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                                                                    EXHIBIT 10.2

                            BACKWEB TECHNOLOGIES LTD.

                                   APPENDIX A

                    TO THE ISRAELI 1996 EMPLOYEE OPTION PLAN

1.       GENERAL

         1.1.     This appendix (the "APPENDIX") is effective with respect to
                  Options granted commencing January 1, 2003 only to Grantees
                  who are residents of the State of Israel or those who are
                  deemed to be residents of the State of Israel for income tax
                  purposes ("ISRAELI GRANTEES"), and shall comply with Amendment
                  no. 132 of the Ordinance.

         1.2      The provisions specified in this Appendix shall form an
                  integral part of the BackWeb Technologies Ltd. (the "COMPANY")
                  1996 Employee Option Plan (the "PLAN"), which applies to the
                  issuance of Options to purchase Ordinary Shares, NIS 0.03
                  nominal value each, of the Company.

         1.3.     This Appendix only modifies the terms of Part A of the Plan
                  with respect to grant of Options to Israeli Grantees in order
                  to comply with changes to Israeli tax legislation and, in
                  particular, to the provisions of Section 102 (as defined
                  below). For the avoidance of doubt, this Appendix does not add
                  to or modify the Plan in any other manner or with respect to
                  any other category of Grantees.

         1.4.     In any case of contradiction, whether explicit or implied,
                  between the provisions of this Appendix and the provisions of
                  the Plan, the provisions set out in this Appendix shall
                  prevail.

         1.5.     Any capitalized term not specifically defined in this Appendix
                  shall be construed according to the interpretation given to it
                  in the Plan.

2.       DEFINITIONS

         2.1      "AFFILIATE" means any "employing company" within the meaning
                  of Section 102(a) of the Ordinance.

         2.2      "APPROVED 102 OPTION" means an Option granted pursuant to
                  Section 102(b) of the Ordinance and held in trust by a Trustee
                  for the benefit of the Grantee.

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         2.3      "CAPITAL GAINS OPTION" means an Approved 102 Option elected
                  and designated by the Company to qualify under the capital
                  gains tax treatment in accordance with the provisions of
                  Section 102(b)(2) of the Ordinance.

         2.4      "CONTROLLING SHAREHOLDER" shall have the meaning ascribed to
                  it in Section 32(9) of the Ordinance.

         2.5      "ELECTION" shall have the meaning ascribed to it in Section
                  3.5 of this Appendix.

         2.6      "EMPLOYEE" means a person who is employed by the Company or
                  its Affiliates, including an individual who is serving as a
                  director or an office holder, but excluding any Controlling
                  Shareholder.

         2.7      "HOLDING PERIOD" shall have the meaning ascribed to it in
                  Section 4.1 of this Appendix.

         2.8      "NON-EMPLOYEE" means a consultant, adviser, service provider,
                  Controlling Shareholder or any other person who is not an
                  Employee.

         2.9      "ORDINARY INCOME OPTION" means an Approved 102 Option elected
                  and designated by the Company to qualify under the ordinary
                  income tax treatment in accordance with the provisions of
                  Section 102(b)(1)of the Ordinance.

         2.10     "SECTION 102" means section 102 of the Ordinance and any
                  regulations, rules, orders or procedures promulgated
                  thereunder as now in effect or as hereafter amended.

         2.11     "TRUSTEE" means any individual appointed by the Company to
                  serve as a trustee and approved by the Income Tax Authorities,
                  all in accordance with the provisions of Section 102(a) of the
                  Ordinance.

         2.12     "UNAPPROVED 102 OPTION" means an Option granted pursuant to
                  Section 102(c) of the Ordinance and not held in trust by the
                  Trustee.

         2.13     "3(i) OPTION" means an Option granted pursuant to Section 3(i)
                  of the Ordinance to any person who is a Non- Employee.

         2.14     "102 OPTION" means any Option granted to Employees pursuant to
                  Section 102 of the Ordinance.

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3.       ISSUANCE OF OPTIONS

         3.1      The persons eligible for participation in the Plan as Grantees
                  shall include any Employees and/or Non-Employees of the
                  Company or of any Affiliate; provided, however, that (i)
                  Employees may only be granted 102 Options; and (ii)
                  Non-Employees may only be granted 3(i) Options.

         3.2      The Company's board of directors may designate Options granted
                  to Employees pursuant to Section 102 as Unapproved 102 Options
                  or Approved 102 Options.

         3.3      The grant of Approved 102 Options shall be made under this
                  Appendix, and shall be conditioned upon the approval of this
                  Appendix by the Income Tax Authorities.

         3.4      Approved 102 Options may either be classified as Capital Gain
                  Options or Ordinary Income Options, as selected by the
                  Company's board of directors.

         3.5      No Approved 102 Options may be granted under this Appendix to
                  any eligible Employee, unless and until, the Company's board
                  of directors' election of the type of Approved 102 Options as
                  Capital Gains Options or Ordinary Income Options granted to
                  Employees (the "ELECTION"), is appropriately filed with the
                  Income Tax Authorities. Such Election shall become effective
                  beginning the first date of grant of an Approved 102 Option
                  under this Appendix and shall remain in effect until the end
                  of the year following the year during which the Company first
                  granted Approved 102 Options. The Election shall obligate the
                  Company to grant only the type of Approved 102 Option it has
                  elected, and shall apply to all Grantees who were granted
                  Approved 102 Options during the period indicated herein, all
                  in accordance with the provisions of Section 102(g) of the
                  Ordinance. For the avoidance of doubt, such Election shall not
                  prevent the Company from simultaneously granting Unapproved
                  102 Options.

         3.6      All Approved 102 Options must be held in trust by a Trustee,
                  as described in Section 4 below.

         3.7      For the avoidance of doubt, the designation of Unapproved 102
                  Options and Approved 102 Options shall be subject to the terms
                  and conditions set forth in Section 102.

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4.       TRUSTEE

         4.1      Notwithstanding any contrary provisions of the Plan, including
                  without limitation Sections 4.1 and 4.2.2 of the Plan,
                  Approved 102 Options granted under this Appendix and/or any
                  Option Shares allocated or issued upon exercise of such
                  Approved 102 Options and/or other shares received subsequently
                  following any realization of rights including bonus shares,
                  shall be allocated or issued to the Trustee and held for the
                  benefit of the Grantees for such period of time as required by
                  Section 102 (the "HOLDING PERIOD"). In the case the
                  requirements for Approved 102 Options are not met (including,
                  without limitation, the Holding Period), then the Approved 102
                  Options shall be regarded as Unapproved 102 Options, all in
                  accordance with the provisions of Section 102. All of the
                  rights attached to shares issued upon exercise of Section 102
                  Options including, without limitation, bonus shares, will be
                  deposited with the Trustee until the elapse of the Holding
                  Period and shall be subject to the same tax treatment as the
                  treatment to which the Section 102 Options are subject.

         4.2      The Trustee shall not release any Option Shares or other
                  shares allocated or issued upon exercise of Approved 102
                  Options prior to the full payment of the Grantee's tax
                  liabilities arising from Approved 102 Options which were
                  granted to him.

         4.3      With respect to any Approved 102 Option, subject to the
                  provisions of Section 102, a Grantee shall not be entitled to
                  sell or release from trust any Option Share received upon the
                  exercise of an Approved 102 Option and/or any share received
                  subsequently following any realization of rights, including
                  without limitation, bonus shares, until the lapse of the
                  Holding Period required under Section 102.

5.       THE OPTION AGREEMENT

         Each option agreement shall state the type of Option granted thereunder
         (whether a Capital Gains Option, Ordinary Income Option, Unapproved 102
         Option, or a 3(i) Option).

6.       FAIR MARKET VALUE FOR TAX PURPOSES

         Solely for the purpose of determining the tax liability pursuant to
         Section 102(b)(3) of the Ordinance, if at the date of grant the
         Company's shares are listed on any established stock exchange or a
         national market system, the fair market value of the Ordinary Shares at
         the date of grant shall be determined in accordance with the average
         value of the Company's shares on the thirty (30) trading days preceding
         the date of grant.

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7.       ASSIGNABILITY AND SALE OF OPTIONS

         7.1      As long as Options or Option Shares purchased pursuant thereto
                  are held by the Trustee on behalf of the Grantee, all rights
                  of the Grantee over the shares are personal, cannot be
                  transferred, assigned, pledged or mortgaged, other than by
                  will or by operation of law, and the Optionee will not grant
                  in connection therewith any proxy (except to the Trustee) or
                  assignment deed, whether immediately effective or effective at
                  a future date.

         7.2      The Trustee shall not make any transaction or take any action
                  with respect to Approved 102 Options or Option Shares issued
                  upon exercise thereof, will not transfer, assign, release,
                  pledge, mortgage voluntary or grant in connection therewith
                  any proxy or assignment deed, whether immediately effective or
                  effective at a future date, other than by will or by operation
                  of law, until after the full payment of the Optionee's tax
                  liabilities arising from the grant of such Options or their
                  exercise or release or transfer by the Trustee or after
                  guarantying the payment of said taxes. If such Options or
                  Option Shares have been transferred by will or by operation of
                  law, the provisions of Section 102 will apply with respect to
                  the or heirs or the transferees of the Grantee, as the case
                  may be.

 8.      INTEGRATION OF SECTION 102 AND TAX ASSESSING OFFICER'S
         PERMIT

         With regard to Approved 102 Options, the provisions of the Plan and/or
         the Appendix and/or the option agreement shall be subject to the
         provisions of Section 102 and the Tax Assessing Officer's permit, and
         the said provisions and permit (whether or not expressly specified in
         the Plan, the Appendix or the Option Agreement) shall be deemed an
         integral part of the Plan, the Appendix and the option agreement.

9.       DIVIDEND

         In addition to Section 4.6.1 of the Plan, with respect to all Option
         Shares (but excluding, for avoidance of any doubt, any unexercised
         Options) allocated or issued upon the exercise of Options purchased by
         the Grantee and held by the Grantee or by the Trustee, as the case may
         be, and the distribution of dividends shall be subject to any
         applicable taxation on distribution of dividends and, when applicable,
         subject to the provisions of Section 102.

11.      TAX CONSEQUENCES

         11.1     The Grantee shall agree to indemnify the Company and the
                  Trustee and hold them harmless against and from any and all
                  liability for any such tax or interest or penalty thereon,
                  including without limitation, liabilities relating to the

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                  necessity to withhold, or to have withheld, any such tax from
                  any payment made to the Grantee.

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

         11.3     With respect to Unapproved 102 Options, if the Grantee ceases
                  to be employed by the Company or any Affiliate, as a condition
                  to the exercise of the Unapproved 102 Options, the Grantee
                  shall deposit with the Company and/or its Affiliate a security
                  or guarantee for discharge of his tax obligations with respect
                  to the Unapproved 102 Options, all in accordance with the
                  provisions of Section 102.

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