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                                                                    Exhibit 10.1

                               GIVEN IMAGING LTD.

                                1998 OPTION PLAN


         1.       NAME.

                  This plan, as may be amended from time to time, shall be known
as the "1998 Option Plan" (the "PLAN").

         2.       PURPOSE.

                  The Plan is intended as an incentive to retain, in the employ
or directorship of GIven Imaging Ltd. (the "COMPANY") and/or its future
subsidiaries, persons of training, experience and ability, to attract new
employees whose services are considered valuable, to encourage the sense of
proprietorship of such persons and to stimulate their active interest in the
development and financial success of the Company and the appreciation of
shareholders' value, by providing directors, officers, employees and consultants
of the Company with appropriate incentives and rewards.

                  At the election of any Grantee (as defined below), the Option
granted thereto under this Plan ("OPTIONS") shall contain such terms that will
allow such Option and the shares purchasable thereunder to qualify for the tax
regime available under Section 102 of the Israel income Tax Ordinance (New
Version), 5721-1961, as amended (the "ORDINANCE"), and the Income Tax Rules (Tax
Benefits in Stock issuances to Employees) 5749-1989 (the "RULES"), provided that
such Grantee meets the conditions set forth under Section 102 and the Rules, and
the provisions of Section 13 of this Plan shall apply to such Options and
shares.

         3.       ADMINISTRATION.

                  3.1 The Plan will be administered by the Company's
Compensation Committee (the "COMMITTEE"), which will consist of such number of
directors of the Company as may be fixed from time to time by the Board of
Directors of the Company. Subject to the provisions of the Company's Articles,
the Board of Directors 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. Any discretion, power or authority
granted to the Committee under this Plan may also be exercised by the Board of
Directors of the Company, and shall be exercised by the Board of Directors
whenever such power or authority is used in respect of a Grantee who is a
director of the Company or where prescribed by applicable law.

                  3.2 The Committee shall appoint one of its members as its
Chairman and shall hold its meetings at such times and places as it shall
determine. Actions at a meeting of the Committee at which a majority of its
members are 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.


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                  3.3 Subject to the general terms and conditions of this Plan,
the Committee shall have full authority in its discretion, from time to time and
at any time, to determine (i) the persons to whom an Option (or Options) under
this Plan shall be granted (each shall hereinafter be called "GRANTEE", and
collectively, "GRANTEES"), (ii) the number of shares to be covered by each
Option, (iii) the time or times at which the same shall be granted, (iv) the
schedule and conditions on which such Options may be exercised and on which such
shares shall be paid for, (v) any particular terms or conditions which may be
attached to an Option, whether more or less favorable to the Grantee compared
with the general terms of this Plan, and to the extent same are not contrary to
the Plan, and (vi) any other matter which is necessary or desirable for, or
incidental to, the administration of the Plan. In determining the number of
shares covered by the Option to be granted to each Grantee, the Committee may
consider, among other things, the nature of services provided by Grantee,
Grantee's salary and/or the duration of Grantee's service or employment by the
Company.

                  3.4 No member of the Board of Directors or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Option granted thereunder and, subject to the terms provided under
the Companies Ordinance [New Version], 5743-1983, as amended and the Company's
Articles, shall be entitled to be indemnified and held harmless by the Company
in respect of any such actions or determinations to the fullest extent
permitted.

                  3.5 The interpretation and construction by the Committee of
any provision of the Plan or any Option Award (as hereinafter defined) shall be
final and conclusive unless otherwise decided by the Board of Directors.

         4.       ELIGIBLE GRANTEES.

                  Options hereunder may be granted to any employee, director,
consultant or other person providing professional services to the Company or to
any of its future subsidiaries. The grant of an Option to a Grantee hereunder,
shall neither entitle such Grantee to participate, nor disqualify him from
participating, in any subsequent grant of options or shares pursuant to this
Plan or any other share or option incentive plan which the Company or any of its
future subsidiaries may adopt.

         5.       RESERVED SHARES.

                  5.1 The Company shall reserve 100,000 authorized but unissued
Ordinary A' Shares (nominal value NIS 0.01 per share) for the purpose of this
Plan, subject to adjustments as provided in Section 10 hereof. Ordinary A'
Shares shall bear such rights and restrictions as set forth under the Company's
Articles of Association, which in general shall be equal to the Ordinary Shares
of the Company, except for the right to receive notice of, attend and vote at a
general meeting of the Company's shareholders, which rights shall not be
attached to the Ordinary A' Shares.



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                  5.2 Any shares reserved under this Plan, in respect of which
the right hereunder 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 Options under this Plan.

         6.       OPTION AWARDS.

                  6.1 The Committee in its discretion may award to Grantees
options to purchase shares of the Company available under the Plan (each, an
"OPTION", and collectively, the "OPTIONS"). Options may be granted at any time
after this Plan has been approved by the Company, subject to any further
approval or consent required under the Ordinance, the Rules and other applicable
law, except where an Option is to be qualified under Section 102 of the
Ordinance, then such Option shall be effective upon its grant provided that 31
days have elapsed from the date of filing with the Assessing Officer (of the
Income Tax Commission) of an appropriate notice in respect of the grant of such
Option, as required under the Rules, and the Grantee has signed and delivered to
the Company a notice and undertaking as required under the Rules.

                  6.2 The instrument granting an Option (the "OPTION AWARD")
shall state, INTER ALIA, the number of shares covered thereby (the "OPTION
SHARES"), the dates when it may be exercised which, unless otherwise prescribed
by the Committee and specified in the Option Award, shall be as set forth in
Section 8.3 below, the Option Price (as defined under Section 7 below), the
schedule on which such Option Shares may be paid for and such other terms and
conditions as the Committee at its discretion may prescribe, in accordance with
Section 3.3 above.

                  6.3 Unless otherwise determined by the Committee and except as
provided in Section 13 below, Option award shall be granted for no
consideration, other than the Grantee's agreeing to continue to serve the
Company.

         7.       OPTION PRICE.

                  7.1 The purchase price of each Option Share (the "OPTION
PRICE") shall be such amount as may be determined by the Committee, but
otherwise shall be equal to the Fair Market Value (as defined below) of each
Option Share at the date the Option is granted.

                  7.2 (a) In the event that the shares of the Company are not
publicly traded on a stock exchange, the Fair Market Value of an Option Share on
a particular date shall be the price per share at which the Company last issued
any of its shares to a non-affiliated investor.

                      (b)      In the event that the shares of the Company are
publicly traded on a stock exchange, the Fair Market Value of a share on a
particular date shall be the mean between the highest and lowest quoted selling
prices on such date on the securities market where the shares of the Company are
principally traded, and if there were no sales on such date, but there were
sales within a reasonable period both before or after that date, the Fair Market
Value shall be determined by taking a weighted average of the mean between the
highest and lowest selling prices on the nearest date.



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         8.       EXERCISE OF OPTIONS.

                  8.1 Options shall be exercisable pursuant to the terms under
which they were granted and subject to the terms and conditions of this Plan.

                  8.2 An Option, or any part thereof, shall be exercisable by
delivering to the Company at its principal office a signed "NOTICE OF EXERCISE"
in such form and substance as may be prescribed by the Committee from time to
time.

                  8.3 Unless otherwise prescribed by the Committee and specified
in the Option Award, an Option will not be exercisable before the second
anniversary of the date of grant. As of the second anniversary of the date of
grant and at any time thereafter (subject to Section 8.4 below), the Option
Award will be exercisable with respect to 50% of the Option Shares, and with
respect to 25% of the Option Shares after each of the third and fourth
anniversaries of the date of grant, respectively. The Board of Directors shall
have the exclusive authority to accelerate the periods for exercising an Option.

                  8.4 Subject to the provisions of Section 9 hereof, an Option,
or any part thereof, that has not been exercised and the Option Shares covered
thereby not paid for within ten (10) years after the date of grant, or any
shorter period set forth in the Option Award (the "EXERCISE PERIOD"), such
Option, or such part thereof, shall terminate and all interests and rights of
the Grantee thereunder shall automatically expire.

                  8.5 Each payment for Option Shares shall be in respect of a
whole number of shares, effected in cash or by a cashier's or certified check
payable to the order of the Company, or such other method of payment acceptable
to the Committee. Unless otherwise prescribed by the Committee and set forth in
the Option Award, payment for the Option Shares issued upon the exercise of the
Option Award shall be effected together with the delivery of the Notice of
Exercise.

                  8.6 If an Option (or any part thereof) is exercised by the
Trustee (as provided in Section 13 below), then -

                     (a) The Option Shares issued upon such exercise shall be
issued in the name of the Trustee, who will be registered as their holder in the
Company's register of members, and any share certificate issued by the Company
in respect of such Option Shares shall be deposited with, and in the name of,
the Trustee;

                     (b) Any distributions made by the Company thereafter on the
Option Shares (other than bonus shares), in cash or in specie, shall be made to
the beneficiary Grantee thereof, in accordance with the Trustee's records, but
subject to any contrary provision of the Ordinance or the Rules.

         9.       TERMINATION OF EMPLOYMENT.

                  9.1 GENERAL. (a) Subject to the provisions of Section 9.2
hereof and unless otherwise prescribed by the Committee and specified in the
Option Award, if a Grantee should,



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for any cause or reason whatsoever, cease to be employed by or render services
to the Company, all of such Grantee's rights, if any, in respect of such Option
which are not exercisable at that time, shall IPSO FACTO terminate and all of
his/her rights in respect of such Option which are then exercisable shall remain
exercisable in accordance with the terms of the Option for the remaining
duration of the then applicable Exercise Period. Any Option Shares issued
following such cessation of employment or services or other shares acquired by
the Grantee in respect thereof shall be subject to the provisions of Section 9.3
hereof. Subject to Section 9.2 hereof, in no event shall a Grantee, whose
employment or services has ceased prior to the second anniversary of the date of
grant, be entitled to exercise an Option (or any part thereof) unless such
cessation of employment or services is for special cause which is not under the
his/her control and is approved by the Committee, in its sole discretion, and by
the Income Tax Commissioner.

                     (b) In the event of resignation or discharge of a Grantee
from his/her employment with the Company, such Grantee's employment shall, for
the purposes of this Section 9.1, be deemed to have ceased upon the delivery to
the Company of notice of resignation, or upon the delivery to the Grantee of
notice of discharge, as the case may be, irrespective of the effective date of
such resignation or discharge.

                     (c) Notwithstanding any of the foregoing, unless otherwise
prescribed by the Committee and specified in the Option Award, in the event the
employment of a Grantee is terminated by the Company for cause of a material
breach of his/her agreement or other duty toward the Company or his acting
against the Company's interest not in good faith, as the Committee may determine
in its sole discretion, said Grantee shall not be entitled to exercise the
Option Awards subsequent to the time of delivery of the notice of discharge and
all his/her rights with respect thereto shall expire automatically upon
termination of his/her employment.

         9.2 DEATH, DISABILITY, RETIREMENT. Anything herein to the contrary
notwithstanding:

                     (a) In the event of death of a Grantee, the estate or other
successors to whom the rights of a Grantee in respect of an Option are
transferred (by operation of law or by will), shall be entitled to exercise such
Option (such or portions thereof) to the same extent and on the same terms as
the deceased Grantee could have done prior to his death; provided that, unless
otherwise prescribed by the Committee and specified in the Option Award, the
estate or such successor may exercise such Option through the remaining duration
of the then applicable Exercise Period.

                     (b) If a Grantee is unable to continue to be employed by
the Company by reason of said Grantee becoming incapacitated while in the employ
of the Company as a result of an accident or illness or other cause which is
approved by the Committee in its sole discretion, such Grantee shall, subject to
approval of the Committee (which shall not be unreasonably withheld), continue
to enjoy rights under the Plan on such terms and conditions as the Committee in
its discretion may determine.



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                     (c) If a Grantee should retire, such Grantee shall,
subject to the approval of the Committee, continue to enjoy such rights, if any,
under this Plan and on such terms and conditions as the Committee in its sole
discretion may determine.

      9.3 TERMINATION AFTER OPTION SHARES ARE ISSUED. (a) Any Grantee whose
employment with the Company shall terminate for any cause or reason, shall be
deemed to have irrevocably offered to all other shareholders (other than other
employees) to purchase any and all of his/her Option Shares (including other
shares of the Company issued in respect thereof) whether held by him/her or by
the Trustee for his/her benefit pursuant to the terms set forth under Article
18A of the Company's Articles. In the event that the Grantee's shares are not
purchased as aforesaid, any subsequent sale or disposition thereof shall be
subject to the provisions of Article 17 of the Company's Articles.

                     (b) Anything to contrary contained herein or in the
Company's Articles notwithstanding, if the Grantee's employment is terminated
for cause of fraud, breach of fidelity, theft or other malicious behavior
against the Company, then such Grantee shall be deemed to have offered to the
other shareholders of the Company (other than other employees) to purchase all
his Option Shares (or other shares issued in respect thereof) for their nominal
value only, PRO RATA to their respective holdings of the Company's issued and
outstanding shares. Such shares shall be sold and transferred as aforesaid
within 30 days from the date of such termination of employment. If the Grantee
fails to transfer his/her shares as aforesaid, the Company, at the decision of
the Board of Directors, shall be entitled to forfeit his/her shares and to
authorize any person to execute on behalf of the Grantee any instrument or
document necessary to effect such transfer and to make the appropriate
inscription in the Company's register of members. Each Grantee, upon accepting
an Option Award, shall be deemed to have authorized the Company and each of its
officers and to have granted the Company and each of its officers an irrevocable
power-of-attorney to execute in his/her name such instruments and documents. The
Company and its shareholders shall each be deemed as a third party beneficiary
of this paragraph (b) with rights to enforce same against the Grantee.

         10.  ADJUSTMENTS.

                  10.1 In the event the Ordinary A' Shares of the Company shall
be subdivided or combined into a greater or smaller number of shares or if, upon
a merger, consolidation, reorganization, recapitalization or the like, the
Ordinary A' Shares of the Company shall be exchanged for other securities of the
Company or of another corporation, each Grantee shall be entitled, subject to
the conditions herein stated, to purchase such number of shares or other
securities of the Company or such other corporation, as were exchangeable for
the number of Option Shares which such Grantee would have been entitled to
purchase on such date except for such event, and appropriate adjustments shall
be made in the purchase price per share to reflect such subdivision, combination
or exchange; provided, however, that any fractional shares so resulting shall be
cancelled.

                  10.2 In the event that the Company shall issue any bonus
shares (stock dividend), upon or with respect to any shares underlying an Option
granted hereunder, each Grantee upon exercising his Option shall receive (for
the purchase price payable upon such



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exercise), the shares as to which said Grantee is exercising his/her said right
and, in addition thereto (at no additional cost), such number of shares of the
class or classes in which such bonus shares (stock dividend) were declared, as
is equal to the amount of shares which said Grantee would have received had said
Grantee been the holder of the shares as to which he/she is exercising his/her
Option at all times between the date of the granting of such Option and the date
of its exercise; provided, however, that any fractional shares so resulting
shall be cancelled.

                  10.3 Upon the happening of any of the foregoing events, the
class and aggregate number of Ordinary A' Shares issuable pursuant to this Plan
(as set forth in Section 5 hereof), in respect of which Option have not yet been
granted, shall also be appropriately adjusted to reflect the events specified in
Sections 10.1 and 10.2 above.

                  10.4 The Committee shall determine the specific adjustments to
be made under this Section 10, and its determination shall be conclusive.

                  10.5 The Committee may, with the approval of the Board of
Directors, attach special anti-dilution rights to particular Options, if it
shall determine that special circumstances justify granting such rights.

         11.      ASSIGNABILITY AND SALE OF SHARES.

                  Unless otherwise prescribed by the Committee and specified in
the Option Award, no Option, nor Option Shares which were not fully paid for,
shall be assignable or transferable by the Grantee; and during the lifetime of
the Grantee each and all of his/her rights to purchase shares hereunder shall be
exercisable only by the Grantee. For avoidance of doubt, the foregoing shall not
be deemed to restrict the transfer of a Grantee's rights under an Option Awards
or Option Shares purchasable pursuant to the exercise thereof upon the death of
such Grantee to his/her estate or other successors by operation of law or will,
whose rights therein shall be governed by Section 9.2 hereof.

         12.      PARTICIPATION IN FUTURE ISSUES OF SHARES.

                  If the Board of Directors determines at any time, that the
Company shall offer to all its shareholders and on equal terms, to purchase
securities of the Company of any class, then holders of Option Awards granted
under this Plan shall be entitled, on such terms as the Committee may determine,
to be offered with such securities as they would have been entitled to be
offered with should they have exercised at such time that portion of their
respective Options which shall then be exercisable. A Grantee wishing to accept
such offer shall deliver to the Company a written notice of acceptance within
the time specified therefor by the Company under the terms of the offer, however
the issuance of such securities will occur together with the exercise of the
Option, and if the Option will be partially exercised then the number of
securities to be so purchased shall be proportional to the number of Option
Shares purchased upon such exercise of the Option. The purchase price for such
securities will be paid upon their issue to the Grantee, linked to the CPI or US
Dollar, as will be determined by the Committee. If such an offer which is
accepted by a Grantee contains warrants or convertible securities, and the last
date for their exercise is prior to the earliest exercise date of such Grantee's
Option, then the Grantee



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shall be entitled to exercise such warrant or convert such securities, as
applicable, provided that, if Section 102 of the Ordinance applies to such
Option, then the resulting securities will be deposited with the Trustee for the
remainder of the applicable Holding Period of such Option.

         13.      APPLICATION OF SECTION 102.

                  Whenever an eligible Grantee shall request, prior to the grant
of an Option thereto, that such Option shall qualify under Section 102 of the
Ordinance, the following provisions will apply to such Option:

                  13.1 The Option shall be granted in consideration for the
Grantee's waiver of a portion of his/her salary, in an amount determined by the
Committee and agreed with the Grantee, which in any event shall not exceed the
minimum required under the Ordinance and the Rules.

                  13.2 The Option granted to Grantees shall be allotted to and
in the name of a trustee nominated by the Committee in accordance with the
provisions of Section 102 of the Ordinance and the Rules (the "TRUSTEE"), and
held for the benefit of each Grantee for a period of not less than two years
from the date of grant (the "HOLDING PERIOD"), and thereafter, the Trustee will
transfer the Option Awards or the Option Shares, as the case may be, to the
Grantee upon his/her demand, subject to any deduction or withholding required
under the Ordinance, the Rules or any other applicable law.

                  13.3 The Trustee and each Grantee requesting qualification
under Section 102 shall comply with the Ordinance and Rules and with the escrow
agreement entered or to be entered between the Company and the Trustee, and as
may from time to time be amended, and shall each execute, file or make any
notice, statement, filing or other instrument or document required thereunder.

                  13.4 Each Grantee requesting qualification under Section 102
shall be obligated to immediately notify the Company and the Trustee of his
request, if any, to the Income Tax Commissioner pursuant to Rule 6(b) of the
Rules in the event the Option Shares are registered on any stock exchange.

                  13.5 In the event bonus shares (stock dividend) are declared
on Option Shares during the Holding Period, such bonus shares shall be subject
to the provisions of this Plan and shaft be issued and held in the name of the
Trustee until the expiration of the Holding Period applicable for such Option
Shares.

         14.      LISTING FOR PUBLIC TRADE.

                  14.1 GENERAL. In the event that the Company shall offer its
shares to the public in any stock exchange, the Company will take all actions
necessary to convert any Option Shares held by the Grantees into shares of such
class of shares as may be listed for trade at such stock exchange and the
Company shall be entitled to make such changes and amendments to this Plan or to
the Option Awards as the Committee may be necessary in order to enable Option
Shares to be listed for trade. Notwithstanding the foregoing, nothing herein
shall obligate the Company to



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register any Option Shares or other securities which may be issued to a Grantee
pursuant to any Option Award on a stock exchange.

                  14.2 COMPLIANCE WITH SECURITIES LAWS. By his/her exercise of
an Option Award hereunder, the Grantee agrees not to sell, transfer or otherwise
dispose of any of the Option Shares so purchased by him except in compliance
with the United States Securities Act of 1933, as amended, and the rules and
regulations thereunder, or such other applicable securities laws and/or
regulations, and the Grantee further agrees that all certificates evidencing any
of such Option Shares shall bear appropriate legends to reflect such
restriction.

                  14.3 RESTRICTIONS ON SALES. In addition to Sections 11 and
14.2 above, each Grantee hereby agrees, that in the event that the Company's
securities are listed for trade in any stock exchange, the Grantee shall not
sell any Option Shares without first giving the Committee a seven days prior
written notice, specifying the number of Option Shares which he/she intends to
sell, and the Committed approved such sale, provided that the Committee may
disapprove such sale only if it shall reasonably believes that such sale may
violate any applicable securities laws or regulations, or may place the Company
in breach of such laws or regulations or any of its contractual obligations or
may otherwise adversely affect the Company. Should the Committee fail to respond
to the Grantee's notice, it shall be deemed to have approved such sale. The
Committee's approval shall be effective for a period of 60 (sixty) days, shall
be limited to a number of shares, which, if not specified in its approval, shall
be the number specified in the Grantee notice, and the sale of any shares which
the Grantee shall not sell by the end of such 60-day period shall be subject to
a new approval in accordance with the foregoing provisions.

         15.      TERM AND AMENDMENT OF THE PLAN.

                  15.1 This Plan shall be effective as of the date of its
approval by the Board of Directors of the Company, and unless otherwise
prescribed by a subsequent resolution of the Board of Directors, shall remain in
effect for a period of 5 (five) years.

                  15.2 The Board of Directors may, at any time and from time to
time, suspend, terminate or amend the Plan in any respect except that, in no
event may any action of the Company alter or impair the rights of a Grantee,
without his/her consent, under any Option Award previously granted to said
Grantee.

         16.      EMPLOYEE-EMPLOYER RELATIONS.

                  16.1 Neither this Plan nor any Option Award shall impose any
obligation on the Company to continue the employment or service with the Company
of any Grantee, and nothing in the Plan or in any Option Award granted pursuant
thereto shall confer upon any Grantee any right to continue in the employ or
service of the Company, or restrict the right of the Company to terminate such
employment or service at any time.

                  16.2 No income or benefit resulting to a Grantee from any
Option or Option Shares shall be treated or deemed as a basis for any social or
other rights or benefits to which the Grantee may be entitled in connection with
his employment with the Company or any subsidiary



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thereof, and the Grantee shall indemnify and hold harmless the Company or any
subsidiary thereof, as the case may be, for any cost or expense which will arise
or accrue thereto in respect of any such income or benefit.

         17.      GOVERNING LAW AND JURISDICTION.

                  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. Any dispute arising out of or in connection with
this Plan or any instrument issued thereunder shall be under the exclusive
jurisdiction of the competent courts situated in Tel-Aviv.

         18.      TAX CONSEQUENCES.

                  Any tax consequences arising from the grant or exercise of any
Option Award, from the payment for shares covered thereby or from any other
event or act (of the Company or the Grantee) hereunder, shall be borne solely by
the Grantee. Furthermore, the Grantee shall agree to indemnify the Company and
hold it harmless against and from any and all liability for any such tax or
interest or penalty thereon, including without limitation, liabilities relating
to the necessity to withhold, or to have withheld, any such tax from any payment
made to the Grantee.




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                               GIVEN IMAGING LTD.
                                 PC/51-257802-2
                                 (the "COMPANY")


                                  OPTION AWARD

         TO PURCHASE UP TO _____ ORDINARY A' SHARES, PAR VALUE NIS 0.01
         EACH QUALIFYING UNDER SECTION 102 OF THE INCOME TAX ORDINANCE


Made on ________, 1998, in the name of:

                                    ---------------------------
                                    of
                                      -------------------------
                                    (the "TRUSTEE")
                                          -------

In favor of:

                                    ---------------------------
                                    of
                                      -------------------------
                                    (the "GRANTEE")
                                          -------


Pursuant to the resolution of the Company's Compensation Committee of
__________, 1998, this Option Award evidences the right granted to the Trustee,
in the benefit of the Grantee, to purchase up to ______ (______________________)
Ordinary A' Shares, par value NIS 0.01 each of the Company (the "OPTION
SHARES"), according to, and subject to the terms of the Company's 1998 Option
Plan, a copy of which is attached to this Option Award as APPENDIX A and forms
an integral part hereof (the "PLAN"), and subject to the provisions of Section
102 of the Income Tax Ordinance (New Version), 5721-1961 (the "ORDINANCE"), the
Income Tax Rules (Tax Benefits in Stock Issuances to Employees) 5749-1989 (the
"RULES") and the Company's Articles of Association, all as from time to time may
be amended, and further subject to the Trust Agreement entered between the
Trustee and the Company on _________, 1998, a copy of which is attached hereto
as APPENDIX B, and to the special terms, if any, set forth below. All
capitalized terms used herein shall bear the respective meaning ascribed thereto
under the Plan, unless otherwise defined herein.

OPTION PRICE

The Option Price per each one Option Share shall be (US) $.

SPECIAL TERMS

 . . .


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      IN WITNESS WHEREOF, the Company executed this Option Award on the date
first written above.


GIVEN IMAGING LTD.


By:
      ------------------------
Title:
      ------------------------






                 We, the undersigned, hereby agree to the terms of this Option
                 Award:

                 ------------------------              ------------------------
                       the Trustee                          the Grantee


APPENDICES

A'     1998 Option Plan
B'     Trust Agreement