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Exhibit 4.19

2003 Equity Incentive
Plan

# ECTEL LTD.

# 2003 EQUITY INCENTIVE
PLAN

A. NAME AND PURPOSE

1.       
          Name: This plan, as amended from time to time, shall be known as
          ECtel Ltd. 2003 Share Option Plan (the Plan).

2.       
          Purpose: The purpose and intent of the Plan is to provide incentives to
          employees, former employees, directors, consultants and contractors (both
          Israeli and non-Israeli) of ECtel Ltd., a company organized under the laws of
          the State of Israel, or any subsidiary thereof (the Company), by
          providing them with opportunities to participate in the Companys future
          performance through awards of Options, Stock Appreciation Rights and Restricted
          Stock Units relating to the Ordinary Shares, nominal value of 0.04 New Israeli
          Shekel each of the Company (the Shares), pursuant to a plan approved
          by the Board of Directors of the Company (the Board). Such plan is
          designed to allow Grantees (as such term is defined below) subject to Israeli
          taxation to benefit from the provisions of either Section 102 or Section
          3(9) of the Israeli Income Tax Ordinance [New Version] 1961 (the
          Ordinance), as applicable, and the rules and regulations promulgated
          thereunder or any other tax ruling provided by the tax authorities to the
          Company, Grantees subject to U.S. taxation and receiving awards of Options (as
          defined below), to receive incentive stock options within the meaning of Section
          422 of the Internal Revenue Code of 1986, as amended (the Code), or
          nonqualified stock options, or, with respect to Grantees resident in other
          countries , to benefit from the applicable laws relevant in the country of
          residency of such Grantees.

References
to the defined term Options in paragraphs 3.4, 3.5, 3.6, 3.7, 4, 5, 7.1, 7.2,
7.4, 7.5, 10, 11 (other than in respect of 11.4(a)(i)), 12, 13, 14 and 15 shall hereafter
be deemed to be references to the defined term Awards.

B. GENERAL TERMS AND CONDITIONS OF THE PLAN

3.        Administration:

| | 3.1        The
Board may appoint a Share Incentive Committee, which will consist of such number of
Directors of the Company, as may be fixed from time to time by 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. The
Plan will be administered by the Share Incentive Committee, or by the Board (including,
but not limited to, actions which the Share Incentive Committee is not permitted to take
according to Section112 of the Companies Law, 1999 (the Companies Law))
(collectively  theCommittee).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | 3.3        Subject
to the general terms and conditions of this Plan and applicable law, the Committee shall
have the full authority in its discretion, from time to time and at any time to determine
(i) the persons (Grantees) to whom awards under
this Plan (Awards) shall be granted, (ii) the
number of Shares subject to each Award, (iii) the time or times at which the same
shall be granted, (iv) the schedule and conditions on which such Awards may be
exercised and on which such Awards shall be paid for, (v) rules and provisions as
may be necessary or appropriate to permit eligible Grantees who are not Israeli or U.S.
residents to participate in the Plan and/or to receive preferential tax treatment in
their country of residence, with respect to the Awards granted hereunder, and/or (vi) any
other matter which is necessary or desirable for, or incidental to, the administration of
the Plan. Awards that may be granted under this Plan include (a) options to purchase
Shares (Options), (b) Awards made pursuant to Section 16
hereof (each, a Stock Appreciation Right or SAR)
and (c) Awards made pursuant to Section 17 hereof (each, a Restricted Stock
Unit).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.4        Subject
to the general terms and conditions of the Plan and the Ordinance, the Committee shall
have the full authority in its discretion, from time to time and at any time, to
determine:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)        with
respect to the grant of 102 Options (as defined in Section 5.1(a)(i) below)
           whether the Company shall elect the Ordinary Income Route          under
Section 102(b)(1) of the Ordinance (the Ordinary Income Route)           or
the Capital Gains Route under Section 102(b)(2) of the Ordinance
          (the Capital Gains Route) (each of the Ordinary Income Route or the
          Capital Gains Route  a Taxation Route) for the grant of 102
          Options, and the identity of the trustee who shall be granted such 102 Options
          in accordance with the provisions of this Plan and the then prevailing Taxation
          Route.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event the Committee determines that the Company shall elect one of the Taxation
Routes for the grant of 102 Options, the Company shall be entitled to change such
election only following the lapse of one year from the end of the tax year in which 102
Options are first granted under the then prevailing Taxation Route; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        with
respect to the grant of 3(9) Options (as defined in Section 5.1(a)(ii)           below)
 whether or not 3(9) Options shall be granted to a trustee in           accordance
with the terms and conditions of this Plan, and the identity of the           trustee who
shall be granted such 3(9) Options in accordance with the provisions           of this
Plan.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 3.5        Notwithstanding
the aforesaid, the Committee may, from time to time and at any time, grant 102 Options
that will not be subject to a Taxation Route, as detailed in Section 102(c) of the
Ordinance (102(c) Options).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

4.        Eligible
Grantees:

| | 4.1        The
Committee, at its discretion, may grant Options to any employee, former employee,
director, consultant or contractor of the Company. Anything in this Plan to the contrary
notwithstanding, all grants of Options to office holders (i.e., Nosei Misra,
as such term is defined in the Companies Law) shall be authorized and implemented only in
accordance with the provisions of the Companies Law. Notwithstanding anything else herein
to the contrary, Incentive Stock Options (as defined below) shall be granted only to
employees of the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2        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 share option plan of the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | 5.1        Grant
of Options and Issuance of Shares.
| | ---------------------------------------------------

| | (a)        Subject
to the provisions of the Ordinance and applicable law,
| | -------------------------------------------------------------------------

| | (i)        all
grants of Options to employees, directors and office holders of the
          Company, other than to a Controlling Shareholder of the Company (i.e.,
          Baal Shlita, as such term is defined in the Ordinance), shall be
          made only pursuant to the provisions of Section 102 of the Ordinance, the
          Income Tax Rules (Tax Relief in Issuance of Shares to Employees), 2003
          (102 Rules) and any other regulations, rulings, procedures or
          clarifications promulgated thereunder (102 Options), or any other
          section of the Income Tax Ordinance that will be relevant for such issuance in
          the future; and
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        all
grants of Options to consultants, contractors, former employees or           Controlling
Shareholders of the Company shall be made only pursuant to the           provisions of
Section 3(9) of the Ordinance and the rules and regulations           promulgated
thereunder (3(9) Options), or any other section of the           Ordinance
that will be relevant for such issuance in the future.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)        Notwithstanding
the aforesaid in Sections 5.1(a)(i) and 5.1 (a)(ii), the           Committee, at it
discretion, may grant Options to any employee, former employee,           director,
consultant or contractor of the Company pursuant to the provisions of           any tax
ruling provided to the Company with respect to such Options by the           Israeli
Commissioner of Income Tax.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        Subject
to Sections 7.1 and 7.2 hereof, the effective date of the grant of an           Option
(the Date of Grant) shall be the date the Committee resolves           to
grant such Option, unless specified otherwise 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        Trust.
In the event Options are granted under the Plan to a trustee           designated by the
Committee in accordance with the provisions of Section 3.4           hereof and, with
respect to 102 Options, approved by the Israeli Commissioner of           Income Tax (the
Trustee), the Trustee shall hold each such Option           and the Shares
issued upon exercise thereof in trust (the Trust) for           the benefit
of the Grantee in respect of whom such Option was granted (the           Beneficial
Grantee).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
accordance with Section 102, the tax benefits afforded to 102 Options (and any Shares
received upon exercise thereof) in accordance with the Ordinary Income Route or Capital
Gains Route, as applicable, shall be contingent upon the Trustee holding such 102 Options
for a period of at least (i) one year from the end of the tax year in which the 102
Options are granted, if the Company elects the Ordinary Income Route, or (ii) two years
from the end of the tax year in which the 102 Options are granted, if the Company elects
the Capital Gains Route, or (iii) such other period as shall be approved by the Israeli
Commissioner of Income Tax (collectively the Trust Period).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | (i)        A
Grantee granted 102 Options shall not be entitled to sell the Shares received
          upon exercise thereof (the Exercised Shares) or to transfer such
          Exercised Shares (or such 102 Options) from the Trust prior to the lapse of the
          Trust Period;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        Any
and all rights issued in respect of the Exercised Shares, including bonus
          shares but excluding cash dividends (Rights(, shall be issued to
the           Trustee and held thereby until the lapse of the Trust Period, and such
Rights           shall be subject to the Taxation Route which is applicable to such
Exercised           Shares.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii)        Notwithstanding
the aforesaid, Exercised Shares or Rights may be sold or           transferred, and the
Trustee may release such Exercised Shares (or 102 Options)           or Rights from
Trust, prior to the lapse of the Trust Period, provided however,           that tax is
paid or withheld in accordance with Section 102(b)(4) of the           Ordinance and
Section 7 of the 102 Rules.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | (d)        Subject
to the terms hereof, at any time after the Options have vested, with           respect to
any Options or Shares the following shall apply: Upon the written           request of
any Beneficial Grantee, the Trustee shall release from the Trust the           Options
granted, and/or the Shares issued, on behalf of such Beneficial Grantee,           by
executing and delivering to the Company such instrument(s) as the Company may
          require, giving due notice of such release to such Beneficial Grantee, provided,
however, that the Trustee shall not so release any such           Options and/or
Shares to such Beneficial Grantee unless the latter, prior to, or           concurrently
with, such release, provides the Trustee with evidence,           satisfactory in form
and substance to the Trustee, that all taxes, if any,           required to be paid upon
such release have, in fact, been paid.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 5.2        Guarantee.
In the event a 102(c) Option is granted to a Grantee who is an employee at the time of
such grant, if the Grantees employment is terminated, for any reason, such Grantee
shall provide the Company with a guarantee or collateral securing the payment of all
taxes required to be paid upon the sale of the Exercised Shares received upon exercise of
such 102(c) Option.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.3        Dividend.
All Shares issued upon the exercise of Options granted under the Plan shall entitle the
Grantee thereof to receive dividends with respect thereto. For so long as Shares issued
to the Trustee on behalf of a Beneficial Grantee are held in the Trust, the dividends
paid or distributed with respect thereto shall be remitted to the Trustee for the benefit
of such Beneficial Grantee or distributed directly to such Beneficial Grantee, as shall
be solely determined by the Committee.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5.4        Shareholder
Rights. The holder of an Option shall have no shareholder rights with respect to the
Shares subject to such Option until such person shall have exercised the Option, paid the
exercise price and become the record holder of the purchased Shares. Subject to the
provisions of the Plan and the provisions of the Articles of Association of the Company,
the Exercised Shares shall entitle the Grantee or Beneficial Grantee thereof to full
shareholder rights (via the Trustee, if in Trust), including voting and dividend rights,
with respect to such Exercised Shares.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6.       
          Reserved Shares: The total number of Shares that may be subject to Awards
          granted under the Plan shall not exceed 3,700,000 in the aggregate, subject to
          adjustments as provided in Section 11 hereof. Without derogating from the
          foregoing, the Committee shall have full authority in its discretion to
          determine that the Company may issue, for the purposes of the Plan, previously
          issued Shares that are held by the Company, from time to time, as Dormant Shares
          (as such term is defined in the Companies Law). 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 Awards under the Plan.

7.        Grant
of Options:

| | 7.1        The
implementation of the Plan and the granting of any Option under the Plan shall be subject
to the Companys procurement of all approvals and permits required by applicable law
or regulatory authorities having jurisdiction over the Plan, the Options granted under it
and the Shares issued pursuant to it.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.2        The
Notice of Grant shall state, inter alia, the number of Shares subject to each
Option, the vesting schedule, the dates when the Options may be exercised, the exercise
price, whether the Options granted thereby are 102 Options or 3(9) Options or other
Options, and such other terms and conditions as the Committee at its discretion may
prescribe, provided that they are consistent with this Plan. Each Notice of Grant
evidencing a 102 Option shall, in addition, be subject to the provisions of the
provisions of the Ordinance applicable to such Options.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.3        Vesting.
Without derogating from the rights and powers of the Committee under Section 7.3
hereof, unless otherwise specified by the Committee, the Options shall be for a term of
ten (10) years. The Vesting Period pursuant to which the Options shall vest shall be
determined by the Committee from time to time.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Vesting
Period of an Option means, for the purpose of the Plan and its related instruments,
the period between the Adoption Date (the AdoptionDate for the purpose
of this Plan means the Date of Grant or any other date determined by the Committee for a
given grant of Options) and the date on which the holder of an Option may exercise the
rights awarded pursuant to the terms of the Option.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.4        Acceleration
of Vesting. The Committee shall have full authority to determine any provisions
regarding the acceleration of the Vesting Period of any Option or the cancellation of all
or any portion of any outstanding restrictions with respect to any Option or Share upon
certain events or occurrences, and to include such provisions in the Notice of Grant on
such terms and conditions as the Committee shall deem appropriate.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.5        Repricing.
Subject to applicable law, the Committee shall have full authority to, at any time and
from time to time, without the approval of the Shareholders of the Company, (i) grant in
its discretion to the holder of an outstanding Option, in exchange for the surrender and
cancellation of such Option, a new Option having an exercise price lower than provided in
the Option so surrendered and canceled and containing such other terms and conditions as
the Committee may prescribe in accordance with the provisions of the Plan, or (ii)
effectuate a decrease in the Exercise Price (see Section 8 below) of outstanding Options.
At the full discretion of the Committee such actions may be brought before the
shareholders of the Company for their approval.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.       
          Exercise Price: The exercise price per Share subject to each Award (the
          Exercise Price) shall be determined by the
          Committee in its sole and absolute discretion, subject to applicable law.

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 Grantee (or, with respect to Options held in the Trust,
by the Trustee upon 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 subject
thereto 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
Shares subject to such Options shall again be available for grant through Options under
the Plan, as provided for in Section 6 herein.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 banks check payable to the order of the Company, or such other
method of payment acceptable to the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10.        Termination
of Employment:

| | 10.1        Employees.
In the event that a Grantee who was an employee of the Company on the Date of Grant of
any Options to him or her ceases, for any reason, to be employed by the Company (the
Cessation of Employment), unless otherwise determined by the Committee, all
Options theretofore granted to such Grantee when such Grantee was an employee of the
Company shall terminate as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)        The
date of the Grantees Cessation of Employment shall be the date on           which
the employee-employer relationship between the Grantee and the Company           ceases
to exist (the Date of the Cessation).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (b)        All
such Options which are not vested at the Date of Cessation shall terminate
          immediately.
| | ----------------------------------------------------------------------------------------------------------------

| | (c)        If
the Grantees Cessation of Employment is by reason of such           Grantees
death or Disability (as hereinafter defined), such           Options (to the
extent vested at the Date of Cessation) shall be exercisable by           the Grantee or
the Grantees guardian, legal representative, estate or           other person to
whom the Grantees rights are transferred by will or by           laws of descent or
distribution, at any time until 180 days from the Date of           Cessation, and shall
thereafter terminate.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
purposes hereof, Disability shall mean the inability to engage in any
substantial gainful occupation for which the Grantee is suited by education, training or
experience, by reason of any medically determinable physical or mental impairment which
is expected to result in such persons death or to continue for a period of six (6)
consecutive months or more.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        If
the Grantees Cessation of Employment is due to any reason other than
          those stated in Sections 10.1(c), 10.1(e) and 10.1(f) herein, such Options (to
          the extent vested at the Date of Cessation) shall be exercisable at any time
          until 30 days after the Date of Cessation, and shall thereafter terminate; provided,
however, that if the Grantee dies within such period,           such Options (to
the extent vested at the Date of Cessation) 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 at any time until
180 days from the Date of Cessation, and shall           thereafter terminate.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

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

| | 10.2        Directors,
Consultants and Contractors. In the event that a Grantee, who is a director,
consultant or contractor of the Company, ceases, for any reason, to serve as such, the
provisions of Sections 10.1(b), 10.1(c), 10.1(d), 10.1(e), 10.1(g) and 10.2(h) above
shall apply, mutatis mutandis. For the purposes of this Section 10.2, Date
of Cessation shall mean:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a)        with
respect to directors  the date on which a director submits notice of
          resignation from the Board or the date on which the shareholders of the Company
          remove such director from the Board; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)        with
respect to consultants and contractors  the date on which the           consulting
or contractor agreement between such consultant or contractor, as           applicable,
and the Company expires or the date on which either of the parties           to such
agreement sends the other notice of its intention to terminate said           agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

11.        Adjustments,
Liquidation and Corporate Transaction:

| | 11.1        Definitions:
| | ------------------------

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

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

| | (ii)        a
sale or other disposition of at least eighty percent (80%) of the outstanding
          securities of the Company;
| | --------------------------------------------------------------------------------------------------------------------------------

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

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



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| | 11.2        Adjustments.
Subject to any required action by the shareholders of the Company, the number of Shares
subject to 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 subject to 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
any class, or securities convertible into shares 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.3        Liquidation.
Unless otherwise provided by the Board, in the event of the proposed dissolution or
liquidation of the Company, all outstanding Options will terminate immediately prior to
the consummation of such proposed action. In such case, the Committee may declare that
any Option shall terminate as of a date fixed by the Committee and give each Grantee the
right to exercise his Option, including any Option which would not otherwise be
exercisable.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.4        Corporate
Transaction.
| | ----------------------------------

| | (a)        In
the event of a Corporate Transaction, immediately prior to the effective date
          of such Corporate Transaction, each Option may, at the sole and absolute
          discretion of the Committee, either:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)        be
substituted for an option to purchase securities of any successor entity (the
          Successor Entity Option) such that the Grantee may exercise the
          Successor Entity Option for such number and class of securities of the
successor           entity which would have been issuable to the Grantee in consummation
of such           Corporate Transaction, had the Option been exercised immediately prior
to the           effective date of such Corporate Transaction; and/or
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)        be
assumed by any successor entity such that the Grantee may exercise the Option
          for such number and class of securities of the successor entity which would
have           been issuable to the Grantee in consummation of such Corporate
Transaction, had           the Option been exercised immediately prior to the effective
date of such           Corporate Transaction.
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In the event of a clause (i) or
clause (ii) action, appropriate adjustments shall be made to the exercise price per Share
to reflect such action.

| | (b)        Immediately
following the consummation of the Corporate Transaction, all           outstanding
Options shall terminate and cease to be outstanding, except to the           extent
assumed by a successor entity.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)        Notwithstanding
the aforementioned in Section 7.4 above, ten (10) days prior to           the effective
date of the Corporate Transaction, all Options granted under the           plan to
Directors and executive officers, notwithstanding the Vesting Period of           such
Options, subject to closing of said transaction, shall vest in full and           become
fully exercisable.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d)        Notwithstanding
the foregoing, and without derogating from the power of the           Committee pursuant
to the provisions of this Plan, the Committee shall have full           authority and
sole discretion to determine that any of the provisions of           Sections 11.4(a)(i)
and/or 11.4(a)(ii) above shall apply in the event of a           Corporate Transaction in
which the consideration received by the shareholders of           the Company is not
solely comprised of securities of a successor entity, or in           which such
consideration is solely cash or assets other than securities of a           successor
entity.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.5        Sale.
Subject to any provision in the Article of Association of the Company, in the event that
all or substantially all of the issued and outstanding share capital of the Company is to
be sold (the Sale), each Grantee shall be obligated to participate in the
Sale and sell his or her Shares and/or Options in the Company, provided, however,
that each such Share or Option shall be sold at a price equal to that of any other Share
sold under the Sale (minus the applicable exercise price), while accounting for changes
in such price due to the respective terms of any such Option, and subject to the absolute
discretion of the Board.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | With
respect to Shares held in Trust the following  procedure  will be applied:  The Trustee
will transfer the Shares held in Trust and sign any document in order to effectuate the
transfer of Shares, including share transfer deeds, provided however, that the Trustee
receives a notice from the Board, specifying that: (i) all or substantially all of the
issued outstanding share capital of the Company is to be sold, and therefore the Trustee
is obligated to transfer the Shares held in Trust; (ii) the Company is obligated to
withhold at the source all taxes required to be paid upon release of the Shares from the
Trust and to provide the Trustee with evidence, satisfactory to the Trustee, that such
taxes indeed have been paid; (iii) the Company is obligated to transfer the consideration
for the Shares directly to the Grantees.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.6        The
grant of Options under the Plan shall in no way affect the right of the Company to
adjust, reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12.       
          Limitations on Transfer: 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.        Term
and Amendment of the Plan:

| | 13.1        The
Plan was adopted by the Board on August 3, 2003. The Plan shall terminate upon the
earliest of (i) the expiration of the ten (10)-year period measured from the date
the Plan was adopted by the Board, or (ii) the termination of all outstanding
Options in connection with a Corporate Transaction. All Options outstanding at the time
of a clause (i) termination event shall continue to have full force and effect in
accordance with the provisions of the Plan and the documents evidencing such Options.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.2        Subject
to applicable laws, the Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect any rights and obligations with respect to Options at
the time outstanding under the Plan, unless the Grantee consents to such amendment or
modification.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.3        Without
derogating from the foregoing, the Board in its discretion may, at any time and from time
to time, without the approval of the Shareholders of the Company, (i) expand of the
class of participants eligible to participate in the Plan; and/or (ii) expand the types
of options or awards provided under the Plan and/or (iii) extend the duration of the
Plan. Notwithstanding the aforesaid, at the full discretion of the Board any of the above
actions may be brought before the shareholders of the Company for their approval.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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14.       
          Withholding and Tax Consequences: The Companys obligation to
          deliver Shares upon the exercise of any Options granted under the Plan shall be
          subject to the satisfaction of all applicable income tax and other compulsory
          payments withholding requirements. All tax consequences and obligations
          regarding any other compulsory payments arising from the grant or exercise of
          any Option, from the payment for, or the subsequent disposition of, Shares
          subject thereto or from any other event or act (of the Company, of the Trustee
          or of the Grantee) hereunder, shall be borne solely by the Grantee, and the
          Grantee shall indemnify the Company and/or the Trustee, as applicable, and hold
          them harmless against and from any and all liability for any such tax or other
          compulsory payment, or interest or penalty thereon, including without
          limitation, liabilities relating to the necessity to withhold, or to have
          withheld, any such tax or other compulsory payment from any payment made to the
          Grantee.

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 or service of any Grantee.
Nothing in the Plan or in any Option granted thereunder shall confer upon any Grantee any
right to continue in the employ or service of the Company for any period of specific
duration, or interfere with or otherwise restrict in any way the right of the Company to
terminate such employment or service at any time, for any reason, with or without cause.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.2        Requirement
of Law.Notwithstanding anything to the contrary in this Plan,the grant
of Options and the issuance of Shares under the Plan to Grantees who are non-Israeli
residents, shall not be governed by Section 102 or Section 3(9) and shall be subject to
all applicable laws, rules and regulations, and to such approvals as may be required by
any governmental agency of the country of residence of such Grantees.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.3        Governing
Law. The Plan and all instruments issued thereunder or in connection therewith, shall
be governed by, and interpreted in accordance with, the laws of the State of Israel.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.4        Use
of Funds. Any proceeds received by the Company from the sale of Shares pursuant to
the exercise of Options granted under the Plan shall be used for general corporate
purposes of the Company.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.5        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
Grant, as determined by the Committee.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.6        Non-Exclusivity
of the Plan. The adoption of the Plan by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the granting of
stock options otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16.        Stock
Appreciation Rights.

| | 16.1        Stock
Appreciation Rights; SAR Agreement. A Stock Appreciation Right (or SAR) is an award of an
option to acquire Shares that is settled in Shares having a value equal to the value
determined by multiplying the difference between the Fair Market Value (as defined below)
on the date of settlement over the Exercise Price and the number of Shares with respect
to which the SAR is being settled. A SAR may be awarded for past services already
rendered or future services to be rendered to the Company, or any Parent or Subsidiary of
the Company. Each grant of a Stock Appreciation Right or SAR under the Plan shall be
evidenced by a SAR Agreement between the Grantee and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other terms that
are not inconsistent with the Plan. The provisions of the various SAR Agreements entered
into under the Plan need not be identical. SARs may be granted in consideration of a
reduction in the Grantees other compensation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.2        Exercise
of SARs. Upon exercise of a SAR, the Grantee (or any person having the right to exercise
the SAR after his or her death) shall receive from the Company Shares and the Fair Market
Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the
amount by which the Fair Market Value (on the date of surrender) of the Shares subject to
the SARs exceeds the Exercise Price.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.3        Number
of SARs. Each SAR Agreement shall specify the number of rights to which the SAR pertains
and shall provide for the adjustment of such number in accordance with the Plan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.4        Exercise
Price. Each SAR Agreement shall specify the Exercise Price. A SAR Agreement may specify
an Exercise Price that varies in accordance with a predetermined formula while the SAR is
outstanding.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.5        Exercisability
and Term. Each SAR Agreement shall specify the date when all or any installment of the
SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR.
Notwithstanding anything else in the Plan or this Amendment to the contrary, unless
otherwise specified by the Committee, each SAR shall be for a term of six (6) years. A
SAR Agreement may provide for accelerated exercisability in the event of the Grantees
death, Disability or other events and may provide for expiration prior to the end of its
term in the event of Termination. SARs may be awarded in combination with Options, and
such an Award may provide that the SARs will not be exercisable unless the related
Options are forfeited. The Vesting Period pursuant to which the SARs shall vest shall be
determined by the Committee from time to time.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17.        Restricted
Stock Units.

| | 17.1        Restricted
Stock Units; RSU Agreement. A Restricted Stock Unit (or RSU) is an award covering a
number of Shares that is settled by issuance of those Shares. A RSU may be awarded for
past services already rendered or future services to be rendered to the Company, or any
Parent or Subsidiary of the Company. Each grant of Restricted Stock Units under the Plan
shall be evidenced by a Restricted Stock Unit Agreement between the Grantee and the
Company. Such Restricted Stock Units shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Restricted Stock Unit Agreements entered into under the Plan
need not be identical. Restricted Stock Units may be granted in consideration of a
reduction in the recipients other compensation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.2        Payment.
Other than the par value of the Shares, no payment of cash shall be required as
consideration.
| | -------------------------------------------------------------------------------------------------------------------

| | 17.3        Vesting.
Restricted Stock Units may or may not be subject to vesting. Vesting shall occur, in full
or in installments, upon satisfaction of the conditions specified in the Restricted Stock
Unit Agreement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.4        Rights
as a Shareholder. No voting or dividend rights as a shareholder shall exist prior to the
actual issuance of Shares in the name of the Participant.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 17.5        Exercisability
and Term. Notwithstanding anything else in the Plan or this Amendment to the contrary,
unless otherwise specified by the Committee, each Restricted Stock Unit shall be for a
term of six (6) years. Each Restricted Stock Unit Agreement shall specify its term and
any conditions on the time or times for settlement, and provide for expiration prior to
the end of its term in the event of Termination, and may provide for earlier settlement
in the event of the Participants death, Disability or other events.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.6        Settlement.
Settlement of vested Restricted Stock Units shall be made in the form of Shares.
Distribution to a Grantee of an amount (or amounts) from settlement of vested Restricted
Stock Units can be deferred to a date after settlement as determined by the Committee.
The amount of a deferred distribution may be increased by an interest factor or by
dividend equivalents. Until an Award of Restricted Stock Units is settled, the number of
such Restricted Stock Units shall be subject to adjustment pursuant to the Plan.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18.        Fair
Market Value

For purposes of the plan,
Fair Market Value shall means, as of any date, the value of a share
determined as follows:

| | 18.1        if
such Shares are then quoted on the Nasdaq Stock Market, its closing price on the Nasdaq
stock Market on the date immediately preceding the date of determination as reported in
The Wall Street Journal;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 18.2        if
such Shares are publicly traded and are then listed on a national securities exchange,
its closing price on the date immediately preceding the date of determination on the
principal national securities exchange on which the Shares are listed or admitted to
trading as reported in The Wall Street Journal;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 18.3        if
such Shares are publicly traded but are not quoted on the Nasdaq Stock Market nor listed
or admitted to trading on a national securities exchange, the average of the closing bid
and asked prices on the date immediately preceding the date of determination as reported
by The Wall Street Journal (or, if not so reported, as otherwise reported by any
newspaper or other source as the Board may determine); or
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 18.4        if
none of the foregoing is applicable, by the Committee in good faith.
| | -----------------------------------------------------------------------------------

19.        Incorporation
by Reference of certain U.S Plan terms

| | 19.1        The
following paragraphs of the ECtel Ltd. 2003 U.S. Employee Stock Option           Plan
(the U.S. Plan) shall be incorporated herein by reference: 2,           7.3,
8.1, 8.2, 8.3, 8.7, 16.2.3, 16.6 (provided that references in such           paragraph
16.6 to Options shall be deemed references to the defined           term
Awards, references therein to Grantees shall be           deemed
references to the defined term Awardees and references           therein to
Parent shall be deemed references to the defined term           Company).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.2        Paragraphs
10 and 11.2 of the U.S. Plan shall be incorporated herein by reference, provided that the
provisions thereof shall apply only to Options granted under the U.S. Plan prior to March
1, 2006, unless decided otherwise by the Committee.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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