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                                                                     Exhibit 4.1


                      CONDUCT LTD. 1998 SHARE OPTION PLAN
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                                 CONDUCT LTD.

                            1998 SHARE OPTION PLAN


     1.   Purposes of the Plan.  The purposes of this Share Option Plan are to
          --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under this Plan may or may not contain such terms as will qualify the
Options as Options granted pursuant to the provisions of section 102 of the
Israeli Income Tax Ordinance (new version) 1961 (the "Ordinance") and any
regulations, rules, orders or procedures promulgated thereunder, including the
Income Tax Rules (Tax benefits in Stock Issuance to Employees) 5349-1989 (the
"Rules") ("Qualified Options"). Options granted under this Plan may or may not
contain such terms as will qualify the Options as Incentive Share Option
("ISOs") within the meaning of section 422(b) of the United State Internal
Revenue Code of 1986, as amended (the "Code"). Options granted under this Plan
will be designated for tax purposes as determined by the Administrator at the
time of the grant in accordance with Applicable Laws.

     2.   Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a) "Administrator" means the Board or any of its Committees as shall
               -------------
be administering the Plan, in accordance with Section 4 hereof.

          (b) "Applicable Laws" means the requirements relating to the
               ---------------
administration of share option plans under U.S. state corporate laws, U.S.
federal and state securities laws, U.S. and Israeli tax laws, Israel's
securities laws, Israel's companies ordinance, Israel's foreign exchange control
law, any stock exchange or quotation system on which the Shares are listed or
quoted and any other applicable laws of any country or jurisdiction where
Options are granted under the Plan.

          (c) "Board" means the Board of Directors of the Company or of any
               -----
Parent or Subsidiary of the Company.

          (d) "Committee"  means a committee of Directors appointed by the Board
               ---------
in accordance with Section 4 hereof.

          (e) "Company" means Conduct Ltd., a company organized under the laws
               -------
of the State of Israel.

          (f) "Consultant" means any person who is engaged by the Company or any
               ----------
Parent or Subsidiary to render consulting or advisory services to such entity.

          (g) "Director" means a member of the Board.
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          (h) "Employee" means any person, including officers of the Company
               --------
(within the meaning of the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder) and Directors, employed by the
Company or any Parent or Subsidiary of the Company.  A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the
Company, any Parent, any Subsidiary, or any successor.  Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

          (i) "Fair Market Value" means, as of any date, the value of a Share
               -----------------
determined as follows:

              (i)   If the Shares are listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, their 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 the time of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable;

              (ii)  If the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, their 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;

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

          (j) "Option" means a share option granted pursuant to the Plan.
               ------

          (k) "Option Agreement" means a written or electronic agreement between
               ----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant.  The Option Agreement is subject to the terms and conditions of
the Plan.

          (l) "Optioned Shares" means the Shares subject to an Option.
               ---------------

          (m) "Optionee" means the holder of an outstanding Option granted under
               --------
the Plan.

          (n) "Parent" means a "parent corporation," whether now or hereafter
               ------
existing, as defined in Section 424(e) of the U.S. Internal Revenue Code of
1986, as amended.

          (o) "Plan" means this 1998 Share Option Plan.
               ----

          (p) "Repurchaser" means (i) the Company, if permitted by Applicable
               -----------
Laws; (ii) if the Company is not permitted by law, then any affiliate or
subsidiary of the Company; or (iii) if the majority of the Board of Directors of
the Company so decide, any other third party or

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parties designated by the Board of Directors, provided in no case shall the
Company provide financial assistance to any other party to purchase the Shares
if doing so is prohibited by Applicable Laws.

          (q) "Service Provider" means an Employee, Director or Consultant.
               ----------------

          (r) "Share" means a share of the Company's Ordinary Shares having a
               -----
nominal value of NIS 0.01, as adjusted in accordance with Section 12 below.

          (s) "Subsidiary" means a "subsidiary corporation," whether now or
               ----------
hereafter existing, as defined in Section 424(f) of the U.S. Internal Revenue
Code of 1986, as amended.

     3.   Shares Subject to the Plan.  Subject to the provisions of Section 12
          --------------------------
of the Plan, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 1,875,000 Shares, of which up to 1,200,000
Shares may be subject to options intended to qualify under Section 102 of the
Ordinance and regulations, rules and orders of procedures promulgated
thereunder.  The Shares may be authorized, but unissued, or acquired by the
Repurchaser.

          If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
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the Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan.

     4.   Administration of the Plan.
          --------------------------

          (a) Procedure.  The Plan shall be administered by the Board or a
              ---------
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.

          (b) Powers of the Administrator.  Subject to the provisions of the
              ---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority, in its discretion:

              (i)   to determine the Fair Market Value;

              (ii)  to select the Service Providers to whom Options may from
time to time be granted hereunder;

              (iii) to determine the number of Shares to be covered by each
such award granted hereunder;

              (iv)  to approve forms of agreement for use under the Plan;

              (v)   to determine the terms and conditions of any Option granted
hereunder;

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              (vi)   to determine whether and under what circumstances an Option
may be settled in cash under subsection 10(e) instead of Shares;

              (vii)  to reduce the exercise price of any Option to the then
current Fair Market Value, if the Fair Market Value of the Shares covered by
such Option has declined since the date the Option was granted;

              (viii) to prescribe, amend and rescind rules and regulations
relating to the Plan;

              (ix)   subject to Applicable Laws, to allow Optionees to satisfy
withholding tax obligations by electing to have the Company, if permitted under
Applicable Laws, withhold from the Shares to be issued upon exercise of an
Option that number of Shares having a Fair Market Value equal to the amount
required to be withheld.  The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined.  All elections by Optionees to have Shares withheld for this purpose
shall be made in such form and under such conditions as the Administrator may
deem necessary or advisable; and

              (x)    to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

          (c) Effect of Administrator's Decision.  All decisions, determinations
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and interpretations of the Administrator shall be final and binding on all
Optionees.

          (d) Grants to Committee Members.  If the Administrator is a committee
              ---------------------------
appointed by the Board, the grant of options under the Plan to members of such
committee, if any, shall be made by the Board and not by such committee.
Anything in this Plan to the contrary not withstanding, all grants of Options to
Directors and office holders - "Nosei Misra"- as such term is defined in the
Israeli Companies Ordinance (New Version), 1983, as amended from time to time
(the "Companies Ordinance"), shall be authorized and implemented only in
accordance with the provisions of the Companies Ordinance.

     5.   Eligibility.
          -----------

          (a) Options may be granted to Service Providers. The persons eligible
to receive Qualified Options shall include  any  employees  of  the Company. The
persons eligible to receive Non Qualified Options  shall include  any employees
of the Company or of any Parent or Subsidiary of the Company, Directors of the
Company or of any Parent or Subsidiary of the Company who are not employees of
the Company or its Subsidiaries and consultants or  contractors of the Company
or its Subsidiaries.

          (b) The Plan shall not confer upon any Optionee any right with respect
to continuing the Optionee's relationship as a Service Provider with the Company
or a Parent or Subsidiary of the Company, nor shall it interfere in any way with
his or her right or the Company's right, or the right of the Company's Parent or
Subsidiary, to terminate such

                                      -4-
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relationship at any time, with or without cause.

     6.   Application of Section 102 of the Ordinance.
          --------------------------------------------

          (a) The provisions governing the exemption of tax for Options granted
to employees as embodied in Section 102 of the Ordinance shall be applied to
Qualified Options and to the Shares subject to Qualified Options (the "Qualified
Shares").

          (b) No employee receiving Qualified Options  shall claim an exemption
from Israeli Tax pursuant to Sections 95 or 97(a) of the Ordinance or pursuant
to the Law for the Encouragement of Industry (Taxes) 5729-1960 in connection
with a transfer by such employee of an Option or acquired Share prior to the end
of the "Holding Period" as defined in Rule 1( i ) of the Rules.

          (c) The Qualified Options and the Qualified Shares shall be issued to
an escrow agent and held in escrow for the benefit of the Qualified Optionee
for a period of no less than two years from the date of the grant. After the two
year holding period, the escrow agent may release the Qualified Options or the
Qualified Shares to the Optionee only after ( i) the receipt by the escrow agent
of an acknowledgment from the Income Tax Authority that the Optionee has paid
any applicable tax due pursuant to the ordinance and the Rules, or (ii) the
escrow agent withholds any applicable tax due pursuant to the Ordinance and
Rules. The escrow agent and each such Qualified Optionee shall comply with the
Ordinance, the Rules and with the Escrow Agreement entered into between the
Company and the escrow agent. In the event a share dividend is declared on
Qualified Shares, such dividend shall also be subject to the provisions of this
Section 6 and the holding period for such dividend shares shall be measured from
the commencement of the holding period for the Qualified Option from which the
dividend was declared.

          (d) Each Qualified Optionee shall be obligated to immediately notify
the Company and the escrow agent of his or her request, if any, to the income
Tax Authority pursuant to Rule 6(b) of the Rules in the event the Qualified
Share are registered on any stock exchange. Nothing herein shall obligate the
Company to register its shares or any portion of its shares on a stock exchange.

          (e) The exemption under Section 102 of the Ordinance shall be
forfeited and the Optionee shall be required to pay any applicable tax  promptly
at such time as (i) the Optionees employment is terminated during the two year
holding period (other than because of death or some other reason acceptable to
the Income Tax Authority); (ii) the Company or the Optionee fails to comply with
one or more of the conditions for the exemption as required by the Ordinance,
Rules or Income Tax Authority; or (iii) the Income Tax  Authority withdraws or
cancels the exemption for the Plan or the particular Optionee. Notwithstanding
the loss of an exemption, the escrow agent shall continue to hold the Qualified
options or Qualified Shares (to the extent the Option remains exercisable
following termination of employment) for the remainder of the applicable holding
period under Section 102 of the Ordinance.

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     7.   Term of Plan.  The Plan shall become effective upon its adoption by
          ------------
the Board.  It shall continue in effect for a term of ten (10) years after the
earlier of its adoption by the Board or by the Company's Shareholders, unless
sooner terminated under Section 14 of the Plan.

     8.   Term of Option.  The term of each Option shall be stated in the Option
          --------------
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof.

     9.   Option Exercise Price and Consideration.
          ---------------------------------------

          (a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator in accordance with Applicable Laws and subject to guidelines as
shall be suggested by the Board from time to time, if any; provided, however,
that for Options subject to California securities laws, such price shall be (i)
no less than 85% of the Fair Market Value per Share on the date of the grant, or
(ii) if the Option is granted to a Service Provider who, at the time of the
grant of such Option, owns stock representing more than 10% of the voting power
of all classes of shares of the Company or any Parent or Subsidiary of the
Company, no less than 110% of the Fair Market Value per Share on the date of the
grant.

          (b) The 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)
promissory note, (4) consideration received by the Company under a formal
cashless exercise program adopted by the Company in connection with the Plan, or
(5) any combination of the foregoing methods of payment.  To the extent that the
consideration paid for the Shares is denominated in a currency other than New
Israeli Shekels, the exchange rate to be used to obtain a New Israeli Shekel
value of such consideration shall be according to the Representative Rate of the
U.S. dollar published by the Bank of Israel and known on the date of exercise of
the Option.  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.

          (c)  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.

     10.  Exercise of Option.
          ------------------

          (a) Procedure for Exercise; Rights as a Shareholder. Any Option
              -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.  Options subject to California securities laws
shall become exercisable at a rate of no less than 20% per year over five (5)
years from the date the Options are granted (except in the case of Options
granted to Officers, Directors and Consultants).  Unless the Administrator
provides otherwise, vesting of Options granted hereunder shall be tolled during
any unpaid leave of absence.  An Option may not be exercised for a fraction of a
Share.

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          An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised.  Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by Applicable Laws, the Option Agreement and the
Plan.  If required by Israel's Currency Control Law-1978 and the regulations
promulgated thereunder (the "CCL") at the time of the payment, payment for the
Shares by a non Israeli resident shall be effected via an Israeli commercial
bank that qualifies as an "authorized dealer" pursuant to the CCL.  Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse, provided that Shares issued upon exercise of a Qualified Option, within
24 months from the date of the grant, shall be issued in the name of the escrow
agent for the benefit of the Optionee. The escrow agent shall have no rights to
equity participation as to the Shares held in escrow. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option.  Upon their issuance, the
Shares shall carry equal voting rights on all matters where such vote is
permitted by Applicable Law.  The Company shall issue (or cause to be issued)
such Shares promptly after the Option is exercised.  No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 12 of the Plan.

          If any law or regulation requires the Company to take any action with
respect to the Shares specified in such notice before the issuance thereof, then
the date of  their issuance shall be extended for the period necessary to take
such action.

          An Option may not be exercised unless, at the time the Optionee gives
notice of exercise to the Company, the Optionee includes with such notice
payment in cash or by bank check of all withholding taxes due, if any, on
account of his or her acquired Shares under the Option  or  gives other
assurance satisfactory to the Administrator of the payment of those withholding
taxes.

          In the event the Shares are to be held by an escrow agent in
accordance with  the  provisions  of  Section 6 hereof, the escrow agent will
transfer the Shares to the Optionee upon  demand, but in no event earlier than
24 months from date of grant.

          Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

          (b) Termination of Relationship as a Service Provider.  If an Optionee
              -------------------------------------------------
ceases to be a Service Provider, other than upon the Optionee's death or
disability (as defined below), the Optionee may exercise his or her Option
within such period of time (of at least thirty (30) days) as is specified in the
Option Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in

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the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for three (3) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

          (c) Disability of Optionee.  If an Optionee ceases to be a Service
              ----------------------
Provider as a result of the Optionee's total and permanent disability (as
defined in Section 22(e)(3) of the Code), the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement (of at
least six (6) months) to the extent the Option is vested on the date of
termination, but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement.  In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination.  If, on the date of termination,
the Optionee is not vested as to the entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If, after termination,
the Option is not exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

          (d) Death of Optionee.  If an Optionee dies while a Service Provider,
              -----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent that the Option is
vested on the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement) by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance.  In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination.  If, at the time of death, the Optionee is not vested as to the
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan.  If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

          (e) Buyout Provisions.  The Administrator may at any time, if
              -----------------
permitted under Applicable Laws, offer to buy out for a payment in cash or
Shares, an Option previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that
such offer is made.

          (f) Qualified Option Provisions. Notwithstanding the foregoing, any
              ---------------------------
termination of employment prior  to the expiration of the 24 month period
required under Section 102 of the Ordinance and Rules may subject the Optionee
who has received Qualified Options to forfeiture of the tax benefits available
under Section 102 of the Ordinance.

     11.  Non-Transferability of Options.  Options may not be sold, pledged,
          ------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

     12.  Adjustments Upon Changes in Capitalization or Merger.
          ----------------------------------------------------

                                      -8-
<PAGE>

          (a) Changes in Capitalization.  Subject to any required action by the
              -------------------------
shareholders of the Company, the number of Shares covered by each outstanding
Option, and the number of Shares which have been authorized for issuance under
the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the exercise price per Share of each such outstanding Option shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a shares split, reverse shares split, shares dividend,
recapitalization, combination or reclassification of the Shares, rights issues
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."  Such adjustment shall be
made 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 price of Shares subject to an Option.

          (b) Dissolution or Liquidation.  In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Shares, including Shares as to which
the Option would not otherwise be exercisable.  To the extent it has not been
previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.

          (c) Merger or Asset Sale.  In the event of a merger of the Company
              --------------------
with or into another company, or the sale of substantially all of the assets of
the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor company or a Parent or Subsidiary of the successor
company.  In the event that the successor company refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Shares, including shares as to
which it would not otherwise be vested or exercisable.  If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee in
writing or electronically that the Option shall be fully exercisable for a
period of fifteen (15) days from the date of such notice, and the Option shall
terminate upon the expiration of such period.  For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger or
sale of assets, the option confers the right to purchase or receive, for each
Share of Optioned Shares immediately prior to the merger or sale of assets, the
consideration (whether shares, cash, or other securities or property) received
in the merger or sale of assets by holders of Shares for each Share held on the
effective date of the transaction (and if such 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 merger or sale of assets is not solely ordinary shares (or their
equivalent) of the successor company or its Parent, the Administrator may, with
the consent of the successor company, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Shares, to
be solely ordinary shares (or their equivalent) of the successor

                                      -9-
<PAGE>

company or its Parent equal in fair market vale to the per Share consideration
received by holders of in the merger or sale of assets.

     13.  Date of Grant.  Subject to Applicable Laws, the date of grant of an
          -------------
Option shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Board.  Notice of the determination shall be given to each Service Provider to
whom an Option is so granted within a reasonable time after the date of such
grant.

     14.  Amendment and Termination of the Plan.
          -------------------------------------

          (a) Amendment and Termination.  The Board may at any time amend,
              -------------------------
alter, suspend or terminate the Plan.

          (b) Shareholder Approval.  The Board shall obtain shareholder approval
              --------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

          (c) Effect of Amendment or Termination.  No amendment, alteration,
              ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     15.  Conditions Upon Issuance of Shares.
          ----------------------------------

          (a) Legal Compliance.  Shares shall not be issued pursuant to the
              ----------------
exercise of an Option  unless the exercise of such Option, the method of payment
and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

          (b) Investment Representations.  As a condition to the exercise of an
              --------------------------
Option, the Administrator may require the person exercising such Option to
represent and warrant 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.

     16.  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.

     17.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the

                                     -10-
<PAGE>

requirements of the Plan.

     18.  Shareholder Approval.  The Plan shall be subject to approval by the
          --------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

     19.  Information to Optionees and Purchasers.  To the extent required under
          ---------------------------------------
California securities laws, the Company shall provide to each Optionee and to
each individual who acquires Shares pursuant to the Plan, not less frequently
than annually during the period such Optionee or purchaser has one or more
Options outstanding, and, in the case of an individual who acquires Shares
pursuant to the Plan, during the period such individual owns such Shares, copies
of annual financial statements.  The Company shall not be required to provide
such statements to key employees whose duties in connection with the Company
assure their access to equivalent information.

     20.  Governing law. This  Plan 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.

     21.  Tax Consequences. Any tax consequences arising from the grant or
          ----------------
exercise of any Option,  from the  payment for Shares or from any other event or
act (of  the Company  or the Optionee) hereunder, shall be borne solely by the
Optionee.

     22.  Multiple Agreements. The terms of each Option may differ from other
          -------------------
Options granted under the Plan at the same time.  The Administrator may also
grant more than one Option to a given Optionee during the term of the Plan,
either in addition to, or in substitution for, one or more Options previously
granted to that Optionee.

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