Exhibit 10.20

VENUS CONCEPT LTD.

2010 ISRAELI EMPLOYEE SHARE OPTION

PLAN*

* Extended, November 8, 2017

PREFACE

This plan, as amended from time to time, shall be known as the Venus Concept
Ltd. 2010 Israeli Employee Share Option Plan” (the “ESOP”).

 

1.

PURPOSE OF THE ESOP

The purpose of this ESOP is to foster and promote the long-term financial
success of the Company and its Affiliates and increase shareholder value by:

 

  (a)

motivating superior performance by means of performance-related incentives;

 

  (b)

encouraging and providing for the acquisition of an ownership interest in the
Company by eligible Employees; and

 

  (c)

enabling the Company to attract and retain the services of outstanding
management team and other qualified and dedicated employees upon whose judgment,
interest and special effort the successful conduct of its operations is largely
dependent.

 

2.

DEFINITIONS

For purposes of this ESOP and related documents, including the Grant Letter, the
following definitions shall apply:

 

  2.1

“102 Option” - means an Option that the Board intends to be a “102 Option” which
shall only be granted to Employees, and shall be subject to and construed
consistently with the requirements of Section 102. Approved 102 Options may
either be classified as Capital Gains Track Options (CGTO) or Ordinary Income
Track Options (OITO).

 

  2.2

“3(i) Option” - means Options that do not contain such terms as will qualify
under Section 102.

 

  2.3

“Administrator” - means the Board or the Committee as shall be administering
this ESOP, in accordance with Section 3 below.

 

  2.4

“Affiliate” - means any company eligible to be qualified as an “employing
company”, with respect to the Company, within the meaning of Section 102(a) of
the Ordinance including any and all rules and regulations promulgated
thereunder, as now in effect or as hereafter amended.

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  2.5

“Approved 102 Option” - means an Option granted pursuant to Section 102(b) of
the Ordinance, including any and all rules and regulations promulgated
thereunder, as now in effect or as hereafter amended, and held in trust by a
Trustee for the benefit of the Optionee, pursuant to Section 102.

 

  2.6

“Articles of Association” - means the Articles of Association of the Company as
same are in effect from time to time.

 

  2.7

“Board” - means the Board of Directors of the Company.

 

  2.8

“Capital Gains Track Option” or “CGTO” - as defined in Section 5.4 below.

 

  2.9

“Cause” - means, with respect to an Employee (i) as such term is defined in the
individual employment agreement or other engagement agreement between the
Employee and the Company or its Affiliates, or (ii) if no such agreement is in
place, then ‘Cause’ shall mean any one of the following: (a) conviction of any
felony involving moral turpitude or affecting the Company; (b) any failure to
carry out, as an employee of the Company or its Affiliates, a reasonable
directive of the chief executive officer, the Board or the Optionee’s direct
supervisor, which involves the business of the Company or its Affiliates and
which was capable of being lawfully performed by Optionee; (c) embezzlement or
theft of funds of the Company or its Affiliates; (d) any breach of the
Optionee’s fiduciary duties or duties of care of the Company; including, without
limitation, self-dealing, prohibited disclosure of confidential information of,
or relating to, the Company, or engagement in any business competitive to the
business of the Company or of its Affiliates; (e) any conduct (other than
conduct in good faith) reasonably determined by the Board to be materially
detrimental to the Company, and (f) any other circumstances under which the
Company is entitled to terminate Optionee’s employment with the Company without
paying Optionee severance pay under applicable law; and with respect to a
Non-Employee (i) as such term is defined in the individual engagement agreement
between the Optionee and the Company or its Subsidiaries, or (ii) if no such
agreement is in place, then ‘Cause’ shall mean any one of the circumstances set
forth in (a) through and including (e) herein, as applicable to such
Non-Employee.

 

  2.10

“Chairman” - means the chairman of the Committee.

 

  2.11

“Committee” - means a share option compensation committee appointed by the
Board, which shall consist of no fewer than two members of the Board, and if no
such compensation committee is appointed, then the Board.

 

  2.12

“Company” - means Venus Concept Ltd., a company incorporated under the laws of
the State of Israel.

 

  2.13

“Companies Law” - means the Israeli Companies Law, 5759-1999, including any
rules and regulations promulgated thereunder and any provisions of the Companies
Ordinance [New Version], 1983 still in effect, as amended from time to time.

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  2.14

“Controlling Shareholder” - shall have the meaning ascribed to it in
Section 32(9) of the Ordinance.

 

  2.15

“Cut-Off Date” – as defined in Section 11.3(b) below.

 

  2.16

“Date of Grant” - means the date of grant of an Option, as determined by the
Board and set forth in the Optionee’s Grant Letter, and in any event not earlier
than the first date on which the Company is permitted to effect Option grants
under this ESOP and the provisions of the Ordinance, including any and all rules
and regulations promulgated thereunder, as now in effect or as hereafter
amended. For the avoidance of doubt, no 102 Option shall be deemed granted
before the lapse of thirty (30) days from the due submission of this ESOP to the
ITA.

 

  2.17

“Disability” – as defined in Section 9.5(v) below.

 

  2.18

“Election” – as defined in Section 5.6 below.

 

  2.19

“Employee” - means a person who is employed by the Company or its Affiliates,
including an individual who is serving as a director or an office holder, but
excluding Controlling Shareholders.

 

  2.20

“Event” – as defined in Section 11.2 below.

 

  2.21

“Expiration Date” - means the date upon which an Option shall expire, as set
forth in Section 9.2 below.

 

  2.22

“Fair Market Value” - means as of any date, the value of a Share determined as
follows:

 

  2.22.1

If the Shares are listed on any established stock exchange or a national market
system, including without limitation the Tel Aviv Stock Exchange, NASDAQ
National Market system, or the NASDAQ SmallCap Market of the NASDAQ Stock
Market, the Fair Market Value shall be the closing sales price for such Shares
(or the closing bid, if no sales were reported), as quoted on such exchange or
system for the last market trading day prior to time of determination, as
reported in the Wall Street Journal, or such other source as the Board deems
reliable.

 

  2.22.2

Without derogating from the above, solely for the purpose of determining the tax
liability pursuant to Section 102(b)(3) of the Ordinance, if at the Date of
Grant the Company’s shares are listed on any established stock exchange or a
national market system or if the Company’s shares will be registered for trading
within ninety (90) days following the Date of Grant, the Fair Market Value of a
Share at the Date of Grant shall be determined in accordance with the average
value of the Company’s shares on the thirty (30) trading days preceding the Date
of Grant or on the thirty (30) trading days following the date of registration
for trading, as the case may be;

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  2.22.3

If the Shares are regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value shall be the mean between the
high bid and low asked prices for the Shares on the last market trading day
prior to the day of determination, or;

 

  2.22.4

In the absence of an established market for the Shares, the Fair Market Value
thereof shall be determined in good faith by the Board.

 

  2.23

“Grant Letter” - means the grant letter given by the Company to the Optionee and
signed by the Optionee, and which sets out the terms and conditions of an
Option.

 

  2.24

“IPO” - means the underwritten initial public offering of the Company’s shares
pursuant to a registration statement filed with and declared effective under the
Israeli Securities Law, 1968, under the U.S. Securities Act of 1933, as amended,
or under any similar law of any other jurisdiction.

 

  2.25

“ESOP” - means as defined in the preface hereto.

 

  2.26

“ITA” - means the Israeli Tax Authority.

 

  2.27

“NIS” – means, New Israeli Shekels.

 

  2.28

“Non-Employee” - means a consultant, adviser, service provider, Controlling
Shareholder or any other person who is not an Employee.

 

  2.29

“Notice” – as defined in Section 12.3(b) below.

 

  2.30

“Notice Period” – as defined in Section 12.3(c) below.

 

  2.31

“Ordinary Income Track Option” or “OITO” - as defined in Section 5.5 below.

 

  2.32

“Option” - means an option to purchase one or more Shares of the Company
pursuant to this ESOP.

 

  2.33

“Optionee” - means a person who receives or holds an Option under this ESOP.

 

  2.34

“Ordinance” - means the Israeli Income Tax Ordinance [New Version] 1961.

 

  2.35

“Proposed Transferee” – as defined in Section 12.3(c) below.

 

  2.36

“Proposing Holders” – as defined in Section 12.5 below.

 

  2.37

“Proxy” – as defined in Section 7.2 below.

 

  2.38

“Proxy Holder” – as defined in Section 7.2 below.

 

  2.39

“Purchase Price” - means the purchase price for each Share underlying an Option,
as determined in Section 8 below.

 

  2.40

“Representative” – as defined in Section 9.1 below.

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  2.41

“Repurchaser(s)” – as defined in Section 12.3(a) below.

 

  2.42

“Restricted Period” – as defined in Section 6.1 below.

 

  2.43

“Sale” – as defined in Section 12.3 below.

 

  2.44

“Section 102” - means Section 102 of the Ordinance, including any and all rules,
regulations, orders and procedures promulgated thereunder, as now in effect or
as hereafter amended.

 

  2.45

“Share” - means the Ordinary Shares of the Company, of nominal value NIS 0.01
each.

 

  2.46

“Successor Company” - means any entity into or with which the Company is merged
or by which, the Company is acquired, pursuant to a Transaction in which the
Company is not the surviving entity.

 

  2.47

“Transaction” – means (i) a merger, acquisition or reorganization of the Company
with one or more other entities in which the Company is not the surviving entity
(including by way of reverse triangular merger or exchange of shares), (ii) a
sale of all or substantially all of the assets or shares of the Company, or
(iii) an IPO.

 

  2.48

“Trustee” - means any individual or entity appointed by the Company to serve as
a trustee and who has been approved by the ITA, all in accordance with the
provisions of Section 102(a) of the Ordinance, including any and all rules and
regulations promulgated thereunder, as now in effect or as hereafter amended.

 

  2.49

“US$” – means United States of America dollars.

 

  2.50

“Vested Option” – means any Option that has already become vested and
exercisable according to its Vesting Dates or otherwise (e.g. acceleration upon
certain events).

 

  2.51

“Vesting Dates” - means, with respect to any Option, the date(s) as of which the
Optionee shall be entitled to exercise such Option, as set forth Optionee’s
individual Grant Letter, and if no such date(s) are specified in Optionee’s
individual Grant Letter, then as set out in Section 10.2 below.

 

  2.52

“Unapproved 102 Option” - means an Option granted pursuant to Section 102(c) of
the Ordinance, including any and all rules and regulations promulgated
thereunder, as now in effect or as hereafter amended, and not held in trust by a
Trustee.

 

3.

ADMINISTRATION OF THIS ESOP

This ESOP shall be administered by the Board. The Board shall have the authority
in its sole discretion, subject and not inconsistent with the express provisions
of this ESOP, to administer this ESOP and to exercise all the powers and
authorities specifically granted to it under this ESOP as necessary and
advisable in the administration of this ESOP. The

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Board may issue Shares and/or Options pursuant to this ESOP. In the event of
issuance of Shares the recipient of such Shares shall be deemed an “Optionee”
hereunder and the provisions of this ESOP shall apply to such issuance and to
the issued Shares, mutatis mutandis.

Provided that the Board is entitled by the Articles of Association and by law to
delegate all and any of its powers and authority granted to it under this ESOP
to a Committee, then such powers and authority may be delegated to the
Committee. The Committee shall have the responsibility of construing and
interpreting this ESOP and of establishing and amending such rules and
regulations, as it deems necessary or desirable for the proper administration of
this ESOP.

 

  3.1

The Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places, as the Chairman shall determine or as
otherwise convened in accordance with the Articles of Association. The Committee
shall keep records of its meetings and shall make such rules and regulations for
the conduct of its business, as it shall deem advisable.

 

  3.2

The Committee shall have the power to recommend to the Board and the Board shall
have the full power and authority to: (i) designate Optionees; (ii) determine
the Date of Grant, terms and provisions of the respective Grant Letters (which
need not be identical), including, but not limited to, the number of Options to
be granted to each Optionee, the number of Shares to be covered by each Option,
provisions concerning the time and extent to which the Options may be exercised,
and the nature and duration of restrictions as to the transferability, or
restrictions constituting substantial risk of forfeiture upon occurrence of
certain events; (iii) determine the Fair Market Value of the Shares covered by
each Option; (iv) designate the type of Options; and (v) cancel or suspend
Options, as necessary.

 

  3.3

Subject to the provisions of this ESOP, the Articles of Association, the
applicable laws and, the specific duties delegated by the Board to the
Committee, and subject to the approval of any relevant authorities, the
Committee shall have the authority, in its discretion:

 

  (i)

To construe and interpret the terms of this ESOP and any Options granted
pursuant hereto;

 

  (ii)

To designate the Employees and Non-Employees to whom Options may from time to
time be granted hereunder;

 

  (iii)

To determine the number of Shares to be covered by each such Option granted
hereunder;

 

  (iv)

To prescribe forms of agreements and/or Grant Letters for use under this ESOP;

 

  (v)

To determine the terms of any Option granted hereunder;

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  (vi)

To determine the Purchase Price of any Option granted hereunder;

 

  (vii)

To determine the Fair Market Value of Shares;

 

  (viii)

To prescribe, amend and rescind rules and regulations relating to this ESOP,
provided that any such amendment or rescindment that would adversely affect the
rights of an Optionee that has received or been granted an Option shall not be
made without the Optionee’s written consent.

 

  (ix)

To take all other action and make all other determinations necessary for the
administration of this ESOP.

 

  (x)

To determine the total number of Shares within the pool allocated for the
purpose of 6 this ESOP from time to time, and or any additional awards
hereafter, subject to this ESOP.

 

  3.4

Subject to the Articles of Association and applicable law, all decisions and
selections made by the Board or the Committee pursuant to the provisions of this
ESOP shall be made by a majority of its members. Any decision reduced to writing
shall be executed in accordance with the provisions of the Articles of
Association, as the same may be in effect from time to time.

 

  3.5

Any decision or action taken or to be taken by the Committee, arising out of or
in connection with the construction, administration, interpretation and effect
of this ESOP and of its rules and regulations, shall, to the maximum extent
permitted by applicable law, be within its absolute discretion (except as
otherwise specifically provided herein) and shall be conclusive and binding upon
all Optionees and any person claiming under or through any Optionee.

 

  3.6

The liability of any member of the Board or the Committee, with respect to this
ESOP or any Option granted hereunder, shall be in accordance with the Articles
of Association and applicable law.

 

  3.7

Any member of the Committee shall be eligible to receive Options under this ESOP
while serving on the Committee, unless otherwise specified herein. No person
shall be eligible to be a member of the Committee if that person’s membership
would prevent this ESOP from complying with exemptions provided under applicable
laws.

 

4.

DESIGNATION OF OPTIONEES

 

  4.1

The persons eligible for participation in this ESOP as Optionees shall include
any Employees and/or Non-Employees of the Company or of any Affiliate thereof;
provided, however, that (i) Employees may only be granted 102 Options; and
(ii) Non-Employees may only be granted 3(i) Options.

 

  4.2

Each Option granted pursuant to this ESOP shall be evidenced by a Grant Letter,
substantially in such form attached hereto as Exhibits A and B. Each Grant
Letter shall state, among other matters, the number of Shares to which the
Option relates,

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  the type of Option granted thereunder (whether an CGTO, OITO, Unapproved 102
Option or a 3(i) Option), the Vesting Dates, the Purchase Price per share, the
Expiration Date and such other terms and conditions included in the letter,
including any such other terms that the Committee or the Board in their
discretion may prescribe, provided in all cases that they are consistent with
this ESOP. The Grant Letter shall be delivered to the Optionee and executed by
the Optionee and shall incorporate the terms of this ESOP by reference and
specify the terms and conditions thereof and any rules applicable thereto.

 

  4.3

Neither this ESOP nor any Grant Letter nor any offer of Options to an Optionee
shall impose any obligation on the Company to continue to employ or to engage
the services of any Optionee, and nothing in this ESOP or in any Option granted
pursuant thereto shall give any Optionee any right to continued employment,
service with or engagement by the Company or restrict the right of the Company
to terminate such employment, services or engagement at any time. Further, the
Company and each Affiliate expressly reserves the right at any time to dismiss
an Optionee free from any liability, or any claim under this ESOP, except as
provided herein or in any agreement entered into with respect to an Option.

 

  4.4

The grant of an Option hereunder shall neither entitle the Optionee to
participate nor disqualify the Optionee from participating in, any other grant
of Options pursuant to this ESOP or any other option or share plan of the
Company or any of its Affiliates.

 

  4.5

Notwithstanding anything in the ESOP to the contrary, all grants of Options to
directors and office holders shall be authorized and implemented in accordance
with the provisions of the Companies Law.

 

5.

DESIGNATION OF OPTIONS PURSUANT TO SECTION 102

 

  5.1

The Company may designate Options granted to Employees pursuant to Section 102
as Unapproved 102 Options or Approved 102 Options.

 

  5.2

The grant of Approved 102 Options under this ESOP shall be made in accordance
with the provisions herein, including the provisions of Section 6 below, and
shall be conditioned upon the approval of this ESOP by the ITA.

 

  5.3

An Approved 102 Option may either be classified as either a Capital Gains Track
Option (CGTO) or an Ordinary Income Track Option (OITO).

 

  5.4

An Approved 102 Option 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 “CGTO”.

 

  5.5

An Approved 102 Option elected and designated by the Company to qualify under
the ordinary income tax treatment in accordance with the provisions of
Section 102(b)(1) shall be referred to herein as “OITO”.

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  5.6

The Company’s election of the type of Approved 102 Options as CGTO or OITO
granted to Employees (the “Election”) shall be appropriately filed with the ITA
before the first Date of Grant of an Approved 102 Option under such Election.
Such Election shall become effective beginning the first Date of Grant of an
Approved 102 Option under such Election and shall remain in effect until
changed, but in any case not earlier than the end of the year following the year
during which the Company first granted Approved 102 Options under such Election.
The Election shall obligate the Company to grant only the type of Approved 102
Option it has elected, and shall apply to all Optionees who were granted
Approved 102 Options during the period indicated herein, all in accordance with
the provisions of Section 102(g) of the Ordinance, including any and all rules
and regulations promulgated thereunder, as now in effect or as hereafter
amended. For avoidance of doubt, such Election shall not prevent the Company
from granting Unapproved 102 Options simultaneously.

 

  5.7

Designation of Approved 102 Options – if an Optionee exercises and sells his
Shares within the Restricted Period, the Company shall not bear any tax
liability arising due to the exercise and or sale of such Shares resulting from
Optionee’s termination of employment, except for the tax liability mentioned in
Section 22 below.

 

  5.8

All Approved 102 Options must be held in trust by the Trustee, as described in
Section 6 below.

 

  5.9

For avoidance of doubt, the designation of Unapproved 102 Options and Approved
102 Options shall be subject to the terms and conditions set forth in
Section 102.

 

6.

TRUSTEE

 

  6.1

Approved 102 Options which shall be granted under this ESOP and/or any Shares
allocated or issued upon exercise of such Approved 102 Options and/or other
shares received subsequently following any realization of rights, including,
without limitation, bonus shares, shall be allocated or issued to the Trustee
(and registered in the Trustee’s name in the Company’s shareholders register)
and held by the Trustee for the benefit of the Optionees to whom such Approved
102 Options were granted for such period of time as required by Section 102 (the
“Restricted Period”). All certificates representing Shares issued to the Trustee
under this ESOP shall be deposited with the Trustee, and shall be held by the
Trustee until such time that such Shares are released from the aforesaid trust
as herein provided. If the requirements for Approved 102 Options are not met,
the Approved 102 Options may be treated as Unapproved 102 Options, all in
accordance with the provisions of Section 102.

 

  6.2

Notwithstanding anything to the contrary herein, the Trustee shall not release
any Shares allocated or issued upon exercise of Approved 102 Options prior to
the full payment of the Optionee’s tax liabilities arising from Approved 102
Options, which were granted to such Optionee and/or any Shares allocated or
issued upon exercise of such Options.

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  6.3

With respect to any Approved 102 Option, subject to the provisions of
Section 102, an Optionee shall not sell or release from trust any Share received
upon the exercise of an Approved 102 Option and/or any share received
subsequently following any realization of rights, including without limitation,
bonus shares, until the lapse of the Restricted Period required under
Section 102. Notwithstanding the above, if any such sale or release occurs
during the Restricted Period, the sanctions under Section 102 shall apply to and
shall be borne by such Optionee.

 

  6.4

Upon receipt of Approved 102 Option, the Optionee 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 this ESOP, or any Approved 102
Option or Share granted to him hereunder. Such release may be incorporated into
the Grant Letter.

 

  6.5

3(i) Options which shall be granted under the ESOP, may, but need not, be issued
to the Trustee, and if so issued to the Trustee, shall be held for the benefit
of the Optionee. The Trustee shall hold such Options and the shares issued upon
the exercise thereof (in the event of an exercise of such Options) pursuant and
subject to Section 3(i) of the Ordinance, including any and all rules,
regulations, orders and procedures promulgated thereunder, as now in effect or
as hereafter amended. Anything to the contrary notwithstanding, the Trustee
shall not release any 3(i) Options held by it and which were not already
exercised into shares of the Company by the Optionee, nor shall the Trustee
release any shares issued upon the exercise of 3(i) Options – in both cases -
prior to the full payment of the relevant Optionee’s tax liabilities arising
from those 3(i) Options which were granted to him and any shares issued upon the
exercise of such 3(i) Options.

 

7.

SHARES RESERVED FOR THE ESOP; RESTRICTIONS THEREON

 

  7.1

The Company shall from time to time reserve, out of its authorized but un-issued
share capital, such number of Shares as the Board deems appropriate (subject to
the Articles of Association) for the purposes of this ESOP and/or for the
purposes of any other share option plans which have previously been, or may in
the future be, adopted by the Company, subject to adjustment as set forth in
Section 11 below. Any Shares which remain un-issued and which are not subject to
then outstanding Options at the termination or expiration of this ESOP shall
cease to be reserved for the purpose of this ESOP, but may continue to be
reserved for other share option plans then in effect, and in any event, until
termination of this ESOP the Company shall at all times reserve sufficient
number of Shares to meet the requirements of any then outstanding Options.
Should any Option for any reason expire or be canceled prior to its exercise or
relinquishment in full, the Shares subject to such Option may again be subjected
to a new Option under this ESOP or under the Company’s other share option plans,
provided, however, that Shares that have actually been issued under this ESOP
shall not be returned to the pool under this ESOP and shall not become available
for future distribution under this ESOP.

 

  7.2

The Company, at its sole discretion, may require that, until the consummation of
an IPO any Shares issued upon exercise of Options (and securities of the Company

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  issued with respect thereto) shall be voted by an irrevocable proxy (the
“Proxy”), in the form attached to each Grant Letter, such Proxy to be assigned
to the chairman of the Board or to any other director of the Company designated
by the Board (the “Proxy Holder”) and to provide for the power of such Proxy
Holder to act, instead of the Optionee and on its behalf, with respect to any
and all aspects of the Optionee’s shareholdings in the Company. The Proxy Holder
shall vote the Shares and/or execute any written instruments relating to the
Shares in the same manner as the votes of the majority of the shareholders of
the Company present and voting at the applicable meeting. The Proxy may be
contained in the individual Optionee’s Grant Letter or otherwise as the
Committee determines. If contained in the Grant Letter, no further document
shall be required to implement such Proxy, and the signature of the Optionee on
the Grant Letter shall indicate approval of the Proxy thereby granted. The Proxy
Holder shall be indemnified and held harmless by the Company and the Optionees
against any cost or expense (including counsel fees) reasonably incurred by
him/her, or any liability (including any sum paid in settlement of a claim with
the approval of the Company) arising out of any act or omission to act in
connection with the voting of such Proxy unless arising out of the Proxy
Holder’s own fraud or bad faith, to the extent permitted by applicable law. Such
indemnification shall be in addition to any rights of indemnification the Proxy
Holder may have as a director or otherwise under the Articles of Association,
any agreement, any vote of shareholders or disinterested directors, insurance
policy or otherwise. Without derogating from the above, with respect to Shares
issuable upon exercise of Approved 102 Options, such Shares shall be voted in
accordance with the provisions of Section 102 and of any rules, regulations or
orders promulgated thereunder. In the event that the Trustee hold Shares in
trust, the Trustee shall not, with respect to such Shares, represent the holder
of such Shares in any meeting of the shareholders of the Company or any action
of the shareholders of the Company by written consent. The Trustee shall provide
the Proxy Holder on such date with a power-of-attorney to participate and vote
in such meetings and execute such actions by written consent with respect to all
shares held in trust, if so requested by the Company.

 

8.

PURCHASE PRICE

 

  8.1

The Purchase Price of each Share subject to an Option shall be equal to the
Share’s Fair Market Value or as otherwise determined by the Committee in its
sole and absolute discretion in accordance with applicable law, subject to any
guidelines as may be determined by the Board from time to time. Each Grant
Letter will contain the Purchase Price determined for each Option covered
thereby (but in any event, not less than the nominal value of the Share issuable
upon exercise thereof).

 

  8.2

The total consideration to be paid for the Shares to be issued upon exercise of
an Option, including the method of payment, shall be determined by the
Administrator and may consist entirely of (1) cash, (2) check, (3) wire
transfer, or (4) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company. The Committee shall have the authority to postpone the date
of payment on such terms as it may determine.

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  8.3

The Purchase Price shall be denominated in NIS or US$ or otherwise as determined
by the Committee.

 

  8.4

The proceeds received by the Company from the issuance of Shares subject to the
Options will be added to the general funds of the Company and used for its
corporate purposes.

 

9.

TERM AND EXERCISE OF OPTIONS

 

  9.1

Options shall be exercised by the Optionee by giving written notice to the
Company and/or to any third party designated by the Company (the
“Representative”), in such form and method as may be determined by the Committee
and when applicable, by the Trustee in accordance with the requirements of
Section 102, which exercise shall be effective upon receipt of such notice by
the Company and/or the Representative and the payment of the Purchase Price at
the Company’s or the Representative’s principal office. The notice shall specify
the number of Shares with respect to which the Option is being exercised.

 

  9.2

Options, to the extent not previously exercised, shall terminate forthwith upon
the earlier of: (i) the date set forth in the Grant Letter (and unless otherwise
determined in accordance with the provisions of this ESOP with respect to any
Option(s), such date shall be ten (10) years from the respective Date of Grant);
or (ii) the expiration of any extended period in any of the events set forth in
Section 9.5 below.

 

  9.3

The Options may be exercised by the Optionee in whole at any time or in part
from time to time, to the extent that the Options become vested and exercisable,
prior to the Expiration Date, and provided that, subject to the provisions of
Section 9.5 below, the Optionee who is an Employee is employed by or providing
services to the Company or any of its Affiliates, at all times during the period
beginning with the granting of the Option and ending upon the date of exercise.
An Optionee who is a Non-Employee may exercise the Options in whole at any time
or in part from time to time, to the extent that the Options have become vested
and exercisable, prior to the Expiration Date.

 

  9.4

Subject to the provisions of Section 9.5 below, in the event of termination of
Optionee’s employment or services, with the Company or any of its Affiliates (it
being clarified that the transfer of Optionee’s employment or services between
the Company and any of its Affiliates, or between the Company’s Affiliates,
shall not be deemed termination hereunder), all Options granted to such Optionee
that are at the time of termination non-vested will immediately expire. A notice
of termination of employment or service shall be deemed to constitute
termination of employment or service. For the avoidance of doubt, in case of
such termination of employment or service, the unvested portion of the
Optionee’s Option shall not vest and shall not become exercisable and any
unvested portion of the Optionee’s Option shall revert to the pool of Shares
under this ESOP or that of other share option plans then in effect.

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  9.5

Notwithstanding anything to the contrary herein and unless otherwise determined
in the Optionee’s Grant Letter, an Option may be exercised after the date of
termination of Optionee’s employment or service with the Company or any
Affiliates (it being clarified that the transfer of Optionee’s employment or
services between the Company and any of its Affiliates, or between the Company’s
Affiliates, shall not be deemed termination hereunder) during an additional
period of time beyond the date of such termination, but only with respect to the
number of Vested Options at the time of such termination according to the
Vesting Dates, as follows:

 

  (i)

If termination is without Cause, then any Vested Option still in force and
un-expired may be exercised within a period of 90 days after the date of such
termination;

 

  (ii)

If termination is the result of death, or Disability (defined below) of the
Optionee, then any Vested Option still in force and un-expired may be exercised
within a period of twelve (12) months after the date of such termination;

 

  (iii)

With respect to (i) and (ii) above, prior to the expiration of the periods set
out therein (i.e., the 3-month period in (i) above, and the 12-month period in
(ii) above), the Committee may authorize an extension of the terms of exercise
post-termination of all or part of the Vested Options beyond the date of such
termination for a period not to exceed the period during which the Options by
their terms would otherwise have been exercisable.

 

  (iv)

For avoidance of any doubt, notwithstanding anything herein to the contrary, if
termination of employment or service is for Cause: (a) any outstanding
unexercised

Option (whether vested or non-vested), will immediately expire and terminate,
and the Optionee shall not have any right in connection to such outstanding
Options; and (b) all Shares issued upon exercise of Options prior to the date of
termination of employment or service for Cause shall be subject to repurchase at
their nominal value by the Repurchaser(s), provided however that in no case
shall the Company provide financial assistance to any other party to purchase
the Shares if doing so is prohibited by law. If the Repurchaser(s) exercise the
right of repurchase of such Shares in accordance with the provisions of
Section 12.3(a) below, and the Optionee (whose employment or engagement with the
Company was terminated for Cause), fails to transfer his/her Shares as
aforesaid, the Company, at the decision of the Board, shall be entitled to
forfeit such Optionee’s Shares and to authorize any person to execute on behalf
of the Optionee any instrument or document necessary to effect such transfer and
to make the appropriate inscription in the Company’s records. Each Optionee,
upon executing a Grant Letter, shall be deemed to have authorized and granted
the Company and each of its officers an irrevocable

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power of attorney to execute in his/her behalf such instruments and documents
that are necessary to give full effect to the repurchase provisions set forth
herein. In this respect, each of the Company and its shareholders shall be
deemed to be third party beneficiaries of this paragraph (iv) with rights to
enforce the same against the Optionees.

 

  (v)

As used herein: the term “Disability” shall have the meaning ascribed thereto in
the individual employment or engagement agreement between the Optionee and the
Company or any of its Affiliates, as applicable and if no such definition
exists, then “Disability” shall mean Optionee’s inability to perform his/her
duties to the Company, or to any of its Affiliates, for a consecutive period of
at least 180 days, by reason of any medically determinable physical or mental
impairment.

 

  9.6

To avoid doubt, the Optionees shall not be deemed owners of the Shares issuable
upon the exercise of Options and shall not have any of the rights or privileges
of shareholders of the Company in respect of any Shares purchasable upon the
exercise of any Option, nor shall they be deemed to be a class of shareholders
of the Company for any purpose, including but not limited for the purpose of the
operation of Sections 350 and 351 of the Companies Law or any successor to such
section, until registration of the Optionee as holder of such Shares in the
Company’s register of shareholders upon exercise of the Option in accordance
with the provisions of this ESOP, but in case of Options and Shares held by the
Trustee, subject to the provisions of Section 6 above. Notwithstanding anything
herein to the contrary, in no event shall the Optionees be deemed a class of
creditors of the Company for any purpose whatsoever, including but not limited
to for the purpose of the operation of Sections 350 and 351 of the Companies Law
or any successor to such section.

 

  9.7

The form of Grant Letter customarily used by the Company in connection with the
grant of Options, provided it is consistent with the provisions of this ESOP,
may contain such other provisions, as the Committee or the Board may, from time
to time, deem advisable.

 

  9.8

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
for 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.

 

  9.9

With respect to Unapproved 102 Options, if the Optionee ceases to be employed by
the Company or any Affiliate, the Optionee shall extend to the Company and/or
its Affiliate a security or guarantee for the payment of tax due at the time of
sale of Shares, all in accordance with the provisions of Section 102. In respect
of any employer’s tax liability for the purpose of employment taxes such as in
the case of social taxes, see Section 22 below.

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  9.10

Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such 12 Option, the method of payment and the issuance and delivery
of such Shares shall comply with applicable laws.

 

  9.11

Upon their issuance, the Shares shall carry equal voting rights on all matters
where such vote is permitted by applicable laws of the jurisdiction of
incorporation of the Company, provided however, that the Company, at its sole
discretion, may require that, until the consummation of an IPO any Shares issued
upon exercise of Options (and securities of the Company issued with respect
thereto) shall be voted by an irrevocable Proxy to be given to the Proxy Holder
in the same manner as the votes of the majority of the other shareholders of the
Company present and voting at the applicable meeting, such Proxy to be assigned
to the Proxy Holder and provide for the power of the Proxy Holder to act,
instead of the Optionee and on its behalf, with respect to any and all aspects
of the Optionee’s shareholdings in the Company, as set forth in Section 7.2
above.

 

  9.12

It is hereby clarified that the Company shall have no liability to an Optionee,
or to any other party, if an Option (or any part thereof), which is intended to
be a 102 Option, does not eventually qualify as a 102 Option.

 

10.

VESTING OF OPTIONS

 

  10.1

Subject to the provisions of this ESOP, each Option shall vest and become
exercisable commencing on the Vesting Date thereof, as determined by the Board
or by the Committee, for the number of Shares as shall be provided in the Grant
Letter. However, no Option shall be exercisable after the Expiration Date.

 

  10.2

Unless otherwise stated in the Optionee’s Grant Letter, all Options granted
pursuant to this ESOP, shall vest quarterly, in equal portions, over a 4-year
period from its Date of Grant.

 

  10.3

An Option may be subject to such other terms and conditions on the time or times
when it may be exercised, as the Committee may deem appropriate. The vesting
provisions of individual Options may vary.

 

11.

ADJUSTMENTS

 

  11.1

Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of Shares covered by each outstanding Option, the number
of Shares which have been reserved for issuance under this ESOP and/or any other
share option plan adopted by the Company, but as to which no Options have yet
been granted or which have been returned to this ESOP or such other share option
plans upon cancellation or expiration of an Option, as well as the Purchase
Price per share of Shares covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease resulting from a share
split, bonus shares (share dividend), combination or reclassification of the
Shares, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company. The adjustments
described herein shall be made

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  by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, 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 thereof shall be made with
respect to the number or the price of Shares subject to an Option. If the
Options or the Shares issued upon the exercise of such Options will be deposited
with a Trustee, as determined by the Administrator, all of the Shares formed by
these adjustments also will be deposited with the Trustee on the same terms and
conditions as the original Options or Shares.

 

  11.2

Dissolution or Liquidation. In the event of any dissolution or liquidation of
the Company, whether voluntary or involuntary (the “Event”), the Administrator
shall notify each Optionee as soon as practicable prior to the effective date of
such Event. The Option holders shall then have fifteen (15) days to exercise any
unexercised Vested Options held by them at that time, in accordance with the
exercise procedure set forth herein. Upon the expiration of such 15-day period,
all remaining unexercised Options and any non Vested Options will terminate
immediately. The Administrator in its sole discretion may allow the exercise of
any or all-outstanding Options, whether or not such Options are Vested Options,
during a longer period following such notification and prior to the Event, all
subject to the provisions of applicable laws. To the extent it has not been
previously exercised, an Option and all Optionee’s rights thereto will terminate
immediately prior to the Event.

 

  11.3

Transaction.

 

  (a)

In the event of a Transaction, and to the extent possible by the terms of the
Transaction, each outstanding Option shall be assumed for an equivalent option
or right substituted by the successor corporation (or a parent or a subsidiary
of the successor corporation), and appropriate adjustments shall be made in the
number of options in order to reflect such an action and to keep the Optionee
harmless due to the Transaction.

 

  (b)

In the event that as part of the Transaction the successor corporation (or a
parent or a subsidiary of the successor corporation) refuses to assume or
substitute outstanding Options, the vesting periods defined in the Grant Letters
may be fully accelerated, in whole or in part, if so determined by the Board. In
this event, the Administrator shall notify each Optionee in writing or
electronically if and to what extent the Board has approved the acceleration of
an Option, and as to each Option that has been accelerated, the period of time
during which the Vested Option may be exercised by the Optionee. The
determination as to acceleration of any then un-Vested Options and the duration
during which any Vested Options may be exercised in connection with a
Transaction shall be in the sole and absolute discretion of the Board. Subject
to the following paragraph of this Section 11.3(b), any Vested Options shall be
fully exercisable for such period as determined by the Board, where any
un-Vested or Vested but un-exercised Options shall terminate upon the expiration
of such period.

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In any event, any Vested Option not exercised by the date determined above by
the Board above (the “Cut-Off Date”), and any un-Vested Options on such Cut-Off
Date, shall immediately terminate and no longer be exercisable by the Optionee
as of the Cut-Off Date.

 

  (c)

Without derogating from the provisions of paragraph (b) above, if as a condition
precedent to a Transaction, all Optionees are required to sell or exchange their
Vested Options and/or any Shares issued upon exercise thereof as part of the
Transaction, then each Optionee shall be obligated to sell or exchange, as the
case may be, any Vested Options and/or Shares such Optionee holds or purchased
under this ESOP, in accordance with the instructions of the Board, at its sole
and absolute discretion, in connection with the Transaction, and on the same
terms as shall be determined to all the holders of Ordinary Shares in the
Company. For avoidance of doubt, on the Cut-Off Date, any Vested Options not
sold or exchanged and any non-Vested Options shall terminate and expire as of
the Cut-Off Date.

 

  (d)

For the purposes of this paragraph, the Option shall be considered assumed if,
following a Transaction, the Optionee receives the right to purchase or receive,
for each Share subject to the Option immediately prior to the Transaction, the
consideration (whether in shares, stocks, cash, or other securities or property)
received in the Transaction by holders of Shares for each Share held on the
effective date of the Transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the Transaction is not solely shares of the successor corporation or its
parent or subsidiary, the Administrator may, with the consent of the successor
corporation, provide for each Optionee to receive solely Shares of the successor
company or its parent or subsidiary equal in Fair Market Value to the per share
consideration received by holders of Shares in the Transaction.

 

  11.4

No changes will be made to the terms of the Options upon the consummation of a
Transaction, except as the Board determines to be necessary or desired to effect
such Transaction.

 

  11.5

Stock Dividend, Bonus Shares, Stock Split.

 

  (a)

If the outstanding shares of the Company shall at any time be changed or
exchanged by declaration of a share dividend (bonus shares), share split,
combination or exchange of shares, recapitalization, or any other like event by
or of the Company, and as often as the same shall occur, then the number, class
and kind of the Shares subject to this ESOP or subject to any Options therefor
granted, and the Purchase Prices, shall be appropriately and equitably adjusted
so as to maintain the proportionate number of Shares without changing the
aggregate Purchase Price, provided, however, that the Purchase Price shall not
be less than the nominal value of the Share underlying any such Options, and
provided further, that no adjustment shall

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  be made by reason of the distribution of subscription rights (rights offering)
on outstanding shares. Upon the occurrence of any of the foregoing, the class
and aggregate number of Shares issuable pursuant to this ESOP (as set forth in
Section 7 hereof), in respect of which Options have not yet been exercised,
shall be appropriately adjusted, all as will be determined by the Board whose
determination shall be final.

 

  (b)

Except as expressly provided herein, 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 thereof shall be made with respect to, the number or price
of Shares subject to an Option.

 

12.

SHARES SUBJECT TO RIGHT OF FIRST REFUSAL AND BRING ALONG

All Shares subject to outstanding Options, whether exercised or not, shall be
subject to the restrictions and limitations contained in the Articles of
Association.

 

  12.1

Notwithstanding anything to the contrary in the Articles of Association none of
the Optionees shall have a right of first refusal in relation with any Sale (as
hereinafter defined) of shares in the Company.

 

  12.2

Unless otherwise determined by the Committee, until such time as the Company
shall complete an IPO, an Optionee shall not have the right to effect a Sale of
Shares issued upon the exercise of an Option within six (6) months and one day
of the date of the later of the exercise of such Option or issuance of such
Shares (if such an issuance is not made immediately upon exercise).

 

  12.3

Sale, transfer, assignment or other disposal (collectively, “Sale”) of Shares
issuable upon the exercise of an Option shall be subject to the right of first
refusal of other shareholders of the Company, as set forth in the Articles of
Association or in any agreement among the Company and all or substantially all
of its shareholders. In the event that neither the Articles of Association nor
any such agreement shall provide for applicable rights of first refusal, then,
unless otherwise determined by the Committee, until such time as the Company
shall complete an IPO, the Sale by an Optionee of Shares issuable upon the
exercise of an Option shall be subject to a right of first refusal on the part
of the Repurchaser(s), as follows:

 

  (a)

“Repurchaser(s)” means: (i) the Company, if permitted by applicable law, (ii) if
the 15 Company is not permitted by applicable law, then any Affiliate of the
Company designated by the Committee and to the extent permitted by applicable
law, or (iii) if no decision is reached by the Committee or if an Affiliate is
not permitted to be a Repurchaser according to applicable law, then the
Company’s existing shareholders (save, for avoidance of doubt, for other
Optionees who already exercised their Options), pro rata in accordance with
their respective shareholdings in the Company’s issued and outstanding share
capital.

--------------------------------------------------------------------------------

  (b)

The Optionee shall give a notice of sale (hereinafter the “Notice”) to the
Company in order to offer the Shares to the Repurchaser(s). The Company will
forward the Notice to the applicable Repurchaser(s).

 

  (c)

The Notice shall specify the name of each proposed purchaser or other transferee
(hereinafter the “Proposed Transferee”), the number of Shares offered for Sale,
the price per Share and the payment terms. The Repurchaser(s) will be entitled
to twenty-one (21) days from the day of receipt of the Notice (hereinafter the
“Notice Period”), to purchase all or part of the offered Shares (if the
Repurchaser(s) are shareholders of the Company, then such entitlement shall be
on a pro rata basis, based on their respective holdings in the Company’s issued
and outstanding share capital).

 

  (d)

If, by the end of the Notice Period, not all of the offered Shares have been
purchased by the Repurchaser(s), the Optionee shall be entitled to Sell any
remaining un-sold Shares, at any time during the ninety (90) days following the
end of the Notice Period on terms not more favorable to the Proposed Transferee
than those set out in the Notice, provided that the Proposed Transferee agrees
in writing that the provisions of this section shall continue to apply to the
Shares in the hands of such Proposed Transferee. Any Sale of Shares issued under
this ESOP by the Optionee that is not made in accordance with this ESOP or the
Grant Letter shall be null and void.

 

  (e)

If the consideration to be paid for the Shares is not cash, the value of the
consideration shall be determined in good faith by the Board, and if the Company
cannot for any reason pay for the Shares in the form of non-cash consideration,
the Company may pay the cash equivalent thereof, as determined by the Board.

 

  12.4

Prior to an IPO, and in addition to the right of first refusal, any transfer of
Shares by an Optionee shall require the approval of the Board as to the identity
of the transferee and as may be required under the Articles of Association. The
Board may refuse to approve the transfer of Shares by an Optionee to any other
person or entity the Board determines, in its discretion, may be detrimental to
the Company, including without limitation to a competitor of the Company.

 

  12.5

Notwithstanding anything herein to the contrary, the Optionees shall be bound by
the “bring along” provisions of the Articles of Association and/or any agreement
among the Company and all or substantially all of its shareholders, as in effect
from time to time, to the effect that if, prior to the completion of the IPO,
shareholders holding a certain percentage of the Company’s share capital (as set
forth in such agreement) (“Proposing Holders”), elect to sell all of their
equity securities in the Company to a third party, or agree to merge or
consolidate the Company with or into another entity, and such sale or merger is
conditioned upon the sale of all remaining stock of the Company to such third
party, or to the agreement of all of the shareholders, the Optionees shall be
required, if so demanded by the Proposing Holders, to sell or transfer all of
their equity securities in the Company to such third party as stipulated in the
Articles of Association or such other shareholders

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  agreement referred to herein. If no specific percentage of Proposing Holders
is stipulated in the Articles of Association or such a shareholders agreement,
then the percentage for the purposes of this Section 12.5 and for the purposes
of Section 341 of the Companies Law shall be seventy percent (70%).

 

  12.6

Notwithstanding anything herein to the contrary, if prior to the completion of
the IPO, a Transaction is consummated pursuant to which, all or substantially
all of the shares of the Company are sold, or exchanged for securities of
another Company, then each Optionee shall be obligated to sell or exchange, as
the case may be, any Shares such Optionee purchased under this ESOP (in
accordance with the value of the Optionee’s Shares pursuant to the terms of the
Transaction), and perform any action and/or execute any document necessary or
desired in order to effectuate such Transaction, all in accordance with the
instructions issued by the Board in connection with the Transaction, whose
determination shall be final.

 

13.

PURCHASE FOR INVESTMENT; LIMITATIONS UPON IPO; REPRESENTATIONS

 

  13.1

The Company’s obligation to issue or allocate Shares upon exercise of an Option
granted under this ESOP is expressly conditioned upon: (a) the Company’s
completion of any registration or other qualifications of such Shares under all
applicable laws, rules and regulations or (b) representations and undertakings
by the Optionee (or his legal representative, heir or legatee, in the event of
the Optionee’s death) to assure that the sale of the Shares complies with any
registration exemption requirements which the Company in its sole discretion
shall deem necessary or advisable. Such required representations and
undertakings may include representations and agreements that such Optionee (or
his legal representative, heir, or legatee): (a) is purchasing such Shares for
investment and not with any present intention of selling or otherwise disposing
thereof; and (b) agrees to have placed upon the face and reverse of any
certificates evidencing such Shares a legend setting forth (i) any
representations and undertakings which such Optionee has given to the Company or
a reference thereto and (ii) that, prior to effecting any sale or other
disposition of any such Shares, the Optionee must furnish to the Company an
opinion of counsel, satisfactory to the Company, that such sale or disposition
will not violate the applicable laws, rules, and regulations, whether of the
State of Israel or of any other State having jurisdiction over the Company and
the Optionee.

 

  13.2

The Optionee acknowledges that in the event that the Company’s shares shall be
registered for trading in any public market, Optionee’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 Optionee
unconditionally agrees and accepts any such limitations.

 

  13.3

If any Shares shall be registered under the United States Securities Act of
1933, no public offering otherwise than a national securities exchange (as
defined in the United States Securities Exchange Act of 1934, as amended) of any
Shares shall be made by the Optionee (or any other person) under such
circumstances that he or she (or such other person) may be deemed an
underwriter, as defined in the United States Securities Act of 1933.

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  13.4

Upon the grant of Options to an Optionee or the issuance of Shares upon the
exercise thereof, the Company shall obtain from the Optionee the representations
and undertakings as follows, and any other representations and warranties that
the Committee may deem advisable, and the giving of such representations and
warranties by the Optionee shall be a condition precedent to Optionee’s right to
receive the Option and/or be issued the Shares upon exercise thereof:

 

  (a)

That the Optionee knows that there is no certainty that the exercise of the
Options will be financially worthwhile. The Optionee thereby undertakes not to
have any claim against the Company or any of its directors, employees,
stockholders or advisors if it emerges, at the time of exercising the Options,
that the Optionee’s investment in the Company’s Shares was not worthwhile, for
any reason whatsoever.

 

  (b)

That the Optionee knows and understands that his rights regarding the Options
and the Shares are subject for all intents and purposes to the instructions of
the Company’s documents of incorporation and to the agreements of the
shareholders in the Company.

 

  (c)

That the Optionee knows that in addition to the allocations set forth above, the
Company has allocated and/or is entitled to allocate Options and Shares to other
employees and other people, and the Optionee shall have no claim regarding such
allocations, their quantity, the relationship among them and between them and
the other shareholders in the Company, exercising of the options or any matter
related to or stemming from them.

 

  (d)

That the Optionee knows that neither this ESOP nor the grant of Option or Shares
thereunder shall impose any obligation on the Company to continue the engagement
of the Optionee, and nothing in this ESOP or in any Option or Shares granted
pursuant thereto shall confer upon any Optionee any right to continue being
engaged by the Company, or restrict the right of the Company to terminate such
engagement at any time.

 

14.

DIVIDENDS

With respect to all Shares (but excluding, for avoidance of any doubt, any
unexercised Options) allocated or issued upon the exercise of Options purchased
by the Optionee and held by the Optionee or by the Trustee, as the case may be,
the Optionee shall be entitled to receive dividends in accordance with the
quantity of such Shares, subject to the provisions of the Articles of
Association and subject to any applicable taxation on distribution of dividends,
and, when applicable, subject to the provisions of Section 102.

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15.

RESTRICTIONS ON ASSIGNABILITY AND SALE OF OPTIONS

 

  15.1

No Option or any right with respect thereto, purchasable hereunder, whether
fully paid or not, shall be assignable, transferable or given as collateral or
any right with respect to it given to any third party whatsoever, except as
specifically allowed under this ESOP, and during the lifetime of the Optionee
each and all of such Optionee’s rights to purchase Shares hereunder shall be
exercisable only by the Optionee.

Any such action made directly or indirectly, for an immediate validation or for
a future one, shall be void.

 

  15.2

So long as Options and/or Shares are held by the Trustee on behalf of the
Optionee, all rights of the Optionee over the Shares are personal, can not be
transferred, assigned, pledged or mortgaged, other than by will or pursuant to
the laws of descent and distribution.

 

16.

EFFECTIVE DATE AND DURATION OF THE ESOP

This ESOP shall be effective as of the day it was adopted by the Board and shall
remain in full force and effect until terminated by the Board pursuant to
Section 17 below.

 

17.

AMENDMENTS OR TERMINATION

The Board may at any time, but when applicable, after consultation with the
Trustee, amend, alter, suspend or terminate this ESOP. No amendment, alteration,
suspension or termination of this ESOP shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Company, which
agreement must be in writing and signed by the Optionee and the Company.
Termination of this ESOP shall not affect the Committee’s ability to exercise
the powers granted to it hereunder with respect to Options granted under this
ESOP prior to the date of such termination.

 

18.

GOVERNMENT REGULATIONS

This ESOP, and the grant and exercise of Options hereunder, and the obligation
of the Company to sell and deliver Shares under such Options, shall be subject
to all applicable laws, rules, and regulations, whether of the State of Israel
any other State having jurisdiction over the Company and the Optionee,
including, without limitation, the United States Securities Act of 1933, the
Companies Law, the Securities Law, 1968, and the Ordinance (including any and
all rules and regulations promulgated thereunder, as now in effect or as
hereafter amended), and to such approvals by any governmental agencies or
national securities exchanges as may be required. Nothing herein shall be deemed
to require the Company to register the Shares under the securities laws of any
jurisdiction.

 

19.

CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES

Neither this ESOP nor the Grant Letter with the Optionee shall impose any
obligation on the Company or an Affiliate thereof, to continue any Optionee in
its employ or service, and nothing in this ESOP or in any Option granted
pursuant thereto shall confer upon any

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Optionee any right to continue in the employ or service of the Company or an
Affiliate thereof or restrict the right of the Company or an Affiliate thereof
to terminate such employment or service at any time.

 

20.

GOVERNING LAW & JURISDICTION

This ESOP 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 district, Israel shall have sole and exclusive
jurisdiction in any matters pertaining to this ESOP and any Grant Letters
effected hereunder.

 

21.

INTEGRATION OF SECTION 102 AND TAX COMMISSIONER’S PERMIT

 

  21.1

With regards to Approved 102 Options, the provisions of this ESOP and the Grant
Letter shall be subject to the provisions of Section 102 and the ITA
Commissioner’s permit, and the said provisions and permit shall be deemed an
integral part of this ESOP and of the individual Grant Letters with each
Optionee.

 

  21.2

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 this ESOP or the individual Grant Letter of the
Optionees, shall be considered binding upon the Company and the Optionees.

 

22.

TAX CONSEQUENCES

 

  22.1

Any tax consequences 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 and/or its Affiliates, the Trustee or the Optionee), hereunder, shall be
borne solely by the Optionee. The Company and/or its Affiliates and/or the
Trustee shall withhold taxes according to the requirements of any applicable
laws, rules, and regulations, including withholding taxes at source.
Furthermore, the Optionee shall agree to indemnify the Company and/or its
Affiliates 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 Optionee.

 

  22.2

The Company and, when applicable, the Trustee shall not be required to release
any Share or share certificate representing such Shares to an Optionee until all
required payments have been fully made.

 

  22.3

To the extent provided by the terms of any Grant Letter, the Optionee may
satisfy any tax withholding obligation relating to the exercise or acquisition
of Shares under an Option by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Optionee by the
Company) or by a combination of such means: (i) tendering a cash payment;
(ii) subject to the Committee’s approval on or prior to the payment date,
authorizing the Company to

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withhold Shares from the Shares otherwise issuable to the Optionee as a result
of the exercise or acquisition of Shares under the Option in an amount not to
exceed the minimum amount of tax required to be withheld by law; or
(iii) subject to Committee approval on or prior to the payment date, delivering
to the Company owned and unencumbered Shares; provided that Shares acquired on
exercise of Options have been held for at least 6 months from the date of
exercise.

 

  22.4

The Company shall have the right to deduct from all amounts paid to an Optionee
in cash (whether under this ESOP or otherwise) any taxes required by law to be
withheld in respect of Options under this ESOP. In the case of any Option
satisfied by the issuance of Shares, no Shares shall be issued unless and until
arrangements satisfactory to the Committee shall have been made to satisfy any
withholding tax obligations applicable with respect to such Option. Without
limiting the generality of the foregoing and subject to such terms and
conditions as the Committee may impose, the Company shall have the right to
retain, or the Committee may, subject to such terms and conditions as it may
establish from time to time, permit Optionees to elect to tender, Shares to
satisfy, in whole or in part, the amount required to be withheld.

 

  22.5

In respect of any employer’s tax liability arising only for the purpose of
employment taxes such as in the case of social taxes resulting from a breach of
Section 102, the Company shall not bear any tax due at the time of sale of
Shares, all in accordance with the provisions of Section 102.

 

  22.6

Notwithstanding anything herein to the contrary of Section 22.5 above, only in
the event of termination of employment by the Company, other than termination
for Cause, the Company should bear the tax liability arising only for the
purpose of employment taxes such as in the case of social taxes.

 

  22.7

For avoidance of any doubt, notwithstanding anything herein to the contrary, if
termination of employment or service is for Cause, the Company shall not bear
any tax liability derived due to the exercise and or sale of the Options as a
result of Optionee’s termination.

 

23.

NON-EXCLUSIVITY OF THIS ESOP

The adoption of this ESOP by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangements or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of options to purchase shares of the Company otherwise than under this
ESOP, and such arrangements may be either applicable generally or only in
specific cases.

For the avoidance of doubt, prior grant of options to Employees and/or
Non-Employees of the Company under their employment agreements or other
engagement agreements, and not in the framework of any previous option plan,
shall not be deemed an approved incentive arrangement for the purpose of this
Section 23.

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24.

MULTIPLE AGREEMENTS

The terms of each Option may differ from the terms of other Options granted
under this ESOP at the same time, or at any other time. The Board may also grant
more than one Option to a given Optionee during the term of this ESOP, either in
addition to, or in substitution for, one or more Options previously granted to
that Optionee.

 

25.

DISPUTES

Any dispute or disagreement which may arise under or as a result of or pursuant
to this ESOP or the individual Grant Letters shall be determined by the Board in
its sole discretion and any interpretation made by the Board of the terms of
this ESOP or the individual Grant Letters shall be final, binding and
conclusive.

This ESOP was adopted by the Board on November 28, 2010.