S-8 POS












EXHIBIT 4.1  



CHECK POINT SOFTWARE
TECHNOLOGIES LTD. 



2005 ISRAEL EQUITY
INCENTIVE PLAN 



    1.        Purposes
of the Plan. The purposes of this Israel Equity Incentive Plan           are:  



	 	— 	to
attract and retain the best available personnel for positions of substantial
responsibility,






	 	— 	to
provide additional incentive to Service Providers, and






	 	— 	to
promote our employees' interest in the success of the Company's business. 






        Awards
granted under the Plan may be Options, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Deferred Stock Units or Dividend Equivalents, as
determined by the Administrator at the time of grant. 



        Furthermore,
the Plan is designed to benefit from, and is made pursuant to, the provisions of Section
102 of the Ordinance, with respect to Awards granted to Employees pursuant to the Plan. 



    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 of           the Plan.  







		    (b)        “Affiliate” means
an “employing company” as such term           is defined in Section 102(a) of
the Ordinance, other than the Company itself.  







		    (c)        “Applicable
Laws” means the requirements relating to the           administration of, or
otherwise affecting, equity compensation plans under the           Companies Law, the
Securities Law, other applicable laws of Israel, U.S. federal           and state
securities laws, any stock exchange or quotation system on which the           Shares are
listed or quoted, U.S. state corporate laws, and any other country or
          jurisdiction where Awards are granted under the Plan or a sub-plan or addendum
          hereto.  







		    (d)        “Approved
102 Award” means an Award granted pursuant to Section           102(b) of the
Ordinance and held in trust by a Trustee for the benefit of the           Participant.  







		    (e)        “Award” means,
individually or collectively, a grant under the           Plan of Options, Restricted
Stock, Restricted Stock Units, Performance Shares,           Performance Units, Deferred
Stock Units or Dividend Equivalents.  







		    (f)        “Award
Agreement” means the written or electronic agreement           setting forth the
terms and provisions applicable to each Award granted under           the Plan. The Award
Agreement is subject to the terms and conditions of the           Plan.  







		    (g)        “Awarded
Stock” means the Shares subject to an Award.  







		    (h)        “Board” means
the Board of Directors of the Company.  







		    (i)        “Capital
Gains Award (CGA)” means an Approved 102 Award elected           and designated
by the Company to qualify for capital gains tax treatment in           accordance with
Section 102(b)(2) of the Ordinance.  







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		    (j)        “Change
of Control” means the occurrence of any of the           following events, in
one or a series of related transactions:  







		    (i)        any
individual or entity, other than the Company, a subsidiary of the Company or           a
Company employee benefit plan, including any trustee of such plan acting as
          trustee, is or becomes the “beneficial owner”, directly or
indirectly,           of securities of the Company representing fifty percent (50%) or
more of the           combined voting power of the Company’s then outstanding
securities entitled           to vote generally in the election of directors; or  







		    (ii)        a
merger or consolidation of the Company or any direct or indirect subsidiary of
          the Company with any other corporation, other than a merger or consolidation
          which would result in the voting securities of the Company outstanding
          immediately prior thereto continuing to represent (either by remaining
          outstanding or by being converted into voting securities of the surviving
          entity) at least fifty percent (50%) of the total voting power represented by
          the voting securities of the Company or such surviving entity outstanding
          immediately after such merger or consolidation; or  







		    (iii)        the
sale or disposition by the Company of all or substantially all the           Company’s
assets.  







		    (k)        “Committee” means
a Committee appointed by the Board in           accordance with Section 4 of the Plan.  







		    (l)        “Companies
Law” means the Israeli Companies Law, 5759-1999.  







		    (m)        “Company” means
Check Point Software Technologies Ltd.  







		    (n)        “Consultant” means
any person, other than an Employee, engaged           by the Company or any Affiliate to
render services and who is compensated for           such services.  







		    (o)        “Continuous
Status as a Director” means that the Director           relationship is not
interrupted or terminated.  







		    (p)        “Controlling
Shareholder” shall have the meaning ascribed to           such term in Section
32(9) of the Ordinance.  







		    (q)        “Deferred
Stock Unit” means a deferred stock unit Award granted           to a Participant
pursuant to Section  13.  







		    (r)        “Director” means
a member of the Board.  







		    (s)        “Disability” means
total and permanent disability as determined           by the Administrator.  







		    (t)        “Dividend
Equivalent” means a credit, payable in cash, made at           the discretion of
the Administrator, to the account of a Participant in an           amount equal to the
cash dividends paid on one Share for each Share represented           by an Award held by
such Participant. The Dividend Equivalent for each Share           subject to an Award
shall only be paid to a Participant on the vesting date for           such Share.  







		    (u)        “Election” means
the Company’s election of the type of           Approved 102 Awards as set forth in
Section 19(b)(iii).  







		    (v)        “Employee” means
any person employed by the Company or any           Affiliate of the Company, and
includes Officers and Directors. 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 Subsidiary, or any successor.  







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		    (w)        “Fair
Market Value” means, as of any date, the value of Shares           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 of the National
          Association of Securities Dealers, Inc. Automated Quotation           (“Nasdaq”) System,
the Fair Market Value of a Share shall be the           closing sales price for such
shares (or the closing bid, if no sales were           reported) as quoted on such
system or exchange (or the exchange with the           greatest volume of trading in
Shares) on the day of determination, as           reported in The Wall Street
Journal or such other source as the           Administrator deems reliable;  







		    (ii)        If
the Shares are quoted on the Nasdaq System (but not on the Nasdaq National
          Market thereof) or are regularly quoted by a recognized securities dealer
          but selling prices are not reported, the Fair Market Value of a Share 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, as reported in The
Wall           Street Journal or such other source as the Administrator deems
reliable;  







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







		    (x)        “ITA” means
the Israeli Tax Authorities.  







		    (y)        “Non-approved
102 Award” means an Award granted pursuant to           Section 102(c) of the
Ordinance and not held in trust by a Trustee.  







		    (z)        “Non-employee
Director” means a Director who is neither an           Employee nor a
Consultant, and who is a resident of Israel.  







		    (aa)        “Notice
of Grant” means a written or electronic notice           evidencing certain
terms and conditions of an individual Award. The Notice of           Grant is part of the
Award Agreement.  







		    (bb)        “Officer” means,
with respect to the Company and Affiliates           that are Israeli companies, a person
who is a “nosei misra”          within the meaning of the Companies Law
but is not a Director, and with respect           to Affiliates that are not Israeli
companies means a person who is an officer           within the meaning of the applicable
corporate law of the jurisdiction of           incorporation of such Affiliate.  







		    (cc)        “Option” means
an option to purchase Shares granted pursuant to           the Plan.  







		    (dd)        “Option
Agreement” means a written or electronic agreement           between the Company
and a Participant evidencing the terms and conditions of an           individual Option
grant. The Option Agreement is subject to the terms and           conditions of the Plan.  







		    (ee)        “Ordinance” means
the Israeli Income Tax Ordinance (New           Version), 1961 as now in effect and as
hereafter amended.  







		    (ff)        “Ordinary
Income Award (OIA)” means an Approved 102 Award           elected and designated
by the Company to qualify for ordinary income tax           treatment in accordance with
Section 102(b)(1) of the Ordinance.  







		    (gg)        “Ordinary
Shares” shall mean the Ordinary Shares of the           Company, NIS 0.01
nominal value.  







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		    (hh)        “Participant” means
the holder of an outstanding Award granted           under the Plan.  







		    (ii)        “Performance
Share” means a performance share Award granted to           a Participant
pursuant to Section 11.  







		    (jj)        “Performance
Unit”means a performance unit Award           granted to a Participant
pursuant to Section 12.  







		    (kk)        “Plan” means
this 2005 Israel Equity Incentive Plan.  







		    (ll)        “Restricted
Stock” means Shares granted pursuant to Section            9 of the Plan.  







		    (mm)        “Restricted
Stock Unit” means an Award granted pursuant to           Section  10 of the
Plan.  







		    (nn)        “Section
3(i) Award” means an Award granted to a Consultant or           a Controlling
Shareholder in accordance with Section 3(i) of the Ordinance.  







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







		    (pp)        “Section
102 Shares” means Shares issued under a Section 102           Award pursuant to
Section  19(c)(i) below.  







		    (qq)        “Section
102 Period” shall have the meaning ascribed to such           term in Section
 19(c)(i) below.  







		    (rr)        “Securities
Law” means the Israeli Securities Law,           5728–1968.  







		    (ss)        “Service
Provider” means an Employee or Consultant.  







		    (tt)        “Share” means
one Ordinary Share, as adjusted in accordance           with Section 21 of the Plan.  







		    (uu)        “Trustee” means
a trustee designated by the Board and approved           by the ITA, pursuant to the
requirements of Section 102 and a trust           agreement to be entered into and
between the Company and such Trustee and           approved by the ITA.  







    3.        Shares
Subject to the Plan.  



		    (a)        Subject
to the provisions of Section 21 of the Plan, the maximum           aggregate number of
Shares which may be issued under the Plan is 30,000,000           Shares, increased
annually on the first day of each of the Company’s fiscal           years during the
term of the Plan by 3,000,000 Shares.  







		    (b)        The
Shares may be authorized but unissued, or reacquired, Shares.  







		    (c)        Any
Shares subject to Options shall be counted against the numerical limits of           this
Section  3 as one Share for every Share subject thereto. Any           Shares subject to
Restricted Stock, Performance Shares or Restricted Stock Units           with a per share
or unit purchase price lower than 100% of Fair Market Value on           the date of
grant shall be counted against the numerical limits of this           Section 3 as
two Shares for every one Share subject thereto. To the extent           that a Share that
was subject to an Award that counted as two Shares against the           Plan reserve
pursuant to the preceding sentence is recycled back into the Plan           under the
next paragraph of this Section 3, the Plan shall be           credited with two Shares.  







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		    (d)        If
an Award expires or becomes unexercisable without having been exercised in
          full, or, with respect to Restricted Stock, Performance Shares or Restricted
          Stock Units, is forfeited to or repurchased by the Company at its original
          purchase price due to such Award failing to vest, the unpurchased Shares (or
for           Awards other than Options, the forfeited or repurchased shares) which were
          subject thereto shall become available for future grant or sale under the Plan
          (unless the Plan has terminated). Shares that have actually been issued under
          the Plan under any Award shall not be returned to the Plan and shall not become
          available for future distribution under the Plan; provided, however, that if
          Shares of Restricted Stock, Performance Shares or Restricted Stock Units are
          repurchased by the Company at their original purchase price or are forfeited to
          the Company due to such Awards failing to vest, such Shares shall become
          available for future grant under the Plan. Shares used to pay the exercise
price           of an Option shall not become available for future grant or sale under
the Plan.           Shares used to satisfy tax withholding obligations shall not become
available           for future grant or sale under the Plan. To the extent an Award under
the Plan           is paid out in cash rather than shares, such cash payment shall not
reduce the           number of Shares available for issuance under the Plan. Any payout
of Dividend           Equivalents or Performance Units, because they are payable only in
cash, shall           not reduce the number of Shares available for issuance under the
Plan.           Conversely, any forfeiture of Dividend Equivalents or Performance Units
shall           not increase the number of Shares available for issuance under the Plan.  







    4.        Administration
of the Plan.  



		    (a)        Procedure.
The Plan shall be administered by (A) the Board or (B) a           Committee,
which committee shall be constituted to satisfy Applicable Laws. The           Plan may
be administered by different Committees with respect to different           groups of
Service Providers.  







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







		    (i)        to
determine the Fair Market Value of the Shares, in accordance with           Section 2(w) of
the Plan;  







		    (ii)        to
select the Service Providers to whom Awards may be granted hereunder;  







		    (iii)        to
determine whether and to what extent Awards or any combination thereof, are
          granted hereunder;  







		    (iv)        to
determine the number of Shares or equivalent units to be covered by each           Award
granted hereunder;  







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







		    (vi)        to
determine the terms and conditions, not inconsistent with the terms of the
          Plan, of any award granted hereunder. Such terms and conditions include, but
are           not limited to, the exercise price, the time or times when Options may be
          exercised or other Awards vest (which may be based on performance criteria),
any           vesting acceleration or waiver of forfeiture restrictions, and any
restriction           or limitation regarding any Award or Shares relating thereto, based
in each case           on such factors as the Administrator, in its sole discretion,
shall determine;  







		    (vii)        to
construe and interpret the terms of the Plan and Awards;  







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		    (viii)        to
prescribe, amend and rescind rules and regulations relating to the Plan,
          including rules and regulations relating to sub-plans or Plan addendums,
          established for the purpose of qualifying for preferred tax treatment (e.g.,
          Section 102);  







		    (ix)        to
modify or amend each Award (subject to Section 23(c) of the           Plan),
including the discretionary authority to extend the post-termination
          exercisability period of Options longer than is otherwise provided for in the
          Plan;  







		    (x)        to
authorize any person to execute on behalf of the Company any instrument
          required to effect the grant of an Award previously granted by the
          Administrator;  







		    (xi)        to
allow Participants to satisfy withholding tax obligations by electing to have
          the Company and/or its Affiliates and/or the Trustee withhold taxes in
          accordance with the Applicable Laws. The Fair Market Value of any 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 a Participant to have Shares or cash
          withheld for this purpose shall be made in such form and under such conditions
          as the Administrator may deem necessary or advisable;  







		    (xii)        to
determine whether Dividend Equivalents will be granted in connection with
          another Award;  







		    (xiii)        to
determine the terms and restrictions applicable to Awards;  







		    (xiv)        to
determine the price per each Share to be issued under the Awards (excluding           the
Option exercise price to be set in accordance with Section  8(b)           below). Shares
to be issued under grants of Restricted Stock, RSUs, Performance           Shares and
Performance Units may be issued upon payment of their nominal value;  







		    (xv)        to
make an election as to the type of 102 Approved Award; and  







		    (xvi)        to
make all other determinations deemed necessary or advisable for administering
          the Plan.  







		    (c)        Effect
of Administrator’s Decision. The Administrator’s           decisions,
determinations and interpretations shall be final and binding on all
          Participants and any other holders of Awards.  







    5.        Eligibility.
Awards may be granted to Service Providers, provided that           Section 102 Awards
may be granted only to Employees.  



    6.        No
Employment Rights. Neither the Plan nor any Award shall confer upon a
          Participant any right with respect to continuing the Participant’s
          employment with the Company or its Affiliates, nor shall they interfere in any
          way with the Participant’s right or the Company’s or Affiliate’s
          right, as the case may be, to terminate such employment at any time, with or
          without cause or notice.  



    7.        Term
of Plan. The Plan shall continue in effect for a term of ten           (10) years
following the date upon which the Board approved the Plan in           2005.  



    8.        Options.  



		    (a)        Term.
The term of each Option shall be stated in the Notice of Grant;           provided,
however, that the term shall be no more than seven (7) years from           the date
of grant or such shorter term as may be provided in the Notice of           Grant.  







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		    (b)        Option
Exercise Price. The per share exercise price for the Shares to be           issued
pursuant to exercise of an Option shall be determined by the           Administrator and
shall be no less than 100% of the Fair Market Value per share           on the date of
grant.  







		    (c)        Waiting
Period and Exercise Dates. At the time an Option is granted, the
          Administrator shall fix the period within which the Option may be exercised and
          shall determine any conditions which must be satisfied before the Option may be
          exercised. In so doing, the Administrator may specify that an Option may not be
          exercised until the completion of a service period or until performance
          milestones are satisfied. In any event, no Option granted hereunder shall vest
          until at least six months following the Option grant date.  







		    (d)        Form
of Consideration. The Administrator shall determine the acceptable           form of
consideration for exercising an Option, including the method of payment.           In the
case of a Section 102 Award, the Administrator shall determine the           acceptable
form of consideration at the time of grant. Subject to Applicable           Laws, such
consideration may consist entirely of:  







		    (i)        cash;  







		    (ii)        check;  







		    (iii)        other
Shares which (A) in the case of Shares acquired upon exercise of an
          option, have been owned by the Participant for more than six months on the date
          of surrender, and (B) have a Fair Market Value on the date of surrender
          equal to the aggregate exercise price of the Shares as to which said Option
          shall be exercised;  







		    (iv)        delivery
of a properly executed exercise notice together with such other           documentation
as the Administrator and the broker, if applicable, shall require           to effect an
exercise of the Option and delivery to the Company or Affiliate of           the sale
proceeds required to pay the exercise price;  







		    (v)        any
combination of the foregoing methods of payment; or  







		    (vi)        such
other consideration and method of payment for the issuance of Shares to the
          extent permitted by Applicable Laws.  







		    (e)        Exercise
of Option; 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.  







        An
Option may not be exercised for a fraction of a Share. 



        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 the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Participant, provided
however that Shares issued following the exercise of Options granted under Section 102(b)
to the Ordinance shall be issued under the name of the Trustee for the benefit of the
Participant and shall be held in trust by the Trustee. Until the stock certificate
evidencing such Shares is 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
optioned stock, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate 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 stock certificate is issued, except as provided in Section 21
of the Plan. 



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        Exercising
an Option in any manner shall decrease the number of Shares thereafter available for sale
under the Option, by the number of Shares as to which the Option is exercised. 



    9.        Restricted
Stock.  



		    (a)        Grant
of Restricted Stock. Subject to the terms and conditions of the           Plan,
Restricted Stock may be granted to Participants at any time as shall be
          determined by the Administrator, in its sole discretion. The Administrator
shall           have complete discretion to determine (i) the number of Shares
subject to a           Restricted Stock award granted to any Participant, and (ii) the
conditions           that must be satisfied, which typically will be based principally or
solely on           continued provision of services but may include a performance-based
component,           upon which is conditioned the grant, vesting or issuance of
Restricted Stock;           provided, however that no Restricted Stock Award shall vest
until at least one           year following the grant date.  







		    (b)        Other
Terms. The Administrator, subject to the provisions of the Plan,           shall have
complete discretion to determine the terms and conditions of           Restricted Stock
granted under the Plan. Restricted Stock grants shall be           subject to the terms,
conditions, and restrictions determined by the           Administrator at the time the
stock or the restricted stock unit is awarded. The           Administrator may require
the recipient to sign a Restricted Stock Award           agreement as a condition of the
award. Any certificates representing the Shares           of stock awarded shall bear
such legends as shall be determined by the           Administrator.  







		    (c)        Restricted
Stock Award Agreement. Each Restricted Stock grant shall be           evidenced by an
agreement that shall specify the purchase price (if any) and           such other terms
and conditions as the Administrator, in its sole discretion,           shall determine;
provided; however, that if the Restricted Stock grant has a           purchase price,
such purchase price must be paid no more than ten (10) years           following the date
of grant.  







    10.        Restricted
Stock Units.  



		    (a)        Grant.
Restricted Stock Units may be granted at any time and from time to           time as
determined by the Administrator. The Administrator shall have complete
          discretion to determine (i) the number of Shares subject to a Restricted
          Stock Unit award granted to any Participant, and (ii) the conditions that
          must be satisfied, which typically will be based principally or solely on
          continued service but may include a performance-based component, upon which is
          conditioned the grant or vesting of Restricted Stock Units. Restricted Stock
          Units shall be granted in the form of units to acquire Shares. Each such unit
          shall be the equivalent of one Share for purposes of determining the number of
          Shares subject to an Award. Until the Shares are issued, no right to vote or
          receive dividends or any other rights as a shareholder shall exist with respect
          to the units to acquire Shares.  







		    (b)        Vesting
Criteria and Other Terms. The Administrator shall set vesting           criteria in
its discretion, which, depending on the extent to which the criteria           are met,
will determine the number of Restricted Stock Units that will be paid           out to
the Participant. The Administrator may set vesting criteria based upon           the
achievement of Company-wide, Affiliate-wide, business unit, or individual           goals
(including, but not limited to, continued employment), or any other basis
          determined by the Administrator in its discretion; provided, however that no
          Restricted Unit Award shall vest until at least one year following the grant
          date.  







		    (c)        Earning
Restricted Stock Units. Upon meeting the applicable vesting           criteria, the
Participant shall be entitled to receive a payout as specified in           the
Restricted Stock Unit Award Agreement. Notwithstanding the foregoing, at any
          time after the grant of Restricted Stock Units, the Administrator, in its sole
          discretion, may reduce or waive any vesting criteria that must be met to
receive           a payout.  







		    (d)        Form
and Timing of Payment. Payment of earned Restricted Stock Units           shall be
made as soon as practicable after the date(s) set forth in the           Restricted Stock
Unit Award Agreement. The Administrator shall pay earned           Restricted Stock Units
in Shares.  







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		    (e)        Cancellation.
On the date set forth in the Restricted Stock Unit Award           Agreement, all
unearned Restricted Stock Units shall be forfeited to the           Company.  







    11.        Performance
Shares.  



		    (a)        Grant
of Performance Shares. Subject to the terms and conditions of the           Plan,
Performance Shares may be granted to Participants at any time as shall be
          determined by the Administrator, in its sole discretion. The Administrator
shall           have complete discretion to determine (i) the number of Shares
subject to a           Performance Share award granted to any Participant, and (ii) the
conditions           that must be satisfied, which typically will be based principally or
solely on           achievement of performance milestones but may include a service-based
component,           upon which is conditioned the grant or vesting of Performance
Shares.           Performance Shares shall be granted in the form of units to acquire
Shares. Each           such unit shall be the equivalent of one Share for purposes of
determining the           number of Shares subject to an Award. Until the Shares are
issued, no right to           vote or receive dividends or any other rights as a
shareholder shall exist with           respect to the units to acquire Shares.  







		    (b)        Other
Terms. The Administrator, subject to the provisions of the Plan,           shall have
complete discretion to determine the terms and conditions of           Performance Shares
granted under the Plan. Performance Share grants shall be           subject to the terms,
conditions, and restrictions determined by the           Administrator at the time the
stock is awarded, which may include such           performance-based milestones as are
determined appropriate by the Administrator;           provided, however that no
Performance Share Award shall vest until at least one           year following the grant
date. The Administrator may require the recipient to           sign a Performance Shares
agreement as a condition of the award. Any           certificates representing the Shares
of stock awarded shall bear such legends as           shall be determined by the
Administrator.  







		    (c)        Performance
Share Award Agreement. Each Performance Share grant shall be           evidenced by
an agreement that shall specify such other terms and conditions as           the
Administrator, in its sole discretion, shall determine.  







    12.        Performance
Units.  



		    (a)        Grant
of Performance Units. Performance Units are similar to Performance           Shares,
except that they shall be settled in a cash equivalent to the Fair           Market Value
of the underlying Shares, determined as of the vesting date.           Subject to the
terms and conditions of the Plan, Performance Units may be           granted to
Participants at any time and from time to time as shall be determined           by the
Administrator, in its sole discretion. The Administrator shall have           complete
discretion to determine the conditions that must be satisfied, which           typically
will be based principally or solely on achievement of performance           milestones
but may include a service-based component, upon which is conditioned           the grant
or vesting of Performance Units. Performance Units shall be granted in           the form
of units to acquire Shares. Each such unit shall be the cash equivalent           of one
Share. No right to vote or receive dividends or any other rights as a
          shareholder shall exist with respect to Performance Units or the cash payable
          thereunder.  







		    (b)        Number
of Performance Units. The Administrator will have complete           discretion in
determining the number of Performance Units granted to any           Participant.  







		    (c)        Other
Terms. The Administrator, subject to the provisions of the Plan,           shall have
complete discretion to determine the terms and conditions of           Performance Units
granted under the Plan. Performance Unit grants shall be           subject to the terms,
conditions, and restrictions determined by the           Administrator at the time the
grant is awarded, which may include such           performance-based milestones as are
determined appropriate by the Administrator.           The Administrator may require the
recipient to sign a Performance Unit agreement           as a condition of the award. Any
certificates representing the units awarded           shall bear such legends as shall be
determined by the Administrator.  







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		    (d)        Performance
Unit Award Agreement. Each Performance Unit grant shall be           evidenced by an
agreement that shall specify such terms and conditions as the           Administrator, in
its sole discretion, shall determine.  







    13.        Deferred
Stock Units. Deferred Stock Units shall consist of a Restricted           Stock,
Restricted Stock Unit, Performance Share or Performance Unit Award that           the
Administrator, in its sole discretion permits to be paid out in installments           or
on a deferred basis, in accordance with rules and procedures established by           the
Administrator. Deferred Stock Units shall remain subject to the claims of           the
Company’s general creditors until distributed to the Participant.  



    14.        Automatic
Stock Option Grants to Non-employee Directors.  



		    (a)        Procedure
for Grants. All grants of Options to Non-employee Directors           under this
Section  14 shall be automatic and non-discretionary and shall           be made strictly
in accordance with the following provisions:  







		    (i)        Each
Non-employee Director shall be automatically granted an Option to purchase
          50,000 Shares, or a lesser amount determined by the Board, in its sole
          discretion (the “First Option”), upon the date on which such person
          first becomes a Director, whether through election by the shareholders of the
          Company or appointment by the Board of Directors to fill a vacancy; provided,
          however, that a Non-employee Director who has previously been employed by the
          Company (or any Affiliate) shall not be eligible to receive a First Option.  







		    (ii)        At
each of the Company’s annual shareholder meetings, and commencing in           2005, each
Non-employee Director shall be automatically granted an Option           to purchase
25,000 Shares, or a lesser amount determined by the Board, in its           sole
discretion (the “Annual Option”), provided that such individual           has
served as an Non-Employee Director for at least six months prior to the date           of
such annual meeting.  







		    (iii)        Notwithstanding
the provisions of subsections (i) and           (ii) hereof, in the event
that an automatic grant hereunder would cause the           number of Shares subject to
outstanding Options plus the number of Shares           previously purchased upon
exercise of Options to exceed the number of Shares           available for issuance under
the Plan, then each such automatic grant shall be           for that number of Shares
determined by dividing the total number of Shares           remaining available for grant
by the number of Non-employee Directors on           the automatic grant date. Any
further grants shall then be deferred until such           time, if any, as additional
Shares become available for grant under the Plan.  







		    (iv)        The
terms of an Option granted hereunder shall be as follows:  







		    (A)         The
term of the Option shall be seven (7) years.  







		    (B)         The
Option shall be exercisable only while the Non-employee Director remains a Director
of the Company, except as set forth in           subsection (c) hereof.  







		    (C)        The
exercise price per Share shall be 100% of the fair market value           per Share on
the date of grant of the Option.  







		    (D)         The
First Option shall become exercisable as to 1⁄4 of the covered           Shares each
year on the day prior to each year’s normally scheduled annual           shareholders’ meeting,
so as to become 100% vested on the day prior to the           normally scheduled annual
shareholders’ meeting occurring approximately           four years following the
grant date, subject to the Participant maintaining           Continuous Status as a
Director on each vesting date.  







- 10 -










		    (E)         The
Subsequent Option shall become exercisable as to 50% of the covered           Shares six
months following the grant date, and as to an additional 25% of the           covered
Shares each three months thereafter, so as to be 100% vested on the           first
anniversary of the grant date, subject to the Participant maintaining
          Continuous Status as a Director on each vesting date.  







		    (b)        Consideration
for Exercising Non-employee Director Stock Options. The           consideration to be
paid for the Shares to be issued upon exercise of an           automatic Non-employee Director
Option shall consist of any consideration           permitted under Section 8(d) hereof
and as set forth in the Award           Agreement.  







		    (c)        Post-Directorship
Exercisability. If a Non-employee Director           ceases to serve as a
Director, he or she may, but only within one year after the           date he or she
ceases to be a Director, exercise his or her Option to the extent           that he or
she was entitled to exercise it at the date of such termination. To           the extent
that he or she was not entitled to exercise an Option at the date of           such
termination, or if he or she does not exercise such Option (which he was
          entitled to exercise) within the time specified herein, the Option shall
          terminate.  







		    (d)        Limitation
on Automatic Stock Option Grants. The Directors serving           immediately prior
to the appointment or election of a new Non-employee Director,           or prior to an
annual shareholders’ meeting, as the case may be, shall           determine as to
each new Non-employee Director whether he or she shall be           granted an
Award under this Section 14   or
under the comparable provisions of another incentive plan of the Company. A new
Non-employee Director who receives an Award of a First Option under this Plan shall not be
eligible to receive a comparable automatic stock option grant under any other incentive
plan of the Company. A Non-employee Director who receives an Award of a Subsequent Option
under this Plan shall not be eligible to receive a comparable automatic stock option grant
under any other incentive plan of the Company with respect to such fiscal year of the
Company. 








    15.        Termination
of Relationships, Death or Disability.  



		    (a)        Termination
of Relationship as a Service Provider. If a Participant           ceases to be a
Service Provider, other than upon the Participant’s death or           Disability,
then (i) in the case of an Award that is an Option, the           Participant may
exercise any Options within such period of time 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 the Option Agreement), and (ii) in the case of any           Award other
than an Option, the Participant shall be entitled to the benefit           conferred by
such Award during such period of time as is specified in the Award           Agreement to
the extent that the Award is vested on the date of termination (but           in no event
later than the expiration of the term of such Award, if any, as set           forth in
the Award Agreement). In the absence of a specified time in the Award
          Agreement, an Option shall remain exercisable, and the Participant shall be
          entitled to the benefit conferred by an Award other than an Option, for three
          months following the Participant’s termination. If, on the date of
          termination, the Participant is not vested as to his or her entire Award, the
          Shares covered by the unvested portion of the Award shall revert to the Plan.
          If, after termination, the Participant does not exercise his or her Option, or
          receive the benefit conferred by an Award other than an Option, within the time
          specified herein, the Award shall terminate, and the Shares covered by such
          Award shall revert to the Plan.  







		    (b)        Disability.
If a Participant ceases to be a Service Provider as a result           of the Participant’s
Disability, then (i) in the case of an Award that           is an Option, the
Participant may exercise his or her Option within such period           of time as is
specified in the Option Agreement to the extent 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 the Option Agreement), and (ii) in           the case of
any Award other than an Option, the Participant shall be entitled to           the
benefit conferred by such Award during such period of time as is specified           in
the Award Agreement to the extent that the Award is vested on the date of
          termination (but in no event later than the expiration of the term of such
          Award, if any, as set forth in the Award Agreement). In the absence of a
          specified time in the Award Agreement, an Option shall remain exercisable, and
          the Participant shall be entitled to the benefit conferred by an Award other
          than an Option, for twelve (12) months following the Participant’s
          termination due to Disability. If, on the date of termination, the Participant
          is not vested as to his or her entire Award, the Shares covered by the unvested
          portion of the Award shall revert to the Plan. If, after termination, the
          Participant does not exercise his or her Option, or receive the benefit
          conferred by an Award other than an Option, within the time specified herein,
          the Award shall terminate, and the Shares covered by such Award shall revert to
          the Plan.  







- 11 -










		    (c)        Death
of Participant. If a Participant dies while a Service Provider,           then (i) in
the case of an Award that is an Option, the Option may be           exercised following
the Participant’s death within such period of time as           is specified in the
Option Agreement to the extent the Option is vested on the           date of death (but
in no event may the option be exercised later than the           expiration of the term
of such Option as set forth in the Option Agreement), by           the Participant’s
designated beneficiary, provided such beneficiary has           been designated prior to
Participant’s death in a form acceptable to the           Administrator, and (ii) in
the case of any Award other than an Option, the           Participant’s designated
beneficiary, provided such beneficiary has been           designated prior to Participant’s
death in a form acceptable to the           Administrator, shall be entitled to the
benefit conferred by such Award during           such period of time as is specified in
the Award Agreement to the extent that           the Award is vested on the date of death
(but in no event later than the           expiration of the term of such Award, if any,
as set forth in the Award           Agreement). If no such beneficiary has been
designated by the Participant, then           such Option may be exercised by, or the
benefit conferred by such Award shall be           provided to, the personal
representative of the Participant’s estate or by           the person(s) to whom the
Award is transferred pursuant to the           Participant’s will or in accordance
with the laws of descent and           distribution. In the absence of a specified time
in the Award Agreement, the           Option shall remain exercisable, or the benefit
conferred by such Award shall be           provided, for twelve (12) months following
Participant’s death. If the           Option is not so exercised or the benefit
conferred by such Award is not           provided within the time specified herein, the
Award shall terminate, and the           Shares covered by such Award shall revert to the
Plan.  







    16.        Leaves
of Absence. Unless the Administrator provides otherwise or except           as
otherwise required by Applicable Laws, vesting of Awards granted hereunder
          shall cease commencing on the first day of any unpaid leave of absence and
shall           only recommence upon return to active service.  



    17.        Part-Time
Service. Unless the Administrator provides otherwise or except           as otherwise
required by Applicable Laws, any service-based vesting of Awards           granted
hereunder shall be extended on a proportionate basis in the event an           Employee
transitions to a work schedule under which they are customarily           scheduled to
work on less than a full-time basis, or if not on a full-time work           schedule, to
a schedule requiring fewer hours of service. Such vesting shall be
          proportionately re-adjusted prospectively in the event that the Employee
          subsequently becomes regularly scheduled to work additional hours of service.  



    18.        Non-Transferability
of Awards. Unless determined otherwise by the           Administrator, an Award 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           recipient, only by the recipient. If
the Administrator makes an Award           transferable, it may only be transferable for
no consideration to transferees           permitted pursuant to a Form S-8 Registration
Statement (such as family members           or pursuant to a settlement of marital
property rights) and such Award shall           contain such additional terms and
conditions as the Administrator deems           appropriate.  



    19.        Grant
of Approved 102 Awards and Non-approved 102 Awards.  



		    (a)        Participants.
Approved 102 Awards may only be granted to Employees who           are residents of the
State of Israel. Except as otherwise specifically approved           by the ITA, a
Controlling Shareholder or a Consultant shall not be eligible for           grant of
Approved 102 Awards or Non-approved 102 Awards, and shall only be           eligible for
grant of Section 3(i) Awards.  







- 12 -










		    (b)        Grant
of Section 102 Awards. 







		    (i)        The
Company may designate Awards granted to Employees pursuant to Section 102 as
          Non-approved 102 Awards or Approved 102 Awards.  







		    (ii)        The
grant of Approved 102 Awards under the Plan shall be conditioned upon the
          approval of the Plan by the ITA.  







		    (iii)        Approved
102 Awards may either be classified as Capital Gains Awards (CGAs) or           Ordinary
Income Awards (OIAs). No Approved 102 Award may be granted under the           Plan
unless and until the Company’s election of the type of Approved 102           Awards
as CGA or OIA granted to Employees (the “Election”) is
          appropriately filed with the ITA. Such Election shall become effective
beginning           the first date of grant of an Approved 102 Award and shall remain in
effect           until the end of the year following the year during which Employees were
first           granted Approved 102 Awards. The Election shall obligate the Company to
grant only the type of Approved 102 Awards it has elected, and shall apply to
          all Participants who were granted such Approved 102 Awards during the period
          indicated herein, all in accordance with the provisions of Section 102(g) of
the           Ordinance. For the avoidance of doubt, such Election shall not prevent the
          Administrator from granting Employees Approved 102 Awards and Non-approved 102
          Awards simultaneously.  







		    (iv)        All
Approved 102 Awards must be held in trust by a Trustee, as described in
          subsection (c) below.  







		    (v)        For
the avoidance of doubt, the designation of Non-approved 102 Awards and           Approved
102 Awards shall be subject to the terms and conditions of Section 102.








		    (vi)        With
respect to Non-approved 102 Award, if the Employee ceases to be           employed by the
Company or any Affiliate, the Employee 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.  







		    (c)        Trustee.  







		    (i)        All
Approved 102 Awards granted under the Plan and any Shares allocated or           issued
upon exercise of such Approved 102 Awards (“Section 102           Shares”)
or other shares received subsequently following any           realization of rights,
including bonus shares, shall be allocated or issued to           the Trustee, and shall
be held by the Trustee for the benefit of the           Participants for such period of
time as required by Section 102 (the           “Section 102 Period”). In
case the requirements for Approved           102 Awards are not met, then the Approved
102 Awards shall be regarded as           Non-approved 102 Awards, all in accordance with
the provisions of Section 102.  







		    (ii)        Notwithstanding
anything to the contrary, the Trustee shall not release any           Section 102 Shares
or other Shares received subsequently following any           realization of the
Participant’s rights prior to the full payment of the           Participant’s
tax liabilities arising from the grant, exercise, release or           transfer of the
Approved 102 Award and any Section 102 Shares or other Shares           received
subsequently following any realization of rights.  







		    (iii)        With
respect to any Approved 102 Awards, subject to the provisions of Section           102, a
Participant shall not sell or release from trust any Section 102 Shares           or any
Shares received subsequently following any realization of rights,           including
bonus shares, until the lapse of the Section 102 Period.           Notwithstanding the
above, if any such sale or release occurs during the Section           102 Period, the
sanctions under Section 102 shall apply to, and be borne by,           such Participant.  







- 13 -










		    (iv)        Upon
receipt of an Approved 102 Award, the Participant will sign an Award           Agreement
under which the Participant will agree to be subject to the trust           agreement
between the Company and the Trustee, stating, among others, that the           Trustee
will be released from any liability in respect of any action or decision           duly
taken and bona fide executed in relation with the Plan, or any Approved 102
          Award or Section 102 Share granted to him or her thereunder.  







		    (v)        As
long as Approved 102 Awards granted, or Section 102 Shares are held by the
          Trustee, then all rights the Participant possesses over such Awards or Shares
          may not be transferred, assigned, pledged or mortgaged by the Participant,
other           than by will or laws of descent and distribution.  







		    (vi)        If
dividends, whether cash, property or stock dividends, are declared on Section
          102 Shares held by the Trustee, such dividends shall also be subject to the
          provisions of Section 102 and the provisions of this Section  19.           The
Section 102 Period for any such additional shares shall be equal to the           Section
102 Period for the original Section 102 Shares.  







		    (vii)        At
any time after the end of the Section 102 Period with respect to any Section
          102 Awards or Section 102 Shares, the Participant may order (but shall not be
          obligated to order) the Trustee to sell or transfer to the Participant such
          Section 102 Awards or Section 102 Shares, provided that no securities shall be
          sold or transferred until all required payments have been fully made:
          (i) such Participant has deposited with the Trustee an amount of money
          which, in the Trustee’s opinion, is necessary to discharge such
          Participant’s tax obligations with respect to such Section 102 Awards or
          Section 102 Shares, or (ii) the receipt by the Trustee of an
acknowledgment           from the ITA that the Participant has paid any applicable tax
due pursuant to           the Ordinance, or (iii) the Company has made other
arrangements for the           deduction of tax at source acceptable to the Trustee, or
(iv) upon the sale           by the Trustee of any securities held in trust from the
proceeds of which the           Company or the Trustee has withheld all applicable taxes
and has remitted the           amount withheld to the appropriate Israeli tax
authorities, has paid the balance           thereof directly to such Participant, and has
reported to such Participant the           amount so withheld and paid to such tax
authorities.  







		    (d)        Integration
of Section 102 and Tax Assessing Officer’s Permit.  







		    (i)        With
regards to Approved 102 Awards, the provisions of the Plan and the Award
          Agreement shall be subject to the provisions of Section 102 of the Ordinance
and           the Tax Assessing Officer’s permit, and the said provisions and permit
          shall be deemed an integral part of the Plan and of the Award Agreement.  







		    (e)        Tax
Consequences.  







		    (i)        Any
and all tax consequences arising from the grant, exercise transfer, or sale           of
an Award or from the payment for Shares covered thereby or from any other           event
or act under the Plan (whether of a Participant and/or of the Company           and/or a
Affiliate and/or the Trustee) shall be borne solely by the Participant.           The
Company and/or its Affiliates and/or the Trustee shall withhold taxes           according
to the requirements under the applicable laws, rules, and regulations,
          including withholding taxes at source. Furthermore, the Participant shall agree
          to indemnify the Company and the Trustee, if applicable, and hold them harmless
          against and from any and all liability for any tax or interest or penalty
          thereon, including (without limitation) liabilities relating to the necessity
to           withhold, or to have withheld, any tax from any payment made to the
Participant.  







		    (ii)        The
Company, or where applicable, the Trustee, shall not be required to release           any
share certificate to a Participant until all requirement payment have been
          fully made.  







- 14 -










		    (iii)        Without
derogating from Section 2 above and 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 of           the Approved 102
Award, the Fair Market Value of the Shares at the date of grant           shall be
determined in accordance with the average value of the Company’s           Shares on
the thirty trading days preceding the date of grant or the thirty           trading days
following the date of registration for trading, as the case may be.  







    20.        Grant
of Section 3(i) Awards. In the event that grants are made under           Section
3(i) of the Ordinance, the Company may elect to enter into an agreement           with a
trustee concerning the administration of the exercise of Options, the           purchase
and sale of Shares, and the arrangements for payment of or withholding           of taxes
due in connection with such exercise, purchase and sale. The trust           agreement
may provide that the Company will issue the Shares to such trustee for           the
benefit of the Participants. The type of Section 3(i) Awards to be granted
          under the Plan shall be subject to the provisions of Section 3(i) to the
          Ordinance.  



    21.        Adjustments
Upon Changes in Capitalization, Dissolution or Liquidation or           Change of Control.  



		    (a)        Changes
in Capitalization. Subject to any required action by the           shareholders of
the Company, the number of shares of Ordinary Shares covered by           each
outstanding Award, the number of shares of Ordinary Shares which have been
          authorized for issuance under the Plan but as to which no Awards have yet been
          granted (including the automatic annual replenishment of three million Shares)
          or which have been returned to the Plan upon cancellation or expiration of an
          Award, as well as the price per Ordinary Shares covered by each such
outstanding           Award shall be proportionately adjusted for any increase or
decrease in the           number of issued Ordinary Shares resulting from a stock split,
reverse stock           split, stock dividend, combination or reclassification of the
Ordinary Shares,           or any other increase or decrease in the number of issued
Ordinary 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 stock of any
class, or           securities convertible into shares of stock of any class, shall
affect, and no           adjustment by reason thereof shall be made with respect to, the
number or price           of Ordinary Shares subject to an Award.  







		    (b)        Dissolution
or Liquidation. In the event of the proposed dissolution or           liquidation of
the Company, the Administrator shall notify each Participant as           soon as
practicable prior to the effective date of such proposed transaction.           The
Administrator in its discretion may provide for a Participant to have the           right
to exercise his or her Option until ten (10) days prior to such           transaction as
to all of the Awarded Stock covered thereby, including Shares as           to which the
Award would not otherwise be exercisable. In addition, the           Administrator may
provide that any Company repurchase option or forfeiture           rights applicable to
any Award shall lapse 100%, and that any Award vesting           shall accelerate 100%,
provided the proposed dissolution or liquidation takes           place at the time and in
the manner contemplated. To the extent it has not been           previously exercised
(with respect to Options) or vested (with respect to other           Awards), an Award
will terminate immediately prior to the consummation of such           proposed action.  







		    (c)        Change
of Control.  







- 15 -










		    (i)        Options.
In the event of a Change of Control, each outstanding Option           shall be assumed
or an equivalent option substituted by the successor           corporation or a parent or
Affiliate of the successor corporation. In the event           that the successor
corporation refuses to assume or substitute for the Option,           the Administrator,
in its sole discretion, may provide that either (i) all           Options shall
terminate immediately prior to the consummation of the Change of           Control, or
(ii) Participants shall fully vest in and have the right to           exercise their
Options as to all of the Awarded Stock, 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 Change of
Control, the Administrator shall notify the Participant in           writing or
electronically that the Option shall be fully vested and 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 Change of
          Control, the option confers the right to purchase or receive, for each Share of
          Awarded Stock subject to the Option immediately prior to the Change of Control,
          the consideration (whether stock, cash, or other securities or property)
          received in the Change of Control by holders of Ordinary 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 Ordinary Shares); provided, however, that if such
          consideration received in the Change of Control is not solely stock of the
          successor corporation or its parent, the Administrator may, with the consent of
          the successor corporation, provide for the consideration to be received upon
the           exercise of the Option, for each Share of Awarded Stock subject to the
Option,           to be solely stock of the successor corporation or its parent equal in
fair           market value to the per share consideration received by holders of
Ordinary           Shares in the Change of Control.  







		    (ii)        Restricted
Stock, Restricted Stock Units, Performance Shares, Performance           Units and
Deferred Stock Units. In the event of a Change of Control, each           outstanding
Restricted Stock, Restricted Stock Unit, Performance Share,           Performance Unit
and Deferred Stock Unit award (and any related Dividend           Equivalent), shall be
assumed or an equivalent Restricted Stock, Restricted           Stock Unit, Performance
Share, Performance Unit and Deferred Stock Unit award           substituted by the
successor corporation or a parent or Affiliate of the           successor corporation. In
the event that the successor corporation refuses to           assume or substitute for
the Restricted Stock, Restricted Stock Unit,           Performance Share, Performance
Unit or Deferred Stock Unit award, the           Administrator, in its sole discretion,
may provide either that (i) such           Awards shall terminate immediately prior
to the consummation of the Change of           Control, or (ii) Participants shall
fully vest in the Restricted Stock,           Restricted Stock Unit, Performance Share,
Performance Unit or Deferred Stock           Unit Awards including as to Shares (or with
respect to Performance Units, the           cash equivalent thereof) which would not
otherwise be vested. For the purposes           of this paragraph, a Restricted Stock,
Restricted Stock Unit, Performance Share,           Performance Unit and Deferred Stock
Unit award shall be considered assumed if,           following the Change of Control, the
award confers the right to purchase or           receive, for each Share (or with respect
to Performance Units, the cash           equivalent thereof) subject to the Award
immediately prior to the Change of           Control, the consideration (whether stock,
cash, or other securities or           property) received in the Change of Control by
holders of Ordinary 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 Ordinary
Shares); provided, however,           that if such consideration received in the Change
of Control is not solely stock           of the successor corporation or its parent, the
Administrator may, with the           consent of the successor corporation, provide for
the consideration to be           received, for each Share and each unit/right to acquire
a Share subject to the           Award, to be solely stock of the successor corporation
or its parent equal in           fair market value to the per share consideration
received by holders of Ordinary           Shares in the Change of Control.  







    22.        Date
of Grant. The date of grant of an Award shall be, for all purposes,           the
date on which the Administrator makes the determination granting such Award,           or
such other later date as is determined by the Administrator. Notice of the
          determination shall be provided to each Participant within a reasonable time
          after the date of such grant.  



    23.        Amendment
and Termination of the Plan.  



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







- 16 -










		    (b)        Shareholder
Approval. The Company shall obtain shareholder approval of           any Plan
amendment to the extent necessary and desirable to comply with the           Applicable
Laws and in such a manner and to such a degree as is required by the           Applicable
Laws.  







		    (c)        Effect
of Amendment or Termination. No amendment, alteration, suspension           or
termination of the Plan shall impair the rights of any Participant, unless
          mutually agreed otherwise between the Participant and the Administrator, which
          agreement must be in writing (or electronic format) and signed by the
          Participant and the Company or its Affiliate.  







    24.        Conditions
Upon Issuance of Shares.  



		    (a)        Legal
Compliance. Shares shall not be issued pursuant to the exercise of           an Award
unless the exercise of the Award or the issuance and delivery of such           Shares
(or with respect to Performance Units, the cash equivalent thereof) 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 or receipt of           an Award, the
Company may require the person exercising or receiving such Award           to represent
and warrant at the time of any such exercise or receipt 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.  







		    (c)        Tax
Consequences. Any and all tax consequences arising from the grant or
          exercise, or otherwise relating to, an Award or from the payment for Shares
          covered thereby or from any other event or act under the Plan (whether of the
          Participant or of the Company or of a Affiliate) shall be borne solely by the
          Participant. The Company or its Affiliates shall withhold taxes according to
the           requirements under the Applicable Laws, including withholding taxes at
source.           Furthermore, the Participant shall agree to indemnify the Company and
its           Affiliates, if applicable, and hold them harmless from and against any and
all           liability for any tax, or interest or penalty thereon, including
liabilities           relating to the necessity to withhold, or to have withheld, any tax
from any           payment made to the Participant.  







    25.        Liability
of Company.  



		    (a)        Inability
to Obtain Authority. The inability of the Company to obtain           authority from
any regulatory body having jurisdiction, which authority is           deemed by the
Company’s counsel to be necessary to the lawful issuance and           sale of any
Shares hereunder, shall relieve the Company of any liability in           respect of the
failure to issue or sell such Shares as to which such requisite           authority shall
not have been obtained.  







		    (b)        Grants
Exceeding Allotted Shares. If the Awarded Stock covered by an           Award
exceeds, as of the date of grant, the number of Shares which may be issued
          under the Plan without additional shareholder approval, such Award shall be
void           with respect to such excess Awarded Stock, unless shareholder approval of
an           amendment sufficiently increasing the number of Shares subject to the Plan
is           timely obtained in accordance with Section 23(b) of the Plan.  







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



- 17 -










CHECK POINT SOFTWARE
TECHNOLOGIES LTD. 



2005 ISRAEL EQUITY
INCENTIVE PLAN 



OPTION AWARD AGREEMENT 



Unless otherwise defined herein, each
capitalized term defined in the Check Point Software Technologies Ltd. 2005 Israel
Equity Incentive Plan, a copy of which is attached as Exhibit A
 hereto (the “Plan”), shall have the same defined meaning in this
Option Award Agreement (the “Award Agreement”). 



	I.  	NOTICE
OF OPTION GRANT  






	 	
Participant
Name:  






	 	
ID:  






	 	
Address:  






You have been granted an option to
purchase Ordinary Shares (the “Shares”) of the Company, subject to the terms and
conditions of the Plan and this Award Agreement, as follows: 












		
	Date of Grant                                     



Vesting Commencement Date                         



Exercise Price per Share                          



Total Number of Shares Covered by Options Granted
	____________________________________________



____________________________________________



$___________________________________________



____________________________________________










	Designation:	 o
	Approved
102 Option:






	 	 o
	Capital
Gain Option (CGO); or 






	 	 o
	Ordinary
Income Option (OIO) 








	 	 o
	Non-approved
102 Option






	 	 o
	3(i)
Option







		
	Term/Expiration Date:	7 years from Date of Grant 



















        Vesting
Schedule:  




This Option (as defined below) may be
exercised, in whole or in part, in accordance with the following schedule: 



	 	— 	25%
of the options will vest after 24 months, measured from grant date






	 	— 	25%
of the options will vest after 36 months, measured from grant date






	 	— 	25%
of the options will vest after 48 months, measured from grant date






	 	—  	25%
of the options will vest after 60 months, measured from grant date






        Termination
Period:  




        This
Option shall be exercisable for three (3) months after Participant ceases to be a Service
Provider, unless such termination is due to Participant’s death or Disability, in
which case this Option shall be exercisable for twelve (12) months after Participant
ceases to be a Service Provider. Notwithstanding the foregoing, in no event may this
Option be exercised after the Term/Expiration Date as provided above. 



	II.  	AGREEMENT  






	 	A. 	Grant
of Option. 






        The
Plan Administrator of the Company hereby grants to the Participant named in the Notice of
Stock Option Grant (the “Notice of Grant”) attached as Part I of this Agreement
(the “Participant”) an option (the “Option”) to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share set forth in
the Notice of Grant (the “Exercise Price”), subject to the terms and conditions
of the Plan, which is incorporated herein by reference. Subject to Section 23(c) of the
Plan, in the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Award Agreement, the terms and conditions of the Plan shall
prevail. 



	 	B. 	Exercise
of Option. 






		    a)        Right
to Exercise. This Option is exercisable during its term in           accordance with
the Vesting Schedule set out in the Notice of Grant and the           applicable
provisions of the Plan and this Award Agreement.  







		    b)        Method
of Exercise. This Option is exercisable by delivery of an exercise           notice,
in the form attached as Exhibit B (the “Exercise           Notice”) or
in such other form and manner as determined by the           Administrator, which shall
state the election to exercise the Option, the number           of Shares in respect of
which the Option is being exercised (the “Exercised           Shares”), and
such other representations and agreements as may be required           by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall           be completed
by the Participant and delivered to the Company. The Exercise           Notice shall be
accompanied by payment of the aggregate Exercise Price as to all           Exercised
Shares. This Option shall be deemed to be exercised upon receipt by           the Company
of such fully executed Exercise Notice accompanied by such aggregate           Exercise
Price.  







	 	        No
Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with Applicable Laws.  







- 2 -










	 	C. 	Method
of Payment. 






        Payment
of the aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Participant: 



	 	1. 	cash;  






	 	2. 	cashier’s
check;  






	 	3. 	delivery
of a properly executed exercise notice together with such other
               documentation as the Administrator and the broker, if applicable, shall
require                to effect an exercise of the Option and delivery to the Company or
Subsidiary of                the sale proceeds required to pay the exercise price;  






	 	4. 	any
combination of the foregoing methods of payment.  






	 	D. 	Non-Transferability
of Option or Shares; Release of Shares. 






		    1.        This
Option may not be transferred in any manner otherwise than by will or by
               the laws of descent or distribution and may be exercised during the
lifetime of                Participant only by the Participant. The terms of the Plan and
this Award                Agreement shall be binding upon the executors, administrators,
heirs, successors                and assigns of the Participant.  







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







		    3.        With
respect to Non-approved 102 Award, if the Participant ceases to be employed
               by the Company or any Affiliate, the Participant 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 Exercised Shares, all in accordance with
the provisions of                Section 102.  







		    4.        The
Participant shall not dispose of any Exercised Shares in transactions which
               violate, in the opinion of the Company, any applicable laws, rules and
               regulations.  







		    5.        The
Participant agrees that the Company shall have the authority to endorse upon
               the certificate or certificates representing the Exercised Shares such
legends                referring to the foregoing restrictions, and any other applicable
restrictions                as it may deem appropriate (which do not violate the
Participant’s rights                according to this Award Agreement).  







	 	E. 	Term
of Option. 






        This
Option may be exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of this Award
Agreement. 



- 3 -










	 	F. 	Tax
Obligations. 






		    1.        Withholding
Taxes. Participant agrees to make appropriate arrangements           with the Company
(or the Parent or Subsidiary employing or retaining           Participant) for the
satisfaction of all income, employment tax, national           insurance and other
withholding requirements applicable to the Option exercise.           Participant
acknowledges and agrees that the Company may refuse to honor the           exercise and
refuse to deliver Shares if such withholding amounts are not           delivered at the
time of exercise.  







		    2.        With
respect to Approved 102 Awards, the Participant hereby acknowledges that he           is
familiar with Section  102, including without limitations the type of Award granted
hereunder and the tax implications applicable to such grant.  







		    3.        The
Participant accepts the provisions of the trust agreement signed between the
          Company and the Trustee as amended from time to time (the “Trust
          Agreement”), and agrees to be bound by its terms . A copy of the Trust
          Agreement is and will be available for review on the Company’s intranet.
          The Participant undertakes to take all actions and to execute any document
          reasonably requested by the Trustee. The Trustee is released from any liability
          in respect of any action or decision duly taken and bona fide executed in
          relation with the Plan, this Agreement, or any Approved 102 Award or Section
102           Share granted hereunder.  







		    4.        The
income that may be earned in connection with the issuance of the Exercised
          Shares, their transfer in the name of the Participant or sale thereof shall not
          be taken into account in calculation of the entitlement of the Participant to
          any social benefits. Such social benefits shall include, without limitation,
          national insurance, managers’ insurance, study funds, pension funds,
          severance pay and vacation payments. In the event that the Company or any
          Affiliate shall be obligated by applicable law to include social benefits as
          income or profits of the Participant then the Participant shall indemnify and
          hold harmless the Company and the Trustee for any cost that they may incur in
          this regards.  







	 	G. 	Entire
Agreement; Governing Law. 






        The
Plan is incorporated herein by reference. The Plan and this Award Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and Participant with
respect to the subject matter hereof, and may not be modified adversely to the
Participant’s interest except by means of a writing signed by the Company and
Participant. This Award Agreement is governed by the internal substantive laws, but not
the choice of law rules, of the State of Israel. 



	 	H. 	NO
GUARANTEE OF CONTINUED SERVICE. 






        PARTICIPANT
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF
IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY OR
PARTICIPANT’S EMPLOYER (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN
OPTION OR PURCHASING SHARES HEREUNDER). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH PARTICIPANT’S RIGHT OR THE COMPANY’S (OR PARTICIPANT’S
EMPLOYER’S) RIGHT TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER
AT ANY TIME, WITH OR WITHOUT CAUSE. 



[Remainder of Page
Intentionally Left Blank]  




- 4 -











By Participant’s signature and
the signature of the Company’s representative below, Participant and the Company
agree that this Option is granted under and governed by the terms and conditions of the
Plan and this Award Agreement. Participant has reviewed the Plan and this Award Agreement
and all exhibits hereto in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Award Agreement and fully understands all provisions of
the Plan and Award Agreement. Participant hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Award Agreement. Participant further agrees to notify the Company
upon any change in the residence address indicated below. 





	PARTICIPANT:





____________________________________ 

Signature                            



____________________________________ 

Print Name                           



____________________________________

Residence Address



____________________________________
	CHECK POINT SOFTWARE 

TECHNOLOGIES LTD.



____________________________________

By



____________________________________

Title





















- 6 -










EXHIBIT B  



CHECK POINT SOFTWARE
TECHNOLOGIES LTD. 



2005 ISRAEL EQUITY
INCENTIVE PLAN 



EXERCISE NOTICE 



Check Point Software
Technologies Ltd. 

Diamond Tower, 24th floor 

3a Jabotinsky street 

Ramat Gan 

Israel 52520 



Attention: Stock Option
Administration 



    1.        Exercise
of Option. Effective as of today, ________________, 20__, the           undersigned (“Purchaser”)
hereby elects to purchase ______________           Ordinary Shares (the “Shares”)
of Check Point Software Technologies           Ltd. (the “Company”) under and
pursuant to the 2005 Israel Equity           Incentive Plan (the “Plan”) and
the Option Award Agreement dated           ___________ (the “Award Agreement”).
The purchase price for the Shares           shall be $_____, as required by the Award
Agreement.  



	    2.        Delivery
of Payment. Purchaser herewith delivers to the Company the full           purchase
price for the Shares and any required withholding taxes and other           amounts to be
paid in connection with the exercise of the Option.  







    3.        Representations
of Purchaser. Purchaser acknowledges that Purchaser has           received, read, and
understood the Plan and the Award Agreement and agrees to           abide by and be bound
by their terms and conditions.  



    4.        Rights
as Shareholder. Until the issuance (as evidenced by the           appropriate entry
on the books of the Company or of a duly authorized transfer           agent of the
Company) of the Shares, no right to vote or receive dividends or           any other
rights as a shareholder shall exist with respect to the Shares subject           to the
Option, notwithstanding the exercise of the Option. The Shares so           acquired
shall be issued to the Participant or to the Trustee in accordance with           the
Plan and the Award Agreement as soon as practicable after exercise of the
          Option. No adjustment shall be made for a dividend or other right for which the
          record date is prior to the date of issuance, except as provided in
          Section 21 of the Plan.  



    5.        Tax
Consultation. Purchaser understands that Purchaser may suffer adverse           tax
consequences as a result of Purchaser’s purchase or disposition of the
          Shares. Purchaser represents that Purchaser has consulted with any tax
          consultants Purchaser deems advisable in connection with the purchase or
          disposition of the Shares and that Purchaser is not relying on the Company for
          any tax advice.  



    6.        Entire
Agreement; Governing Law. The Plan and Award Agreement are           incorporated
herein by reference. This Agreement, the Plan, and the Award           Agreement
constitute the entire agreement of the parties with respect to the           subject
matter hereof and supersede in their entirety all prior undertakings and
          agreements of the Company and Purchaser with respect to the subject matter
          hereof, and may not be modified adversely to the Purchaser’s interest
          except by means of a writing signed by the Company and Purchaser. This
agreement           is governed by the internal substantive laws, but not the choice of
law rules,           of the State of Israel.  
















		
	Submitted by: 



PURCHASER: 






____________________________________ 

Signature 



____________________________________ 

Print Name 





Address: 



____________________________________ 











____________________________________




 

	Accepted by:



CHECK POINT SOFTWARE 
TECHNOLOGIES LTD.





____________________________________

By



____________________________________

Its





Address:



Check Point Software Technologies Ltd.

Diamond Tower, 24th floor

3a Jabotinsky street

Ramat Gan

Israel 52520







____________________________________

Date Received 










- 2 -