Document:

20-F

Exhibit 4.3  

RETALIX LTD. 

SECOND 1998 SHARE
INCENTIVE PLAN 

         1.       
          Purposes of the Plan. The purposes of this Share Incentive
          Plan are to attract and retain the best available personnel for positions of
          substantial responsibility, to provide additional incentive to Employees,
          Directors and Consultants and to promote the success of the Company’s
          business. Options granted under the Plan may be Incentive Stock Options or
          Nonstatutory Stock Options, as determined by the Administrator at the time of
          grant. 

         2.       
          Definitions. As used herein, the following definitions shall apply: 

		    (a)        “Administrator” means
the Board or any of its Committees as           shall be administering the Plan, in
accordance with Section 4 hereof.  

		    (b)        “Applicable
Laws” means the requirements relating to the           administration of share
incentive plans under Israeli corporate and securities           laws, U.S. state
corporate laws, U.S. federal and state securities laws, the           Code, any stock
exchange or quotation system on which the Shares are listed or           quoted and the
applicable laws of any country or jurisdiction where Options are           granted under
the Plan.  

		    (c)        “Board” means
the Board of Directors of the Company.  

		    (d)        “Code” means
the U.S. Internal Revenue Code of 1986, as           amended.  

		    (e)        “Committee” means
a committee of Directors appointed by the           Board in accordance with Section 4
hereof.  

		    (f)        “Company” means
Retalix Ltd., a corporation incorporated under           the laws of the State of Israel.  

		    (g)        “Consultant” means
any person who is engaged by the Company or           any Parent or Subsidiary to render
consulting or advisory services to such           entity.  

		    (h)        “Director” means
a member of the Board of Directors of the           Company.  

		    (i)        “Disability” means
total and permanent disability as defined in           Section 22(e)(3) of the Code.  

		    (j)        “Employee” means
any person, including Officers and Directors,           employed by the Company or any
Parent or Subsidiary of the Company. An Employee           shall not cease to be an
Employee in the case of (i) any leave of absence           approved by the Company
or (ii) transfers between locations of the Company           or between the Company,
its Parent, any Subsidiary, or any successor. For           purposes of Incentive Stock
Options, no such leave may exceed ninety days,           unless reemployment upon
expiration of such leave is guaranteed by statute or           contract. If reemployment
upon expiration of a leave of absence approved by the           Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock           Option held by
the Optionee shall cease to be treated as an Incentive Stock           Option and shall
be treated for tax purposes as a Nonstatutory Stock Option.           Neither service as
a Director nor payment of a director’s fee by the           Company shall be
sufficient to constitute “employment” by the Company.  

		    (k)        “Exchange
Act” means the Securities Exchange Act of 1934, as           amended.  

		    (l)        “Fair
Market Value” means, as of any date, the value of a Share           determined
as follows:  

		    (i)        If
the Shares are listed on the Nasdaq National Market or The Nasdaq SmallCap
          Market of The Nasdaq Stock Market, their Fair Market Value shall be the closing
          sales price for such Shares (or the closing bid, if no sales were reported) as
          quoted on such system for the last market trading day prior to the time of
          determination, as reported in The Wall Street Journal or such other
          source as the Administrator deems reliable;  

		    (ii)        If
the Shares are listed on the Tel Aviv Stock Exchange, but are not traded on           the
Nasdaq National Market or The Nasdaq Small Cap Market, their Fair Market           Value
shall be the closing sales price for such Shares (or the closing bid if no
          sales were reported) as quoted on such exchange for the last market trading day
          prior to the time of determination, as reported in Globes, HaAretz or
          such other source as the Administrator deems reliable;  

		    (iii)        If
the Shares are regularly quoted by a recognized securities dealer but selling
          prices are not reported, their Fair Market Value shall be the mean between the
          high bid and low asked prices for the Shares on the last market trading day
          prior to the day of determination, or;  

		    (iv)        In
the absence of an established market for the Shares, the Fair Market Value
          thereof shall be determined in good faith by the Administrator.  

		    (m)        “Incentive
Stock Option” means an Option intended to qualify as           an incentive
stock option within the meaning of Section 422 of the Code.  

		    (n)        “Nonstatutory
Stock Option” means an Option not intended to           qualify as an Incentive
Stock Option.  

		    (o)        “Officer” means
a person who is an officer of the Company           within the meaning of Section 16 of
the Exchange Act and the rules and           regulations promulgated thereunder.  

		    (p)        “Option” means
a share option granted pursuant to the Plan.  

		    (q)        “Option
Agreement” means a written or electronic agreement           between the Company
and an Optionee evidencing the terms and conditions of an           individual Option
grant. The Option Agreement is subject to the terms and           conditions of the Plan.  

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		    (r)        “Optioned Shares” means
the Shares subject to an Option.  

		    (s)        “Optionee” means
the holder of an outstanding Option granted           under the Plan.  

		    (t)        “Parent” means
a “parent corporation,” whether now or           hereafter existing, as defined
in Section 424(e) of the Code.  

		    (u)        “Plan” means
this Second Share Incentive Plan.  

		    (V)        “RSUs” means
Restricted Stock Units, as defined in Section 13           below.  

		    (w)        “Service
Provider” means an Employee, Director or Consultant.  

		    (x)        “Share” means
one of the Company’s Ordinary Shares having           a nominal value of 1.00 NIS,
as adjusted in accordance with Section 11 below.  

		    (y)        “Subsidiary” means
a “subsidiary corporation,”          whether now or hereafter existing, as
defined in Section 424(f) of the           Code.  

         3.       
          Shares Subject to the Plan. Subject to the provisions
          of Section 11 of the Plan, the maximum aggregate number of Shares which may be
          subject to option and sold under the Plan is 1,500,000 Shares. The Shares may be
          authorized, but unissued, or reacquired. 

	 	        If
an Option expires or becomes unexercisable without having been exercised in full, the
unpurchased Shares which were subject thereto shall become available for future grant or
sale under the Plan (unless the Plan has terminated); provided, however, that
Shares that have actually been issued under the Plan shall not be returned to the Plan
and shall not become available for future distribution under the Plan.  

         4.       
          Administration of the Plan. 

		    (a)        Procedure.  

		    (i)        Multiple
Administrative Bodies. The Plan may be administered by different           Committees
with respect to different groups of Service Providers.  

		    (ii)        Section
162(m). To the extent that the Administrator determines it to be           desirable
to qualify Options granted hereunder as “performance-based           compensation” within
the meaning of Section 162(m) of the Code, the Plan           shall be administered by a
Committee of two or more “outside           directors” within the meaning of
Section 162(m) of the Code.  

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		    (iii)        Other
Administration. Other than as provided above, the Plan shall be
          administered by (A) the Board or (B) a Committee, which committee shall be
          constituted to satisfy Applicable Laws.  

		    (b)        Powers of the Administrator.
Subject to the provisions of           the Plan and, in the case of a Committee, the
specific duties delegated by the           Board to such Committee, and subject to the
approval of any relevant           authorities, the Administrator shall have the
authority, in its discretion:  

		    (i)        to
determine the Fair Market Value;  

		    (ii)        to
select the Service Providers to whom Options may from time to time be granted
          hereunder;  

		    (iii)        to
determine the number of Shares to be covered by each such award granted
          hereunder;  

		    (iv)        to
approve forms of agreement for use under the Plan;  

		    (v)        to
determine the terms and conditions of any Option granted hereunder;  

		    (vi)        to
determine whether and under what circumstances an Option may be settled in           cash
under subsection 9(e) instead of Shares;  

		    (vii)        to
prescribe, amend and rescind rules and regulations relating to the Plan; 

		    (viii)        to
construe and interpret the terms of the Plan and awards granted pursuant to           the
Plan.  

		    (c)        Effect of Administrator’s
Decision. All decisions,           determinations and interpretations of the
Administrator shall be final and           binding on all Optionees.  

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         5.       
          Eligibility. 

		    (a)        Nonstatutory
Stock Options may be granted to Service Providers. Incentive Stock           Options may
be granted only to Employees.  

		    (b)        Each
Option shall be designated in the Option Agreement as either an Incentive           Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
          designation, to the extent that the aggregate Fair Market Value of the Shares
          with respect to which Incentive Stock Options are exercisable for the first
time           by the Optionee during any calendar year (under all plans of the Company
and any           Parent or Subsidiary) exceeds $100,000, such Options shall be treated
as           Nonstatutory Stock Options. For purposes of this Section 5(b),
Incentive           Stock Options shall be taken into account in the order in which they
were           granted. The Fair Market Value of the Shares shall be determined as of the
time           the Option with respect to such Shares is granted.  

		    (c)        The
Plan shall not confer upon any Optionee any right with respect to continuing
          the Optionee’s relationship as a Service Provider with the Company, nor
          shall it interfere in any way with his or her right or the Company’s right
          to terminate such relationship at any time, with or without cause.  

		    (d)        The
following limitations shall apply to grants of Options:  

		    (i)        No
Service Provider shall be granted, in any fiscal year of the Company, Options
          to purchase more than 500,000 Shares.  

		    (ii)        However,
in connection with his or her initial service, a Service Provider may           be
granted Options to purchase up to an additional 500,000 Shares which shall           not
count against the limit set forth in subsection (i) above.  

		    (iii)        The
foregoing limitations shall be adjusted proportionately in connection with           any
change in the Company’s capitalization as described in Section 11.  

		    (iv)        If
an Option is cancelled in the same fiscal year of the Company in which it was
          granted (other than in connection with a transaction described in Section 11),
          the cancelled Option will be counted against the limits set forth in
subsections           (i) and (ii) above. For this purpose, if the exercise price of an
Option is           reduced, the transaction will be treated as a cancellation of the
Option and the           grant of a new Option.  

         6.       
          Term of Plan. The Plan shall become effective upon its adoption by the
          Board. It shall continue in effect for a term of ten (10) years unless sooner
          terminated under Section 14 of the Plan. 

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         7.       
          Term of Option. The term of each Option shall be stated in the Option
          Agreement; provided, however, that the term shall be no more than ten (10)
          years from the date of grant thereof. In the case of an Incentive Stock Option
          granted to an Optionee who, at the time the Option is granted, owns shares
          representing more than ten percent (10%) of the voting power of all classes of
          shares of the Company or any Parent or Subsidiary, the term of the Option shall
          be five (5) years from the date of grant or such shorter term as may be provided
          in the Option Agreement. 

         8.       
          Option Exercise Price and Consideration. 

		    (a)        The
per share exercise price for the Shares to be issued pursuant to exercise of           an
Option shall be such price as is determined by the Administrator, but shall           be
subject to the following:  

		    (i)        In
the case of an Incentive Stock Option  

		    (A)        granted
to an Employee who, at the time of the grant of such Incentive Stock           Option,
owns shares representing more than ten percent (10%) of the voting power           of all
classes of shares of the Company or any Parent or Subsidiary, the           exercise
price shall be no less than 110% of the Fair Market Value per Share on           the date
of grant.  

		    (B)        granted
to any Employee other than an Employee described in the preceding           subparagraph,
the per Share exercise price shall be no less than 100% of the           Fair Market
Value per Share on the date of grant.  

		    (ii)        In
the case of a Nonstatutory Stock Option the per Share exercise price shall be
          no less than 100% of the Fair Market Value per Share on the date of grant and
be           determined by the Administrator.  

		    (iii)        Notwithstanding
the foregoing, Options may be granted with a per Share exercise           price (other
than as required above) of less than 100% of Fair Market Value on           the date of
grant pursuant to a merger or other corporate transaction.  

		    (b)        The
consideration to be paid for the Shares to be issued upon exercise of an
          Option, including the method of payment, shall be determined by the
          Administrator (and, in the case of an Incentive Stock Option, shall be
          determined at the time of grant) and may consist entirely of (1) cash,
          (2) check, (3) promissory note, (4) consideration received by
the           Company under a formal cashless exercise program adopted by the Company in
          connection with the Plan, or (5) any combination of the foregoing methods
          of payment. To the extent that the consideration paid for the Shares is
          denominated in a currency other than New Israeli Shekels, the exchange rate to
          be used to obtain a New Israeli Shekel value of such consideration shall be the
          noon buying rate as reported by the Federal Reserve Bank of New York (expressed
          in shekels per unit of non-Israeli currency) on the date of grant of the
Option.           In making its determination as to the type of consideration to accept,
the           Administrator shall consider if acceptance of such consideration may be
          reasonably expected to benefit the Company.  

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         9.       
          Exercise of Option. 

		    (a)        Procedure for Exercise;
Rights as a Shareholder. Any Option           granted hereunder shall be exercisable
according to the terms of the Plan and at           such times and under such conditions
as determined by the Administrator and set           forth in the Option Agreement.
Unless the Administrator provides otherwise,           vesting of Options granted
hereunder shall be tolled during any unpaid leave of           absence. An Option may not
be exercised for a fraction of a Share.  

	 	        An
Option shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the Optionee or,
if requested by the Optionee, in the name of the Optionee and his or her spouse. Until
the Shares are issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be
issued) such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the Shares
are issued, except as provided in Section 11 of the Plan.  

	 	        Exercise
of an Option in any manner shall result in a decrease in the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the number of
Shares as to which the Option is exercised.  

		    (b)        Termination of
Relationship as a Service Provider. If an Optionee           ceases to be a Service
Provider, other than upon the Optionee’s death or           Disability, the Optionee
may exercise his or her Option within such period of           time (of at least thirty
(14) days) as is specified in the Option Agreement to           the extent that the
Option is vested on the date of termination (but in no event           later than the
expiration of the term of such Option as set forth in the Option           Agreement). In
the absence of a specified time in the Option Agreement, the           Option shall
remain exercisable for three (3) months following the           Optionee’s
termination. If, on the date of termination, the Optionee is not           vested as to
his or her entire Option, the Shares covered by the unvested           portion of the
Option shall revert to the Plan. If, after termination, the           Optionee does not
exercise his or her Option within the time specified by the           Administrator, the
Option shall terminate, and the Shares covered by such Option           shall revert to
the Plan. Notwithstanding the foregoing provisions of this           Subsection (b),
and for the avoidance of doubt, the transfer of an Optionee           from the employ or
service of the Company to the employ or service of a Parent           or Subsidiary, or
from the employ or service of a Parent or Subsidiary to the           employ or service
of the Company or another Parent or Subsidiary, shall not be           deemed a
termination of employment or service as a Service Provider for purposes           hereof.  

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		    (c)        Disability
of Optionee. If an Optionee ceases to be a Service Provider as           a result of
the Optionee’s Disability, the Optionee may exercise his or her           Option
within such period of time as is specified in the Option Agreement (of at           least
six (6) months) to the extent the Option is vested on the date of           termination
(but in no event later than the expiration of the term of such           Option as set
forth in the Option Agreement). In the absence of a specified time           in the
Option Agreement, the Option shall remain exercisable for twelve (12)           months
following the Optionee’s termination. If, on the date of           termination, the
Optionee is not vested as to his or her entire Option, the           Shares covered by
the unvested portion of the Option shall revert to the Plan.           If, after
termination, the Optionee does not exercise his or her Option within           the time
specified herein, the Option shall terminate, and the Shares covered by           such
Option shall revert to the Plan.  

		    (d)        Death of Optionee.
If an Optionee dies while a Service           Provider, the Option may be exercised
within such period of time as is specified           in the Option Agreement (of at least
six (6) months) to the extent that the           Option is vested on the date of death
(but in no event later than the expiration           of the term of such Option as set
forth in the Option Agreement) by the           Optionee’s estate or by a person who
acquires the right to exercise the           Option by bequest or inheritance. In the
absence of a specified time in the           Option Agreement, the Option shall remain
exercisable for twelve (12) months           following the Optionee’s termination.
If, at the time of death, the           Optionee is not vested as to the entire Option,
the Shares covered by the           unvested portion of the Option shall revert to the
Plan. If the Option is not so           exercised within the time specified herein, the
Option shall terminate, and the           Shares covered by such Option shall revert to
the Plan.  

         10.       
          Non-Transferability of Options. Options may not be sold,
          pledged, assigned, hypothecated, transferred, or disposed of in any manner other
          than by will or by the laws of descent or distribution and may be exercised,
          during the lifetime of the Optionee, only by the Optionee. 

         11.       
          Adjustments Upon Changes in Capitalization or Merger. 

		    (a)        Changes
in Capitalization. In the event the Shares shall be subdivided or           combined
into a greater or smaller number of Shares or if, upon a           reorganization,
recapitalization or the like, the Shares shall be exchanged for           other
securities of the Company, each Optionee shall be entitled, subject to the
          conditions herein stated, to purchase such number of Shares or amount of other
          securities of the Company as were exchangeable for the number of Shares of the
          Company which such Optionee would have been entitled to purchase except for
such           action, and appropriate adjustments shall be made in the purchase price
per           share to reflect such subdivision, combination or exchange.  

	 	        In
the event that the Company shall issue any of its Shares or other securities as bonus
shares or a stock dividend upon or with respect to any Shares which shall at the time be
subject to an Option hereunder, each Optionee upon exercising such Option shall be
entitled to receive (for the purchase price payable upon such exercise), the Shares as to
which he or she is exercising such Option and, in addition thereto (at no additional
cost), such number of shares of the class or classes in which such bonus shares or stock
dividend were declared, and such amount of Shares (and the amount in lieu of fractional
Shares) as is equal to the Shares which he would have received had he been the holder of
the Shares as to which he is exercising his Option at all times between the date of the
granting of such Option and the date of its exercise.  

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	 	        Upon
the occurrence of any of the foregoing events, the class and aggregate number of Shares
or other securities issuable pursuant to the Plan, in respect of which Options have not
yet been granted, shall also be appropriately adjusted to reflect the events specified
above. If the Company offers the holders of the Shares, or of any other class of security
for which the Options are then exerciseable, rights to purchase securities of the
Company, then the Company shall offer the same rights to the Optionees as if they had
exercised their Options on the record date with respect to such rights offering.  

		    (b)        Dissolution
or Liquidation. In the event of the proposed dissolution or           liquidation of
the Company, the Administrator shall notify each Optionee as soon           as
practicable prior to the effective date of such proposed transaction. The
          Administrator in its discretion may provide for an Optionee to have the right
to           exercise his or her Option until fifteen (15) days prior to such transaction
as           to all of the Optioned Shares, including Shares as to which the Option would
not           otherwise be exercisable. To the extent it has not been previously
exercised, an           Option will terminate immediately prior to the consummation of
such proposed           action.  

		    (c)        Merger
or Asset Sale. In the event of a merger of the Company with or           into another
corporation, or the sale of substantially all of the assets of the           Company,
each outstanding Option shall be assumed or an equivalent option           substituted by
the successor corporation or a Parent or Subsidiary of the           successor
corporation. In the event that the successor corporation refuses to           assume or
substitute for the Option, the Option shall terminate as of the           closing of the
merger or sale of assets. For the purposes of this paragraph, the           Option shall
be considered assumed if, following the merger or sale of assets,           the option
confers the right to purchase or receive, for each Optioned Share           immediately
prior to the merger or sale of assets, the consideration (whether           shares, cash,
or other securities or property) received in the merger or sale of           assets by
holders of Shares for each Share held on the effective date of the           transaction
(and if such holders were offered a choice of consideration, the           type of
consideration chosen by the holders of a majority of the outstanding           Shares);
provided, however, that if such consideration received in the merger or           sale of
assets is not solely ordinary shares (or their equivalent) of the           successor
corporation or its Parent, the Administrator may, with the consent of           the
successor corporation, provide for the consideration to be received upon the
          exercise of the Option, for each Optioned Share, to be solely ordinary shares
          (or their equivalent) of the successor corporation or its Parent equal in fair
          market value to the per Share consideration received by holders of Ordinary
          Shares in the merger or sale of assets.  

         12.       
          Date of Grant. The date of grant of an Option shall, for all purposes, be
          the date on which the Administrator makes the determination granting such
          Option, or such other date as is determined by the Board. Notice of the
          determination shall be given to each Service Provider to whom an Option is so
          granted within a reasonable time after the date of such grant. 

         13.       
          Restricted Stock Unit. Subject to the sole and absolute discretion and
          determination of the Committee, the Committee may decide to grant under this
          Plan, in addition to, or instead of, any grant of Options – RSUs. A RSU is
          a right to receive a Share of the Company, under certain provisions, for a
          consideration of no more than the underlying Share’s nominal value. In
          addition, upon the lapse of the vesting period of a RSU, such RSU shall
          automatically vest into a Share of the Company and the Optionee shall pay to the
          Company its purchase price. 

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	 	        Unless
determined otherwise by the Committee, in the event an Optionee ceases to be a Service
Provider, all RSUs theretofore granted to such Optionee when such Optionee was an
employee, director, service provider, consultant or constructor of the Company, as the
case may be, that are not vested on such date of cessation, shall terminate immediately
and have no legal effect.  

	 	        Notwithstanding
the foregoing provisions of this Section 13, the Committee shall have the
discretion, exercisable either at the time an RSU is granted or thereafter, to permit an
unvested RSU to continue to vest into a Share, during the applicable vesting period even
following the date of cessation as a Service Provider, with respect to one or more
additional installments in which the Optionee would have vested under the RSU had the
Optionee continued in the employ or service of the Company.  

	 	        Notwithstanding
the foregoing provisions of this Section 13, and for the avoidance of doubt, the
transfer of an Optionee from the employ or service of the Company to the employ or
service of a Parent or Subsidiary, or from the employ or service of a Parent or
Subsidiary to the employ or service of the Company or another Parent or Subsidiary, shall
not be deemed a cessation of Optionee’s employment or service as Service Provider
for purposes hereof.  

	 	        All
other terms and conditions of this Plan applicable to Options, shall apply to RSUs, mutatis
mutandis.  

         14.       
          Amendment and Termination of the Plan. 

		    (a)        Amendment
and Termination. The Board may at any time amend, alter,           suspend or
terminate the Plan.  

		    (b)        Shareholder
Approval. The Board shall obtain shareholder approval of any           Plan amendment
and of any grant of Options thereunder to the extent necessary           and desirable to
comply with Applicable Laws.  

		    (c)        Effect of Amendment or Termination.
No amendment,           alteration, suspension or termination of the Plan shall impair
the rights of any           Optionee, unless mutually agreed otherwise between the
Optionee and the           Administrator, which agreement must be in writing and signed
by the Optionee and           the Company. Termination of the Plan shall not affect the
Administrator’s           ability to exercise the powers granted to it hereunder
with respect to Options           granted under the Plan prior to the date of such
termination.  

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         15.       
          Conditions Upon Issuance of Shares. 

		    (a)        Legal
Compliance. Shares shall not be issued pursuant to the exercise of           an
Option unless the exercise of such Option and the issuance and delivery of           such
Shares shall comply with Applicable Laws and shall be further subject to           the
approval of counsel for the Company with respect to such compliance.  

		    (b)        Investment
Representations. As a condition to the exercise of an Option,           the
Administrator may require the person exercising such Option 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 if, in the opinion of counsel for the Company, such a
representation is           required.  

         16.       
          Inability to Obtain Authority. 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, shall relieve the Company of any liability in
          respect of the failure to issue or sell such Shares as to which such requisite
          authority shall not have been obtained. 

         17.       
          Reservation of Shares. The Company, during the term of this
          Plan, shall at all times reserve and keep available such number of Shares as
          shall be sufficient to satisfy the requirements of the Plan. 

         18.       
          Shareholder Approval. The Plan shall be subject to approval by the
          shareholders of the Company within twelve (12) months after the date the Plan is
          adopted. Such shareholder approval shall be obtained in the manner and to the
          degree required under Applicable Laws. 

- 11 -20-F

Exhibit 4.4  

Retalix Ltd.

2004 Israeli Share Incentive Plan 

     A.
          NAME AND PURPOSE 

         1.       
          Name: This plan, as amended from time to time, shall be known as the
          “Retalix Ltd. 2004 Israeli Share Incentive Plan” (the
          “Plan”). 

         2.       
          Purpose: The purpose and intent of the Plan is to provide incentives to
          employees, directors, consultants and contractors of Retalix Ltd., a company
          incorporated under the laws of the State of Israel (the
          “Company”), or any subsidiary or affiliate thereof (where
          applicable in this Plan, the term “Company” shall include any
          subsidiary or affiliate of the Company), by providing them with opportunities to
          purchase Ordinary Shares, nominal value of 1.00 New Israeli Shekel each
          (“Shares”) of the Company, pursuant to a plan approved by the
          Board of Directors of the Company (the “Board”) which is
          designed to benefit from, and is made pursuant to, the provisions of either
          Section 102 or Section3(9) of the Israeli Income Tax Ordinance [New
          Version] 1961 (the “Ordinance”), as applicable, and the rules
          and regulations promulgated thereunder. 

     B.
          GENERAL TERMS AND CONDITIONS OF THE PLAN 

    3.        Administration: 

		    3.1        The
Board may appoint a Share Incentive Committee or other committee of the board, which will
consist of such number of Directors of the Company, as may be fixed from time to time by
the Board. The Board shall appoint the members of such committee, may from time to time
remove members from, or add members to, such committee and shall fill vacancies in such
committee however caused. The Plan will be administered by such committee, or by the
Board (including, but not limited to, actions which the Share Incentive Committee is not
permitted to take according to Section 112 of the Companies Law, 1999 (the “Companies
Law”)) (the Board or its committee, as applicable – the “Committee”).  

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

		    3.3        Subject
to the general terms and conditions of this Plan and applicable law, the Committee shall
have the full authority in its discretion, from time to time and at any time to determine
(i) the persons (“Grantees”) to whom options to purchase Shares (the “Options”)
shall be granted, (ii) the time or times at which the same shall be granted, (iii) the
schedule and conditions on which such Options may be exercised and on which such Shares
shall be paid for, (iv) rules and provisions as may be necessary or appropriate to permit
eligible Grantees who are not Israeli residents to participate in the Plan and/or to
receive preferential tax treatment in their country of residence, with respect to the
Options granted hereunder, and/or (v) any other matter which is necessary or desirable
for, or incidental to, the administration of the Plan. Unless otherwise determined by the
Committee for a specific grant or grants of Options, each Option will be exercisable,
under the terms of this Plan, into one Share of the Company.  

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

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

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

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

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

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

2

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

    4.        Eligible
Grantees:  

		    4.1        The
Committee, at its discretion, may grant Options to any employee, director, consultant or
contractor of the Company. Anything in this Plan to the contrary notwithstanding, all
grants of Options to office holders shall be authorized and implemented only in
accordance with the provisions of applicable law.  

		    4.2        The
grant of an Option to a Grantee hereunder, shall neither entitle such Grantee to
participate, nor disqualify him from participating, in any other grant of options
pursuant to this Plan or any other share incentive plan of the Company.  

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

		     5.1        Grant
of Options and Issuance of Shares.  

		    (a)        Subject
to the provisions of the Ordinance and applicable law (it being           understood
that, unless otherwise determined by the Committee, the following           shall not
apply to Options granted to non-Israeli Grantees),  

		    (i)        all
grants of Options to employees, directors and office holders of the
          Company, other than to a Controlling Shareholder of the Company (i.e.,
          “Baal Shlita”, as such term is defined in Section 32(9) of the
          Ordinance), shall be made only pursuant to the provisions of Section 102
of           the Ordinance, the Income Tax Rules (Tax Relief in Issuance of Shares to
          Employees), 2003 (“102 Rules”) and any other regulations,
          rulings, procedures or clarifications promulgated thereunder (“102
          Options”), or any other section of the Income Tax Ordinance that will
          be relevant for such issuance in the future; and  

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

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

3

		    (b)        Subject
to Sections 7.1 and 7.2 hereof, the effective date of the grant of an           Option
(the “Date of Grant”) shall be the date the Committee           resolves
to grant such Option, unless specified otherwise by the Committee in           its
determination relating to the award of such Option. The Committee shall
          promptly give the Grantee written notice (the “Notice of           Grant”)
of the grant of an Option.  

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

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

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

		    (i)        A
Grantee granted 102 Options will not be entitled to sell the Shares issued           upon
exercise thereof (the “Exercised Shares”) or to transfer           such
Exercised Shares (or such 102 Options) from the Trust prior to the lapse of           the
Trust Period;  

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

		    (iii)        Notwithstanding
the aforesaid, Exercised Shares or Rights may be sold or           transferred, and the
Trustee may release such Exercised Shares (or 102 Options)           or Rights from
Trust, prior to the lapse of the Trust Period, provided, however,           that tax is
paid or withheld in accordance with Section 102(b)(4) of the           Ordinance and/or
Section 7 of the 102 Rules. However, the Committee may, in its           sole discretion,
require a Grantee not to sell the Exercised Shares or transfer           the Options in
the Grantee’s name prior to the lapse of the Trust Period.  

4

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

		    (d)        Subject
to the terms hereof and specifically the provisions of Section 9 herein,           at any
time after the Options have vested, with respect to any Options or Shares           the
following shall apply: Upon the written request of any Beneficial Grantee,           the
Trustee shall release from the Trust the Options granted, and/or the Shares
          issued, on behalf of such Beneficial Grantee, by executing and delivering to
the           Company such instrument(s) as the Company may require, giving due notice of
such           release to such Beneficial Grantee, provided, however, that
the           Trustee shall not so release any such Options and/or Shares to such
Beneficial           Grantee unless the latter, prior to, or concurrently with, such
release,           provides the Trustee with evidence, satisfactory in form and substance
to the           Trustee, that all taxes, if any, required to be paid upon such release
have, in           fact, been paid.  

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

		    5.3        Dividend.
All Shares issued upon the exercise of Options granted under this Plan shall entitle the
Grantee thereof to receive dividends with respect thereto. For so long as Shares are held
in the Trust, the dividends paid or distributed with respect thereto shall be distributed
directly to such Beneficial Grantee, and the Company shall provide appropriate
notification to the Trustee of such distribution.  

		    5.4        Shareholder
Rights. Unless otherwise provided herein, the holder of an Option shall have no
shareholder rights with respect to the Shares underlying such Option until such person
shall have exercised the Option, paid the exercise price and become the record holder of
the purchased Shares. Subject to the provisions of the Plan and the provisions of the
Articles of Association of the Company, the Exercised Shares shall entitle the Grantee
thereof to full shareholder rights, including voting and dividend rights, with respect to
such Exercised Shares. As long as the Exercised Shares are registered in the name of the
Trustee, the voting rights at the Company’s general meeting attached to such
Exercised Shares will remain with the Trustee. However, the Trustee shall not be
obligated to exercise such voting rights at general meetings, and may, in its sole
discretion, empower another person, including the respective Beneficial Grantee, to vote
in name and in place of the Trustee according to such Beneficial Grantee’s
instructions, if provided.  

5

         6.       
          Reserved Shares: The total number of Shares that may be subject to
          Options granted under this Plan shall not exceed 2,000,000 in the
          aggregate, subject to adjustments as provided in Section 11 hereof. Without
          derogating from the foregoing, the Committee shall have full authority in its
          discretion to determine that the Company may issue, for the purposes of the
          Plan, previously issued Shares that are held by the Company, from time to time,
          as Dormant Shares (as such term is defined in the Companies Law). All Shares
          under the Plan, in respect of which the right of a Grantee to purchase the same
          shall, for any reason, terminate, expire or otherwise cease to exist, shall
          again be available for grant through Options under the Plan. 

	    7.        Grant
of Options:  

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

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

		    7.3        Validity
and Vesting. Without derogating from the rights and powers of the Committee under
this Section 7.3, unless otherwise specified by the Committee, the Options shall be
valid for a term of ten (10) years from the Date of Grant and thereafter expire. Subject
to Section 10 hereof, unless determined otherwise by the Committee, the Vesting Period
pursuant to which Options shall vest, and the Grantee thereof shall be entitled to pay
for and acquire the Exercised Shares, shall be such that all Options shall be fully
vested on the first business day following the passing of three (3) years from the Date
of Grant, as follows: 1/3 of such Options shall vest on the first anniversary of the
Adoption Date (the “Adoption Date” for the purpose of this Plan means
the Date of Grant or any other date determined by the Committee for a given grant of
Options). A further 1/3 of such Options shall vest on each of the second, and third
anniversaries of the Adoption Date.  

	 	        “Vesting
Period” of an Option means, for the purpose of the Plan and its related
instruments, the period between the Adoption Date and the date on which the Grantee may
exercise the rights awarded pursuant to the terms of the Option. Unless otherwise
determined by the Committee, any period in which the Grantee shall not be employed by the
Company (or, in the case of consultants, contractors or directors, shall not be in the
service of the Company) or in which the Grantee shall have taken an unpaid leave of
absence, shall not be included in the Vesting Period. 

6

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

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

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

    9.        Exercise
of Options:  

		    9.1        Options
shall be exercisable pursuant to the terms under which they were awarded and subject to
the terms and conditions of the Plan.  

		    9.2        The
exercise of an Option shall be made by a written notice of exercise (the “Notice
of Exercise”) delivered by the Grantee (or, with respect to Options held in the
Trust, by the Trustee upon receipt of written instructions from the Beneficial Grantee)
to the Company at its principal executive office, specifying the number of Shares to be
purchased and accompanied by the payment therefor, and complying with such other terms
and conditions as the Committee shall prescribe from time to time.  

		    9.3        Anything
herein to the contrary notwithstanding, but without derogating from the provisions of
Section 10 hereof, if any Option has not been exercised and the Shares subject
thereto not paid for within ten (10) years after the Date of Grant (or any shorter period
set forth in the Notice of Grant), such Option and the right to acquire such Shares shall
terminate, all interests and rights of the Grantee in and to the same shall ipso facto expire,
and, in the event that in connection therewith any Options are still held in the Trust as
aforesaid, the Trust with respect thereto shall ipso facto expire, and the Shares
underlying such Options shall again be available for grant through Options under the
Plan, as provided for in Section 6 herein, provided the Plan shall be in force at such
time.  

7

		    9.4        Each
payment for Shares shall be in respect of a whole number of Shares, and shall be effected
in cash or by a bank’s check payable to the order of the Company, or such other
method of payment acceptable to the Company.  

		    9.5        Notwithstanding
the provisions of Section 9.4 above, the Company will be entitled in its sole discretion
on a case-by-case basis, to allow payment of the Exercise Price out of the proceeds from
the sale of the Exercised Shares, provided that the Company has ascertained the Grantee’s
ability to pay the exercise price at that time. Grantees are not entitled to demand that
the Company, and the Company shall not be required to, act as described in this Section
9.5.  

    10.        Termination
of Employment:  

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

		    (a)        The
date of the Grantee’s Cessation of Employment shall be the date on           which
the employee-employer relationship between the Grantee and the Company           ceases
to exist (the “Date of the Cessation”).  

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

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

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

8

		    (d)        If
the Grantee’s Cessation of Employment is due to any reason other than
          those stated in Sections 10.1(c), 10.1(e) and 10.1(f) herein, such Options (to
          the extent vested at the Date of Cessation) shall be exercisable at any time
          until (i) the Date of Cessation; or (ii) in the event the Grantee’s
          Cessation of Employment is initiated by the Company and the Grantee receives an
          applicable one-time payment from the Company in lieu of a notice period, 15
days           after the Date of Cessation; and shall thereafter terminate, provided,
however, that if the Grantee dies within such period, such Options (to
          the extent vested at the Date of Cessation) shall be exercisable by the
          Grantee’s legal representative, estate or other person to whom the
          Grantee’s rights are transferred by will or by laws of descent or
          distribution at any time until 180 days from the Date of Cessation, and shall
          thereafter terminate.  

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

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

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

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

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

9

		    (a)        with
respect to directors – the date on which the director ceases to serve           as a
director of the Company; and  

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

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

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

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

		    10.4        Notwithstanding
the foregoing provisions of this Section 10, and for the avoidance of doubt, the
transfer of a Grantee from the employ or service of the Company to the employ or service
of an affiliate, or from the employ or service of an affiliate to the employ or service
of the Company or another affiliate, shall not be deemed a termination of employment or
service for purposes hereof.  

    11.        Adjustments,
Liquidation and Corporate Transaction:  

		    11.1        Definitions:  

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

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

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

10

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

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

		    11.2        Adjustments.
Subject to any required action by the shareholders of the Company, the number of Shares
subject to each outstanding Option, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Options have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an Option, as well as
the price per share of Shares subject to each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Shares or the payment of a stock dividend (bonus shares) with
respect to the Shares or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed to have
been “effected without receipt of consideration.” The Committee, whose
determination in that respect shall be binding and conclusive, shall execute such
adjustment. Except as expressly provided herein, no issuance by the Company of shares of
any class, or securities convertible into shares of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of Shares
subject to an Option.  

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

		    11.4        Corporate
Transaction.  

		    (a)        Upon
a Corporate Transaction involving another corporation or a parent or           subsidiary
of such other corporation (each, a “Successor           Entity”), then,
unless otherwise determined by the Board, immediately           prior to the effective
date of such Corporate Transaction, each Option shall, at           the sole and absolute
discretion of the Committee, either:  

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

11

		    (ii)        be
assumed by the Successor Entity such that the Grantee may exercise the Option
          for such number and class of securities of the Successor Entity which would
have           been issuable to the Grantee in consummation of such Corporate
Transaction, had           the Option been exercised immediately prior to the effective
date of such           Corporate Transaction; or  

		    (iii)        automatically
vest in full so that the Option shall, immediately prior to the           effective date
of the Corporate Transaction, become fully exercisable for all of           the Shares at
that time subject to the Option and may be exercised for any or           all of those
Shares;  

	 	        In
the  event of a  clause  (i) or  clause  (ii)  action,  appropriate adjustments shall be
made to the exercise price per Share to reflect such action.  

	 	        Immediately
 following the consummation of the Corporate  Transaction, all outstanding Options shall
terminate and cease to be outstanding, except to the extent assumed by the Successor
Entity.  

		    (b)        Notwithstanding
the foregoing, the Committee shall have full authority and sole           discretion to
determine that any of the provisions of Sections 11.4(a)(i),           11.4(a)(ii) or
11.4(a)(iii) above shall apply in the event of a Corporate           Transaction in which
the consideration received by the shareholders of the           Company is not solely
comprised of securities of the Successor Entity, or in           which such consideration
is solely cash or assets other than securities of the           Successor Entity.  

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

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

12

         12.       
          Limitations on Transfer: No Option shall be assignable or transferable by
          the Grantee to whom granted otherwise than by will or the laws of descent and
          distribution, and an Option may be exercised during the lifetime of the Grantee
          only by such Grantee or by such Grantee’s guardian or legal representative.
          The terms of such Option shall be binding upon the beneficiaries, executors,
          administrators, heirs and successors of such Grantee. 

    13.        Restricted
Stock Units:  

		    13.1        Subject
to the sole and absolute discretion and determination of the Committee, the Committee may
decide to grant under this Plan, in addition to, or instead of, any grant of Options,
Restricted Stock Unit(s) (“RSU(s)”). A RSU is a right to receive a Share
of the Company, under certain provisions, for a consideration of no more than the
underlying Share’s nominal value. In addition, upon the lapse of the vesting period
of a RSU, such RSU shall automatically vest into an Exercised Share of the Company and
the Grantee shall pay to the Company its purchase price.  

		    13.2        Unless
determined otherwise by the Committee, in the event of a Cessation of Employment, all
RSUs theretofore granted to such Grantee when such Grantee was an employee, director,
service provider, consultant or constructor of the Company, as the case may be, that are
not vested on the Date of Cessation, shall terminate immediately and have no legal
effect.  

	 	        Notwithstanding
the foregoing provisions of this Section 13, the Committee shall have the
discretion, exercisable either at the time an RSU is granted or thereafter, to permit an
unvested RSU to continue to vest into an Exercised Share, during the applicable Vesting
Period even following the Date of Cessation, with respect to one or more additional
installments in which the Grantee would have vested under the RSU had the Grantee
continued in the employ or service of the Company.  

	 	        Notwithstanding
the foregoing provisions of this Section 13, and for the avoidance of doubt, the
transfer of a Grantee from the employ or service of the Company to the employ or service
of an affiliate, or from the employ or service of an affiliate to the employ or service
of the Company or another affiliate, shall not be deemed a termination of employment or
service for purposes hereof.  

		    13.2        All
other terms and conditions of this Plan applicable to Options, shall apply to RSUs, mutatis
mutandis.  

13

    14.        Term
and Amendment of the Plan:  

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

		    14.2        Subject
to applicable laws and regulations, the Board in its discretion may, at any time and from
time to time, amend this Plan, including effecting the following amendments without the
approval of the Shareholders of the Company: (i) expanding the class of participants
eligible to participate in the Plan; and/or (ii) expanding the types of options or
awards provided under the Plan and/or (iii) extending the duration of the Plan. However,
no amendment or modification shall adversely affect any rights and obligations with
respect to Options at the time outstanding under the Plan, unless the applicable Grantee
consents to such amendment or modification.  

         15.       
          Withholding and Tax Consequences: The Company’s obligation to
          deliver Shares upon the exercise of any Options granted under the Plan shall be
          subject to the satisfaction of all applicable income tax and other compulsory
          payments withholding requirements. All tax consequences and obligations (of the
          Company or the Grantee or the Trustee) regarding any other compulsory payments
          arising from the grant or exercise of any Option, from the payment for, or the
          subsequent disposition of, Shares subject thereto or from any other event or act
          (of the Company or the Grantee or the Trustee) hereunder, shall be borne solely
          by the Grantee, and the Grantee shall indemnify the Company and/or the Trustee,
          as applicable, and hold them harmless against and from any and all liability for
          any such tax or other compulsory payment, or interest or penalty thereon,
          including without limitation, liabilities relating to the necessity to withhold,
          or to have withheld, any such tax or other compulsory payment from any payment
          made to the Grantee. 

    16.        Miscellaneous:  

		    16.1        Continuance
of Employment. Neither the Plan nor the grant of an Option thereunder shall impose
any obligation on the Company to continue the employment or service of any Grantee.
Nothing in the Plan or in any Option granted thereunder shall confer upon any Grantee any
right to continue in the employ or service of the Company for any period of specific
duration, or interfere with or otherwise restrict in any way the right of the Company to
terminate such employment or service at any time, for any reason, with or without cause.  

14

		    16.2       Rights
Deriving from Employee-Employer Relationship. Any gain or income credited or
attributable to a Grantee (or deemed as such) as a result of this Plan will not be taken
into account when calculating the basis for entitlement of the Grantee to any social
rights or benefits, or any other benefits deriving from an employee-employer relationship
between the Grantee and the Company.  

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

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

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

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

15

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