option, or (B) in

 

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the case of a Limited Stock Appreciation Right which is a Free Standing Stock
Appreciation Right, the per share Exercise Price specified in the Free Standing
Stock Appreciation Right, such excess to be multiplied by the number of Shares
in respect of which the Limited Stock Appreciation Right shall have been
exercised.

 

(d) Non-Transferability.

 

(i) Free Standing Stock Appreciation Rights shall be transferable only when and
to the extent that an Option would be transferable under Section 6(f) of the
Plan.

 

(ii) Related Stock Appreciation Rights shall be transferable only when and to
the extent that the underlying Option would be transferable under Section 6(f)
of the Plan.

 

(iii) Limited Stock Appreciation Rights shall be transferable only when and to
the extent that an Option would be transferable under Section 6(f) of the Plan.

 

(e) Termination of Employment or Service

 

(i) In the event of the termination of employment or service of a Participant
who has been granted one or more Free Standing Stock Appreciation Rights, such
rights shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Administrator at or after grant.

 

(ii) In the event of the termination of employment or service of a Participant
who has been granted one or more Related Stock Appreciation Rights, such rights
shall be exercisable at such time or times and subject to such terms and
conditions as set forth in the related Options.

 

(iii) In the event of the termination of employment or service of a Participant
who has been granted one or more Limited Stock Appreciation Rights, such rights
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Administrator at or after grant.

 

(f) Term.

 

(i) The term of each Free Standing Stock Appreciation Right shall be fixed by
the Administrator, but no Free Standing Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.

 

(ii) The term of each Related Stock Appreciation Right shall be the term of the
Option to which it relates, but no Related Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.

 

(iii) The term of each Limited Stock Appreciation Right shall be fixed by the
Administrator, but no Limited Stock Appreciation Right shall be exercisable more
than ten years after the date such right is granted.

 

13

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Section 8. Restricted Stock, Deferred Stock and Performance Shares.

 

Awards of Restricted Stock, Deferred Stock or Performance Shares may be issued
either alone or in addition to other Awards granted under the Plan. The
Administrator shall determine the Eligible Recipients to whom, and the time or
times at which, Awards of Restricted Stock, Deferred Stock or Performance Shares
shall be made; the number of Shares to be awarded; the Exercise Price, if any,
to be paid by the Participant for the acquisition of Restricted Stock, Deferred
Stock or Performance Shares; the Restricted Period (as defined in Section 8(b))
applicable to Awards of Restricted Stock or Deferred Stock; the performance
objectives applicable to Awards of Deferred Stock or Performance Shares; and all
other conditions of the Awards of Restricted Stock, Deferred Stock and
Performance Shares. Subject to the requirements of Section 162(m) of the Code,
as applicable, the Administrator may also condition the grant of the Award of
Restricted Stock, Deferred Stock or Performance Shares upon the exercise of
Options, or upon such other criteria as the Administrator may determine, in its
sole discretion. The provisions of the Awards of Restricted Stock, Deferred
Stock or Performance Shares need not be the same with respect to each
Participant. In the sole discretion of the Administrator, loans may be made to
Participants in connection with the purchase of Restricted Stock under
substantially the same terms and conditions as provided in Section 6(e) of the
Plan with respect to the exercise of Options.

 

(a) Awards and Certificates. The prospective recipient of Awards of Restricted
Stock, Deferred Stock or Performance Shares shall not have any rights with
respect to any such Award, unless and until such recipient has executed an Award
Agreement evidencing the Award (a “Restricted Stock Award Agreement,” “Deferred
Stock Award Agreement” or “Performance Shares Award Agreement,” as appropriate)
and delivered a fully executed copy thereof to the Company, within a period of
sixty days (or such other period as the Administrator may specify) after the
award date. Except as otherwise provided below in Section 8(b), (i) each
Participant who is granted an Award of Restricted Stock or Performance Shares
shall be issued a stock certificate in respect of such shares of Restricted
Stock or Performance Shares; and (ii) such certificate shall be registered in
the name of the Participant, and shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to any such Award.

 

The Company may require that the stock certificates evidencing Restricted Stock
or Performance Shares granted hereunder be held in the custody of the Company
until the restrictions thereon shall have lapsed, and that, as a condition of
any Award of Restricted Stock or Performance Shares, the Participant shall have
delivered a stock power, endorsed in blank, relating to the Shares covered by
such Award.

 

With respect to Awards of Deferred Stock, at the expiration of the Restricted
Period, stock certificates in respect of such Shares of Deferred Stock shall be
delivered to the Participant, or his legal representative, in a number equal to
the number of Shares covered by the Deferred Stock Award.

 

14

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(b) Restrictions and Conditions. The Awards of Restricted Stock, Deferred Stock
and Performance Shares granted pursuant to this Section 8 shall be subject to
the following restrictions and conditions:

 

(i) Subject to the provisions of the Plan and the Restricted Stock Award
Agreement, Deferred Stock Award Agreement or Performance Shares Award Agreement,
as appropriate, governing any such Award, during such period as may be set by
the Administrator commencing on the date of grant (the “Restricted Period”), the
Participant shall not be permitted to sell, transfer, pledge or assign shares of
Restricted Stock, Deferred Stock or Performance Shares awarded under the Plan;
provided, however, that the Administrator may, in its sole discretion, provide
for the lapse of such restrictions in installments and may accelerate or waive
such restrictions in whole or in part based on such factors and such
circumstances as the Administrator may determine, in its sole discretion,
including, but not limited to, the attainment of certain performance related
goals, the Participant’s termination of employment or service as a director,
consultant or advisor to the Company or any Parent or Subsidiary, the
Participant’s death or Disability or the occurrence of a “change in control” as
defined in the Restricted Stock Award Agreement, Deferred Stock Award Agreement
or Performance Shares Award Agreement, as appropriate, evidencing such Award.

 

(ii) Except as provided in Section 8(c)(i), the Participant shall generally have
the rights of a stockholder of the Company with respect to Restricted Stock or
Performance Shares during the Restricted Period. The Participant shall generally
not have the rights of a stockholder with respect to Shares subject to Awards of
Deferred Stock during the Restricted Period; provided, however, that dividends
declared during the Restricted Period with respect to the number of Shares
covered by Awards of Deferred Stock shall be paid to the Participant.
Certificates for unrestricted Shares shall be delivered to the Participant
promptly after, and only after, the Restricted Period shall expire without
forfeiture in respect of such Awards of Restricted Stock, Deferred Stock or
Performance Shares except as the Administrator, in its sole discretion, shall
otherwise determine.

 

(iii) The rights of Participants granted Awards of Restricted Stock, Deferred
Stock or Performance Shares upon termination of employment or service as a
director, consultant or advisor to the Company or to any Parent or Subsidiary
terminates for any reason during the Restricted Period shall be set forth in the
Restricted Stock Award Agreement, Deferred Stock Award Agreement or Performance
Shares Award Agreement, as appropriate, governing such Awards.

 

Section 9. Amendment and Termination.

 

The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any Award theretofore granted without such Participant’s
consent, or that, without the approval of the stockholders (as described below),
would:

 

(a) except as provided in Section 3 of the Plan, increase the total number of
Shares reserved for issuance under the Plan;

 

(b) change the class of officers, directors, employees, consultants and advisors
eligible to participate in the Plan; or

 

15

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(c) extend the maximum Option period under Section 6(b) of the Plan.

 

Notwithstanding the foregoing, stockholder approval under this Section 9 shall
only be required at such time and under such circumstances as stockholder
approval would be required under Section 162(m) of the Code or other applicable
law, rule or regulation with respect to any material amendment to an employee
benefit plan of the Company.

 

The Administrator may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Section 3 of Plan, no such
amendment shall impair the rights of any Participant without his or her consent.

 

Section 10. Unfunded Status of Plan.

 

The Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.

 

Section 11. General Provisions.

 

(a) Shares shall not be issued pursuant to the exercise of any Award granted
hereunder unless the exercise of such Award and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act and the requirements of any stock exchange upon which the Common
Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

 

(b) The Administrator may require each person acquiring Shares to represent to
and agree with the Company in writing that such person is acquiring the Shares
without a view to distribution thereof. The certificates for such Shares may
include any legend which the Administrator deems appropriate to reflect any
restrictions on transfer.

 

All certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Administrator may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable Federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.

 

(c) Nothing contained in the Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to stockholder approval, if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases. The adoption of the Plan shall not confer
upon any Eligible Recipient any right to continued employment or service with
the Company or any Parent or Subsidiary, as the case may be, nor shall it
interfere in any way with the right of the Company or any Parent or Subsidiary
to terminate the employment or service of any of its Eligible Recipients at any
time.

 

16

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(d) Each Participant shall, no later than the date as of which the value of an
Award first becomes includible in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
Award. The obligations of the Company under the Plan shall be conditional on the
making of such payments or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Participant.

 

(e) No member of the Board or the Administrator, nor any officer or employee of
the Company acting on behalf of the Board or the Administrator, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Board or the
Administrator and each and any officer or employee of the Company acting on
their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.

 

Section 12. Stockholder Approval; Effective Date of Plan; Effective Date of
Amendments.

 

(a) The grant of any Award hereunder shall be contingent upon stockholder
approval of the Plan being obtained within 12 months before or after the date
the Board adopts the Plan.

 

(b) Subject to the approval of the Plan by the stockholders of the Company
within twelve (12) months before or after the date the Plan is adopted by the
Board, the Plan shall be effective as of November 22, 1999.

 

(c) Subject to the approval of the Amendments by the stockholders of the Company
within twelve (12) months before or after the date the Amendments are adopted by
the Board, the Amendments to the Plan shall be effective as of the first trading
day on or after the date on which the Securities and Exchange Commission
declares the Company’s Registration Statement effective (the “Effective Date”).

 

Section 13. Term of Plan.

 

No Option, Stock Appreciation Right, Limited Stock Appreciation Right, or Awards
of Restricted Stock, Deferred Stock or Performance Shares shall be granted
pursuant to the Plan on or after November 22, 2009, but Awards theretofore
granted may extend beyond that date.

 

17

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APPENDIX A

 

VYYO INC.

 

THIRD AMENDED AND RESTATED 2000 EMPLOYEE AND CONSULTANT EQUITY

INCENTIVE PLAN

 

1. General

 

  1.1. This appendix (the “Appendix”) is intended to enable the Company to issue
Awards in compliance with Amendment no. 132 of the Ordinance (as defined below)
and in particular with the provisions of Section 102 and Section 3(i) of the
Ordinance, as amended or replaced from time to time.

 

  1.2. Any capitalized term not specifically defined in this Appendix shall have
such meaning as is ascribed to it in the Vyyo Inc. Third Amended ad Restated
2000 Employee And Consultant Equity Incentive Plan (hereinafter, the “Plan”) and
shall be construed according to the interpretation given to it in the Plan.

 

  1.3. The provisions of this Appendix shall apply only to Participants who are
residents of the state of Israel or those who are deemed to be residents of the
state of Israel for the payment of tax.

 

  1.4. The Plan and this Appendix are complementary to each other and shall be
deemed a single integrated document. Except as otherwise set forth herein, the
terms and conditions of the Plan shall remain unchanged and in full force and
effect, and shall govern the grant of Awards to Israeli Employees and to Israeli
Non-Employees (as such terms are defined below).

 

  1.5. In the event of any inconsistencies or conflicting provisions between the
provisions of the Plan and the provisions of this Appendix, whether explicit or
implied, the provisions of this Appendix shall prevail.

 

2. Definitions

 

  2.1. “3(i) Award” means an Award granted pursuant to Section 3(i) of the
Ordinance to any person who is an Israeli Non-Employee.

 

  2.2. “102 Award” means an Award granted pursuant to Section 102 of the
Ordinance to any person who is an Israeli Employee.

 

  2.3. “102 Capital Gain Awards (102 CGA)” means a Trustee 102 Award elected and
designated by the Employing Company to qualify for capital gain tax treatment in
accordance with the provisions of Section 102(b)(2) of the Ordinance.

 

18

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  2.4. “102 Ordinary Income Award (102 OIA)” means a Trustee 102 Award elected
and designated by the Employing Company to qualify for ordinary income tax
treatment in accordance with the provisions of Section 102(b)(1) of the
Ordinance.

 

  2.5. “Controlling Shareholder” shall have the meaning ascribed to it in
Section 32(i) of the Ordinance.

 

  2.6. “Employing Company” shall have the meaning ascribed to it in Section
102(a) of the Ordinance.

 

  2.7. “Israeli Employee” means a person who is a resident of the state of
Israel or who is deemed to be a resident of the state of Israel for the payment
of tax, and who is an employee or an Office Holder (“Nose Missra”) of the
Company, or any Parent or Subsidiary of the Company, in each case excluding a
person who is a Controlling Shareholder prior to the issuance of the relevant
Award or as a result thereof.

 

  2.8. “Israeli Non-Employee” means a person who is a resident of the state of
Israel or who is deemed to be a resident of the state of Israel for the payment
of tax, and who is (i) a consultant, adviser, service provider of the Company,
or any Parent or Subsidiary of the Company, who is not an Israeli Employee, or
(ii) a Controlling Shareholder (whether or not an employee of the Company or any
Parent or Subsidiary thereof).

 

  2.9. “ITA” means the Israeli Income Tax Authorities.

 

  2.10. “Non-Trustee 102 Award” means an Award granted to an Israeli Employee
pursuant to Section 102(c) of the Ordinance, which is not required to be held in
trust by a Trustee.

 

  2.11. “Ordinance” means the 1961 Israeli Income Tax Ordinance [New Version],
as now in effect or as amended or replaced from time to time.

 

  2.12. “Section 102” means section 102 of the Ordinance and any regulations,
rules, orders or procedures promulgated thereunder as now in effect or as
amended or replaced from time to time.

 

  2.13. “Trustee” means any person or entity appointed by the Company, any of
its Parents or any of its Subsidiaries, as applicable and approved by the ITA,
to serve as a trustee, all in accordance with the provisions of Section 102(a)
of the Ordinance.

 

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  2.14. “Trustee 102 Award” means an Award granted pursuant to Section 102(b) of
the Ordinance and held in trust by a Trustee for the benefit of the Participant.

 

3. Issuance of Awards

 

  3.1. Without derogating from the provisions of the Plan: (i) Israeli Employees
may be granted only 102 Awards; and (ii) Israeli Non-Employees may be granted
only 3(i) Awards. In each case, such Awards shall be subject to the terms and
conditions of the Ordinance.

 

  3.2. The Employing Company may designate 102 Awards granted to Israeli
Employees pursuant to Section 102 as Non-Trustee 102 Awards or as Trustee 102
Awards.

 

4. Trustee 102 Awards

 

  4.1. Awards granted pursuant to this Section 4 are intended to constitute
Trustee 102 Awards and are subject to the provisions of Section 102 and the
general terms and conditions specified in the Plan, except for such provisions
of the Plan applying to Awards under a different tax law or regulation.

 

  4.2. Trustee 102 Awards may be granted only to Israeli Employees.

 

  4.3. Trustee 102 Awards shall be classified as either 102 CGA or 102 OIA,
subject to the terms and conditions of Section 102 and the provisions of the
Plan and this Appendix

 

  4.4. No Trustee 102 Awards may be granted under this Appendix, unless and
until the Employing Company’s election of the type of Trustee 102 Awards granted
to Israeli Employees, 102 CGA or 102 OIA (the “Election”), is appropriately
filed with the ITA.

 

After making an Election, the Company may grant only the type of Trustee 102
Awards it has elected (i.e. 102 CGA or 102 OIA), and the Election shall apply to
all grants to Participants of Trustee 102 Awards until such Election is changed
pursuant to the provisions of Section 102(g) of the Ordinance. The Employing
Company may change such Election only after the passage of at least one year
following the end of the year during which the applicable Employing Company
first granted Trustee 102 Awards in accordance with the previous Election.

 

For the avoidance of doubt, such Election shall not prevent the Company from
granting Non-Trustee 102 Awards or 3(i) Awards simultaneously with the grant of
Trustee 102 Awards.

 

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  4.5. The grant of Trustee 102 Awards shall be conditioned upon the approval
(or the deemed approval pursuant to the provisions of section 102(a) of the
Ordinance) of the Plan, this Appendix and the Trustee by the ITA.

 

  4.6. Trustee 102 Awards may be granted only after the passage of thirty days
(or a shorter period as and if approved by the ITA) following the delivery by
the appropriate Employing Company to the ITA of a request for approval of the
Plan (including this Appendix) and the Trustee according to Section 102.

 

Notwithstanding the foregoing paragraph, if within ninety (90) days of delivery
of the abovementioned request, the appropriate ITA officer notifies the
Employing Company of his or her decision not to approve the Plan or the Trustee,
the Awards that were intended to be granted as a Trustee 102 Awards shall be
deemed to be Non-Trustee 102 Awards, unless otherwise determined by the ITA
officer.

 

  4.7. Anything herein to the contrary notwithstanding, all Trustee 102 Awards
granted under this Plan shall be granted or issued to a Trustee. The Trustee
shall hold each such Trustee 102 Award, all Shares issued upon exercise thereof,
and all other securities received following any exercise or realization of
rights, including bonus shares, in trust for the benefit of the Participant in
respect of whom such Award was granted. All certificates representing Awards or
Shares issued to the Trustee under the Plan shall be deposited with the Trustee,
and shall be held by the Trustee until such time that such Awards or Shares are
released from the trust.

 

  4.8. With respect to 102 CGA and 102 OIA, the Awards or Shares issued upon the
exercise thereof and all rights related to them, including bonus shares, will be
held by the Trustee for such period of time as required under Section 102
(currently, at least 24 months (in case of a 102 CGA) and 12 months (in case of
a 102 OIA), from the end of the tax year in which such Award was deposited with
the Trustee) or a shorter period as approved by the ITA (hereinafter, the
“Holding Period”), under the terms set forth in Section 102.

 

  4.9.

In accordance with Section 102, the Participant shall not sell, cause the
release from trust, or otherwise dispose of, any Trustee 102 Award, any Share
issued upon the exercise thereof, or any rights related to them, including bonus
shares, until the end of the applicable Holding Period. Notwithstanding the
foregoing but without derogating from the provisions of the Plan and the terms
and conditions set forth in the Award Agreement, if any such sale, release, or
disposition occurs during the Holding Period, then the provision of Section 102,

 

21

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relating to non-compliance with the Holding Period, will apply and all sanctions
under Section 102 shall be borne by the Participant.

 

  4.10. Anything herein to the contrary notwithstanding, the Trustee shall not
release any Awards which were not already exercised into Shares by the
Participant, nor release any Shares issued upon exercise of the Trustee 102
Awards or rights related thereto, including bonus shares, prior to the full
payment of the Exercise Price and Participant’s tax liability arising from the
Trustee 102 Awards which were granted to him or her.

 

  4.11. In the event that the requirements for the Trustee 102 Awards are not
met, then the Trustee 102 Awards shall be regarded as Non-Trustee 102 Awards.

 

  4.12. Upon receipt of a Trustee 102 Award, the Participant will sign an Award
Agreement under which such Participant will agree to be subject to the trust
agreement between the Company and/or its Subsidiaries and the Trustee, stating,
inter alia, that the Trustee will be released from any liability in respect of
any action or decision duly taken and executed in good faith in relation to this
Appendix, or any Trustee 102 Award or Share issued to him or her thereunder.

 

5. Non-Trustee 102 Awards

 

  5.1. Awards granted pursuant to this Section 5 are intended to constitute
Non-Trustee 102 Awards and are subject to the provisions of Section 102 and the
general terms and conditions specified in the Plan, except for such provisions
of the Plan applying to Awards granted under a different tax law or regulations.

 

  5.2. Non-Trustee 102 Awards may be granted only to Israeli Employees.

 

  5.3. Non-Trustee 102 Awards that shall be granted pursuant to the Plan may be
issued directly to the Israeli Employee or to a trustee appointed by the
administrator in his sole discretion. In the event that the Administrator
determines that Non-Trustee 102 Awards, and Shares issued upon the exercise
thereof, shall be deposited with a trustee, the provisions of Sections 4.7 and
4.10 of this Appendix shall apply, mutatis mutandis.

 

  5.4. In the event that an Israeli Employee who was granted a Non-Trustee 102
Award is an employee of the Company, or any Parent or Subsidiary thereof, such
employee will be obligated to provide his employer, upon the termination of his
employment for any reason, with a security or guarantee to cover any future tax
obligation resulting from the grant, exercise or disposition of the Award or the
Shares issuable upon the exercise thereof, in the form satisfactory to such
employer in the latter’s sole discretion.

 

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6. 3(i) Awards

 

  6.1. Awards granted pursuant to this Section 6 are intended to constitute 3(i)
Awards and are subject to the provisions of Section 3(i) of the Ordinance and
the general terms and conditions specified the Plan, except for provisions of
the Plan applying to Awards granted under a different tax law or regulations.

 

  6.2. 3(i) Awards may be granted only to Israeli Non-Employees.

 

  6.3. 3(i) Awards that shall be granted pursuant to the Plan may be issued
directly to the Israeli Non-Employee or to a trustee appointed by the
administrator in his sole discretion. In the event that the Administrator
determines that 3(i) Awards, and Shares issued upon the exercise thereof, shall
be deposited with a trustee, the provisions of Sections 4.7 and 4.10 of this
Appendix shall apply, mutatis mutandis.

 

7. The Award Agreement

 

The terms and conditions upon which the Awards shall be issued and exercised,
shall be as specified in the Award Agreement to be executed pursuant to the Plan
and this Appendix. Each Award Agreement shall state, inter alia, the number of
Shares to which the Award relates, the type of Award granted thereunder (whether
a Trustee 102 Award and if so, whether a 102 CGA or 102 OIA, Non-Trustee 102
Award, or a 3(i) Award), the vesting provisions, the term of the Award, and the
exercise price. Any grant of Awards shall be conditioned upon the Participant’s
undertaking to be subject to the provisions of Section 102 or Section 3(i), as
applicable.

 

8. Fair Market Value For Israeli Tax Purposes

 

Without derogating from Section 1(p) of the Plan and solely for the purpose of
determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if
at the date of grant of a 102 CGA the Company’s Shares are listed on any
established stock exchange or a national market system, or if the Company’s
shares are registered for trading within ninety (90) days following the date of
grant of the 102 CGA, 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 applicable.

 

9. Exercise of Awards

 

Awards shall be exercised in accordance with the provisions of the Plan and the
Award Agreement, and when applicable, in accordance with the requirements of
Section 102.

 

10. Assignability and Sale of Awards

 

  10.1. 

Notwithstanding any other provision of the Plan to the contrary, no Options,
Shares of Restricted Stock, Deferred Stock, Performance Shares, or any right

 

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with respect thereto or purchasable thereunder, whether fully paid or not, shall
be assignable, transferable or given as collateral or any right with respect
thereto granted to any third party whatsoever, without the prior written consent
of the Administrator, and in any event subject to the provisions of the
Ordinance. Any purported assignment, transfer, grant of collateral, or pledge of
Options, Shares of Restricted Stock, Deferred Stock, Performance Shares or any
right with respect thereto or purchaseable thereunder, in contradiction to the
provisions of this Section, directly or indirectly, for an immediate effect or
for a future one, shall be null and void and cause the applicable Award to
immediately expire.

 

During the lifetime of the Participant all of such Participant’s rights to
purchase Shares or to otherwise exercise an Award hereunder shall be exercisable
only by the Participant.

 

  10.2. Without derogating from Section 10.1 above, for as long as Awards or
Shares purchased upon the exercise thereof are held by the Trustee on behalf of
the Participant, all rights of the Participant with respect to such Awards and
Shares shall be personal, and may not be transferred, assigned, pledged or
mortgaged, other than by will or laws of descent and distribution.

 

Any purported assignment, transfer, grant of collateral, or pledge of an Award
or Share in contradiction to the provisions of this Section, directly or
indirectly, for an immediate effect or for a future one, shall be null and void
and cause the Award to expire immediately.

 

11. Integration of Section 102 And Tax Assessing Officer’s Permit

 

  11.1. With respect to Trustee 102 Awards, the provisions of the Plan, this
Appendix and the Award Agreement shall be subject to the provisions of Section
102 and the Tax Assessing Officer’s permit (to the extent that such permit is
issued) (the “Permit”), and said provisions and Permit shall be deemed an
integral part of the Plan, this Appendix and the Award Agreement.

 

  11.2. Any provision of Section 102 or the Permit which is necessary in order
to receive or to keep any tax benefit pursuant to Section 102, which is not
expressly specified in the Plan, this Appendix, or the Award Agreement, shall be
deemed to have been automatically incorporated into this Appendix and considered
binding upon the Company and the Participants who are Israeli Employees or
Israeli Non-Employees.

 

12. Dividends

 

Without derogating from the provisions of the Plan, a Participant shall be
entitled to receive dividends with respect to Shares issued upon the exercise of
his or her Awards (whether such Shares are held by the Participant or by the
Trustee for his or her benefit), in accordance with the provisions

 

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of Vyyo Inc.’s Certificate of Incorporation (including all amendments thereto),
subject to any applicable taxation on distribution of dividends and, when
applicable, subject to the provisions of Section 102.

 

13. Tax Consequences

 

  13.1. Any tax arising with respect to the grant or exercise of any Award, the
payment for, or disposition of, Shares covered thereby, or from any other event
or act in connection therewith (of the Company, its Parents or Subsidiaries, the
Trustee or the Participant), shall be borne solely by the Participant. The
Company, its Parents, Subsidiaries, and the Trustee shall be entitled to
withhold taxes according to the requirements of any applicable laws, rules, and
regulations, including withholding taxes at source and particularly regulation
7(b) of the Income Tax Regulations (tax benefits on the issuance of shares to
employees) 2003. The Participant shall indemnify the Company, its Parents,
Subsidiaries, and the Trustee, as the case may be, and hold each of 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.

 

  13.2. The Administrator or, when applicable, the Trustee shall not be required
to release any share certificate to a Participant until all required tax
payments have been fully made.

 

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