Document:

Exhibit 10.36

                             STOCK OPTION AGREEMENT

                  STOCK OPTION AGREEMENT dated as of  _________,  ____,  between
DATA SYSTEMS & SOFTWARE INC., a Delaware corporation (the "Company"), and
_________________ (the "Optionee").

                              Preliminary Statement

                  The Company's 1994 Stock Option Plan for Outside Directors, as
amended (the  "Plan")  provides for the grant to any director who is an "outside
director" under the eligibility  criteria set forth in the Plan, of an option to
purchase  _____ shares of the Company's  common stock,  par value $.01 per share
("Common  Stock"),  subject to the Plan and the terms and  conditions set forth.
The parties hereto desire to enter into this Agreement in order to set forth the
terms of such option.

                  Accordingly, the parties hereto agree as follows:

                  1.  Grant of  Option.  Subject  to the Plan and the  terms and
conditions of this  Agreement,  the Company hereby grants to Optionee the option
(the  "Option") to purchase  from the Company up to _____ shares of Common Stock
at a price per  share of $____.  The  number  of  shares  to which  this  Option
pertains  and the price per share at which  this  Option  may be  exercised  are
subject to  adjustment  in  accordance  with the  provisions of Section 6 of the
Plan.

                  2. Plan Governs Terms of Option.  The Option is subject in all
respects to the terms and  conditions  of the Plan,  a copy of which is attached
hereto as Exhibit A.

                  3. Time of Exercise of Option. This Option may be exercised as
to all ______  shares at any time,  or as to any  portion  thereof  from time to
time,  after  __________,  _____,  unless  this  Option has been  terminated  in
accordance with the provisions of Paragraph 4.

                  4.  Termination  of  Option.  This  Option  shall  immediately
terminate upon the earliest of (i) _________,  ____, (ii) the first  anniversary
of the date  upon  which the  Optionee  ceases to be an  Eligible  Director  (as
defined in Section 3 of the Plan), or (iii) ____ days after the date an Optionee
ceases to be a director.

<PAGE>

                  5.  Manner  of  Exercise.  This  Option  may be  exercised  by
delivering to the Company a written notice (signed by the Optionee)  stating the
number of shares with respect to which the Option is being  exercised,  together
with full payment of the purchase price  therefor in cash or by certified  check
payable to the order of the Company or by delivery  of  certificates  evidencing
shares of Common Stock  registered in the name of the Optionee (duly endorsed in
blank or with stock powers attached)  having a Fair Market Value  (determined in
accordance  with  Section  5(d)(i) of the Plan) at least equal to the  aggregate
exercise  price of the shares  purchasable  upon  exercise of this option,  or a
combination of cash and shares.  The Board may require  Optionee to remit to the
Company an amount sufficient to satisfy any federal,  state or local withholding
tax  requirements  prior to  delivering  to Optionee any shares  purchased  upon
exercise of this  Option.  This Option may not be  exercised  with  respect to a
fractional share.

                  6.  Restriction on Transfer.  This Option may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered except
by will  or the law of  descent  and  distribution  and  during  the  Optionee's
lifetime may be  exercised  only by Optionee,  or  Optionee's  guardian or legal
representative.

                  7.  Notice.   Any  notice  or  communication  to  the  Company
hereunder  shall be in writing  and shall be deemed to have been duly given when
delivered in person,  or by United States mail, to the following  address (or to
such other address as the Company shall from time to time specify):

                             Data Systems & Software Inc.
                             200 Route 17
                             Mahwah, New Jersey  07340
                             Attention:  Secretary

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the date and year first above written.

                                        DATA SYSTEMS & SOFTWARE INC.

                                        By:_____________________________
                                           Name:
                                           Title:

----------------------------
Optionee

<PAGE>

                              OPTION EXERCISE FORM

DATA SYSTEMS & SOFTWARE INC.
200 ROUTE 17
MAHWAH, NJ  07430

Gentlemen:

                  I hereby  exercise the following  portion of the stock options
that have heretofore been granted to me as follows:

                  Date of grant_________________________________________________

                  Exercise price per share $____________________________________

                  Number of options granted_____________________________________

                  Number of options held________________________________________

                  Number of options being exercised hereby____________

                  In connection with this exercise [check one]:

                  _____ I enclose my check in the amount of $______________

                  _____ I am  delivering  to a broker  designated or approved by
the Company irrevocable instructions to (i) sell shares of Common Stock acquired
upon exercise and (ii) promptly deliver to the Company a portion of the proceeds
thereof equal to the exercise price and any applicable withholding taxes.

                  I  hereby  agree  to  execute  whatever  other  documents  are
necessary in order to comply with the Plan and any applicable legal requirements
in connection with the issuance of the stock to me pursuant to the Plan.

------------------------------                    ------------------------------
Optionee (Signature)                              Social Security Number

------------------------------                    ------------------------------
Please print name

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Date                                              AddressExhibit 10.37

                             STOCK OPTION AGREEMENT

                  STOCK OPTION  AGREEMENT  dated as of  ______________,  between
DATA SYSTEMS & SOFTWARE INC., a Delaware corporation (the "Company"), and
________ (the "Optionee").

                              Preliminary Statement

                  Pursuant  to  the   Company's   1995  Stock  Option  Plan  for
Nonmanagement  Employees (the "Plan"), and the authority delegated to him by the
Board of Directors,  on ________________,  the Company's Chief Executive Officer
(the  "Authorized  Officer")  granted  to the  Optionee  an option  to  purchase
_________  shares  of the  Company's  Common  Stock,  par  value  $.01 per share
("Common  Stock"),  subject to the Plan and the terms and  conditions  set forth
herein.

                  Accordingly, the parties hereto agree as follows:

                  1.  Grant of  Option.  Subject  to the Plan and the  terms and
conditions of this  Agreement,  the Company hereby grants to Optionee the option
(the  "Option")  to  purchase  from the Company up to  ______________  shares of
Common  Stock  (the  "Shares")  at a price per share of  $______.  The number of
shares to which  this  Option  pertains  and the  price per share at which  this
Option  may be  exercised  are  subject to  adjustment  in  accordance  with the
provisions of the Plan.

                  2. Plan Governs Terms of Option.  The Option is subject in all
respects to the terms and conditions of the Plan.

                  3. Type of Option. The Option is not intended to qualify as an
"incentive  stock  option"  within the meaning of Section  422A of the  Internal
Revenue Code of 1986, as amended.

                  4. Time of Exercise of Option. This Option may be exercised as
to not more than _______ of the Shares at any time after ___________________, as
to not more than __________ of the Shares at any time after  ______________  and
all the  Shares at any time  after  ____________  unless  this  Option  has been
terminated in accordance with the provisions of Paragraph 5.

                  5.  Termination  of  Option.  This  Option  shall  immediately
terminate  after  _______________,  or  upon  the  earlier  termination  of  the
Optionee's  employment  with  the  Company  (including,  for this  purpose,  any
subsidiary of the Company), except that if the date of such termination is after
______________, the Optionee's right to exercise the unexercised portion of this
Option shall continue to be  exercisable  but only as to the number of Shares as
to which it would  otherwise have been  exercisable for __ months after the date
of such termination (but in no event later than  _____________).  The Optionee's
right to exercise any portion of this Option after termination of the Optionee's
employment  with  the  Company  shall  be  subject  to the  satisfaction  of the
conditions  precedent that the Optionee not take any action adversely  affecting
the Company.

                  6. Manner of  Exercise.  This Option may be  exercised  by the
delivery to the Company of a written  notice  signed by the Optionee in the form
of Exhibit A hereto, together with either (i) full payment of the purchase price
therefor in cash or by  certified  check  payable to the order of the Company or
(ii) irrevocable  instructions to a broker designated or approved by the Company
to sell Shares issuable upon exercise of this Option and promptly deliver to the
Company a portion of the proceeds  thereof  equal to the exercise  price and any
applicable  withholding  taxes.  As provided in the Plan,  the  Optionee  may be
required to remit to the Company an amount  sufficient  to satisfy any  federal,
state or local withholding tax requirements  prior to delivering to Optionee any
shares purchased upon exercise of this Option.  This Option may not be exercised
with respect to a fractional share.

<PAGE>

                  7. Restriction on Transfer. This Option may not be assigned or
transferred except by will or the law of descent and distribution and during the
Optionee's lifetime may be exercised only by Optionee.

                  8.  Notice.   Any  notice  or  communication  to  the  Company
hereunder  shall be in writing  and shall be deemed to have been duly given when
delivered in person,  or by United States mail, to the following  address (or to
such other address as the Company shall from time to time specify):

                           Data Systems & Software Inc.
                           200 Route 17
                           Mahwah, New Jersey  07340
                           Attention:  Secretary

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the date and year first above written.

                                        DATA SYSTEMS & SOFTWARE INC.

                                        By
                                           -------------------------------------
                                           Name:  George Morgenstern
                                           Title: President and CEO

---------------
Optionee

                                       2
<PAGE>

                       EXHIBIT A TO STOCK OPTION AGREEMENT

                              OPTION EXERCISE FORM

DATA SYSTEMS & SOFTWARE INC.
200 ROUTE 17
MAHWAH, NJ  07430

Gentlemen:

                  I hereby  exercise the  following  portion of the stock option
that has heretofore been granted to me as follows:

                  Date of grant________________________

                  Exercise price per share $________________________

                  Number of shares underlying option grant______________________

                  Number of shares underlying option held_______________________

                  Number of shares for which option being exercised hereby______

                  In connection with this exercise [check one]:

                  _____ I enclose my check in the amount of $______________

                  _____ I am  delivering  to a broker  designated or approved by
the Company irrevocable instructions to (i) sell shares of Common Stock acquired
upon exercise and (ii) promptly deliver to the Company a portion of the proceeds
thereof equal to the exercise price and any applicable withholding taxes.

                  I  hereby  agree  to  execute  whatever  other  documents  are
necessary in order to comply with the Plan and any applicable legal requirements
in connection with the issuance of the stock to me pursuant to the Plan.

------------------------------                    ------------------------------
Optionee (Signature)                              Social Security Number

------------------------------                    ------------------------------
Please print name

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Date                                              Address

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