Document:

Exhibit 10.1

Kornit Digital Ltd.

2004 Share Option Plan

(as amended June 15, 2005)

1.     
Purpose

The purpose of
this Share Option Plan is to secure for Kornit digital Ltd. and its
shareholders the benefits arising from ownership of share capital
by employees, officers and directors of the Company and its
Affiliates (as defined below), who are expected to contribute to
the Company’s future growth and success.

2.    
Definitions

2.1   Defined
Terms

Initially capitalized terms, as used in this
Plan, shall have the meaning ascribed thereto as set forth
below:

	

means the Board of Directors of the Company, or
the compensation committee appointed by the Board. Subject to the
Articles of Association of the Company, as may be amended from time
to time, the Administrator, if it is a committee, shall consist of
such number of members (but not less than two (2)) as may be
determined by the Board.

	

“Administrator”

	

 

	

 

	

 

	

 

	

means a present or future company that either
(i) Controls Kornit digital Ltd. or is
Controlled by Kornit digital Ltd.; or
(ii) is Controlled by the same person or entity that Controls
Kornit digital
Ltd.

	

“Affiliate(s)”

	

 

	

 

	

 

	

 

	

with respect to Options, means the allocation of
Options by the Company to the Trustee on behalf of a
Participant.

	

“Allocate” or
“Allocated”

	

 

	

 

	

 

	

 

	

means, when used in connection with the
termination of a Participant’s employment with, or service to
the Company or an Affiliate, as a result of a basis for
termination, including, but not limited to: dishonesty toward the
Company or Affiliate, insubordination, substantial malfeasance or
nonfeasance of duty, unauthorized disclosure of confidential
information, and conduct substantially prejudicial to the business
of the Company or Affiliate; or, any substantial breach by the
Participant of (i) his or her employment or service agreement or
(ii) any other obligations toward Company or Affiliate.

	

“Cause”

	

 

	

 

	

 

	

 

	

means the date of commencement of the vesting
schedule with respect to a Grant of Options which, unless otherwise
determined by the Administrator, shall be the date on which such
Grant of Options shall be Allocated.

	

“Commencement Date”

	

 

	

 

	

 

	

 

	

means Kornit digital Ltd., a
company incorporated under the laws of the State of
Israel.

	

“Company”

	

 

	

 

	

 

	

 

	

shall have the meaning ascribed thereto in
Section 102.

	

“Control” or
“Controlled”

	

 

	

 

	

 

	

 

	

means physical or mental impairment or sickness
of a Participant, making it impossible for the Participant to
continue such Participant’s employment with or service to the
Company or Affiliate.

	

“Disability”

	

 

	

 

	

 

	

 

	

means, the price determined by the Administrator
in accordance with Section 7.1 below which is to be paid to the
Company in order to exercise a Granted Option and convert such
Option into an Underlying Share.

	

“Exercise Price”

	

 

 

	

means a letter from the Company or Affiliate to
a Participant in which the Participant is notified of the decision
to Grant to the Participant Options according to the terms of the
Plan. The Grant Letter shall specify (i) the Tax Track that the
Company selected according to Section 11 of the Plan; (ii) the
Exercise Price; (iii) the vesting period; and (iv) the number of
Options Granted to the Participant.

	

“Grant Letter”

	

 

	

 

	

 

	

 

	

with respect to Options, means the grant of
Options by the Company to a Participant pursuant to a Grant
Letter.

	

“Grant of Options”

	

 

	

 

	

 

	

 

	

means the period in which the Allocated Options
granted to a Participant or, upon exercise thereof the Underlying
Shares, are to be held by the Trustee on behalf of the Participant,
in accordance with Section 102, and pursuant to the Tax Track which
the Company selects.

	

“Holding Period”

	

 

	

 

	

 

	

 

	

means the initial public offering of shares of
the Company and the listing of such shares for trading on any
recognized stock exchange or over-the-counter or computerized
securities trading system.

	

“IPO”

	

 

	

 

	

 

	

 

	

means the laws of the State of Israel as are in
effect from time to time.

	

“Law”

	

 

	

 

	

 

	

 

	

(i) a sale of all or substantially all of the
assets of the Company; or (ii) a sale (including an exchange) of
all or substantially all of the shares of the capital stock of the
Company; or (iii) a merger, consolidation or like transaction of
the Company with or into another corporation.

	

“Merger Transaction”

	

 

	

 

	

 

	

 

	

shall have the meaning set forth in Section
7.4
below.

	

“Notice of Exercise”

	

 

	

 

	

 

	

 

	

means an option to purchase one Share of the
Company.

	

“Option”

	

 

	

 

	

 

	

 

	

means an employee, officer or director of the
Company or any Affiliate (provided that such person does not
Control the Company as such term is defined in the Tax Ordinance),
on behalf of whom an Option is Granted pursuant to the
Plan.

	

“Participant”

	

 

	

 

	

 

	

 

	

means this Share Option Plan, as may be amended
from time to time.

	

“Plan” or “Option
Plan”

	

 

	

 

	

 

	

 

	

means the termination of a Participant’s
employment as a result of his or her reaching the earlier of (i)
the age of retirement as defined by Law; or (ii) the age of
retirement specified in the Participant’s employment
agreement.

	

“Retirement”

	

 

	

 

	

 

	

 

	

means Section 102 of the Tax
Ordinance.

	

“Section 102”

	

 

	

 

	

 

	

 

	

means the Income Tax Rules (Tax Relief for
Issuance of Shares to Employees), 2003.

	

“Section 102 Rules”

	

 

	

 

	

 

	

 

	

means an ordinary share of the Company, having a
par value of NIS 0.1.

	

“Share(s)”

	

 

	

 

	

 

	

 

	

means the Israeli Income Tax Ordinance [New
Version], 1961, as amended, and any regulations, rules, orders or
procedures promulgated thereunder.

	

“Tax Ordinance”

	

 

	

 

	

 

	

 

	

means one of the three tax tracks described
under Section 102, specifically: (1) the “Capital Gains Track
Through a Trustee”; (2) “Income Tax Track Through a
Trustee”; or (3) the “Income Tax Track Without a
Trustee”; each as defined in Sections 11.1-11.2 of this Plan,
respectively.

	

“Tax Track”

	

 

	

 

	

 

	

 

	

means, with respect to Granted but unexercised
Options, the time period set forth in Section 9
below.

	

“Term of the Options”

	

 

	

 

	

 

	

 

	

means a Trustee appointed by the Company to hold
in trust, Allocated Options and the Underlying Shares issued upon
exercise of such Options, on behalf of Participants.

	

“Trustee”

	

 

	

 

	

 

	

 

	

means Shares issued or to be issued upon
exercise of Granted Options all in accordance with the
Plan.

	

“Underlying Shares”

	

 

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2.2  
General

Without
derogating from the meanings ascribed to the capitalized terms
above, all singular references in this Plan shall include the
plural and vice versa, and reference to one gender shall include
the other, unless otherwise required by the context.

3.     Shares Available for
Options

The total number of Underlying Shares reserved
for issuance under the Plan and any modification thereof, shall be
determined from time to time by the Board of Directors of the
Company. Such number of Shares shall be subject to adjustment as
required for the implementation of the provisions of the Plan, in
accordance with Section 4 below.

In the event that Options Allocated under the
Plan expire or otherwise terminate in accordance with the
provisions of the Plan, such expired or terminated Options shall
become available for future Grants and Allocations under the
Plan.

4.    
Adjustments

In the event that any dividend or other
distribution (whether in the form of Shares, other securities, or
other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities
of the Company, or other change in the corporate structure of the
Company affecting the Shares occurs, the Administrator, in order to
prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, may (in its
sole discretion) adjust the number and class of Shares that may be
delivered under the Plan and/or the number, class, and price of
Shares covered by each outstanding Option or Share Purchase Right.
Upon the occurrence of any such adjustment, references in this Plan
to Shares and Underlying Shares shall be construed to mean the
Shares of the Company subject to the Plan as so determined by the
Administrator, following such adjustment.

If the Change in Capitalization is the
distribution of a cash dividend, the Company shall transfer to the
Trustee the amount of dividend resulting from the Underlying Shares
held by the Trustee for the benefit of Participants in accordance
with the provisions of this Plan. The Trustee shall deduct all
applicable taxes from the dividend amount and transfer the
remaining dividend amount to such Participants.

5.     
Administration of the Plan

5.1   Power

Subject to the Law, the Articles of Association
of the Company, and any resolution to the contrary by the
Company’s Board of Directors, the Administrator is
authorized, in its sole and absolute discretion, to exercise all
powers and authorities either specifically granted to it under the
Plan or necessary or advisable in the administration of the Plan;
including, without limitation,

(A) to determine:

(i)    the Participants in the
Plan, and the number of Options to be Granted for each
Participant’s benefit;

(ii)   the time or times at which
Options shall be Granted;

(iii)  the Exercise Price for any Granted
Option (subject to the approval of the Board);

(iv)  whether, to what extent, and under
what circumstances an Option may be settled, canceled, forfeited,
exchanged, or surrendered;

(v)   any terms and conditions in
addition to those specified in the Plan under which an Option may
be Granted; and

(vi)  any measures, and to take actions, as
deemed necessary or advisable for the administration and
implementation of the Plan.

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(B) to interpret the provisions of the Plan
and to take all actions resulting therefrom including without
limitation;

(i)    subject to Section 7, to
accelerate the date on which any Allocated Option under the Plan
becomes exercisable;

(ii)   to waive or amend Plan
provisions relating to exercise of Options, including exercise of
Options after termination of employment, for any reason;
and

(iii)  to amend any of the terms of the
Plan, or any prior determinations of the Administrator;

5.2  
Limitations

Notwithstanding the provisions of Section 5.1
above, no interpretations, determinations or actions of the
Administrator shall contradict the provisions of Section 102, and
no waiver or amendment with respect to the Plan shall have a
material adverse affect on any Participant’s rights in
connection with any Granted Option under the Plan without receiving
the consent of such Participant.

6.     Allocation of
options

6.1   Conditions for
Allocation of Options

Options may be Allocated at any time
after:

(A)   the Plan has been approved by
the necessary corporate bodies of the Company; and

(B)   the 30-day waiting period
beginning on the date on which the Company has filed all required
documents with the Israeli Tax Authorities as specified in Section
102 and the Rules, has elapsed; and

(C)   all other approvals, consents or
requirements necessary by Law have been received or met.

6.2  
Date of Allocation

The date on which Options shall be deemed
Allocated under the Plan shall be the date on which the Company
shall notify the Trustee that such Allocated Options have been
Allocated in the name of the Trustee on behalf of a
Participant.

7.     
Exercise of Options

7.1   Exercise
Price

The Exercise Price per Underlying Share
deliverable upon the exercise of an Option shall be determined by
the Administrator. The Exercise Price shall be set forth in the
Grant Letter.

7.2   Vesting
Schedule

Unless otherwise determined by the
Administrator, all Options allocated on a certain date shall,
subject to continued employment with or service to the Company or
Affiliate by the Participant, become vested and exercisable in
accordance with the vesting schedule specified in the Grant
Letter.

7.3   Minimum
Exercise

No exercise of Options by any Participant shall
be for an aggregate Exercise Price of less than $500, or such other
minimum sum determined by the Administrator, unless the exercise is
of all of the Participant’s Options that are vested as of the
date of exercise.

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An Option may not be exercised for fractional
shares or for less than ten Shares.

The exercise of a portion of the Options Granted
shall not cause the expiration, termination or cancellation of the
remaining unexercised Options held by the Trustee on behalf of the
Participant.

7.4   Manner of
Exercise

An Option may be exercised by and upon the
fulfillment of the following:

(A)   Notice of Exercise

       The signing
by the Participant, and delivery to both the Company (at its
principal office) and the Trustee (if the Options are held by a
Trustee), of an exercise notice form as prescribed by the
Administrator, including but not limited to: (i) the identity of
the Participant, (ii) the number of Options to be exercised, and
(iii) the Exercise Price to be paid (the “Notice of
Exercise”).

(B)   Exercise Price

       The payment
by the Participant to the Company, in such manner as shall be
determined by the Administrator, of the Exercise Price with respect
to all the Options exercised, as set forth in the Notice of
Exercise.

(C)   Allocation of Shares

       Upon the
delivery of a duly signed Notice of Exercise and the payment to the
Company of the Exercise Price with respect to all the Options
specified therein, the Company shall issue the Underlying Shares to
the Trustee (according to the applicable Holding Period) or to the
Participant, as the case may be.

8.     Waiver of Option
Rights

At any time prior to the expiration of any
Granted (but unexercised) Options, a Participant may waive his
rights to the Options or to some of the Options by a written notice
to the Company’s principal office. Such notice shall specify
the number of Options, which the Participant waives, and shall be
signed by the Participant.

Upon receipt by the Company of a notice of
waiver of such rights, such Options shall expire and shall become
available for future Grants and Allocations under the
Plan.

9.     Term of the
Options

Unless earlier terminated pursuant to the
provisions of this Plan, all Granted but unexercised Options shall
expire and cease to be exercisable at 5:00 p.m. Israel time on the
7th
anniversary of the Commencement Date of such Options.

10.   Termination of
Employment

10.1 Termination of
Employment

If a Participant ceases to be an employee,
director, or officer of the Company or Affiliate for any reason
(“Termination of Employment”) other than death,
Retirement, Disability or Cause, then any vested but unexercised
Options on the date of Termination of Employment (as shall be
determined by the Company or Affiliate, in its sole discretion),
Allocated on the Participant’s behalf (“Exercisable
Options”) may be exercised, if not previously expired, not
later than the earlier of (i) 90 days after the date of Termination
of Employment; or (ii) the Term of the Options.

All other Granted Options for the benefit of
Participant shall expire upon the date of Termination of
Employment.

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10.2 Termination for
Cause

In the event of Termination of Employment of a
Participant for Cause, the Participant’s right to exercise
any unexercised Options, Granted to such Participant, whether
vested or not on the date of Termination of Employment, shall cease
as of such date of Termination of Employment, and the Options shall
thereupon expire.

If subsequent to the Participant’s
Termination of Employment, but prior to the exercise of Options
Granted to such Participant, the Administrator determines that
either prior or subsequent to the Participant’s Termination
of Employment, the Participant engaged in conduct which would
constitute Cause, then the Participant’s right to exercise
the Options Granted to such Participant shall immediately cease
upon such determination and the Options shall thereupon
expire.

The determination by the Administrator as to the
occurrence of Cause shall be final and conclusive for all purposes
of this Plan.

10.3 Termination by
Reason of Death, Retirement, or Disability

In the event of Termination of Employment of a
Participant by reason of death, Retirement, or Disability, any
vested but unexercised Options shall be exercisable in the case of
death, by his or her estate, personal representative or
beneficiary, or in the case of Retirement or Disability, by the
Participant or his or her personal representative (as the case may
be), until the earlier of (i)12 months after the date of
Termination of Employment; or (ii) the Term of the
Options.

All other Granted Options for the benefit of
Participant shall expire upon the date of Termination of
Employment.

10.4 Exceptions

In special
circumstances, pertaining to the Termination of Employment of a
certain Participant, the Administrator may in its discretion decide
to extend any of the periods stated above in Sections
10.1-10.3.

10.5 Transfer of
Employment or Service

Subject to the
receipt of appropriate approvals from the Israeli Tax Authorities,
a Participant’s right to Options or the exercise thereof that
were Granted to him or her under this Plan, shall not be terminated
or expire solely as a result of the fact that the
Participant’s employment or service as an employee, officer
or director changes from the Company to an Affiliate or vice
versa.

11.   Trust Arrangement and Holding
Period

11.1 Trustee Tax
Tracks

If the Company
elects to Grant Options through (i) the Capital Gains Track Through
a Trustee, or (ii) the Income Tax Track Through a Trustee, then, in
accordance with the requirements of Section 102, the Company shall
appoint a Trustee who will hold in trust on behalf of each
Participant the Allocated Options and the Underlying Shares issued
upon exercise of such Options in trust on behalf of each
Participant.

The Holding Period for the Options will be as
follows:

(A)   The Capital Gains Tax
Track Through a Trustee — if the Company elects to
Allocate the Options according to the provisions of this track,
then the Holding Period will be 24 months from the end of the tax
year in which the Options were Allocated to the Trustee on behalf
of the Participant, or such period as may be approved by the
Israeli Tax Authorities or imposed by Law.

(B)   Income
Tax Track Through a Trustee — if the Company elects to
Allocate Options according to the provisions of this track, then
the Holding Period will be 12 months from the end of the tax year
in which the Options were Allocated to the Trustee on behalf of the
Participant, or such period as may be approved by the Israeli Tax
Authorities or imposed by Law.

6

Subject to
Section 102 and the Rules, Participants shall not be able to
receive from the Trustee, nor shall they be able to sell or dispose
of Underlying Shares before the end of the applicable Holding
Period. If a Participant sells or removes the Underlying Shares
form the Trustee before the end of the applicable Holding Period
(“Breach”), the Participant shall pay all applicable
taxes imposed on such Breach by Section 7 of the
Rules.

In the event of a distribution of rights,
including an issuance of bonus shares, in connection with Options
originally Allocated (the “Additional Rights”), all
such Additional Rights shall be Allocated and/or issued to the
Trustee for the benefit of Participants, and shall be held by the
Trustee for the remainder of the Holding Period applicable to the
Options originally Allocated. Such Additional Rights shall be
treated in accordance with the provisions of the applicable Tax
Track.

11.2 Income Tax Track
Without a Trustee

If the Company elects to Allocate Options
according to the provisions of this track, then the Options will
not be subject to a Holding Period. However, upon exercise of
Options under this Tax Track, the Trustee shall hold such
Underlying Shares for the benefit of the Participant in accordance
with the provisions of Section 15 of this Plan.

11.3 Track
Selection

The Company, in its sole discretion, shall elect
under which of above three Tax Tracks each Option is Granted and
shall notify the Participant in the Grant Letter, which Tax Track
applies to each Granted Option.

11.4 Concurrent
Conditions

The Holding Period, if any, is in addition to
the vesting period as specified in the Grant Letter. The Holding
Period and vesting period may run concurrently, but neither is a
substitute for the other, and each are independent terms and
conditions for Options Granted.

11.5 Trust
Agreement

The terms and conditions applicable to the trust
relating to the Tax Track selected by the Company, as appropriate,
shall be set forth in an agreement signed by the Company and the
Trustee (the “Trust Agreement”).

12.   Term of Shares Held In
Trust

No Underlying Shares or Additional Rights issued
by the Company to the Trustee, shall be held by the Trustee on
behalf of the Participant for a period longer than seven (7) years
after the end of the Term of the Options. The Administrator shall
instruct the Trustee as to the transfer of these Shares.

13.   Rights as a
Shareholder

Unless
otherwise specified in the Plan, a Participant shall not have any
rights as a shareholder with respect to Shares issued under this
Plan, until such time as the Shares shall be registered in the name
of the Participant in the Company’s register of
shareholders.

14.   No Special Employment
Rights

Nothing
contained in this Plan shall confer upon any Participant any right
with respect to the continuation of employment by or service to the
Company or Affiliate or to interfere in any way with the right of
the Company or Affiliate, to terminate such employment or service
or to increase or decrease the compensation of the
Participant.

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15.   Restrictions on Sale of Options
and Shares

15.1 Options

Options may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent.

15.2 Shares

Unless otherwise determined by the
Administrator, prior to the Company’s IPO, the Shares may not
be sold assigned, transferred,
pledged, hypothecated or otherwise disposed of, except as stated
below in this Section 15. Unless otherwise determined by the
Administrator, any Underlying Shares issued upon exercise of
Options, granted under any of the tax tracks detailed in Section 11
above, will be held by the Trustee until the earlier to occur of a
Merger, as detailed in Section 15.3 below, or an IPO.

15.3 Mergers

In the event of a Merger Transaction, then,
subject to obtaining the applicable approvals of the Israeli Tax
Authorities, the Administrator in its sole discretion, shall
decide:

(A)   if and how unvested Options
shall be canceled, replaced or accelerated;

(B)   if and how vested Options
(including Options with respect to which the vesting period has
been accelerated according to Section 15.3.(a) shall be exercised,
replaced and/or sold by the Trustee or the Company (as the case may
be) on the behalf of Participants; and

(C)   how Underlying Shares issued
upon exercise of the Options and held by the Trustee on behalf of
Participants shall be replaced and/or sold by the Trustee on behalf
of the Participant.

15.4 Acceleration
Provision

The Administrator, in its sole discretion, may
decide to add a provision in certain Grant Letters, according to
which in case of a Merger, all or some of the unvested Options,
shall automatically accelerate.

15.5 Lock
Up

Notwithstanding the Holding Period, following
the Company’s IPO, at the request of the underwriter, the
Administrator may determine that the Underlying Shares issued
pursuant to the exercise of Options may be subject to a lock-up
period of up to180 days, or such longer period of time as may be
recommended by the Company’s Board of Directors, during which
time Participants shall not be allowed to sell Shares.

16.   Voting

Until consummation of the Company’s IPO,
Shares issued to a Participant or to the Trustee for the benefit of
a Participant, shall be voted by an irrevocable proxy assigned to a
representative appointed by the Company’s Board of Directors
(the “Representative”).

(A)   The Company’s Board of
Directors may, at its discretion, replace the Representative from
time to time.

(B)   Shares subject to proxy shall be
voted by the Representative on any issue or resolution brought
before the shareholders of the Company in accordance with
instructions of the Board of Directors of the Company.

(C)   Each Participant, upon execution
of the irrevocable proxy specified above, undertakes to hold the
Representative harmless from any and all claims related or
connected to said proxy.

8

(D)   The Representative shall be
indemnified and held harmless by the Company against any cost or
expense (including attorneys’ fees) reasonably incurred by
the Representative, or any liability (including any sum paid in
settlement of a claim with the approval of the Company) arising out
of any act or omission to act in connection with the voting of the
Shares subject to proxy, unless arising out of the
Representative’s own fraud or gross negligence, to the extent
permitted by applicable law. In the event the Representative shall
have indemnification by virtue of other functions or services he or
she performs for the Company or Affiliate (whether by agreement,
insurance policy or decision of the appropriate corporate body(ies)
of the Company and/or Affiliate) , this indemnification shall be in
addition to any such other indemnification.

17.   Tax Matters

This Plan
shall be governed by, and shall conform with and be interpreted so
as to comply with, the requirements of Section 102 and any written
approval from the Israeli Tax Authorities. All tax consequences
under any applicable law (other than stamp duty) which may arise
from the Grant or Allocation of Options, from the exercise thereof
or from the holding or sale of Underlying Shares (or other
securities issued under the Plan) by or on behalf of the
Participant, shall be borne solely by the Participant. The
Participant shall indemnify the Company and/or Affiliate, as the
case may be, and hold them harmless, against and from any liability
for any such tax or any penalty, interest or
indexing.

If the Company elects to Allocate Options
according to the provisions of the Income Tax Track Without a
Trustee (Section 11.2 of this Plan), and if prior to the exercise
of any and/or all of these Options, such Participant ceases to be
an employee, director, or officer of the Company or Affiliate, the
Participant shall deposit with the Company a guarantee or other
security as required by law, in order to ensure the payment of
applicable taxes upon the Exercise of such Options.

18.   

Withholding Taxes

Whenever an
amount with respect to withholding tax relating to Options Granted
to a Participant and/or Underlying Shares issued upon the exercise
thereof is due from the Participant and/or the Company and/or an
Affiliate, the Company and/or an Affiliate shall have the right to
demand from a Participant such amount sufficient to satisfy any
applicable withholding tax requirements related thereto, and
whenever Shares or any other non-cash assets are to be delivered
pursuant to the exercise of an Option, or transferred thereafter,
the Company and/or an Affiliate shall have the right to require the
Participant to remit to the Company and/or to the Affiliate, or to
the Trustee an amount in cash sufficient to satisfy any applicable
withholding tax requirements related thereto. If such amount is not
timely remitted, the Company and/or the Affiliate shall have the
right to withhold or set-off (subject to Law) such Shares or any
other non-cash assets pending payment by the Participant of such
amounts.

Until all
taxes have been paid in accordance with Rule 7 of the Section 102
Rules, Options and/or Underlying Shares may not be sold,
transferred, assigned, pledged,
encumbered, or otherwise willfully hypothecated or disposed of, and
no power of attorney or deed of transfer, whether for immediate or
future use may be validly given. Notwithstanding the foregoing, the
Options and/or Underlying Shares
may be validly transferred in accordance with Section 20 below,
provided that the transferee thereof shall be subject to the
provisions of Section 102 and the Section 102 Rules as would have
been applicable to the deceased Participant were he or she to have
survived.

19.   No Transfer of Options

The Trustee
shall not transfer Options to any third party, including a
Participant, except in accordance with instructions received from
the Administrator.

20.   Transfer of Rights Upon
Death

No transfer of any right to an Option or
Underlying Share issued upon the exercise thereof by will or by the
laws of descent shall be effective to bind the Company unless the
Company shall have been furnished with the following signed and
notarized documents:

(A)   A written request for such
transfer and a copy of the legal documents creating and confirming
the right of the person acting with respect to the
Participant’s estate and of the transferee;

9

(B)   A written consent by the
transferee to pay any amounts in connection with the Options and
Underlying Shares any payment due according to the provisions of
the Plan and otherwise abide by all the terms of the Plan;
and

(C)   any such other evidence as the
Administrator may deem necessary to establish the right to the
transfer of the Option or Underlying Share issued upon the exercise
thereof and the validity of the transfer.

21.   No Right of Others to
Options

Subject to the provisions of the Plan, no person
other than the Participant shall have any right with respect to
Options Granted to the Participant’s under the
Plan.

22.   Expenses and Receipts

The expenses
incurred in connection with the administration and implementation
of the Plan (including any applicable stamp duty) shall be borne by
the Company. Any proceeds
received by the Company in connection with the exercise of any
Option may be used for general corporate
purposes.

23.   Required Approvals

The Plan is
subject to the receipt of all approvals required
under Section 102 and the
Law.

24.   Applicable Law

This Plan and all
documents delivered or executed by the Company or Affiliate in
connection herewith shall be governed by, and construed and
administered in accordance with the Law.

25.   Treatment of Participants

There is no
obligation for uniformity of treatment of
Participants.

26.   No Conflicts

In the event of any conflict between
the terms of the Plan and the Grant Letter, the Plan shall
prevail.

27.   Optionee
Undertakings

By entering into this Plan, the Optionee shall
(1) agree and acknowledges that he or she have received and read
the Plan, and the Grant Letter; (2) undertake all the provisions
set forth in: Section 102 (including provisions regarding the
applicable Tax Track that the Company has selected), the 102 Rules,
the Plan, the Grant Letter and the Trust Agreement; and (3) subject
to the provisions of Section 102 and the Rules, undertake not to
sell or release the Underlying Shares from trust before the end of
the Holding Period (if any).

10Exhibit 10.2

Kornit
Digital LTD.

_________________________________________

2012 SHARE INCENTIVE PLAN

_________________________________________

_________________________________________

Adopted:
October 21, 2012

_________________________________________

 

_________________________________________

Kornit
Digital LTD.

2012
sHARE INCENTIVE PLAN

_________________________________________

Unless otherwise defined, terms used herein
shall have the meaning ascribed to them in Section 2
hereof.

1.     
PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

1.1.  Purpose. The
purpose of this 2012 Share Incentive Plan (as amended, the
“Plan”) is
to afford an incentive to employees, directors, officers,
consultants, advisors, and any other person or entity whose
services are considered valuable (collectively, the
“Service
Providers”) to Kornit Digital Ltd., an Israeli company
(the “Company”),
or any Affiliate of the Company, which now exists or hereafter is
organized or acquired by the Company, to continue as Service
Providers, to increase their efforts on behalf of the Company or
Affiliate and to promote the success of the Company’s
business, by providing such Service Providers with opportunities to
acquire a proprietary interest in the Company by the issuance of
Ordinary Shares of the Company, and the grant of options to
purchase Shares, restricted Shares awards (“Restricted
Shares”) and other Share-based Awards pursuant to the
Plan.

1.2.  Types of
Awards. The Plan is intended to enable the Company to
issue Awards under varying tax regimes, including, without
limitation:

(i)    pursuant and subject to
the provisions of Section 102 of the Ordinance, and all regulations
and interpretations adopted thereunder, including without
limitation the Income Tax Rules (Tax Benefits in Stock Issuance to
Employees) 5763-2003 (the “Rules”) or
such other rules published by the Israeli Income Tax Authorities
(the “ITA”) (such
Awards, “102
Awards”). 102 Awards may either be granted to a
Trustee or without a trustee;

(ii)    pursuant to Section 3(9)
of the Ordinance (such Awards, “3(9)
Awards”);

(iii)   Incentive Stock Options within
the meaning of Section 422 of the Code, or the corresponding
provision of any subsequently enacted United States federal tax
statute, as amended from time to time, to be granted to Service
Providers who are deemed to be residents of the U.S. for purposes
of taxation;

(iv)   Nonqualified Stock Options to
be granted to Service Providers who are deemed to be residents of
the U.S. for purposes of taxation; and

(v)   other stock-based Awards
pursuant to Section 12 hereof.

In addition to the issuance of Awards under the
relevant tax regimes in the United States of America and the State
of Israel, the Plan contemplates issuances to Grantees in other
jurisdictions with respect to which the Committee is empowered to
make the requisite adjustments in the Plan and set forth the
relevant conditions in the Company’s agreement with the
Grantee in order to comply with the requirements of the tax regimes
in any such jurisdictions.

The Plan contemplates the issuance of Awards by
the Company, both as a private company and as a publicly traded
company.

1.3.  Construction. To
the extent any provision herein conflicts with the conditions of
any relevant tax law or regulation which are relied upon for tax
relief in respect of a particular Award to a Grantee, the
provisions of such law or regulation shall prevail over those of
the Plan and the Committee is empowered hereunder to interpret and
enforce the said prevailing provisions.

2.     
DEFINITIONS.

2.1.  Terms
Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and
“including” shall be deemed to be followed by the
phrase “without

- 2 -

limitation”. Unless the context requires
otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to
time amended, restated, supplemented or otherwise modified (subject
to any restrictions on such amendments, restatements, supplements
or modifications set forth therein or herein), (ii) references
to any law, constitution, statute, treaty, regulation, rule or
ordinance, including any section or other part thereof shall refer
to that it as amended from time to time and shall include any
successor law, (iii) reference to a person shall means an
individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, or a government or
agency or political subdivision thereof, (iv) the words
“herein”, “hereof” and
“hereunder”, and words of similar import, shall be
construed to refer to this Plan in its entirety and not to any
particular provision hereof and (v) all references herein to
Sections shall be construed to refer to Sections to this
Plan.

2.2.  Defined
Terms. The following terms shall have the meanings
ascribed to them in this Section 2:

2.2.1.    “Affiliate”
shall mean an affiliate of, or person affiliated with, a specified
person or company or other trade or business that directly, or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person within
the meaning of Rule 405 of Regulation C under the Securities Act,
including, without limitation, any Subsidiary. For the purpose of
Options granted pursuant to Section 102 shall mean also an
“employing company” within the meaning of Section
102(a) of the Ordinance.

2.2.2.    “Applicable
Law” shall mean any applicable law, rule, regulation,
statute, pronouncement, policy, interpretation, judgment, order or
decree of any federal, provincial, state or local governmental,
regulatory or adjudicative authority or agency, of any
jurisdiction, and the rules and regulations of any stock exchange
or trading system on which the Shares are then traded or
listed.

2.2.3.    “Award”
shall mean any Restricted Share, Option or any other Share-based
award, granted to a Grantee under the Plan and any share issued
pursuant to the exercise thereof.

2.2.4.    “Board”
shall mean the Board of Directors of the Company.

2.2.5.    “Code” shall
mean the United States Internal Revenue Code of 1986, as
amended.

2.2.6.    “Committee”
shall mean a committee established by the Board to administer the
Plan, subject to Section 3.1.

2.2.7.    “Companies
Law” shall mean the Israel Companies Law-1999 and the
regulations promulgated thereunder, all as amended from time to
time.

2.2.8.    “Controlling
Shareholder” shall have the meaning set forth in
Section 32(9) of the Ordinance.

2.2.9.    “Disability”
shall mean (i) the inability of a Grantee to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for
a continuous period of not less than 12 months, as determined by a
medical doctor satisfactory to the Committee or, if applicable,
(ii) as “permanent and total disability” as defined in
Section 22(e)(3) of the Code, as amended from time to
time.

2.2.10.  “Employee”
shall mean a person who is employed by the Company or any of its
Affiliates, including, for the purpose of Section 102, an
individual who is serving as an “office holder” as
defined under the Companies Law, but excluding any Controlling
Shareholder.

2.2.11.  “Exercise
Period” shall mean the period, commencing on the date
of grant of an Option, during which an Option shall be exercisable,
subject to any vesting provisions thereof and the termination
provisions hereof.

2.2.12.  “Exercise
Price” shall mean the exercise price for each Share
covered by an Option.

2.2.13.  “Fair Market
Value” per share as of a particular date shall mean
(i) the closing sales price per Share on the securities exchange on
which the Shares are principally traded for the last preceding date
on which

- 3 -

there was a sale of such Shares on such
exchange; or (ii) if the Shares are listed on Nasdaq, the last
reported price per Share on Nasdaq on the last preceding date on
which there was a sale of such Share on Nasdaq; or (iii) if the
Shares are then traded in an over-the-counter market, the average
of the closing bid and asked prices for the Shares in such
over-the-counter market for the last preceding date on which there
was a sale of such Shares in such market; (iv) if the Shares are
not then listed on a securities exchange or market or traded in an
over-the-counter market, such value as the Committee, in its sole
discretion, shall determine, with full authority to determine the
method for making such determination (which may be Black-Scholes
model or any other method), and which determination shall be
conclusive and binding on all parties, and shall be made after such
consultations with outside legal, accounting and other experts as
the Committee may deem advisable. The Committee may maintain a
written record of its method of determining such value. If the
Shares are listed or quoted on more than one established stock
exchange or national market system, the Committee shall determine
the appropriate exchange or system for the purpose of determination
of Fair Market Value.

2.2.14.  “Grantee”
shall mean a person who receives a grant of Award under the Plan,
and who at the time of grant is a Service Provider of the Company
or any Affiliate thereof.

2.2.15.  “Non-Employee”
shall mean a consultant, adviser, service provider, Controlling
Shareholder or any other person who is not an Employee.

2.2.16.  “Nonqualified Stock
Option” shall mean any Option granted to Service
Provider who is deemed to be residents of the U.S. for purposes of
taxation, which Option is not designated as, or does not meet the
conditions for, an Incentive Stock Option.

2.2.17.  “Options”
shall mean all options to purchase Shares granted as 102 Awards,
3(9) Awards, Incentive Stock Options and Non-Qualified Stock
Options, as well as options to purchase Shares issued under other
tax regimes.

2.2.18.  “Ordinance”
shall mean the Israeli Income Tax Ordinance (New Version) 1961, and
the regulations promulgated thereunder, all as amended from time to
time.

2.2.19.  “Parent”
shall mean any company (other than the Company), which now exists
or is hereafter organized, (i) in an unbroken chain of companies
ending with the Company if, at the time of granting an Award, each
of the companies (other than the Company) owns stock possessing
fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other companies in such chain,
or, if applicable, (ii) as defined in Section 424(e) of the
Code.

2.2.20.  “Retirement”
shall mean a Grantee’s retirement pursuant to applicable law
or in accordance with the terms of any tax-qualified retirement
plan maintained by the Company or any of its affiliates in which
the Grantee participates.

2.2.21.  “Securities
Act” shall mean Securities Act of 1933, as
amended.

2.2.22.  “Shares”
shall mean Ordinary Shares, par value NIS 0.01 of the Company, or
shares of such other class of shares of the Company as shall be
designated by the Board in respect of the relevant
Award.

2.2.23.  “Subsidiary”
shall mean any company (other than the Company), which now exists
or is hereafter organized or acquired by the Company, (i) in an
unbroken chain of companies beginning with the Company if, at the
time of granting an Award, each of the companies other than the
last company in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other companies in such chain, or,
if applicable, (ii) as defined in Section 424(f) of the
Code.

2.2.24.  “Ten Percent
Shareholder” shall mean a Grantee who, at the time an
Incentive Stock Option is granted, owns shares possessing more than
ten percent (10%) of the total combined voting power of all classes
of shares of the Company or any Parent or Subsidiary.

- 4 -

2.2.25.  “Trustee”
shall mean the trustee appointed by the Committee or the Board, as
the case may be, to hold the respective Options and/or Shares (and,
in relation with 102 Awards, approved by the Israeli tax
authorities), if so appointed.

2.3.  Other
Defined
Terms. The
following terms shall have the meanings ascribed to them in the
Sections set forth below:

	

Section

	

Term

	

 

	

1.2(i)

	

102 Awards

	

 

	

9.1

	

102 Capital Gains Track Options

	

 

	

9.2

	

102 Non-Trustee Options

	

 

	

9.1

	

102 Ordinary Income Track Options

	

 

	

9.1

	

102 Trustee Options

	

 

	

1.2(ii)

	

3(9) Awards

	

 

	

6.6.3

	

Cause

	

 

	

1.1

	

Company

	

 

	

25.1

	

Effective Date

	

 

	

9.2

	

Election

	

 

	

4.2

	

Eligible 102 Grantees

	

 

	

8.3

	

ISO Shares

	

 

	

1.2(i)

	

ITA

	

 

	

17

	

Market Stand-Off

	

 

	

14.2

	

Merger/Sale

	

 

	

6

	

Option Agreement

	

 

	

1.1

	

Plan

	

 

	

9.4

	

Required Holding Period

	

 

	

11.4

	

Restricted Period

	

 

	

11

	

Restricted Share Agreement

	

 

	

12.1

	

Restricted Share Unit Agreement

	

 

	

1.1

	

Restricted Shares

	

 

	

12.1

	

RSU

	

 

	

1.2(i)

	

Rules

	

 

	

1.1

	

Service Provider(s)

	

 

	

14.2.1

	

Successor Corporation

	

 

	

18.3

	

Withholding Obligations

	

 

3.     
ADMINISTRATION.

3.1.  To the extent permitted under
Applicable Law and the Memorandum of Association, Articles of
Association and any other governing document of the Company, the
Plan shall be administered by the Committee. In the event that the
Board does not create a committee to administer the Plan, the Plan
shall be administered by the Board in its entirety. In the event
that an action necessary for the administration of the Plan is
required under law to be taken by the Board, then such action shall
be so taken by the Board. In any such event, all references herein
to the Committee shall be construed as references to the
Board.

3.2.  The Committee shall consist of two or
more directors of the Company, as determined 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, provided that
the composition of the Committee shall at all times be in
compliance with any mandatory requirements of Applicable Law. The
Committee may select one of its members as its Chairman and shall
hold its meetings at such times and places as it shall determine.
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 and subject to
requirements of Applicable Law.

- 5 -

3.3.  Subject to the terms and conditions
of this Plan and any mandatory provisions of Applicable Law, and in
addition to the Committee’s powers contained elsewhere in
this Plan, the Committee shall have full authority in its
discretion, from time to time and at any time, to determine any of
the following, or to recommend to the Board any of the following if
it is not authorized to take such action according to Applicable
Law:

(i)       eligible
Grantees,

(ii)      grants of
Awards and setting the terms and provisions of option agreements
(which need not be identical) and any other agreements or
instruments under which Awards are made, including, but not limited
to, the number of Shares underlying each Award,

(iii)      the time or
times at which Awards shall be granted,

(iv)     the schedule and
conditions on which Awards may be exercised,

(v)      the Exercise
Price,

(vi)     to interpret the
Plan,

(vii)     prescribe, amend
and rescind rules and regulations relating to and for carrying out
the Plan, as it may deem appropriate,

(viii)    the Fair Market Value
of the Shares,

(ix)     the tax track
(capital gains, ordinary income track or any other track available
under the Section 102 of the Ordinance) for the purpose of 102
Awards, and

(x)      any other
matter which is necessary or desirable for, or incidental to, the
administration of the Plan and any Award thereunder.

3.4.  Grants of Awards shall be made
pursuant to written notice to Grantees setting forth the terms of
the Award. Such notice shall designate the type of Award as one of
the following: (i) a 102 Award granted to a Trustee (either as a
102 Award (capital gain track) with Trustee or a 102 Award
(ordinary income track) with Trustee), (ii) a 102 Award without a
102 Trustee, (iii) a 3(9) Award, (iv) Incentive Stock Option, (v)
Nonqualified Stock Option, or (vi) any other type of
Award.

3.5.  Subject to the mandatory provisions
of Applicable Law, the grant of any Award, whether by the Committee
or the Board, shall be deemed to include an authorization of the
issuance of Shares upon the due exercise thereof.

3.6.  The
authority granted hereunder includes the authority to modify Awards
to eligible individuals who are foreign nationals or are
individuals who are employed outside Israel to recognize
differences in local law, tax policy or custom, in order to
effectuate the purposes of the Plan but without amending the Plan.
The Committee shall have the authority to grant, in its discretion,
to the holder of an outstanding Award, in exchange for the
surrender and cancellation of such Award, a new Award having an
exercise price lower than provided in the Award 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 to set a new exercise price for the same Award lower than
that previously provided in the Award.

3.7.  All decisions, determination and
interpretations of the Committee shall be final and binding on all
Grantees of any Awards under this Plan, unless otherwise determined
by the Board. No member of the Committee shall be liable for any
action taken or determination made in good faith with respect to
the Plan or any Award granted hereunder.

4.    

ELIGIBILITY.

4.1.  Awards may be granted to Service
Providers of the Company and any Affiliate thereof, taking into
account the qualification under each tax regime pursuant to which
such Awards are granted. A person who has been granted an Award
hereunder may be granted additional Awards, if the Committee shall
so determine, subject to the limitations

- 6 -

herein. In determining the persons to whom
Awards shall be granted and the number of Shares to be covered by
each Award, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to
the success of the Company and such other factors as the Committee
shall deem relevant in connection with accomplishing the purpose of
the Plan.

4.2.  Subject to Applicable Law, 102 Awards
may not be granted to Controlling Shareholders and may only be
granted to Employees, including officers and directors, of the
Company or any Affiliate thereof, who are Israeli residents
(“Eligible 102
Grantees”). Awards to Eligible 102 Grantees in Israel
shall be 102 Awards. Eligible 102 Grantees may receive only 102
Awards, which may either be grants to a Trustee or grants under
Section 102 without a trustee. Unless otherwise permitted by the
Ordinance and the Rules, no 102 Awards to a Trustee may be granted
until the expiration of thirty (30) days after the requisite
filings under the Ordinance and the Rules have been appropriately
made with the ITA.

4.3.  Subject to Applicable Law,
Non-Employees who are Israeli residents and are not Eligible 102
Grantees may only be granted 3(9) Awards under this
Plan.

5.     
SHARES.

The number of
Shares reserved for the grant of Awards under the Plan shall
initially be 44,790 Shares, or such number as may be reserved for
such purpose from time to time. The class of said Shares shall be
designated by the Board with respect to each Award and the notice
of grant shall reflect such designation. Any share underlying an
Award granted hereunder which has expired, or was cancelled or
terminated or forfeited for any reason without having been
exercised, shall be automatically, and without any further action
on the part of the Company or any Grantee, returned to the
“pool” of reserved Shares hereunder and shall again be
available for grant for the purposes of this Plan (unless this Plan
shall have been terminated) or unless the Board determines
otherwise. The Board may, subject to any other approvals required
under any Applicable Law, increase or decrease the number of Shares
to be reserved under the Plan. Such Shares may, in whole or in
part, be authorized but unissued Shares, or Shares that shall have
been or may be reacquired by the Company (to the extent permitted
pursuant to the Companies Law) or by a trustee appointed by the
Board under the relevant provisions of the Ordinance, the Companies
Law or any equivalent provision. Any Shares which are not subject
to outstanding options at the termination of the Plan shall cease
to be reserved for the purpose of the Plan, but until termination
of the Plan, the Company shall at all times reserve a sufficient
number of Shares to meet the requirements of the Plan.

6.    

TERMS AND CONDITIONS OF OPTIONS.

Each Option granted pursuant to the Plan shall
be evidenced by a written agreement between the Company and the
Grantee or a written notice delivered by the Company and accepted
by the Grantee (the “Option
Agreement”), in such form and containing such terms
and conditions as the Committee shall from time to time approve,
which Option Agreement shall comply with and be subject to the
following terms and conditions, unless otherwise specifically
provided in such Option Agreement or the terms referred to in
Sections 9 and 10 below. For purposes of interpreting this Section
6, a director’s service as a member of the Board or the
services of an officer, as the case may be, shall be deemed to be
employment with the Company or its Subsidiary or
Affiliate.

6.1.  Number of
Shares. Each Option Agreement shall state the number of
Shares covered by the Option.

6.2.  Type of
Option. Each Option Agreement shall specifically state
the type of Option granted thereunder and whether it constitutes an
Incentive Stock Option, Nonqualified Stock Option, 102 Option Award
and the relevant track, 3(9) Option Award, or otherwise.

6.3.  Exercise
Price. Each Option Agreement shall state the Exercise
Price, which, in the case of an Incentive Stock Option, shall not
be less than one hundred percent (100%) of the Fair Market Value of
the Shares covered by the Option on the date of grant or such other
amount as may be required pursuant to the Code. In the case of any
other Option, the per share Exercise Price shall be equal to the
amount determined by the Committee. In the case of an Incentive
Stock Option granted to any Ten-Percent Shareholder, the Exercise
Price shall be no less than 110% of the Fair Market Value of the
Shares covered by the Option on the date of grant. In no event
shall the Exercise Price of an

- 7 -

Option be less than the par value of the shares
for which such Option is exercisable. Subject to Section 3 and to
the foregoing, the Committee may reduce the Exercise Price of any
outstanding Option. The Exercise Price shall also be subject to
adjustment as provided in Section 14 hereof.

6.4.  Manner of
Exercise. An Option may be exercised, as to any or all
Shares as to which the Option has become exercisable, by written
notice delivered in person or by mail to the Secretary of the
Company or to such other person as determined by the Committee,
specifying the number of Shares with respect to which the Option is
being exercised, accompanied by payment of the Exercise Price for
such Shares in the manner specified in the following sentence. The
Exercise Price shall be paid in full with respect to each Share, at
the time of exercise, either in (i) cash, (ii) if the
Company’s shares are publicly traded, all or part of the
Exercise Price and any withholding taxes may be paid by the
delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales proceeds to the
Company or the Trustee, (iii) if the Company’s shares are
publicly traded, all or part of the Exercise Price and any
withholding taxes may be paid by the delivery (on a form prescribed
by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security
for a loan, and to deliver all or part of the loan proceeds to the
Company or the Trustee, or (iv) in such other manner as the
Committee shall determine, which may include procedures for
cashless exercise.

6.5.  Term and
Vesting of Options. Each Option Agreement shall provide
the vesting schedule for the Option as determined by the Committee.
To the extent permitted under Applicable Law, the Committee shall
have the authority to determine the vesting schedule and accelerate
the vesting of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate.
Unless otherwise resolved by the Committee and stated in the Option
Agreement, and subject to Sections 6.6 and 6.7 hereof, Options
shall vest and become exercisable under the following schedule:
fifty percent (50%) of the Shares covered by the Option, on the
second anniversary of the date on which such Option is granted,
provided that the Grantee remains continuously employed by or in
the service of the Company or its Subsidiary or Affiliate for that
respective two-year period, and twenty five percent (25%) of the
Shares covered by the Option at the end of each subsequent
anniversary, provided that the Grantee remains continuously
employed by or in the service of the Company or its Subsidiary or
Affiliate for that respective year, over the course of the
following two (2) years of continued employment by or service for
the Company or its Subsidiary or Affiliate. The Option Agreement
may contain performance goals and measurements, and the provisions
with respect to any Option need not be the same as the provisions
with respect to any other Option. The Exercise Period of an Option
will be seven (7) years from the date of grant of the Option unless
otherwise determined by the Committee, but subject to the vesting
provisions described above and the early termination provisions set
forth in Sections 6.6 and 6.7 hereof; provided, however, that in
the case of an Incentive Stock Option granted to a Ten Percent
Shareholder, such Exercise Period shall not exceed five (5) years
from the date of grant of such Option. At the expiration of the
Exercise Period, all unexercised Options shall become null and
void.

6.6.  Termination.

6.6.1. Except as provided in this Section 6.6
and in Section 6.7 hereof, an Option may not be exercised unless
the Grantee is then in the employ of or maintaining a director,
officer, consultant, advisor or supplier relationship with the
Company or a Subsidiary or Affiliate thereof or, in the case of an
Incentive Stock Option, a company or a parent or subsidiary company
of such company issuing or assuming the Option in a transaction to
which Section 424(a) of the Code applies, and unless the Grantee
has remained continuously so employed or in the director, officer,
supplier, consultant, or advisor relationship since the date of
grant of the Option. In the event that the employment or director,
officer or consultant, advisor or supplier relationship of a
Grantee shall terminate (other than by reason of death, Disability
or Retirement), all Options of such Grantee that are vested and
exercisable at the time of such termination may, unless earlier
terminated in accordance with their terms, be exercised within up
to ninety (90) days after the date of such termination (or such
different period as the Committee shall prescribe); provided,
however, that if the Company (or the Subsidiary or Affiliate, when
applicable) shall terminate the Grantee’s employment or
service for Cause (as defined below) or if, whether or not the
Grantee’s employment is terminated by either party,
circumstances arise or are discovered with respect to the Grantee
that would have constituted Cause for termination of his or her
employment or service, all Options theretofore granted to such
Grantee (whether vested or not) shall, to the extent not
theretofore exercised, terminate on the date of such termination
(or on which such circumstance arise or are discovered, as the case
may be) unless otherwise determined by the Committee.

- 8 -

6.6.2.    In the case of a
Grantee whose principal employer is a Subsidiary or Affiliate, the
Grantee’s employment shall also be deemed terminated for
purposes of this Section 6.6 as of the date on which such principal
employer ceases to be a Subsidiary or Affiliate. Notwithstanding
anything to the contrary, the Committee, in its absolute discretion
may, on such terms and conditions as it may determine appropriate,
extend the periods for which the Options held by any individual may
continue to vest and be exercisable; provided, that such Options
may lose their status as Incentive Stock Options under applicable
law and be deemed Nonqualified Stock Options in the event that the
period of vesting and/or exercisability of any option is extended
beyond the later of: (i) one hundred and eighty (180) days after
the date of cessation of employment or performance of services; or
(ii) the applicable period under Section 6.7 below.

6.6.3.    For purposes of this
Plan, the term “Cause”
shall mean any of the following: (a) fraud, embezzlement or felony
or similar act by the Grantee; (b) an act of moral turpitude by the
Grantee, or any act that causes significant injury to the
reputation, business, assets, operations or business relationship
of the Company (or a Subsidiary or Affiliate, when applicable); (c)
any material breach by the Grantee of an agreement between the
Company or any Subsidiary or Affiliate and the Grantee (including
material breach of confidentiality, non-competition or
non-solicitation covenants) or of any duty of the Grantee to the
Company or any Subsidiary or Affiliate thereof; or (d) any
circumstances that constitute grounds for termination for cause
under the Grantee’s employment, consulting or service
agreement with the Company or Subsidiary or Affiliate, to the
extent applicable.

6.7.    Death,
Disability or Retirement of Grantee. If a Grantee shall
die while employed by, or performing service for, the Company or a
Subsidiary, or within the three (3) month period after the date of
termination of such Grantee’s employment or service (or
within such different period as the Committee may have provided
pursuant to Section 6.6 hereof), or if the Grantee’s
employment or service shall terminate by reason of Disability, all
Options theretofore granted to such Grantee may (to the extent
otherwise vested and exercisable and unless earlier terminated in
accordance with their terms), be exercised by the Grantee or by the
Grantee’s estate or by a person who acquired the right to
exercise such Options by bequest or inheritance or otherwise by
result of death or Disability of the Grantee, at any time within
one (1) year after the death or Disability of the Grantee (or such
different period as the Committee shall prescribe). In the event
that an Option granted hereunder shall be exercised by the legal
representatives of a deceased or former Grantee, written notice of
such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal
representative to exercise such Option. In the event that the
employment or service of a Grantee shall terminate on account of
such Grantee’s Retirement, all Options of such Grantee that
are exercisable at the time of such Retirement may, unless earlier
terminated in accordance with their terms, be exercised at any time
within the three (3) month period after the date of such Retirement
(or such different period as the Committee shall
prescribe).

6.8.    Suspension
of Vesting. Unless the Board of Directors or the
Committee provides otherwise, vesting of Options granted hereunder
shall be suspended during any unpaid leave of absence, other than
in the case of any (a) leave of absence which was pre-approved by
the Company for purposes of continuing the vesting of Options, or
(b) transfers between locations of the Company or between the
Company, any Affiliate, or any respective successor
thereof.

6.9.    Voting
Proxy. Until immediately after the listing for trading
on a stock exchange or market or trading system of the
Company’s (or the Successor Corporation’s) shares, the
right to vote any Shares acquired under this Plan pursuant to an
Award shall, unless otherwise determined by the Committee, be given
by the Grantee or the Trustee (if so requested from the Trustee and
agreed by the Trustee), as the case may be, pursuant to an
irrevocable proxy, to the person or persons designated by the
Board. All Awards granted hereunder shall be conditioned upon the
execution of such irrevocable proxy. So long as any such Shares are
held by a Trustee (and unless a proxy was given by the Trustee as
aforesaid), such Shares shall be voted by the Trustee, and unless
the Trustee is directed otherwise by the Board, such Shares shall
be voted in the same proportion as the result of the shareholder
vote at the shareholders meeting or written consent in respect of
which the Shares held by the Trustee are being voted. Any
irrevocable proxy granted pursuant hereto shall be of no force or
effect immediately after the listing for trading on a stock
exchange or market or trading system of the Company’s (or the
Successor Corporation’s) shares. The provisions of this
Section shall apply to the Grantee and to any purchaser, assignee
or transferee of any Shares.

- 9 -

6.10.   Other
Provisions. The Option Agreement evidencing Awards
under the Plan shall contain such other terms and conditions not
inconsistent with the Plan as the Committee may determine, at or
after the date of grant, including without limitation, provisions
in connection with the restrictions on transferring the Awards,
which shall be binding upon the Grantees and other terms and
conditions as the Committee shall deem appropriate.

6.11.   Israeli
Index Base for 102 Awards. Each 102 Award will be
subject to the Israeli index base of the Value of Benefit, as
defined in Section 102(a) of the Ordinance, as determined by the
Committee in its discretion, pursuant to the Rules, from time to
time. In the event that the Company effects a public offering of
its shares in any stock exchange outside of Israel, the Committee
may amend retroactively the Israeli index base, pursuant to the
Rules, without the Grantee’s consent.

7.     
NONQUALIFIED STOCK OPTIONS.

Options granted pursuant to this Section 7 are
intended to constitute Nonqualified Stock Options and shall be
subject to the general terms and conditions specified in Section 6
hereof and other provisions of the Plan, except for any provisions
of the Plan applying to Options under different tax laws or
regulations.

8.     
INCENTIVE STOCK OPTIONS.

Options granted
pursuant to this Section 8 are intended to constitute Incentive
Stock Options and shall be granted subject to the following special
terms and conditions, the general terms and conditions specified in
Section 6 hereof and other provisions of the Plan, except for any
provisions of the Plan applying to Options under different tax laws
or regulations:

8.1.    Value of
Shares. The aggregate Fair Market Value (determined as
of the date the Incentive Stock Option is granted) of the Shares
with respect to which all Incentive Stock Options granted under
this Plan and all other option plans of any Subsidiary or Affiliate
become exercisable for the first time by each Grantee during any
calendar year shall not exceed one hundred thousand United States
dollars ($100,000) with respect to such Grantee. To the extent that
the aggregate Fair Market Value of Shares with respect to which the
Incentive Stock Options are exercisable for the first time by any
Grantee during any calendar years exceeds one hundred thousand
United States dollars ($100,000), such Options shall be treated as
Nonqualified Stock Options. The foregoing shall be applied by
taking options into account in the order in which they were
granted, with the Fair Market Value of any Share to be determined
at the time of the grant of the Option. In the event the foregoing
results in the portion of an Incentive Stock Option exceeding the
one hundred thousand United States dollars ($100,000) limitation,
only such excess shall be treated as a Nonqualified Stock
Option.

8.2.    Ten
Percent Shareholder. In the case of an Incentive Stock
Option granted to a Ten Percent Shareholder, (i) the Exercise Price
shall not be less than one hundred and ten percent (110%) of the
Fair Market Value of the Shares on the date of grant of such
Incentive Stock Option, and (ii) the Exercise Period shall not
exceed five (5) years from the date of grant of such Incentive
Stock Option.

8.3.    Incentive
Stock Option Lock-Up Period. No disposition of Shares
received pursuant to the exercise of Incentive Stock Options
(“ISO
Shares”), shall be made by the Grantee within 2 years
from the date of grant, nor within 1 year after the transfer of
such ISO Shares to him. To the extent that the Grantee violates the
aforementioned limitations, the Incentive Stock Options shall be
deemed to be Nonqualified Stock Options.

8.4.    Approval. The
status of any ISO Shares shall be subject to approval of the Plan
by the Company’s shareholders, such approval to be provided
12 months before or after the date of adoption of the Plan by the
Board of Directors.

8.5.    Exercise
Following Termination. Notwithstanding anything else in
this Plan to the contrary, Incentive Stock Options that are not
exercised within ninety (90) days following termination of
Grantee’s employment in the Company or its Affiliates and
Subsidiaries, or within one year in case of termination of
Grantee’s employment in the Company or its Affiliates and
Subsidiaries due to a disability (within the meaning of section
22(e)(3) of the Code), shall be deemed to be Nonqualified Stock
Options.

- 10 -

8.6.    Adjustments
to Incentive Stock Options. Any Option Agreement
providing for the grant of Incentive Stock Options shall indicate
that adjustments made pursuant to the Plan with respect to
Incentive Stock Options could constitute a
“modification” of such Incentive Stock Options (as that
term is defined in Section 424(h) of the Code) or could cause
adverse tax consequences for the holder of such Incentive Stock
Options and that the holder should consult with his or her tax
advisor regarding the consequences of such
“modification” on his or her income tax treatment with
respect to the Incentive Stock Option.

8.7.    Notice to
Company of Disqualifying Disposition. Each Grantee who
receives an Incentive Stock Option must agree to notify the Company
in writing immediately after the Grantee makes a Disqualifying
Disposition of any ISO Shares. A “Disqualifying
Disposition” is any disposition (including any sale) of such
ISO Shares before the later of (i) two years after the date
the Grantee was granted the Incentive Stock Option, or
(ii) one year after the date the Grantee acquired Shares by
exercising the Incentive Stock Option. If the Grantee dies before
such ISO Shares are sold, these holding period requirements do not
apply and no disposition of the ISO Shares will be deemed a
Disqualifying Disposition.

9.     
102 OPTION AWARDS.

9.1.    Options granted pursuant
to this Section 9 are intended to be granted pursuant to Section
102 of the Ordinance pursuant to either (a) Section 102(b)(2)
thereof as capital gains track options (“102 Capital Gains
Track Options”), or (b) Section 102(b)(1) thereof as
ordinary income track options (“102 Ordinary Income
Track Options”; together with 102 Capital Gains Track
Options, “102 Trustee
Options”). 102 Trustee Options shall be granted
subject to the following special terms and conditions contained in
this Section 9, the general terms and conditions specified in
Section 6 hereof and other provisions of the Plan, except for any
provisions of the Plan applying to Options under different tax laws
or regulations.

9.2.    The Company may grant
only one type of 102 Trustee Option at any given time to all
Grantees who are to be granted 102 Trustee Options pursuant to this
Plan, and shall file an election with the ITA regarding the type of
102 Trustee Option it elects to grant before the date of grant of
any 102 Trustee Options (the “Election”).
Such Election shall also apply to any bonus shares received by any
Grantee as a result of holding the 102 Trustee Options. The Company
may change the type of 102 Trustee Option that it elects to grant
only after the passage of at least 12 months from the end of the
year in which the first grant was made in accordance with the
previous Election, or as otherwise provided by Applicable Law. Any
Election shall not prevent the Company from granting Options,
pursuant to Section 102(c) of the Ordinance without a Trustee
(“102 Non-Trustee
Options”).

9.3.    Each 102 Trustee Option
will be deemed granted on the date stated in a written notice to be
provided by the Company, provided that on or before such date (i)
the Company has provided such notice to the Trustee and (ii) the
Grantee has signed all documents required pursuant to Applicable
Law and under the Plan.

9.4.    Each 102 Trustee Option,
each Share issued pursuant to the exercise of any 102 Trustee
Option, and any rights granted thereunder, including, without
limitation, bonus shares, shall be allotted and issued to and
registered in the name of the Trustee and shall be held in trust
for the benefit of the Grantee for a period of not less than the
requisite period prescribed by the Ordinance and the Rules or such
longer period as set by the Committee (the “Required
Holding Period”). In the event that the requirements
under Section 102 to qualify an Option as a 102 Trustee Option are
not met, then the Option may be treated as a 102 Non-Trustee
Option, all in accordance with the provisions of Section 102 and
the Rules. After termination of the Required Holding Period, the
Trustee may release such 102 Trustee Option and any such Shares,
provided that (i) the Trustee has received an acknowledgment from
the ITA that the Grantee has paid any applicable taxes due pursuant
to the Ordinance or (ii) the Trustee and/or the Company and/or its
Affiliate withholds any applicable taxes due pursuant to the
Ordinance arising from the 102 Trustee Options and/or any Shares
allotted or issued upon exercise of such 102 Trustee Options. The
Trustee shall not release any 102 Trustee Options or Shares issued
upon exercise thereof prior to the payment in full of the
Grantee’s tax liabilities arising from such 102 Trustee
Options and/or Shares or the withholding referred to in (ii)
above.

9.5.    Each 102 Trustee Option
shall be subject to the relevant terms of the Ordinance and the
Rules, which shall be deemed an integral part of the 102 Trustee
Option and shall prevail over any term contained in the Plan or
Option

- 11 -

Agreement which is not consistent therewith. Any
provision of the Ordinance, the Rules and any approvals by the
Income Tax Commissioner not expressly specified in this Plan or
Option Agreement which, as determined by the Committee, are
necessary to receive or maintain any tax benefit pursuant to
Section 102 shall be binding on the Grantee. The Grantee granted a
102 Trustee Option shall comply with the Ordinance and the terms
and conditions of the Trust Agreement entered into between the
Company and the Trustee. The Grantee agrees to execute any and all
documents, which the Company and/or its Affiliates and/or the
Trustee may reasonably determine to be necessary in order to comply
with the Ordinance and the Rules.

9.6.    During the Required
Holding Period, the Grantee shall not release from trust or sell,
assign, transfer or give as collateral, the Shares issuable upon
the exercise of a 102 Trustee Option and/or any securities issued
or distributed with respect thereto, until the expiration of the
Required Holding Period. Notwithstanding the above, if any such
sale or release occurs during the Required Holding Period it will
result in adverse tax consequences to the Grantee under Section 102
of the Ordinance and the Rules, which shall apply to and shall be
borne solely by such Grantee. Subject to the foregoing, the Trustee
may, pursuant to a written request from the Grantee, release and
transfer such Shares to a designated third party, provided that
both of the following conditions have been fulfilled prior to such
release or transfer: (i) payment has been made to the ITA of all
taxes required to be paid upon the release and transfer of the
Shares, and confirmation of such payment has been received by the
Trustee and (ii) the Trustee has received written confirmation from
the Company that all requirements for such release and transfer
have been fulfilled according to the terms of the Company’s
corporate documents, the Plan, the Option Agreement and any
Applicable Law.

9.7.    If a 102 Trustee Option
is exercised during the Required Holding Period, the Shares issued
upon such exercise shall be issued in the name of the Trustee for
the benefit of the Grantee. If such 102 Trustee Option is exercised
after the expiration of the Required Holding Period, the Shares
issued upon such exercise shall, at the election of the Grantee,
either (i) be issued in the name of the Trustee, or (ii) be issued
to the Grantee, provided that the Grantee first complies with all
applicable provisions of the Plan and all taxes with respect
thereto shall have been fully paid to the ITA.

9.8.    The foregoing
provisions of this Section 9 relating to 102 Trustee Options shall
not apply with respect to 102 Non-Trustee Options, which shall,
however, be subject to the relevant provisions of Section 102 and
the Rules.

9.9.    Upon receipt of a 102
Trustee Option, the Grantee will sign an undertaking to release the
Trustee from any liability with respect to any action or decision
duly taken and executed in good faith by the Trustee in relation to
the Plan, or any 102 Trustee Option or Share granted to such
Grantee thereunder.

10.   
3(9) OPTION AWARD.

10.1.   Options granted pursuant to
this Section 10 are intended to constitute a 3(9) Option Award and
shall be granted subject to the general terms and conditions
specified in Section 6 hereof and other provisions of the Plan,
except for any provisions of the Plan applying to Options under
different tax laws or regulations.

10.2.   To the extent required by the
Ordinance or the ITA or otherwise deemed by the Committee prudent
or advisable, the 3(9) Option Awards granted pursuant to the Plan
shall be issued to a Trustee nominated by the Committee in
accordance with the provisions of the Ordinance. In such event, the
Trustee shall hold such Options in trust, until exercised by the
Grantee, pursuant to the Company’s instructions from time to
time as set forth in a trust agreement, which will be entered into
between the Company and the Trustee. If determined by the Board of
Directors or the Committee, and subject to such trust agreement the
Trustee shall be responsible for withholding any taxes to which a
Grantee may become liable upon the exercise of Options.

11.   
RESTRICTED SHARES.

The Committee may award Restricted Shares to any
eligible Grantee, including under Section 102 of the Ordinance.
Each Award of Restricted Shares under the Plan shall be evidenced
by a written agreement between the Company and the Grantee (the
“Restricted Share
Agreement”), in such form as the Committee shall from
time to time approve. The Restricted Share Agreement shall comply
with and be subject to the following terms and conditions, unless
otherwise specifically provided in such Agreement:

- 12 -

11.1.   Number of
Shares. Each Restricted Share Agreement shall state the
number of Shares covered by an Award.

11.2.   Purchase
Price. Each Restricted Share Agreement may state an
amount of purchase price to be paid by the Grantee in consideration
for the issuance of the Restricted Shares and the terms of payment
thereof, which may include, payment by issuance of promissory notes
or other evidence of indebtedness on such terms and conditions as
determined by the Committee.

11.3.   Vesting. Each
Restricted Share Agreement shall provide the vesting schedule for
the Restricted Shares as determined by the Committee, provided that
(to the extent permitted under Applicable Law) the Committee shall
have the authority to determine the vesting schedule and accelerate
the vesting of any outstanding Restricted Share at such time and
under such circumstances as it, in its sole discretion, deems
appropriate. Unless otherwise resolved by the Committee and stated
in the Restricted Share Agreement, Restricted Shares shall vest in
the same vesting schedule as set forth in Section 6.5
hereof.

11.4.   Restrictions. Restricted
Shares may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws
of descent and distribution, for such period as the Committee shall
determine from the date on which the Award is granted (the
“Restricted
Period”). The Committee may also impose such
additional or alternative restrictions and conditions on the
Restricted Shares, as it deems appropriate, including the
satisfaction of performance criteria. Such performance criteria may
include, but are not limited to, sales, earnings before interest
and taxes, return on investment, earnings per share, any
combination of the foregoing or rate of growth of any of the
foregoing, as determined by the Committee. Certificates for shares
issued pursuant to Restricted Share Awards shall bear an
appropriate legend referring to such restrictions, and any attempt
to dispose of any such shares in contravention of such restrictions
shall be null and void and without effect. Such certificates may,
if so determined by the Committee, be held in escrow by an escrow
agent appointed by the Committee, or, if a Restricted Share Award
is made pursuant to Section 102, by the Trustee. In determining the
Restricted Period of an Award the Committee may provide that the
foregoing restrictions shall lapse with respect to specified
percentages of the awarded Restricted Shares on successive
anniversaries of the date of such Award. To the extent required by
the Ordinance or the ITA, the Restricted Shares issued pursuant to
Section 102 of the Ordinance shall be issued to the Trustee in
accordance with the provisions of the Ordinance and the Restricted
Shares shall be held for the benefit of the Grantee for such period
as may be required by the Ordinance.

11.5.   Adjustment
of Performance Goals. The Committee may adjust
performance goals to take into account changes in law and
accounting and tax rules and to make such adjustments as the
Committee deems necessary or appropriate to reflect the inclusion
or the exclusion of the impact of extraordinary or unusual items,
events or circumstances. The Committee also may adjust the
performance goals by reducing the amount to be received by any
Grantee pursuant to an Award if and to the extent that the
Committee deems it appropriate.

11.6.  
Forfeiture. Subject
to such exceptions as may be determined by the Committee, if the
Grantee’s continuous employment with the Company or any
Subsidiary or Affiliate shall terminate for any reason prior to the
expiration of the vesting date or Restricted Period of an Award or
prior to the payment in full of the purchase price of any
Restricted Shares with respect to which the vesting date or the
Restricted Period has expired, any shares remaining subject to
vesting or restrictions or with respect to which the purchase price
has not been paid in full, shall thereupon be forfeited and shall
be deemed transferred to, and reacquired by, or cancelled by, as
the case may be, the Company or a Subsidiary at no cost to the
Company or Subsidiary, subject to all Applicable Laws. Upon
forfeiture of Restricted Shares, the Grantee shall have no further
rights with respect to such Restricted Shares.

11.7.   Ownership. During
the Restricted Period the Grantee shall possess all incidents of
ownership of such Restricted Shares, subject to Section 6.9 and
Section 11.4, including the right to receive dividends with respect
to such shares. All distributions, if any, received by a Grantee
with respect to Restricted Shares as a result of any stock split,
stock dividend, combination of shares, or other similar transaction
shall be subject to the restrictions applicable to the original
Award.

- 13 -

12.   
RESTRICTED SHARE UNITS.

12.1.   A Restricted Share Unit (an
“RSU”) is an
Award covering a number of Shares that is settled by issuance of
those Shares. An RSU may be awarded to any eligible Grantee,
including under Section 102 of the Ordinance. Each grant of RSUs
under the Plan shall be evidenced by a written agreement between
the Company and the Grantee (the “Restricted Share Unit
Agreement”), in such form as the Committee shall from
time to time approve. Such RSUs 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 Share Unit Agreements entered into under the Plan need
not be identical. RSUs may be granted in consideration of a
reduction in the recipient’s other compensation.

12.2.   Other than the par value of
the Shares, no payment of cash shall be required as consideration
for RSUs. RSUs 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 Share Unit
Agreement.

12.3.   Without limitation of Section
6.9, no voting or dividend rights as a shareholder shall exist
prior to the actual issuance of Shares in the name of the Grantee.
Notwithstanding anything else in this Plan (as may be amended from
time to time) to the contrary, unless otherwise specified by the
Committee, each RSU shall be for a term of seven (7) years. Each
Restricted Share 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
of employment or service providing to the Company, and may provide
for earlier settlement in the event of the Grantee’s death,
Disability or other events.

12.4.   Settlement of vested RSUs shall be made in the form of
Shares. Distribution to a Grantee of an amount (or amounts) from
settlement of vested RSUs 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 the grant of RSUs is settled, the number of such
RSUs shall be subject to adjustment pursuant hereto.

13.   
OTHER SHARE OR SHARE-BASED AWARDS.

The Committee may grant other Awards under the
Plan pursuant to which Shares (which may, but need not, be
Restricted Shares pursuant to Section 11 hereof), cash or a
combination thereof, are or may in the future be acquired or
received, or Awards denominated in stock units, including units
valued on the basis of measures other than market value. The
Committee may also grant stock appreciation rights without the
grant of an accompanying option, which rights shall permit the
Grantees to receive, at the time of any exercise of such rights,
cash equal to the amount by which the Fair Market Value of all
Shares in respect to which the right was granted exceeds the
exercise price thereof. The Committee may, and it is hereby deemed
to be an Award under the terms of the Plan, grant to Grantees
(including employees) the opportunity to purchase Shares of the
Company in connection with any public offerings of the
Company’s securities. Such other Share based Awards may be
granted alone, in addition to, or in tandem with any Award of any
type granted under the plan and must be consistent with the
purposes of the Plan.

14.   
EFFECT OF CERTAIN CHANGES.

14.1.   General. In
the event of a subdivision of the outstanding share capital of the
Company, any payment of a stock dividend (distribution of bonus
shares), a recapitalization, a reorganization (which may include a
combination or exchange of shares), a consolidation, a stock split,
a reverse stock split, a spin-off or other corporate divestiture or
division, a reclassification or other similar occurrence, the
Committee shall make such adjustments as determined by the
Committee to be appropriate in order to adjust (i) the number of
Shares available for grants of Awards, (ii) the number of Shares
covered by outstanding Awards, and (iii) the exercise price per
share covered by any Award; provided, however, that any fractional
shares resulting from such adjustment shall be rounded down to the
nearest whole share and that the Company shall have no obligation
to make any cash or other payment with respect to such fractional
shares.

14.2.   Merger and
Sale of Company. In the event of (i) a sale of all or
substantially all of the assets of the Company; or (ii) a sale
(including an exchange) of all or substantially all of the shares
of the Company, or an acquisition

- 14 -

by a shareholder of the Company or by an
Affiliate of such shareholder, of all the shares of the Company
held by other shareholders or by other shareholders who are not
Affiliated with such acquiring party; (iii) a merger,
consolidation, amalgamation or like transaction of the Company with
or into another corporation; (iv) a scheme of arrangement for the
purpose of effecting such sale, merger or amalgamation; or (v) such
other transaction or set of circumstances that is determined by the
Committee, in its discretion, to be a transaction having a similar
effect (all such transactions being herein referred to as a
“Merger/Sale”),
then, without the Grantee’s consent and action and without
any prior notice requirement:

14.2.1.  unless otherwise determined by the
Committee in its sole and absolute discretion, any Award then
outstanding shall be assumed or an equivalent Award shall be
substituted by such successor corporation of the Merger/Sale or any
parent or Affiliate thereof as determined by the Board in its
discretion (the “Successor
Corporation”), under substantially the same terms as
the Award;

           
For the purposes of this Section 14.2.1, the Award shall be
considered assumed if, following a Merger/Sale, the Award confers
on the holder thereof the right to purchase or receive, for each
Share underlying an Award immediately prior to the Merger/Sale,
either (i) the consideration (whether stock, cash, or other
securities or property) distributed to or received by holders of
Shares in the Merger/Sale for each Share held on the effective date
of the Merger/Sale (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares), which may be subject to
vesting and other terms as determined by the Committee in its
discretion, or (ii) regardless of the consideration received by the
holders of Shares in the Merger/Sale, solely shares (or their
equivalent) of the Successor Corporation at a value to be
determined by the Committee in its discretion, which may be subject
to vesting and other terms as determined by the Committee in its
discretion. The foregoing shall not limit the Committee authority
to determine, in its sole discretion, that in lieu of such
assumption or substitution of Awards for Awards of the Successor
Corporation, such Award will be substituted for any other type of
asset or property, including under Section 14.2.2
hereunder.

14.2.2.  In
the event that the Awards are not assumed or substituted by an
equivalent Award, then the Committee may (but shall not be
obligated to), in lieu of such assumption or substitution of the
Award and in its sole discretion, (i) provide for the Grantee to
have the right to exercise the Award, or otherwise for the
acceleration of vesting of such Award, as to all or part of the
Shares, including Shares covered by the Award which would not
otherwise be exercisable or vested, under such terms and conditions
as the Committee shall determine, including the cancellation of all
unexercised Awards upon closing of the Merger/Sale; and/or (ii)
provide for the cancellation of each outstanding Award at the
closing of such Merger/Sale, and payment to the Grantee of an
amount in cash as determined by the Committee to be fair in the
circumstances (with full authority to determine the method for
making such determination, which may be Black-Scholes model or any
other method, and which determination shall be conclusive and
binding on all parties), and subject to such terms and conditions
as determined by the Committee.

14.2.3.  Notwithstanding the foregoing, in
the event of a Merger/Sale, the Committee may determine, in its
sole discretion, that upon completion of such Merger/Sale, the
terms of any Award be otherwise amended, modified or terminated, as
the Committee shall deem in good faith to be appropriate, and if an
Option Award, that the Option Award shall confer the right to
purchase or receive any other security or asset, or any combination
thereof, or that its terms be otherwise amended, modified or
terminated, as the Committee shall deem in good faith to be
appropriate. Neither the authorities and powers of the Committee
under this Section 14.2, nor the exercise or implementation
thereof, shall (i) be restricted or limited in any way by any
adverse consequences (tax or otherwise) that may result to any
holder of an Award, and (ii) as, inter alia,
being a feature of the Award upon its grant, be deemed to
constitute a change or an amendment of the rights of such holder
under this Plan, nor shall any such adverse consequences (as well
as any adverse tax consequences that may result from any tax ruling
or other approval or determination of any relevant tax authority)
be deemed to constitute a change or an amendment of the rights of
such holder under this Plan.

14.3.   Reservation
of Rights. Except as expressly provided in this Section
14, the Grantee of an Award hereunder shall have no rights by
reason of any subdivision or consolidation of shares of any class
or the payment of any

- 15 -

stock dividend (bonus shares), any other
increase or decrease in the number of shares of any class or by
reason of any dissolution, liquidation, Merger/Sale, or
consolidation, divestiture or spin-off of assets or shares of
another company. Any issue by the Company of shares of any class,
or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with
respect to, the number, type or price of shares subject to an
Award. The grant of an Award pursuant to the Plan shall not affect
in any way the right of power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or part of its business or
assets or engage in any similar transactions.

15.   
NON-TRANSFERABILITY OF AWARDS; SURVIVING
BENEFICIARY.

15.1.   All Awards granted under the
Plan shall not be transferable otherwise than by will or by the
laws of descent and distribution, unless otherwise determined by
the Board or under this Plan, provided that with respect to shares
issued upon exercise of Options, the restrictions on transfer shall
be the restrictions referred to in Section 16 (Conditions upon
Issuance of Shares) hereof. Awards may be exercised or otherwise
realized, during the lifetime of the Grantee, only by the Grantee
or by his guardian or legal representative, to the extent provided
for herein. Any transfer of an Award not permitted hereunder
(including transfers pursuant to any decree of divorce, dissolution
or separate maintenance, any property settlement, any separation
agreement or any other agreement with a spouse) and any grant of
any interest in any Award to, or creation in any way of any
interest in any Award by, any party other than the Grantee shall be
null and void and shall not confer upon any party or person, other
than the Grantee, any rights. A Grantee may file with the Committee
a written designation of a beneficiary on such form as may be
prescribed by the Committee and may, from time to time, amend or
revoke such designation. If no designated beneficiary survives the
Grantee, the executor or administrator of the Grantee’s
estate shall be deemed to be the Grantee’s beneficiary.
Notwithstanding the foregoing, upon the request of the Grantee and
subject to Applicable Law the Committee, at its sole discretion,
may permit to transfer the Award to a family trust.

15.2.   As long as the Shares are held
by the Trustee in favor of the Grantee, all rights possessed by the
Grantee over the Shares are personal, and may not be transferred,
assigned, pledged or mortgaged, other than by will or laws of
descent and distribution.

15.3.   The provisions of this Section
15 shall apply to the Grantee and to any purchaser, assignee or
transferee of any Shares.

16.   
CONDITIONS UPON ISSUANCE OF SHARES

16.1.   Legal
Compliance. Shares shall not be issued pursuant to the
exercise of an Award, unless the exercise of such Award and the
issuance and delivery of such Shares shall comply with Applicable
Laws as determined by counsel to the Company. The inability of the
Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, and the inability to issue Shares hereunder due
to non-compliance with any Company policies with respect to the
sale of Shares, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which
such requisite authority or compliance shall not have been obtained
or achieved. Shares issued pursuant to an Awards shall be subject
to the Articles of Association of the Company, any shareholders
agreement applicable to all or substantially all of the
Company’s holders of Shares (regardless of whether or not the
Grantee is party to such shareholders agreement) and any other
governing documents of the Company, including all policies, manuals
and internal regulations adopted by the Company from time to time,
as may be amended from time to time, including, without limitation,
any provisions included therein concerning restrictions or
limitations on transferability of Shares (such as, but not limited
to, right of first refusal and lock up/market stand-off) or grant
of any rights with respect thereto and any provisions concerning
restrictions on the use of inside information and other provisions
deemed by the Company to be appropriate in order to ensure
compliance with Applicable Laws, statutes and
regulations.

16.2.   Investment
Representations. As a condition to the exercise of an
Award, the Company may require the person exercising such Award to
represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares, and make
other

- 16 -

representations as may be required under
applicable securities laws if, in the opinion of counsel for the
Company, such representations are required, all in form and content
specified by the Company.

17.   
MARKET STAND-OFF

17.1.   In connection with any
underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed
under the United States Securities Act of 1933, as amended or
equivalent law in another jurisdiction, the Grantee shall not
directly or indirectly, without the prior written consent of the
Company or its underwriters, (i) lend, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant
to purchase, or otherwise transfer or dispose of, directly or
indirectly, any Shares acquired under this Plan or any securities
of the Company (whether or not such Shares acquired under this
Plan), or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of the Shares acquired under this Plan,
whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Shares acquired under this Plan or
such other securities, in cash or otherwise. Such restriction (the
“Market
Stand-Off”) shall be in effect for such period of time
following the effective date of the registration statement
relating to such offering, as may be requested
by the Company or such underwriters, however in any event, such
period shall not exceed 180 days (in the case of the
Company’s first underwritten offering of its Shares)
following the effective date of such registration statement; or 90
days (in the case of a registration
statement thereafter).

17.2.   In the event of a subdivision
of the outstanding share capital of the Company, the declaration
and payment of a stock dividend (distribution of bonus shares), the
declaration and payment of an extraordinary dividend payable in a
form other than stock, a recapitalization, a reorganization (which
may include a combination or exchange of shares or a similar
transaction affecting the Company’s outstanding securities
without receipt of consideration), a consolidation, a stock split,
a spin-off or other corporate divestiture or division, a
reclassification or other similar occurrence, an adjustment in
conversion ratio, any new, substituted or additional securities
which are by reason of such transaction distributed with respect to
any Shares subject to the Market Stand-Off, or into which such
Shares thereby become convertible, shall immediately be subject to
the Market Stand-Off.

17.3.   In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with
respect to the Shares acquired under this Plan until the end of the
applicable stand-off period.

17.4.   The underwriters in connection
with a registration statement so filed are intended

to be third
party beneficiaries of this Section 17
and shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto.

17.5.   The provisions of this Section
17 shall apply to the Grantee and to any purchaser, assignee or
transferee of any Shares.

18.   
AGREEMENT BY GRANTEE REGARDING TAXES.

18.1.   If the Committee shall so
require, as a condition of exercise of an Award, the release of
Shares by the Trustee or the expiration of the Restricted Period, a
Grantee shall agree that, no later than the date of such
occurrence, he will pay to the Company or make arrangements
satisfactory to the Committee and the Trustee (if applicable)
regarding payment of any applicable taxes of any kind required by
Applicable Law to be withheld or paid.

18.2.   ALL TAX CONSEQUENCES UNDER ANY
APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS OR THE
EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY SHARES GRANTED
HEREUNDER OR ISSUED UPON EXERCISE OF ANY AWARD 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, ITS SUBSIDIARIES AND AFFILIATES AND THE
TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY
LIABILITY FOR ANY SUCH TAX OR PENALTY, INTEREST OR INDEXATION
THEREON. EACH GRANTEE AGREES TO, AND UNDERTAKES TO COMPLY WITH, ANY
RULING, SETTLEMENT,

- 17 -

CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR
ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH 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 AWARDS HEREUNDER.
THE COMPANY DOES NOT ASSUME ANY RESPONSIBILITY TO ADVISE THE
GRANTEE ON SUCH MATTERS, WHICH SHALL REMAIN SOLELY THE
RESPONSIBILITY OF THE GRANTEE.

18.3.   The Company or any Subsidiary
or Affiliate may take such action as it may deem necessary or
appropriate, in its discretion, for the purpose of or in connection
with withholding of any taxes which the Company or any Subsidiary
or Affiliate is required by any Applicable Law to withhold in
connection with any Awards (collectively, “Withholding
Obligations”). Such actions may include, without
limitation, (i) requiring a Grantees to remit to the Company in
cash an amount sufficient to satisfy such Withholding Obligations;
(ii) subject to Applicable Law, allowing the Grantees to provide
Shares to the Company, in an amount that at such time, reflects a
value that the Committee determines to be sufficient to satisfy
such Withholding Obligations; (iii) withholding Shares otherwise
issuable upon the exercise of an Award at a value which is
determined by the Committee to be sufficient to satisfy such
Withholding Obligations; or (iv) any combination of the foregoing.
The Company shall not be obligated to allow the exercise of any
Award by or on behalf of a Grantee until all tax consequences
arising from the exercise of such Award are resolved in a manner
acceptable to the Company.

18.4.   Each Grantee shall notify the
Company in writing promptly and in any event within ten (10) days
after the date on which such Grantee first obtains knowledge of any
tax bureau inquiry, audit, assertion, determination, investigation,
or question relating in any manner to the Awards 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,
a 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.

18.5.   With respect to 102
Non-Trustee Options, if the Grantee ceases to be employed by the
Company or any Affiliate, the Grantee shall extend to the Company
and/or its Affiliate with whom the Grantee is employed a security
or guarantee for the payment of taxes due at the time of sale of
Shares, all in accordance with the provisions of Section 102 of the
Ordinance and the Rules.

19.   
RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.

19.1.   Subject to Section 11.7, a
Grantee shall have no rights as a shareholder of the Company with
respect to any Shares covered by the Award until the date of the
issuance of a share certificate to the Grantee for such Shares. In
the case of 102 Option Awards or 3(9) Option Awards (if such Share
Options are being held by a Trustee), the Trustee shall have no
rights as a shareholder of the Company with respect to any Shares
covered by such Award until the date of the issuance of a share
certificate to the Trustee for such Shares for the Grantee’s
benefit, and the Grantee shall have no rights as a shareholder of
the Company with respect to any Shares covered by the Award until
the date of the release of such Shares from the Trustee to the
Grantee and the issuance of a share certificate to the Grantee for
such Shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution of other rights for which the record date is prior to
the date such share certificate is issued, except as provided in
Section 14 hereof.

19.2.   With respect to all Shares
issued in the form of Awards hereunder or upon the exercise of
Awards hereunder, any and all voting rights attached to such Shares
shall be subject to Section 6.9, and the Grantee shall be entitled
to receive dividends distributed with respect to such Shares,
subject to the provisions of the Company’s Articles of
Association, as amended from time to time, and subject to any
Applicable Law.

19.3.   The Company may, but shall not
be obligated to, register or qualify the sale of Shares under any
applicable securities law or any other applicable law.

- 18 -

20.   
NO REPRESENTATION BY COMPANY.

By granting the Awards, the Company is not, and
shall not be deemed as, granting any representation or warranties
to the Grantee regarding the Company, its business affairs, its
prospects or the future value of its Shares.

21.   
NO RETENTION RIGHTS.

Nothing in the Plan or in any Award granted or
agreement entered into pursuant hereto shall confer upon any
Grantee the right to continue in the employ of, or be in a
consultant, advisor, director, officer or supplier relationship
with, the Company or any Subsidiary or Affiliate or to be entitled
to any remuneration or benefits not set forth in the Plan or such
agreement or to interfere with or limit in any way the right of the
Company or any such Subsidiary or Affiliate to terminate such
Grantee’s employment or service. Awards granted under the
Plan shall not be affected by any change in duties or position of a
Grantee as long as such Grantee continues to be employed by, or be
in a consultant, advisor, director, officer or supplier
relationship with, the Company or any Subsidiary or
Affiliate.

22.   
PERIOD DURING WHICH AWARDS MAY BE GRANTED.

Awards may be granted pursuant to the Plan from
time to time within a period of ten (10) years from the Effective
Date. From the tenth (10th)
anniversary of the Effective Date no grants of Awards may be made
and the Plan shall continue to be in full force and effect solely
with respect to such Awards that remain outstanding. The Plan shall
terminate at such time after the tenth (10th)
anniversary of the Effective Date that no Awards remain
outstanding.

23.   
TERM 
OF 
AWARD

Anything herein to the contrary notwithstanding,
but without derogating from the provisions of Sections 6.6, 6.7 or
8.2 hereof, if any Award, or any part thereof, has not been
exercised and the Shares covered thereby not paid for within the
term of the Award as determined by the Committee, which in any
event shall not exceed ten (10) years after the date on which the
Award was granted, as set forth in the Notice of Grant in the
Grantee’s Award, such Award, or such part thereof, and the
right to acquire such Shares shall terminate, and all interests and
rights of the Grantee in and to the same shall expire. In the case
of Shares held by a Trustee, the Grantee shall elect whether to
release such Shares from trust or sell the Shares and upon such
release or sale such trust shall expire.

24.   
AMENDMENT AND TERMINATION OF THE PLAN.

The Board at any time and from time to time may
suspend, terminate, modify or amend the Plan, whether retroactively
or prospectively; provided, however, that, unless otherwise
determined by the Board, an amendment which requires shareholder
approval in order for the Plan to continue to comply with any
Applicable Law shall not be effective unless approved by the
requisite vote of shareholders, and provided further that except as
provided herein, no suspension, termination, modification or
amendment of the Plan may adversely affect any Award previously
granted, without the written consent of Grantees holding a majority
in interest of the Awards so affected, and in the event that such
consent is obtained, all Awards so affected and the holders thereof
shall be bound by and be deemed amended as set forth in, such
consent.

25.   
APPROVAL.

25.1.   The Plan shall take effect
upon its adoption by the Board (the “Effective
Date”), except that solely with respect to grants of
Incentive Stock Options the Plan shall also be subject to approval
within one year of the Effective Date, by a majority of the votes
cast on the proposal at a meeting or a written consent of
shareholders. Failure to obtain approval by the shareholders shall
not in any way derogate from the valid and binding effect of any
grant of an Award, which is not an Incentive Stock Option. Upon
approval of the Plan by the shareholders of the Company as set
forth above, all Incentive Stock Options granted under the Plan on
or after the Effective Date shall be fully effective as if the
shareholders of the Company had approved the Plan on the Effective
Date. Notwithstanding the foregoing, in the event that approval of
the Plan by the shareholders of the Company is required under
Applicable

- 19 -

Law, in connection with the application of
certain tax treatment or pursuant to applicable stock exchange
rules or regulations or otherwise, such approval shall be obtained
within the time required under the Applicable Law.

25.2.   The 102 Awards are subject to
the approval, if required, of the ITA and receipt by the Company of
all approvals thereof.

26.   
RULES PARTICULAR TO SPECIFIC COUNTRIES; SECTION
409A

Notwithstanding anything herein to the contrary,
the terms and conditions of the Plan may be amended with respect to
a particular country by means of an appendix to the Plan, and to
the extent that the terms and conditions set forth in any appendix
conflict with any provisions of the Plan, the provisions of the
appendix shall govern. Terms and conditions set forth in the
Appendix shall apply only to Award granted to a Grantee under the
jurisdiction of the specific country that is the subject of the
appendix and shall not apply to Awards issued to a Grantee not
under the jurisdiction of such country. The adoption of any such
appendix shall be subject to the approval of the Board of Directors
or Committee, and if required in connection with the application of
certain tax treatment, pursuant to applicable stock exchange rules
or regulations or otherwise, then also the approval of the
shareholders of the Company at the required majority. To the extent
applicable, the Plan and any agreement hereunder shall be
interpreted in accordance with Section 409A of the Code.
Notwithstanding any provision of the Plan to the contrary, in the
event that, following the Effective Date, the Board determines that
any Award may be subject to Section 409A of the Code, the Board may
adopt such amendments to the Plan and such agreement or adopt other
policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions,
that the Board determines are necessary or appropriate to (a)
exempt the Award from Section 409A of the Code and/or preserve the
intended tax treatment of the benefits provided with respect to the
Award or (b) comply with the requirements of Section 409A of the
Code.

27.   
GOVERNING LAW; JURISDICTION.

The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of
Israel, except with respect to matters that are subject to tax
laws, regulations and rules in any specific jurisdiction, which
shall be governed by the respective laws, regulations and rules of
such jurisdiction. Certain definitions, which refer to laws other
than the laws of such jurisdiction, shall be construed in
accordance with such other laws. The competent courts located in
Tel-Aviv-Jaffa, Israel shall have exclusive jurisdiction over any
dispute arising out of or in connection with this Plan and any
Award granted hereunder, and by signing any agreement relating to
an Award hereunder each Grantee irrevocably submits to such
exclusive jurisdiction.

28.   
NON-EXCLUSIVITY OF THE PLAN.

Neither the adoption of the Plan by the Board
nor the submission of the Plan to shareholders of the Company for
approval (to the extent required under Applicable Law), shall be
construed as creating any limitations on the power or authority of
the Board to adopt such other or additional incentive or other
compensation arrangements of whatever nature as the Board may deem
necessary or desirable or preclude or limit the continuation of any
other plan, practice or arrangement for the payment of compensation
or fringe benefits to employees generally, or to any class or group
of employees, which the Company or any Subsidiary now has lawfully
put into effect, including, without limitation, any retirement,
pension, savings and stock purchase plan, insurance, death and
disability benefits and executive short-term or long-term incentive
plans.

29.   
MISCELLANEOUS.

29.1.   Additional
Terms. Each Award awarded under the Plan may contain
such other terms and conditions not inconsistent with the Plan as
may be determined by the Committee, in its sole
discretion.

29.2.   Severability. If
any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in
any jurisdiction, the remaining provisions hereof and thereof shall
be severable and enforceable in accordance with their terms, and
all provisions shall remain enforceable in any other

- 20 -

jurisdiction. In addition, if any particular
provision contained in this Agreement shall for any reason be held
to be excessively broad as to duration, geographic scope, activity
or subject, it shall be construed by limiting and reducing such
provision as to such characteristic so that the provision is
enforceable to fullest extent compatible with the applicable law as
it shall then appear.

29.3.   Captions
and Titles. The use of captions and titles in this Plan
or any Option Agreement, Restricted Share Agreement or other Award
related agreement is for the convenience of reference only and
shall not affect the meaning of any provision of the Plan or such
agreement.

* * *

- 21 -

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