Exhibit 4.5

     

    CELLCOM
ISRAEL,
LTD.

     

    2006
SHARE INCENTIVE PLAN

     

    A.  NAME
AND PURPOSE

     

    1.           Name:  This plan, as
amended from time to time, shall be known as the “Cellcom Israel, Ltd. 2006
Share Incentive Plan”.

     

    2.           Purpose: The purpose and
intent of the Plan is to provide incentives to employees, directors, consultants
and/or contractors of the Company and its Affiliates, by providing them with
opportunities to purchase Shares, pursuant to a plan approved by the Board which
is designed to enable the Company to issue options and restricted stock units,
with respect to Israeli residents, pursuant to the provisions of either
Section 102 or Section 3(9) of the Ordinance, as applicable, and the rules
and regulations promulgated thereunder, as amended from time to time, or any
other tax ruling provided by the tax authorities to the Company, as well as with
respect to non-Israeli residents pursuant to the applicable law in their
respective country of residence.

     

    B.
DEFINITIONS

     

    “Adoption Date” means the Date
of Grant, or any other date of commencement of vesting of an Award for the
purposes of this Plan, that is determined by the Committee for a given grant of
an Award

     

    “Affiliate” means any company
(i) that is a Controlling Shareholder (as such term is defined in Section 102 of
the Ordinance) of the Company, or (ii) of which the Company is a Controlling
Shareholder, or (iii) which has a Controlling Shareholder that is also a
Controlling Shareholder of the Company.

     

    “Awards” means Options and/or
RSUs.

     

    “Beneficial Grantee” means the
Grantee in respect of whom, an Award held in Trust by the Trustee was
granted.

     

    “Board” means Board of
Directors of the Company.

     

    “Cessation of Employment” means
the cessation of employment of a Grantee (who was an employee of the Company on
the Date of Grant of any Awards to him or her), with the Company, for any
reason.

     

    “Committee” means the Board or
a committee appointed by the Board for such purpose, if appointed.

     

    “Companies Law” means the
Companies Law 1999.

     

    “Company” means Cellcom
Israel, Ltd., a company organized under the laws of the State of Israel, or any
Affiliate thereof, unless the context otherwise requires.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Controlling Shareholders”
means controlling shareholders of the Company, as such term is defined in the
Ordinance.

     

    “Corporate Transaction” means the occurrence, in
a single transaction or in a series of related transactions, of any one or more
of the following events:

     

    (i)           any
event, as a result of which, Discount Investment Corporation Ltd. (“DIC”) ceases
to control (as such term is defined in the Israeli Securities Law, 1968) the
Company;

     

    (ii)          a
sale or other disposition of all or substantially all, as determined by the
Board in its discretion, of the consolidated assets of the Company and its
subsidiaries;

     

    (iii)         a
merger, consolidation or similar transaction following which the Company is not
the surviving corporation; or

     

    (iv)         a
merger, consolidation or similar transaction following which the Company is the
surviving corporation but the Ordinary Shares of the Company outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.

     

    Whether a transaction is a “Corporate
Transaction” as defined above, shall be finally and conclusively determined by
the Committee in its absolute discretion.

     

    “Date of Grant” means the
effective date of the grant of an Award, as detailed in Section 5.1(b)
hereinafter.

     

    “Date of Cessation” means (i)
the date on which the employee-employer relationship between the Grantee and the
Company ceases to exist, or (ii) if the Grantee is a contractor or consultant -
the date on which the consulting or contractor agreement between the Grantee and
the Company expires, or the date on which either of the parties to such
agreement sends the other notice of its intention to terminate said agreement,
or (iii) if the Grantee is a director - the date on which the Grantee ceases to
serve as a director of the Company.

     

    “Disability” means the
inability to engage in any substantial gainful occupation for which the Grantee
is suited by education, training or experience, by reason of any medically
determinable physical or mental impairment that is expected to result in such
person’s death or to continue for a period of six (6) consecutive months or
more.

     

    “Exercise Date” means the
actual date of exercise of Options.

     

    “Exercise Price” means the
purchase price per Exercised Share, subject to each Option, or the nominal value
per Exercised Share to be paid upon the vesting of an RSU, if
applicable.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Exercised Shares” means Shares
received upon exercise of Options (or Rights, if applicable) and/or vesting of
RSUs.

     

    “Grantee” means the person to
whom Awards shall be granted under this Plan.

     

    “IPO” means an initial public
offering of Shares.

     

    “Notice of Exercise” means a
written notice of exercise of an Option, delivered by a Grantee to the
Company.

     

    “Notice of Grant” means a
written notice of the grant of an Award.

     

    “102 Awards” means grants of
Awards to Israeli employees, directors and office holders of the Company,
other than to a Controlling Shareholder, pursuant to the provisions of
Section 102 of the Ordinance, the 102 Rules, and any other regulations,
rulings, procedures or clarifications promulgated thereunder. Such grants of
Awards may be pursuant to (i) a Taxation Route and/or (ii) Section 102(c) of the
Ordinance (“102(c)
Awards”).

     

    “102 Rules” means the Income
Tax Rules (Tax Relief in Issuance of Shares to Employees), 2003.

     

    “Options” means options to
purchase Shares.

     

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

     

     “Plan” means this “Cellcom
Israel, Ltd. 2006 Share Incentive Plan”, as amended from time to
time.

     

    “Representative” means any
third party designated by the Company for the purpose of the exercise of the
Options, as provided in Section 9.2 hereinafter.

     

    “Rights” means rights issued in
respect of Exercised Shares, including bonus shares but excluding cash
dividends.

     

    “RSUs” means Restricted Stock
Units, as described in Section 13 below.

     

    “Shares” means ordinary shares,
nominal value of NIS 0.01 each of the Company (subject to an expected split of
the Company’s shares).

     

    “Taxation Route” means the
capital gains route under Section 102(b)(2) of the Ordinance.

     

    “3(9) Awards” means grants of
Awards to Israeli consultants, contractors or Controlling Shareholders of the
Company pursuant to the provisions of Section 3(9) of the Ordinance and the
rules and regulations promulgated thereunder, or any other section of the
Ordinance that will be relevant for such issuance in the future.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Trust” means the holding of
each Award and Exercised Shares by the Trustee in Trust for the benefit of the
Beneficial Grantee.

     

    “Trustee” means a trustee
designated by the Committee in accordance with the provisions of Section 3.4
hereof and, with respect to 102 Awards, approved by the Israeli Tax
Authority.

     

    “Trust Expiration Date” means
1.1.2015, or any other date determined by the Board.

     

    “Trust Period” means the period
of time required under a Taxation Route for Awards and/or Exercised Shares to be
held in Trust in order for the Beneficial Grantee to enjoy the tax benefits
afforded under such Taxation Route, as will be applicable for such Taxation
Route from time to time.

     

    “Vesting Period” of an Award
means, for the purpose of the Plan and its related instruments, the period
between the Adoption Date and the date on which (i) an Option becomes
exercisable into a Share; or (ii) an RSU is automatically vested into a Share,
as applicable.

     

    C.  GENERAL
TERMS AND CONDITIONS OF THE PLAN

     

    3.           Administration:

     

    3.1           The
Plan will be administered by the Board or, subject to applicable law, including
but not limited to the instructions of the Companies Law, by a Committee, which
will consist of such number of directors of the Company as may be fixed, from
time to time, by the Board. If a Committee is not appointed, the term Committee,
whenever used herein, shall mean the Board. The Board shall appoint the members
of the Committee, may from time to time remove members from, or add members to,
the Committee and shall fill vacancies in the Committee however
caused.

     

    3.2           The
Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places, as it shall determine. Actions taken by a
majority of the members of the Committee, at a meeting at which a majority of
its members is present, or acts reduced to, or approved in, writing by all
members of the Committee, shall be the valid acts of the Committee. The
Committee may appoint a secretary, who shall keep records of its meetings and
shall make such rules and regulations for the conduct of its business, as it
shall deem advisable.

     

    3.3           Subject
to the general terms and conditions of this Plan and applicable law, the
Committee shall have the full authority in its discretion, from time to time and
at any time to determine (i) the Grantees under the Plan, (ii) the
number of Shares subject to each Award, (iii) the time or times at which
the same shall be granted, (iv) the schedule and conditions, including
performance conditions, if applicable, on which such Awards may be exercised
and/or on which such Shares shall be paid for and/or on which such RSUs may
vest, and/or (v) rules and provisions, as may be necessary or appropriate to
permit eligible Grantees who are not Israeli residents to participate in the
Plan and/or to receive preferential tax treatment in their 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    country
of residence, with respect to the Awards granted hereunder, and/or (vi) any
other matter which is necessary or desirable for, or incidental to, the
administration of the Plan.

     

    3.4           Furthermore,
subject to the general terms and conditions of the Plan, the Ordinance, and any
other applicable laws and regulations, the Committee shall have the full
authority in its discretion, from time to time and at any time, to
determine:

     

    (a)           With
respect to grants of 102 Awards pursuant to the Taxation Route the identity of
the trustee who shall be granted such 102 Awards in accordance with the
provisions of this Plan and the Taxation Route; and

     

    (b)           With
respect to the grant of 3(9) Awards - whether or not 3(9) Awards shall be
granted to a trustee in accordance with the terms and conditions of this Plan,
and the identity of the trustee who shall be granted such 3(9) Awards in
accordance with the provisions of this Plan.

     

    3.5           Notwithstanding
the aforesaid, the Committee may, from time to time and at any time, grant
102(c) Awards.

     

    3.6           The
Committee may, from time to time, adopt such rules and regulations for carrying
out the Plan, as it may deem necessary.  No member of the Board or of
the Committee shall be liable for any act or determination made in good faith
with respect to the Plan or any Award granted thereunder.

     

    3.7           The
interpretation and construction by the Committee of any provision of the Plan or
of any Award thereunder shall be final and conclusive and binding on all parties
who have an interest in the Plan or any Award or Share issuance thereunder,
unless otherwise determined by the Board.

     

    4.           Eligible
Grantees:

     

    4.1           The
Committee, at its discretion, may grant Awards to any employee, director,
consultant and/or contractor of the Company. Anything in this Plan to the
contrary notwithstanding, all grants of Awards shall be authorized and
implemented only in accordance with the provisions of applicable
law.

     

    4.2           The
grant of an Award to a Grantee hereunder, shall neither entitle such Grantee to
participate, nor disqualify him from participating, in any other grant of Awards
pursuant to this Plan or any other incentive plan of the Company.

     

    5.           Grant of Awards, Issuance of Shares,
Dividends and Shareholder Rights:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    5.1           Grant of Awards and Issuance
of Shares.

     

    (a)           Subject
to the provisions of the Ordinance and applicable law (it being understood that,
unless otherwise determined by the Committee, the following shall not apply to
Awards granted to non Israeli Grantees),

     

    (i)           All
grants of Awards to Israeli employees, directors and office holders of the
Company, other than to Controlling Shareholders, shall be as 102 Awards and
shall be subject either to the Taxation Route or to Section 102(c) of the
Ordinance; and

     

    (ii)          All
grants of Awards to Israeli consultants, contractors or Controlling Shareholders
of the Company shall be as 3(9) Awards.

     

    (b)           Subject
to Sections 7.1 and 7.2 hereof, the Date of Grant shall be the date the
Committee resolves to grant such Award, unless specified otherwise by the
Committee in its determination relating to the grant of such
Award.  The Committee shall promptly give the Grantee a Notice of
Grant.

     

    (c)           Trust.  In
the event Awards are deposited with a Trustee, the Trustee shall hold each such
Award and Exercised Shares in Trust for the benefit of the Beneficial Grantee;
provided, however, that
unless the Committee determines otherwise, in its sole and absolute discretion,
the Trustee shall not hold any Awards in Trust following the Trust Expiration
Date, all Awards held in Trust on such date shall be transferred automatically
to the Grantee, and all implications, including tax implications, resulting from
such transfer of Awards shall be borne solely by the Grantee.

     

    In accordance with Section 102, the
tax benefits afforded to 102 Awards and any Exercised Shares, in accordance with
the Taxation Route, shall be contingent upon the Trustee holding such 102 Awards
for the applicable Trust Period.

     

    With
respect to 102 Awards granted to the Trustee, the following shall
apply:

     

    (i)            A
Grantee granted 102 Awards shall not be entitled to sell the Exercised Shares or
to transfer such Exercised Shares (or such 102 Awards) from the Trust prior to
the lapse of the Trust Period; and

     

    (ii)           Any
and all Rights shall be issued to the Trustee and held thereby until the lapse
of the Trust Period, and such Rights shall be subject to the Taxation
Route.

     

    Notwithstanding
the aforesaid, Exercised Shares or Rights may be sold or transferred, and the
Trustee may release such Exercised Shares (or 102 Awards) or Rights from Trust, prior to
the lapse of the Trust Period, provided however, that tax is paid or withheld in
accordance with Section 102 of the Ordinance and/or the 102 Rules, and/or any


     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    other
provision of the Ordinance and any regulation, ruling, procedure and
clarification promulgated thereunder, that will be relevant from time to
time.

     

    All
certificates representing Exercised Shares issued to the Trustee under the Plan
shall be deposited with the Trustee, and shall be held by the Trustee until such
time that such Shares are released from the Trust as herein
provided.

     

    Alternatively,
in the event the Company’s Shares are listed on any stock exchange or admitted
to trading on an electronic securities trading system, whether in Israel or
outside of Israel, the Company shall register the Exercised Shares issued to the
Trustee pursuant to the Plan, in the name of the Trustee, in accordance with any
applicable laws, rules and regulations, until such time that such Shares are
released from the Trust as herein provided.

     

    (d)           Subject
to the terms hereof, at any time after the Awards are vested, with respect to
any 102 Awards or Exercised Shares held by the Trustee the following shall
apply:

     

    (i)           Upon
the written request of any Beneficial Grantee, the Trustee shall release  from the Trust, within
a reasonable period of time, the Awards granted, and/or the Exercised Shares
issued, on behalf of such Beneficial Grantee, by executing and delivering to the
Company such instrument(s) as the Company may require, giving due notice of such
release to such Beneficial Grantee, provided, however, that the
Trustee shall not so release any such Awards and/or Exercised Shares to such
Beneficial Grantee unless the latter, prior to, or concurrently with, such
release, provides the Trustee with evidence, satisfactory in form and substance
to the Trustee, that all taxes, if any, required to be paid upon such release
have, in fact, been paid.

     

    (ii)          Alternatively,
subject to the terms hereof, with respect to any  Exercised Shares
held by the Trustee, provided the Exercised Shares are listed on a stock
exchange or admitted to trading on an electronic securities trading system (such
as the Nasdaq), upon the written instructions of the Beneficial Grantee to sell
any Exercised Shares, the Company and/or the Trustee shall use their reasonable
efforts to effect such sale within a reasonable period of time, and shall
transfer such Exercised Shares to the purchaser thereof concurrently with the
receipt of, or after having made suitable arrangements to secure, the payment of
the proceeds of the purchase price in such transaction.  The Company
and/or the Trustee, as applicable, shall withhold from such proceeds any and all
taxes required to be paid in respect of such sale, shall remit the amount so
withheld to the appropriate tax authorities and shall pay the balance thereof
directly to the Beneficial Grantee, reporting to such Beneficial Grantee and to
the Company the amount so withheld and paid to said tax authorities. In case an
appropriate tax exemption or partial tax exemption certificate was provided to
the Company and/or Trustee, an adequate time prior to the date in which the
proceeds are to be paid, the Company and/or Trustee shall not withhold or
partially withhold the taxes required, in accordance with the tax exemption
certificate, as the case may be).

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.2           Guarantee. In the
event a 102(c) Award is granted to a Grantee who is an employee at the time of
such grant, upon  the Grantee’s Cessation of Employment, such Grantee
shall provide the Company, to its full satisfaction, with a guarantee or
collateral securing the future payment of all taxes required to be paid upon the
sale of the Exercised Shares received upon exercise of such 102(c) Award or its
vesting (if an RSU), all in accordance with the provisions of Section 102 of the
Ordinance, the 102 Rules and the regulation or orders promulgated
thereunder.

     

    5.3           Dividend.  All
Exercised Shares shall entitle the Grantee thereof to receive dividends with
respect thereto. For so long as Exercised Shares deposited with the Trustee on
behalf of a Beneficial Grantee are held in the Trust, the cash dividends paid or
distributed with respect thereto shall be distributed directly to such
Beneficial Grantee, subject to any applicable taxation on distribution of
dividends, and when applicable subject to the provisions of Section 102 of the
Ordinance, the 102 Rules and the regulations or orders promulgated
thereunder.

     

    5.4           Voting Rights; Shareholder
Rights.  The holder of an Award shall have no shareholder
rights with respect to the Shares subject to such Award until such person shall
have exercised the Award, or the Award has vested (if an RSU), as the case may
be, has paid the Exercise Price, if applicable, and has become the record holder
of the applicable Exercised Shares.

     

    As long as the Exercised Shares are
held by the Trustee, the voting rights at the Company’s general meeting attached
to such Exercised Shares will remain with the Trustee. The Trustee shall not be
obligated to exercise such voting rights at general meetings, nor to notify the
Grantee of any Exercised Shares held in the Trust, of any meeting of the
Company’s shareholders. However, the Trustee may, at his sole discretion,
empower the respective Beneficial Grantee, to vote in name and in place of the
Trustee according to such Beneficial Grantee’s instructions, if
provided.

     

    6.           Reserved Shares: The total
number of Shares that may be subject to Awards granted under this Plan shall not
exceed 2,500,000 in the aggregate, subject to adjustments as provided in
Section 11 hereof. All Shares under the Plan, in respect of which the right
of a Grantee to purchase the same shall, for any reason, terminate, expire or
otherwise cease to exist, shall again be available for grant through Awards
under the Plan, and under any other plans or sub-plans, as the Committee may
determine at its own discretion, from time to time, provided, however, that
until termination of the Plan the Company shall at all times reserve sufficient
number of unissued Shares to meet the requirements of the Plan.

     

    Without derogating from the foregoing,
the Committee shall have full authority in its discretion to determine that the
Company may issue, for the purposes of this Plan and/or any other plans,
previously issued Shares that are held by the Company, from time to time, as
Dormant Shares (as such term is defined in the Companies Law).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    7.           Required Approvals; Notice of Grant;
Vesting and Re-pricing:

     

    7.1           The
implementation of the Plan and the grant of any Award under the Plan shall be
subject to the Company’s procurement of all approvals and permits required by
applicable law or regulatory authorities having jurisdiction over the Plan, the
Awards granted under it, and the Exercised Shares issued pursuant to
it.

     

    The Company shall obtain the approval
of the Company’s shareholders for the adoption of this Plan or for any amendment
or sub-plan adopted in the future to this Plan, if shareholders’ approval is
necessary to comply with the Company's bylaws, any applicable law, rule or
regulation, including without limitation the US securities laws, or the
securities laws of other jurisdictions applicable to Awards granted to Grantees
under this Plan, or if shareholders’ approval is required by any authority or by
any governmental agencies or national securities exchanges, including without
limitation the US Securities and Exchange Commission.

     

    7.2           The
Notice of Grant shall state, inter alia, the number of
Shares subject to each Award, the vesting schedule, the dates when the Awards
may be exercised or shall automatically vest into Exercised Shares (for RSUs),
as applicable, their Exercise Price, if applicable, whether the Awards granted
to Israeli Grantees are 102 Awards (and in particular whether the 102 Awards are
granted under the Taxation Route, or as 102(c) Awards) or 3(9) Awards, and such
other terms and conditions as the Committee at its discretion may prescribe,
provided that they are consistent with this Plan. Each Notice of Grant
evidencing a 102 Award shall, in addition, be subject to the provisions of the
Ordinance applicable to such awards.

     

    Furthermore, each Grantee of a 102
Award under the Taxation Route shall be required to execute a declaration
stating that he or she is familiar with the provisions of Section 102 of the
Ordinance and the Taxation Route, and to undertake not to sell or transfer the
Awards and/or the Exercised Shares prior to the lapse of the applicable Trust
Period, unless he or she pays all taxes that may arise in connection with such
sale and/or transfer.

     

    7.3           Term of Awards;
Vesting.  Without derogating from the rights and powers of the
Committee under Section 7.2 hereof and subject to Section 10 hereinafter,
unless otherwise specified by the Committee, the Awards shall be for a term of
six (6) years, and, unless determined otherwise by the Committee, the Vesting
Period pursuant to which such Awards shall vest, shall be such that 25% of the
Awards granted to a Grantee in a specific grant shall vest on each of the first,
second, third and fourth anniversaries of the Adoption Date; provided,
however, that no Award
granted under this Plan shall vest prior to the consummation of an
IPO.

     

    Unless determined otherwise by the
Committee, any period in which the Grantee shall not be employed by the Company,
or in which the Grantee shall have taken an unpaid leave of absence, or in which
the Grantee shall cease to serve as a director, consultant or contractor of the
Company, shall not be included in the Vesting Period.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    7.4           Acceleration of
Vesting.  Anything herein to the contrary in this Plan
notwithstanding, the Committee shall have full authority, whether before of
after the grant of an Award, to determine any provisions regarding the
acceleration of the Vesting Period of any Award, or the cancellation of all or
any portion of any outstanding restrictions with respect to any Award upon
certain events or occurrences, on such terms and conditions as the Committee
shall deem appropriate.

     

    7.5           Repricing. Subject to
applicable law, the Committee shall have full authority to, at any time and from
time to time, (i) grant in its discretion to the holder of an outstanding
Award, in exchange for the surrender and cancellation of such Award, a new Award
having an Exercise
Price lower than provided in the Award so surrendered and
canceled and containing such other terms and conditions as the Committee may
prescribe in accordance with the provisions of the Plan, or (ii) effectuate a decrease in the
Exercise Price (see Section 8 below) of outstanding Awards.

     

    8.           Exercise Price: The Exercise
Price shall be determined by the Committee in its sole and absolute discretion,
subject to applicable law and to guidelines adopted by the Board from time to
time.

     

    9.           Exercise of
Options:

     

    9.1           Options
shall be exercisable pursuant to the terms under which they were awarded and
subject to the terms and conditions of the Plan.

     

    9.2           The
exercise of an Option shall be made by a written Notice of Exercise delivered by
the Grantee to the Company at its principal executive office, and/or to a
Representative and, with respect to Options held in the Trust, to the Trustee,
in such form and method as may be determined by the Company and when applicable,
by the Trustee in accordance with the requirements of Section 102 of the
Ordinance, specifying the number of Shares to be purchased and accompanied by
the payment of the Exercise Price, at the Company’s or the Representative’s
principal office, and containing such other terms and conditions as the
Committee shall prescribe from time to time.

     

    9.3           Notwithstanding
the provisions of Section 9.2 above, and unless otherwise provided by the Board,
all Options shall be exercised using the following method (the “Net Exercise”):

     

    (a)           The
Company shall issue to the Grantee (or to the Trustee, as applicable) a number
of Shares having an aggregate Market Value (as defined below) equal to the
Benefit Amount (as defined below) (the “Net Exercise
Shares”);

     

    For the purposes of this
Section:

     

    (i) The “Benefit Amount” shall mean the
difference between:

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

          (A) 
(i) the Market Value times (ii) the number of Shares subject to the Options for
which a Notice of Exercise has been delivered to the Company; and

     

          (B)  
(i) the Exercise Price times (ii) the number of Shares subject to the Options
for which a Notice of Exercise has been delivered to the Company.

     

                (ii)
“Market Value” shall
mean the closing price for a Share on the last trading day prior to the date of
exercise, as reported or quoted on the Nasdaq or on any other stock market on
which Shares are traded, as shall be determined by the Committee.

     

    (b)           The
Grantee shall not be required to pay to the Company any sum with respect to the
exercise of such Options, other than a sum equal to [the aggregate nominal value
of the Net Exercise Shares (which shall be paid in a manner provided in Section
9.5 below) (the “Nominal Value
Sum”). However, the Company shall have the full authority in its
discretion to determine at any time that the Nominal Value Sum shall not be paid
and that the Company shall capitalize applicable profits or take any other
action to ensure that it meets any requirement of applicable law regarding
issuance of Shares for consideration that is lower than the nominal value of
such Shares;

     

    (c)           No
fractional Shares will be issued to the Grantee and the number of Shares granted
to the Grantee under the Plan shall be rounded off (upward or downward) to the
nearest whole number.

     

    9.4           Anything
herein to the contrary notwithstanding, but without derogating from the
provisions of Section 10 hereof, unless otherwise determined by the
Committee, if any Option has not been exercised and the Shares subject thereto
not paid for within six (6) years after the Date of Grant (or any shorter period
set forth in the Notice of Grant), such Option and the right to acquire such
Shares shall terminate, all interests and rights of the Grantee in and to the
same shall ipso facto
expire, and, in the event that in connection therewith any Options are still
held in the Trust as aforesaid, the Trust with respect thereto shall ipso facto expire, and the
Shares subject to such Options shall again be available for grant through Awards
under the Plan (provided its term is extended, if needed), any other plans or
sub-plans, as provided for in Section 6 herein, or any other incentive
arrangement of the Company.

     

    9.5           Each
payment for Exercised Shares shall be in respect of a whole number of Shares,
and shall be effected in cash or by a bank’s check payable to the order of the
Company, or such other method of payment acceptable to the Company.

     

    10.           Termination of
Employment:

     

    10.1           Employees.  In
the event of a Cessation of Employment of a Grantee who was an employee at the
Date of Grant, all Awards theretofore granted to such Grantee when such Grantee
was an employee of the Company, unless determined otherwise by the Committee,
shall terminate as follows:

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (a)           All
such Awards that are not vested on the Date of Cessation shall terminate
immediately.

     

    (b)           If
the Grantee’s cessation of employment is by reason of such Grantee's death or
Disability, any Options previously granted to the Grantee (to the extent vested
on the Date of Cessation) shall be exercisable by the Grantee (if applicable) or
the Grantee's guardian, legal representative, estate or other person to whom the
Grantee's rights are transferred by will or by laws of descent or distribution,
at any time until the lapse of twelve (12) months from the Date of
Cessation (but in no event after the expiration date of such Options), and shall
thereafter terminate.

     

    (c)           If
the Grantee’s Cessation of Employment is due to any reason other than those
stated in Sections 11.1(b), 11.1(d) or 11.1(e) herein, any Options previously
granted to the Grantee (to the extent vested on the Date of Cessation) shall be
exercisable at any time until the lapse of three (3) months from the Date
of Cessation (but in no event after the expiration date of such Options), and
shall thereafter terminate;

     

    (d)           Notwithstanding
the aforesaid, if the Grantee’s Cessation of Employment is due to
(i) breach of the Grantee’s duty of loyalty towards the Company, or
(ii) breach of the Grantee’s duty of care towards the Company, or
(iii) the commission of any flagrant criminal offense by the Grantee, or
(iv) the commission of any act of fraud, embezzlement or dishonesty towards
the Company by the Grantee, or (v) any unauthorized use or disclosure by
the Grantee of confidential information or trade secrets of the Company, or any
substantial breach of the Grantee’s employment agreement with the Company, or
(vi) any other intentional misconduct by the Grantee (by act or omission)
adversely affecting the business or affairs of the Company in a material manner,
or (vii) any act or omission by the Grantee which would allow for the
termination of the Grantee’s employment without severance pay, according to the
Severance Pay Law, 1963, any and all Options previously granted to the Grantee
whether vested or not shall ipso facto expire immediately
and be of no legal effect.

     

    (e)           If
a Grantee retires, he may, subject to the approval of the Committee, continue to
enjoy such rights, if any, under the Plan and on such terms and conditions, with
such limitations and subject to such requirements as the Committee in its
discretion may determine.

     

    (f)           Whether
the Cessation of Employment of a particular Grantee is by reason of “Disability” for the purposes
of paragraph 10.1(b) hereof or by virtue of “retirement” for purposes of
paragraph 10.1(e) hereof, or is a termination of employment other than by
reason of such Disability or retirement, or is for reasons as set forth in
paragraph 10.1(d) hereof, shall be finally and conclusively determined by
the Committee in its absolute discretion.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (g)           Notwithstanding
the aforesaid, under no circumstances shall any Option be exercisable after the
specified expiration of the term of such Option.

     

    10.2                Directors, Consultants and
Contractors.  In the event that a Grantee, who is a director,
consultant or contractor of the Company, ceases, for any reason, to serve as
such, the provisions of Sections 10.1(a), 10.1(b), 10.1(c), 10.1(d), 10.1(f) and
10.1(g) above shall apply, mutatis
mutandis.

     

    10.3           Notwithstanding
the foregoing provisions of this Section 10, the Committee shall have the
discretion, exercisable either at the time an Option is granted or thereafter,
to:

     

    (a)           Extend
the period of time for which the Option is to remain exercisable following the
Date of Cessation to such greater period of time, as the Committee shall deem
appropriate, but in no event beyond the specified expiration of the term of the
Option; or

     

    (b)           Permit
the Option to be exercised, during the applicable exercise period following the
Date of Cessation, not only with respect to the number of Shares for which such
Option is exercisable on the Date of Cessation but also with respect to one or
more additional installments in which the Grantee would have vested under the
Option had the Grantee continued in the employ or service of the
Company.

     

    10.4           Notwithstanding
the foregoing provisions of this Section 10, and for the avoidance of
doubt, unless the Board determines otherwise, the transfer of a Grantee from the
employ or service of the Company to the employ or service of an Affiliate, or
from the employ or service of an Affiliate to the employ or service of the
Company or another Affiliate, shall not be deemed a Cessation of Employment or
termination of service for purposes hereof.

     

    11.           Adjustments, Liquidation and
Corporate Transaction:

     

    11.1           Bonus
Shares.

     

    (a)           If
the Company distributes bonus shares to all of its shareholders, including all
holders of Shares, whose date of distribution is earlier than the Exercise Date
or vesting date (for RSUs), as applicable, Shares in the number and kind that
the Award holder would have been entitled to as bonus shares had he/she
exercised the Options or had his/her RSUs vested, as the case may be, before the
record date determining the right to receive bonus shares, will be added to the
Exercised Shares to which the holder of the Awards is entitled upon exercising
the Options or vesting of the RSUs, as applicable.

     

    (b)           The
Exercise Price of each Award will not change as a result of the addition of such
bonus shares, while other terms referring to the Exercised Shares will also
apply to the bonus shares added to the Exercised Shares, mutatis
mutandis.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (c)           If
the Company distributes bonus shares, as described in Section (a) above, for
which the record date for distribution and/or the date of distribution fall
during the period in which Exercised Shares are registered in the name of the
Trustee for the Beneficial Grantee, the Company will transfer to the Trustee an
amount of bonus shares according to the number of Exercised Shares registered in
its name at the time of distribution, and the Trustee will hold them in Trust
for the Beneficial Grantees. In the event Exercised Shares have been transferred
from the Trustee to a Beneficial Grantee and/or sold by the Company or the
Trustee at the Beneficial Grantee’s request between the record date for
distribution and the date of distribution, the Company will transfer bonus
shares in respect of these Shares directly to such Beneficial Grantee. Each such
Grantee will be entitled to Shares in the same number and class to which he
would have been entitled, had the Shares been held by him prior to the record
date for the right to receive the bonus shares.

     

    11.2           Cash Dividends. If
the Company distributes cash dividends with respect to all Company’s Shares
issued to its shareholders, and the record date for determining the right to
receive such dividends (the “Determining Date”) is earlier
than the Exercise Date of the Options granted hereunder, then the Exercise Price
for each Share subject to an Option not exercised prior to the Determining Date,
shall be reduced by an amount equal to the gross amount of the dividend per
Share distributed, calculated in the same currency as the Exercise Price
according to the representative rate of exchange as of the Determining Date, if
applicable. Notwithstanding the aforesaid, in the event the Company’s Shares are
listed on any stock exchange or admitted to trading on an electronic securities
trading system, the aforesaid reduction of the Exercise Price for each Share
subject to an Option not exercised shall correspond to the reduction in the
price of a Company Share as a result of such distribution as recorded by such
stock exchange or electronic securities trading system. Unless determined
otherwise by the Board, the Exercise Price shall not be reduced to less than the
nominal value of a Share.

     

    11.3           Adjustments.  Unless
determined otherwise by the Committee, subject to any required action by the
shareholders of the Company and/or any other required action under any
applicable law, the number of Shares subject to each outstanding Award, and the
number of Shares which have been authorized for issuance under the Plan but as
to which no Awards have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Award, as well as the price per share of
Shares subject to each such outstanding Award, shall be proportionately adjusted
for any increase or decrease in the number of issued Shares resulting from a
share split, reverse share split, combination or reclassification of the Shares
or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company; 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 Committee, whose determination in that respect
shall be final, binding and conclusive.

     

    Except as expressly provided in this
Section 12, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to an Award.

     

    Except as expressly provided in this
Section 11, the grant of Awards under the Plan shall in no way affect the right
of the Company to distribute bonus shares, to offer rights to purchase its
securities, or to distribute cash dividends.

     

    11.4           Liquidation.  Unless
otherwise provided by the Board, in the event of the proposed dissolution or
liquidation of the Company, all outstanding Awards will terminate immediately
prior to the consummation of such proposed action. In such case, the Committee
may declare that any Award shall terminate as of a date fixed by the Committee
and give each Grantee the right to exercise his/her Award or to allow his/her
Awards to vest (for RSUs), including any Award that would not otherwise be
vested (in respect of RSUs) and/or exercisable (in respect of
Options).

     

    11.5           Corporate
Transaction.

     

    (a)           In
the event of a Corporate Transaction, the Vesting Period of the Awards shall be
automatically and immediately accelerated so that all Awards whether vested or
not shall become vested and, in respect of Options, exercisable, as of ten (10)
days prior to the effective date of such Corporate Transaction and until the
effective date of such Corporate Transaction. The Company will provide each
Grantee with a ten (10) day advanced notice prior to the effective date of a
Corporate Transaction and in case no such advance notice is possible and/or the
exercise of Awards is restricted under applicable law or regulations during the
ten (10) days prior to the effective date of a Corporate Transaction, the
Grantee will be entitled to exercise his or her Awards after the effective date
of said Corporate Transaction, allowing a ten (10) day period to do so from the
later of (i) receipt of such notice, or (ii) removal of all restrictions under
applicable law or regulations on the exercise of the Awards, after which any
unexercised Awards shall terminate.

     

    (b)           Immediately
prior the consummation of the Corporate Transaction, all outstanding Awards
which are not exercised until the effective date of the Corporate Transaction,
shall terminate and cease to be outstanding.

     

    11.6           Sale.  Subject
to any provision in the Articles of Association of the Company and to the
Committee’s sole and absolute discretion, in the event of sale or other
disposition of all or substantially all of the outstanding share capital of the
Company, each Grantee shall be obligated to participate in such sale and sell
his or her Exercised Shares, provided, however, that each
such Exercised Share shall be sold at a price equal to that of any other Share
sold under the sale, subject to the absolute discretion of the
Board.

     

    With respect to Exercised Shares held
in Trust the following procedure will be applied:  the Trustee will
transfer the Exercised Shares held in Trust and sign any document in order to
effectuate the transfer of such Shares, including share transfer deeds, provided, however, that the
Trustee receives a notice from the Board, specifying that: (i) all or


     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    substantially
all of the issued outstanding share capital of the Company is to be sold, and
therefore the Trustee is obligated to transfer the Exercised Shares held in
Trust under the provisions of this Section 11.5; and (ii) the Company is
obligated to withhold at source all taxes required to be paid upon release of
the Exercised Shares from the Trust and to provide the Trustee with evidence,
satisfactory to the Trustee, that such taxes indeed have been paid; and (iii) the Company
is obligated to transfer the consideration for the Exercised Shares directly to
the Grantees.

     

    11.7           The
grant of Awards under the Plan shall in no way affect the right of the Company
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

     

    12.           Limitations on
Transfer:

     

    12.1           Unless
determined otherwise by the Committee, no Award shall be assignable or
transferable by the Grantee to whom granted otherwise than by will or the laws
of descent and distribution, and an Award may be exercised, where applicable,
during the lifetime of the Grantee only by such Grantee or by such Grantee's
guardian or legal representative. Any assignment or transfer other than as
aforesaid, shall be null and void. The terms of such Award shall be binding upon
the beneficiaries, executors, administrators, heirs and successors of such
Grantee.  In addition, as long as Awards and/or Exercised Shares are
held by the Trustee on behalf of the Grantee, all rights of the Grantee over the
Exercised Shares are personal, cannot be transferred, assigned, pledged or
mortgaged, other than by will or pursuant to the laws of descent and
distribution.

     

    12.2           Underwriter’s
Lock-up.  The
Grantee’s rights to sell Exercised Shares may be subject to certain
limitations (including a
lock-up period), as will be requested by the Company or its underwriters, from
time to time, or upon a specific occurrence, and the Grantee unconditionally
agrees and accepts any such limitations.

     

    12.3           Restrictions
on Shares. The Committee may impose such
restrictions on any Exercised Shares, as it may deem advisable, including, but
not limited to, restrictions related to applicable U.S. federal securities laws,
the requirements of any national securities exchange or system upon which Shares
are then listed or traded, or any U.S. blue sky or state securities
laws.

     

    13.           Restricted Stock
Units

     

    13.1           Subject
to the sole and absolute discretion and determination of the Committee, the
Committee may decide to grant under this Plan, in addition to, or instead of,
any grant of Options, Restricted Stock Unit(s) (“RSU(s)”). RSUs are Options,
bearing an Exercise Price of no more than the underlying Share’s nominal
value.  In addition, notwithstanding anything to the contrary in
Section 9.2 above, upon the lapse of the Vesting Period of an RSU, such RSU
shall automatically vest into an Exercised Share of the Company and, unless
otherwise determined by the 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Board,
the Grantee shall pay to the Company its nominal value as a precondition to any
issuance of such Exercised Share. However, the Company shall have the full
authority in its discretion to determine at any time that the nominal value
shall not be paid and that the Company shall capitalize applicable profits or
take any other action to ensure that it meets any requirement of applicable law
regarding issuance of shares for consideration that is lower than the nominal
value of such Shares.

     

    


     

    13.2           All
other terms and conditions of this Plan applicable to Options, shall apply to
RSUs mutatis
mutandis.

     

    14.           Term and Amendment of the
Plan:

     

    14.1           The
Plan shall terminate, and no additional Awards may be granted pursuant to it,
upon the earliest of (i) the expiration of ten (10) years from the date the
Plan was adopted by the Board, or (ii) the termination of all outstanding
Awards in connection with a Corporate Transaction. All Awards outstanding at the
time of a clause (i) termination event shall continue to have full force and
effect in accordance with the provisions of the Plan and the documents
evidencing such Awards.

     

    14.2           Subject
to applicable laws and regulations, the Board in its discretion may, at any time
and from time to time, amend, alter, extend or terminate the Plan, as it deems advisable.
However, no amendment or modification shall adversely affect any rights and
obligations with respect to Options at the time outstanding under the Plan,
unless the applicable Grantee consents to such amendment or modification. In the
event the Committee wishes to grant Awards to non-Israeli Grantees, the
Committee may adopt, as part of this Plan and based on it, sub-plans, in order
to comply with all relevant and applicable laws and regulations of the country
of residence of such Grantees.

     

    15.           Withholding and Tax
Consequences: The Company’s obligation to deliver Exercised Shares upon
the exercise or vesting of any Awards granted under the Plan shall be subject to
the satisfaction of all applicable income tax and other compulsory payments
withholding requirements. All tax consequences and obligations regarding any
other compulsory payments arising from the grant, exercise, or vesting of any
Award, from the payment for, or the subsequent disposition of, Exercised Shares
subject thereto or from any other event or act (of the Company, of the Trustee
or of the Grantee) hereunder, shall be borne solely by the Grantee, and the
Grantee shall indemnify the Company and/or the Trustee, as applicable, and hold
them harmless against and from any and all liability for any such tax or other
compulsory payment, or interest or penalty thereon, including without
limitation, liabilities relating to the necessity to withhold, or to have
withheld, any such tax or other compulsory payment from any payment made to the
Grantee.

     

    The Company and/or the Trustee, when
applicable, shall not be required to release any Share certificate to a Grantee
until all required payments have been fully made.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    16.           Miscellaneous:

     

    16.1           Continuance of
Employment.  Neither the Plan nor the grant of an Award
thereunder shall impose any obligation on the Company to continue the employment
or service of any Grantee. Nothing in the Plan or in any Award granted
thereunder shall confer upon any Grantee any right to continue in the employment
or service of the Company for any period of specific duration, or interfere with
or otherwise restrict in any way the right of the Company to terminate such
employment or service at any time, for any reason, with or without
cause.

     

    16.2           Notwithstanding
anything to the contrary in this Plan, it is hereby clarified, that any income
attributed (or deemed to be attributed) to the Grantee as a result of this Plan,
the grant or exercise of Awards thereunder, or the sale of Exercised Shares,
shall not be taken into account for the purpose of calculating the Grantee’s
eligibility for any rights deriving from the employee-employer or service
provider-client relationship between the Grantee and the Company.

     

    16.3           Governing
Law.  The Plan and all instruments issued thereunder or in
connection therewith, shall be governed by, and interpreted in accordance with,
the laws of the State of Israel, excluding the choice of law rules thereof.

     

    16.4           Application of
Funds.  Any proceeds received by the Company from the sale of
Exercised Shares pursuant to the Awards granted under the Plan shall be used for
general corporate purposes of the Company.

     

    16.5           Multiple
Agreements.  The terms of each Award may differ from other
Awards granted under the Plan at the same time, or at any other
time.  The Committee may also grant more than one Award to a given
Grantee during the term of the Plan, either in addition to, or in substitution
for, one or more Awards previously granted to that Grantee.  The grant
of multiple Awards may be evidenced by a single Notice of Grant or multiple
Notices of Grant, as determined by the Committee.

     

    16.6           Non-Exclusivity of the
Plan.  The adoption of the Plan by the Board shall not be
construed as amending, modifying or rescinding any previously approved incentive
arrangement or as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of awards otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific
cases.

     

    16.7                      The
provisions of this Plan shall not be construed as deviating from any applicable
laws, rules and regulations.

     

    *****

     

     

     18