Exhibit 10.20



 




EXHIBIT 10.20


MARVELL TECHNOLOGY GROUP LTD.



AMENDED AND RESTATED



1995 STOCK OPTION PLAN

(As amended through May 7, 2003)



     1.     Purpose. This Plan is intended to attract and retain the best
available individuals as Employees, Consultants and Outside Directors of the
Company and its Subsidiaries, to provide additional incentives to those
Employees, Consultants and Outside Directors, and to promote the success of the
Company’s business.


     2.     Defined Terms. The meanings of defined terms (generally, capitalized
terms) in this Plan are provided in Section 21 (“Glossary”).


     3.     Shares Reserved. Subject to Section 14, Shares that may be issued
with respect to Awards granted under the Plan shall not exceed an aggregate of
60,260,394 Shares of Common Stock; provided however, that on the first business
day of each fiscal year starting January 31, 2004 or after, and continuing
until the earlier of January 31, 2013 or termination of the Plan, there shall
be added to this Plan the lesser of an additional (i) 10,000,000 shares of
Common Stock, or (ii) 5.0% of the outstanding shares of capital stock on such
date. The Shares may be authorized, but unissued, or reacquired Common Stock.
If an Award under the Plan expires or becomes unexercisable for any reason, the
Shares subject to such Award which have not been issued shall be available for
future issuance under this Plan. Shares retained to satisfy tax withholding
obligations do not reduce the number authorized for issuance.


     4.     Administration.


     (a)  In General. This Plan shall be administered by the Board or a
Committee appointed by the Board. Once appointed, a Committee shall
serve until otherwise directed by the Board. From time to time, the
Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and appoint new members
in their stead, fill vacancies however caused, and terminate the
Committee and thereafter directly administer this Plan.


     (b)  Committee Composition. The Board may provide for administration of
this Plan with respect to Officers and directors of the Company by a Committee
constituted so as to satisfy:



		
	 	     (i) such requirements as the Securities and Exchange
Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its
successor) under the Exchange Act; and
	 
	 	     (ii) such requirements as the Internal Revenue Service may establish
for Outside Directors acting under plans intended to qualify for
exemption under Section 162(m)(4)(C) of the Code.



 






 






     A Committee appointed under this Section 4(b) may be separate from any
Committee appointed to administer this Plan with respect to Employees who are
neither Officers nor directors. Within the limitations of this Section 4(b),
any reference in the Plan to the Committee shall include such committee or
committees appointed pursuant to this Section 4.


     (c)  Powers of the Administrator. Subject to the provisions of this Plan
and in the case of a Committee, subject to the specific duties delegated by the
Board, the Administrator shall have the authority, in its sole and absolute
discretion:



		
	 	     (i) to determine the Fair Market Value of the Common Stock;




		
	 	     (ii) to grant Awards to such Consultants, Outside Directors
and Employees as it selects; provided, however, that
notwithstanding any other provision of the Plan, grants of Awards
to Outside Directors shall be limited to grants of Options upon
initial appointment to the Board, and such Awards shall be subject
to ratification by the Board;




		
	 	     (iii) to determine the terms and conditions of each Award
granted, including without limitation the number of Shares subject
to each Award, the exercise price per Share of Optioned Stock, and
whether an Option is to be granted as an ISO or a NSO;




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




		
	 	     (v) to determine whether and under what circumstances to
offer to buy out an Option for cash or Shares under Section 12;




		
	 	     (vi) to modify grants of Awards to participants who are
foreign nationals or employed outside of the United States in
order to recognize differences in local law, tax policies, or
customs; and




		
	 	     (vii) to construe and interpret the terms of this Plan and of
each Award granted pursuant to this Plan.



     (d)  Administrator’s Decisions Binding. All decisions, determinations, and
interpretations of the Administrator shall be final and binding on all Grantees
and any other holders of any Awards, and no member of the Administrator shall
be liable for any such determination, decision, or interpretation made in good
faith.


     5.     Eligibility.


     (a)  General. Nonstatutory Stock Options may be granted to Employees,
Consultants and Outside Directors. Incentive Stock Options may be granted only
to Employees. Other Awards
may be granted to Employees and Consultants. An Employee or Consultant
who has been granted an Award may, if otherwise eligible, be granted additional
Awards.


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     (b)  Limitations.



		
	 	     (i) While the Company or a successor has outstanding any class of
equity securities required to be registered under Section 12 of the
Exchange Act, the following limitations shall apply to grants of Awards
to Employees:




		
	 	     (ii) No Employee shall be granted, in any fiscal year of the
Company, Awards with respect to more than 1,000,000 Shares, in the
aggregate, adjusted proportionately in connection with any change in the
Company’s capitalization as described in Section 14. If an Award is
granted but canceled in the same fiscal year, it shall nonetheless count
against the foregoing limit. Reduction of an Option’s exercise price is
treated as a cancellation of the Option and the grant of a new Option.



     6.     Term of Options. The term of each Option shall be determined by the
Administrator at the time of grant but shall not exceed ten years. In the case
of an ISO granted to an Optionee who, at the time of grant, owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or any Parent or Subsidiary, the Option term shall not exceed
five years.


     7.     Date of Option Grant. Unless otherwise determined by the
Administrator, the date of grant of an Option shall be the date on which the
Administrator completes the actions necessary to grant the Option. Notice of
the grant shall be given to the Optionee within a reasonable time after the
date of the grant.


     8.     Option Exercise Price and Form of Consideration.


     (a)  Price. The per-Share exercise price of an Option shall be determined
by the Administrator at the time of grant, but:



		
	 	     (i) In the case of an ISO:




		
	 	     (A) granted to an Employee who, at the time of grant, owns stock
representing more than ten percent of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per-Share exercise
price shall be at least 110% of the Fair Market Value on the date of
grant; or




		
	 	     (B) granted to any other Employee, the per-Share exercise price
shall be at least the Fair Market Value on the date of grant.




		
	 	     (ii) In the case of a NSO, the per-Share exercise price shall be at
least the Fair Market Value on the date of grant.



     (b)  Form of Payment. Payment for Shares upon exercise of an Option shall
be made in any lawful consideration approved by the Administrator and may,
without limitation, consist of
(1) cash, (2) check, (3) other Shares that have a Fair Market Value on the
date of payment equal to the aggregate exercise price of the Shares as to which
Option is exercised; provided, however, that the Optionee shall not surrender,
or attest to the ownership of, Shares in payment of the


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Exercise Price if such
action would cause the Company to recognize compensation expense (or additional
compensation expense) with respect to the Option for financial reporting
purposes, (4) delivery by a broker or brokerage firm approved by the
Administrator of a properly executed exercise notice together with payment of
the exercise price and such other documentation as the Administrator shall
require, or (5) any combination of the foregoing. Notwithstanding the
foregoing, a form of payment shall not be available if the Administrator
determines, in its sole and absolute discretion, that such form of payment
could violate any law or regulation.


     9.     Option Exercise.


     (a)  Exercisability. Each Option shall be exercisable at such times and
under such conditions as determined by the Administrator at the time of grant.


     (b)  Vesting. Each Option and the corresponding Optioned Stock shall vest
at such times and under such conditions as determined by the Administrator at
the time of grant, and as are otherwise permissible under the terms of this
Plan, including without limitation, performance criteria with respect to the
Company and/or the Optionee.


     (c)  Fractional Shares. An Option may not be exercised for a fraction of a
Share.


     (d)  Manner of Exercise; Rights as a Shareholder. Unless otherwise allowed
by the Administrator, an Option shall be exercised by delivery to the Company
of all of the following: (i) written notice of exercise by the Optionee, in a
form approved by the Administrator and in accordance with the terms of the
Option, (ii) full payment for the Shares with respect to which the Option is
exercised, and (iii) payment (or provision for payment) of withholding taxes
pursuant to Subsection (g), below. Delivery of any of the foregoing may be by
electronic means approved by the Administrator. The Optionee shall be treated
as a shareholder of the Company with respect to the purchased Shares upon
completion of exercise of the Option.


     (e)  Optionee Representations. If Shares purchasable pursuant to the
exercise of an Option have not been registered under the Securities Act of
1933, as amended, at the time the Option is exercised, the Optionee shall, if
required by the Administrator, as a condition to exercise of all or any portion
of the Option, deliver to the Company an investment representation statement in
a form approved by the Administrator.


     (f)  Termination of Employment or Consulting Relationship. If an
Optionee’s Continuous Service terminates, the Optionee (or the Optionee’s
estate or heirs, if termination is due to death or the Optionee dies during the
post-termination exercise period of the Option) may exercise the Option, (i)
only within such period of time as is determined by the Administrator (but no
later than the expiration date for the Option determined by the Administrator
at the time of grant) and the Option shall terminate at the end of that period,
and (ii) unless otherwise determined by the Administrator, only to the extent
that the Optionee was entitled to exercise it at the date of termination.


     (g)  Tax Withholding. The Company’s obligation to deliver Shares upon
exercise of an Option is subject to payment (or provision for payment
satisfactory to the Administrator) by the


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Optionee of all federal, state, and
local income and employment taxes that the Administrator determines in its
discretion to be due as a result of the exercise of the Option or sale of the
Shares.


     10.     Rule 16b-3. Except to the extent determined by the Administrator,
Awards granted to persons subject to Section 16(b) of the Exchange Act shall
comply with Rule 16b-3 and shall contain such terms as may be required or
desirable to qualify Plan transactions for the maximum exemption from Section
16 of the Exchange Act.


     11.     Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.


     12.     Buyout of Options. The Administrator may at any time offer to buy out
an Option for a payment in cash or Shares, based on such terms and conditions
as the Administrator shall establish and communicate to the Optionee at the
time of the offer.


     13.     Other Awards. The Administrator may from time to time grant other
stock-based awards to eligible Employees and Consultants in such amounts, on
such terms and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required by law, as it
shall determine and set forth in the applicable Grant Agreement, including
without limitation the following:


     (a)  Stock Appreciation Rights. The Administrator may from time to time
grant Awards of stock appreciation rights (“SAR”). An SAR entitles the Grantee
to receive, subject to the provisions of the Plan and the Grant Agreement, a
payment having an aggregate value equal to the product of (i) the excess of (A)
the Fair Market Value on the exercise date of one share of Common Stock over
(B) the base price per share specified in the Grant Agreement, times (ii) the
number of shares specified by the SAR, or portion thereof, which is exercised.
Payment by the Company of the amount receivable upon any exercise of an SAR may
be made by the delivery of Common Stock or cash, or any combination of Common
Stock and cash, as determined in the sole discretion of the Administrator. If
upon settlement of the exercise of an SAR a Grantee is to receive a portion of
such payment in shares of Common Stock, the number of shares shall be
determined by dividing such portion by the Fair Market Value of a share of
Common Stock on the exercise date. No fractional shares shall be used for such
payment and the Administrator shall determine whether cash shall be given in
lieu of such fractional shares or whether such fractional shares shall be
eliminated.


     (b)  Stock Awards. The Administrator may from time to time grant
restricted or unrestricted Awards of Common Stock in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall determine.


     (c)  Stock Units. The Administrator may from time to time grant Awards
denominated in stock-equivalent units (“stock units”) in such amounts and on
such terms and conditions as it


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shall determine. Stock units shall be credited
to a bookkeeping reserve account solely for accounting purposes and shall not
require a segregation of any of the Company’s assets. An Award of stock units
may be settled in Common Stock, in cash, or in a combination of Common Stock
and cash, as determined in the sole discretion of the Administrator. Except as
otherwise provided in the applicable Grant Agreement, the Grantee shall not
have the rights of a stockholder with respect to any shares of Common Stock
represented by a stock unit solely as a result of the grant of a stock unit to
the Grantee.


     (d)  Performance Awards. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or more
performance goals established by the Administrator. Performance awards may be
paid by the delivery of Common Stock or cash, or any combination of Common
Stock and cash, as determined in the sole discretion of the Administrator.
Performance goals established by the Administrator may be based on one or more
business criteria selected by the Administrator that apply to an individual or
group of individuals, a business unit, or the Company as a whole, over such
performance period as the Administrator may designate.


     (e)  Other Stock-Based Awards. The Administrator may grant other
stock-based awards may be denominated in cash, in Common Stock or other
securities, in stock-equivalent units, in stock appreciation units, in
securities or debentures convertible into Common Stock, or in any combination
of the foregoing and may be paid in Common Stock or other securities, in cash,
or in a combination of Common Stock or other securities and cash, all as
determined in the sole discretion of the Administrator.


     (f)  Deferral of Awards.


     The Administrator (in its sole discretion) may provide that Shares or cash
that otherwise would be delivered to a Grantee as a result of the exercise of
an Option or other settlement of an Award may be converted into amounts
credited to a deferred compensation account established for such Grantee by the
Administrator as an entry on the Company’s books. A deferred compensation
account established under this Section 13(f) may be credited with interest or
other forms of investment return, as determined by the Administrator. A
Grantee for whom such an account is established shall have no rights other than
those of a general creditor of the Company. Such an account shall represent an
unfunded and unsecured obligation of the Company and shall be subject to the
terms and conditions of the applicable Grant Agreement between such Participant
and the Company. The Administrator (in its sole discretion) shall establish
Grant rules, procedures and forms pertaining to any deferral of Awards pursuant
to this Section 13(f).


     14.     Changes in Capitalization or Control.


     (a)  Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares of Optioned Stock or of other
Shares subject to an outstanding Award, and the number of Shares that have been
authorized for issuance under this Plan but as to
which no Options or other Awards have then been granted (including the
number of shares automatically added to the Plan on an annual basis as provided
for in Section 3(i) and (ii)), or that


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have been returned to this Plan upon
cancellation or expiration of an Option or an Award, as well as the price per
Share of Optioned Stock or of other Shares subject to an outstanding Award,
shall be proportionately adjusted for any change in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other change in the number of
issued Shares effected without receipt of consideration by the Company (not
counting Shares issued upon conversion of convertible securities of the Company
as “effected without receipt of consideration”). Such adjustment shall be made
by the Board and shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
consequent adjustment shall be made with respect to, the number or price of
Shares subject to this Plan.


     (b)  Change in Control. The Administrator may, in its discretion,
determine at any time from and after the grant of an Award the effect that a
Change in Control shall have upon the Award; provided, however, that a Change
in Control shall not have the effect of impairing the rights of any Grantee
under any then-outstanding Award without his or her prior written consent.
Without limiting the foregoing sentence, the Administrator may determine that
upon a Change in Control, an Option:



		
	 	     (i) shall become fully vested and exercisable either for a
limited period following the Change in Control or for the
remainder of the Option’s term;




		
	 	     (ii) shall terminate upon or after a specified period
following the Change in Control;




		
	 	     (iii) shall be cancelled in exchange for cash in the amount
of the excess of the fair market value of the Optioned Shares over
the exercise price upon termination; or




		
	 	     (iv) shall be treated as provided under a combination of
clauses (i) through (iii), or shall be so treated only if not
adequately assumed (or substituted for) by a surviving or
successor person or entity in the transactions or events that give
rise to the Change in Control.



For purposes of this Section 14(b), (A) the occurrence of any of the foregoing
clauses (i), (ii), (iii) or (iv) shall not constitute an impairment of the
rights of any Optionee and (B) the “Administrator” shall be the Administrator
as constituted before the Change in Control occurs.


     15.     Amendments; Termination. The Board may at any time amend, alter,
suspend, discontinue or terminate this Plan, but no such action shall impair
the rights of any Grantee under any then-outstanding Award without his or her
prior written consent.


     16.     Securities Regulation Requirements.


     (a)  Compliance with Rule. In general, Shares shall not be issued pursuant
to the exercise of an Option or pursuant to any other Award unless the exercise
of the Option or other Award


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and issuance of the Shares comply with all
relevant provisions of law, including, without limitation, any applicable state
securities laws, the Securities Act of 1933, as amended, the Exchange Act, the
rules and regulations promulgated thereunder, the requirements of any stock
exchange or national market system upon which the Shares may then be listed,
and the requirements of any regulatory body having jurisdiction.


     (b)  Optionee Investment Representation. As a condition to the exercise of
an Option, the Company may require the person exercising the Option to
represent and warrant that the Shares are being purchased only for investment
and without any present intention to sell or distribute the Shares if, in the
opinion of counsel for the Company, such a representation is required by law.


     17.     Written Agreements. Awards shall be evidenced by written agreements
in a form the Administrator approves from time to time. The written agreement
shall designate an Option as either an Incentive Stock Option or a Nonstatutory
Stock Option. Delay in executing a written agreement shall not affect the date
of grant of an Option; however, an Option may not be exercised until a written
agreement has been executed by the Company and the Optionee.


     18.     Shareholder Approval. This Plan is subject to approval by the
shareholders of the Company within 12 months after the Board initially adopts
this Plan. Shareholder approval shall be obtained in the degree and manner
required under applicable state and federal law and the rules of any stock
exchange or national market system upon which the Common Stock is listed.


     19.     No Employment Rights. This Plan does not confer upon any Grantee any
right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with the Company’s right to
terminate his or her employment or consulting relationship at any time, with or
without cause.


     20.     Term of Plan. This Plan shall become effective upon the earlier to
occur of the initial adoption by the Board or initial approval by the
shareholders of the Company, as described in Section 18. It shall continue in
effect until terminated by the Board pursuant to Section 15, except that no
ISOs shall be granted on or after the 10th anniversary of the later of (a) the
date when the Board adopted the Plan or (b) the date when the Board adopted the
most recent increase in the number of Shares available under Section 3 that was
approved by the shareholders of the Company.


     21.     Glossary. The following definitions apply for purposes of this Plan:


     (a)  “Administrator” means the Board or a committee appointed by the Board
under Section 4.


     (b)  “Award” means any stock option, stock appreciation right, stock award,
stock units award, performance award, or other stock-based award granted under
the Plan.


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


     (d)  “Change in Control” means a change in ownership or control of the
Company by any of:


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	 	     (i) a merger or consolidation in which the holders of stock
possessing a majority of the voting power in the surviving entity
(or a parent of the surviving entity) did not own a majority of
the Common Stock immediately before the transaction;




		
	 	     (ii) the sale of all or substantially all of the Company’s
assets to any other person or entity (other than a Subsidiary);




		
	 	     (iii) the liquidation or dissolution of the Company;




		
	 	     (iv) the direct or indirect acquisition by any person or
related group of persons of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than 50% of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange
offer made directly to the Company’s shareholders that the Board
does not recommend that the shareholders accept, or




		
	 	     (v) a change in composition of the Board over a period of 36
consecutive months such that a majority of the Board ceases, by
reason of one or more contested elections for Board membership, to
be composed of individuals who either (A) have been Board members
continuously since the beginning of that period or (B) have been
elected or nominated for election as Board members during that
period by at least a majority of the Board members described in
clause (A) who were in office when the Board approved the election
or nomination.



     (e)  “Code” means the Internal Revenue Code of 1986, as amended.


     (f)  “Committee” means the committee designated by the Board of Directors,
which is authorized to administer the Plan, as described in Section 4 hereof.


     (g)  “Common Stock” means the common stock of the Company.


     (h)  “Company” means Marvell Technology Group Ltd., a Bermuda corporation.


     (i)  “Consultant” means any person, other than an Employee, who is engaged
by the Company or any Parent or Subsidiary to perform consulting or advisory
services.


     (j)  “Continuous Service” means that an Optionee’s employment and/or
consulting relationship with the Company or a Parent or Subsidiary or service
as an Outside Director is not interrupted or terminated. Continuous Service is
not interrupted by (i) any leave of absence approved by the Company, (ii)
transfers between locations of the Company or between the
Company, a Parent, a Subsidiary, or any successor, or (iii) changes in
status from Employee to Consultant or Outside Director or from Consultant or
Outside Director to Employee


     (k)  “Outside Director” means a member of the Board who is not a common law
employee of the Company or a Parent or Subsidiary.


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     (l)  “Employee” means any person employed by the Company or any Parent or
Subsidiary of the Company.


     (m)  “Exchange Act” means the Securities Exchange Act of 1934, as amended.


     (n)  “Fair Market Value” means, as of any date, the value of common Stock
determined as follows:



		
	 	     (i) If the Common Stock is quoted on an established stock
exchange or national market system, including without limitation
the National Association of Securities Dealers, Inc. Automated
Quotation (“NASDAQ”) National Market System, Fair Market Value
shall be the closing sales price (or the closing bid, if no sales
are reported) as quoted on that exchange or system for the day of
the determination, as reported in The Wall Street Journal or an
equivalent source, or if the determination date is not a trading
day, then on the most recent preceding trading day;




		
	 	     (ii) If the Common Stock is quoted on NASDAQ (but not on the
National Market System) or regularly quoted by a recognized
securities dealer but selling prices are not reported, Fair Market
Value shall be the mean between the high bid and low asked prices
for the Common Stock on the day of the determination, or on the
most recent preceding trading day if the determination date is not
a trading day; or




		
	 	     (iii) In the absence of an established market for the Common
Stock, Fair Market Value shall be determined by the Administrator.



     (o)  “Grant Agreement” means a written document memorializing the terms and
conditions of an Award granted pursuant to the Plan and shall incorporate the
terms of the Plan.


     (p)  “Grantee” means the Employee, Consultant or Outside Director who
receives an Award.


     (q)  “Incentive Stock Option” or “ISO” means an Option intended to qualify
as an “incentive stock option” within the meaning of, and to the extent
otherwise permitted by, Section 422 of the Code.


     (r)  “Nonstatutory Stock Option” or “NSO” means an Option not intended to
qualify as an ISO.


     (s)  “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.


     (t)  “Option” means a stock option granted pursuant to this Plan.


     (u)  “Optioned Stock” means the Common Stock subject to an Option.


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     (v)  “Optionee” means the Employee, Consultant or Outside Director who
receives an Option and includes any person who owns all or any part of an
Option, or who is entitled to exercise an Option, after the death or disability
of an Optionee.


     (w)  “Parent” means a “parent corporation,” present or future, as defined
in Section 424(e) of the Code.


     (x)  “Plan” means this Amended and Restated 1995 Marvell Technology Group
Ltd. Stock Option Plan.


     (y)  “Share” means a share of the Common Stock, as adjusted in accordance
with Section 14(a).


     (z)  “Subsidiary” means a “subsidiary corporation,” present or future, as
defined in Section 424(f) of the Code.


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APPENDIX TO THE AMENDED AND

RESTATED 1995 STOCK OPTION PLAN

Of MARVELL TECHNOLOGY GROUP LTD.

IN RESPECT OF ISRAELI EMPLOYEES




	1.	 	Purpose
	 
	 	 	The purpose of this appendix is to modify, to the extent set forth
herein, the Amended and Restated 1995 Marvell Technology Group Ltd. Stock
Option Plan (the “Plan”) in respect of the Israeli employees of Marvell
Technology Group Ltd. and its affiliates and subsidiaries who are
eligible to participate in the Plan in accordance with its terms, in
order to reflect the specific requirements of the Israeli law.
	 
	2.	 	Defined Terms




	 	(a)	 	Capitalized terms used but not defined herein shall have the
meanings provided in Section 21 of the Plan.
	 
	 	(b)	 	In addition, in this Appendix, the following terms shall have
the meanings set forth beside them:




	 	 	 
	“102 Provisions”	 	
The provisions of section 102 of the Ordinance and
of the Income Tax Rules (Tax Relief in Allocating
Shares to Employees), 5749-1989, as they shall
apply from time to time on shares and options
issued hereunder, including the Special Conditions;
	 	 	 
	“Effective Date”	 	
The latest of the date the Options were issued or
the date of the Income Tax Commissioner approval
that the Plan satisfies the Special Conditions;
	 	 	 
	“Employer”	 	
The Company, any of its Subsidiaries or its Parent
employing Israeli Employees;
	 	 	 
	“Israeli Employees”	 	
Employees subject to taxation in Israel;
	 	 	 
	“Trustee”	 	
Galileo Technology Ltd., or in the alternate, the
Trust Company of Investek Bank, or any other
trustee who shall replace same by the Board for the
purposes of this Plan;
	 	 	 
	“Ordinance”	 	
The Income Tax Ordinance (New Version), 5721-1961;
	 	 	 
	“Special Conditions”	 	
Special conditions set by the Israeli Income Tax
Commissioner in connection with the issuance of the
Options hereunder, by the power vested in him/her
under section 102 of the Ordinance, if



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and to the extent the Commissioner shall so set;
	 	 	 
	“Tax Lockup Period”	 	
Two years following the Effective Date or such
other period of time in accordance with the 102
Provisions, as they shall be amended from time to
time.




	 	(c)	 	The Israeli Employees shall be entitled to exercise their
options in accordance with the terms of the Plan, subject to the
terms of this Appendix. In the event of any contradiction between
any term of this Appendix and any term of the Plan, the provisions
of this Appendix shall override with respect to the Israeli
Employees, in respect of whom this Appendix shall constitute an
integral part of the Plan and references to the Plan in respect of
the Israeli Employees shall be interpreted accordingly.




	3.	 	Special Conditions




	 	(a)	 	The Company shall apply to the Income Tax Commissioner to
approve the Trustee and the Plan under the 102 Provisions. Subject
to the approval of this Plan by the Israeli Income Tax Commissioner,
the Special Conditions shall apply to the plan and to this Appendix.
	 
	 	(b)	 	The Administrator shall exercise its discretion under the
Plan in accordance with the terms of this Appendix.




	4.	 	Eligibility
	 
	 	 	Options shall not be granted to any Israeli Employee who is, or on giving
effect to such grant, will become, the holder of a controlling interest
(‘baal shlita’) in the Company, as defined in section 32(9) of the
Ordinance.
	 
	5.	 	Trust




	 	(a)	 	The Options and the Shares shall be issued directly in the
name of the Trustee and shall be held in escrow by the Trustee for
the Israeli Employees’ benefit, for no less then the Tax Lockup
Period, all according to the terms of this Appendix.
	 
	 	(b)	 	In the event that bonus shares shall be issued on account of
the Shares, such bonus shares shall be issued by the Company to the
Trustee. The 102 Provisions shall apply to such bonus shares for all
purposes.
	 
	 	(c)	 	The Trustee shall be entitled to set additional exercise
procedures to those described in the Plan, as the Trustee shall see
fit, provided that the Trustee has given the Company prior written
notice of any such procedures.



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	6.	 	Taxes




	 	(a)	 	The Israeli Employees shall be taxed in respect of the
Options in accordance with the provisions of the Ordinance,
including the 102 Provisions. The Israeli Employee will not be
entitled to the exemption from tax contained in sections 95 or 97(a)
of the Ordinance.
	 
	 	(b)	 	Without derogating from section 9(g) of the Plan, any tax
imposed in respect of the Options and/or the Shares and/or the sale
and/or the transfer of the Options and/or the Shares shall be borne
solely by the Israeli Employee, and in the event of the death of the
Israeli Employee, by the Israeli Employee’s heirs or successors. The
Employer, shall not bear the aforementioned taxes, directly or
indirectly, nor shall the Employer be required to gross such tax up
in the Israeli Employee’s salaries or remuneration. The imposed tax
shall be paid by the Israeli Employee or deducted, on the date such
tax is payable, from the sale consideration paid to the Trustee by
the Israeli Employee, as applicable.
	 
	 	(c)	 	At the end of the Tax Lockup Period, the Israeli Employee (or
the Israeli Employee’s heirs or successors) shall be entitled at any
time to instruct the Trustee to transfer the Options or the Shares
to which such Israeli Employee is entitled to the Israeli Employee
or its nominees, or, if appropriate, to sell the Shares and pay the
consideration received to the Israeli Employee.
	 
	 	 	 	Subject to the 102 Provisions, the Trustee shall not transfer
the Options and/or the Shares to the Israeli Employee’s name, and
shall not transfer the consideration received from the sale of the
Shares to the Israeli Employee, unless one of the following
conditions shall be fulfilled:




	 	(i)	 	The Israeli Employee has provided the Trustee
with certification from the assessing officer that the tax has
been paid; or
	 
	 	(ii)	 	The Israeli Employee has paid the Trustee an
amount equal to 30% of the ‘consideration’, as defined in
section 102 of the Ordinance (the “Taxable Consideration”) for
such sale, and the Trustee has reviewed the manner of
calculating the payable amount and is fully satisfied that the
calculation was performed lawfully; or
	 
	 	(iii)	 	The Trustee has deducted an amount equal to 30%
of the Taxable Consideration from the consideration received
from the sale of the Shares.




	 	(d)	 	The effects of any future amendment to the tax arrangements
which apply to the issuance of securities to the Israeli Employees,
shall apply to the Israeli Employees in accordance with such
provisions of law, and the Israeli Employees shall bear the full
cost thereof, unless the modified arrangement expressly provides
otherwise.



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	 	(e)	 	Each Israeli Employee shall indemnify the Employer and/or the
Trustee, immediately upon receipt of notice from the Employer and/or
the Trustee, for any amount (including interest and/or fines of any
type and/or linkage differentials in respect of tax and/or withheld
tax) payable by such Israeli Employee under law (including under the
102 Provisions), and which has been paid by the Employer or the
Trustee or which the Employer or the Trustee are required to pay by
the tax authorities.
	 
	 	(f)	 	Should the Israeli Amendment of Tax Law Bill 2000 (or any
other substantially similar draft legislation) (the “New Law”) enter
into effect, the Board shall be entitled, at its absolute
discretion, to order the Trustee to make an application to the
Israeli Tax Commission in order to request that the provisions set
out in the New Law, which replace the 102 Provisions, shall apply to
the Israeli Employees, regarding either existing or future
allotments, as shall be determined in the New Law.




	7.	 	Miscellaneous




	 	(a)	 	The Israeli Employees shall sign any document required by the
Trustee or the Income Tax Commission to give effect to the
provisions of this Appendix.
	 
	 	(b)	 	Without derogating section 19 of the Plan, it is hereby
acknowledged that the Options and/or the Exercise Shares are
extraordinary, one-off benefits granted to the Offerees, and are not
and shall not be deemed a salary component for any purpose
whatsoever, including in connection with calculating severance
compensation under the Severance Pay Law, 5723-1963 and the
regulations promulgated thereunder.
	 
	 	(c)	 	The grant of Options to each Israeli Employee shall be made
in consideration of a waiver on the part of such Israeli Employee of
a portion of the Israeli Employee’s salary in the amount of NIS 1.
	 
	 	(d)	 	In the event of a change in control of the Company is
proposed during the Tax Lock Up Period, the consummation which will
cause the breach of the terms of the 102 Provisions, the Company
will use its best efforts to apply to the Israeli Tax Authorities to
obtain a pre-ruling to regulate the tax treatment applicable to the
Options in the context of the proposed transaction.
	 
	 	(e)	 	Except as expressly provided in this Appendix, the provisions
of this Appendix do not supercede any provisions of the Plan, and
the provisions of the Plan shall govern all Options granted to
Israeli Employees.




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