XTL
Biopharmaceuticals LTD.




2000
DIRECTORS, CONSULTANTS AND EMPLOYEES SHARE OPTION PLAN





A. NAME
AND PURPOSE







1. Name:
This
plan, as amended from time to time, shall be known as the “XTL
Biopharmaceuticals Ltd. 2000 Directors, Consultants and Employee Share Option
Plan” (the “Plan”).




2. Purpose: The
purpose and intent of the Plan is to provide incentives to the directors,
consultants and employees of XTL Biopharmaceuticals Ltd. (the "Company") and its
subsidiaries by providing them with options to purchase Ordinary Shares, nominal
value 0.02 New Israeli Shekels each (the "Shares"), of the Company.




B.
GENERAL TERMS AND CONDITIONS OF THE PLAN




3.    Administration: 




3.1 The Plan
will be administered by the Board of Directors of the Company (the "Board") or
by a committee appointed by the Board (the "Committee"), which, if appointed,
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, the Committee shall have the
full authority in its sole and absolute discretion, from time to time and at any
time, to determine (i) the persons ("Grantees") to whom options to purchase
Shares ("Option(s)") shall be granted, (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, and/or (v) any other
matter which is necessary or desirable for, or incidental to, the administration
of the Plan. 




3.4 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 Option granted thereunder.




3.5 The
interpretation and construction by the Committee of any provision of the Plan or
of any Option thereunder shall be final and conclusive unless otherwise
determined by the Board.




4. Eligible
Grantees: The
Committee, at its discretion, may grant Options to any employee of the Company
(including officers, directors who are employees) or its subsidiaries. Anything
in this Plan to the contrary notwithstanding, all grants of Options to Directors
and Office Holders -"Nosei Misra" - as such term is defined in the
Israeli Companies Ordinance (New Version), 1983, as amended from time to time
(the "Companies Ordinance") - shall be authorized and implemented only in
accordance with the provisions of the Companies Ordinance. The grant of an
Option to a Grantee hereunder, shall neither entitle such Grantee to
participate, nor disqualify him from participating, in any other grant of
options pursuant to this Plan or any other stock option plan of the Company.











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5. Grant
of Options in Trust: 




5.1
 Subject
to Section 7.1 hereof, the effective date of the grant of an Option (the "Date
of Grant") shall be the date specified by the Committee in its determination
relating to the award of such Option. The Committee shall promptly give the
Grantee written notice (the “Notice of Grant”) of the grant of an
Option.




5.2 Anything
herein to the contrary notwithstanding, all Options granted under the Plan shall
be granted by the Company to a trustee designated by the Board (the "Trustee"),
the Trustee shall hold each such Option in trust (the "Trust") for the benefit
of the Grantee in respect of whom such Option was granted (the "Beneficial
Grantee"), and no Options shall be released from the Trust until the vesting of
such Options pursuant to Section 7.2 hereof (the "Release Date"). From and
after the Release Date, upon the written request of any Beneficial Grantee, the
Trustee shall release from the Trust the Options granted and exercise them 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 and exercise any such Options on behalf of the Beneficial Grantee unless
the latter, prior to, or concurrently with, such release and exercise, provides
the Trustee with evidence, satisfactory in form and substance to the Trustee,
that all taxes and/or compulsory payments, if any, required to be paid upon such
release and exercise have, in fact, been paid.




6. Reserved
Shares: The
Company has reserved 187,000 authorized but unissued Shares for purposes of
the Plan subject to adjustments as provided in Section 11 hereof. All
Shares under the 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 the
Plan.

 

7. Grant
of Options:




7.1 The
Committee in its discretion may award to Grantees Options to purchase Shares in
the Company available under the Plan. Options may be granted at any time after
receipt of a pre-ruling from the Income Tax Authorities that the exercise of
Options granted under the Plan will be subject to tax in accordance with the
provisions of Section 102 of the Income Tax Ordinance [New Version]
1961.




7.2 The
Notice of Grant shall state, inter alia, the number of Shares covered thereby,
the schedule pursuant to which such Options shall vest, the Beneficial Grantee
thereof shall be entitled to pay for, and acquire, the Shares, the exercise
price, and such other terms and conditions as the Committee at its discretion
may prescribe, provided that they are consistent with this Plan.




7.3 Without
derogating from the rights and powers of the Committee under Section 7.2
hereof, unless otherwise specified in the Notice of Grant, each Option under the
Plan shall be for a term of ten (10) years. 




8. Exercise
Price: The
exercise price per Share covered by each Option shall be determined by the
Committee in its sole and absolute discretion.




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 (the "Notice
of Exercise") delivered by the Trustee (after receipt of written instructions
from the Beneficial Grantee) to the Company at its principal executive office,
specifying the number of Shares to be purchased and accompanied by the payment
therefor, and containing such other terms and conditions as the Committee shall
prescribe from time to time.










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9.3 Anything
herein to the contrary notwithstanding, but without derogating from the
provisions of Section 10 hereof, if any Option has not been exercised and
the Shares covered thereby not paid for within ten (10) 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 Trustee shall
thereafter hold such Options in an unallocated pool until instructed by the
Company that some or all of such Options are again to be held in trust for one
or more Grantees.

 

9.4 Each
payment for Shares shall be in respect of a whole number of Shares, and shall be
effected in cash or by a cashier'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 In the
event that a Grantee ceases, for any reason, to be employed by the Companies,
all Options theretofore granted to such Grantee shall terminate as
follows:




(a) If the
Grantee’s termination of employment is due to such Grantee’s death or
“Disability” (as hereinafter defined), such Option (to the extent exercisable at
the time of the Grantee’s termination of employment) shall be exercisable by the
Grantee’s legal representative, estate of other person to whom the Grantee’s
rights are transferred by will or by laws of descent of distribution for a
period of six (6) months following such termination of employment (but in no
event after the expiration date of such Option), and shall thereafter terminate.
For purposes hereof, Disability shall mean the inability, due to illness or
injury, to engage in any gainful occupation for which the individual is suited
by education, training or experience, which condition continues for at least six
(6) months.




(b) If the
Grantee’s termination of employment is for any other reason, such Options (to
the extent exercisable at the time of the Grantee's termination of employment)
shall be exercisable for a period of thirty (30) days following such termination
of employment, and shall thereafter terminate; provided,
however, that if
the Grantee’s dies within such thirty-day period, such Options (to the extent
exercisable at the time of the Grantee's termination of employment) shall be
exercisable by the Grantee's legal representative, estate or other person to
whom the Grantee's rights are transferred by will or by laws of descent or
distribution for a period of six (6) months following the Grantee’s death (but
in no event after the expiration date of such Option), and shall thereafter
terminate.

 

10.2 Notwithstanding
the foregoing provisions of Section 10.1, the Committee may provide, either
at the time an Option is granted or thereafter, that such Option may be
exercised after the periods provided for in Section 10.1, but in no event
beyond the term of the Option.




11. Adjustment
Upon Changes in Capitalization




11.1 Subject
to any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Option, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per share of Shares covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Shares or
the payment of a stock dividend (bonus shares) with respect to 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 herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares subject to an Option.





11.2 In the
event of the proposed dissolution or liquidation of the Company, the Committee
shall notify each Grantee at least fifteen (15) days prior to such proposed
action. To the extent it has not been previously exercised, each Option will
terminate immediately prior to the consummation of such proposed action. In the
event of a consolidation or the merger of the Company with or into another
corporation, each Option shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation.

 







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12. Non-Transferability: 







No Option
shall be assignable or transferable by the Grantee to whom granted otherwise
than by will or the laws of descent and distribution, and an Option may be
exercised during the lifetime of the Grantee only by such Grantee or by such
Grantee's guardian or legal representative. The terms of such Option shall be
binding upon the beneficiaries, executors, administrators, heirs and successors
of such Grantee.




13.  Terms
and Amendment of the Plan:




13.1 The Plan
was authorized by the Board on April 12, 2000, and shall expire on April 12,
2010 (except as to Options outstanding on that date), but such expiration shall
not affect the instructions contained herein or in any applicable law with
respect to the Options and Shares held in the Trust at such time of
expiration.




13.2 Subject
to applicable laws, the Board may, at any time and from time to time, terminate
or amend the Plan in any respect. In no event may any action of the Company
alter or impair the rights of a Grantee, without his consent, under any Option
previously granted to him.




14. Tax
Consequences: All tax
consequences and/or obligations regarding other compulsory payment arising from
the grant or exercise of any Option, from the payment for, or the subsequent
disposition of, Shares covered thereby 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 the Trustee and hold them harmless
against and from any and all liability for any such tax (and compulsory payment,
if any) or interest or penalty thereon, including without limitation,
liabilities relating to the necessity to withhold, or to have withheld, any such
tax (and compulsory payment, if any) from any payment made to the
Grantee.

 

15. Miscellaneous:




15.1 Continuance
of Employment: Neither
the Plan nor the grant of an Option thereunder shall impose any obligation on
the Company to continue the employment of any Grantee, and nothing in the Plan
or in any Option granted pursuant thereto shall confer upon any Grantee any
right to continue in the employ of the Company, or restrict the right of the
Company to terminate such employment at any time.




15.2 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.




15.3 Application
of Funds: The
proceeds received by the Company from the sale of Shares pursuant to Options
granted under the Plan will be used for general corporate purposes of the
Company.




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

 

15.5 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 stock
options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.









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