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                                                                    Exhibit 10.1

                               GIVEN IMAGING LTD.

                                1998 OPTION PLAN

         1.       NAME.

                  This plan, as may be amended from time to time, shall be known
as the "1998 Option Plan" (the "PLAN").

         2.       PURPOSE.

                  The Plan is intended as an incentive to retain, in the employ
or directorship of GIven Imaging Ltd. (the "COMPANY") and/or its future
subsidiaries, persons of training, experience and ability, to attract new
employees whose services are considered valuable, to encourage the sense of
proprietorship of such persons and to stimulate their active interest in the
development and financial success of the Company and the appreciation of
shareholders' value, by providing directors, officers, employees and consultants
of the Company with appropriate incentives and rewards.

                  At the election of any Grantee (as defined below), the Option
granted thereto under this Plan ("OPTIONS") shall contain such terms that will
allow such Option and the shares purchasable thereunder to qualify for the tax
regime available under Section 102 of the Israel income Tax Ordinance (New
Version), 5721-1961, as amended (the "ORDINANCE"), and the Income Tax Rules (Tax
Benefits in Stock issuances to Employees) 5749-1989 (the "RULES"), provided that
such Grantee meets the conditions set forth under Section 102 and the Rules, and
the provisions of Section 13 of this Plan shall apply to such Options and
shares.

         3.       ADMINISTRATION.

                  3.1 The Plan will be administered by the Company's
Compensation Committee (the "COMMITTEE"), which will consist of such number of
directors of the Company as may be fixed from time to time by the Board of
Directors of the Company. Subject to the provisions of the Company's Articles,
the Board of Directors 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. Any discretion, power or authority
granted to the Committee under this Plan may also be exercised by the Board of
Directors of the Company, and shall be exercised by the Board of Directors
whenever such power or authority is used in respect of a Grantee who is a
director of the Company or where prescribed by applicable law.

                  3.2 The Committee shall appoint one of its members as its
Chairman and shall hold its meetings at such times and places as it shall
determine. Actions at a meeting of the Committee at which a majority of its
members are 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.

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                  3.3 Subject to the general terms and conditions of this Plan,
the Committee shall have full authority in its discretion, from time to time and
at any time, to determine (i) the persons to whom an Option (or Options) under
this Plan shall be granted (each shall hereinafter be called "GRANTEE", and
collectively, "GRANTEES"), (ii) the number of shares to be covered by each
Option, (iii) the time or times at which the same shall be granted, (iv) the
schedule and conditions on which such Options may be exercised and on which such
shares shall be paid for, (v) any particular terms or conditions which may be
attached to an Option, whether more or less favorable to the Grantee compared
with the general terms of this Plan, and to the extent same are not contrary to
the Plan, and (vi) any other matter which is necessary or desirable for, or
incidental to, the administration of the Plan. In determining the number of
shares covered by the Option to be granted to each Grantee, the Committee may
consider, among other things, the nature of services provided by Grantee,
Grantee's salary and/or the duration of Grantee's service or employment by the
Company.

                  3.4 No member of the Board of Directors or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Option granted thereunder and, subject to the terms provided under
the Companies Ordinance [New Version], 5743-1983, as amended and the Company's
Articles, shall be entitled to be indemnified and held harmless by the Company
in respect of any such actions or determinations to the fullest extent
permitted.

                  3.5 The interpretation and construction by the Committee of
any provision of the Plan or any Option Award (as hereinafter defined) shall be
final and conclusive unless otherwise decided by the Board of Directors.

         4.       ELIGIBLE GRANTEES.

                  Options hereunder may be granted to any employee, director,
consultant or other person providing professional services to the Company or to
any of its future subsidiaries. The grant of an Option to a Grantee hereunder,
shall neither entitle such Grantee to participate, nor disqualify him from
participating, in any subsequent grant of options or shares pursuant to this
Plan or any other share or option incentive plan which the Company or any of its
future subsidiaries may adopt.

         5.       RESERVED SHARES.

                  5.1 The Company shall reserve 100,000 authorized but unissued
Ordinary A' Shares (nominal value NIS 0.01 per share) for the purpose of this
Plan, subject to adjustments as provided in Section 10 hereof. Ordinary A'
Shares shall bear such rights and restrictions as set forth under the Company's
Articles of Association, which in general shall be equal to the Ordinary Shares
of the Company, except for the right to receive notice of, attend and vote at a
general meeting of the Company's shareholders, which rights shall not be
attached to the Ordinary A' Shares.

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                  5.2 Any shares reserved under this Plan, in respect of which
the right hereunder of a Grantee to purchase the same shall for any reason
terminate, expire or otherwise cease to exist, shall again be available for
grant through Options under this Plan.

         6.       OPTION AWARDS.

                  6.1 The Committee in its discretion may award to Grantees
options to purchase shares of the Company available under the Plan (each, an
"OPTION", and collectively, the "OPTIONS"). Options may be granted at any time
after this Plan has been approved by the Company, subject to any further
approval or consent required under the Ordinance, the Rules and other applicable
law, except where an Option is to be qualified under Section 102 of the
Ordinance, then such Option shall be effective upon its grant provided that 31
days have elapsed from the date of filing with the Assessing Officer (of the
Income Tax Commission) of an appropriate notice in respect of the grant of such
Option, as required under the Rules, and the Grantee has signed and delivered to
the Company a notice and undertaking as required under the Rules.

                  6.2 The instrument granting an Option (the "OPTION AWARD")
shall state, INTER ALIA, the number of shares covered thereby (the "OPTION
SHARES"), the dates when it may be exercised which, unless otherwise prescribed
by the Committee and specified in the Option Award, shall be as set forth in
Section 8.3 below, the Option Price (as defined under Section 7 below), the
schedule on which such Option Shares may be paid for and such other terms and
conditions as the Committee at its discretion may prescribe, in accordance with
Section 3.3 above.

                  6.3 Unless otherwise determined by the Committee and except as
provided in Section 13 below, Option award shall be granted for no
consideration, other than the Grantee's agreeing to continue to serve the
Company.

         7.       OPTION PRICE.

                  7.1 The purchase price of each Option Share (the "OPTION
PRICE") shall be such amount as may be determined by the Committee, but
otherwise shall be equal to the Fair Market Value (as defined below) of each
Option Share at the date the Option is granted.

                  7.2 (a) In the event that the shares of the Company are not
publicly traded on a stock exchange, the Fair Market Value of an Option Share on
a particular date shall be the price per share at which the Company last issued
any of its shares to a non-affiliated investor.

                      (b)      In the event that the shares of the Company are
publicly traded on a stock exchange, the Fair Market Value of a share on a
particular date shall be the mean between the highest and lowest quoted selling
prices on such date on the securities market where the shares of the Company are
principally traded, and if there were no sales on such date, but there were
sales within a reasonable period both before or after that date, the Fair Market
Value shall be determined by taking a weighted average of the mean between the
highest and lowest selling prices on the nearest date.

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         8.       EXERCISE OF OPTIONS.

                  8.1 Options shall be exercisable pursuant to the terms under
which they were granted and subject to the terms and conditions of this Plan.

                  8.2 An Option, or any part thereof, shall be exercisable by
delivering to the Company at its principal office a signed "NOTICE OF EXERCISE"
in such form and substance as may be prescribed by the Committee from time to
time.

                  8.3 Unless otherwise prescribed by the Committee and specified
in the Option Award, an Option will not be exercisable before the second
anniversary of the date of grant. As of the second anniversary of the date of
grant and at any time thereafter (subject to Section 8.4 below), the Option
Award will be exercisable with respect to 50% of the Option Shares, and with
respect to 25% of the Option Shares after each of the third and fourth
anniversaries of the date of grant, respectively. The Board of Directors shall
have the exclusive authority to accelerate the periods for exercising an Option.

                  8.4 Subject to the provisions of Section 9 hereof, an Option,
or any part thereof, that has not been exercised and the Option Shares covered
thereby not paid for within ten (10) years after the date of grant, or any
shorter period set forth in the Option Award (the "EXERCISE PERIOD"), such
Option, or such part thereof, shall terminate and all interests and rights of
the Grantee thereunder shall automatically expire.

                  8.5 Each payment for Option Shares shall be in respect of a
whole number of shares, effected in cash or by a cashier's or certified check
payable to the order of the Company, or such other method of payment acceptable
to the Committee. Unless otherwise prescribed by the Committee and set forth in
the Option Award, payment for the Option Shares issued upon the exercise of the
Option Award shall be effected together with the delivery of the Notice of
Exercise.

                  8.6 If an Option (or any part thereof) is exercised by the
Trustee (as provided in Section 13 below), then -

                     (a) The Option Shares issued upon such exercise shall be
issued in the name of the Trustee, who will be registered as their holder in the
Company's register of members, and any share certificate issued by the Company
in respect of such Option Shares shall be deposited with, and in the name of,
the Trustee;

                     (b) Any distributions made by the Company thereafter on the
Option Shares (other than bonus shares), in cash or in specie, shall be made to
the beneficiary Grantee thereof, in accordance with the Trustee's records, but
subject to any contrary provision of the Ordinance or the Rules.

         9.       TERMINATION OF EMPLOYMENT.

                  9.1 GENERAL. (a) Subject to the provisions of Section 9.2
hereof and unless otherwise prescribed by the Committee and specified in the
Option Award, if a Grantee should,

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for any cause or reason whatsoever, cease to be employed by or render services
to the Company, all of such Grantee's rights, if any, in respect of such Option
which are not exercisable at that time, shall IPSO FACTO terminate and all of
his/her rights in respect of such Option which are then exercisable shall remain
exercisable in accordance with the terms of the Option for the remaining
duration of the then applicable Exercise Period. Any Option Shares issued
following such cessation of employment or services or other shares acquired by
the Grantee in respect thereof shall be subject to the provisions of Section 9.3
hereof. Subject to Section 9.2 hereof, in no event shall a Grantee, whose
employment or services has ceased prior to the second anniversary of the date of
grant, be entitled to exercise an Option (or any part thereof) unless such
cessation of employment or services is for special cause which is not under the
his/her control and is approved by the Committee, in its sole discretion, and by
the Income Tax Commissioner.

                     (b) In the event of resignation or discharge of a Grantee
from his/her employment with the Company, such Grantee's employment shall, for
the purposes of this Section 9.1, be deemed to have ceased upon the delivery to
the Company of notice of resignation, or upon the delivery to the Grantee of
notice of discharge, as the case may be, irrespective of the effective date of
such resignation or discharge.

                     (c) Notwithstanding any of the foregoing, unless otherwise
prescribed by the Committee and specified in the Option Award, in the event the
employment of a Grantee is terminated by the Company for cause of a material
breach of his/her agreement or other duty toward the Company or his acting
against the Company's interest not in good faith, as the Committee may determine
in its sole discretion, said Grantee shall not be entitled to exercise the
Option Awards subsequent to the time of delivery of the notice of discharge and
all his/her rights with respect thereto shall expire automatically upon
termination of his/her employment.

         9.2 DEATH, DISABILITY, RETIREMENT. Anything herein to the contrary
notwithstanding:

                     (a) In the event of death of a Grantee, the estate or other
successors to whom the rights of a Grantee in respect of an Option are
transferred (by operation of law or by will), shall be entitled to exercise such
Option (such or portions thereof) to the same extent and on the same terms as
the deceased Grantee could have done prior to his death; provided that, unless
otherwise prescribed by the Committee and specified in the Option Award, the
estate or such successor may exercise such Option through the remaining duration
of the then applicable Exercise Period.

                     (b) If a Grantee is unable to continue to be employed by
the Company by reason of said Grantee becoming incapacitated while in the employ
of the Company as a result of an accident or illness or other cause which is
approved by the Committee in its sole discretion, such Grantee shall, subject to
approval of the Committee (which shall not be unreasonably withheld), continue
to enjoy rights under the Plan on such terms and conditions as the Committee in
its discretion may determine.

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                     (c) If a Grantee should retire, such Grantee shall,
subject to the approval of the Committee, continue to enjoy such rights, if any,
under this Plan and on such terms and conditions as the Committee in its sole
discretion may determine.

      9.3 TERMINATION AFTER OPTION SHARES ARE ISSUED. (a) Any Grantee whose
employment with the Company shall terminate for any cause or reason, shall be
deemed to have irrevocably offered to all other shareholders (other than other
employees) to purchase any and all of his/her Option Shares (including other
shares of the Company issued in respect thereof) whether held by him/her or by
the Trustee for his/her benefit pursuant to the terms set forth under Article
18A of the Company's Articles. In the event that the Grantee's shares are not
purchased as aforesaid, any subsequent sale or disposition thereof shall be
subject to the provisions of Article 17 of the Company's Articles.

                     (b) Anything to contrary contained herein or in the
Company's Articles notwithstanding, if the Grantee's employment is terminated
for cause of fraud, breach of fidelity, theft or other malicious behavior
against the Company, then such Grantee shall be deemed to have offered to the
other shareholders of the Company (other than other employees) to purchase all
his Option Shares (or other shares issued in respect thereof) for their nominal
value only, PRO RATA to their respective holdings of the Company's issued and
outstanding shares. Such shares shall be sold and transferred as aforesaid
within 30 days from the date of such termination of employment. If the Grantee
fails to transfer his/her shares as aforesaid, the Company, at the decision of
the Board of Directors, shall be entitled to forfeit his/her shares and to
authorize any person to execute on behalf of the Grantee any instrument or
document necessary to effect such transfer and to make the appropriate
inscription in the Company's register of members. Each Grantee, upon accepting
an Option Award, shall be deemed to have authorized the Company and each of its
officers and to have granted the Company and each of its officers an irrevocable
power-of-attorney to execute in his/her name such instruments and documents. The
Company and its shareholders shall each be deemed as a third party beneficiary
of this paragraph (b) with rights to enforce same against the Grantee.

         10.  ADJUSTMENTS.

                  10.1 In the event the Ordinary A' Shares of the Company shall
be subdivided or combined into a greater or smaller number of shares or if, upon
a merger, consolidation, reorganization, recapitalization or the like, the
Ordinary A' Shares of the Company shall be exchanged for other securities of the
Company or of another corporation, each Grantee shall be entitled, subject to
the conditions herein stated, to purchase such number of shares or other
securities of the Company or such other corporation, as were exchangeable for
the number of Option Shares which such Grantee would have been entitled to
purchase on such date except for such event, and appropriate adjustments shall
be made in the purchase price per share to reflect such subdivision, combination
or exchange; provided, however, that any fractional shares so resulting shall be
cancelled.

                  10.2 In the event that the Company shall issue any bonus
shares (stock dividend), upon or with respect to any shares underlying an Option
granted hereunder, each Grantee upon exercising his Option shall receive (for
the purchase price payable upon such

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exercise), the shares as to which said Grantee is exercising his/her said right
and, in addition thereto (at no additional cost), such number of shares of the
class or classes in which such bonus shares (stock dividend) were declared, as
is equal to the amount of shares which said Grantee would have received had said
Grantee been the holder of the shares as to which he/she is exercising his/her
Option at all times between the date of the granting of such Option and the date
of its exercise; provided, however, that any fractional shares so resulting
shall be cancelled.

                  10.3 Upon the happening of any of the foregoing events, the
class and aggregate number of Ordinary A' Shares issuable pursuant to this Plan
(as set forth in Section 5 hereof), in respect of which Option have not yet been
granted, shall also be appropriately adjusted to reflect the events specified in
Sections 10.1 and 10.2 above.

                  10.4 The Committee shall determine the specific adjustments to
be made under this Section 10, and its determination shall be conclusive.

                  10.5 The Committee may, with the approval of the Board of
Directors, attach special anti-dilution rights to particular Options, if it
shall determine that special circumstances justify granting such rights.

         11.      ASSIGNABILITY AND SALE OF SHARES.

                  Unless otherwise prescribed by the Committee and specified in
the Option Award, no Option, nor Option Shares which were not fully paid for,
shall be assignable or transferable by the Grantee; and during the lifetime of
the Grantee each and all of his/her rights to purchase shares hereunder shall be
exercisable only by the Grantee. For avoidance of doubt, the foregoing shall not
be deemed to restrict the transfer of a Grantee's rights under an Option Awards
or Option Shares purchasable pursuant to the exercise thereof upon the death of
such Grantee to his/her estate or other successors by operation of law or will,
whose rights therein shall be governed by Section 9.2 hereof.

         12.      PARTICIPATION IN FUTURE ISSUES OF SHARES.

                  If the Board of Directors determines at any time, that the
Company shall offer to all its shareholders and on equal terms, to purchase
securities of the Company of any class, then holders of Option Awards granted
under this Plan shall be entitled, on such terms as the Committee may determine,
to be offered with such securities as they would have been entitled to be
offered with should they have exercised at such time that portion of their
respective Options which shall then be exercisable. A Grantee wishing to accept
such offer shall deliver to the Company a written notice of acceptance within
the time specified therefor by the Company under the terms of the offer, however
the issuance of such securities will occur together with the exercise of the
Option, and if the Option will be partially exercised then the number of
securities to be so purchased shall be proportional to the number of Option
Shares purchased upon such exercise of the Option. The purchase price for such
securities will be paid upon their issue to the Grantee, linked to the CPI or US
Dollar, as will be determined by the Committee. If such an offer which is
accepted by a Grantee contains warrants or convertible securities, and the last
date for their exercise is prior to the earliest exercise date of such Grantee's
Option, then the Grantee

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shall be entitled to exercise such warrant or convert such securities, as
applicable, provided that, if Section 102 of the Ordinance applies to such
Option, then the resulting securities will be deposited with the Trustee for the
remainder of the applicable Holding Period of such Option.

         13.      APPLICATION OF SECTION 102.

                  Whenever an eligible Grantee shall request, prior to the grant
of an Option thereto, that such Option shall qualify under Section 102 of the
Ordinance, the following provisions will apply to such Option:

                  13.1 The Option shall be granted in consideration for the
Grantee's waiver of a portion of his/her salary, in an amount determined by the
Committee and agreed with the Grantee, which in any event shall not exceed the
minimum required under the Ordinance and the Rules.

                  13.2 The Option granted to Grantees shall be allotted to and
in the name of a trustee nominated by the Committee in accordance with the
provisions of Section 102 of the Ordinance and the Rules (the "TRUSTEE"), and
held for the benefit of each Grantee for a period of not less than two years
from the date of grant (the "HOLDING PERIOD"), and thereafter, the Trustee will
transfer the Option Awards or the Option Shares, as the case may be, to the
Grantee upon his/her demand, subject to any deduction or withholding required
under the Ordinance, the Rules or any other applicable law.

                  13.3 The Trustee and each Grantee requesting qualification
under Section 102 shall comply with the Ordinance and Rules and with the escrow
agreement entered or to be entered between the Company and the Trustee, and as
may from time to time be amended, and shall each execute, file or make any
notice, statement, filing or other instrument or document required thereunder.

                  13.4 Each Grantee requesting qualification under Section 102
shall be obligated to immediately notify the Company and the Trustee of his
request, if any, to the Income Tax Commissioner pursuant to Rule 6(b) of the
Rules in the event the Option Shares are registered on any stock exchange.

                  13.5 In the event bonus shares (stock dividend) are declared
on Option Shares during the Holding Period, such bonus shares shall be subject
to the provisions of this Plan and shaft be issued and held in the name of the
Trustee until the expiration of the Holding Period applicable for such Option
Shares.

         14.      LISTING FOR PUBLIC TRADE.

                  14.1 GENERAL. In the event that the Company shall offer its
shares to the public in any stock exchange, the Company will take all actions
necessary to convert any Option Shares held by the Grantees into shares of such
class of shares as may be listed for trade at such stock exchange and the
Company shall be entitled to make such changes and amendments to this Plan or to
the Option Awards as the Committee may be necessary in order to enable Option
Shares to be listed for trade. Notwithstanding the foregoing, nothing herein
shall obligate the Company to

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register any Option Shares or other securities which may be issued to a Grantee
pursuant to any Option Award on a stock exchange.

                  14.2 COMPLIANCE WITH SECURITIES LAWS. By his/her exercise of
an Option Award hereunder, the Grantee agrees not to sell, transfer or otherwise
dispose of any of the Option Shares so purchased by him except in compliance
with the United States Securities Act of 1933, as amended, and the rules and
regulations thereunder, or such other applicable securities laws and/or
regulations, and the Grantee further agrees that all certificates evidencing any
of such Option Shares shall bear appropriate legends to reflect such
restriction.

                  14.3 RESTRICTIONS ON SALES. In addition to Sections 11 and
14.2 above, each Grantee hereby agrees, that in the event that the Company's
securities are listed for trade in any stock exchange, the Grantee shall not
sell any Option Shares without first giving the Committee a seven days prior
written notice, specifying the number of Option Shares which he/she intends to
sell, and the Committed approved such sale, provided that the Committee may
disapprove such sale only if it shall reasonably believes that such sale may
violate any applicable securities laws or regulations, or may place the Company
in breach of such laws or regulations or any of its contractual obligations or
may otherwise adversely affect the Company. Should the Committee fail to respond
to the Grantee's notice, it shall be deemed to have approved such sale. The
Committee's approval shall be effective for a period of 60 (sixty) days, shall
be limited to a number of shares, which, if not specified in its approval, shall
be the number specified in the Grantee notice, and the sale of any shares which
the Grantee shall not sell by the end of such 60-day period shall be subject to
a new approval in accordance with the foregoing provisions.

         15.      TERM AND AMENDMENT OF THE PLAN.

                  15.1 This Plan shall be effective as of the date of its
approval by the Board of Directors of the Company, and unless otherwise
prescribed by a subsequent resolution of the Board of Directors, shall remain in
effect for a period of 5 (five) years.

                  15.2 The Board of Directors may, at any time and from time to
time, suspend, terminate or amend the Plan in any respect except that, in no
event may any action of the Company alter or impair the rights of a Grantee,
without his/her consent, under any Option Award previously granted to said
Grantee.

         16.      EMPLOYEE-EMPLOYER RELATIONS.

                  16.1 Neither this Plan nor any Option Award shall impose any
obligation on the Company to continue the employment or service with the Company
of any Grantee, and nothing in the Plan or in any Option Award granted pursuant
thereto shall confer upon any Grantee any right to continue in the employ or
service of the Company, or restrict the right of the Company to terminate such
employment or service at any time.

                  16.2 No income or benefit resulting to a Grantee from any
Option or Option Shares shall be treated or deemed as a basis for any social or
other rights or benefits to which the Grantee may be entitled in connection with
his employment with the Company or any subsidiary

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thereof, and the Grantee shall indemnify and hold harmless the Company or any
subsidiary thereof, as the case may be, for any cost or expense which will arise
or accrue thereto in respect of any such income or benefit.

         17.      GOVERNING LAW AND JURISDICTION.

                  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. Any dispute arising out of or in connection with
this Plan or any instrument issued thereunder shall be under the exclusive
jurisdiction of the competent courts situated in Tel-Aviv.

         18.      TAX CONSEQUENCES.

                  Any tax consequences arising from the grant or exercise of any
Option Award, from the payment for shares covered thereby or from any other
event or act (of the Company or the Grantee) hereunder, shall be borne solely by
the Grantee. Furthermore, the Grantee shall agree to indemnify the Company and
hold it harmless against and from any and all liability for any such tax or
interest or penalty thereon, including without limitation, liabilities relating
to the necessity to withhold, or to have withheld, any such tax from any payment
made to the Grantee.

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                               GIVEN IMAGING LTD.
                                 PC/51-257802-2
                                 (the "COMPANY")

                                  OPTION AWARD

         TO PURCHASE UP TO _____ ORDINARY A' SHARES, PAR VALUE NIS 0.01
         EACH QUALIFYING UNDER SECTION 102 OF THE INCOME TAX ORDINANCE

Made on ________, 1998, in the name of:

                                    ---------------------------
                                    of
                                      -------------------------
                                    (the "TRUSTEE")
                                          -------

In favor of:

                                    ---------------------------
                                    of
                                      -------------------------
                                    (the "GRANTEE")
                                          -------

Pursuant to the resolution of the Company's Compensation Committee of
__________, 1998, this Option Award evidences the right granted to the Trustee,
in the benefit of the Grantee, to purchase up to ______ (______________________)
Ordinary A' Shares, par value NIS 0.01 each of the Company (the "OPTION
SHARES"), according to, and subject to the terms of the Company's 1998 Option
Plan, a copy of which is attached to this Option Award as APPENDIX A and forms
an integral part hereof (the "PLAN"), and subject to the provisions of Section
102 of the Income Tax Ordinance (New Version), 5721-1961 (the "ORDINANCE"), the
Income Tax Rules (Tax Benefits in Stock Issuances to Employees) 5749-1989 (the
"RULES") and the Company's Articles of Association, all as from time to time may
be amended, and further subject to the Trust Agreement entered between the
Trustee and the Company on _________, 1998, a copy of which is attached hereto
as APPENDIX B, and to the special terms, if any, set forth below. All
capitalized terms used herein shall bear the respective meaning ascribed thereto
under the Plan, unless otherwise defined herein.

OPTION PRICE

The Option Price per each one Option Share shall be (US) $.

SPECIAL TERMS

 . . .

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      IN WITNESS WHEREOF, the Company executed this Option Award on the date
first written above.

GIVEN IMAGING LTD.

By:
      ------------------------
Title:
      ------------------------

                 We, the undersigned, hereby agree to the terms of this Option
                 Award:

                 ------------------------              ------------------------
                       the Trustee                          the Grantee

APPENDICES

A'     1998 Option Plan
B'     Trust Agreement<Page>

                                                                    Exhibit 10.2

                               GIven Imaging Ltd.

                                    THE 2000
                                STOCK OPTION PLAN

1.       NAME

This Plan, as amended from time to time, shall be known as the GIven Imaging
Ltd. 2000 Stock Option Plan ("the Option Plan").

2.       PURPOSE OF THE OPTION PLAN

The Option Plan is intended to provide an incentive to retain, in the employ or
directorship of GIven Imaging Ltd. ("the Company"), and its subsidiaries,
persons of training, experience, and ability, to attract new employees,
directors or consultants whose services are considered valuable, to encourage
the sense of proprietorship of such persons, and to stimulate the active
interest of such persons in the development and financial success of the Company
by providing them with opportunities to purchase shares in the Company, pursuant
to the Option Plan approved by the board of directors of the Company ("the
Board").

2.1    Options granted to non Israeli Optionees under the Option Plan may or
may not contain such terms as will qualify such options as Incentive Stock
Options ("ISOs") within the meaning of Section 422 (b) of the United States
Internal Revenue Code of 1986, as amended ("the Code"). Options that do not
contain terms that will qualify them as ISOs shall be referred to herein as
Non-Qualified Stock Options ("NQSOs"). Each Option Agreement shall state
whether such Option will or will not be treated as an ISO. No ISO shall be
granted unless such Option, when granted, qualifies as an "incentive stock
option" under Section 422 of the Code. Any ISO granted under the Option Plan
shall contain such terms and conditions, consistent with the Option Plan, as
the Company may determine to be necessary to qualify such Option as an
"incentive stock option" under Section 422 of the Code. Any ISO granted under
the Option Plan may be modified by the Company to disqualify such Option from
treatment as an "incentive stock option" under Section 422 of the Code.

                                     1
<Page>

2.2    Options granted to Israeli Optionees under the Option Plan may or may
not contain such terms as will qualify such options for the special tax
treatment under section 102 of the Israeli Tax Ordinance (New Version),
5721-1961, as amended (the "Ordinance"), and the Income Tax Rules (Tax
Benefits in Stock Issuances to Employees ) 5749-1989 (the "Rules") ("102
Options"). Options that do not contain terms that will qualify them for the
special tax treatment under section 102 of the Ordinance, shall be referred
to herein as Section 3(I) Options ("3(I) Options").

All options granted hereunder, whether together or separately, shall be
hereinafter referred to as "Options".

3.       ADMINISTRATION OF THE OPTION PLAN

The Board or a compensation committee appointed and maintained by the Board for
such purpose ("the Committee") shall have the power to administer the Option
Plan. Notwithstanding the above, the Board shall automatically have a residual
authority if no Committee shall be constituted or if such Committee shall cease
to operate for any reason whatsoever.

The Committee shall consist of such number of members (not less than two (2) in
number) as may be fixed by the Board. Subject to the provisions of the Company's
Articles, the Board shall appoint the members of the Committee, may from time to
time remove members from, or add members to, the Committee and shall fill
vacancies in the Committee however caused The Committee shall select one of its
members as its chairman ("the Chairman") and shall hold its meetings at such
times and places as the Chairman shall determine. The Committee shall keep
records of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.

Any member of such Committee shall be eligible to receive Options under the
Option Plan while serving on the Committee, unless otherwise specified herein.

The Committee shall have full power and authority to (i) designate participants
in the Option Plan; (ii) determine the terms and provisions of respective Option
agreements (which need not be identical) including, but not limited to, the
number of shares in the Company to be covered by each Option, provisions
concerning the time or times when, and the extent to which, the Options may be
exercised and the nature and duration of restrictions as to transferability,
vesting or other terms and conditions of the Option; (iii) accelerate the right
of an Optionee to exercise, in whole or in part, any previously granted Option;
(iv) designate Options as 102 Options, as (3I) Options, as ISOs or as NQSO; (v)
interpret the provisions and supervise the administration of the Option Plan;
(vi) amend the Option Plan from time to time in order to qualify for tax
benefits applicable under U.S. and Israel laws, and - (vi) determine any other
matter which is necessary or desirable for, or incidental to administration of
the Option Plan. In determining the number of shares covered by the Options to
be granted to each recipient, the Committee may consider, among other things,
the nature of services provided by the recipient, the recipient's salary and/or
duration of his service or employment by the Company.

All decisions and selections made by the Board or the Committee pursuant to the

                                       2
<Page>

provisions of the Option Plan shall be made by a majority of its members except
that no member of the Board or the Committee shall vote on, or be counted for
quorum purposes, with respect to any proposed action of the Board or the
Committee relating to any Option to be granted to that member. Any decision
reduced to writing and signed by a majority of the members who are authorized to
make such decision shall be fully effective as if it had been made by a majority
at a meeting duly held.

The interpretation and construction by the Committee of any provision of the
Option Plan or of any Option thereunder shall be final and conclusive unless
otherwise determined by the Board.

Each member of the Board or the Committee shall be indemnified and held harmless
by the Company against any cost or expense (including counsel fees) reasonably
incurred by him, 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 Option Plan unless arising out of such member's own
fraud or bad faith, to the extent permitted by applicable law. Such
indemnification shall be in addition to any rights of indemnification the member
may have as a director or otherwise under the Company's Articles of Association,
any agreement, any vote of shareholders or disinterested directors, insurance
policy or otherwise.

4.       DESIGNATION OF PARTICIPANTS

The persons eligible for participation in the Option Plan as recipients of
Options shall include any employees, directors and consultants of the Company or
of any subsidiary of the Company. The grant of an Option hereunder shall neither
entitle the recipient thereof to participate nor disqualify him from
participating in, any other grant of Options pursuant to this Option Plan or any
other option or stock plan of the Company or any of its affiliates.
Notwithstanding any provisions to the contrary herein, no ISO shall be granted
to any individual otherwise eligible to participate in the Option Plan who is
not an employee of the Company or a "subsidiary" of the Company, within the
meaning of Section 424(f) of the Code, on the date of granting of such ISO.

To the extent applicable and anything in the Option Plan to the contrary
notwithstanding, all grants of Options to directors and office holders ("Nosei
Misra" - as such term is defined in the Israeli Companies Law, 5759-1999 - "the
Companies Law") shall be authorized and implemented only in accordance with the
provisions of the Companies Law, as in effect from time to time.

5.       TRUSTEE

The 102 Options which shall be granted to Optionees and/or any Shares issued
upon exercise of such Options and/or any other shares received subsequently
following any realization of rights resulting from a 102 Option or from Shares
issued upon exercise of a 102 Option, shall be issued to a Trustee nominated by
the Committee, and approved in accordance with the provisions of Section 102 of
the Ordinance ("the Trustee") and held for the benefit of the Optionees for a
period of not less than two

                                       3
<Page>

years (24 months) from the date of grant, and thereafter, the Trustee will
transfer the Options or the Option shares, as the case may be, to the Optionees
upon his/her demand, subject to any deduction or withholding required under the
Ordinance, the Rules or any other applicable law.

Anything to the contrary notwithstanding, the Trustee shall not release any 102
Options which were not already exercised into Shares by the Optionee or release
any Shares issued upon exercise of such Options prior to the full payment of the
Optionee's tax liabilities arising from such Options which were granted to him
and/or any Shares issued upon exercise of such Options.

Upon receipt of a 102 Option, the Optionee will sign the Stock Option Agreement
which shall be deemed as Optionee's undertaking to exempt the Trustee from any
liability in respect of any action or decision duly taken and bona fide executed
in relation with the Option Plan, or any Option or Share granted to him
thereunder.

6.       SHARES RESERVED FOR THE OPTION PLAN; RESTRICTION THEREON

6.1    Subject to adjustments as set forth in Section 8 below, a total of
[____________] authorized but unissued Ordinary A' Shares, (nominal value NIS
0.01 per share ) of the share capital of the Company ("the Shares") shall be
reserved for and subject to the Option Plan. The Shares shall bear such
rights and restrictions as set forth under the Company's Articles of
Association, which in general shall be equal to the Ordinary Shares of the
Company, except for the right to receive notice of, attend and vote at a
general meeting of the Company's shareholders, which rights shall not be
attached to the Shares, provided, however, that in the event of an IPO or any
similar "exit" event, the Company, subject to its shareholders resolution,
shall grant the Shares voting rights which shall be equal to the voting
rights granted to the Ordinary Shares of the Company. For the avoidance of
any doubt, it is hereby clarified that the Purchase Price of the Shares (as
specified in Section 7 of this Option Plan) includes the aforesaid voting
rights. Any of such Shares which may remain unissued and which are not
subject to outstanding Options at the termination of the Option Plan shall
cease to be reserved for the purpose of the Option Plan, but until
termination of the Option Plan the Company shall at all times reserve
sufficient number of Shares to meet the requirements of the Option Plan.
Should any Option for any reason expire or be canceled prior to its exercise
or relinquishment in full, the Shares therefore subject to such Option may
again be subjected to an Option under the Option Plan.

6.2    Each Option granted pursuant to the Plan, shall be evidenced by a
written agreement between the Company and the Optionee (the "Option
Agreement"), in such form as the Board or the Committee shall from time to
time approve. Each Option Agreement shall state a number of the Shares to
which the Option relates and the type of Option granted thereunder (whether a
102 Option, a 3(I) Option, an ISO or an NQSO).. Notwithstanding any intent to
grant ISOs, no ISO may be granted to any eligible employee of the Company or
its "subsidiary" within the meaning of Section 424(f) of the Code to the
extent that the ISO, together with any other "incentive stock

                                       4
<Page>

options" (within the meaning of Section 422 of the Code, but without regard to
subsection (d) of such Section) under the Plan and any other "incentive stock
option" plans of the Company, any "subsidiary" of the Company within the meaning
of Section 424(f) of the Code, and any "parent corporation" of the Company
within the meaning of Section 424(e) of the Code, are exercisable for the first
time by any Optionee during any calendar year with respect to Shares having an
aggregate fair market value in excess of $100,000 (or such other limit as may be
required by the Code, from time to time) as of the time the Option with respect
to such Shares is granted. The rule set forth in the preceding sentence shall be
applied by taking Options into account in the order in which they were granted.
In the event an Optionee receives an Option intended to be an Incentive Stock
Option which is subsequently determined not to comply with the requirements of
the Code for Incentive Stock Options, the Option shall be amended, if necessary,
in accordance with the Code and applicable Treasury Regulations and rulings to
preserve, as the first priority, to the maximum possible extent, the status of
the Option as an ISO (as defined in the Code) and to preserve, to the maximum
possible extent, the number of shares subject to the Option. Options may be
granted at any time after this Option Plan has been approved by the Company,
subject to any further approval or consent required under Section 102 of the
Ordinance or the Rules, in case of 102 Options, or of the U.S. Treasury, in case
of ISOs and other applicable law, except that 102 Options shall be effective
upon its grant provided that 31 days have elapsed from the date of filing with
the Assessing Officer (of the Income Tax Commission) of an appropriate notice in
respect of the grant of such Option, as required under the Rules, and the
Optionee has signed and delivered to the Company a notice and undertaking as
required under the Rules.

7.       PURCHASE PRICE

7.1    The purchase price of each Share subject to a new Option to be granted
or any portion thereof shall be determined by the Committee in its sole and
absolute discretion in accordance with applicable law, subject to any
guidelines as may be determined by the Board from time to time. The purchase
price of the Shares covered by each ISO shall be not less than the Fair
Market Value of the Company shares on the date the Option is granted;
provided, however, that no ISO shall be granted to an individual otherwise
eligible to participate in the Option Plan who owns (within the meaning of
Section 424(d) of the Code), at the time the Option is granted, more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company, any "subsidiary" of the Company within the meaning of Section
424(f) of the Code, or any "parent corporation" of the Company within the
meaning of Section 424(e) of the Code, unless, at the time such ISO is
granted, the exercise price per Share subject to the Option is at least 110%
of the Fair Market Value of a Share on the date such ISO is granted, and the
ISO by its terms is not exercisable after the expiration of five years from
such date of grant For purposes of the foregoing, if the Company shares are
publicly traded on the Over-the-Counter Market or a recognized stock exchange
on the date the Option is granted, "Fair Market Value" shall mean, for any
particular date, the last sale price of the Company shares on the applicable
stock exchange or, if no reported sales take place on the applicable date,
the average of the high bid and low asked price of the Company shares as
reported for such date or, if no

                                       5
<Page>

such quotation is made on such date, on the next preceding day on which there
were quotations, provided that such quotations shall have been made within the
ten (10) business days preceding the applicable date. In the event that the
shares of the Company are not publicly traded on a stock exchange, the Fair
Market Value of an Option Share on a particular date shall be the price per
share at which the Company last issued any of its shares to a non-affiliated
investor. Notwithstanding the preceding provision to the contrary, solely with
respect to Shares granted pursuant to an ISO under the Option Plan, Fair Market
Value shall be determined in accordance with Section 422(c)(7) of the Code.

7.2    The purchase price shall be payable upon the exercise of the Option in
a form satisfactory to the Committee, including without limitation, by cash or
cheque.

8.       ADJUSTMENTS

Upon the occurrence of any of the following described events, Optionee's rights
to purchase Shares under the Option Plan shall be adjusted as hereafter
provided:

8.1    If the Company is separated, reorganized, merged or consolidated with
or into another corporation while Options which were not yet vested remain
outstanding under the Option Plan, the Company shall see that the rights of
holders of such Options shall not be derogated by such separations,
reorganizations, mergers or consolidations. However, subject to any
applicable law and unless the Board or the Committee resolves otherwise, in
the event that in any such transaction the successor corporation does not
agree to assume the Options, the vesting period defined in Section 4 of each
Optionee's Option Agreement shall be accelerated so that any unvested Option
shall be immediately vested in full as of the date ten (10) days prior to the
effective date of such transaction.

8.2    If the outstanding shares of the Company shall at anytime be changed
or exchanged by declaration of a stock dividend, stock split, combination or
exchange of shares, recapitalization, or any other like event of the Company,
then in such event only and as often as the same shall occur, the number,
class and kind of Shares (including Shares issuable pursuant to the Option
Plan, as set forth in Section 6 hereof, in respect of which Options have not
yet been exercised) subject to this Option Plan or subject to any Options
therefore granted, and the purchase prices of the Options, shall be
appropriately and equitably adjusted so as to maintain the proportionate
number of Shares without changing the aggregate purchase price of the Options.

8.3    Anything herein to the contrary notwithstanding, if prior to the
completion of an initial public offering of the Company's securities ("IPO"),
all or substantially all of the shares of the Company are to be sold, or upon
a merger or reorganization or the like, the shares of the Company, or any
class thereof, are to be exchanged for securities of another Company, then in
such event, each Optionee shall be obliged to sell or exchange (in accordance
with the value of his Shares in accordance with the deal), as the case may
be, the Shares such Optionee purchased under the Option Plan, in accordance
with the instructions then issued by the Board whose determination

                                       6
<Page>

shall be final.

8.4    Notwithstanding the foregoing adjustments, any changes to ISOs
pursuant to this Section 8 shall, unless the Company determines otherwise,
only be effective to the extent such adjustments or changes do not cause a
"modification" (within the meaning of Section 424(h)(3) of the Code) of such
ISOs or adversely affect the tax status of such ISOs

9.       TERM AND EXERCISE OF OPTIONS

9.1    Options shall be exercised by the Optionee by giving written notice to
the Company, in such form and method as may be determined by the Company and
the Trustee , which exercise shall be effective upon receipt of such notice
by the Company at its principal office. The notice shall specify the number
of Shares with respect to which the Option is being exercised.

9.2   Unless otherwise prescribed by the Committee or the Board and specified
in Section 4 of the Option Agreement, an Option will not be exercisable
before the second anniversary of the date of grant. As of the second
anniversary of the date of grant and at any time thereafter (subject to the
sentence below), the Option will be exercisable with respect to the 50% of
the Option Shares, and with respect to 25% of the Option Shares after each of
the third and fourth anniversaries of the date of grant, respectively. The
Board shall have the exclusive authority to accelerate the periods for
exercising an Option. However, subject to the provisions of section 9.6
below, no option shall be exercisable after the , expiration of ten (10)
years from the Date of Grant (or in the event of grant of ISOs, five years
from the Date of Grant in the case of an Option held by an Optionee who holds
more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company, any "subsidiary" of the Company within the meaning
of Section 424(f) of the Code, or any "parent corporation" of the Company
within the meaning of Section 424(e) of the Code);, and such options, or such
part thereof, shall terminate and all interests and rights of the Optionee
thereunder shall automatically expire.

9.3    Options granted under the Option Plan shall not be transferable by
Optionees other than by will or laws of descent and distribution, and during
an Optionee's lifetime shall be exercisable only by that Optionee.

9.4    The Options may be exercised by the Optionee in whole at any time or
in part from time to time, to the extent that the Options become vested and
exercisable, prior to the Expiration Date, and provided that, subject to the
provisions of Section 9.6 below and unless the Board or Committee resolves
otherwise, the Optionee is an employee of the Company or any of its
subsidiaries or continuing to provide services to such entities, at all times
during the period beginning with the granting of the Option and ending upon
the date of exercise.

9.5    Subject to the provisions of Section 9.6 below, in the event of
termination of Optionee's employment with the Company or any of its
subsidiaries, or if applicable, the termination of services given by the
Optionee to the Company or any of its

                                       7
<Page>

subsidiaries all Options granted to him will immediately expire. A notice of
termination of employment or services shall be deemed to constitute termination
of employment or services.

9.6    Notwithstanding anything to the contrary in Section 9.5 above and
subject to the provisions of Section 9.7 below, an Option may be exercised
after the date of termination of Optionee's service or employment with the
Company or any subsidiary of the Company only with respect to the number of
Options already vested and unexpired at the time of such termination
according to the vesting and expiration periods of the Options set forth in
this Option Plan, or under a different period prescribed by the Committee or
by the Board and specified in Optionee's Option Agreement, provided however,
that;

         9.6.1.   such termination is without Cause (as defined below); or -

         9.6.2.   such termination is the result of death or disability of the
                  Optionee.

The term "Cause" shall mean a material breach of the employee's agreement or
other duty toward the Company or his acting against the Company's interest not
in good faith, as the Committee may determine in its sole discretion.

9.7     (a) Any Optionee whose employment with the Company shall terminate
for any cause or reason, shall be deemed to have irrevocably offered to all
other shareholders (other than other employees) to purchase any and all of
his/her Shares (including other shares of the Company issued in respect
thereof) whether held by him/her or by the Trustee for his/her benefit
pursuant to the terms set forth under Article 18A of the Company's Articles.
In the event that the Optionee's shares are not purchased as aforesaid, any
subsequent sale or disposition thereof shall be subject to the provisions of
Article 17 of the Company's Articles.

         (b) Anything to the contrary contained herein or in the Company's
Articles notwithstanding, if the Optionee's employment is terminated for cause
of fraud, breach of fidelity, theft or other malicious behavior against the
Company, then such Optionee shall be deemed to have offered to the other
shareholders of the Company (other than other employees) to purchase all the
Shares (or other shares issued in respect thereof) in consideration for the
purchase price (determined in accordance with Section 7 of this Option Plan)
paid by such employee for such Shares owned by the employee PRO RATA to their
respective holdings of the Company's issued and outstanding shares. Such shares
shall be sold and transferred as aforesaid within 30 days from the date of such
termination of employment. If the Optionee fails to transfer his/her shares as
aforesaid, the Company, at the decision of the Board, shall be entitled to
forfeit his/her shares and to authorize any person to execute on behalf of the
Optionee any instrument or document necessary to effect such transfer and to
make the appropriate inscription in the Company's register of members. Each
Optionee, upon executing an Option Agreement, shall be deemed to have authorized
the Company and each of its officers and to have granted the Company and each of
its officers an irrevocable power of attorney to execute in his/her behalf such
instruments and documents. The Company and its shareholders shall each be deemed
as a third party beneficiary of this paragraph (b) with rights to enforce same
against the Optionee.

         (c) This Section 9.7 will terminate upon the closing of the initial
public offering of any securities of the Company, anywhere in the world.

                                       8
<Page>

9.8    The holders of Options shall not have any of the rights or privileges
of shareholders of the Company in respect of any Shares purchasable upon the
exercise of any part of an Option unless and until, following exercise ,
registration of the Optionee as holder of such Shares in the Company's
register of members, but in case of Options and Shares held by the Trustee,
subject always to the provisions of section 5 of the Option Plan.

9.9    Any form of Option agreement authorized by the Option Plan may contain
such other provisions as the Committee may, from time to time, deem
advisable. Without limiting the foregoing, the Committee may, with the
consent of the Optionee, from time to time, cancel all or any portion of any
Option then subject to exercise, and the Company's obligation in respect of
such Option may be discharged by payment to the Optionee of an amount in cash
equal to the excess, if any, of the fair market value of the Shares at the
date of such cancellation subject to the portion of the Option so canceled
over the aggregate purchase price of such Shares.

10.      PURCHASE FOR INVESTMENT

The Company's obligation to issue Shares upon exercise of an Option granted
under the Plan is expressly conditioned upon (a) the Company's completion of any
registration or other qualifications of such Shares under any state and/or
federal law, rulings or regulations or (b) representations and undertakings by
the Optionee (or his legal representative, heir or legatee, in the event of the
Optionee's death) to assure that the sale of the Shares complies with any
registration exemption requirements which the Company in its sole discretion
shall deem necessary or advisable. Such required representations and
undertakings may include representations and agreements that such Optionee (or
his legal representative, heir, or legatee): (a) is purchasing such Shares for
investment and not with any present intention of selling or otherwise disposing
thereof; and (b) agrees to have placed upon the face and reverse of any
certificates evidencing such Shares a legend setting forth (i) any
representations and undertakings which such Optionee has given to the Company or
a reference thereto and (ii) that, prior to effecting any sale or other
disposition of any such Shares, the Optionee must furnish to the Company an
opinion of counsel, satisfactory to the Company, that such sale or disposition
will not violate the applicable requirements of State and federal laws and
regulatory agencies.

11.      DIVIDENDS

With respect to all Shares (in contrary to Options not exercised into Shares)
issued upon the exercise of Options purchased by the Optionee, the Optionee
shall be entitled to receive dividends in accordance with the quantity of such
Shares, and subject to any applicable taxation on distribution of dividends.

During the period in which Shares, issued to the Trustee on behalf of an
Optionee

                                       9
<Page>

upon exercise of a 102 Option, are held by the Trustee, the cash dividends paid
with respect thereto shall be paid directly to the Optionee.

12.      ASSIGNABILITY AND SALE OF OPTIONS

12.1    No Option, purchasable hereunder, whether fully paid or not, shall be
assignable, transferable or given as collateral or any right with respect to
them given to any third party whatsoever, and during the lifetime of the
Optionee each and all of such Optionee's rights to purchase Shares hereunder
shall be exercisable only by the Optionee.

12.2    As long as Shares are held by the Trustee in favor of the Optionee,
then all rights the last possesses over the Shares are personal, can not be
transferred, assigned, pledged or mortgaged, other than by will or laws of
descent and distribution. Any such action made directly or oblique, for an
immediate validation or for a future one, shall be void

13.      TERM OF THE OPTION PLAN

The Plan shall become effective on the date that it is adopted by the Board of
Directors; provided, however, that no Option may be exercised until the Plan has
been approved by the holders of a majority of the voting stock of the Company.
If the Plan is not approved by the shareholders of the Company within twelve
months after the date the Plan is adopted by the Board of Directors, the Plan
and all Options granted thereunder shall be null and void. Subject to Section 14
below the Option Plan shall terminate at the end of 10 years from such day of
adoption; provided, however, Options theretofore may extend beyond such date.

14.      AMENDMENTS OR TERMINATION

The Board may, at any time and from time to time, amend, alter or discontinue
the Option Plan, except that no amendment or alteration shall be made which
would impair the rights of the holder of any Option therefore granted, without
his consent. However, unless otherwise required by law or specifically provided
herein, no such amendment, alteration or discontinuation shall be made which,
without first obtaining approval of the shareholders of the Company (where such
approval is necessary to satisfy (i) with regard to ISOs, any requirements under
the Code relating to ISOs or (ii) any applicable law, regulation or rule),
would:

                  (a)   except as is provided in Section 8, increase the maximum
                        number of Shares which may be sold or awarded under the
                        Option Plan;

                  (b)   except as is provided in Section 8, decrease the minimum
                        Option exercise price requirements under the Option
                        Plan;

                                       10
<Page>

                  (c)   change the class of persons eligible to receive Stock
                        Options under the Plan; or

                  (d)   extend the duration of the Plan or the period during
                        which ISOs may be exercised under Section 9.

15.      GOVERNMENT REGULATIONS

The Option Plan, the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver Shares under such Options, shall
be subject to all applicable laws, rules, and regulations, whether of the State
of Israel or of the United States or any other State having jurisdiction over
the Company and the Optionee, including the registration of the Shares under the
United States Securities Act of 1933, and to such approvals by any governmental
agencies or national securities exchanges as may be required.

16.      CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES

Neither the Option Plan nor the Option agreement with the Optionee shall impose
any obligation on the Company or a subsidiary thereof, to continue any Optionee
in its employ, or the hiring by the Company of the Optionee's services and
nothing in the Option Plan or in any Option granted pursuant thereto shall
confer upon any Optionee any right to continue in the employ or service of the
Company or a subsidiary thereof or restrict the right of the Company or a
subsidiary thereof to terminate such employment or service hiring at any time.

17.      GOVERNING LAW & JURISDICTION

This Option Plan shall be governed by and construed and enforced in accordance
with the laws of the State of Israel applicable to contracts made and to be
performed therein, without giving effect to the principles of conflict of laws.
The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any
matters pertaining to this Option Plan.

18.      TAX CONSEQUENCES

Any tax consequences arising from the grant or exercise of any Option, from the
payment for Shares covered thereby or from any other event or act (of the
Company, the Trustee or the Optionee), hereunder, shall be borne solely by the
Optionee. The Company and/or the Trustee (where applicable) shall withhold taxes
according to the requirements under the applicable laws, rules, and regulations,
including the withholding of taxes at source. Furthermore, the Optionee shall
agree to indemnify the Company and the Trustee (where applicable) and hold them
harmless against and from any and all liability for any such tax or interest or
penalty thereon, including

                                       11
<Page>

without limitation, liabilities relating to the necessity to withhold, or to
have withheld, any such tax from any payment made to the Optionee.

The Board, the Committee and/or the Trustee shall not be required to release any
Share certificate, issued upon exercise of a 102 Option and/or a 3(I) Option, to
an Optionee, until all required payments have been fully made.

If the Option is intended to qualify as an ISO, then if the Optionee makes a
disposition, within the meaning of Section 424(c) of the Code and the
regulations promulgated thereunder, of any Share issued to the Optionee pursuant
to his exercise of the Option within the two-year period commencing on the Date
of Grant or within the one-year period commencing on the date after the date of
transfer of such Share to the Optionee pursuant to such exercise, the Optionee
shall, within ten (10) days after such disposition, notify the Company thereof,
by delivery of a written notice to the Secretary of the Company, and immediately
deliver to the Company the amount of all applicable withholding taxes and any
other information as may be prescribed by the Committee or the Company.

19.      NON-EXCLUSIVITY OF THE OPTION  PLAN

The adoption of the Option Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangements 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 then under the Option Plan, and such
arrangements may be either applicable generally or only in specific cases.

20.      MULTIPLE AGREEMENTS

The terms of each Option may differ from other Options granted under the Option
Plan at the same time, or at any other time. The Committee may also grant more
than one Option to a given Optionee during the term of the Option Plan, either
in addition to, or in substitution for, one or more Options previously granted
to that Optionee.

                                       12
<Page>

                             STOCK OPTION AGREEMENT
                      Made as of the day of ________, 2000
                                 By and between

                               GIven Imaging Ltd.
  an Israeli Company located at Building 7B, New Industrial Park, P.O. Box 258'
                                  Yokneam 20692
                                 ("the Company")
                                of the first part

                                       and

                                  -------------
                                       ID
                                ("the Optionee")
                               of the second part

                                    PREAMBLE

Whereas   On _________, 2000, the Company has adopted its 2000 Stock Option
Plan, a copy of which is attached as Exhibit A hereto, forming an integral
part hereof ("the Option Plan"); and -

Whereas   The Company has determined that the Optionee be granted an Option
under the Option Plan to purchase shares of the Company, and the Optionee has
agreed to such grant, all on the terms and subject to the conditions
hereinafter provided.

NOW, THEREFORE, it is agreed as follows:

1.    PREAMBLE AND DEFINITIONS

1.1   The Preamble to this Agreement constitutes an integral part hereof.

1.2   Unless otherwise defined herein, capitalized terms used herein shall have
the meaning ascribed to them in the Option Plan.

2.    GRANT OF OPTION

2.1   The Company hereby grants to [(the "Trustee", for the benefit of the
Optionee under the terms and conditions of Section 102 of the Ordinance and as
evidenced by the Letter of Allotment attached to this Agreement as Exhibit 2.1]
[the Optionee] ____________ [ISO/NQSO/102 Options/ 3(l) Options] (the
"Option/s"), exercisable in

                                       13
<Page>

whole or in part for Ordinary A' Shares nominal value NIS 0.01 of the share
capital of the Company, taken from the total number of shares reserved for
purposes of the Option Plan in the Company's authorized unissued share capital
("the Share"), at the price per Share of ______________ ("the Purchase Price"),
on the terms and subject to the conditions hereinafter provided.

2.2   The Optionee is aware that the Company intends to issue additional shares
in the future to various entities and individuals, as the Company in its sole
discretion shall determine.

2.3   [APPLICABLE TO ISOs: The Option is intended to qualify as an Incentive
Stock Option within the meaning of Section 422 (or any successor section
thereof) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and
the terms of this Option Agreement shall be construed in accordance with such
Code section; provided, however, that nothing in this Agreement shall be
interpreted as a representation, guarantee or other undertaking on the part of
the Company that the Option is or will be determined to be an Incentive Stock
Option within the meaning of Section 422 of the Code.]

3.       PERIOD OF OPTION AND CONDITIONS OF EXERCISE

3.1   The terms of this Option Agreement shall commence on the date hereof ("the
Date of Grant") and terminate at the Expiration Date (as defined in Section 6
below), or at the time at which the Option is completely terminated pursuant to
the terms of the Option Plan or pursuant to this Agreement.

3.2   The Options may be exercised by the Optionee in whole at any time or in
part from time to time, to the extent that the Options become vested and
exercisable pursuant to Section 9 of the Option Plan and subject to any terms
and conditions determined by the Board or the Committee, prior to the Expiration
Date. To the extent the Option is intended to qualify as an ISO, notwithstanding
the foregoing,an Option granted under the Option Plan will not be considered an
ISO to the extent that it, together with any other "incentive stock options"
(within the meaning of Section 422 of the Code, but without regard to subsection
(d) of such Section) under the Option Plan and any other "incentive stock
option" plans of the Company, any "subsidiary" of the Company within the meaning
of Section 424(f) of the Code, and any "parent corporation" of the Company
within the meaning of Section 424(e) of the Code, are exercisable for the first
time by any Optionee during any calendar year with respect to Shares having an
aggregate fair market value (determined as of the Date of Grant) in excess of
$100,000 (or such other limit as may be required by the Code) as of the time the
Option with respect to such Shares is granted. The rule set forth in the
preceding sentence shall be applied by taking Options into account in the order
in which they were granted.

3.3   Subject to the provisions of Section 3.4 below, in the event of
termination of the

                                       14
<Page>

Optionee's employment with the Company or any of its subsidiaries, or, if
applicable, the termination of the provision of services by the Optionee to the
Company or any of its subsidiaries, all Options granted to him will immediately
expire. A notice of termination of employment or services by either the Company
or the Optionee shall be deemed to constitute termination of employment or
services.

3.4   Notwithstanding anything to the contrary in Section 3.2 above, an Option
may be exercised after the date of termination of Optionee's service or
employment with the Company or any subsidiary of the Company, but only with
respect to the number of Options already vested and unexercised at the time of
such termination, according to the vesting and expiration periods of the
Options, set forth in Section 9 of the Option Plan , , provided, however that;

      3.4.1 such termination is without Cause (as defined below); or -

      3.4.2 such termination is the result of death or disability of the
            Optionee.

      The term "Cause" shall mean a material breach of the employee's agreement
      or other duty toward the Company or his acting against the Company's
      interest not in good faith, as the Committee may determine in its sole
      discretion.

3.5   (a) In the event that the employment of the Optionee with the Company
shall terminate for any cause or reason, he/she shall be deemed to have
irrevocably offered to all other shareholders (other than other employees) to
purchase any and all of his/her Shares (including other shares of the Company
issued in respect thereof) whether held by him/her or by the Trustee for his/her
benefit pursuant to the terms set forth under Article 18A of the Company's
Articles. In the event that the Optionee's shares are not purchased as
aforesaid, any subsequent sale or disposition thereof shall be subject to the
provisions of Article 17 of the Company's Articles.

      (b) Anything to the contrary contained herein or in the Company's Articles
notwithstanding, if the Optionee's employment is terminated for cause of fraud,
breach of fidelity, theft or other malicious behavior against the Company, then
such Optionee shall be deemed to have offered to the other shareholders of the
Company (other than other employees) to purchase all his Option Shares (or other
shares issued in respect thereof) in consideration for the Purchase Price paid
by such employee for the Shares , PRO RATA to their respective holdings of the
Company's issued and outstanding shares. Such Shares shall be sold and
transferred as aforesaid within 30 days from the date of such termination of
employment. If the Optionee fails to transfer his/her shares as aforesaid, the
Company, at the decision of the Board, shall be entitled to forfeit his/her
shares and to authorize any person to execute on behalf of the Optionee any
instrument or document necessary to effect such transfer and to make the
appropriate inscription in the Company's register of members. Each Optionee,
upon executing an Option Agreement, shall be deemed to have authorized the
Company and each of its officers and to have granted the Company and each of its
officers an irrevocable power of attorney to execute in his/her behalf such

                                       15
<Page>

instruments and documents. The Company and its shareholders shall each be deemed
as a third party beneficiary of this paragraph (b) with rights to enforce same
against the Optionee.

3.6   The Options may be exercised only to purchase whole Shares, and in no case
may a fraction of a Share be purchased. If any fractional Shares would be
deliverable upon exercise, such fraction shall be rounded up one-half or more,
or otherwise rounded down, to the nearest whole number. Notwithstanding the
foregoing adjustments, any changes to ISOs pursuant to this Section 3.6 shall,
unless the Company determines otherwise, only be effective to the extent such
adjustments or changes do not cause a "modification" (within the meaning of
Section 424(h)(3) of the Code) of such ISOs or adversely affect the tax status
of such ISOs.

4.       VESTING

Subject to the requirements as to the number of Shares for which an Option is
exercisable, as set forth in Section 2.1 above, Options shall vest (i.e.,
Options shall become exercisable) in accordance with Section 9 of the Option
Plan [IF SPECIAL TERMS APPLY INSERT THEM HERE].

5.       METHOD OF EXERCISE

5.1   Options shall be exercised by the Optionee by giving written notice to the
Company, in such form and method as may be determined by the Company and in the
case of Options designated as 102 Options ("102 Options"), as may be determined
by the Company and the Trustee ("the Exercise Notice"), which exercise shall be
effective upon receipt of such notice by the Company at its principal office.
The notice shall specify the number of Shares with respect to which the Option
is being exercised.

5.2   Shares issued upon exercise of a 102 Option shall immediately be deposited
by the Trustee and be held by the Trustee in accordance with the provisions of
Section 5 of the Option Plan. The Trustee shall not transfer any Options to the
Optionee prior to exercise of the Options into Shares. The Trustee will transfer
the Shares to the Optionee upon demand but in no event earlier than two years
(24 months) from Date of Grant. If any law or regulation requires the Company to
take any action with respect to the Shares so demanded before the issuance
thereof, then the date of their issuance shall be extended for the period
necessary to take such action. The Optionee hereby authorizes the Trustee to
sign an agreement with the Company whereby Shares will not be transferred
without deduction of taxes at source. The Optionee hereby undertakes to exempt
the Trustee from any liability in respect of any action or decision duly taken
and bona fide executed in relation with the Option Plan, or any Option or Share
granted to him thereunder.

                                       16
<Page>

6.       TERMINATION OF OPTION

6.1 Except as otherwise stated in this Agreement, the Options, to the extent not
previously exercised, shall terminate forthwith after 10 years from the Date of
Grant (or, in the event of grant of an ISO, five years from the Date of Grant in
the case of an Option held by an Optionee who holds more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, any
"subsidiary" of the Company within the meaning of Section 424(f) of the Code, or
any "parent corporation" of the Company within the meaning of Section 424(e) of
the Code) (the "Expiration Date").

6.2   Without derogating from the above, the Committee may, with the prior
written consent of the Optionee, from time to time cancel all or any portion of
the Options then subject to exercise, and the Company's obligation in respect of
such Options may be discharged by (i) payment to the Optionee of an amount in
cash equal to the excess, if any, of the fair market value of the Shares
pertaining to such canceled Options, at the date of such cancellation, over the
aggregate purchase price of such Shares, (ii) the issuance or transfer to the
Optionee of Shares of the Company with a fair market value at the date of such
transfer equal to any such excess, or (iii) a combination of cash and Shares
with a combined value equal to any such excess, all determined by the Committee
in its sole discretion.

7.       ADJUSTMENTS

7.1   If the Company is separated, reorganized, merged or consolidated with or
into another corporation while Options which were not yet vested remain
outstanding under the Option Plan, the Company shall see that the rights of
holders of such Options shall not be derogated by such separations,
reorganizations, mergers or consolidations. Without limiting the generality of
the above, subject to any applicable law and unless the Board or the Committee
resolves otherwise, in the event that in any such transaction the successor
corporation does not agree to assume the Options, the vesting period defined in
Section 4 above shall be accelerated so that any unvested Option shall be
immediately vested in full as of the date ten (10) days prior to the effective
date of such transaction.

7.2   If the outstanding shares of the Company shall at anytime be changed or
exchanged by declaration of a stock dividend, stock split, combination or
exchange of shares, recapitalization, or any other like event of the Company,
then in such event only and as often as the same shall occur, the number, class
and kind of Shares (including Shares issuable pursuant to the Option Plan, as
set forth in Section 6 thereof, in respect of which Options have not yet been
exercised) subject to this Option Plan or subject to any Options therefore
granted, and the purchase prices of the Options, shall be appropriately and
equitably adjusted so as to maintain the proportionate number of Shares without
changing the aggregate purchase price of the Options.

                                       17
<Page>

7.3 Anything herein to the contrary notwithstanding, if prior to the completion
of the IPO, all or substantially all of the shares of the Company are to be
sold, or upon a merger or reorganization or the like, the shares of the Company,
or any class thereof, are to be exchanged for securities of another Company,
then in such event, the Optionee shall be obliged to sell or exchange (in
accordance with the value of his Shares in accordance with the deal) as the case
may be, the Shares such Optionee purchased hereunder, in accordance with the
instructions then issued by the Board, which will be given according to the
decided upon policy concerning Optionees under the Option Plan.

8.      RIGHTS PRIOR TO EXERCISE OF OPTION; LIMITATIONS AFTER PURCHASE OF SHARES

8.1   Subject to the provisions of Section 8.2 below, the Optionee shall not
have any of the rights or privileges of shareholders of the Company in respect
of any Shares purchasable upon the exercise of any part of an Option unless and
until, following exercise, registration of the Optionee as holder of such Shares
in the Company's register of members, but in case of Options and Shares held by
the Trustee, subject always to the provisions of Section 5 of the Option Plan.

8.2   With respect to all Shares (in contrary to Options which were not
exercised into Shares) issued upon the exercise of Options purchased by the
Optionee, the Optionee shall be entitled to receive dividends in accordance with
the quantity of such Shares, and subject to any applicable taxation on
distribution of dividends. During the period in which Shares, issued to the
Trustee on behalf of an Optionee upon exercise of a 102 Option, are held by the
Trustee, the cash dividends paid with respect thereto shall be paid directly to
the Optionee.

8.3   No Option purchasable hereunder, whether fully paid or not, shall be
assignable, transferable or given as collateral or any right with respect to
them, given to any third party whatsoever other than by will or laws of descent
and distribution, and during the lifetime of the Optionee each and all of the
Optionee's rights to purchase Shares hereunder shall be exercisable only by the
Optionee.

8.4   As long as Shares are held by the Trustee in favor of the Optionee, then
all rights the last possesses over the Shares are personal, can not be
transferred, assigned, pledged or mortgaged, other than by will or laws of
descent and distribution. Any such action made directly or oblique, for an
immediate validation or for a future one, shall be void.

8.5   Optionee agrees that if the Company's shares will be traded in a public
market, his right to sell his Shares may be subject to some limitations, as set
forth by the Company's underwriters. In such event, the Optionee will
unconditionally agree to any such limitations.

                                       18
<Page>

8.6   The Optionee may be required by the Company, at the Company's discretion,
to give a representation in writing upon exercising the Option, that he or she
is acquiring the Shares for his or her own account, for investment and not with
a view to, or for sale in connection with, the distribution of any part thereof.

8.7   The Optionee shall not dispose of any Shares in transactions which, in the
opinion of counsel to the Company, violate the U.S. Securities Act of 1933, as
amended ("the 1933 Act"), or the rules and regulations thereunder, or any
applicable state securities or "blue sky" laws, including the securities laws of
the State of Israel.

8.8   If any Shares shall be registered under the 1933 Act, no public offering
(otherwise than a national securities exchange, as defined in the Securities
Exchange Act of 1934, as amended) of any Shares shall be made by the Optionee
(or any other person) under such circumstances that he or she (or such other
person) may be deemed an underwriter, as defined in the 1933 act.

8.9   The Optionee agrees that the Company shall have the authority to endorse
upon the certificate or certificates representing the Shares such legends
referring to the foregoing restrictions, and any other applicable restrictions,
as it may deem appropriate (which do not violate the Optionee's rights according
to this Agreement).

9.       GOVERNMENT REGULATIONS

The Option Plan, the granting and exercise of the Options thereunder, and the
Company's obligation to sell and deliver Shares or cash under the Options, are
subject to all applicable laws, rules and regulations of any state in which the
shares of the Company are publicly traded, or of the State of Israel or of the
United States or any other State having jurisdiction over the Company and the
Optionee, including the registration of the Shares under the United States
Securities Act of 1933, and to such approvals by any governmental agencies or
national securities exchanges as may required.

10.      CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES

Nothing in this Option Agreement shall be construed to impose any obligation on
the Company or a subsidiary thereof to continue the Optionee's employment with
it or the hiring by the Company of the Optionee's services, to confer upon the
Optionee any right to continue in the employ of the Company or a subsidiary
thereof or the grant of services thereto, or to restrict the right of the
Company or a subsidiary thereof to terminate such employment or the grant of
services at any time.

11.      GOVERNING LAW & JURISDICTION

                                       19
<Page>

This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Israel applicable to contracts made and to be
performed therein, without giving effect to the principles of conflict of laws.
The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any
matters pertaining to this Agreement.

13.      TAX CONSEQUENCES

Any tax consequences arising from the grant or exercise of any Option, from the
payment for Shares covered thereby or from any other event or act (of the
Company, the Trustee or the Optionee), hereunder, shall be borne solely by the
Optionee. The Company and/or the Trustee (where applicable) shall withhold taxes
according to the requirements under the applicable laws, rules, and regulations,
including the withholding of taxes at source. Furthermore, the Optionee shall
agree to indemnify the Company and the Trustee (where applicable) and hold them
harmless against and from any and all liability for any such tax or interest or
penalty thereon, including without limitation, liabilities relating to the
necessity to withhold, or to have withheld, any such tax from any payment made
to the Optionee

The Board and/or the Committee and/or the Trustee shall not be required to
release any Share certificate, issued upon exercise of a 102 Option and/or a
3(I) Option, to an Optionee, until all required payments have been fully made.
The Optionee hereby declares that he/she will not transfer the Shares, issued
upon exercise of a 102 Option, nor any other shares received subsequently
following any realization of rights resulting from a 102 Option or from Shares
issued upon exercise of a 102 Option, by a way of tax - exempt transfer or a
transfer under sections 104 (a), 104 (b) or 97 (a) of the Income Tax Ordinance.

If the Option is intended to qualify as an ISO, then if the Optionee makes a
disposition, within the meaning of Section 424(c) of the Code and the
regulations promulgated thereunder, of any Share issued to the Optionee pursuant
to his exercise of the Option within the two-year period commencing on the Date
of Grant or within the one-year period commencing on the date after the date of
transfer of such Share to the Optionee pursuant to such exercise, the Optionee
shall, within ten (10) days after such disposition, notify the Company thereof,
by delivery of a written notice to the Secretary of the Company, and immediately
deliver to the Company the amount of all applicable withholding taxes and any
other information as may be prescribed by the Committee or the Company.

14.      FAILURE TO ENFORCE NOT A WAIVER

The failure of any party to enforce at any time any provisions of this Option
Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.

                                       20
<Page>

15.      PROVISIONS OF THE OPTION PLAN

The Options provided for herein are granted pursuant to the Option Plan, and
said Options and this Option Agreement are in all respects governed by the
Option Plan and subject to all of the terms and provisions whether such terms
and provisions are incorporated in this Option Agreement solely by reference or
are expressly cited herein. Any interpretation of this agreement will be made in
accordance with the Option Plan but in the event there is any contradiction
between the provisions of this agreement and the Option Plan, the provisions of
this agreement will prevail; PROVIDED, HOWEVER, that the provisions of the
Option Plan with respect to ISOs shall prevail with respect to any
contradictions or inconsistencies between the Option Plan and any provisions
contained in the Option Agreement for the grant of ISOs.

16.      BINDING EFFECT

This Agreement shall be binding upon the heirs, executors, administrators, and
successors of the parties hereof.

17.      NOTICES

Any notice sent by one party to the other under this Option Agreement shall be
sent to the addresses first set forth above, or to any other address of a party
designated in writing by such party, and shall be considered as having reached
its destination, if it was delivered by hand, at the time of its delivery; if it
was sent by registered mail, within 96 hours from the time it was so dispatched;
and if it was sent by facsimile or e-mail, within 48 hours from the receipt of
the confirmation of proper transmission of the notice.

18.      ENTIRE AGREEMENT

This Agreement exclusively concludes all the terms of the Optionee's Option
Plan, and, subject to the provisions of Section 19 of the Option Plan, annuls
and supersedes any other agreement, arrangement or understanding, whether oral
or in writing, relating to the grant of options to the Optionee. Any change of
any kind to this agreement will be valid only if made in writing and signed by
both the Optionee and the Company's authorized member and has received the
approval of the Board. The grant of options to the Optionee shall be subject to
the approval of the Option Plan by Company's Shareholders General Meeting.

                                       21
<Page>

IN WITNESS WHEREOF, the Company executed this Option Agreement in duplicate on
the day and year first above written.

GIVEN IMAGING LTD.

By:

The undersigned hereby accepts, and agrees to, all terms and provisions of the
foregoing Option Agreement.

The Optionee

                                       22
<Page>

                                   EXHIBIT 2.1

                               GIVEN IMAGING LTD.

                                 PC/51-257802-2

                                 (the "COMPANY")

                                                                     [DATE]

  To:      INVESTEC CLALI TRUST COMPANY  LTD.
           29 YAVNE STREET
           TEL-AVIV 65792
           ISRAEL

                             RE: LETTER OF ALLOTMENT

  This is to confirm that on __________ (DATE OF GRANT), Given Imaging Ltd.
  ("the Company") has granted you ________ Options exercisable in whole or in
  part for _________ ordinary A' Shares of the Company, each having a nominal
  value of NIS 0.01 in favor of Mr./Mrs. ___________________.

  The Options are granted according to (mark the appropriate box):

           [   ]  Section 102 of the Income Tax Ordinance (New Version), 1961.

           [   ] Section 3(I) of the Income Tax Ordinance (New Version), 1961.

  PURCHASE PRICE

  The Purchase Price for each option is ______ per share.

  Vesting of Options is according to Section 9 of Stock Option Plan.

  SPECIAL TERMS:

  -------------------------------------------------------------------

  -------------------------------------------------------------------

  This letter is of value.

                                                      -------------------
                                                      GIVEN IMAGING LTD.

                                       23

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