EXHIBIT
      10.3


**MEDIS
      TECHNOLOGIES LTD.**


**2007
      EQUITY INCENTIVE PLAN**




**STOCK
      OPTION AGREEMENT**






AGREEMENT,
      dated as of [_____] [__], 2007, between Medis Technologies Ltd., a Delaware
      corporation (the “Company”), and [__________] (the “Grantee”).




**W
      I T N E S S E T H:**




WHEREAS,
      as of April 18, 2007, the Company adopted the Medis Technologies Ltd. 2007
      Equity Incentive Plan (the “Plan”), which Plan authorizes, among other things,
      the grant of options to purchase shares of common stock, $.01 par value (“Common
      Stock”), of the Company to directors, officers and employees of the Company and
      to other individuals; and




WHEREAS,
      the Company’s Compensation Committee, as administrator of the Plan, has
      determined that it would be in the best interests of the Company to grant the
      option documented herein.




NOW,
      THEREFORE, the parties hereto hereby agree as follows:




1  Definitions.  Capitalized
      terms not defined in this Agreement shall have the meaning ascribed to such
      terms in the Plan.




2  Grant
      of Option. Subject to the terms and conditions of the Plan and as set forth
      herein, the Company hereby grants to the Grantee, as of date hereof, an option
      (the “Option”) to purchase from the Company all or any part of an aggregate
      number of [_____] shares of Common Stock (the “Optioned Shares”)




3  Vesting.
      Subject to such further limitations as are provided in the Plan and as set
      forth
      herein, the Option shall become exercisable at a per share price of $[_____]
      (“Exercise Price”), the Grantee having the right hereunder to purchase from the
      Company the indicated number of Optioned Shares upon exercise of the Option,
      on
      and after such dates, in cumulative fashion:




**Exercise**
                **Date**
            
            
            **Non−Qualified**
                **Stock
                  Options**
            
            
            **Incentive**
                **Stock**
                **Options**
            
            
            **102
                  Capital Gains**
                **Track
                  Option Award**
                **(with
                  Trustee) (Israel)**
            
            
            **102
                  Ordinary**
                **Income
                  Track**
                **Option
                  Award**
                **(with
                  Trustee)**
                **(Israel)**
            
            
            **102
                  Non-**
                **Trustee**
                **Option**
                **Award**
                **(Israel)**
            
            
            **3(9)**
                **Option**
                **Award**
                **(Israel)**




Only
      those Optioned Shares indicated above as “Incentive Stock Options” are intended
      by the parties hereto to be, and be treated as, “incentive
      stock options” (as such term is defined under Section 422 of the Code). The
      Option may not be exercised with respect to less than 100 Optioned Shares (or
      the Optioned Shares then subject to purchase under the Option, if less than
      100
      shares) or for any fractional shares.




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4  Termination
      of Option. (a)  The Option, to the extent not previously
      exercised, shall terminate and become null and void on [_____][__], 20[__]
      (the
“Option Expiration Date”).




(b)  Subject
      to the provisions of Section 5 hereof, and except as otherwise provided in
      this
      Section 4, upon the Grantee’s ceasing for any reason to be employed by the
      Company or a Subsidiary (such occurrence being a “termination of the Grantee’s
      employment”), the Option, to the extent not previously exercised, shall
      terminate and become null and void three (3) months after such termination
      of
      the Grantee’s employment, or upon the Option Expiration Date, whichever occurs
      first.




(c)  Subject
      to the provisions of Section 5 hereof, if the Grantee has been continuously
      employed with the Company or a Subsidiary for six (6) years or more, upon a
      termination of the Grantee’s employment (other than for Cause), the Option, to
      the extent not previously exercised, shall terminate and become null and void
      on
      the Option Expiration Date; provided, however, that to the extent the Options
      are Incentive Stock Options, the Options (to such an extent) shall cease to
      constitute Incentive Stock Options to the extent that such Options are exercised
      more than three (3) months after the termination of the Grantee’s
      employment.




(d)  Upon
      a
      termination of the Grantee’s employment for Cause or if following the Grantee’s
      termination of employment, circumstances arise or are discovered with respect
      to
      the Grantee that would have constituted Cause for termination of employment,
      the
      Option, to the extent not previously exercised, shall terminate and become
      null
      and void immediately upon such termination of the Grantee’s employment (or when
      such circumstances arise or are discovered).




(e)  Subject
      to the provisions of Section 5 hereof, and except as otherwise provided in
      this
      Section 4 (other than Section 4(b)), upon a termination of the Grantee’s
      employment by reason of permanent disability (within the meaning of Section
      22(e)(3) of the Code) or by reason of the death of the Grantee, the Option,
      to
      the extent not previously exercised, shall terminate and become null and void
      twelve (12) months after such termination of the Grantee’s employment, or upon
      the Option Expiration Date, whichever occurs first.




5  Exercisability.
      (a)  Upon a termination of the Grantee’s employment, the Option shall
      be exercisable only to the extent that the Option is vested and is in effect
      on
      the date of such termination of the Grantee’s employment.




(b)  To
      the
      extent exercisable, the Option may be exercised by a legal representative on
      behalf of the  Grantee in the event of such permanent disability, or,
      in the case of the death of the Grantee, by the estate of the Grantee or by
      any
      person or persons who acquired the right to exercise the Option by bequest
      or
      inheritance or by reason of the death of the Grantee.




6  Manner
      of Exercise. (a)  The Option may be exercised in full at one time
      or in part from time to time for the number of Optioned Shares then exercisable
      by giving written notice, signed by the person exercising the Option, to the
      Company, stating the number of Optioned Shares with respect to which the Option
      is being exercised and the date of exercise thereof, which date shall be at
      least five days after the giving of such notice.




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(b)  Full
      payment by the Grantee of the Exercise Price for the Optioned Shares purchased
      shall be made on or before the exercise date specified in the notice of exercise
      by delivery of (i) cash or a check payable to the order of the Company in an
      amount equal to such Exercise Price, (ii) shares of Common Stock owned by the
      Grantee having a Fair Market Value equal in amount to such Exercise Price,
      or
      (iii) any combination of the preceding clauses (i) and (ii).




(c)  The
      Company shall be under no obligation to issue any Optioned Shares unless the
      person exercising the Option, in whole or in part, shall give a written
      representation and undertaking to the Company which is satisfactory in form
      and
      substance to counsel for the Company and upon which, in the opinion of such
      counsel, the Company may reasonably rely, that he or she is acquiring such
      Optioned Shares for his or her own account as an investment and not with a
      view
      to, or for sale in connection with, the distribution of any such Optioned
      Shares, and that he or she will make no transfer of the same except in
      compliance with any rules and regulations in force at the time of such transfer
      under the Securities Act of 1933, or any other applicable law.




(d)  Upon
      exercise of the Option in the manner prescribed by this Section 6, delivery
      of a
      certificate for the Optioned Shares then being purchased shall be made at the
      principal office of the Company to the person exercising the Option within
      a
      reasonable time after the date of exercise specified in the notice of
      exercise.




7  Non−Transferability
      of Option. The Option shall not be assignable or transferable by the Grantee
      other than by will or the laws of descent and distribution, and shall be
      exercisable during the lifetime of the Grantee only by the Grantee. The Option
      shall terminate and become null and void immediately upon the bankruptcy of
      the
      Grantee, or upon any attempted assignment or transfer except as herein provided,
      including without limitation, any purported assignment, whether voluntary or
      by
      operation of law, pledge, hypothecation or other disposition, attachment,
      trustee process or similar process, whether legal or equitable, upon the
      Option.




8  No
      Special Employment Rights. Neither the granting of the Option nor its
      exercise shall be construed to confer upon the Grantee any right with respect
      to
      the continuation of his or her employment by the Company (or any subsidiary
      of
      the Company) or interfere in any way with the right of the Company (or any
      subsidiary of the Company), subject to the terms of any separate employment
      agreement to the contrary, at any time to terminate such employment or to
      increase or decrease the compensation of the Grantee from the rate in existence
      as of the date hereof.




9  Tax
      Consequences.  (a)  All tax consequences under any
      Applicable Law which may arise from the grant of this Option or the exercise
      thereof, the sale or disposition of any shares granted hereunder or issued
      upon
      exercise of this Option or from any other action of the Grantee in connection
      with the foregoing shall be borne and paid solely by the Grantee, and the
      Grantee shall indemnify the Company, and its Subsidiaries and Affiliates, and
      shall hold them harmless against and from any liability for any such tax or
      penalty, interest or indexation thereon. The Grantee agrees to, and undertakes
      to comply with, any ruling, settlement, closing agreement or other similar
      agreement or arrangement with any tax authority in connection with




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the
      foregoing which is approved by the Company.  The Grantee is advised to
      consult with a tax advisor with respect to the tax consequences of receiving
      or
      exercising this Option.  The Company does not assume any
      responsibility to advise the Grantee on such matters, which shall remain solely
      the responsibility of the Grantee.




(b)           The
      Grantee shall notify the Company in writing promptly and in any event within
      ten
      (10) days after the date on which the Grantee first obtains knowledge of any
      tax
      bureau inquiry, audit, assertion, determination, investigation, or question
      relating in any manner to the Option granted or received hereunder or Shares
      issued thereunder and shall continuously inform the Company of any developments,
      proceedings, discussions and negotiations relating to such matter, and shall
      allow the Company and its representatives to participate in any proceedings
      and
      discussions concerning such matters. Upon request, the Grantee shall provide
      to
      the Company any information or document relating to any matter described in
      the
      preceding sentence, which the Company, in its discretion, requires.




(c)           To
      the extent a 102 Option Award is designated above, you declare and acknowledge:
      (i) that you fully understand that Section 102 of the Israeli Income Tax
      Ordinance and the rules and regulations enacted thereunder apply to the Options
      specified in this Agreement and to you; and (ii) that you understand the
      provisions of Section 102, the tax track chosen and the implications thereof.
      With respect to Options granted under Section 102, the terms of such Options
      shall also be subject to the terms of the Trust Agreement made between the
      Company and the Trustee for the benefit of the Grantee, as well as the
      requirements of the Israeli Income Tax Commissioner. The grant of Options
      hereunder is further conditioned upon the Grantee signing all documents
      requested by the Company or the Trustee, in accordance with and under the Trust
      Agreement. A copy of the Trust Agreement is available for the Grantee’s review,
      during normal working hours, at the Company’s offices.




10  No
      Rights of Stockholder. The Grantee shall not be deemed for any purpose to be
      a stockholder of the Company with respect to the Option except to the extent
      that the Option shall have been exercised with respect thereto and, in addition,
      a stock certificate shall have been issued theretofore and delivered to the
      Grantee.




11  Amendment.
      Subject to the terms and conditions of the Plan, the Board or a committee
      appointed by the Board to administer the Plan (the “Committee”), whichever shall
      then have authority to administer the Plan, may amend this Agreement with the
      consent of the Grantee when and subject to such conditions as are deemed to
      be
      in the best interests of the Company and in accordance with the purposes of
      the
      Plan.




12  Notices.
      Any communication or notice required or permitted to be given hereunder shall
      be
      in writing, and, if to the Company, to its principal place of business,
      attention: Secretary, and, if to the Grantee, to the address as appearing on
      the
      records of the Company. Such communication or notice shall be deemed given
      if
      and when (a) properly addressed and posted by registered or certified mail,
      postage prepaid, or (b) delivered by hand.




13  Incorporation
      of Plan by Reference. The Option is granted pursuant to the terms of the
      Plan, the terms of which are incorporated herein by reference, and the Option
      shall in all respects be interpreted in accordance with the Plan. In the event
      of any inconsistency between




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the
      Plan
      and this Agreement, the Plan shall govern. The Board or the Committee, whichever
      shall then have authority to administer the Plan, shall interpret and construe
      the Plan and this Agreement, and their interpretations and determinations shall
      be conclusive and binding upon the parties hereto and any other person claiming
      an interest hereunder, with respect to any issue arising hereunder or
      thereunder.




14  Acknowledgement.  The
      Grantee acknowledges receipt of the copy of the Plan attached hereto as Exhibit
      A.




15  Governing
      Law. The validity, construction and interpretation of this Agreement shall
      be governed by and determined in accordance with the laws of the State of New
      York.




**[SIGNATURES
      ON NEXT PAGE]**









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IN
      WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
      above written.






MEDIS
                TECHNOLOGIES LTD.
              
              
              By:
                ____________________________________
              Name:
              Title:
              
              
              GRANTEE:
              
              _________________________________________
              Name:














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**Exhibit
      A**









**2007
      Equity Incentive Plan**























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