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                                                                    EXHIBIT 10.3





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                                                                    EXHIBIT 10.3

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                                   CAMTEK LTD.

                    THE COMPANY'S EMPLOYEE SHARES OPTION PLAN

1.       DEFINITIONS

         As used herein the following terms shall have the meanings hereinafter
         set forth, unless the context clearly indicates to the contrary.

         (A)      the "Company" - Camtek Ltd.

         (B)      "Board" - the Board of Directors of the Company.

         (C)      "Share(s)" - Ordinary Shares of the Company, each with a par
                  value of NIS 0.02.

         (D)      "Option(s)" - an Option or Options granted within the
                  framework of this Plan each of which imparts the right to
                  purchase one Share per Option.

         (E)      "Grantee" - an employee of the Company or a subsidiary of the
                  Company to whom Options are granted or to whom the Company
                  decides to grant Options.

         (F)      "Plan" - the Company's Employee Share Option Plan as provided
                  hereunder, and as may be amended from time to time by the
                  Board, as set forth hereinbelow.

         (G)      "Option Agreement" - the Agreement to be executed between the
                  Company and the Grantee under which Option(s) are to be
                  granted.

         (H)      "Vested Option(s)" - that portion of the Options which the
                  Grantee is entitled to exercise in accordance with the
                  provisions of Section 7.2 of the Plan or the provisions of the
                  Option Agreement executed with such Grantee.

         (I)      the "Exercise Period" - the period during which the Vested
                  Options may be exercised, as provided in Section 7.3 of the
                  Plan.

         (J)      "Exercise Price" - the price which the Grantee must pay to
                  exercise each Option.

         (K)      "Exercised Shares" - the Shares issued upon the exercise of
                  the Options.

         (L)      the "Trustee" - the trustee appointed by the Company for the
                  purposes of this Plan.


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2.       THE PLAN

         2.1      PURPOSE - The purpose and intent of the Plan is to grant to
                  selected employees of the Company and of the Company's
                  subsidiaries, an opportunity to purchase Shares of the Company
                  by way of granted Options and to provide an additional
                  incentive to such employees to remain in the employ of the
                  Company and the Company's subsidiaries, to encourage the sense
                  of proprietorship of such employees, and to stimulate the
                  active interest of such employees in the success of the
                  Company and the Company's subsidiaries.

         2.2      EFFECTIVE DATE - The Board has resolved to adopt and authorize
                  the Plan and has resolved that it shall enter into effect
                  commencing 1.9.97.

3.       ADMINISTRATION

         3.1      The Plan shall be administered by the Board or by a committee
                  appointed by the Board.

         3.2      The Board shall have sole and full discretion and sole
                  authority to administer the Plan and all actions related
                  thereto, including to perform any and all of the following
                  from time to time and at any time:

                  3.2.1    to determine the Company's and the Company's
                           subsidiaries' employees in favor of whom the Options
                           shall be granted, the number of Options to be granted
                           in favor of each employee, the Exercise Price
                           thereof, and the conditions under which such Options
                           may be exercised;

                  3.2.2    to interpret the Plan;

                  3.2.3    to determine the terms of the Option Agreements;

                  3.2.4    to perform any action required or advisable for the
                           administration of the Plan;

                  3.2.5    to prescribe, amend, modify (including by adding new
                           terms and rules), and to rescind and terminate the
                           Plan or any of its terms.

         3.3      Any amendment or modification of the Plan, if any, shall be
                  applicable to the relationship between the Grantee and the
                  Company, including under the Option Agreements and the
                  amendment or modification shall be deemed to have been
                  included in the Plan and the Option Agreements, ab initio,
                  unless the amendment or modification adversely affects the
                  rights of a Grantee under the Vested Options.



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4.       ELIGIBILITY

         In determining the employees in favor of whom Options are to be
         granted, the number of Options to be granted and the terms of the
         Options, the Board may take into account the nature of the services
         rendered by the respective employee, his present and future potential
         and contribution to the Company's and Company's subsidiaries' success,
         and any other data the Board may deem relevant.

5.       RESERVED SHARES

         The total number of Options to be granted to the Grantees pursuant to
         the Plan shall be determined from time to time by the Board.

         The Company shall at all times reserve such number of authorized but
         unissued Shares which equals the number of Shares to which all of the
         then outstanding Options may be converted upon exercise.

6.       GRANT OF OPTIONS AND ISSUANCE OF SHARES IN TRUST

         6.1      The Options shall be granted in favor of the Grantee for no
                  consideration.

         6.2      The Options and the Grantee's rights thereunder shall be
                  subject to the execution of an Option Agreement between the
                  Company and the Grantee, which Option Agreement shall set
                  forth the terms and conditions of the Options, as determined
                  by the Company, including without limitation, the number of
                  Options granted thereunder, the terms of exercise thereof
                  (including the Exercise Price) and any other term the Board
                  may deem necessary.

         6.3      In addition, the Options shall be subject to the execution of
                  all the documents necessary in order to comply with all
                  applicable tax laws (hereinafter: the "Tax Laws"), and all
                  other documents required by the Company, (the Option Agreement
                  and said documents shall be hereinafter referred to as:
                  "Documents").

         6.4      The Company shall provide the Grantee with the Documents for
                  signature after the Board adopts a resolution to grant Options
                  in favor of such Grantee, and the Company shall sign such
                  Documents after they have been duly signed and returned by
                  such Grantee.

                  It is hereby clarified that the execution of the said
                  Documents by the Grantee does not exempt the Grantee from
                  signing any other document as may be required by the Company
                  at a later stage.

         6.5      The Options granted hereunder shall be held by the Trustee and
                  the Exercised Shares shall be issued to the Trustee, and both
                  shall be registered in the name of the Trustee, who shall hold
                  the Options and the Exercised Shares in trust for the



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                  benefit of the Grantee for a period of AT LEAST TWO (2) YEARS
                  as of the date an Option letter is deposited with the Trustee
                  (as hereinafter defined) (hereinafter: the "Restricted
                  Period"), and until such time as they are released, as
                  hereinafter provided.

7.       TERMS OF OPTION

         7.1      Except as otherwise provided the amount of Options and the
                  Exercise Price for each Grantee shall be determined by the
                  Board and shall be specified in the Option Agreement; provided
                  however, that in no event shall the Exercise Price be less
                  than the par value price of the Shares.

         7.2      Unless otherwise determined by the Board with respect to any
                  specific Grantee, the right of a Grantee to exercise the
                  Options granted in such Grantee's favor during the Exercise
                  Period shall be vested with such Grantee as follows:

                  (a)      If the Grantee remains in the employ of the Company
                           or the Company's subsidiaries for a period of not
                           less than 2 years from the date of the resolution of
                           the Board regarding the issuance of the Options to
                           the Grantee (hereinafter: the "Date of the Grant") -
                           the Grantee shall be entitled to exercise 50% of all
                           the Options granted in such Grantee's favor.

                  (b)      If the Grantee remains in the employ of the Company
                           or the Company's subsidiaries for a period of not
                           less than 3 years from the Date of the Grant - the
                           Grantee shall be entitled to exercise 75% of all the
                           Options granted in such Grantee's favor.

                  (c)      If the Grantee remains in the employ of the Company
                           or the Company's subsidiaries for a period of not
                           less than 4 years from the Date of the Grant - the
                           Grantee shall be entitled to exercise 100% of all the
                           Options granted in such Grantee's favor.

                  In the event that the employment of the Grantee is terminated
                  for any reason (including due to death or disability), all of
                  the Options granted in his favor which are not yet Vested
                  Options shall immediately expire and terminate, shall become
                  null and void and shall not entitle the Grantee to any right
                  in or to the Company.

         7.3      EXERCISE PERIOD

                  7.3.1    Each Vested Option shall be exercisable during a
                           two-year period beginning on the earlier of: (i) the
                           lapse of seven (7) years after the Date of Grant of
                           such Vested Option; or (ii) the date of issue of the
                           Company's shares on a stock exchange (in Israel or
                           elsewhere).



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                  7.3.2    Notwithstanding the abovesaid, a Grantee shall also
                           be entitled to exercise the Vested Options
                           immediately prior to the closing of a transaction,
                           the nature of which is the sale of all of the shares
                           of the Company by the shareholders, upon receipt of
                           the Company's notice specifying such date. It is
                           hereby clarified that in any event, upon the closing
                           of such a transaction, the non-Vested Options shall
                           expire and terminate and become null and void and
                           shall not entitle the Grantee to any right in or to
                           the Company. In the event the Grantee does not
                           exercise all of the Vested Options on the date
                           specified by the Company, the remaining Vested
                           Options shall expire and terminate and become null
                           and void on the closing date of the abovementioned
                           transaction and shall not entitle the Grantee to any
                           right in or toward the Company.

         7.4      Vested Options may be exercised at one time or from time to
                  time during the Exercise Period, but only by the Trustee,
                  after the Trustee shall have received written instructions
                  from the Grantee, accompanied by the full payment of the
                  Exercise Price for the Vested Options then being exercised, by
                  personal check or cashier's check payable to the order of the
                  Company (the written instructions accompanied by the full
                  payment shall be referred to hereinafter as: the "Exercised
                  Notice"). The Trustee shall exercise such Vested Options with
                  respect to which the Exercise Notice was given, by giving the
                  Company, at its principal office, written notice of intent to
                  exercise such Vested Options, accompanied by the Exercise
                  Notice; provided however, that in case payment is made by
                  personal check (and not by cashier's check), the Options shall
                  not be considered as exercised, and the Company shall not
                  issue the Exercised Shares in respect thereof, until the
                  personal check shall have been fully honored by the bank on
                  which it was drawn.

         7.5      The Exercised Shares shall be issued in the name of the
                  Trustee who shall hold same until their release as hereinafter
                  provided.

         7.6      A Grantee whose employment with the Company was terminated for
                  any reason (including death or disability) shall be entitled
                  only to the Shares which were previously exercised and the
                  Vested Options and the remaining Options (i.e. non-Vested)
                  shall expire and terminate and become null and void and shall
                  not entitle the Grantee to any right in or to the Company.

8.       TRANSFERABILITY

         8.1      The Options and all rights related thereto shall not be
                  assignable, transferable, subjected to an attachment, lien or
                  encumbrance of any kind.

         8.2      Notwithstanding the abovesaid, the Vested Options shall be
                  transferable by will or intestacy, provided that the Company
                  receives written notice thereof, accompanied by an original
                  copy of the Will or Intestacy Order and/or other



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                  evidence deemed acceptable by the Board, and accompany by the
                  transferee(s) written consent to the provisions and rules of
                  the Tax Laws, the Plan, and the Option Agreement.

         8.3      Following the exercise of the Vested Options, the Exercised
                  Shares shall be transferable following the Restricted Period
                  only in accordance with the following terms:

                  (a)      Until an initial public offering of the Company's
                           securities on a recognized stock exchange or NASDAQ -
                           provided that the transferee is not a competitor of
                           the Company.

                  (b)      Until an initial public offering of the Company's
                           securities on a recognized stock exchange or NASDAQ -
                           the sale or transfer shall be subject to a right of
                           first refusal of the existing shareholders of the
                           Company at such time, and the provisions of the
                           Company's incorporation documents with regard to the
                           right of first refusal shall apply, mutatis mutandis.

                  (c)      Payment of all taxes required to be paid in
                           connection with a sale or transfer of Exercised
                           Shares and/or Vested Options shall have been made to
                           the tax assessor, confirmation of same shall have
                           been received by the Trustee and the conditions set
                           forth in Section 9 hereunder shall have been
                           fulfilled.

         8.4      Without derogating from the abovesaid, in the event the
                  shareholders of the Company (not including shareholders who
                  purchased shares under an employee share option plan)
                  (hereinafter: the "Selling Shareholders") intend to sell all
                  of their shares in the Company, and to the effect that the
                  Grantee was asked to do so by the majority of the Selling
                  Shareholders (which majority shall be determined according to
                  the pro rata share of each Selling Shareholder of the issued
                  shares capital of the Company), the Grantee shall be obligated
                  to join the sale and sell his Shares, under the same
                  conditions as the Selling Shareholders are selling their
                  shares, and if requested by the purchasers of such sale, at
                  the purchaser's sole discretion, the Grantee shall sell to the
                  purchasers the Vested Options, under the same terms, as if the
                  Grantee had exercised same immediately prior to the sale.

9.       RELEASE

         Upon the lapse of the Restricted Period, the Trustee may, pursuant to
         the written request of the Grantee, release and transfer the Exercised
         Shares to the Grantee, or to any third party to whom the Grantee wishes
         to sell the Exercised Shares, as indicated in the Grantee's written
         notice, provided however that all the following conditions will have
         been fulfilled prior to such transfer: (i) payment to the tax assessor
         of all taxes required to be paid upon the release and transfer of the
         Exercised Shares and confirmation of same



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         received by the Trustee; and (ii) receipt by the Trustee of written
         confirmation issued by the Company to the Trustee stating that all
         requirements for said release and transfer have been fulfilled
         according to the terms of the Articles, the Tax Laws, the Plan and the
         Option Agreement.

         The date on which the Exercised Shares shall be released and
         transferred to the Grantee shall hereinafter be referred to as the
         "Date of Release."

10.      TERMINATION

         10.1     Notwithstanding anything to the contrary herein, any Option
                  granted in favor of a Grantee not exercised by such Grantee
                  within the Exercise Period and in strict accordance with the
                  terms of the Plan and the Option Agreement, shall, upon the
                  lapse of the Exercise Period, immediately expire and
                  terminate, become null and void, and shall not entitle the
                  Grantee to any right in, or toward the Company in connection
                  with same, and all interests and rights of the Grantee, in and
                  to same, shall expire.

         10.2     Notwithstanding anything to the contrary herein, upon the
                  issuance of a court order declaring the bankruptcy of a
                  Grantee, or the appointment of a receiver or a provisional
                  receiver for a Grantee, or over his assets, or any part
                  thereof, or upon making a general assignment for the benefit
                  of his creditors, any Option issued and registered in favor of
                  such Grantee which was not yet exercised by the Grantee shall
                  immediately expire and terminate, become null and void and
                  shall not entitle the Grantee, his receiver, successors,
                  creditors or assignees, to any right in, or toward the Company
                  in connection with same, and all interests and rights of the
                  Grantee, his receiver, successors, creditors or assignees, in
                  and to same, if any, shall expire.

11.      RIGHTS AS SHAREHOLDER

         11.1     It is hereby clarified that a Grantee shall not, by virtue of
                  the Plan, the Option Agreement or any Option granted in favor
                  of him thereunder, have any of the rights of a shareholder
                  with respect to any Shares represented by the Options, until
                  the Options have been exercised.

                  Furthermore, except for the right to receive dividends as
                  provided in Section 12.1 hereinafter, the Grantee shall not
                  have any rights by virtue of the Exercised Shares until same
                  shall have been transferred to the Grantee by registering same
                  in the Grantee's name, and only then shall the Grantee have
                  the rights of a shareholder with respect to the shares so
                  registered.

         11.2     For so long as the Exercised Shares are held by the Trustee,
                  the Company shall consider only the Trustee as the owner of
                  such shares for all purposes whatsoever (including without
                  limitation, for the purpose of delivering notices); the
                  Trustee,



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                  however, shall not exercise the voting rights conferred by
                  such Exercised Shares in any way whatsoever, and shall not
                  issue a proxy to any person or entity to vote such shares.

         11.3     The Grantee shall not have, and hereby waives the right to
                  have, by virtue of the Exercised Shares, any pre-emptive
                  rights to purchase, along with the other shareholders in the
                  Company, a pro rata portion of any securities proposed to be
                  offered by the Company prior to the offering thereof to any
                  third party and any rights of first refusal to purchase any
                  securities of the Company offered by the other shareholders of
                  the Company.

12.      DIVIDENDS AND BONUS SHARES

         12.1     Cash dividends paid or distributed, if any, with respect to
                  the Exercised Shares held by the Trustee, shall be remitted
                  directly to the Grantee who is entitled to the Exercised
                  Shares for which the dividends are being paid or distributed.

         12.2     All bonus shares to be issued by the Company, if any, with
                  respect to the Exercised Shares, shall be registered in the
                  name of the Trustee and all provisions applying to the
                  Exercised Shares, shall apply to the bonus shares, mutatis
                  mutandis.

         12.3     The Trustee shall transfer the said bonus shares upon the
                  transfer of the Exercised Shares with respect to which the
                  bonus shares were issued.

13.      ADJUSTMENTS

         The number of Shares to which each outstanding Option is exercisable,
         shall be proportionately adjusted in the event of a reorganization of
         the share capital of the Company by a stock split, reverse stock split,
         combination or reclassification of the shares, as well as for a
         distribution of bonus shares. Such adjustment shall be made by the
         Board, whose determination in this matter shall be final and binding.

14.      RIGHTS TO CHANGES

         The Plan or the Option Agreement shall not affect, in any way, the
         rights, powers or freedoms of the Company or its shareholders to make
         or authorize: any sale, transfer or any change whatsoever in all or any
         part of the Company's assets, obligations or business, or any other
         business, commercial or corporate act or proceeding, whether of a
         similar character or otherwise; any or all adjustments,
         recapitalizations, reorganizations or other changes in the Company's
         capital structure or business; any merger or consolidation of the
         Company; any issue of bonds, debentures, shares (including preferred or
         prior preference shares ahead of or affecting the existing shares of
         the Company including the shares into which the Options granted
         hereunder are exercisable or the Exercised Shares or the rights
         thereof, etc.); or the dissolution or liquidation of the



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         Company; and none of the above acts or authorizations shall entitle the
         Grantee to any right or remedy, including, without limitation, a right
         of compensation for any dilution resulting from any issuance of any
         shares or of any other securities in the Company to any person or
         entity whatsoever.

15.      NO EMPLOYMENT OBLIGATIONS

         Nothing in the Plan, the Option Agreements or in any Option granted
         hereunder shall guarantee the Grantee's employment in the Company and
         no obligation of the Company as to the length of employment of the
         Grantee or as to any other term of employment shall be implied by same;
         the Company reserves the right to terminate the employment of any
         employee pursuant to such employee's terms of employment and any law.

16.      NO REPRESENTATION

         The Company does not and shall not, through this Plan or through any
         Option Agreement, make or be deemed to make any representation toward
         any Grantee with regard to the Company, its business, its value or with
         regard to the Company's shares in general, and the Exercised Shares in
         particular, their value or rights.

         The Grantee, upon entering the Option Agreement, represents and
         warrants toward the Company, that his consent to the grant of the
         Options issued in favor of him and their exercise (if so exercised),
         is, in no respect, made on the basis of any representation or warranty
         made by the Company or by any of its directors, officers, shareholders
         or employees, and is made based only upon his examination and
         expectations of the Company, on an "as is" basis. The Grantee waives
         any claim whatsoever of "non conformity" of any kind or any other cause
         of action or claim of any kind with respect to the Options and/or the
         Shares exercised thereupon.

17.      TAX CONSEQUENCES

         All tax consequences arising from the grant or exercise of any Option,
         the payment for or the transfer of the Exercised Shares to the Grantee,
         or from any other event or act (of the Company or the Grantee)
         hereunder, shall be borne solely by the Grantee, and the Grantee shall
         indemnify the Company and hold it harmless from and against any and all
         liability for any such tax or interest or penalty.

         The Company and the Trustee may withhold from any payment to which the
         Grantee may be entitled to from the Company, the amount of the tax
         and/or other mandatory payment the withholding of which is required
         with respect to the Options and/or the Exercised Shares under any law.



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18.      SUBORDINATION

         It is clarified that the Grant of the Options hereunder is subject to
         the approval, if necessary, by the relevant tax authorities of the Plan
         and the Trustee, in accordance with the Tax Laws. It is also clarified
         that the Plan and the Option Agreement are subject to the provisions of
         the Tax Laws which accordingly shall be deemed an integral part of
         each, and which shall prevail over any term that is not consistent with
         the Tax Laws.







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