ORAMED PHARMACEUTICALS INC.
 
2008 STOCK INCENTIVE PLAN
 
1. Purposes of the Plan. The purposes of this Plan are to attract and retain the
best available personnel, to provide additional incentives to Employees,
Directors and Consultants and to promote the success of the Company’s business.
 
2. Definitions. The following definitions shall apply as used herein and in the
individual Award Agreements except as defined otherwise in an individual Award
Agreement. In the event a term is separately defined in an individual Award
Agreement, such definition shall supersede the definition contained in this
Section 2.
 
(a) “3(i) Option” means an Award (other than Restricted Stock) granted under
Section 3(i).
 
(b) “102 Option” means an Award (other than a SAR, a RSU, or any other Award
settled in cash) granted under Section 102.
 
(c) “Administrator” means the Board or any of the Committees appointed to
administer the Plan.
 
(d) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 1 2b-2 promulgated under the Exchange Act.
 
(e) “Applicable Laws” means the legal requirements relating to the Plan and the
Awards under applicable provisions of U.S. federal securities laws, state
corporate and securities laws, the Code, U.S. state and local tax laws, the
rules of any applicable stock exchange or national market system, applicable
laws of Israel, and the rules of any non-U.S. jurisdiction applicable to Awards
granted to residents therein.
 
(f) “Award” means the grant of an Option, SAR, Restricted Stock, Restricted
Stock Unit or other right or benefit under the Plan.
 
(g) “Award Agreement” means the written agreement evidencing the grant of an
Award executed by the Company and the Grantee, including any amendments thereto.
 
(h) “Board” means the Board of Directors of the Company.
 
(i) “Cause” means, with respect to the termination by the Company or a Related
Entity of the Grantee’s Continuous Service, that such termination is for “Cause”
as such term (or word of like import) is expressly defined in a then-effective
written agreement between the Grantee and the Company or such Related Entity,
or, in the absence of such then- effective written agreement and definition, in
the determination of the Administrator, the Grantee’s: (i) conviction of any
felony involving moral turpitude or affecting the Corporation; (ii) any refusal
to carry out a reasonable directive of the chief executive officer, the Board or
the Grantee’s direct supervisor, which involves the business of the Company or a
Related Entity and was capable of being lawfully performed; (iii) embezzlement
of funds of the Company or a Related Entity; (iv) any breach of the Grantee’s
fiduciary duties or duties of care of the Company; including without limitation
disclosure of confidential information of the Company; and (v) any conduct
(other than conduct in good faith) reasonably determined by the Board to be
materially detrimental to the Company.
 
 
 

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(j) “Change in Control” means the sale or disposition, in one or a series of
related transactions, of all or substantially all of the assets, or stock, or
over 50% of the voting stock to any “person” or “group” (as such terms are
defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), or any person or
group is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Act), directly or indirectly, of more than 50% of the total voting
power of the voting stock of the Company, including by way of merger,
consolidation or otherwise
 
(k)  “Code” means the Internal Revenue Code of 1986, as amended.
 
(l) “Committee” means any committee composed of members of the Board appointed
by the Board to administer the Plan.
 
(m) “Common Stock” means the common stock of the Company.
 
(n) “Company” means Oramed Pharmaceuticals Inc., a Nevada corporation, or any
successor entity that adopts the Plan in connection with a merger, consolidation
or similar transaction.
 
(o) “Consultant” means any person (other than an Employee or a Director, solely
with respect to rendering services in such person’s capacity as a Director) who
is engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.
 
(p) “Continuing Directors” means members of the Board who either (i) have been
Board members continuously for a period of at least twelve (12) months or (ii)
have been Board members for less than twelve (12) months and were elected or
nominated for election as Board members by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.
 
(q) “Continuous Service” means that the provision of services to the Company or
a Related Entity in any capacity of Employee, Director or Consultant is not
interrupted or terminated. In jurisdictions requiring notice in advance of an
effective termination as an Employee, Director or Consultant, Continuous Service
shall be deemed terminated upon the actual cessation of providing services to
the Company or a Related Entity notwithstanding any required notice period that
must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under Applicable Laws, unless otherwise affirmatively required
under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the
entity for which the Grantee provides services ceasing to be a Related Entity.
Continuous Service shall not be considered interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related Entity,
or any successor, in any capacity of Employee, Director or Consultant, or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or Consultant
(except as otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized
personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds three (3) months, and reemployment upon expiration
of such leave is not guaranteed by statute or contract, then the Incentive Stock
Option shall be treated as a Non-Qualified Stock Option on the day three (3)
months and one (1) day following the expiration of such three (3) month period.
 
 
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(r) “Covered Employee” means an Employee who is a “covered employee” under
Section 162(m)(3) of the Code.
 
(s) “Director” means a member of the Board or the board of directors of any
Related Entity.
 
(t) “Disability” means as defined under the long-term disability policy of the
Company or the Related Entity to which the Grantee provides services regardless
of whether the Grantee is covered by such policy. If the Company or the Related
Entity to which the Grantee provides service does not have a long-term
disability plan in place, “Disability” means that a Grantee is unable to carry
out the responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment for a period
of not less than ninety (90) consecutive days. A Grantee will not be considered
to have incurred a Disability unless he or she furnishes proof of such
impairment sufficient to satisfy the Administrator in its discretion.
 
(u) “Employee” means any person, including an Officer or Director, who is in the
employ of the Company or any Related Entity, subject to the control and
direction of the Company or any Related Entity as to both the work to be
performed and the manner and method of performance. The payment of a director’s
fee by the Company or a Related Entity shall not be sufficient to constitute
“employment” by the Company.
 
(v) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
 
(w) “Fair Market Value” means, as of any date, the value of Common Stock
determined as follows:
 
(i) If the Common Stock is listed on one or more established stock exchanges or
a national market system, including without limitation the American Stock
Exchange and Nasdaq, the Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on the
principal exchange or system on which the Common Stock is listed (as determined
by the Administrator) on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported
in The Wall Street Journal or such other source as the Administrator deems
reliable;
 
(ii) If the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its
Fair Market Value shall be the closing sales price for such stock as quoted on
such system or by such securities dealer on the date of determination, but if
selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
 
 
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(iii) In the absence of an established market for the Common Stock of the type
described in (i) and (ii), above, the Fair Market Value thereof shall be
determined by the Administrator in good faith.
 
(x) “Grantee” means an Employee, Director or Consultant who receives an Award
under the Plan.
 
(y) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.
 
(z) “Israeli Employee” means Employees, office holders of the Company or a
Related Company (“Nosei Misra” — as such term is defined in the Israeli
Companies Law 1999) and Directors (excluding those who are considered a
“Controlling Shareholder” pursuant to Section 32(9) of the Tax Ordinance or
otherwise excluded by the Tax Ordinance).
 
(aa) “Israeli Grantee” means Grantees who are residents of the State of Israel
or those who are deemed to be residents of the State of Israel for the payment
of tax (whether such grantee is entitled to the tax benefits under Section 102
or not).
 
(bb) “ITA” means Israeli Tax Authorities.
 
(cc) “Non-Employee” means Consultants or any other person who is not an Israeli
Employee.
 
(dd) “Non-qualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.
 
(ee) “Non-Trustee 102 Option” shall mean a 102 Option granted pursuant to
Section 102(c) of the Tax Ordinance and not held in trust by the Trustee.
 
(ff) “Officer” means a person who is an officer of the Company or a Related
Entity within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
 
(gg) “Option” means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.
 
(hh) “Parent” means a “parent corporation,” whether now or hereafter existing,
as defined in Section 424(e) of the Code.
 
 
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(ii) “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.
 
(jj) “Plan” means this 2008 Stock Incentive Plan.
 
(kk) “Related Entity” means any Parent or Subsidiary of the Company. With
respect to Israeli Grantees of 102 Options, the definition shall further include
any entity permitted under Section 102 (a) of the Tax Ordinance.
 
(ll) “Restricted Stock” means Shares issued under the Plan to the Grantee for
such consideration, if any, and subject to such restrictions on transfer, rights
of first refusal, repurchase provisions, forfeiture provisions, and other terms
and conditions as established by the Administrator.
 
(mm) “Restricted Stock Units” means an Award which may be earned in whole or in
part upon the passage of time or the attainment of performance criteria
established by the Administrator and which may be settled for cash, Shares or
other securities or a combination of cash, Shares or other securities as
established by the Administrator.
 
(nn) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor thereto.
 
(oo) “SAR” means a stock appreciation right entitling the Grantee to Shares or
cash compensation, as established by the Administrator, measured by appreciation
in the value of Common Stock.
 
(pp) “Section 3(i)” means section 3(i) of the Tax Ordinance as may be amended
from time to time.
 
(qq) “Section 102” means Section 102 of the Tax Ordinance as may be amended from
time to time.
 
(rr) “Share” means a share of the Common Stock.
 
(ss) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code.
 
(tt) “Tax Ordinance” means the Israeli Income Tax Ordinance [New Version], 1961
(including as amended pursuant to Amendment 132 thereto) and to the extent not
specifically indicated hereunder also the rules, regulations and orders or
procedures promulgated thereunder from time to time, as amended or replaced from
time to time.
 
(uu) “Trustee” means any individual appointed by the Company to serve as trustee
and approved by the ITA, in accordance with the provisions of Section 102(a) of
the Tax Ordinance and the regulations promulgated thereunder.
 
(vv) “Trustee 102 Option” means a 102 Option granted pursuant to Section 102(b)
of the Tax Ordinance and held in trust by the Trustee for the benefit of an
Israeli Grantee.
 
 
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3. Stock Subject to the Plan.
 
(a) Subject to the provisions of Section 10, below, the maximum aggregate number
of Shares which may be issued pursuant to all Awards (including Incentive Stock
Options) under the Plan is 8,000,000 Shares. The Shares to be issued pursuant to
Awards may be authorized, but unissued, or reacquired Common Stock.
 
(b) Any Shares covered by an Award (or portion of an Award) which is forfeited,
canceled or expires (whether voluntarily or involuntarily) shall be deemed not
to have been issued for purposes of determining the maximum aggregate number of
Shares which may be issued under the Plan. Shares that actually have been issued
under the Plan pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance under the Plan, except that if unvested
Shares are forfeited, or repurchased by the Company at the lower of their
original purchase price or their Fair Market Value at the time of repurchase,
such Shares shall become available for future grant under the Plan. To the
extent not prohibited by the listing requirements of the principal established
stock exchange or national market system on which the Common Stock is traded and
Applicable Law, any Shares covered by an Award which are surrendered (i) in
payment of the Award exercise or purchase price (including pursuant to the “net
exercise” of an option pursuant to Section 7(b)(v)) or (ii) in satisfaction of
tax withholding obligations incident to the exercise of an Award shall be deemed
not to have been issued for purposes of determining the maximum number of Shares
which may be issued pursuant to all Awards under the Plan, unless otherwise
determined by the Administrator.
 
4. Administration of the Plan.
 
(a) Plan Administrator.
 
(i) General. With respect to grants of Awards to Directors, Employees or
Consultants, the Plan shall be administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be constituted in such a manner
as to satisfy the Applicable Laws. With respect to grants to Directors or
Officers, any such Committee shall also be constituted to permit such grants and
related transactions to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16-3. Once appointed, such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. Further,
with respect to Consultants and Employees (who are neither Directors or Officers
of the Company), the Board may authorize one or more Officers to grant Awards to
such persons and may limit such authority as the Board determines from time
 
(ii) Administration With Respect to Directors who are not Employees.
Notwithstanding the above, with respect to grants of Awards to Directors who are
not Employees, the Board shall have the exclusive power to select such Directors
to participate in the Plan and to determine the number of Non-qualified Stock
Options, SARs or shares of Restricted Stock or Restricted Stock Units or other
benefits under the Plan to be so awarded. If the Board appoints a Committee to
administer the Plan, it may delegate to the Committee administration of all
other aspects of the Awards made to such Directors who are not Employees.
 
 
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(iii) Administration With Respect to Covered Employees. Notwithstanding the
foregoing, grants of Awards to any Covered Employee intended to qualify as
Performance- Based Compensation shall be made only by a Committee (or
subcommittee of a Committee) which is comprised solely of two or more Directors
eligible to serve on a committee making Awards qualifying as Performance-Based
Compensation. In the case of such Awards granted to Covered Employees,
references to the “Administrator” or to a “Committee” shall be deemed to be
references to such Committee or subcommittee.
 
(iv) Administration With Respect to Israeli Grantees. With respect to grants of
Awards to Israeli Grantees, the Plan shall be administered by (A) the Board or
(B) a Committee or one or more Officers designated by the Board, which Committee
or Officers shall be constituted or appointed in such a manner as to satisfy the
ITA and the Applicable Laws applicable to Awards for Israeli Grantees. Once
appointed, such Committee or Officer shall continue to serve in its/his/her
designated capacity until otherwise directed by the Board.
 
(v) Administration Errors. In the event an Award is granted in a manner
inconsistent with the provisions of this subsection (a), such Award shall be
presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.
 
(b) Powers of the Administrator. Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:
 
(i) to select the Employees, Directors and Consultants to whom Awards may be
granted from time to time hereunder;
 
(ii) to determine whether and to what extent Awards are granted hereunder;
 
(iii) to determine the number of Shares or the amount of other consideration to
be covered by each Award granted hereunder, the exercise price or purchase price
of each Option or other Award, the duration of each Award and the times at which
each Award shall become exercisable;
 
(iv) to approve forms of Award Agreements for use under the Plan;
 
(v) to determine the terms and conditions of any Award granted hereunder,
including but not limited to: the exercise price, the time or times when Options
may be exercised or other Awards vest (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Award or Shares related thereto,
based in each case on such factors as the Administrator, in its sole discretion,
shall determine;
 
(vi) to amend the terms of any outstanding Award granted under the Plan,
provided that any amendment that would adversely affect the Grantee’s rights
under an outstanding Award shall not be made without the Grantee’s written
consent, provided, however, that an amendment or modification that may cause an
Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee. The reduction of the
exercise price of any Option awarded under the Plan and the base appreciation
amount of any SAR awarded under the Plan shall not be subject to stockholder
approval and canceling an Option or SAR at a time when its exercise price or
base appreciation amount (as applicable) exceeds the Fair Market Value of the
underlying Shares, in exchange for another Option, SAR, Restricted Stock, or
other Award shall not be subject to stockholder approval and shall be at the
discretion of the Administrator;
 
 
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(vii) to construe and interpret the terms of the Plan and Awards, including
without limitation, any notice of award or Award Agreement, granted pursuant to
the Plan;
 
(viii) to grant Awards to Employees, Directors and Consultants employed outside
the United States on such terms and conditions different from those specified in
the Plan as may, in the judgment of the Administrator, be necessary or desirable
to further the purpose of the Plan;
 
(ix) to designate Awards as Incentive Stock Options or Non-Qualified Stock
Options, or as 102 Options (whether through a trustee or not) or 3(i) Options
subject to the limitations under the ITA or any other Applicable Law and to
determine the type and route of the Trustee 102 Options.
 
(x) to determine the Fair Market Value of the Shares in accordance with the
provisions of the Plan; and
 
(xi) to take all such other action and make all such other determinations and
interpretations, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.
 
(c) Extent and Effect of Administrator’s Determinations. The express grant in
the Plan of any specific power to the Administrator shall not be construed as
limiting any power or authority of the Administrator; provided that the
Administrator may not exercise any right or power reserved to the Board. Any
decision made, or action taken, by the Administrator or in connection with the
administration of this Plan shall be final, conclusive and binding on all
persons having an interest in the Plan.
 
(d) Indemnification. In addition to such other rights of indemnification as they
may have as members of the Board or as Officers or Employees of the Company or a
Related Entity, the Administrator shall be defended and indemnified by the
Company to the extent permitted by law against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any claim, investigation, action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan, or any Award granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Company) or paid
by them in satisfaction of a judgment in any such claim, investigation, action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such claim, investigation, action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct;
provided, however, that within fifteen (15) days after the institution of such
claim, investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the
same.
 
 
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5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company or a Parent or a Subsidiary of the Company. An
Employee, Director or Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be granted to such Employees,
Directors or Consultants who are residing in non-U.S. jurisdictions as the
Administrator may determine from time to time, provided however that Awards to
Israeli Grantees under Section 102 or Section 3(i) of the Tax Ordinance shall be
subject to Section 20 below.
 
6. Types, Terms and Conditions and Limitations of Awards.
 
(a) Types of Awards. The Administrator is authorized under the Plan to award any
type of arrangement to an Employee, Director or Consultant that is not
inconsistent with the provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) cash or (iii) an Option, a SAR,
or similar right with a fixed or variable price related to the Fair Market Value
of the Shares and with an exercise or conversion privilege related to the
passage of time, the occurrence of one or more events, or the satisfaction of
performance criteria or other conditions. Such awards include, without
limitation, Options, SARs, sales or bonuses of Restricted Stock, or Restricted
Stock Units, and an Award may consist of one such security or benefit, or two
(2) or more of them in any combination or alternative.
 
(b) Designation of Award. Each Award shall be designated in the Award Agreement.
In the case of an Option, the Option shall be designated as either an Incentive
Stock Option or a Non-Qualified Stock Option and with respect to Israeli
Grantees may be further designated as 102 Options or 3(i) Options under the Tax
Ordinance subject to the qualifications described in Section 20 below. However,
notwithstanding such designation, an Option will qualify as an Incentive Stock
Option under the Code only to the extent the $100,000 dollar limitation of
Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section
422(d) of the Code is calculated based on the aggregate Fair Market Value of the
Shares subject to Options designated as Incentive Stock Options which become
exercisable for the first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary of the Company). For purposes
of this calculation, Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value of the Shares shall
be determined as of the grant date of the relevant Option.
 
(c) Conditions of Award. Subject to the terms of the Plan, the Administrator
shall determine the provisions, terms, and conditions of each Award including,
but not limited to, the Award vesting schedule, repurchase provisions, rights of
first refusal, forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, payment contingencies, and
satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, the
following: (i) increase in share price, (ii) earnings per share, (iii) total
stockholder return, (iv) operating margin, (v) gross margin, (vi) return on
equity, (vii) return on assets, (viii) return on investment, (ix) operating
income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii)
revenue, (xiv) expenses, (xv) earnings before interest, taxes and depreciation,
(xvi) economic value added, (xvii) market share, (xviii) satisfactory completion
of clinical trials or scientific benchmarks, and (xix) receipt of regulatory
approvals. The performance criteria may be applicable to the Company, Related
Entities and/or any individual business units of the Company or any Related
Entity. Partial achievement of the specified criteria may result in a payment or
vesting corresponding to the degree of achievement as specified in the Award
Agreement.
 
 
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(d) Date of Grant. The date of grant of an Award shall be, for all purposes, the
date on which the Administrator makes the determination granting such Award, or
such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Grantee within a reasonable time after
the date of such grant. Notwithstanding anything in the Plan to the contrary, if
any Award under this Plan is made to a person subject to taxation in the United
States, the date of grant of such Award shall be the date when the Company
completes the corporate action necessary to create the legally binding right
constituting the Award.
 
(e) Individual Limitations on Awards.
 
(i) Individual Limit for Options and SARs. The maximum number of Shares with
respect to which Options and SARs may be granted to any Grantee in any calendar
year shall be 4,000,000 Shares. The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company’s capitalization
pursuant to Section 10, below. To the extent required by Section 162(m) of the
Code or the regulations thereunder, in applying the foregoing limitations with
respect to a Grantee, if any Option or SAR is canceled, the canceled Option or
SAR shall continue to count against the maximum number of Shares with respect to
which Options and SARs may be granted to the Grantee. For this purpose, the
repricing of an Option (or in the case of a SAR, the base amount on which the
stock appreciation is calculated is reduced to reflect a reduction in the Fair
Market Value of the Common Stock) shall be treated as the cancellation of the
existing Option or SAR and the grant of a new Option or SAR.
 
(ii) Individual Limit for Restricted Stock and Restricted Stock Units. For
awards of Restricted Stock and Restricted Stock Units that are intended to be
Performance- Based Compensation, the maximum number of Shares with respect to
which such Awards may be granted to any Grantee in any calendar year shall be
4,000,000 Shares. The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization pursuant to Section
10, below.
 
(iii) Deferral. If the vesting or receipt of Shares under an Award is deferred
to a later date, any amount (whether denominated in Shares or cash) paid in
addition to the original number of Shares subject to such Award will not be
treated as an increase in the number of Shares subject to the Award if the
additional amount is based either on a reasonable rate of interest or on one or
more predetermined actual investments such that the amount payable by the
Company at the later date will be based on the actual rate of return of a
specific investment (including any decrease as well as any increase in the value
of an investment).
 
(f) Early Exercise. The Award Agreement may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or
Consultant to exercise any part or all of the Award prior to full vesting of the
Award. Any unvested Shares received pursuant to such exercise may be subject to
a repurchase right in favor of the Company or a Related Entity or to any other
restriction the Administrator determines to be appropriate.
 
 
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(g) Term of Award. The term of each Award shall be the term stated in the Award
Agreement, provided, however, that the term of an Incentive Stock Option shall
be no more than ten (10) years from the date of grant thereof. However, in the
case of an Incentive Stock Option granted to a Grantee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary
of the Company, the term of the Incentive Stock Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.
 
(h) Transferability of Awards. Incentive Stock Options or Options to Israeli
Grantees may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Grantee, only by
the Grantee. Other Awards shall be transferable (i) by will and by the laws of
descent and distribution and (ii) during the lifetime of the Grantee, to the
extent and in the manner authorized by the Administrator. Notwithstanding the
foregoing, the Grantee (other than an Israeli Grantee) may designate one or more
beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a
beneficiary designation form provided by the Administrator.
 
7. Award Exercise or Purchase Price, Consideration and Taxes.
 
(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an
Award shall be as follows:
 
(i) In the case of an Incentive Stock Option:
 
(1) granted to an Employee who, at the time of the grant of such Incentive Stock
Option owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, the per Share exercise price shall be not less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant; or
 
(2) granted to any Employee other than an Employee described in the preceding
paragraph, the per Share exercise price shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant.
 
(ii) In the case of Awards intended to qualify as Performance-Based
Compensation, the exercise or purchase price, if any, shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.
 
(iii) In the case of other Awards, such price as is determined by the
Administrator.
 
(b) Consideration. Subject to Applicable Laws, the consideration to be paid for
the Shares to be issued upon exercise or purchase of an Award including the
method of payment, shall be determined by the Administrator. In addition to any
other types of consideration the Administrator may determine, the Administrator
is authorized to accept as consideration for Shares issued under the Plan the
following:
 
 
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(i) cash;
 
(ii) check;
 
(iii) surrender of Shares or delivery of a properly executed form of attestation
of ownership of Shares as the Administrator may require which have a Fair Market
Value on the date of surrender or attestation equal to the aggregate exercise
price of the Shares as to which said Award shall be exercised;
 
(iv) with respect to Options, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate sale
of some or all of the purchased Shares and remit to the Company sufficient funds
to cover the aggregate exercise price payable for the purchased Shares and (B)
shall provide written directives to the Company to deliver the certificates for
the purchased Shares directly to such brokerage firm in order to complete the
sale transaction; or
 
(v) with respect to Options, payment through a “net exercise” such that, without
the payment of any funds, the Grantee may exercise the Option and receive the
net number of Shares equal to (i) the number of Shares as to which the Option is
being exercised, multiplied by (ii) a fraction, the numerator of which is the
Fair Market Value per Share (on such date as is determined by the Administrator)
less the Exercise Price per Share, and the denominator of which is such Fair
Market Value per Share (the number of net Shares to be received shall be rounded
down to the nearest whole number of Shares);
 
(vi) any combination of the foregoing methods of payment.
 
The Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in Section 4(b), or
by other means, grant Awards which do not permit all of the foregoing forms of
consideration to be used in payment for the Shares or which otherwise restrict
one or more forms of consideration.

(c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other
person until such Grantee or other person has made arrangements acceptable to
the Administrator for the satisfaction of any non-U.S., federal, state, or local
income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares. Upon exercise or
vesting of an Award the Company shall withhold or collect from the Grantee an
amount sufficient to satisfy such tax obligations, including, but not limited
to, by surrender of the whole number of Shares covered by the Award sufficient
to satisfy the minimum applicable tax withholding obligations incident to the
exercise or vesting of an Award.
 
8. Exercise of Award.
 
(a) Procedure for Exercise; Rights as a Stockholder.
 
 
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(i) Any Award granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator under the terms of the Plan
and specified in the Award Agreement, provided however that the standard vesting
schedule for Israeli Grantees shall be as set forth in Section 20.
 
(ii) An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised has been made, including, to the
extent selected, use of the broker-dealer sale and remittance procedure to pay
the purchase price as provided in Section 7(b).
 
(b) No Rights as Shareholder. The holder of an Option shall have none of the
rights of a stockholder with respect to the Shares subject to the Option until
such shares are transferred to the holder (or the Trustee, if applicable) upon
the exercise of the Option.
 
(c) Conditions Upon Issuance of Shares.
 
(i) Legal Compliance. Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of the Award or the issuance and delivery of such
Shares or consideration in lieu of Shares shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Company with respect
to such compliance. If at any time the Administrator determines that the
delivery of Shares pursuant to the exercise, vesting or any other provision of
an Award is or may be unlawful under Applicable Laws, the vesting or right to
exercise an Award or to otherwise receive Shares pursuant to the terms of an
Award shall be suspended until the Administrator determines that such delivery
is lawful and shall be further subject to the approval of counsel for the
Company with respect to such compliance. The Company shall have no obligation to
effect any registration or qualification of the Shares under federal or state
laws or other Applicable Laws.
 
(ii) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award make such representations
and warranties which, in the opinion of the Company, are required to ensure that
such exercise, or a subsequent sale or disposition of any Shares obtained upon
such exercise, does not contravene any Applicable Law, including inter alia,
representations and warranties at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required by any Applicable Laws.
 
(iii) Restrictions. Unless otherwise set forth in an Award Agreement, Shares
issued to a Grantee or the Trustee, as applicable, shall be subject to such
restrictions as required by the appropriate securities law and in the event that
the Company’s shares shall be registered for trading in any public market,
Grantee’s rights to sell the Shares may be subject to certain limitations
(including a lock-up period), as will be requested by the Company or its
underwriters, and the Grantee by executing an Award Agreement unconditionally
agrees and accepts any such limitations and undertakes to further execute any
agreement as may be requested by the Company or its underwriters from time to
time.
 
 
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(d) No Fractional Shares. Only whole Shares may be issued pursuant to the
exercise of an Option or other Award, and to the extent that an Option or other
Award covers less than one (1) Share, it is non exercisable.
 
9. Termination, Death, Disability of Grantee.
 
(a) Exercise of Award Following Termination of Continuous Service. In the event
of termination of a Grantee’s Continuous Service for any reason other than
Cause, Disability or death, such Grantee may, but only within three (3) months
from the date of such termination (or such longer or shorter period as specified
in the Award Agreement but in no event later than the expiration date of the
term of such Award as set forth in the Award Agreement), exercise the portion of
the Grantee’s Award that was vested at the date of such termination or such
other portion of the Grantee’s Award as may be determined by the Administrator.
To the extent that the Grantee’s Award was unvested at the date of termination,
or if Grantee does not exercise the vested portion of the Grantee’s Award within
the time specified herein, the Award shall terminate.
 
(b) Termination of Continuous Service for Cause. In the event of termination of
a Grantee’s Continuous Service for Cause, the unvested portion of the Grantee’s
Award and, to the extent not previously exercised, the vested portion of the
Grantee’s Award, shall terminate.
 
(c) Disability of Grantee. In the event of termination of a Grantee’s Continuous
Service as a result of his or her Disability, such Grantee may, but only within
twelve (12) months from the date of such termination (or such longer or shorter
period as specified in the Award Agreement but in no event later than the
expiration date of the term of such Award as set forth in the Award Agreement),
exercise the portion of the Grantee’s Award that was vested at the date of such
termination or such other portion of the Grantee’s Award as may be determined by
the Administrator. To the extent that the Grantee’s Award was unvested at the
date of termination, or if Grantee does not exercise the vested portion of the
Grantee’s Award within the time specified herein, the Award shall terminate.
 
(d) Death of Grantee. In the event of a termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the death of the
Grantee during the post- termination exercise periods following the Grantee’s
termination of Continuous Service specified in this Section 8, above, the
Grantee’s estate or a person who acquired the right to exercise the Award by
bequest or inheritance may exercise the portion of the Grantee’s Award that was
vested as of the date of termination or such other portion of the Grantee’s
Award as may be determined by the Administrator, within twelve (12) months from
the date of death (or such longer or shorter period as specified in the Award
Agreement but in no event later than the expiration of the term of such Award as
set forth in the Award Agreement). To the extent that, at the time of death, the
Grantee’s Award was unvested, or if the Grantee’s estate or a person who
acquired the right to exercise the Award by bequest or inheritance does not
exercise the vested portion of the Grantee’s Award within the time specified
herein, the Award shall terminate.
 
 
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10. Adjustments Upon Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, the maximum number of Shares with respect to which Options
and SARs may be granted to any Grantee in any calendar year, as well as any
other terms that the Administrator determines require adjustment shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or similar transaction affecting
the Shares, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company; provided, however that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.” In connection with the
foregoing adjustments, the Administrator may, in its discretion, prohibit the
exercise of Awards during certain periods of time. Except as the Administrator
determines, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason
hereof shall be made with respect to, the number or price of Shares subject to
an Award. Adjustments shall be made by the Administrator, whose determination in
that respect shall be final, conclusive and binding.
 
11. Adjustments Upon Change in Control.
 
(a) Unless otherwise set forth in the Award Agreement, in the event of a Change
in Control after the effective date of the Plan, the Committee or the Board may,
in its sole discretion, provide for the (i) termination of an Award upon the
consummation of the Change in Control, but only if such Award has vested and
been paid out or the Grantee has been permitted to exercise the Option in full
for a period of not less than 30 days prior to the Change in Control, (ii)
acceleration of all or any portion of an Award, (iii) payment of an amount (in
cash or, in the discretion of the Committee or the Board, in the form of
consideration paid to shareholders of the Company in connection with such Change
in Control) in exchange for the cancellation of an Award, which, in the case of
Options and SARs, shall equal the excess, if any, of the Fair Market Value of
the Shares subject to such Options or SARs over the aggregate exercise price or
grant price of such Option or SAR, and/or (iv) issuance of substitute Awards
that will substantially preserve the otherwise applicable terms of any affected
Awards previously granted hereunder in a manner complying with Treasury
Regulation Section 1.409A-1(b)(5)(v)(D) or any applicable successor provision.
 
(b) In the event of any adjustment in the number of Shares covered by any
Option, any fractional shares resulting from such adjustment shall be
disregarded and each such Option shall cover only the number of full shares
resulting from such adjustment.
 
(c) All adjustments pursuant to Section 11 shall be made by the Administrator,
and its determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive.
 
12. Effective Date and Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 17, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective. In the
case of Israeli Grantees, 102 Options will be granted only after the lapse of at
least 30 days following the date in which the Plan and the relevant forms will
be submitted to the tax authorities.
 
 
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13. Amendment, Suspension or Termination of the Plan.
 
(a) The Board may at any time amend, suspend or terminate the Plan; provided,
however, that no such amendment shall be made without the approval of the
Company’s stockholders to the extent such approval is required by Applicable
Laws, or if such amendment would lessen the stockholder approval requirements of
Section 4(b) or this Section 13(a).
 
(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.
 
(c) No amendment, alteration, suspension or termination of the Plan (except as
provided herein) shall adversely affect any rights under Awards already granted
to a Grantee, unless mutually agreed otherwise between the Grantee and the
Administrator, which agreement must be in writing or electronic format and
signed by the Grantee and the Company.
 
(d)  The Board or the Committee may from time to time amend, suspend or
terminate in while or in part, and if suspended or terminated, may reinstate,
any or all of the provision of the Plan. Notwithstanding the foregoing, no
amendment shall be effective without Board and/or shareholder approval if such
approval is necessary to comply with the applicable provisions of Section
162(m). To the extent applicable, it is intended that the Plan and all Awards
hereunder comply with the requirements of Section 409A of the Code, and the Plan
and all Award Agreements shall be interpreted and applied by the Committee in a
manner consistent with this intent in order to avoid the imposition of any
additional tax under Section 409A of the Code. In the event that any provision
of the Plan or an Award Agreement is determined by the Committee to not comply
with the applicable requirements of Section 409A of the Code, the Committee
shall have the authority to take such actions and to make such changes to the
Plan or an Award Agreement as the Committee deems necessary to comply with such
requirements, provided that no such action shall adversely affect any
outstanding Award without the consent of the affected Grantee. Notwithstanding
the foregoing or anything elsewhere in the Plan or an Award Agreement to the
contrary, if a Grantee is a “specified employee” as defined in Section 409A of
the Code at the time of termination of Continuous Service with respect to an
Award, then solely to the extent necessary to avoid the imposition of any
additional tax under Section 409A of the Code in respect of Awards that are
deferred compensation for purposes of such Section 409A, the commencement of any
payments or benefits under the Award shall be deferred until the date that is
six months following the Grantee’s separation from service (or such other period
as required to comply with Section 409A).
 
14. Reservation of Shares. The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
 
15. Liability of the Company.
 
(a) Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
 
 
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(b) Grants Exceeding Allotted Shares. If the Shares covered by an Award exceeds,
as of the date of grant, the number of Shares which may be issued under the Plan
without additional shareholder approval, such Award shall be void with respect
to such excess awarded Shares, unless shareholder approval of an amendment
sufficiently increasing the number of Shares subject to the Plan is timely
obtained in accordance with the Plan.
 
16. No Effect on Terms of Employment/Consulting Relationship or Retirement
Plans.
 
(a) No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous
Service, nor shall it interfere in any way with his or her right or the right of
the Company or any Related Entity to terminate the Grantee’s Continuous Service
at any time, with or without Cause, and with or without notice. The ability of
the Company or any Related Entity to terminate the employment of a Grantee who
is employed at will is in no way affected by its determination that the
Grantee’s Continuous Service has been terminated for Cause for the purposes of
this Plan.
 
(b) No Effect on Retirement and Other Benefit Plans. Except as specifically
provided in a retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
“Retirement Plan” or “Welfare Plan” under the Employee Retirement Income
Security Act of 1974, as amended.
 
17. Stockholder Approval. The grant of Incentive Stock Options under the Plan
shall be subject to approval by the stockholders of the Company within twelve
(12) months before or after the date the Plan is adopted excluding Incentive
Stock Options issued in substitution for outstanding Incentive Stock Options
pursuant to Section 424(a) of the Code. Such stockholder approval shall be
obtained in the degree and manner required under Applicable Laws. The
Administrator may grant Incentive Stock Options under the Plan prior to approval
by the stockholders, but until such approval is obtained, no such Incentive
Stock Option shall be exercisable. In the event that stockholder approval is not
obtained within the twelve (12) month period provided above, all Incentive Stock
Options previously granted under the Plan shall be exercisable as Non-Qualified
Stock Options.
 
18. Unfunded Obligation. Grantees shall have the status of general unsecured
creditors of the Company. Any amounts payable to Grantees pursuant to the Plan
shall be unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974, as
amended. Neither the Company nor any Related Entity shall be required to
segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations. The Company
shall retain at all times beneficial ownership of any investments, including
trust investments, which the Company may make to fulfill its payment obligations
hereunder. Any investments or the creation or maintenance of any trust or any
Grantee account shall not create or constitute a trust or fiduciary relationship
between the Administrator, the Company or any Related Entity and a Grantee, or
otherwise create any vested or beneficial interest in any Grantee or the
Grantee’s creditors in any assets of the Company or a Related Entity. The
Grantees shall have no claim against the Company or any Related Entity for any
changes in the value of any assets that may be invested or reinvested by the
Company with respect to the Plan.
 
 
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19. Construction. Captions and titles contained herein are for convenience only
and shall not affect the meaning or interpretation of any provision of the Plan.
Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not
intended to be exclusive, unless the context clearly requires otherwise.
 
20. Israeli Grantees. This Section shall apply only to Israeli Grantees and is
intended to enable the Company to grant Awards under the Plan pursuant and
subject to Section 102 and Section 3(i) of the Tax Ordinance. Accordingly, the
Plan is designated to comply with the Tax Ordinance and the rules, regulations
and orders or procedures promulgated thereunder from time to time, as amended or
replaced from time to time and shall be submitted to the ITA as required
thereunder.
 
In any case of contradiction, whether explicit or implied, between the
provisions of this Section and the Plan, the provisions set out in this Section
shall prevail unless the Administrator decides otherwise to ensure compliance
with the Tax Ordinance and other Applicable Laws.

(a) Eligibility. 102 Options may be granted only to Israeli Employees.
Non-Employees may only be granted 3(i) Options. The grant of an Award hereunder
shall neither entitle the Grantee to participate nor disqualify the Israeli
Grantee from participating in, any other grant of Awards pursuant to the Plan or
any other option or stock plan of the Company or any Related Company.
 
(b) Grant of Awards in Trust.
 
(i) Grants Made Under Section 102.
 
(1) The Company may designate 102 Options as Trustee 102 Options or Non-Trustee
102 Options. The designation of Non-Trustee 102 Options and Trustee 102 Options
shall be subject to the terms and conditions set forth in Section 102 of the Tax
Ordinance and the regulations promulgated thereunder,
 
(ii) Grant of Trustee 102 Options.
 
(1) The grant of the Trustee 102 Options shall be made under the Plan and shall
be conditional upon the approval of the Plan by the ITA. Trustee 102 Options may
be granted at any time after the passage of thirty (30) days following the
delivery by the Company to the ITA of a notice pertaining to the appointment of
the Trustee and the adoption of the Plan, unless otherwise determined by the
ITA. Options which shall be granted pursuant to Section 102 and/or any Shares
issued upon exercise of such Options and/or other shares received subsequently
following any realization of rights, shall be issued to the Trustee. Each
Israeli Grantee in respect of whom a Trustee 102 Option is granted and held in
trust by the Trustee shall be referred to as a “beneficial optionee” hereunder.
 
 
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(2) Trustee 102 Option(s) may either be classified as Capital Gain Option(s) or
Ordinary Income Option(s):
 
a. Trustee 102 Option(s) elected and designated by the Company to qualify under
the capital gain tax treatment in accordance with the provisions of Section
102(b)(2) shall be referred to herein as “Capital Gain Option(s)” or “CGO”.
 
b. Trustee 102 Option(s) elected and designated by the Company to qualify under
the ordinary income tax treatment in accordance with the provisions of Section
102(b)(l) shall be referred to herein as “Ordinary Income Option(s)” or “OIO”.
 
(3) The Company’s election of the type of Trustee 102 Options as CGO or OIO
granted to Employees (the “Election”) shall be appropriately filed with the ITA
30 days before the date of grant of a Trustee 102 Option, unless otherwise
determined by the ITA. Such Election shall become effective beginning the first
date of grant of a Trustee 102 Option under this Plan and shall remain in effect
until the end of the year following the year during which the Company first
granted Trustee 102 Options. The Election shall obligate the Company to grant
only the type of Trustee 102 Option it has elected, and shall apply to all
Israeli Grantees who were granted Trustee 102 Options during the period
indicated herein or therein, all in accordance with the provisions of Section
102(g) of the Tax Ordinance. Notwithstanding, such Election shall not prevent
the Company from granting Non-Trustee 102 Options simultaneously. 
 
(4) All Trustee 102 Options must be held in trust by and issued on the name of
the Trustee, as described below.
 
(5) With respect to Trustee 102 Options, the provisions of the Plan and/or an
Award Agreement shall be subject to the provisions of Section 102 and the ITA’s
permit, and the said provisions and permit shall be deemed an integral part of
this Section and of the Award Agreement for the respective Grantees thereof Any
provision of Section 102 and/or the said permit which is necessary in order to
receive and/or to keep any tax benefit pursuant to Section 102, which is not
expressly specified in the Plan or the Award Agreement, shall be considered
binding upon the Company and the Israeli Grantee.
 
(iii) Issuance to Trustee.
 
(1) All Trustee 102 Options granted under the Plan and/or any Shares allocated
or issued upon exercise of such Trustee 102 Options and/or other and all rights
deriving from or in connection therewith, including, without limitation, in
accordance with Section 10 above or any bonus shares or stock dividends issued
in connection therewith shall be granted by the Company to the Trustee, and the
Trustee shall hold each such Trustee 102 Option and the Shares issued upon
exercise thereof in trust for such period of time as required by Section 102 or
any regulations, rules or orders or procedures promulgated thereunder (the
“Holding Period”), for the benefit of the Grantees in respect of whom such
Trustee 102 Option was granted. All certificates representing Shares issued to
the Trustee under the Plan shall be deposited with the Trustee, and shall be
held by the Trustee until such time that such Shares are released from the Trust
as herein provided.
 
 
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(2) In event the requirements for Trustee 102 Options are not met for any reason
whatsoever, then the Trustee 102 Options may be treated as Non-Trustee 102
Options, all in accordance with the provisions of Section 102 and regulations
promulgated thereunder.
 
(3) With respect to any Trustee 102 Option, subject to the provisions of Section
102 and any rules or regulations or orders or procedures promulgated thereunder,
an Israeli Grantee shall not be entitled to sell or release from Trust the
Trustee 102 Option, the Shares received upon the exercise of such Option and/or
any right deriving from or in connection therewith, including, without
limitation, in accordance with Section 10 above or any bonus shares or stock
dividends issued in connection therewith, until the later of: (i) the lapse of
the Holding Period required under Section 102, and (ii) the vesting of such
Options set forth in the respective Award Agreement (such later date being
hereinafter referred to as the “Release Date”). Notwithstanding the foregoing,
if such sale or release occurs during the Holding period, the provisions of
Section 102 and the rules or regulations promulgated thereunder shall apply and
any expenses and/or tax consequences therefrom shall be borne by the Israeli
Grantee.
 
(4) Subject to the terms hereof, at any time after the Release Date with respect
to any Trustee 102 Options or Shares the following shall apply:
 
a. Trustee 102 Options granted, and/or Shares or rights issued to the Trustee
shall continue to be held by the Trustee, on behalf of the beneficial optionee.
From and after the Release Date, upon the written request of any beneficial
optionee, the Trustee shall release from the Trust the Trustee 102 Options
granted, and/or the Shares or rights issued, on behalf of such beneficial
optionee, by executing and delivering to the Company such instrument(s) as the
Company may require, giving due notice of such release to such beneficial
optionee, provided, however, that the Trustee shall not so release any such
Trustee 102 Options and/or Shares and/or rights to such beneficial optionee
unless the latter, prior to, or concurrently with, such release, provides the
Trustee with evidence, satisfactory in form and substance to the Trustee, that
all taxes, if any, required to be paid upon such release have, in fact, been
paid.
 
b. Alternatively, from and after the Release Date, upon the written instructions
of the beneficial optionee to sell any Shares and rights issued upon exercise of
Trustee 102 Options, the Trustee or the Company, as the case may be, shall use
its best efforts to effect such sale and shall transfer such Shares to the
purchaser thereof concurrently with the receipt, or after having made suitable
arrangements to secure the payment, of the purchase price in such transactions.
The Trustee or the Company, as the case may be, shall withhold from such
proceeds any and all taxes required to be paid in respect of such sale, shall
remit the amount so withheld to the appropriate tax authorities and shall pay
the balance thereof directly to the beneficial optionee, reporting to such
beneficial optionee and to the Company the amount so withheld and paid to said
authorities.
 
 
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c. Notwithstanding the foregoing, in the event the underwriters of securities of
the Company impose restrictions on the transferability of the Shares during a
lock-up period, the beneficial optionee shall not be entitled to release from
Trust the Trustee 102 Options granted and/or the Shares issued and/or to
instruct the Trustee to effect a sale of same, for as long as the restrictions
are in effect. In the event the Trustee 102 Options granted and/or the Shares
issued have been released from trust the restrictions imposed on the
transferability of same shall nevertheless apply to said optionee’s Trustee 102
Options held by the Grantee and/or Shares in the same manner. Consequently, the
Israeli Grantee shall sign any documents required in order to effect the
restrictions, for as long as the restrictions are in effect.
 
d. Upon receipt of the Award, the Israeli Grantee will sign an undertaking to
release the Trustee from any liability in respect of any action or decision duly
taken and bona fide executed in relation with the Plan, or any Option or Share
or rights granted to same thereunder. The Trustee may establish additional terms
and conditions in connection with Awards held in trust by the Trustee.
 
(iv) Grant of Non-Trustee 102 Options.
 
(1) Awards granted pursuant to this subsection are intended to constitute
Non-Trustee 102 Options and shall be subject to the general terms and conditions
of the Plan and Section 20, except for provisions of the Plan applying to
Trustee 102 Awards or Options under a different tax law or regulation.
 
(2) With respect to Non-Trustee 102 Options, if the Grantee ceases to be
employed by or of service to the Company or a Related Company, the Grantee shall
be required to extend to the Company a security or guarantee for the payment of
tax due at the time of sale of Shares or other rights, all in accordance with
the provisions of Section 102 and the rules, regulation or orders promulgated
thereunder.
 
(v) Grants Made Under Section 3(i). Awards granted pursuant to this subsection
are intended to constitute 3(i) Options and shall be subject to the general
terms and conditions of the Plan and Section 20 thereof, except for said
provisions of the Plan applying to Awards under a different tax law or
regulation. The Administrator may choose to deposit the 3(i) Options granted
pursuant to Section 3(i) of the Tax Ordinance with a trustee. In such event,
said trustee shall hold such 3(i) Options in trust, until exercised by the
Grantee, pursuant to the Company’s instructions from time to time. If determined
by the Administrator, the trustee shall be responsible for withholding any taxes
to which a Grantee become liable upon the exercise of such 3(i) Options.
 
(c) Award Agreement. Without derogating from the powers of the Administrator
under the Plan, the Administrator shall adopt the form of Award Agreement for
Israeli Grantees in form acceptable by the ITA and in compliance with the Tax
Ordinance. The Award Agreement shall further indicate the type of Options (102,
3(i), Trustee, Non-Trustee etc.) granted thereunder.
 
(d) Vesting. Without derogating from the terms of any Award Agreement or the
discretionary authority of the Administrator, the standard vesting for Options
to Israeli Grantees shall be as follows:
 
 
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(i) Twenty five percent (25%) of the Options granted under each Award Agreement
shall vest on the end of the first year of Continuous Service following the
vesting commencement date determined by the Administrator and if not specified
the date of the grant of an Option (the “First Anniversary”); and
 
(ii) The remaining 75% of the Options shall vest on a quarterly basis over a
period of three years commencing as of the First Anniversary in twelve (12)
equal portions subject to Continuous Service of the Grantee.
 
(e) With respect to all Shares (in contrast to unexercised Options) allocated or
issued upon the exercise of Options by the Israeli Grantee, the Grantee, or the
Trustee, as the case may be, shall be entitled to receive dividends in
accordance with the quantity of such Shares, subject however to any applicable
taxation on distribution of dividends.
 
(f) Without derogating from anything in the Plan, to the extent permitted by
Applicable Laws, any tax consequences, attributable to the Israeli Grantee,
arising from the grant or exercise of any Option, from the payment for Shares
covered thereby or from any other event or act (of the Company, a Related
Company, the Trustee or the Grantee), hereunder, shall be borne solely by the
Grantee. The Company and/or or a Related Company and/or the Trustee shall
withhold taxes according to the requirements under the Applicable Laws, rules,
and regulations, including withholding taxes at source. Furthermore, to the
extent permitted by Applicable Law, the Grantee shall agree to indemnify the
Company and/or a Related Company and/or the Trustee and hold them harmless
against and from any and all liability for any such tax or interest or penalty
thereon, including without limitation, liabilities relating to the necessity to
withhold, or to have withheld, any such tax from any payment made to the
Grantee. The Administrator and/or the Trustee shall not be required to release
any Share certificate to a Grantee until all required payments have been fully
made.
 
(g) The Plan, to the extent applicable to Israeli Grantees, shall be governed by
and construed and enforced in accordance with the laws of the State of Israel
applicable to contracts made and to be performed therein, without giving effect
to the principles of conflict of laws. The competent courts of Tel-Aviv, Israel
shall have sole jurisdiction in any matters pertaining to Israeli Grantees.
 
 
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