Document:

Exhibit 10.7

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of September 1,
2001 to September 1, 2003, plus one year extended to September 1, 2004 is
entered into by and between GLOBAL PAYMENT TECHNOLOGIES INC., a Delaware
corporation, with executive offices at 425B Oser Avenue, Hauppauge, New York,
11788 (the "Company"), and STEPHEN KATZ, residing at 125 Dolphin Drive, Hewlett
Neck, New York, 11557 (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Company has determined that it desires to continue the
employment of the Executive as Chief Executive Officer and Chairman of the Board
of the Company; and

     WHEREAS, the Company and the Executive desire to enter into an agreement
relating to such employment;

     NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

     1. EMPLOYMENT

     1.1 The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to accept employment with the Company, upon the terms and
conditions herein contained, as the Company's Chief Executive Officer and
Chairman of the Board of Directors of the Company (the "Board of Directors"). In
such capacity, the Executive shall be the highest ranking officer of the Company
and Chairman of the Board of Directors and shall have full authority and
responsibility for formulating the plans and policies of the Company and for
administering the same and shall have the duties and responsibilities normally
inherent in such capacity in public corporations of similar size and character.
The Executive shall also serve, if elected or appointed, as a member of any
committee of the Board of Directors, its subsidiaries or affiliates.

     1.2 The term of employment under this Agreement shall commence on September
1, 2001 and, subject to the terms hereof, shall terminate two years thereafter;
provided, however, that the term of this Agreement shall automatically be
extended for an additional one-year term beyond the initial two-year term unless
and until either the Company or the Executive provides 90 days' advance written
notice to the other of its or his desire to terminate this Agreement as of the
end of the then current fiscal year of the Company (such term of employment
(including any extensions thereto) is referred to hereinafter as the "Employment
Term"). It is the intent of the parties to negotiate an extension of this
Agreement commencing on or about 18 months after the effective date hereof.

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     1.3 Throughout the Employment Term, the Executive shall devote such efforts
to the business and affairs of the Company as the Executive shall believe
necessary to fulfill his obligations hereunder. In this connection, the Company
recognizes that the Executive has other interests, business and otherwise, and
that nothing contained herein shall prohibit the Executive from engaging in
other business endeavors and from spending time and attention with respect
thereto, whether business, charitable, philanthropic, or otherwise. The Company
understands that the Executive is the Chief Executive Officer and a member of
the Board of Directors of Cellular Technical Services Company, Inc. ("CTS"), a
publicly traded company, and that the Executive spends time and attention with
respect to the business of CTS. In the event that such involvement by the
Executive requires the Executive (as determined by the Board of Directors) to
devote less than the required time to carry out his responsibilities to the
Company, then the Board of Directors, upon 30 day's advance written notice, may
propose an adjustment to the compensation of the Executive provided hereunder to
reflect such circumstances. But in no event shall such adjustment be more than
20% of the Executives then current base salary (for the balance of the term of
the Agreement.) unless the employee is discharged pursuant to paragraph 8 of
this contract. Such adjustment, if any, shall become final and binding if the
Executive does not dispute it within 30 days. If, within 30 days of the Board of
Director's determination the Executive disputes such adjustment, then a third
party mutually agreeable and knowledgeable in the area of executive compensation
will determine the adjustment, if any, which determination shall be final and
binding on the parties for the balance of the term of this employment contract.

     1.4 The duties and services to be performed by the Executive hereunder
shall be rendered at the Company's current headquarters in Hauppauge or Valley
Stream or any new headquarters (provided that any new headquarters are located
within a radius of 25 miles of either office), except for reasonable travel on
the Company's business incident to the performance of the Executive's duties.
The Executive shall not be required to perform any duties or services that
require him to relocate his current principal residence.

     2. SALARY

     During the Employment Term, the Executive shall be entitled to receive a
base salary at a rate of $175,000 per annum payable in accordance with the
Company's regular payroll practice for senior executives of the Company and may
be increased to a maximum of $225,000 should certain goals, as determined by the
Board of Directors be attained.

     3. ANNUAL BONUSES

     During the Employment Term, for each fiscal year of the Company (October 1
through September 30), the Executive shall be eligible to receive a bonus in an
amount to be determined by the Board of Directors of the Company, in its sole
discretion.

                                       -2-
<PAGE>

     4. ADDITIONAL COMPENSATION

     4.1 Each year the Executive will be eligible to receive stock options made
available to other officers in an amount determined by the Board of Directors.

     5. TERMINATION WITHOUT CAUSE OR GOOD REASON

     5.1 If the Executive's employment is terminated by the Company other than
for "Cause" (as hereinafter defined) or the Executive terminates his employment
for "Good Reason" (as hereinafter defined) prior to the end of the Employment
Term, the Executive shall receive his base salary and all other payments and
benefits hereunder as if such employment had not been terminated.

     5.2 Upon termination of employment pursuant to Section 5.1, the Executive
shall be entitled to continued participation for the remainder of the Employment
Term in the medical reimbursement plans of the Company available generally to
senior executives, provided that if the Executive is eligible for similar
coverage under another employer's plan, any such coverage by the Company shall
cease.

     6. PERMANENT DISABILITY OR DEATH

     6.1 If, prior to the end of the Employment Term, the Executive shall suffer
a "Permanent Disability" (as hereinafter defined), the Company may terminate the
Employment Term by notice in the manner described below. If so terminated, the
Executive shall receive a bonus for the fiscal year in which his Permanent
Disability occurred equal to the pro rata portion of the bonus determined by the
Board of Directors pursuant to Section 3 hereof based on the Executive's efforts
from the beginning of that fiscal year to the date on which the Permanent
Disability occurred. Such bonus shall be paid in a lump sum as soon as possible
following the determination of said bonus, but in no event later than December
31 following the end of such fiscal year. In addition, the Executive shall
receive any portion of the bonus attributable to any completed fiscal year which
has accrued but has not yet been paid. In addition, the Executive shall continue
to receive compensation payable monthly equal to the Executive's then current
base salary until the end of the Employment Term; provided that the Company's
current group LTD policy (or its equivalent) remains in force, which the
Executive has acknowledged is acceptable to him, shall be used to offset the
Company's liability under this Section 6.1. The foregoing obligations may be
paid out monthly or in lump sum as determined by the Board of Directors in its
sole discretion. The amounts payable under this Section 6.1 shall be in lieu of
any amount to which the Executive is entitled under Sections 2 and 3 of this
Agreement. In the event the Company is successful in obtaining an individual
long-term disability insurance policy for the Executive, which insurance policy
is reasonably satisfactory to the Executive, then the amounts received under any
such insurance policy shall be in lieu of the Company's obligation to pay the
monthly amounts to the Executive described above.

                                       -3-
<PAGE>

     Any termination by the Company on account of the Executive's Permanent
Disability shall be communicated to the Executive by a Notice of Disability
Termination 30 days in advance of the proposed termination date. For purposes of
this Agreement, a "Notice of Disability Termination" shall mean a written notice
which sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under this Section
6.1. For purposes of this Agreement, no such purported termination by the
Company shall be effective without such Notice of Disability Termination.

     For purposes of this Agreement, the Executive shall be deemed to have
suffered a "Permanent Disability" if the Executive, by reason of physical or
mental illness, shall have been unable to perform satisfactorily the services to
be rendered by him hereunder for a consecutive period of 180 days. Such
determination shall be made by the Board of Directors upon the advice of a
qualified physician appointed by the Board of Directors. The Executive (or, if
applicable, the person or persons legally empowered to make such decisions on
behalf of the Executive) shall have the opportunity to select a qualified
physician of his own choice and if such physician does not support the
conclusions of the physician appointed by the Board of Directors, then a third
qualified physician, mutually agreed upon by the Board of Directors and the
Executive, shall be appointed and such third physician's determination shall be
final and binding on both parties.

     6.2 If, prior to the expiration of the Employment Term, the Executive shall
die, the Executive's estate, designated beneficiaries or legal representative
shall receive a bonus for the fiscal year in which his death occurred equal to
the pro rata portion of the bonus determined by the Board of Directors pursuant
to Section 3 hereof based on the Executive's efforts from the beginning of that
fiscal year to the date on which death occurred. Such bonus shall be paid in a
lump sum as soon as possible following the determination of said bonus, but in
no event later than December 31 following the end of such fiscal year. The
preceding two sentences shall have no application or effect on the Executive's
right to receive any portion of the bonus attributable to any prior fiscal year
which has accrued but has not yet been paid. In addition, the Executive's
estate, designated beneficiaries or legal representative shall continue to
receive compensation payable monthly equal to the Executive's base salary at the
time of his death until the end of the Employment Term; provided, however, that
the foregoing payments shall not become payable if the Executive's estate,
designated beneficiaries or legal representative receives no less than $500,000
from the life insurance the Company will make its reasonable efforts to obtain
under this Agreement. The amounts payable under this Section 6.2 shall be in
lieu of any amounts to which the Executive is entitled under Sections 2 and 3 of
this Agreement.

     6.3 The Company shall have the right to fund all of the foregoing
obligations with insurance as it shall determine and the Executive shall fully
cooperate with respect thereto.

                                      -4-
<PAGE>

     7. TERMINATION FOR GOOD REASON

     The Executive may terminate his employment hereunder for Good Reason at any
time during the Employment Term, in which event the Executive shall be deemed to
have to resigned from all of his positions with the Company. For purposes of
this Agreement "Good Reason" shall mean any of the following (without the
Executive's express prior written consent):

     (1) The assignment to the Executive by the Company of duties inconsistent
with the Executive's position as Chief Executive Officer and Chairman of the
Board of Directors or any reduction in his duties or responsibilities, or any
removal of the Executive from any of his positions as Chief Executive Officer
and Chairman of the Board of Directors, or any failure to continue the Executive
as a member of the Board of Directors, or any amendment to the By-Laws of the
Company as in effect at the commencement of the Employment Term materially and
adversely affecting the Executive's position, responsibilities and duties as
Chief Executive Officer and Chairman of the Board, except in connection with the
termination of the Executive's employment for Cause, Permanent Disability or as
a result of the Executive's death or termination by the Executive other than for
Good Reason;

     (2) A reduction by the Company in the Executive's base salary as in effect
at the commencement of the Employment Term or as the same may be increased from
time to time during the Employment Term;

     (3) (i) A relocation of the Company's principal executive offices to a
location outside of a radius of 25 miles from Valley Stream, New York, unless
such relocation is required by the Company in order to carry out the operations
of the Company as determined by the Board of Directors; (ii) the Company's
requiring the Executive to be based anywhere other than a location within such
radius, except for reasonable travel on the Company's business incident to the
performance of the Executive's duties.

     (4) The taking of any action by the Company which would deprive the
Executive of any material fringe benefit enjoyed by the Executive at the
commencement of the Employment Term after the Executive has provided the Company
written notice of his objection and such action has not been rescinded in a
reasonable period of time;

     (5) Any material breach by the Company of any provision of this Agreement
after the Executive has provided the Company written notice of the breach and
such breach has not been cured in a reasonable period of time; or

     (6) Any order by the Company to the Executive, including pressure of
sufficient force to have the effect of an order, requiring the Executive to
perform any act which the Executive reasonably believes and would in fact
constitute a civil or criminal violation of any law, regulation, court decision,
administrative decision, or other pronouncement having the force

                                      -5-
<PAGE>

of law, but not a mere suggestion of the Company that the Executive consider a
course of action considered illegal by the Executive and after the Executive has
advised the Company of his belief and the Company nonetheless requires the
Executive to perform such act or course of conduct.

     8. DISCHARGE FOR CAUSE

     8.1 If the Company terminates the employment of the Executive for Cause,
its obligations under this Agreement to make any further payments to the
Executive shall thereupon cease and terminate, except for any obligations
accrued but which remain unpaid.

     8.2 As used herein, the term "Cause" shall mean (a) any act or failure to
act which constitutes a breach of the Executive's fiduciary duty to the Company;
(b) any act of willful malfeasance by the Executive having a material adverse
effect on the Company; or (c) any failure to act by the Executive involving
willful malfeasance having a material adverse effect on the Company; provided
that (b) and (c) shall be inapplicable if the Executive reasonably believed his
conduct to be consistent with the best interests of the Company or if his
conduct occurred under circumstances entitling the Executive to indemnification
under the Certificate of Incorporation, the Company's By-Laws, or applicable
law.

     8.3 Termination of the Executive for Cause pursuant to this Section 8 shall
be communicated by a Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean delivery to the Executive of a copy of a
resolution duly adopted by the affirmative vote of not less than three quarters
(3/4) of the entire membership of the Board of Directors (excluding the
Executive) at a meeting of the Board of Directors called and held for the
purpose (after reasonable notice to the Executive and reasonable opportunity for
the Executive, together with the Executive's counsel, to be heard before the
Board of Directors prior to such vote), finding that in the good faith opinion
of the Board of Directors, the Executive was guilty of conduct set forth in
Section 8.2 above and specifying the particulars thereof in reasonable detail.
For purposes of this Agreement, no such purported termination of Executive's
employment shall be effective without such Notice of Termination.

     9. EXPENSES

     The Executive is authorized to incur reasonable expenses for promoting the
business of the Company, including expenses for travel and similar items. The
Company will reimburse the Executive for all of the above expenses upon
presentation by the Executive from time to time of an itemized account of such
expenditures in accordance with the Company's reasonable procedures as in effect
from time to time.

                                      -6-
<PAGE>

     10. EMPLOYEE BENEFITS

     10.1 The Executive shall be provided, to the extent eligible, with all
benefits coverage afforded by the Company to its senior executives, including,
without limitation, life insurance (in an amount of not less than $500,000),
health and hospitalization insurance, individual long-term disability insurance,
travel insurance and vacations.

     10.2 In all events, and notwithstanding any termination of this Agreement
for any reason other than Cause, the Company shall, for a six-month period
commencing on the date of termination of this Agreement, pay all premiums of a
life insurance policy (in an amount of not less than $500,000) on the life of
the Executive with the beneficiaries to be designated by the Executive. At the
end of the aforementioned six-month period, the Executive shall have the right
to purchase the insurance policy or policies of his life owned by the Company by
agreeing to pay and paying all future premiums due under such policy or
policies.

     10.3 The Executive shall be included in all pension, profit sharing,
incentive or other similar or comparable plans, programs and arrangements
applicable generally to senior executives of the Company in accordance with the
terms thereof and shall be provided with the benefits provided by the Company
under such plans, programs and arrangements as allowed by law.

     10.4 The Executive shall be provided with the full-time use of an
automobile and shall be reimbursed by the Company for all expenses related to
such automobile.

     11. RESTRICTIVE COVENANTS

     11.1 Similar Business. During the Employment Term and during the one-year
period thereafter, the Executive will not directly or indirectly own, manage, be
employed by, engage in, carry on, or be connected in any like manner with any
other business similar to the type of business conducted by the Company within
100 miles of any office or job site of the Company within its trade territory,
or engage in any other conduct which would interfere with or disrupt the
operations of the Company.

     11.2 Customers. The Executive will not at any time, either directly or
indirectly, make known or divulge to any person, firm or corporation the names
or addresses of any of the customers of the Company at the time the Executive
entered the employ of the Company or with whom the Executive became acquainted
after entering the employ of the Company. Furthermore, the Executive will not,
during the period of one year immediately after termination of employment,
directly or indirectly, either for himself or for any other person, firm, or
corporation, call upon, solicit, divert, or take away or attempt to solicit,
divert or take away any of the customers or patrons of the Company upon whom the
Executive called, whom he solicited, to whom he catered, or with whom he became
acquainted during his employment with the Company.

                                      -7-
<PAGE>

     11.3 Employees. The Executive will not, during the one-year period
immediately after termination of employment, directly or indirectly, either for
himself or for any other person, firm, or corporation, approach any employee of
the Company holding the position of Vice President or higher, as a prospective
employee of the Executive, nor shall the Executive within the same period accept
an employment application or grant a job interview to any such employee of the
Company.

     11.4 Information. The Executive will not at any time, in any fashion, form,
or manner, either directly or indirectly, divulge, disclose, or communicate to
any person, firm, or corporation in any manner whatsoever any information of any
kind, nature, or description concerning any matters affecting or relating to the
business of the Company, including, without limitation, the names of any of its
customers, the prices it obtains or has obtained or at which it sells or has
sold its products, or any other information concerning the business of the
Company, its manner of operation, or its plans, processes, or other data of any
kind, nature, or description, without regard to whether any or all of the
foregoing matters would be deemed confidential, material, or important.

     11.5 Records. All books, records, reports, accounts, and documents relating
in any manner to the Company's business or customers, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of employment or at the Company's request at any time.

     11.6 Breach. The parties hereby stipulate that, as between them, each of
the foregoing matters are important, material, and confidential, and gravely
affect the effective and successful conduct of the business of the Company, and
its goodwill, and that any breach of the terms of this Section 11 is a material
breach of this Agreement, from which the Executive may be enjoined and for which
the Executive shall also pay to the Company all damages (including, but not
limited to, compensatory, incidental, consequential and lost profits damages),
which arise from the breach, together with interest, costs and attorney's fees
to collect such damages. Any lawsuit for breach may be brought in Nassau County,
New York, which shall be a proper venue.

     11.7 Savings Clause. To the extent that any of the foregoing restrictive
covenants are inconsistent with New York law, as to either time or geography,
they shall be reformed and enforced in accordance with New York law in any
arbitration or legal proceedings arising hereunder. This Section 11 is severable
from all other sections in this Agreement, and all of the subsections herein
(11.1 through 11.7, inclusive) are severable from one another.

     12. ARBITRATION

     Any controversy or claim arising out of or relating to this Agreement shall
be settled by arbitration in accordance with the Rules of the American
Arbitration Association, one arbitrator, and shall be enforceable in any court
having competent jurisdiction.

                                      -8-
<PAGE>

     13. NOTICES

     All notices or communications hereunder shall be in writing, addressed as
follows:

     To the Company:

            Global Payment Technologies, Inc.
            425B Oser Avenue
            Hauppauge, New York  11778

     To the Executive:

            Stephen Katz
            125 Dolphin Drive
            Hewlett Neck, New York  11557

     All such notices or communications shall be sent certified or registered
mail, return receipt requested, postage prepaid, addressed as above (or to such
other address as such party may designate in writing from time to time), and the
actual date of receipt as shown by the receipt therefor, shall determine the
time at which notice was given.

     14. SEPARABILITY; LEGAL FEES

     If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect. The Company shall pay all legal fees and other fees and expenses which
the Executive may incur in entering into this Agreement, if executed (provided
the amount of such legal fees shall not exceed $25,000), or in obtaining, or
attempting to obtain (if ultimately successful), compensation or other benefits
under this Agreement.

     15. BINDING EFFECT; ASSIGNMENT

     This Agreement shall be binding upon and inure to the benefit of the heirs
and representatives of the Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive or by the Company. The
Company shall not assign this Agreement to any successor or assign of the
Company without the written consent of the Executive.

                                      -9-
<PAGE>

     16. GOVERNING LAW

     This Agreement shall be construed, interpreted, and governed in accordance
with the laws of the State of New York.

     17. ENTIRE AGREEMENT

     This Agreement represents the entire agreement of the parties and shall
supersede any and all previous contracts, arrangements or understandings between
the Company and the Executive with respect to the subject matter hereof. The
Agreement may be amended at any time by mutual written agreement of the parties
hereto.

                                            GLOBAL PAYMENT TECHNOLOGIES, INC.

                                            By
                                             -------------------------------
                                            Name:
                                            Title:

                                            --------------------------------
                                                      Stephen Katz

                                      -10-<PAGE>

                                                                     Exhibit 4.9

                         FLEXTRONICS INTERNATIONAL LTD.

                           2001 EQUITY INCENTIVE PLAN

                           As Adopted August 13, 2001

        1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent and
Subsidiaries, by offering them an opportunity to participate in the Company's
future performance through awards of Options. Capitalized terms not defined in
the text are defined in Section 20.

        2. SHARES SUBJECT TO THE PLAN.

                2.1 Number of Shares Available. Subject to Sections 2.2 and 15,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 7,000,000 Shares plus shares that are subject to
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option. In addition, any authorized
shares not issued or subject to outstanding grants under the Company's 1993
Share Option Plan (the "PRIOR PLAN") that are forfeited or that are issuable
upon exercise of options granted pursuant to the Prior Plan that expire or
become unexercisable for any reason without having been exercised in full, will
no longer be available for grant and issuance under the Prior Plan, but will be
available for grant and issuance under this Plan. At all times the Company shall
reserve and keep available a sufficient number of Shares as shall be required to
satisfy the requirements of all outstanding Options granted under this Plan.

                2.2 Adjustment of Shares. Should any change be made to the
Shares issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Shares as a class without the Company's receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities for which any Participant may be granted
Options over the term of the Plan, (iii) the number and/or class of securities
and price per Share in effect under each Option outstanding under Section 5 and
7, and (iv) the class of securities for which automatic Option grants are to be
subsequently made to newly elected or continuing Outside Directors under Section
7. Such adjustments to the outstanding Options are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under
such options, provided, however, that (i) fractions of a Share will not be
issued but will be replaced by a cash payment equal to the Fair Market Value of
such fraction of a Share, as determined by the Committee, and (ii) no such
adjustment shall be made if as a result, the Exercise Price would fall below the
par value of

<PAGE>

a Share and if such adjustment would but for this paragraph (ii) result in the
Exercise Price being less than the par value of a Share, the Exercise Price
payable shall be the par value of a Share. The adjustments determined by the
Committee shall be final, binding and conclusive. The repricing, replacement or
regranting of any previously granted Option, through cancellation or by lowering
the Exercise Price of such Option, shall be prohibited unless the shareholders
of the Company first approve such repricing, replacement or regranting.

        3. ELIGIBILITY. All Awards may be granted to employees, officers and
directors of the Company or any Parent or Subsidiary of the Company. No person
will be eligible to receive more than 4,000,000 Shares in any calendar year
under this Plan pursuant to the grant of Awards hereunder; provided, however,
that no Outside Director will be eligible to receive more than 50,000 Shares, in
the aggregate, in any calendar year under this Plan pursuant to the grant of
Awards hereunder. A person may be granted more than one Award under this Plan.

        4. ADMINISTRATION.

                4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Except for automatic grants
to Outside Directors pursuant to Section 7 hereof, and subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Except
for automatic grants to Outside Directors pursuant to Section 7 hereof, the
Committee will have the authority to:

                (a)     construe and interpret this Plan, any Award Agreement
                        and any other agreement or document executed pursuant to
                        this Plan;

                (b)     prescribe, amend and rescind rules and regulations
                        relating to this Plan or any Award;

                (c)     select persons to receive Awards;

                (d)     determine the form and terms of Awards;

                (e)     determine the number of Shares or other consideration
                        subject to Awards;

                (f)     determine whether Awards will be granted singly, in
                        combination with, in tandem with, in replacement of, or
                        as alternatives to, other Awards under this Plan or any
                        other incentive or compensation plan of the Company or
                        any Parent or Subsidiary of the Company;

                (g)     grant waivers of Plan or Award conditions;

                (h)     determine the vesting, exercisability and payment of
                        Awards;

                (i)     correct any defect, supply any omission or reconcile any
                        inconsistency in this Plan, any Award or any Award
                        Agreement;

                (j)     determine whether an Award has been earned; and

<PAGE>

                (k)     make all other determinations necessary or advisable for
                        the administration of this Plan.

                4.2 Committee Discretion. Except for automatic grants to Outside
Directors pursuant to Section 7 hereof, any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan.
The Committee may delegate to one or more officers of the Company the authority
to grant an Award under this Plan to Participants who are not Insiders of the
Company.

        5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISO") or Nonqualified Stock Options ("NQSOS"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:

                5.1 Form of Option Grant. Each Option granted under this Plan
will be evidenced by an Award Agreement which will expressly identify the Option
as an ISO or an NQSO ("STOCK OPTION AGREEMENT"), and, except as otherwise
required by the terms of Section 7 hereof, will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the
terms and conditions of this Plan.

                5.2 Date of Grant. The date of grant of an Option will be the
date on which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

                5.3 Exercise Period. Options may be exercisable within the times
or upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that (i) no ISO granted to a person who directly
or by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of shares or stock of the Company or of any Parent or
Subsidiary of the Company ("TEN PERCENT SHAREHOLDER") will be exercisable after
the expiration of five (5) years from the date the ISO is granted and (ii) no
Option granted to a person who is not an employee of the Company or any Parent
or Subsidiary of the Company on the date of grant of that Option will be
exercisable after the expiration of five (5) years from the date the Option is
granted. The Committee also may provide for Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of Shares
or percentage of Shares as the Committee determines.

                5.4 Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted; provided that: (i) the
Exercise Price will be not less than

<PAGE>

100% of the Fair Market Value of the Shares on the date of grant; and (ii) the
Exercise Price of any ISO granted to a Ten Percent Shareholder will not be less
than 110% of the Fair Market Value of the Shares on the date of grant. In no
event may the Exercise Price of an Option be less than the par value of the
Shares. Payment for the Shares purchased may be made in accordance with Section
6 of this Plan.

                5.5 Method of Exercise.

                        (a) Options may be exercised only by delivery to the
Company (or as the Company may direct) of a written stock option exercise
agreement (the "Exercise Agreement") (in the case of a written Exercise
Agreement, in the form approved by the Board or the Committee, which need not be
the same for each Participant), in each case stating the number of Shares being
purchased, the restrictions imposed on the Shares purchased under such Exercise
Agreement, if any, and such representations and agreements regarding
Participant's investment intent and access to information and other matters, if
any, as may be required or desirable by the Company to comply with applicable
securities laws, together with payment in full of the Exercise Price for the
number of Shares being purchased.

                        (b) A written Exercise Agreement may be communicated
electronically through the use of such security device (including, without
limitation, any logon identifier, password, personal identification number,
smartcard, digital certificate, digital signature, encryption device, electronic
key, and/or other code or any access procedure incorporating any one or more of
the foregoing) as may be designated by the Board or the Committee for use in
conjunction with the Plan from time to time ("Security Device"), or via an
electronic page, site, or environment designated by the Company which is
accessible only through the use of such Security Device, and such written
Exercise Agreement shall thereby be deemed to have been sent by the designated
holder of such Security Device. The Company (or its agent) may accept and act
upon any written Exercise Agreement issued and/or transmitted through the use of
the Participant's Security Device (whether actually authorized by the
Participant or not) as his authentic and duly authorized Exercise Agreement and
the Company (or its agent) may treat such Exercise Agreement as valid and
binding on the Participant notwithstanding any error, fraud, forgery, lack of
clarity or misunderstanding in the terms of such Exercise Agreement. All written
Exercise Agreements issued and/or transmitted through the use of the
Participant's Security Device (whether actually authorized by the Participant or
not) are irrevocable and binding on the Participant upon transmission to the
Company (or as the Company may direct) and the Company (or its agent) shall be
entitled to effect, perform or process such Exercise Agreement without the
Participant's further consent and without further reference to the Participant.

                        (c) The Company's records of the Exercise Agreements
(whether delivered or communicated electronically or in printed form), and its
record of any transactions maintained by any relevant person authorized by the
Company relating to or connected with the Plan, whether stored in audio,
electronic, printed or other form, shall be binding and conclusive on the
Participant and shall be conclusive evidence of such Exercise Agreements and/or
transactions. All such records shall be admissible in evidence and, in the case
of a written Exercise Agreement which has been communicated electronically, the
Participant shall not

<PAGE>

challenge or dispute the admissibility, reliability, accuracy or the
authenticity of the contents of such records merely on the basis that such
records were incorporated and/or set out in electronic form or were produced by
or are the output of a computer system, and the Participant waives any of his
rights (if any) to so object.

                5.6 Termination. Notwithstanding the exercise periods set forth
in the Stock Option Agreement, exercise of an Option will always be subject to
the following:

                (a)     If the Participant is Terminated for any reason except
                        death or Disability, then the Participant may exercise
                        such Participant's Options only to the extent that such
                        Options would have been exercisable upon the Termination
                        Date no later than three (3) months after the
                        Termination Date (or such shorter or longer time period
                        not exceeding five (5) years as may be determined by the
                        Committee, provided, that any Option which is exercised
                        beyond three (3) months after the Termination Date shall
                        be deemed to be an NQSO), but in any event no later than
                        the expiration date of the Options.

                (b)     If the Participant is Terminated because of the
                        Participant's death or Disability (or the Participant
                        dies within three (3) months after a Termination other
                        than for Cause or because of the Participant's
                        Disability), then the Participant's Options may be
                        exercised only to the extent that such Options would
                        have been exercisable by the Participant on the
                        Termination Date and must be exercised by the
                        Participant (or the Participant's legal representative
                        or authorized assignee) no later than twelve (12) months
                        after the Termination Date (or such shorter or longer
                        time period not exceeding five (5) years as may be
                        determined by the Committee, provided, that any Option
                        which is exercised beyond twelve (12) months after the
                        Termination Date when the Termination is for
                        Participant's Disability, shall be deemed to be an
                        NQSO), but in any event no later than the expiration
                        date of the Options.

                (c)     If the Participant is terminated for Cause, then the
                        Participant's Options shall expire on such Participant's
                        Termination Date, or at such later time and on such
                        conditions as are determined by the Committee (but in
                        any event, no later than the expiration date of the
                        Options).

                5.7 Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.

                5.8 Limitations on ISO. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISO are
exercisable for the first time by a Participant during any calendar year (under
this Plan or under any other incentive stock option

<PAGE>

plan of the Company, Parent or Subsidiary of the Company) will not exceed
US$100,000. If the Fair Market Value of Shares on the date of grant with respect
to which ISO are exercisable for the first time by a Participant during any
calendar year exceeds US$100,000, then the Options for the first US$100,000
worth of Shares to become exercisable in such calendar year will be ISO and the
Options for the amount in excess of US$100,000 that become exercisable in that
calendar year will be NQSOs. In the event that the Code or the regulations
promulgated thereunder are amended after the Effective Date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISO, such different limit will be automatically incorporated herein
and will apply to any Options granted after the effective date of such
amendment.

                5.9 Modification, Extension or Renewal. The Committee may
modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor, provided that any such action may not, without
the written consent of a Participant, impair any of such Participant's rights
under any Option previously granted, and provided further that the exercise
period of any Option may not in any event be extended beyond the periods
specified in Section 5.3. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code.

                5.10 No Disqualification. Notwithstanding any other provision in
this Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

        6. PAYMENT FOR SHARE PURCHASES.

                6.1 Payment. Payment for Shares purchased pursuant to this Plan
may be made in cash (by check) or, where expressly approved for the Participant
by the Committee and where permitted by law:

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

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

                (c)     with respect only to purchases upon exercise of an
                        Option, and provided that a public market for the
                        Company's Shares exists:

                        (1)     through a "same day sale" commitment from the
                                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 to pay for the Exercise Price, and
                                whereby the NASD Dealer irrevocably commits upon
                                receipt of such Shares to forward the Exercise
                                Price directly to the Company; or

<PAGE>

                        (2)     through a "margin" commitment from the
                                Participant and a NASD Dealer whereby the
                                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 Exercise Price, and whereby the NASD Dealer
                                irrevocably commits upon receipt of such Shares
                                to forward the Exercise Price directly to the
                                Company;

                (d)     conversion of a convertible note issued by the Company,
                        the terms of which provide that it is convertible into
                        Shares issuable pursuant to the Plan (with the principal
                        amount and any accrued interest being converted and
                        credited dollar for dollar to the payment of the
                        Exercise Price); or

                (e)     by any combination of the foregoing.

        7. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.

                7.1 Types of Options and Shares. Options granted under this Plan
and subject to this Section 7 shall be NQSOs.

                7.2 Eligibility. Options subject to this Section 7 shall be
granted only to Outside Directors. In no event, however, may any Outside
Director be granted any Options under this Section 7 if such grant is (a)
prohibited, or (b) restricted (either absolutely or subject to various
securities requirements, whether legal or administrative, being complied with),
in the jurisdiction in which such Outside Director is resident under the
relevant securities laws of that jurisdiction.

                7.3 Initial Grant. Each Outside Director who first becomes a
member of the Board after the Effective Date will automatically be granted an
Option for 20,000 Shares (an "INITIAL GRANT") on the date such Outside Director
first becomes a member of the Board. Each Outside Director who became a member
of the Board on or prior to the Effective Date and who did not receive a prior
option grant (under this Plan or otherwise and from the Company or any of its
corporate predecessors) will receive an Initial Grant on the Effective Date.

                7.4 Succeeding Grant. Immediately following each Annual General
Meeting of shareholders of the Company, each Outside Director will automatically
be granted an Option for 6,000 Shares (a "SUCCEEDING GRANT"), provided, that the
Outside Director is a member of the Board on such date and has served
continuously as a member of the Board for a period of at least twelve (12)
months since the last Option grant (whether an Initial Grant or a Succeeding
Grant) to such Outside Director. If less than twelve (12) months has passed,
then the number of shares subject to the Succeeding Grant will be pro-rated
based on the number of days passed since the last Option grant to such Outside
Director, divided by 365 days.

                7.5 Vesting and Exercisability. The date an Outside Director
receives an Initial Grant or a Succeeding Grant is referred to in this Plan as
the "START DATE" for such Option.

<PAGE>

                (a)     Initial Grant. Each Initial Grant will vest and be
                        exercisable as to 25% of the Shares on the first one
                        year anniversary of the Start Date for such Initial
                        Grant, and thereafter as to 1/48 of the Shares at the
                        end of each full succeeding month, so long as the
                        Outside Director continuously remains a director or a
                        consultant of the Company.

                (b)     Succeeding Grant. Each Succeeding Grant will vest and be
                        exercisable as to 25% of the Shares on the first one
                        year anniversary of the Start Date for such Succeeding
                        Grant, and thereafter as to 1/48 of the Shares at the
                        end of each full succeeding month, so long as the
                        Outside Director continuously remains a director or a
                        consultant of the Company.

No Options granted to an Outside Director will be exercisable after the
expiration of five (5) years from the date the Option is granted to such Outside
Director. If the Outside Director is Terminated, the Outside Director may
exercise such Outside Director's Options only to the extent that such Options
would have been exercisable upon the Termination Date for such period as set
forth in Section 5.6. Notwithstanding any provision to the contrary, in the
event of a Corporate Transaction described in Section 15.1, the vesting of all
Options granted to Outside Directors pursuant to this Section 7 will accelerate
and such Options will become exercisable in full prior to the consummation of
such event at such times and on such conditions as the Committee determines, and
must be exercised, if at all, within three (3) months of the consummation of
said event. Any Options not exercised within such three-month period shall
expire. Notwithstanding any provision to the contrary, in the event of a Hostile
Take-Over, the Outside Director shall have a thirty-day period in which to
surrender to the Company each option held by him or her under this Plan for a
period of at least six (6) months. The Outside Director shall in return be
entitled to a cash distribution from the Company in an amount equal to the
excess of (i) the Take-Over Price of the Shares at the time subject to the
surrendered Option (whether or not the Option is otherwise at the time
exercisable for those Shares) over (ii) the aggregate Exercise Price payable for
such Shares. Such cash distribution shall be paid within five (5) days following
the surrender of the Option to the Company. Neither the approval of the
Committee nor the consent of the Board shall be required in connection with such
option surrender and cash distribution. The Shares subject to each Option
surrendered in connection with the Hostile Take-Over shall NOT be available for
subsequent issuance under the Plan.

                7.6 Exercise Price. The Exercise Price of an Option pursuant to
an Initial Grant and Succeeding Grant shall be the Fair Market Value of the
Shares, at the time that the Option is granted.

        8. WITHHOLDING TAXES.

                8.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan,

<PAGE>

payments in satisfaction of Awards are to be made in cash, such payment will be
net of an amount sufficient to satisfy federal, state, and local withholding tax
requirements.

                8.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may in its
sole discretion, and subject to compliance with all applicable laws and
regulations, allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose will be made in accordance with the requirements
established by the Committee and be in writing in a form acceptable to the
Committee.

        9. TRANSFERABILITY.

                9.1 Except as otherwise provided in this Section 9, Awards
granted under this Plan, and any interest therein, will not be transferable or
assignable by a Participant, and may not be made subject to execution,
attachment or similar process, otherwise than by will or by the laws of descent
and distribution or as determined by the Committee and set forth in the Award
Agreement with respect to Awards. Notwithstanding the foregoing, (i)
Participants may transfer or assign their Options to Family Members through a
gift or a domestic relations order (and not in a transfer for value), and (ii)
if the terms of the applicable instrument evidencing the grant of an Option so
provide, Participants who reside outside of the United States and Singapore may
assign their Options to a financial institution outside of the United States and
Singapore that has been approved by the Committee, in accordance with the terms
of the applicable instrument, subject to Code regulations providing that any
transfer of an ISO may cause such ISO to become a NQSO. The Participant shall be
solely responsible for effecting any such assignment, and for ensuring that such
assignment is valid, legal and binding under all applicable laws. The Committee
shall have the discretion to adopt such rules as it deems necessary to ensure
that any assignment is in compliance with all applicable laws.

                9.2 All Awards other than NQSO's. All Awards other than NQSO's
shall be exercisable: (i) during the Participant's lifetime, only by (A) the
Participant, or (B) the Participant's guardian or legal representative; and (ii)
after Participant's death, by the legal representative of the Participant's
heirs or legatees.

                9.3 NQSOs. Unless otherwise restricted by the Committee, an NQSO
shall be exercisable: (i) during the Participant's lifetime only by (A) the
Participant, (B) the Participant's guardian or legal representative, (C) a
Family Member of the Participant who has acquired the NQSO by "permitted
transfer;" as defined below, (ii) by a transferee that is permitted pursuant to
clause (ii) of Section 9.2, for such period as may be authorized by the terms of
the applicable instrument evidencing the grant of the applicable Option, or by
the Committee, and (iii) after Participant's death, by the legal representative
of the Participant's heirs or legatees. "Permitted transfer" means any transfer
of an interest in such NQSO by gift or domestic relations order

<PAGE>

effected by the Participant during the Participant's lifetime. A permitted
transfer shall not include any transfer for value; provided that the following
shall be permitted transfers and shall not be considered to be transfers for
value: (a) a transfer under a domestic relations order in settlement of marital
property rights or (b) a transfer to an entity in which more than fifty percent
of the voting interests are owned by Family Members or the Participant in
exchange for an interest in that entity.

        10. PRIVILEGES OF STOCK OWNERSHIP. No Participant will have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a shareholder and have all the rights of a shareholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares.

        11. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.

        12. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time and subject to compliance with all applicable laws and
regulations, 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 and subject to
compliance with all applicable laws and regulations buy from a Participant an
Award previously granted with payment in cash, Shares or other consideration,
based on such terms and conditions as the Committee and the Participant may
agree.

        13. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

        14. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary

<PAGE>

of the Company or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's employment or other
relationship at any time, with or without cause.

        15. CORPORATE TRANSACTIONS.

                15.1 Assumption or Replacement of Awards by Successor. Except
for automatic grants to Outside Directors pursuant to Section 7 hereof, in the
event of (a) a dissolution or liquidation of the Company, (b) 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 shareholders of the Company or their relative share
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company immediately prior to such merger
(other than any shareholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction (each, a "CORPORATE TRANSACTION"), each Option which is at
the time outstanding under this Plan shall automatically accelerate so that each
such Option shall, immediately prior to the specified effective date for the
Corporate Transaction, become fully exercisable with respect to the total number
of Shares at the time subject to such Option and may be exercised for all or any
portion of such Shares. However, subject to the specific terms of a
Participant's Award Agreement, an outstanding Option under this Plan shall not
so accelerate if and to the extent: (i) such Option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable Option to purchase shares of
the capital stock of the successor corporation or parent thereof, (ii) such
Option is to be replaced with a cash incentive program of the successor
corporation which preserves the Option spread existing at the time of the
Corporate Transaction and provides for subsequent payout in accordance with the
same vesting schedule applicable to such Option or (iii) the acceleration of
such Option is subject to other limitations imposed by the Committee at the time
of the Option grant. The determination of Option comparability under clause (i)
above shall be made by the Committee, and its determination shall be final,
binding and conclusive.

                15.2 Other Treatment of Awards. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 15 or
other specific terms of a Participant's Award Agreement, in the event of the
occurrence of any Corporate Transaction described in Section 15.1, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, or sale of assets.

                15.3 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; (a) granting an

<PAGE>

Award under this Plan in substitution of such other company's award; or (b)
assuming such award as if it had been granted under this Plan if the terms of
such assumed award could be applied to an Award granted under this Plan. Such
substitution or assumption will be permissible if the holder of the substituted
or assumed award would have been eligible to be granted an Award under this Plan
if the other company had applied the rules of this Plan to such grant. In the
event the Company assumes an award granted by another company, the terms and
conditions of such award will remain unchanged (except that the Exercise Price
and the number and nature of Shares issuable upon exercise of any such Option
will be adjusted appropriately 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.

        16. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become effective
on the date on which the Board adopts the Plan (the "EFFECTIVE DATE"). This Plan
shall be approved by the shareholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve (12)
months before or after the date this Plan is adopted by the Board. Upon the
Effective Date, the Committee may grant Awards pursuant to this Plan; provided,
however, that: (a) no Option may be exercised prior to initial shareholder
approval of this Plan; (b) no Option granted pursuant to an increase in the
number of Shares subject to this Plan approved by the Board will be exercised
prior to the time such increase has been approved by the shareholders of the
Company; (c) in the event that initial shareholder approval is not obtained
within the time period provided herein, all Awards granted hereunder shall be
cancelled; and (d) in the event that shareholder approval of such increase is
not obtained within the time period provided herein, all Awards granted pursuant
to such increase will be cancelled.

        17. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of shareholder approval. This Plan
and all agreements thereunder shall be governed by and construed in accordance
with the laws of the State of California.

        18. AMENDMENT OR TERMINATION OF PLAN. The Board has complete and
exclusive power and authority to amend or modify the Plan (or any component
thereof) in any or all respects whatsoever. However, (i) no such amendment or
modification shall adversely affect rights and obligations with respect to
Options at the time outstanding under the Plan, unless the Participant consents
to such amendment, and (ii) the automatic grants to Outside Directors pursuant
to Section 7 may not be amended at intervals more frequently than once every six
(6) months, other than to the extent necessary to comply with applicable U.S.
income tax laws and regulations. In addition, the Board may not, without the
approval of the Company's shareholders, amend the Plan to (i) materially
increase the maximum number of Shares issuable under the Plan or the number of
Shares for which Options may be granted per newly-elected or continuing Outside
Director or the maximum number of Shares for which any one individual
participating in the Plan may be granted Options, (ii) materially modify the
eligibility requirements for plan participation or (iii) materially increase the
benefits accruing to Participants.

<PAGE>

The Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board will not,
without the approval of the shareholders of the Company, amend this Plan in any
manner that requires such shareholder approval.

        19. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

        20. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

                "AWARD" means any Options granted under this Plan.

                "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.

                "BOARD" means the Board of Directors of the Company.

                "CAUSE" means (a) the commission of an act of theft,
embezzlement, fraud, dishonesty, (b) a breach of fiduciary duty to the Company
or a Parent or Subsidiary of the Company or (c) a failure to materially perform
the customary duties of the employee's employment.

                "CODE" means the Internal Revenue Code of 1986, as amended.

                "COMMITTEE" means the Compensation Committee of the Board.

                "COMPANY" means Flextronics International Ltd. or any successor
corporation.

                "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

                "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                "EXERCISE PRICE" means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.

                "FAIR MARKET VALUE" means, as of any date, the value of the
Shares determined as follows:

<PAGE>

                (a)     if such Shares are then quoted on the Nasdaq National
                        Market, the closing price of such Shares on the Nasdaq
                        National Market on the date of determination as reported
                        in The Wall Street Journal;

                (b)     if such Shares are publicly traded and are then listed
                        on a national securities exchange, the closing price of
                        such Shares on the date of determination on the
                        principal national securities exchange on which the
                        Shares are listed or admitted to trading as reported in
                        The Wall Street Journal;

                (c)     if such Shares are publicly traded but are not quoted on
                        the Nasdaq National Market nor listed or admitted to
                        trading on a national securities exchange, the average
                        of the closing bid and asked prices on the date of
                        determination as reported in The Wall Street Journal; or

                (d)     if none of the foregoing is applicable, by the Committee
                        in good faith.

                "FAMILY MEMBER" includes any of the following:

                (a)     child, stepchild, grandchild, parent, stepparent,
                        grandparent, spouse, former spouse, sibling, niece,
                        nephew, mother-in-law, father-in-law, son-in-law,
                        daughter-in-law, brother-in-law, or sister-in-law of the
                        Participant, including any such person with such
                        relationship to the Participant by adoption;

                (b)     any person (other than a tenant or employee) sharing the
                        Participant's household;

                (c)     a trust in which the persons in (a) and (b) have more
                        than fifty percent of the beneficial interest;

                (d)     a foundation in which the persons in (a) and (b) or the
                        Participant control the management of assets; or

                (e)     any other entity in which the persons in (a) and (b) or
                        the Participant own more than fifty percent of the
                        voting interest.

                "HOSTILE TAKE-OVER" means a change in ownership of the Company
effected through the following transaction:

                (a)     the direct or indirect acquisition by any person or
                        related group of persons (other than the Company or a
                        person that directly or indirectly controls, is
                        controlled by, or is under common control with, the
                        Company) of beneficial ownership (within the meaning of
                        Rule 13d-3 of the Exchange Act) of securities possessing
                        more than fifty percent (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 which the Board does not
                        recommend such shareholders to accept, and

<PAGE>

                (b)     the acceptance of more than fifty percent (50%) of the
                        securities so acquired in such tender or exchange offer
                        from holders other than Insiders.

                "INSIDER" means an officer or director of the Company or any
other person whose transactions in the Company's Shares are subject to Section
16 of the Exchange Act.

                "OPTION" means an award of an option to purchase Shares pursuant
to Sections 5 and 7.

                "OUTSIDE DIRECTOR" means a member of the Board who is not an
employee of the Company or any Parent or Subsidiary.

                "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing more than 50% of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

                "PARTICIPANT" means a person who receives an Award under this
Plan.

                "PLAN" means this Flextronics International Ltd. 2001 Equity
Incentive Plan, as amended from time to time.

                "SEC" means the Securities and Exchange Commission.

                "SECURITIES ACT" means the Securities Act of 1933, as amended.

                "SHARES" means ordinary shares of par value S$0.01 each in the
capital of the Company reserved for issuance under this Plan, as adjusted
pursuant to Sections 2 and 15, and any successor security.

                "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 more than 50% of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

                "TAKE-OVER PRICE" means the greater of (a) the Fair Market Value
per Share on the date the particular Option to purchase Shares is surrendered to
the Company in connection with a Hostile Take-Over or (b) the highest reported
price per Share paid by the tender offeror in effecting such Hostile Take-Over.
However, if the surrendered Option is an ISO, the Take-Over Price shall not
exceed the clause (a) price per Share.

                "TERMINATION" or "TERMINATED" means, for purposes of this Plan
with respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer or director to the Company or a Parent
or Subsidiary of the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or (iii)
any other leave of absence approved by the Committee, provided, that such leave
is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is

<PAGE>

guaranteed by contract or statute or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any employee on an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Stock Option
Agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the "TERMINATION DATE").

<PAGE>

                                                                        NO. ____

                         FLEXTRONICS INTERNATIONAL LTD.
                           2001 EQUITY INCENTIVE PLAN
                             SHARE OPTION AGREEMENT

                This Share Option Agreement (this "AGREEMENT") is made and
entered into as of the date of grant set forth below (the "DATE OF GRANT") by
and between Flextronics International Ltd., a company organized under the laws
of Singapore (the "COMPANY"), and the participant named below ("PARTICIPANT").
Capitalized terms not defined herein shall have the meaning ascribed to them in
the Company's 2001 Equity Incentive Plan (the "PLAN").

Participant:
                                      ------------------------------------------
Social Security Number:
                                      ------------------------------------------
Participant's Address:
                                      ------------------------------------------

Total Option Shares:
                                      ------------------------------------------
Exercise Price Per Share:
                                      ------------------------------------------
Date of Grant:
                                      ------------------------------------------
Vesting Start Date:
                                      ------------------------------------------
Expiration Date:
                                      ------------------------------------------
Type of Share Option
(Check one):                          [ ] Incentive Option
                                      [ ] Nonqualified Option

                1. GRANT OF OPTION. The Company hereby grants to Participant an
option (this "OPTION") to purchase up to the total number of Ordinary Shares of
the Company set forth above (collectively, the "SHARES") at the Exercise Price
Per Share set forth above (the "EXERCISE PRICE"), subject to all of the terms
and conditions of this Agreement and the Plan. If designated as an Incentive
Option above, this Option is intended to qualify as an "incentive stock option"
("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "CODE").

                2. VESTING; EXERCISE PERIOD.

                        2.1 Vesting of Right to Exercise Option. This Option
shall become exercisable as to portions of the Shares as follows: (a) this
Option shall not be exercisable with respect to any of the Shares until , 20___
(the "FIRST VESTING DATE"); (b) if Participant has continuously provided
services to the Company or any Subsidiary or Parent of the Company from the Date
of Grant through the First Vesting Date and has not been Terminated on or before
the First Vesting Date, then on the First Vesting Date this Option shall become

<PAGE>

exercisable as to twenty-five (25%) of the Shares; and (c) thereafter, so long
as Participant continuously provides services to the Company or any Subsidiary
or Parent of the Company and is not Terminated, at the end of each full
succeeding month following the First Vesting Date, this Option shall become
exercisable as to an additional 1/48 of the Shares (rounded down to the nearest
whole share); provided that this Option shall in no event ever become
exercisable with respect to more than 100% of the Shares.

                        2.2 Expiration. This Option shall expire on the
Expiration Date set forth above and must be exercised, if at all, on or before
the earlier of the Expiration Date or the date on which this Option is earlier
terminated in accordance with the provisions of Section 3. Provided that, in the
event that his Option is assigned with respect to any Shares to a financial
institution in accordance with Section 7, then the Option insofar as it relates
to the Shares so assigned shall expire at the close of business on the third
trading day after the date of such assignment.

                3. TERMINATION.

                        3.1 Termination for Any Reason Except Death, Disability
or Cause. If Participant is Terminated for any reason except Participant's
death, Disability or Cause, then this Option, to the extent (and only to the
extent) that it is vested in accordance with the schedule set forth in Section
2.1 hereof on the Termination Date, may be exercised by the Participant no later
than three (3) months after the Termination Date, but in any event no later than
the Expiration Date.

                        3.2 Termination Because of Death or Disability. If
Participant is Terminated because of death or Disability of Participant (or the
Participant dies within three (3) months after Termination other than for Cause
or because of Disability), then this Option, to the extent that it is vested in
accordance with the schedule set forth in Section 2.1 hereof on the Termination
Date, may be exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve (12) months after the Termination
Date, but in any event no later than the Expiration Date. Any exercise after
three months after the Termination Date when the Termination is for any reason
other than Participant's death or disability, within the meaning of Code Section
22(e)(3), shall be deemed to be the exercise of a nonqualified stock option.

                        3.3 Termination for Cause. If Participant is Terminated
for Cause, this Option will expire on the Participant's Termination Date.

                        3.4 No Obligation to Employ. Nothing in the Plan or this
Agreement shall confer on Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent or Subsidiary of the Company,
or limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Participant's employment or other relationship at any time,
with or without cause.

                4. MANNER OF EXERCISE.

<PAGE>

                        4.1 Share Option Exercise Agreement. To exercise this
Option, Participant (or any assignee of Participant permitted under this Option,
or in the case of exercise after Participant's death, Participant's executor,
administrator, heir or legatee, as the case may be) must deliver to the Company
an executed share option exercise agreement in the form attached hereto as
Exhibit A, or in such other form as may be approved by the Company from time to
time (the "EXERCISE AGREEMENT"), which shall set forth, inter alia,
Participant's election to exercise this Option, the number of Shares being
purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Participant's investment intent and access
to information as may be required by the Company to comply with applicable
securities laws. If someone other than Participant exercises this Option, then
such person must submit documentation reasonably acceptable to the Company that
such person has the right to exercise this Option.

                        4.2 Limitations on Exercise. This Option may not be
exercised unless such exercise is in compliance with all applicable federal and
state securities laws, as they are in effect on the date of exercise. This
Option may not be exercised as to fewer than 100 Shares unless it is exercised
as to all Shares as to which this Option is then exercisable.

                        4.3 Payment. The Exercise Agreement shall be accompanied
by full payment of the Exercise Price for the Shares being purchased in cash (by
check), or where permitted by law:

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

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

        (c)     provided that a public market for the Company's stock exists:
                (1) 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 Participant
                irrevocably elects to exercise this Option and to sell a portion
                of the Shares so purchased to pay for the Exercise Price and
                whereby the NASD Dealer irrevocably commits upon receipt of such
                Shares to forward the exercise price directly to the Company; or
                (2) through a "margin" commitment from Participant and an NASD
                -- Dealer whereby Participant irrevocably elects to exercise
                this 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 Exercise Price, and whereby the NASD
                Dealer irrevocably commits upon receipt of such Shares to
                forward the Exercise Price directly to the Company; or

        (d)     by any combination of the foregoing.

                        4.4 Tax Withholding. Prior to the issuance of the Shares
upon exercise of this Option, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company. If the Committee
permits, and subject to compliance with all

<PAGE>

applicable laws and regulations, Participant may provide for payment of
withholding taxes upon exercise of this Option by requesting that the Company
withhold from the Shares to be issued that number of Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall only issue the net number of Shares to the Participant
by deducting the Shares withheld from the Shares issuable upon exercise.

                        4.5 Issuance of Shares. Provided that the Exercise
Agreement and payment are in form and substance satisfactory to counsel for the
Company, the Company shall issue the Shares registered in the name of
Participant, Participant's authorized assignee, or Participant's legal
representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.

                5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If this
Option is an ISO, and if Participant sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (a) the date two
(2) years after the Date of Grant, and (b) the date one (1) year after allotment
of such Shares to Participant upon exercise of this Option, then Participant
shall immediately notify the Company in writing of such disposition. Participant
agrees that Participant may be subject to income tax withholding by the Company
on the compensation income recognized by Participant from the early disposition
by payment in cash or out of the current wages or other compensation payable to
Participant.

                6. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
Option and the issuance and allotment of Shares shall be subject to compliance
by the Company and Participant with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
on which the Company's Shares may be listed at the time of such issuance or
allotment. Participant understands that the Company is under no obligation to
register or qualify the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.

                7. NONTRANSFERABILITY OF OPTION. Except as set forth in Section
9.1 of the Plan, this Option may not be transferred in any manner other than by
will or by the laws of descent and distribution and may be exercised during the
lifetime of Participant only by Participant. In the event that the Participant
assigns this Option (but only with respect to the Shares for which the Option is
then exercisable pursuant to Section 2.1) to a financial institution outside the
United States and Singapore approved by the Company, the Participant shall upon
such assignment deliver to the Company a Notice of Assignment in the form of
Exhibit B hereto, upon receipt of which the Company may issue to the Participant
a letter confirming the balance number (if any) of the Shares comprised in this
Option following such assignment. The terms of this Option shall be binding upon
the executors, administrators, successors and assigns of Participant.

                8. TAX CONSEQUENCES. Set forth below is a brief summary as of
the Effective Date of the Plan of some of the federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT

<PAGE>

SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.

                        8.1 Exercise of ISO. If the Option qualifies as an ISO,
there will be no regular federal or California income tax liability upon the
exercise of the Option, although the excess, if any, of the Fair Market Value of
the Shares on the date of exercise over the Exercise Price will be treated as a
tax preference item for federal alternative minimum tax purposes and may subject
the Participant to the alternative minimum tax in the year of exercise.

                        8.2 Exercise of Nonqualified Share Option. If the Option
does not qualify as an ISO, there may be a regular federal and California income
tax liability upon the exercise of the Option. Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price. If Participant is a current or former employee
of the Company, the Company may be required to withhold from Participant's
compensation or collect from Participant and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise.

                        8.3 Disposition of Shares. The following tax
consequences may apply upon disposition of the Shares.

                                (a) Incentive Share Options. If the Shares are
held for more than twelve (12) months after the date of the allotment of the
Shares pursuant to the exercise of an ISO and are disposed of more than two (2)
years after the Date of Grant, any gain realized on disposition of the Shares
will be treated as long term capital gain for federal and California income tax
purposes. If Shares allotted under an ISO are disposed of within the applicable
one (1) year or two (2) year period, any gain realized on such disposition will
be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price.

                                (b) Nonqualified Share Options. If the Shares
are held for more than twelve (12) months after the date of the transfer of the
Shares pursuant to the exercise of an NQSO, any gain realized on disposition of
the Shares will be treated as long-term capital gain.

                                (c) Withholding. The Company may be required to
withhold from the Participant's compensation or collect from the Participant and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income.

                9. PRIVILEGES OF SHARE OWNERSHIP. Participant shall not have any
of the rights of a shareholder with respect to any Shares until Participant
exercises this Option and pays the Exercise Price.

<PAGE>

                10. INTERPRETATION. Any dispute regarding the interpretation of
this Agreement shall be submitted by Participant or the Company to the Committee
for review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.

                11. ENTIRE AGREEMENT. The Plan is incorporated herein by
reference. This Agreement and the Plan and the Exercise Agreement constitute the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements with
respect to such subject matter.

                12. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Treasurer of the Company at its principal corporate offices at
2090 Fortune Drive, San Jose, California 95131. Any notice required to be given
or delivered to Participant shall be in writing and addressed to Participant at
the address indicated above or to such other address as such party may designate
in writing from time to time to the Company. All notices shall be deemed to have
been given or delivered upon: personal delivery; three (3) days after deposit in
the United States mail by certified or registered mail (return receipt
requested); one (1) business day after deposit with any return receipt express
courier (prepaid); or one (1) business day after transmission by rapifax or
telecopier.

                13. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and assigns.

                14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

                15. ACCEPTANCE. Participant hereby acknowledges receipt of a
copy of the Plan and this Agreement. Participant has read and understands the
terms and provisions thereof, and accepts this Option subject to all the terms
and conditions of the Plan and this Agreement. Participant acknowledges that
there may be adverse tax consequences upon exercise of this Option or
disposition of the Shares and that the Company has advised Participant to
consult a tax advisor prior to such exercise or disposition.

                IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate as of the Date of Grant.

FLEXTRONICS INTERNATIONAL LTD.                 PARTICIPANT

By:
   -------------------------------             ---------------------------------
                                               (Signature)

<PAGE>

----------------------------------             ---------------------------------
(Please print name)                            (Please print name)

----------------------------------             ---------------------------------
(Please print title)

<PAGE>

                                    EXHIBIT A

                         FLEXTRONICS INTERNATIONAL LTD.
                     2001 EQUITY INCENTIVE PLAN (THE "PLAN")
                         SHARE OPTION EXERCISE AGREEMENT

I hereby elect to purchase the number of Ordinary Shares of Flextronics
International Ltd. (the "Company") as set forth below:

<TABLE>
<S>                                                 <C>
Participant (and/or assignee):                      Number of Shares Purchased:
                              -----------------                                 ----------------------------
Social Security Number:                             Purchase Price per Share:
                       ------------------------                              -------------------------------
Address:                                            Aggregate Purchase Price:
        ---------------------------------------                              -------------------------------
                                                    Date of Option Agreement:
        ---------------------------------------                              -------------------------------
Type of Option:    [ ]   Incentive Option           Exact Name of Title to Shares:
                   [ ]   Nonqualified Option                                      --------------------------

                                                    --------------------------------------------------------
</TABLE>

1. DELIVERY OF PURCHASE PRICE. Participant (and/or assignee) hereby delivers to
the Company the Aggregate Purchase Price, to the extent permitted in the Share
Option Agreement (the "Option Agreement"), as follows (check as applicable and
complete):

        [ ]     in cash (by check) in the amount of $_____________________,
                receipt of which is acknowledged by the Company;

        [ ]     by cancellation of indebtedness of the Company to Participant in
                the amount of $_____________________;

        [ ]     by the waiver hereby of compensation due or accrued to
                Participant for services rendered in the amount of
                $_________________________________ ;

        [ ]     through a "same-day-sale" commitment, delivered herewith, from
                Participant and the NASD Dealer named therein, in the amount of
                $___________________________; or

        [ ]     through a "margin" commitment, delivered herewith from
                Participant and the NASD Dealer named therein, in the amount of
                $________________________________.

2. MARKET STANDOFF AGREEMENT. Participant (and/or assignee), if requested by the
Company and an underwriter of Ordinary Shares (or other securities) of the
Company, agrees not to sell or otherwise transfer or dispose of any Ordinary
Shares (or other securities) of the Company held by Participant (and/or
assignee) during the period requested by the managing underwriter following the
effective date of a registration statement of the Company filed under the
Securities Act, provided that all officers and directors of the Company are
required to enter into similar agreements. Such agreement shall be in writing in
a form satisfactory to the Company and such underwriter. The Company may impose
stop-transfer instructions with respect to the Ordinary Shares (or other
securities) subject to the foregoing restriction until the end of such period.

3. TAX CONSEQUENCES. PARTICIPANT UNDERSTANDS THAT PARTICIPANT (AND/OR ASSIGNEE)
MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S (AND/OR
ASSIGNEE'S) PURCHASE OR DISPOSITION OF THE ORDINARY SHARES. PARTICIPANT (AND/OR
ASSIGNEE) REPRESENTS THAT PARTICIPANT (AND/OR ASSIGNEE) HAS CONSULTED WITH ANY
TAX CONSULTANT(S) PARTICIPANT (AND/OR ASSIGNEE) DEEMS ADVISABLE IN CONNECTION
WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND THAT PARTICIPANT (AND/OR
ASSIGNEE) IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

4. ENTIRE AGREEMENT. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement constitute
the entire agreement and understanding of the parties and supersede in their
entirety all prior understandings and agreements of the Company and Participant
with respect to the subject matter hereof, and are governed by California law
except for that body of law pertaining to choice of law or conflict of law.

<PAGE>

Date:
     -----------------------------          ------------------------------------
                                            Signature of Participant
                                            (and/or assignee)

<PAGE>

                                    EXHIBIT B

                              NOTICE OF ASSIGNMENT
                  (To be signed Only Upon Assignment of Option)

Flextronics International Ltd.
36 Robinson Road #18-01
City House, Singapore 06887

        The undersigned, the holder of an option (the "Option") to purchase an
aggregate of _______________ ordinary shares of S$0.01 each ("Option Shares") in
the capital of Flextronics International Ltd. (the "Company") pursuant to a
Share Option Agreement dated ________________ and entered into between the
undersigned and the Company, hereby gives the Company notice that the
undersigned has by an assignment dated ________________ (the "Assignment")
assigned absolutely to _______________ of _____________________ (the
"Assignee"), the option to subscribe for an aggregate of ________________ Option
Shares comprised in the Option (the "Assigned Option").

        The undersigned hereby certifies that, unless the Assignment is being
effected pursuant to an effective registration statement under the Securities
Act, it is being effected in accordance with Rule 904 or Rule 144 under the
Securities Act and with all applicable securities laws of the states of the
United States and other jurisdictions. Accordingly, the undersigned hereby
further certifies as follows:

        (1) Rule 904 Transfers. If the transfer is being effected in accordance
with Rule 904:

                (A) the undersigned is not a distributor of the Assigned Option,
an affiliate of the Company or any such distributor or a person acting on behalf
of any of the foregoing;

                (B) the Assignment is not made to a person in the United States;

                (C) at the time the buy order was originated, the Assignee was
outside the United States or the undersigned and any person acting on his or her
behalf reasonably believed that the Assignee was outside the United States;

                (D) no directed selling efforts in contravention of Rule
904(a)(2) have been made in the United States by or on behalf of the undersigned
or any affiliate thereof;

                (E) if the undersigned is a dealer in securities or has received
a selling concession, fee or other remuneration in respect of the Assignment,
and the transfer is to occur during the first year after the Assignment, then
the requirements of Rule 904(b)(1) have been satisfied; and

                (F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

        (2) Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144, the transfer is occurring:

                (A) after a holding period of at least one year (computed in
accordance with paragraph (d) of Rule 144) has elapsed since the Assigned Option
was last acquired from the Company or from an affiliate of the Company,
whichever is later, and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of Rule 144; or

<PAGE>

                (B) after a holding period of at least two years has elapsed
since the Assigned Option was last acquired from the Company or from an
affiliate of the Company, whichever is later, and the undersigned is not, and
during the preceding three months has not been, an affiliate of the Issuer.

Please check one (1) of the following:

     [ ]         The transfer is being effected in accordance with Rule 904
                 (Regulation S under the Securities Act).

     [ ]         The transfer is being effected pursuant to Rule 144.

Dated:
      --------------------

:
                      ------------------------------------------
                      (Print name)

                      ------------------------------------------
                      Signature

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