EXHIBIT 10.11

NON-PLAN STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT dated as of March 27, 2006 between DATA SYSTEMS &
SOFTWARE INC., a Delaware corporation (the "Company"), and Samuel M. Zentman
(the "Optionee").

WHEREAS, on March 27, 2006 at a meeting of the Board of Directors of the Company
(the “Board”), the Board by resolution authorized the granting to Samuel M.
Zentman, a non-management director and member of the Board, an option to
purchase 25,000 shares of the Company's Common Stock, par value $.01 per share
("Common Stock").

WHEREAS, the parties hereto desire to enter into this Agreement in order to set
forth the terms of such option.

Accordingly, the parties hereto agree as follows:

1.           Grant of Option; Exercise Price. Subject to the terms and
conditions of this Agreement, the Company hereby grants to Optionee the option
(the "Option") to purchase, from the Company, up to 25,000 shares of Common
Stock (“Option Shares”) at a price per share of $2.65 (the “Exercise Price”).
The Option Shares and the Exercise Price are subject to adjustment in accordance
with the provisions set forth in Section 5 below.

2.           Non-Incentive Stock Option. The Option is not intended to qualify
as an "incentive stock option" within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended.

3.           Vesting of Option. This Option shall vest and thereby become
exercisable with respect to the Option Shares on the date of the next held
annual meeting; to be held in 2006.
 
4.           Termination of Option.

(a)           This Option shall terminate upon the earlier of (i) the date 18
months from the date on which Optionee ceases to be a director or (ii) March 30,
2011 (the “Termination Date”).
 
(b)           Upon the death of the Optionee, the portion of the Option, if any,
that was exercisable as of the date of death may be thereafter be exercised by
the legal representative of the estate or by the legatee of the Optionee under
the will of the Optionee, for a period of one year from the date of such death
or until the Termination Date, whichever is shorter.

5.           Adjustments.

(a)           In the event of a stock split, stock dividend, combination of
shares, or any other similar change in the Common Stock as a whole, the Board
shall make equitable, proportionate adjustments in the number and kind of shares
covered by the Option and in the Exercise Price.

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(b)           In the event of any reclassification or reorganization of the
outstanding shares of Common Stock other than a change covered by subsection (i)
hereof or that solely affects the par value of such shares of Common Stock, or
in the case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), the Optionee shall
have the right thereafter (until the expiration of the right of exercise of this
Option) to receive upon the exercise hereof after such event, for the same
aggregate Exercise Price payable hereunder immediately prior to such
reclassification, reorganization, merger or consolidation, the amount and kind
of consideration receivable by a holder of the number of shares of Common Stock
obtainable upon exercise of this Option immediately prior to such event. The
provisions of this subsection (ii) shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
 
6.           Manner of Exercise. This Option may be exercised by the delivery to
the Company of a written notice signed by the Optionee in the form of Exhibit A
hereto, together with either (i) full payment of the purchase price therefor in
cash or by certified check payable to the order of the Company or (ii)
irrevocable instructions to a broker designated or approved by the Company to
sell shares of Common Stock equal to the Option Shares and promptly deliver to
the Company a portion of the proceeds thereof equal to the Exercise Price and
any applicable withholding taxes. The Optionee may be required to remit to the
Company an amount sufficient to satisfy any federal, state or local withholding
tax requirements prior to delivering to Optionee the Option Shares. This Option
may not be exercised with respect to a fractional share.

7.           Restriction on Transfer.

(a)           This Option may not be assigned or transferred except by will or
the law of descent and distribution and during the Optionee's lifetime may be
exercised only by Optionee.
 
(b)           Anything in this Agreement to the contrary notwithstanding, the
Optionee hereby agrees that he or she shall not sell, transfer by any means or
otherwise dispose of the Options Shares acquired by him without registration
under the Securities Act, or that in the event that they are not so registered,
unless (i) an exemption from the Securities Act requirements is available
thereunder, and (ii) the Optionee has furnished the Company with notice of such
proposed transfer and the Company’s legal counsel, in its reasonable opinion,
shall deem such proposed transfer to be so exempt.

8.           Miscellaneous.

(a)           Notices. Any notice or communication to the Company hereunder
shall be in writing and shall be deemed to have been duly given when delivered
in person, or by United States mail, to the following address (or to such other
address as the Company shall from time to time specify):
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Data Systems & Software Inc.
200 Route 17
Mahwah, New Jersey 07340
Attention: Secretary

(b)           Stockholder Rights. The Optionee shall not have any of the rights
of a stockholder with respect to the Option Shares until such shares have been
issue after the due exercise of the Option.

(c)           Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.

(d)           Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Optionee and the Company.

(e)           Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives, any rights, remedies,
obligations or liabilities.
 
(f)           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without regard to choice
of law provisions); provided, however, that all matters relating to or involving
corporate law shall be governed by the Delaware General Corporation Law.

(g)           Headings. The headings contained herein are for the sole purpose
of convenience of reference and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
 

        DATA SYSTEMS & SOFTWARE INC.  
   
   
    By:   /s/ Sheldon Krause  

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Sheldon Krause   Secretary

 

        OPTIONEE  
   
   
    By:   /s/ Samuel M. Zentman  

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Samuel M. Zentman

 
 
 
 
 

 
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EXHIBIT A TO STOCK OPTION AGREEMENT
 
OPTION EXERCISE FORM

 
DATA SYSTEMS & SOFTWARE INC.
200 ROUTE 17
MAHWAH, NJ 07430

Gentlemen:

I hereby exercise the following portion of the stock options that have
heretofore been granted to me under the Non-Plan Stock Option Agreement by and
between myself and Data Systems & Software Inc. dated as of March 27, 2006:

Date of grant                                        March 27, 2006  
Exercise price per share                               $2.65     
Number of options originally granted      25,000   
Number of options currently held      
Number of options being exercised hereby    
In connection with this exercise [check one]:
_____  I enclose my check in the amount of $   
_____  I am delivering to a broker designated or approved by the Company
irrevocable instructions to (i) sell shares of Common Stock acquired upon
exercise and (ii) promptly deliver to the Company a portion of the proceeds
thereof equal to the Exercise Price and any applicable withholding taxes.
 
I hereby agree to execute whatever other documents are necessary in order to
comply with the Agreement and any applicable legal requirements in connection
with the issuance of the stock to me pursuant to the Agreement.

   
Optionee (Signature)
Social Security Number
    _____________________  
Please print name
         
Date
Address

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