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                                                                    EXHIBIT 10.1



                         MARVELL TECHNOLOGY GROUP LTD.

                              AMENDED AND RESTATED

                             1995 STOCK OPTION PLAN

        1. Purpose. This Plan is intended to attract and retain the best
available individuals as Employees and Consultants of the Company and its
Subsidiaries, to provide additional incentives to those Employees and
Consultants, 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 22 ("Glossary").


        3. Shares Reserved. Subject to Section 14, a maximum aggregate of
29,500,000 Shares may be issued under this Plan; provided however, that
beginning the first business day of each fiscal year starting January 30, 2000
or after, there shall be added to this Plan the lesser of an additional (i)
5,000,000 shares of Common Stock, (ii) 5.0% of the outstanding shares of capital
stock on such date, or (iii) an amount determined by the Board. The Shares may
be authorized, but unissued, or reacquired Common Stock. If an Option expires or
becomes unexercisable for any reason, any unpurchased Optioned Stock 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) After Exchange Act Applies. After the Company becomes subject to the
Exchange Act, the Board may provide for administration of this Plan with respect
to Employees who are also officers or directors of the Company by a Committee
constituted so as to permit this Plan to comply as a discretionary plan with
Rule 16b-3 promulgated under the Exchange Act or any successor thereto. 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.

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

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

               (ii) to grant Options to such Consultants and Employees as it
        selects;

               (iii) to determine the terms and conditions of each Option
        granted, including without limitation the number of Shares of Optioned
        Stock, the exercise price per share, 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 13;

               (vi) to modify grants of Options 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
        Options 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
Optionees and any other holders of any Options, and no member of the
Administrator shall be liable for any such determination, decision, or
interpretation made in good faith.

        5.  Eligibility.

        (a) NSOs/ISOs. Nonstatutory Stock Options may be granted to Employees
and Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.

        (b)  Limitations.

               (i) If the Company or a successor issues any class of equity
        securities required to be registered under Section 12 of the Exchange
        Act or if this Plan is assumed by a corporation that has a class of such
        securities, the following limitations shall apply to grants of Options
        to Employees:



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               (ii) No Employee shall be granted, in any fiscal year of the
        Company, Options to purchase more than 1,000,000 Shares, adjusted
        proportionately in connection with any change in the Company's
        capitalization as described in Section 14. If an Option 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 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. 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:

           (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 the Fair Market Value on the date of
           grant; or



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           (B) granted to any other Employee, the per-Share exercise price shall
           be at least 85% of 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, (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.

        9.  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



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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 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,
Options 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. Lockup Agreement. Grant and exercise of each Option are subject to
the Optionee's agreement, upon the request of (and in form and substance
satisfactory to) the Company or the underwriters managing an initial firmly
underwritten public offering of the Company's securities, not to sell, make any
short sale of, loan, grant any option for the purchase of, or otherwise dispose
of any Shares or any derivative security (unless included in the registration of
Shares offered) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of the registration as the Company or underwriters
may specify.

        13. 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.

        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 and the
number of Shares that have been authorized for issuance under this Plan but as
to which no Options have then been granted or that have been returned to this
Plan upon cancellation or expiration of an Option, as well as the price per
share of Optioned Stock, shall be proportionately adjusted



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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 Option the effect that a
Change in Control shall have upon the Option; provided however, that a Change in
Control shall not have the effect of impairing the rights of any Optionee under
any then-outstanding Option 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), (x) 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 (y) the "Administrator" shall be the Administrator as
constituted before the Change in Control occurs.

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



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        16.  Securities Regulation Requirements.

        (a) Compliance with Rule; Buy-out Offer. In general, Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of the Option
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 upon which the
Shares may then be listed, and the requirements of any regulatory body having
jurisdiction. When the Company receives notice of exercise of an Option, if the
Administrator believes in its discretion that the period before Shares may be
issued will exceed 21 days, the Administrator shall (unless it determines that
such an offer is itself prevented by the rules described in the preceding
sentence) make an offer pursuant to Section 13 to buy out the portion of the
Option corresponding to the number of Shares whose issuance is thus prevented.
The buy-out offer shall be valid for at least 21 days.

        (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 Option Agreements. Options shall be evidenced by written
agreements in a form the Administrator approves from time to time. The written
agreement shall designate the 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 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 upon which
the Common Stock is listed.

        19. Information to Optionees. The Company shall provide to each Optionee
copies of financial statements at least annually, at the same time and in the
same form as it furnishes such information to its shareholders. The Company
shall not be required to provide such statements to key employees whose duties
assure their access to equivalent information.

        20. No Employment Rights. This Plan does not confer upon any Optionee
any right with respect to continuation of employment or consulting relationship
with the



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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.

        21. Term of Plan. This Plan shall become effective upon the earlier to
occur of adoption by the Board or approval by the shareholders of the Company,
as described in Section 18. It shall continue in effect for a term of ten years
unless sooner terminated under Section 15.

        22. 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)  "Board" means the Board of Directors of the Company.

        (c) "Change in Control" means a change in ownership or control of the
Company by any of:

               (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.



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        (d) "Code" means the Internal Revenue Code of 1986, as amended.

        (e) "Common Stock" means the Common Stock of the Company.

        (f) "Company" means Marvell Technology Group Ltd., a Bermuda
corporation.

        (g) "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.

         (h) "Continuous Service" means that an Optionee's employment and/or
consulting relationship with the Company or a Parent or Subsidiary 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 Consultant to Employee.

        (i) "Employee" means any person employed by the Company or any Parent or
Subsidiary of the Company.

        (j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

        (k) "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.



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        (l) "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.

        (m) "Nonstatutory Stock Option" or "NSO" means an Option not intended to
qualify as an ISO.

        (n) "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.

        (o) "Option" means a stock option granted pursuant to this Plan.

        (p) "Optioned Stock" means the Common Stock subject to an Option.

        (q) "Optionee" means the Employee or Consultant 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.

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

        (s) "Plan" means this Amended and Restated 1995 Marvell Technology Group
Ltd. Stock Option Plan.

        (t) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 14(a).

        (u) "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 the 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)   Capitalised terms used but not defined herein shall have the meanings
         provided in Section 22 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


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                               vested in him/her under section 102 of the
                               Ordinance, if 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 20 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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