Document:

EX-4.1 Form of Warrant

 

Exhibit 4.1

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE ISRAELI SECURITIES LAW, 1968, AS AMENDED, THE U.S. SECURITIES ACT OF 1933, AS
AMENDED OR UNDER ANY APPLICABLE U.S. STATE SECURITIES LAWS (COLLECTIVELY, THE “SECURITIES LAWS”).
THEY MAY NOT BE OFFERED FOR SALE, SOLD, CONVEYED, TRANSFERRED, PLEDGED, GIFTED, ASSIGNED,
ENCUMBERED OR OTHERWISE DISPOSED OF UNLESS (1) REGISTERED UNDER SUCH SECURITIES LAWS, OR (2)
PURSUANT TO AVAILABLE EXEMPTIONS FROM REGISTRATION FROM SUCH SECURITIES LAWS AND THE RULES
PROMULGATED THEREUNDER, PROVIDED THAT THE HOLDER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION. INVESTORS SHOULD BE
AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.

ORTHODONTIX, INC.

WARRANT

To purchase

                     Shares of Common Stocks (subject to adjustment) of

ORTHODONTIX, INC. (the “Company”)

at a per share price and subject to the terms detailed below

VOID AFTER 17:00 p.m. Eastern Standard Time

on the last day of the Warrant Period (as defined below)

December __, 2006

THIS IS TO CERTIFY THAT, Frost Gamma Investments Trust (the “Holder”), is entitled to purchase from
the Company, at an aggregate purchase price equal to US$                    , an aggregate of
                     (subject to adjustment as set forth herein) fully paid and non-assessable shares of
Common Stock of the Company, nominal value US$.001 per share (the “Warrant Stock”), at an exercise
price equal to US$1.504 per Warrant Stock (the “Exercise Price”) as may be adjusted hereunder,
during the period (the “Warrant Period”) commencing the execution hereof and for one month
thereafter, all subject to the terms and conditions set forth herein. The Warrant Stock shall have
the same rights, preferences and privileges attached to the Common Stock of the Company, nominal
value US$.001 per stock (the “Common Stock”).

1. EXERCISE OF WARRANT

	1.1.	 	Cash Exercise of Warrant. This Warrant may be exercised from time to time or at
any time during the Warrant period by presentation and surrender thereof to the Company at
its principal office or at such other office or agency as it may designate from time to
time, accompanied by:

	 	1.1.1.	 	A duly executed notice of exercise, in the form attached hereto as Exhibit
A (the “Exercise Notice”); and

 

 

	 	1.1.2.	 	Payment to the Company, for the account of the Company, of the aggregate Exercise
Price for the number of Warrant Stock specified in the applicable Exercise Notice,
payable in immediately available funds by wire transfer to the following bank
account at Bank Hapoalim, branch 615, account number 113323 or by banker’s check or
by any other means of payment agreed upon between the Company and the Holder. The
Exercise Price will be paid in United States Dollars.

	1.2.	 	Partial Exercise, Etc. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder to purchase the balance of the Warrant Stock
purchasable hereunder.

	1.3.	 	Issuance of Warrant Stock Upon Cash Exercise. Upon presentation and surrender of
this Warrant accompanied by a duly executed Exercise Notice and the payment of the
applicable aggregate Exercise Price pursuant to Section 1.1 above, the Company shall
promptly (i) issue to the Holder the Warrant Stock to which the Holder is entitled; and
(ii) deliver to the Holder the share certificate(s) evidencing such Warrant Stock. Upon
receipt by the Company of this Warrant, the applicable Exercise Notice and the applicable
aggregate Exercise Price, the Holder shall be deemed to be the holder of record of the
Warrant Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such stock shall not
then be actually delivered to the Holder.

	1.4.	 	Fractional Stock. No fractions of shares shall be issued in connection with the
exercise of this Warrant, and the number of shares issued shall be rounded up to the
nearest whole number.

	1.5.	 	Taxes. The Holder acknowledges that the grant of the Warrant, the issue of the
Warrant Stock and the execution and/or performance of this Warrant may have tax
consequences to the Holder and that the Company is not able to ensure or represent to the
Holder the nature and extent of such tax consequences. The Company shall pay all of the
applicable taxes and other charges payable by the Company in connection with the issuance
of the Warrant Stock and the preparation and delivery of share certificates pursuant to
this Section 1 in the name of the Holder (such as documentary stamp or similar issue or
transfer taxes in respect of the issue or delivery of shares of Common Stock on exercise
of this Warrant), but shall not pay any taxes payable by the Holder by virtue of the
holding, issuance, exercise or sale of this Warrant or the Warrant Stock by the Holder and
the Holder shall indemnify the Company, without derogating from the Holder’s obligation to
pay such amounts, for any and all charges or payments as aforesaid, which may be deducted
at source or set-off from any amounts payable to the Holder (including, without
limitation, dividends, consideration for the sale of stock or from any other source), at
the Company’s absolute and sole discretion, subject to applicable law.

	1.6.	 	Additional Documents. The Holder will sign any and all documents required by
law, the Company’s Articles of Association and/or any agreement
to which the Company is a

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party or by which it bound, to facilitate the issuance of stock upon exercise of
this Warrant.

	1.7.	 	Loss or Destruction of Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably expenses
reimbursement and satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like
tenor and date.

2. RESERVATION OF STOCK; PRESERVATION OF RIGHTS OF HOLDER

	2.1.	 	Reservation of Stock. The Company hereby agrees that, at all times prior to the
expiration or exercise of this Warrant, it will maintain and reserve, free from
pre-emptive or similar rights, such number of authorized but unissued Common Stock so that
this Warrant may be exercised without additional authorization of Common Stock after
giving effect to all other warrants, convertible securities and other rights to acquire
shares of the Company.

	2.2.	 	Preservation of Rights. The Company will not, by amendment of its organizational
documents or through reorganization, recapitalization, consolidation, merger, dissolution,
transfer of assets, issue or sale of securities or any other voluntary act, avoid or seek
to avoid the observance or performance of any of the covenants, stipulations, conditions
or terms to be observed or performed hereunder, but will at all times in good faith assist
in the carrying out of all the provisions hereof and in taking of all such actions and
making all such adjustments as may be necessary or appropriate in order to fulfill the
provisions hereof.

3. ADJUSTMENT

	3.1.	 	Adjustments. The number of Warrant Stock purchasable upon the exercise of this
Warrant and the payment of the Exercise Price shall be subject to adjustment from time to
time or upon exercise as provided in this Section 3.

	3.2.	 	Bonus Stock. In the event that during the Warrant Period the Company shall
distribute a dividend or stock pursuant to a reclassification of its stock capital to all
of the stockholders of the Company (i.e., bonus shares), then this Warrant shall
represent the right to acquire, in addition to the number of Warrant Stock indicated in
the caption of this Warrant, the amount of such bonus shares and/or to receive the stock
dividends, without payment of any additional consideration therefor, to which the Holder
would have been entitled had this Warrant been exercised prior to the distribution of the
stock dividends or the bonus shares.

	3.3.	 	Consolidation and Division. In the event that during the Warrant Period the
Company consolidates its stock capital into stock of greater par value, or subdivides them
into stock of lesser par value, then the number of Warrant Stock to be allotted on
exercise of this Warrant after such consolidation or subdivision shall be reduced or
increased accordingly, as the case may be, such increase or decrease, as the case may
be, to become effective immediately after the opening of business on the day following
the day

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upon which such subdivision or combination becomes effective, and in each case
the Exercise Price shall be adjusted appropriately such that the aggregate consideration
hereunder to the Company shall not change.

	3.4.	 	Capital Reorganization. In the event that during the Warrant Period a
reorganization of the stock capital of the Company is effected (other than subdivision,
combination or reclassification provided for elsewhere in this Section 3) and the Common
Stock are exchanged for other securities of the Company, then, as part of such
reorganization, provision shall be made so that the Holder shall be entitled to purchase
upon exercise of this Warrant such kind and number of stock or other securities of the
Company to which the Holder would have been entitled had this Warrant been exercised prior
to such reorganization, and such that the aggregate consideration to the Company hereunder
shall not change.

4. NOTICE OF CERTAIN EVENTS

If at any time during the Warrant Period (i) there shall be any capital reorganization or
reclassification of the stock capital of the Company or any other event set forth in Section 3
above; or (ii) there shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company, then, in any one or more of said events, the Company shall deliver to the Holder prior
written notice thereof, including the date on which (a) a record shall be taken in connection with
such event and (b) the consummation date of such event. Such written notice shall be delivered to
the Holder at least thirty (30) days prior to the consummation of the applicable event and not less
than thirty (30) days prior to the record date in respect thereto (subject to the provisions of
Section 7 herein).

5. NOTICE OF ADJUSTMENTS

Whenever an adjustment pursuant to Section 3 above is effected, the Company shall promptly compute
such adjustment and deliver to the Holder a certificate setting forth the number of Warrant Stock
(or any other securities) for which this Warrant is exercisable and the Exercise Price as a result
of such adjustment, a brief statement of the facts requiring such adjustment and the computation
thereof and when such adjustment has or will become effective.

6. RIGHTS OF THE HOLDER

The Holder acknowledges that the Warrant Stock shall be subject to such certain rights, privileges,
restrictions and limitations as set forth in this Warrant and the Articles of Association of the
Company, as may be amended from time to time, and that, as a result, inter alia, of such
limitations, it may be difficult or impossible for the Holder to realize his investment and/or to
sell or otherwise transfer the Warrant Stock. The Holder further acknowledges that the Company’s
stock are not listed for trading and therefore the sale and transfer thereof may be subject to
further limitations. This Warrant shall not entitle the Holder, by virtue hereof, to any voting
rights or other rights as a stockholder of the Company, except for the rights expressly set forth
herein.

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7. TERMINATION

Notwithstanding anything to the contrary, this Warrant and all the rights conferred hereby
shall terminate and expire upon the aforementioned time on the last day of the Warrant Period.

8. MISCELLANEOUS

	8.1.	 	Entire Agreement; Amendment. This Warrant sets forth the entire understanding of
the parties with respect to the subject matter hereof and supersedes all existing
agreements among them concerning such subject matter. All article and section headings
herein are inserted for convenience only and shall not modify or affect the construction
or interpretation of any provision of this Warrant. No modification or amendment of this
Warrant will be valid unless executed in writing by the Company and the Holder.

	8.2.	 	Waiver. No failure or delay on the part of any of the parties in exercising any
right, power or privilege hereunder and/or under any applicable laws or the exercise of
such right or power in a manner inconsistent with the provisions of this Warrant or
applicable law shall operate as a waiver thereof. Any waiver must be evidenced in writing
signed by the party against whom the waiver is sought to be enforced.

	8.3.	 	Successors and Assigns; Assignment. Except as otherwise expressly limited
herein, this Warrant shall inure to the benefit of, be binding upon, and be enforceable by
the Holder and its respective successors, assigns, and administrators. The Holder
represents and warrants to the Company that the Warrant Stock, if and when purchased by
the Holder, are for the Holder’s own account and for investment purposes only and not with
a view for resale or transfer and that all the rights pertaining to the Warrant Stock, by
law or equity, shall be purchased and possessed by the Holder for the Holder exclusively.
Holder may not assign, transfer, pledge or otherwise encumber or dispose any of the
rights, privileges, or obligations set forth in, arising under, or created by this
Warrant, other than in accordance with the Articles of Association of the Company,
applicable law and any other contractual undertaking of the Holder, including any lock up
undertaking. In any event no assignment or transfer of the Warrant or the Warrant Stock
may be effected if any such assignment or transfer may render the Company a public company
or require, as a result thereof, the Company to file any registration statement,
prospectus reports or documents with the US Securites and Exchange Commission or any
Stock Exchange or other similar institution in any jurisdiction.

	8.4.	 	Notices. Any notice required or permitted to be given to a party pursuant to the
provisions of this Warrant will be in writing and will be effective and deemed delivered
to such party on the earliest of the following: (a) all notices and other communications
delivered in person or by courier service shall be deemed to have been delivered as of
actual delivery thereof; or, (b) those given by facsimile transmission shall be deemed
delivered on the following business day after transmission, with confirmed transmission
thereof; or (c) all notices and other
communications sent by registered mail (or air mail if the posting is international)
shall be deemed given seven (7) days after posting.

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	8.5.	 	Severability. If any provision of this Warrant is held to be unenforceable, this
Warrant shall be considered divisible and such provision shall be deemed inoperative to
the extent it is deemed unenforceable, and in all other respects this Warrant shall remain
in full force and effect; provided, however, that if any such provision
may be made enforceable by limitation thereof, then such provision shall be deemed to be
so limited and shall be enforceable to the maximum extent permitted by applicable law.

	8.6.	 	Counterparts. This Warrant may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one instrument.
Facsimile signatures of a party shall be binding as evidence of such party’s agreement
hereto and acceptance hereof.

[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.

	 	 	 	 	 	 	 
	Dated: 31 December, 2006	 	ORTHODONTIX, INC.  
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 
	 

	 	 	 	 	 
	 

	 	 	Name: 
	David Aviezer, Ph.D.	 	 
	 

	 	 	Title:
	Chief Executive Officer	 	 

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Exhibit A

Exercise Notice

Date:                     

To: ORTHODONTIX, INC.

The undersigned, pursuant to the provisions set forth in the Warrant to which this Exercise Notice
is attached (the “Warrant”), hereby elects to purchase                      of the Warrant Stock (as such
term is defined in the Warrant) pursuant to Section 1.1 of the Warrant, and herewith makes payment
of                     , representing the full Exercise Price for such stock as provided for in such
Warrant.

	 	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

- 8 -EX-10.1 2006 Stock Incentive Plan

 

Exhibit 10.1

PROTALIX BIOTHERAPEUTICS, INC.

2006 STOCK INCENTIVE PLAN

     1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best
available personnel, to provide additional incentives to Employees, Directors and Consultants and
to promote the success of the Company’s business.

     2. Definitions. The following definitions shall apply as used herein and in the
individual Award Agreements except as defined otherwise in an individual Award Agreement. In the
event a term is separately defined in an individual Award Agreement, such definition shall
supercede the definition contained in this Section 2.

          (a) “3(I) Option” means Award granted under Section 3(I).

          (b) “102 Option” means Award granted under Section 102.

          (c) “Administrator” means the Board or any of the Committees appointed to administer
the Plan.

          (d) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.

          (e) “Applicable Laws” means the legal requirements relating to the Plan and the Awards
under applicable provisions of federal securities laws, state corporate and securities laws, the
Code, the rules of any applicable stock exchange or national market system, and the rules of any
non-U.S. jurisdiction applicable to Awards granted to residents therein.

          (f) “Assumed” means that pursuant to a Corporate Transaction either (i) the Award is
expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are
expressly assumed (and not simply by operation of law) by the successor entity or its Parent in
connection with the Corporate Transaction with appropriate adjustments to the number and type of
securities of the successor entity or its Parent subject to the Award and the exercise or purchase
price thereof which at least preserves the compensation element of the Award existing at the time
of the Corporate Transaction as determined in accordance with the instruments evidencing the
agreement to assume the Award.

          (g) “Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted
Stock, Restricted Stock Unit or other right or benefit under the Plan.

          (h) “Award Agreement” means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.

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

          (j) “Cause” means, with respect to the termination by the Company or a Related Entity
of the Grantee’s Continuous Service, that such termination is for “Cause” as such term (or word of
like import) is expressly defined in a then-effective written agreement between the

 

 

Grantee and the Company or such Related Entity, or in the absence of such then-effective
written agreement and definition, is based on, in the determination of the Administrator, the
Grantee’s: (i) performance of any act or failure to perform any act in bad faith which is
materially detrimental to the Company or a Related Entity as reasonably determined in good faith by
a unanimous decision of members of the Board entitled to vote thereon; (ii) dishonesty, intentional
misconduct or material breach of any agreement with the Company or a Related Entity; (iii)
commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any
person; (iv) embezzlement of funds of the Company or a Related Entity; (v) ownership, direct or
indirect (i.e., by means of a holding company or family member), of an interest in a person or
entity (other than a minority interest in a publicly traded company) in competition with the
products or services of the Company or a Related Entity, including those products or services
contemplated in a plan adopted by the Board; (vi) any breach of the Grantee’s fiduciary duties or
duties of care to the Company or a Related Entity (except for conduct taken in good faith); (vii)
any material failure to carry out a reasonable and legitimate directive of the Board; or (viii) any
material breach of an Employee’s undertakings of confidentiality and non competition.

          (k) “Change in Control” means a change in ownership or control of the Company effected
through either of the following transactions:

               (i) the direct or indirect acquisition by any person or related group of persons (other than
an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a
person that directly or indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting power of the
Company’s outstanding securities pursuant to a tender or exchange offer made directly to the
Company’s stockholders which a majority of the Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such stockholders accept, or

               (ii) a change in the composition of the Board over a period of twelve (12) months or less such
that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one
or more contested elections for Board membership, to be comprised of individuals who are Continuing
Directors.

          (l) “Code” means the Internal Revenue Code of 1986, as amended.

          (m) “Committee” means any committee composed of members of the Board appointed by the
Board to administer the Plan.

          (n) “Common Stock” means the common stock of the Company.

          (o) “Company” means Protalix BioTherapeutics, Inc., a Florida corporation, or any
successor entity that adopts the Plan in connection with a Corporate Transaction.

          (p) “Consultant” means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity.

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          (q) “Continuing Directors” means members of the Board who either (i) have been Board
members continuously for a period of at least twelve (12) months or (ii) have been Board members
for less than twelve (12) months and were elected or nominated for election as Board members by at
least a majority of the Board members described in clause (i) who were still in office at the time
such election or nomination was approved by the Board.

          (r) “Continuous Service” means that the provision of services to the Company or a
Related Entity in any capacity of Employee, Director or Consultant is not interrupted or
terminated. In jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity notwithstanding any required
notice period that must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the entity for which the
Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the
Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in
the Award Agreement). An approved leave of absence shall include sick leave, military leave, or
any other authorized personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such leave is not
guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a
Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of
such three (3) month period.

          (s) “Corporate Transaction” means any of the following transactions, provided,
however, that the Administrator shall determine under parts (iv) and (v) whether multiple
transactions are related, and its determination shall be final, binding and conclusive:

               (i) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the Company is
incorporated;

               (ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company;

               (iii) the complete liquidation or dissolution of the Company;

               (iv) any reverse merger or series of related transactions culminating in a reverse merger
(including, but not limited to, a tender offer followed by a reverse merger) in which the Company
is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such
merger are converted or exchanged by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, or (B) in which securities possessing more than forty percent
(40%) of the total combined voting power of the Company’s outstanding securities are transferred to
a person or persons different from those who held such

3

 

securities immediately prior to such merger or the initial transaction culminating in such
merger; or

               (v) acquisition in a single or series of related transactions by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction (provided however that the Administrator shall have no
discretion in connection with a Corporate Transaction for the purchase of all or substantially all
of the shares of the Company unless the principal purpose of such transaction is to change the
state in which the Company is incorporated).

          (t) “Covered Employee” means an Employee who is a “covered employee” under Section
162(m)(3) of the Code.

          (u) “Director” means a member of the Board or the board of directors of any Related
Entity.

          (v) “Disability” means as defined under the long-term disability policy of the Company
or the Related Entity to which the Grantee provides services regardless of whether the Grantee is
covered by such policy. If the Company or the Related Entity to which the Grantee provides service
does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to
carry out the responsibilities and functions of the position held by the Grantee by reason of any
medically determinable physical or mental impairment for a period of not less than ninety (90)
consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.

          (w) “Dividend Equivalent Right” means a right entitling the Grantee to compensation
measured by dividends paid with respect to Common Stock.

          (x) “Employee” means any person, including an Officer or Director, who is in the
employ of the Company or any Related Entity, subject to the control and direction of the Company or
any Related Entity as to both the work to be performed and the manner and method of performance.
The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.

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

          (z) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

               (i) If the Common Stock is listed on one or more established stock exchanges or national
market systems, including without limitation the American Stock Exchange, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on the principal exchange or system on which the

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Common Stock is listed (as determined by the Administrator) on the date of determination (or,
if no closing sales price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the
closing sales price for such stock as quoted on such system or by such securities dealer on the
date of determination, but if selling prices are not reported, the Fair Market Value of a share of
Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on
the date of determination (or, if no such prices were reported on that date, on the last date such
prices were reported), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

               (iii) In the absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good
faith.

          (aa) “Grantee” means an Employee, Director or Consultant who receives an Award under
the Plan.

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

          (cc) “Israeli Employee” means Employees, office holders of the Company or a Related
Company (“Nosei Misra” — as such term is defined in the Israeli Companies Law 1999) and Directors
(excluding those who are considered a “Controlling Shareholder” pursuant to Section 32(9) of the
Tax Ordinance or otherwise excluded by the Tax Ordinance).

          (dd) “Israeli Grantee” means Grantees who are residents of the State of Israel or
those who are deemed to be residents of the State of Israel for the payment of tax (whether such
grantee is entitled to the tax benefits under Section 102 or not).

          (ee) “ITA” means Israeli Tax Authorities.

          (ff) “Non-Employee” means Consultants or any other person who is not an Israeli
Employee.

          (gg) “Non-Qualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

          (hh) “Non-Trustee 102 Option” shall mean a 102 Option granted pursuant to Section
102(c) of the Tax Ordinance and not held in trust by the Trustee.

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

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          (jj) “Option” means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.

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

          (ll) “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.

          (mm) “Plan” means this 2006 Stock Incentive Plan.

          (nn) “Related Entity” means any Parent or Subsidiary of the Company. With respect to
Israeli Grantees of 102 Options, the definition shall further include any entity permitted under
Section 102 (a) of the Tax Ordinance.

          (oo) “Replaced” means that pursuant to a Corporate Transaction the Award is replaced
with a comparable stock award or a cash incentive program of the Company, the successor entity (if
applicable) or Parent of either of them which preserves the compensation element of such Award
existing at the time of the Corporate Transaction and provides for subsequent payout in accordance
with the same (or a more favorable) vesting schedule applicable to such Award. The determination
of Award comparability shall be made by the Administrator and its determination shall be final,
binding and conclusive.

          (pp) “Restricted Stock” means Shares issued under the Plan to the Grantee for such
consideration, if any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as established by the
Administrator.

          (qq) “Restricted Stock Units” means an Award which may be earned in whole or in part
upon the passage of time or the attainment of performance criteria established by the Administrator
and which may be settled for cash, Shares or other securities or a combination of cash, Shares or
other securities as established by the Administrator.

          (rr) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

          (ss) “SAR” means a stock appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in the value of Common
Stock.

          (tt) “Section 3(I)” means section 3(I) of the Tax Ordinance as may be amended from
time to time.

          (uu) “Section 102” means section 102 of the Tax Ordinance as may be amended from time
to time.

          (vv) “Share” means a share of the Common Stock.

6

 

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

          (xx) “Tax Ordinance” means the Israeli Income Tax Ordinance [New Version], 1961
(including as amended pursuant to Amendment 132 thereto) and to the extent not specifically
indicated hereunder also the rules, regulations and orders or procedures promulgated thereunder
from time to time, as amended or replaced from time to time.

          (yy) “Trustee” means any individual appointed by the Company to serve as trustee and
approved by the ITA, in accordance with the provisions of Section 102(a) of the Tax Ordinance and
the regulations promulgated thereunder.

          (zz) “Trustee 102 Option” means a 102 Option granted pursuant to Section 102(b) of the
Tax Ordinance and held in trust by the Trustee for the benefit of an Israeli Grantee.

     3. Stock Subject to the Plan.

          (a) Subject
to the provisions of Section 10, below, the maximum aggregate number of Shares
which may be issued pursuant to all Awards (including Incentive Stock Options) under the Plan is
9,233,798 Shares. The Shares to be issued pursuant to Awards may be authorized, but unissued, or
reacquired Common Stock.

          (b) Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or
expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes
of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares
that actually have been issued under the Plan pursuant to an Award shall not be returned to the
Plan and shall not become available for future issuance under the Plan, except that if unvested
Shares are forfeited, or repurchased by the Company at the lower of their original purchase price
or their Fair Market Value at the time of repurchase, such Shares shall become available for future
grant under the Plan. To the extent not prohibited by the listing requirements of The American
Stock Exchange (or other established stock exchange or national market system on which the Common
Stock is traded) and Applicable Law, any Shares covered by an Award which are surrendered (i) in
payment of the Award exercise or purchase price (including pursuant to the “net exercise” of an
option pursuant to Section 7(b)(v)) or (ii) in satisfaction of tax withholding obligations incident
to the exercise of an Award shall be deemed not to have been issued for purposes of determining the
maximum number of Shares which may be issued pursuant to all Awards under the Plan, unless
otherwise determined by the Administrator.

     4. Administration of the Plan.

          (a) Plan Administrator.

               (i) Administration with Respect to Directors and Officers. With respect to grants of
Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws
and to permit such grants and related transactions under the Plan to be exempt from

7

 

Section
16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the Board.

               (ii) Administration With Respect to Consultants and Other Employees. With respect to
grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board. The Board may authorize one or more Officers to grant such Awards and may limit such
authority as the Board determines from time to time.

               (iii) Administration With Respect to Covered Employees. Notwithstanding the
foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based
Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised
solely of two or more Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered Employees,
references to the “Administrator” or to a “Committee” shall be deemed to be references to such
Committee or subcommittee.

               (iv) Administration With Respect to Israeli Grantees. With respect to grants of
Awards to Israeli Grantees, the Plan shall be administered by (A) the Board or (B) a Committee or
one or more Officers designated by the Board, which Committee or Officers shall be constituted or
appointed in such a manner as to satisfy the ITA and the Applicable Laws applicable to Awards for
Israeli Grantees. Once appointed, such Committee or Officer shall continue to serve in its/his/her
designated capacity until otherwise directed by the Board.

               (v) Administration Errors. In the event an Award is granted in a manner inconsistent
with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant
date to the extent permitted by the Applicable Laws.

          (b) Powers of the Administrator. Subject to Applicable Laws and the provisions of the
Plan (including any other powers given to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the authority, in its discretion:

               (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time
to time hereunder;

               (ii) to determine whether and to what extent Awards are granted hereunder;

               (iii) to determine the number of Shares or the amount of other consideration to be covered by
each Award granted hereunder;

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

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

8

 

               (vi) to amend the terms of any outstanding Award granted under the Plan, provided that any
amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be
made without the Grantee’s written consent, provided, however, that an amendment or modification
that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee. The reduction of the exercise price of
any Option awarded under the Plan and the base appreciation amount of any SAR awarded under the
Plan shall not be subject to stockholder approval and canceling an Option or SAR at a time when its
exercise price or base appreciation amount (as applicable) exceeds the Fair Market Value of the
underlying Shares, in exchange for another Option, SAR, Restricted Stock, or other Award shall not
be subject to stockholder approval and shall be at the discretion of the Administrator;

               (vii) to construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the Plan;

               (viii) to grant Awards to Employees, Directors and Consultants employed outside the United
States on such terms and conditions different from those specified in the Plan as may, in the
judgment of the Administrator, be necessary or desirable to further the purpose of the Plan; and

               (ix) to designate Awards as 102 Options (whether through a trustee or not) or 3(I) Options
subject to the limitations under the ITA or any other Applicable Law and to determine the type and
route of the Trustee 102 Options.

               (x) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

The express grant in the Plan of any specific power to the Administrator shall not be construed as
limiting any power or authority of the Administrator; provided that the Administrator may not
exercise any right or power reserved to the Board. Any decision made, or action taken, by the
Administrator or in connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan.

          (c) Indemnification. In addition to such other rights of indemnification as they may
have as members of the Board or as Officers or Employees of the Company or a Related Entity,
members of the Board and any Officers or Employees of the Company or a Related Entity to whom
authority to act for the Board, the Administrator or the Company is delegated shall be defended and
indemnified by the Company to the extent permitted by law on an after-tax basis against all
reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection
with the defense of any claim, investigation, action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan, or any Award granted hereunder, and against
all amounts paid by them in settlement thereof (provided such settlement
is approved by the Company) or paid by them in satisfaction of a judgment in any such claim,
investigation, action, suit or proceeding, except in relation to matters as to which it shall be
adjudged in such claim, investigation, action, suit or proceeding that such person is liable for

9

 

gross negligence, bad faith or intentional misconduct; provided, however, that within thirty (30)
days after the institution of such claim, investigation, action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the
same.

     5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of
the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who
has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be
granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as
the Administrator may determine from time to time, provided however that Awards to Israeli Grantees
under Section 102 or Section 3(I) of the Tax Ordinance shall be subject to Section 20 below.

     The Company does not warrant that the Plan will be recognized by the income tax authorities in
any jurisdiction or that future changes will not be made to the provisions of applicable laws or
rules or regulations which are promulgated from time to time thereunder, or that any exemption or
benefit currently available, whether by the ITA pursuant to Section 102 or otherwise, will not be
abolished.

     6. Terms and Conditions of Awards.

          (a) Types of Awards. The Administrator is authorized under the Plan to award any type
of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions
of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) cash
or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair
Market Value of the Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance criteria or other
conditions. Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted
Stock, Restricted Stock Units or Dividend Equivalent Rights, and an Award may consist of one such
security or benefit, or two (2) or more of them in any combination or alternative.

          (b) Designation of Award. Each Award shall be designated in the Award Agreement. In
the case of an Option, the Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option and with respect to Israeli Grantees may be further designated as 102
Options or 3(I) Options under the Tax Ordinance subject to the qualifications described in Section
20 below. However, notwithstanding such designation, an Option will qualify as an Incentive Stock
Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the
Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated based on
the aggregate Fair Market Value of the Shares subject to Options designated as Incentive Stock
Options which become exercisable for the first time by a Grantee during any calendar year (under
all plans of the Company or any Parent or Subsidiary of the Company). For purposes of this
calculation, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market Value of the
Shares shall be determined as of the grant date of the relevant Option.

10

 

          (c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall
determine the provisions, terms, and conditions of each Award including, but not limited to, the
Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form
of payment (cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, the following: (i) increase in
share price, (ii) earnings per share, (iii) total stockholder return, (iv) operating margin, (v)
gross margin, (vi) return on equity, (vii) return on assets, (viii) return on investment, (ix)
operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii) revenue,
(xiv) expenses, (xv) earnings before interest, taxes and depreciation, (xvi) economic value added
and (xvii) market share. The performance criteria may be applicable to the Company, Related
Entities and/or any individual business units of the Company or any Related Entity. Partial
achievement of the specified criteria may result in a payment or vesting corresponding to the
degree of achievement as specified in the Award Agreement.

          (d) Acquisitions and Other Transactions. The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant
future awards in connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.

          (e) Deferral of Award Payment. The Administrator may establish one or more programs
under the Plan to permit selected Grantees the opportunity to elect to defer receipt of
consideration upon exercise of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish the election procedures, the timing
of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if
any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules
and procedures that the Administrator deems advisable for the administration of any such deferral
program.

          (f) Separate Programs. The Administrator may establish one or more separate programs
under the Plan for the purpose of issuing particular forms of Awards to one or more classes of
Grantees on such terms and conditions as determined by the Administrator from time to time.

          (g) Individual Limitations on Awards.

               (i) Individual Limit for Options and SARs. The maximum number of Shares with respect
to which Options and SARs may be granted to any Grantee in any calendar year shall be 9,233,798
Shares. Shares which shall not count against the limit set forth in the previous sentence. The
foregoing limitations shall be adjusted proportionately in connection with any change in the
Company’s capitalization pursuant to Section 10, below. To the extent required by Section 162(m) of
the Code or the
regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if
any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the
maximum number of Shares with respect to which Options and SARs may be granted to the Grantee. For
this purpose, the repricing of an Option

11

 

(or in the case of a SAR, the base amount on which the
stock appreciation is calculated is reduced to reflect a reduction in the Fair Market Value of the
Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a
new Option or SAR.

               (ii) Individual Limit for Restricted Stock and Restricted Stock Units. For awards of
Restricted Stock and Restricted Stock Units that are intended to be Performance-Based Compensation,
the maximum number of Shares with respect to which such Awards may be granted to any Grantee in any
calendar year shall be 9,233,798 Shares. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company’s capitalization pursuant to Section
10, below.

               (iii) Deferral. If the vesting or receipt of Shares under an Award is deferred to a
later date, any amount (whether denominated in Shares or cash) paid in addition to the original
number of Shares subject to such Award will not be treated as an increase in the number of Shares
subject to the Award if the additional amount is based either on a reasonable rate of interest or
on one or more predetermined actual investments such that the amount payable by the Company at the
later date will be based on the actual rate of return of a specific investment (including any
decrease as well as any increase in the value of an investment).

          (h) Early Exercise. The Award Agreement may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any
part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.

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

          (j) Transferability of Awards. Incentive Stock Options or Options to Israeli Grantees
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised, during the lifetime of
the Grantee, only by the Grantee. Other Awards shall be transferable (i) by will and by the laws
of descent and distribution and (ii) during the lifetime of the Grantee, to the extent and in the
manner authorized by the Administrator. Notwithstanding the foregoing, the Grantee may designate
one or more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a
beneficiary designation form provided by the Administrator.

          (k) Time of Granting Awards. The date of grant of an Award shall for all purposes be
the date on which the Administrator makes the determination to grant such Award, or such other date
as is determined by the Administrator.

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     7. Award Exercise or Purchase Price, Consideration and Taxes.

          (a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award
shall be as follows:

               (i) In the case of an Incentive Stock Option:

                    (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns
stock representing more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less
than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

                    (B) granted to any Employee other than an Employee described in the preceding paragraph, the
per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.

               (ii) In the case of Awards intended to qualify as Performance-Based Compensation, the exercise
or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair Market
Value per Share on the date of grant.

               (iii) In the case of other Awards, such price as is determined by the Administrator.
Notwithstanding the foregoing, with respect to Israeli Grantees, unless otherwise restricted or has
an adverse effect on the Company or a Related Company, such price shall be equal to the price per
share paid in the most recent financing round consummated prior to the date of grant of the
respective Award discounted by no less than 30%.

               (iv) Notwithstanding
the foregoing provisions of this Section 7(a), in the case of an Award
issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be
determined in accordance with the provisions of the relevant instrument evidencing the agreement to
issue such Award.

          (b) Consideration. Subject to Applicable Laws, the consideration to be paid for the
Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator. In addition to any other types of consideration the Administrator
may determine, the Administrator is authorized to accept as consideration for Shares issued under
the Plan the following:

               (i) cash;

               (ii) check;

               (iii) surrender of Shares or delivery of a properly executed form of attestation of ownership
of Shares as the Administrator may require which have a Fair Market Value on the date of surrender
or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be
exercised;

13

 

               (iv) with respect to Options, payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (A) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the
Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and
(B) shall provide written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale transaction; or

               (v) with respect to Options, payment through a “net exercise” such that, without the payment
of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i)
the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the
numerator of which is the Fair Market Value per Share (on such date as is determined by the
Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market
Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole
number of Shares);

               (vi) any combination of the foregoing methods of payment.

The Administrator may at any time or from time to time, by adoption of or by amendment to the
standard forms of Award Agreement described in Section 4(b)(iv), or by other means, grant Awards
which do not permit all of the foregoing forms of consideration to be used in payment for the
Shares or which otherwise restrict one or more forms of consideration.

          (c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person
until such Grantee or other person has made arrangements acceptable to the Administrator for the
satisfaction of any non-U.S., federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to the receipt of Shares. Upon
exercise or vesting of an Award the Company shall withhold or collect from the Grantee an amount
sufficient to satisfy such tax obligations, including, but not limited to, by surrender of the
whole number of Shares covered by the Award sufficient to satisfy the minimum applicable tax
withholding obligations incident to the exercise or vesting of an Award.

     8. Exercise of Award.

          (a) Procedure for Exercise; Rights as a Stockholder.

               (i) Any Award granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Award Agreement
provided however that the standard vesting schedule for Israeli Grantees shall be as set forth in
Section 20.

               (ii) An Award shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Award by the person entitled to exercise
the Award and full payment for the Shares with respect to which the Award is exercised has been
made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to
pay the purchase price as provided in Section 7(b).

14

 

          (b) Exercise of Award Following Termination of Continuous Service. In the event of
termination of a Grantee’s Continuous Service for any reason other than Cause, Disability or death,
such Grantee may, but only within twelve (12) months from the date of such termination (or such
longer or shorter period as specified in the Award Agreement but in no event later than the
expiration date of the term of such Award as set forth in the Award Agreement), exercise the
portion of the Grantee’s Award that was vested at the date of such termination or such other
portion of the Grantee’s Award as may be determined by the Administrator. To the extent that the
Grantee’s Award was unvested at the date of termination, or if Grantee does not exercise the vested
portion of the Grantee’s Award within the time specified herein, the Award shall terminate.

          (c) Exercise of Award Following Termination of Continuous Service for Cause. In the
event of termination of a Grantee’s Continuous Service for Cause, such Grantee may, but only within
fourteen (14) days from the date of such termination (or such longer or shorter period as specified
in the Award Agreement but in no event later than the expiration date of the term of such Award as
set forth in the Award Agreement), exercise the portion of the Grantee’s Award that was vested at
the date of such termination or such other portion of the Grantee’s Award as may be determined by
the Administrator. To the extent that the Grantee’s Award was unvested at the date of termination,
or if Grantee does not exercise the vested portion of the Grantee’s Award within the time specified
herein, the Award shall terminate.

          (d) Disability of Grantee. In the event of termination of a Grantee’s Continuous
Service as a result of his or her Disability, such Grantee may, but only within twelve (12) months
from the date of such termination (or such longer or shorter period as specified in the Award
Agreement but in no event later than the expiration date of the term of such Award as set forth in
the Award Agreement), exercise the portion of the Grantee’s Award that was vested at the date of
such termination or such other portion of the Grantee’s Award as may be determined by the
Administrator. To the extent that the Grantee’s Award was unvested at the date of termination, or
if Grantee does not exercise the vested portion of the Grantee’s Award within the time specified
herein, the Award shall terminate.

          (e) Death of Grantee. In the event of a termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the death of the Grantee during the
post-termination exercise periods following the Grantee’s termination of Continuous Service
specified in this Section 8, above, the Grantee’s estate or a person who acquired the right to
exercise the Award by bequest or inheritance may exercise the portion of the Grantee’s Award that
was vested as of the date of termination or such other portion of the Grantee’s Award as may be
determined by the Administrator, within twelve (12) months from the date of death (or such longer
or shorter period as specified in the Award Agreement but in no event later than the expiration of
the term of such Award as set forth in the Award Agreement). To the extent that, at the time of
death, the Grantee’s Award was unvested, or if the Grantee’s estate or a person who
acquired the right to exercise the Award by bequest or inheritance does not exercise the
vested portion of the Grantee’s Award within the time specified herein, the Award shall terminate.

15

 

          (f) The holder of an Option shall have none of the rights of a stockholder with respect to the
Shares subject to the Option until such shares are transferred to the holder (or the Trustee, if
applicable) upon the exercise of the Option.

     9. Conditions Upon Issuance of Shares.

          (a) If at any time the Administrator determines that the delivery of Shares pursuant to the
exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws,
the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of
an Award shall be suspended until the Administrator determines that such delivery is lawful and
shall be further subject to the approval of counsel for the Company with respect to such
compliance. The Company shall have no obligation to effect any registration or qualification of
the Shares under federal or state laws or other Applicable Laws.

          (b) As a condition to the exercise of an Award, the Company may require the person exercising
such Award make such representations and warranties which, in the opinion of the Company, are
required to ensure that such exercise, or a subsequent sale or disposition of any Shares obtained
upon such exercise, does not contravene any Applicable Law, including inter alia, representations
and warranties at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares if, in the opinion
of counsel for the Company, such a representation is required by any Applicable Laws.

          (c) Unless otherwise set forth in an Award Agreement, Shares issued to a Grantee or the
Trustee, as applicable, shall be subject to such restrictions as required by the appropriate
securities’ law and in the event that the Company’s shares shall be registered for trading
in any public market, Grantee’s rights to sell the Shares may be subject to certain
limitations (including a lock-up period), as will be requested by the Company or its
underwriters, and the Grantee by executing an Award Agreement unconditionally agrees and accepts
any such limitations and undertakes to further execute any agreement as may be requested by the
Company or its underwriters from time to time.

     10. Adjustments Upon Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding Award, and the number
of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet
been granted or which have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, the maximum number of Shares with respect to which Options and SARs may be
granted to any Grantee in any calendar year, as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in
the number of issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii)
any other increase or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) any other transaction with respect to Common Stock including
a corporate merger, consolidation, acquisition of property or stock,
separation (including a spin-off or other distribution of stock or property), reorganization,
liquidation (whether partial or complete) or any similar transaction; provided, however that
conversion of any convertible securities of the Company shall not be deemed to have been

16

 

“effected
without receipt of consideration.” In connection with the foregoing adjustments, the Administrator
may, in its discretion, prohibit the exercise of Awards during certain periods of time. Except as
the Administrator determines, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be
made with respect to, the number or price of Shares subject to an Award.

     11. Corporate Transactions and Changes in Control.

          (a) Termination of Award to Extent Not Assumed in Corporate Transaction. Effective
upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall
terminate. However, all such Awards shall not terminate to the extent they are Assumed in
connection with the Corporate Transaction.

          (b) Acceleration of Award Upon Corporate Transaction or Change in Control.

               (i) Corporate Transaction. Except as provided otherwise in an individual Award
Agreement, in the event of a Corporate Transaction and:

                    (A) for the portion of each Award that is Assumed or Replaced, then such Award (if Assumed),
the replacement Award (if Replaced), or the cash incentive program (if Replaced) automatically
shall become fully vested, exercisable and payable and be released from any repurchase or
forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the
Shares (or other consideration) at the time represented by such Assumed or Replaced portion of the
Award, immediately upon termination of the Grantee’s Continuous Service if such Continuous Service
is terminated by the successor company or the Company without Cause within twelve (12) months after
the Corporate Transaction; and

                    (B) for the portion of each Award that is neither Assumed nor Replaced, such portion of the
Award shall automatically become fully vested and exercisable and be released from any repurchase
or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the
Shares (or other consideration) at the time represented by such portion of the Award, immediately
prior to the specified effective date of such Corporate Transaction, provided that the Grantee’s
Continuous Service has not terminated prior to such date.

               (ii) Change in Control. Except as provided otherwise in an individual Award
Agreement, following a Change in Control (other than a Change in Control which also is a Corporate
Transaction) and upon the termination of the Continuous Service of a Grantee if such Continuous
Service is terminated by the Company or Related Entity without Cause within twelve (12) months
after a Change in Control, each Award of such Grantee which is at the time outstanding under the
Plan automatically shall become fully vested and exercisable and be released from any repurchase or
forfeiture rights (other than repurchase rights exercisable at Fair Market Value), immediately upon
the termination of such Continuous Service.

          (c) Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option
accelerated under this Section 11 in connection with a Corporate Transaction or Change in Control
shall remain exercisable as an Incentive Stock Option under the Code only to the extent the
$100,000 dollar limitation of Section 422(d) of the Code is not exceeded.

17

 

     12. Effective Date and Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board or its approval by the stockholders of the Company. It shall
continue in effect for a term of ten (10) years unless sooner
terminated. Subject to Section 17,
below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

     13. Amendment, Suspension or Termination of the Plan.

          (a) The Board may at any time amend, suspend or terminate the Plan; provided, however, that no
such amendment shall be made without the approval of the Company’s stockholders to the extent such
approval is required by Applicable Laws, or if such amendment would lessen the stockholder approval
requirements of Section 4(b)(vi) or this Section 13(a).

          (b) No Award may be granted during any suspension of the Plan or after termination of the
Plan.

          (c) No suspension or termination of the Plan (including termination of the Plan under Section
11, above) shall adversely affect any rights under Awards already granted to a Grantee.

     14. Reservation of Shares.

          (a) The Company, during the term of the Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

          (b) The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.

     15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or any Related Entity to
terminate the Grantee’s Continuous Service at any time, with or without Cause, and with or without
notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee
who is employed at will is in no way affected by its determination that the Grantee’s Continuous
Service has been terminated for Cause for the purposes of this Plan.

     16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided
in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be
deemed compensation for purposes of computing benefits or contributions under any retirement
plan of the Company or a Related Entity, and shall not affect any benefits under any other
benefit plan of any kind or any benefit plan subsequently instituted under which the availability
or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or
“Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

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     17. Stockholder Approval. The grant of Incentive Stock Options under the Plan shall
be subject to approval by the stockholders of the Company within twelve (12) months before or after
the date the Plan is adopted excluding Incentive Stock Options issued in substitution for
outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such stockholder
approval shall be obtained in the degree and manner required under Applicable Laws. The
Administrator may grant Incentive Stock Options under the Plan prior to approval by the
stockholders, but until such approval is obtained, no such Incentive Stock Option shall be
exercisable. In the event that stockholder approval is not obtained within the twelve (12) month
period provided above, all Incentive Stock Options previously granted under the Plan shall be
exercisable as Non-Qualified Stock Options.

     18. Unfunded Obligation. Grantees shall have the status of general unsecured
creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded
and unsecured obligations for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations. The Company shall retain at all
times beneficial ownership of any investments, including trust investments, which the Company may
make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance
of any trust or any Grantee account shall not create or constitute a trust or fiduciary
relationship between the Administrator, the Company or any Related Entity and a Grantee, or
otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any
assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or
any Related Entity for any changes in the value of any assets that may be invested or reinvested by
the Company with respect to the Plan.

     19. Construction. Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.

     20. Israeli Grantees. This Section shall apply only to Israeli Grantees and is
intended to enable the Company to grant Awards under the Plan pursuant and subject to Section 102
and Section 3(I) of the Tax Ordinance. Accordingly, the Plan is designated to comply with the Tax
Ordinance and the rules, regulations and orders or procedures promulgated thereunder from time to
time, as amended or replaced from time to time and shall be submitted to the ITA as required
thereunder.

In any case of contradiction, whether explicit or implied, between the provisions of this Section
and the Plan, the provisions set out in this Section shall prevail unless the Administrator decides
otherwise to ensure compliance with the Tax Ordinance and other Applicable Laws.

          (a) Eligibility. 102 Options may be granted only to Israeli Employees. Non-Employees
may only be granted 3(I) Options. The grant of an Award hereunder shall neither entitle the Grantee
to participate nor disqualify the Israeli Grantee from participating in, any

19

 

other grant of Awards
pursuant to the Plan or any other option or stock plan of the Company or any Related Company.

          (b) Grant of Awards in Trust

               (i) Grants Made Under Section 102.

          The Company may designate 102 Options as Trustee 102 Options or Non-Trustee 102
Options. The designation of Non-Trustee 102 Options and Trustee 102 Options shall be subject to
the terms and conditions set forth in Section 102 of the Tax Ordinance and the regulations
promulgated thereunder.

               (ii) Grant of Trustee 102 Options.

                    (1) The grant of the Trustee 102 Options shall be made under the Plan and shall be conditional
upon the approval of the Plan by the ITA. Trustee 102 Options may be granted at any time after the
passage of thirty (30) days following the delivery by the Company to the ITA of a notice pertaining
to the appointment of the Trustee and the adoption of the Plan, unless otherwise determined by the
ITA. Options which shall be granted pursuant to Section 102 and/or any Shares issued upon exercise
of such Options and/or other shares received subsequently following any realization of rights,
shall be issued to the Trustee. Each Israeli Grantee in respect of whom a Trustee 102 Option is
granted and held in trust by the Trustee shall be referred to as a “beneficial optionee” hereunder.

                    (2) Trustee 102 Option(s) may either be classified as Capital Gain Option(s) or Ordinary
Income Option(s):

                         (A) Trustee 102 Option(s) elected and designated by the Company to qualify under the capital
gain tax treatment in accordance with the provisions of Section 102(b)(2) shall be referred to
herein as “Capital Gain Option(s)” or “CGO”.

                         (B) Trustee 102 Option(s) elected and designated by the Company to qualify under the ordinary
income tax treatment in accordance with the provisions of Section 102(b)(1) shall be referred to
herein as “Ordinary Income Option(s)” or “OIO”.

                    (3) The Company’s election of the type of Trustee 102 Options as CGO or OIO granted to
Employees (the “Election”) shall be appropriately filed with the ITA 30 days before the date of
grant of a Trustee 102 Option, unless otherwise determined by the ITA. Such Election shall become
effective beginning the first date of grant of a Trustee 102 Option under this Plan and shall
remain in effect until the end of the year following the year during which the Company first
granted Trustee 102 Options. The Election shall obligate the Company to grant only the type of
Trustee 102 Option it has elected, and shall apply to all Israeli Grantees who were granted Trustee
102 Options during the period indicated herein or therein, all in
accordance with the provisions of Section 102(g) of the Tax Ordinance. Notwithstanding, such
Election shall not prevent the Company from granting Non-Trustee 102 Options simultaneously.

20

 

                    (4) All Trustee 102 Options must be held in trust by and issued on the name of the Trustee, as
described below.

                    (5) With respect to Trustee 102 Options, the provisions of the Plan and/or an Award Agreement
shall be subject to the provisions of Section 102 and the ITA’s permit, and the said provisions and
permit shall be deemed an integral part of this Section and of the Award Agreement for the
respective Grantees thereof. Any provision of Section 102 and/or the said permit which is necessary
in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly
specified in the Plan or the Award Agreement, shall be considered binding upon the Company and the
Israeli Grantee.

               (iii)  Issuance to Trustee.

                    (1) All Trustee 102 Options granted under the Plan and/or any Shares allocated or
issued upon exercise of such Trustee 102 Options and/or other and all rights deriving from or in
connection therewith, including, without limitation, in accordance with Section 10 above or any
bonus shares or stock dividends issued in connection therewith shall be granted by the Company to
the Trustee, and the Trustee shall hold each such Trustee 102 Option and the Shares issued upon
exercise thereof in trust for such period of time as required by Section 102 or any regulations,
rules or orders or procedures promulgated thereunder (the “Holding Period”), for the benefit of the
Grantees in respect of whom such Trustee 102 Option was granted. All certificates representing
Shares issued to the Trustee under the Plan shall be deposited with the Trustee, and shall be held
by the Trustee until such time that such Shares are released from the Trust as herein provided.

                    (2) In event the requirements for Trustee 102 Options are not met for any reason whatsoever,
then the Trustee 102 Options may be treated as Non-Trustee 102 Options, all in accordance with the
provisions of Section 102 and regulations promulgated thereunder.

                    (3) With respect to any Trustee 102 Option, subject to the provisions of Section 102 and any
rules or regulations or orders or procedures promulgated thereunder, an Israeli Grantee shall not
be entitled to sell or release from Trust the Trustee 102 Option, the Shares received upon the
exercise of such Option and/or any right deriving from or in connection therewith,
including, without limitation, in accordance with Section 10 above or any bonus shares or stock
dividends issued in connection therewith, until the later of: (i) the lapse of the Holding Period
required under Section 102, and (ii) the vesting of such Options set forth in the respective Award
Agreement (such later date being hereinafter referred to as the “Release Date”). Notwithstanding
the foregoing, if such sale or release occurs during the Holding period, the provisions of Section
102 and the rules or regulations promulgated thereunder shall apply and any expenses and/or tax
consequences therefrom shall be borne by the Israeli Grantee.

                    (4) Subject to the terms hereof, at any time after the Release Date with respect to any
Trustee 102 Options or Shares the following shall apply:

21

 

                         (A) Trustee 102 Options granted, and/or Shares or rights issued to the Trustee shall continue
to be held by the Trustee, on behalf of the beneficial optionee. From and after the Release Date,
upon the written request of any beneficial optionee, the Trustee shall release from the Trust the
Trustee 102 Options granted, and/or the Shares or rights issued, on behalf of such beneficial
optionee, by executing and delivering to the Company such instrument(s) as the Company may require,
giving due notice of such release to such beneficial optionee, provided, however, that the Trustee
shall not so release any such Trustee 102 Options and/or Shares and/or rights to such beneficial
optionee unless the latter, prior to, or concurrently with, such release, provides the Trustee with
evidence, satisfactory in form and substance to the Trustee, that all taxes, if any, required to be
paid upon such release have, in fact, been paid.

                         (B) Alternatively, from and after the Release Date, upon the written instructions of the
beneficial optionee to sell any Shares and rights issued upon exercise of Trustee 102 Options, the
Trustee shall use its best efforts to effect such sale and shall transfer such Shares to the
purchaser thereof concurrently with the receipt, or after having made suitable arrangements to
secure the payment, of the purchase price in such transactions. The Trustee shall withhold from
such proceeds any and all taxes required to be paid in respect of such sale, shall remit the amount
so withheld to the appropriate tax authorities and shall pay the balance thereof directly to the
beneficial optionee, reporting to such beneficial optionee and to the Company the amount so
withheld and paid to said authorities.

                         (C) Notwithstanding the foregoing, in the event the underwriters of securities of the Company
impose restrictions on the transferability of the Shares during a lock-up period, the beneficial
optionee shall not be entitled to release from Trust the Trustee 102 Options granted and/or the
Shares issued and/or to instruct the Trustee to effect a sale of same, for as long as the
restrictions are in effect. In the event the Trustee 102 Options granted and/or the Shares issued
have been released from trust the restrictions imposed on the transferability of same shall
nevertheless apply to said optionee’s Trustee 102 Options and/or Shares in the same manner.
Consequently, the Israeli Grantee shall sign any documents required in order to effect the
restrictions, for as long as the restrictions are in effect.

                         (D) Upon receipt of the Award, the Israeli Grantee will sign an undertaking to release the
Trustee from any liability in respect of any action or decision duly taken and bona fide executed
in relation with the Plan, or any Option or Share or rights granted to same thereunder. The Trustee
may establish additional terms and conditions in connection with Awards held in trust by the
Trustee.

               (iv) Grant of Non-Trustee 102 Options

                    (1) Awards granted pursuant to this subsection are intended to constitute Non-Trustee 102
Options and shall be subject to the general terms and conditions of
the Plan and Section 20, except for provisions of the Plan applying to Trustee 102 Awards or
Options under a different tax law or regulation.

22

 

                    (2) With respect to Non-Trustee 102 Options, if the Grantee ceases to be employed by or of
service to the Company or a Related Company, the Grantee may be required to extend to the Company a
security or guarantee for the payment of tax due at the time of sale of Shares or other rights, all
in accordance with the provisions of Section 102 and the rules, regulation or orders promulgated
thereunder.

               (v) Grants Made Under Section 3(I). Awards granted pursuant to this subsection are
intended to constitute 3(I) Options and shall be subject to the general terms and conditions of the
Plan and Section 20 thereof, except for said provisions of the Plan applying to Awards under a
different tax law or regulation. The Administrator may choose to deposit the Awards granted
pursuant to Section 3(I) of the Tax Ordinance with a trustee. In such event, said trustee shall
hold such Option in trust, until exercised by the Grantee, pursuant to the Company’s instructions
from time to time. If determined by the Administrator, the trustee shall be responsible for
withholding any taxes to which a Grantee become liable upon the exercise of Options.

          (c) Award Agreement. Without derogating from the powers of the Administrator under the
Plan, the Administrator shall adopt the form of Award Agreement for Israeli Grantees in form
acceptable by the ITA and in compliance with the Tax Ordinance. The Award Agreement shall further
indicate the type of Options (102, 3(I), Trustee, Non-Trustee etc.) granted thereunder.

          (d) Vesting. Without derogating from the terms of any Award Agreement or the
discretionary authority of the Administrator, the standard vesting for Options to Israeli Grantees
shall be as follows:

               (i) Twenty five percent (25%) of the Options granted under each Award Agreement shall vest on
the end of the first year of Continuous Service following the vesting commencement date determined
by the Administrator and if not specified the date of the grant of an Option (the “First
Anniversary”); and

               (ii) The remaining 75% of the Options shall vest on a quarterly basis over a period of three
years commencing as of the First Anniversary in twelve (12) equal portions subject to Continuous
Service of the Grantee.

          (e) With respect to all Shares (in contrast to unexercised Options) allocated or issued upon
the exercise of Options by the Israeli Grantee, the Grantee shall be entitled to receive dividends
in accordance with the quantity of such Shares, subject however to any applicable taxation on
distribution of dividends. Subject to the Tax Ordinance and any restrictions imposed by the Trustee
or the ITA, during the period in which Shares are held by the Trustee on behalf of the Israeli
Grantee, the cash dividends paid with respect thereto shall be paid directly to the Grantee after
deduction of withholding tax applicable thereto.

          (f) Without derogating from anything in the Plan, to the extent permitted by Applicable Laws,
any tax consequences, attributable to the Israeli Grantee, 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, a Related Company, the Trustee or the Grantee), hereunder, shall be

23

 

borne
solely by the Grantee. The Company and/or or a Related Company and/or the Trustee shall withhold
taxes according to the requirements under the Applicable Laws, rules, and regulations, including
withholding taxes at source. Furthermore, to the extent permitted by Applicable Law, the Grantee
shall agree to indemnify the Company and/or a Related Company and/or the Trustee 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 Grantee. The Administrator and/or the Trustee
shall not be required to release any Share certificate to a Grantee until all required payments
have been fully made.

          (g) The Plan, to the extent applicable to Israeli Grantees, 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 Israeli
Grantees.

24

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