Document:

[FACE OF CERTITICICATE]
NUMBER
ORDINARY SHARES
[LOGO] Syneron Medical Ltd.

INCORPORATED UNDER THE LAWS OF THE STATE OF ISRAEL
SHARES

CUSIP

SEE REVERSE FOR CERTAIN DEFINITIONS

THIS IS TO CERTIFY that

is the owner of

FULLY  AND  NON-ASSESSABLE  ORDINARY  SHARES,  PAR  VALUE  NIS 0.01 PER SHARE OF
Syneron  Medical Ltd.  (hereinafter  called the "Company")  transferable  on the
books of the  Company  by the  Registered  Holder  hereof  in  person or by duly
authorized attorney upon surrender of this Certificate  properly endorsed.  This
Certificate  and the  shares  represented  hereby  are  issued and shall be held
subject to all the  provisions  of the Articles of  Association  and  amendments
thereto of the Company.

This  Certificate  is not  valid  unless  countersigned  and  registered  by the
Transfer Agent and Registrar.

WITNESS the facsimile seal of the Company and the facsimile signatures of its
duly authorized officers.

Dated:

[SIGNATURE]
CHIEF FINANCIAL OFFICER

[SEAL]

[SIGNATURE]
CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED: AMERICAN STOCK TRANSFER & TRUST COMPANY (New York,
N.Y.) TRANSFER AGENT AND REGISTRAR

BY

AUTHORIZED SIGNATURE

[REVERSE OF CERTIFICATE]

The following  abbreviations,  when used in the  inscription on the face of this
certificate,  shall  be  construed  as  though  they  were  written  out in full
according to applicable laws or regulations:

TEN COM - as tenants in common

TEN ENT - as tenants by the entireties

JT TEN - as joint tenants with right of survivorship and not as tenants in
common

UNIF GIFT MIN ACT - (Cust) Custodian (Minor) under Uniform Gifts to Minors Act
(State)

Additional abbreviations may also be used though not in the above list.

For Value Received, hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) of
the Ordinary Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint Attorney to transfer the said stock on the
books of the within named Company with full power of substitution in the
premises.

Dated

NOTICE:  THE  SIGNATURE  TO THIS  ASSIGNMENT  MUST  CORRESPOND  WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED  SIGNATURE  GUARANTEE  MEDALLION  PROGRAM),  PURSUANT TO S.E.C. RULE
17Ad-15.SYNERON MEDICAL LTD.

                             SHARE OPTION PLAN 2003

1.     NAME

       This plan,  as amended  from time to time,  shall be known as the Syneron
       Medical Ltd. Share Option Plan (2003) (the "Plan").

2.     PURPOSE

       The purpose and intent of the Plan is to serve as an incentive to attract
       new  employees,  consultants  and service  providers  and retain,  in the
       employ of the Company and its subsidiaries or affiliates  (together:  the
       "Group"),  persons of training,  experience and ability by providing them
       with  opportunities  to purchase  shares of the Company,  pursuant to the
       Plan approved by the board of directors of the Company (the "BOARD").

       This Plan shall serve as an  "umbrella"  plan for the Company and all the
       Group worldwide. Therefore, if so required, local appendices may be added
       to the  Plan  for the  various  international  subsidiaries  in  order to
       accommodate for local  circumstances  that do not fall under the scope of
       the Plan - at the  discretion  of the Board.  Options  granted under this
       Plan shall adhere to all  applicable  laws,  including but not limited to
       the Israeli Income Tax Ordinance (New Version), 1961 and any regulations,
       rules, orders or procedures promulgated thereunder as may be amended from
       time  to  time   (together   shall  be  referred  as  the   "ORDINANCE").
       Accordingly,  Options  granted under the Plan,  may contain such terms as
       will qualify the Options as options granted under a trustee scheme or any
       other  method  of  grant  permitted  by  applicable   law,   collectively
       hereinafter, the ("OPTIONS").

       The Company has chosen the CAPITAL GAINS TAX SCHEME to apply to this Plan
       regarding all grantees who are taxed under Israeli rules and are eligible
       to be included in such a scheme.

3.     ADMINISTRATION

3.1.   The Board or a share option  committee  appointed  and  maintained by the
       Board  for  such  purpose  (the  "COMMITTEE")  shall  have  the  power to
       administer  the  Plan.   Notwithstanding   the  above,  the  Board  shall
       automatically  have  a  residual  authority  if  no  Committee  shall  be
       constituted  or if such  Committee  shall cease to operate for any reason
       whatsoever. The Board shall appoint the members of the Committee, and may
       from time to time remove members from, or add members to, the Committee.

3.2.   The  Committee  shall select one of its members as its Chairman and shall
       hold its  meetings  at such  times  and  places,  as the  chairman  shall
       determine.  Actions

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                                       2

       at a meeting of the  Committee  at which a majority  of its  members  are
       present or acts  reduced to or  approved in writing by all members of the
       Committee,  shall be the valid acts of the Committee. The Committee shall
       make such rules and  regulations  for the  conduct of its  business as it
       shall deem advisable and may appoint a secretary,  who shall keep records
       of its meetings.

3.3.   The  Committee  shall  fulfill  tasks  with  respect  to (i)  designating
       participants  ("GRANTEES") and (ii) approving the grant of Options to the
       Grantees.  Without derogating from the foregoing,  the Committee shall be
       authorized to issue on behalf of the Company shares  underlying  Options,
       which have been granted by the Board and duly exercised.

3.4.   The Committee shall have full authority and discretion, from time to time
       and at any time,  to determine  the terms and  conditions  of  respective
       share  options  agreements  signed  between the Company and each  Grantee
       individually ("OPTION AGREEMENT") including,  but not limited to: (i) the
       time or  times  and the  conditions  (including  without  limitation  the
       accomplishment  of  various  milestones  by the  Grantee)  upon which the
       Options  may vest;  (ii) the nature and  duration of  restrictions  as to
       transferability;   (iii)  interpret  the  provisions  and  supervise  the
       administration  of the Plan;  (iv) amend,  modify and  replace  terms and
       conditions  of  any  specific  Option  Agreement  or a  group  of  Option
       Agreements, however, it is expressly stipulated that such act in one case
       or for one or several Grantee/s, will not automatically entitle any other
       Grantee  to the  same  treatment  and in the  event  that  such act has a
       material  adverse  effect on the rights of a Grantee such changes must be
       consented  by the  affected  Grantee;  and (v) any other  matter which is
       necessary or desirable for, or incidental to, the  administration  of the
       Plan.

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

3.6.   A member of the  Board or the  Committee  shall be  eligible  to  receive
       Options  under the Plan while  serving on the  Committee,  subject to the
       provisions of the Israeli Companies Law 1999 (the "Companies Law").

3.7.   The  interpretation and construction by the Committee of any provision of
       the Plan or of any Option thereunder shall be final and conclusive unless
       otherwise determined by the Board.
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                                       3

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

4.     ELIGIBLE GRANTEES

       Subject to limitation and restriction  imposed by applicable law, Options
       may be granted to any officer, key employee, other employee of the Group,
       director,  consultant or service  provider of the Group.  The grant of an
       Option to a Grantee  hereunder,  shall  neither  entitle  such Grantee to
       participate,  nor  disqualify  him/her from  participating,  in any other
       grant of options  pursuant to this Plan or any other share  incentive  or
       share option plan of the Company or any of its related companies.

       Anything  in this Plan to the  contrary  notwithstanding,  all  grants of
       Options to Directors  and Office  Holders  ("Nose  Misra" as such term is
       defined in the  Companies  Law , as amended from time to time),  shall be
       authorized  and  implemented  in  accordance  with the  provisions of the
       Companies Law.

5.     TRUSTEE & CERTAIN PROVISIONS UNDER SECTION 102 TO THE ORDINANCE

5.1.   Any Options  under a Trustee  Scheme  and/or  shares in the Company which
       will be issued upon the exercise of Options under a Trustee  Scheme shall
       be held by a trustee designated by the Board (the "TRUSTEE") according to
       the terms of the Ordinance and pursuant to the Trust Agreement, a copy of
       which  shall be attached  hereto and forms an integral  part of the Plan,
       and the  Company's  instructions  from time to time.  The Grantee  hereby
       consents   to  the  terms  of  the   Trust   Agreement,   which   include
       indemnification and waiver by the Grantee.

5.2.   The Grantee's signature on the Option Agreement constitutes the Grantee's
       consent to  release  the  Trustee  from any  liability  in respect of any
       action or

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                                       4

       decision  duly taken and bona fide executed in relation with the Plan, or
       any Option or share granted to the Grantee thereunder.

5.3.   The Trustee may resign or the Company may  terminate the  appointment  of
       the Trustee at any time, subject to prior notice as required in the Trust
       Agreement.  The  Company,  at its own  discretion,  shall  determine  the
       identity of the new Trustee.

5.4.   Without  derogating  from the  generality of the Ordinance as attached to
       this Plan, the following restrictions shall apply:

       5.4.1  Under the provisions of Section 102 to the Ordinance,  the Options
              shall be issued to the  Trustee  and held in trust for the benefit
              of the Grantee for a period  commencing  on the date of deposit of
              the  Options in trust and ending no sooner than after the lapse of
              the  remaining  months of the tax year in which the grant was made
              plus  24  months  ("Restricted  Period").  During  the  Restricted
              Period,  the Options  and the  Shares,  as the case may be, may be
              exercised,  sold or  transferred or be subject of an attachment or
              security interest if and to the extent allowable by the Ordinance.

       5.4.2  After the end of the Restricted  Period, the Trustee shall release
              the Options to the Grantee upon request but only after the Trustee
              is  satisfied  that  all  requirements  made  by  the  Income  Tax
              Authorities   according  to  the   Ordinance  and  Rules  are  met
              (including payment of the applicable tax due).

       5.4.3  During  the  Restricted  Period  all  benefits  arising  from  the
              Options/Shares,  including share dividend (bonus shares), shall be
              deposited  with the  Trustee for the  duration  of the  Restricted
              Period and the  capital  gains tax scheme  and the  provisions  of
              Section 102 of the Ordinance shall apply to such benefits.

       5.4.4  If the  Grantee  shall  cease to work for the  Company  before the
              exercise of all the Options  granted to such Grantee,  the Grantee
              shall   provide   the  Company   with  a  security  or   guarantee
              satisfactory  to the  Company to ensure the timely  payment of the
              taxes due when such Grantee's Options are exercised.

6.     RESERVED SHARES

       The Company has initially reserved up to 1,350,000 non allocated Ordinary
       shares nominal value NIS 0.01 per share of the Company (the "SHARES") for
       purposes  of the Plan,  subject to  adjustment  as provided in section 11
       hereof.  Such  initial  number  may be  increased  from  time  to time by
       resolutions  of the Board.  Any Share under the Plan, in respect of which
       the right  hereunder  of a Grantee  to  purchase  the same  shall for any

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                                       5

       reason  terminate,  expire or  otherwise  cease to exist,  shall again be
       available for grant through Options under the Plan.

7.     OPTIONS AWARD

7.1.   The Committee in its discretion may award to Grantees Options to purchase
       Shares in the Company available under the Plan. Options may be granted at
       any time after this Plan has been approved by the Board and until the end
       of the term of the Plan as  provided  in  Section  13 below.  The date of
       grant of each Option shall be the date  specified by the Committee at the
       time such is made, subject to applicable law.

7.2.   The Options granted  pursuant to the Plan shall be evidenced by a written
       Option  Agreement.  The Option Agreement shall state,  inter alia, if the
       Options  granted  are  Trustee  Options,  the  number of  Shares  covered
       thereby, the dates when it may be exercised (subject to section 9.1), the
       exercise  price and such other terms and  conditions  as the Committee in
       its discretion may prescribe, provided that they are consistent with this
       Plan.

8.     OPTION PRICE

       The exercise  price per Share  covered by each Option shall be determined
       by the  Committee,  subject to any guidelines as may be determined by the
       Board from time to time;  provided,  however,  that such  exercise  price
       shall not be less than the  nominal  value of the Shares  underlying  the
       Option. Each Option Agreement shall contain the exercise price determined
       for each Grantee.

9.     TERM AND EXERCISE OF OPTION

9.1.   Options shall be exercisable  pursuant to the terms under which they were
       awarded  as set  forth in the  Option  Agreement  and  Notice of Grant of
       Options and subject to the terms and  conditions of this Plan;  provided,
       however,  that only vested  Options may be exercised and that in no event
       shall an Option be  exercisable  after the  expiration of seven (7) years
       from the date such  Option  is  granted  unless  another  period  (either
       shorter or  longer)  is  specifically  provided  in the Option  Agreement
       ("TERM").
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                                       6

9.2.   An Option,  or any part thereof,  shall be  exercisable  by the Grantee's
       signing and returning to the Company at its principal  office (and to the
       Trustee,  where  applicable),  an  "EXERCISE  NOTICE"  in such  form  and
       substance as may be prescribed by the  Committee  from time to time.  The
       Exercise Notice shall be accompanied by payment of the sum required to be
       paid under the Rules with respect to the exercised Shares.

9.3.   Anything herein to the contrary  notwithstanding,  but without derogating
       from the  provisions  of section 10 hereof,  if any Options,  or any part
       thereof,  has not been exercised and the Shares covered  thereby not paid
       for within the Term, such Options, or such part thereof, and the right to
       acquire  such Shares shall  terminate,  all  interests  and rights of the
       Grantee  in and to the same  shall  expire,  and,  in the  event  that in
       connection  therewith  any  Shares are held in trust as  aforesaid,  such
       trust shall expire and the Trustee shall  thereafter  hold such Shares in
       an unallocated  pool until  instructed by the Company that some or all of
       such Shares are again to be held in trust for one or more Grantees.

9.4.   Each  payment for Shares  under an Option  shall be in respect of a whole
       number  of  Shares,  shall  be  effected  in  cash or by a  cashier's  or
       certified  check  payable  to the  order  of the  Company,  and  shall be
       accompanied  by a notice  stating  the  number of Shares  being  paid for
       thereby.

9.5.   Prior to  exercise,  the  Grantees  shall have none of the rights  and/or
       privileges  of  shareholders  of the  Company  in  respect  of any Shares
       purchasable upon the exercise of any part of an Option, nor shall they be
       deemed to be a class of  shareholders  or  creditors  of the  Company for
       purpose  of  the  operation  of  the  Companies  Law,  including  without
       limitation sections 350 and 351 thereof.

10.    TERMINATION OF ENGAGEMENT

10.1   In the event of termination of Grantee's  employment  with the Company or
       if applicable,  the termination of services or consulting provided by the
       Grantee  to  the  Company  ("Engagement"),  all  Options  granted  to the
       Grantee,  which are vested and  exercisable  at the date the  termination
       came into effect,  may be exercised  within six (6) months after the date
       of such  termination  (or such  different  period as the Committee  shall
       prescribe in the Option Agreement)  ("GRACE PERIOD") but in any event not
       later than the expiration of the Term of such Options as set forth in the
       Plan or the Option Agreement.  If, on the date of such  termination,  the
       Grantee is not vested as to his or her entire Options, the Shares covered
       by the unvested  portion of the Options  shall revert to the Plan. If the
       Options are not so exercised  within the Grace Period,  the Options shall
       terminate,  and the Shares  covered by such  Options  shall revert to the
       Plan.

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                                       7

       Furthermore,  if during  the  Engagement  period or any  extended  period
       thereafter in which the Grantee may still exercise  Options,  the Grantee
       breaches the confidentiality,  non-competition non-solicitation,  non-use
       or assignment of Intellectual Property undertakings binding upon him/her,
       the  Company  shall have the right to cause a  forfeiture  of all Options
       (including vested Options).

10.2   Notwithstanding  the above,  in the event the Grantee is discharged  from
       his Engagement with the Company for "Cause" as hereinafter  defined,  all
       the unexercised  Options  granted to the Grantee  (whether vested or not)
       shall  immediately   terminate,   unless  determined   otherwise  by  the
       Committee,  and the Shares  covered by such  Options  shall revert to the
       Plan.

       The term "Cause" shall mean (i) conviction of any felony  involving moral
       turpitude  or  affecting  the  Company;  (ii) any  refusal to carry out a
       reasonable  directive of the CEO or the Board which involves the business
       of the Company or the Group and was capable of being lawfully  performed;
       (iii)  embezzlement of funds or assets of the Company or the Group;  (iv)
       material  breach of Grantee's  fiduciary  duties or duties of care to the
       Group;   including   without   limitation   disclosure  of   confidential
       information of the Company,  non-competition or non-use;  (v) any conduct
       (other than conduct in good faith) reasonably  determined by the Board to
       be materially  detrimental to the Company;  (vi) any breach of a material
       provision in the Engagement Agreement which has not been corrected within
       15 days of written notice; and (vii) upon any dissolution, liquidation or
       insolvency of a Grantee that is a non-natural person.

10.3   RETIREMENT. Notwithstanding anything herein to the contrary, if a Grantee
       should retire,  the Committee shall be entitled,  at its sole discretion,
       to allow the Grantee to continue to enjoy  rights  under the Plan on such
       terms and  conditions as the Committee in its  discretion  may determine.
       This  Section10.3  does  not  apply to  Grantees  which  are  non-natural
       persons.

10.4   Termination  as a result of Death or  Disability  of the Grantee.  In the
       event of termination of Grantee's  Engagement  with the Company by reason
       of death or Disability (as hereinafter defined), the outstanding Options,
       which were vested on the date of  Termination,  may be  exercised  by the
       Grantee,  the Grantee's legal guardian,  the Grantee's estate or a person
       who acquires the right to exercise the Option by bequest or  inheritance,
       as the case may be, within twelve (12) months after  Termination (or such
       different   period  as  the  Committee  shall  prescribe  in  the  Option
       Agreement), but in no event later than the expiration of the term of such
       Option  as set  forth  in the  Option  Agreement.  If,  on  the  date  of
       termination,  there are Options which are not entirely vested, the Shares
       covered by the unvested  portion of the Options shall revert to the Plan.
       If the Option is not so exercised within the time specified  herein,  the
       Option  shall  terminate,  and the Shares  covered by such  Option  shall
       revert to the Plan. For purposes hereof, "Disability" shall mean complete
       and permanent inability,  due to illness or injury, to perform the duties
       of the  occupation at which the Grantee was engaged when such  disability

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                                       8

       commenced,  as  determined  by the  Committee  based on medical  evidence
       acceptable to it. This Section 10.4 does not apply to Grantees  which are
       non-natural persons.

10.5   CONTINUITY  OF RIGHTS.  For the purpose of this section 10, a transfer of
       the Grantee from the  Engagement  by the Company to a  subsidiary  of the
       Company (and vice versa) or from the  Engagement  by a subsidiary  of the
       Company to another subsidiary thereof,  shall not be deemed a termination
       of Engagement to the extent permitted by applicable law.

11.    ADJUSTMENTS

       Upon the occurrence of any of the following events, a Grantee's rights to
       purchase Shares under the Plan shall be adjusted as hereinafter provided.

11.1.  In the event that the Ordinary  shares of the Company are  subdivided  or
       combined into a greater or smaller number of shares, respectively, or the
       ordinary shares of the Company are exchanged for other  securities of the
       Company, then each Grantee shall be entitled, upon exercise of the Option
       and subject to the conditions  herein stated,  to purchase such number of
       Ordinary  shares or amount of other  securities  of the  Company  as were
       exchangeable  for the number of Ordinary shares of the Company which such
       Grantee  would have been  entitled to purchase had the Grantee  exercised
       the  Option   immediately   prior  to  such  an  event,  and  appropriate
       adjustments shall be made in the exercise price per share to reflect such
       subdivision, combination or exchange.

11.2.  In the event of a merger of the Company with or into another  corporation
       whereby the Company is not the  surviving  entity,  or the sale of all or
       substantially   all  of  the  assets  or  shares  of  the  Company   (the
       "TRANSACTION"),  while unexercised  Options remain  outstanding under the
       Plan,  the  Options  shall  be  substituted  with the  corresponding  and
       adjusted number of options to purchase  shares of the surviving  entity -
       of the same  class as the shares  received  by the  holders  of  Oridnary
       shares of the Company in exchange for their Ordinary shares.  In the case
       of  such  substitution,  appropriate  adjustments  shall  be  made in the
       exercise  price to reflect such action,  and all other material terms and
       conditions of the Option Agreements shall remain in force.

       In the event that the surviving entity refuses to substitute the Options,
       then the Grantee's  vesting  schedule set forth in the Option Agreement /
       Notice  of  Grant  shall  be  partly  accelerated  so  that  50%  of  the
       outstanding  not  yet  vested  Options  may be  exercised  in full by the
       Grantee (in addition to the Grantee's  vested  Options - if any) five (5)
       business days prior to the  effective  date of the  Transaction.  In such
       case,   the   Committee   shall   notify  the   Grantees  in  writing  or
       electronically that the Options shall be

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                                       9

       exercisable  for a period of five (5) business days from the date of such
       notice,  and the  unexercised  vested  Options and the un-vested  Options
       shall terminate upon the expiration of such period.

       The provisions as stated above shall be subject to the actual  completion
       of a Transaction.  If the Transaction is not consummated  then any action
       taken pursuant to this Sub-Section 11.2 shall be reversed.

11.3.  In the event that the Company issues any of its Ordinary  shares or other
       securities as bonus shares (stock  dividend)  upon or with respect to any
       Ordinary Shares,  which are at the time subject to a right of purchase by
       a Grantee  hereunder,  each  Grantee upon  exercising  an Option shall be
       entitled to receive  (if he/she so elects),  in addition to the Shares as
       to which he/she is exercising such right, the appropriate number of bonus
       shares, on the same terms and conditions as offered to the other ordinary
       shareholders,  which he/she would have received had he been the holder of
       the Shares as to which he is  exercising  his right at all times  between
       the date of the granting of such right and the date of its exercise.

11.4   The Committee shall  determine the specific  adjustments to be made under
       this  Section  11,  and  its  determination  shall  be  conclusive.   The
       Committee's  determination may differ from one Grantee to another, except
       that  determination  of specific  adjustment  under Section 11.1 shall be
       applied in the same manner to all applicable Grantees.

12.    ASSIGNABILITY AND SALE OF SHARES

12.1   Shares purchased hereunder shall not be assignable or transferable except
       pursuant  to  applicable  laws and the  Articles  of  Association  of the
       Company.

12.2   Options may not be sold, pledged, assigned, hypothecated,  transferred or
       disposed of in any manner other than by will or by the laws of descent or
       distribution  and may be  exercised,  during the lifetime of the Grantee,
       only by the Grantee.  This restriction applies also to Grantees which are
       not natural persons, unless such transfer is approved by the Committee in
       writing,  at its sole  discretion.  The terms of the Plan and the  Option
       Agreement  shall be binding upon the  executors,  administrators,  heirs,
       successors and assigns of the Grantee.

13.    TERM AND AMENDMENT OF THE PLAN

13.1.  The Plan was  adopted  by the Board on March  2003,  and shall  expire on
       April 30, 2012 (except as to Options outstanding on that date).
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                                       10

13.2.  The Board may, at any time and from time to time,  terminate or amend the
       Plan in any respect.  Provided,  that the Company may not alter or impair
       the  rights of a  Grantee,  without  his/her  consent,  under any  Option
       previously granted to the Grantee.

14.    CONTINUANCE OF ENGAGEMENT

       Neither the Plan nor the Option  Agreement shall impose any obligation on
       the Company or a related company thereof,  to continue any Grantee in its
       employ or to continue to receive  services  rendered by the Grantee,  and
       nothing  in the Plan or in any  Option  granted  pursuant  thereto  shall
       confer  upon any  Grantee  any  right to  continue  in the  employ  or in
       rendering  services  to the  Company or any other  entity of the Group or
       restrict  the right of the  Company  or any other  entity of the Group to
       terminate  such  employment or rendering of services or consulting at any
       time, with or without Cause.

15.    GOVERNING LAW

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

16.    TAX CONSEQUENCES

       Any tax consequences  arising from the grant or exercise of any Option or
       from the  payment  for Shares or from sale or  transfer  of the Shares or
       from any other event or act  (whether of the Grantee or of the Company or
       its  subsidiary or the Trustee)  hereunder,  shall be borne solely by the
       Grantee.  The  Company  and/or  any entity  within  the Group  and/or the
       Trustee shall withhold and/or deduct taxes according to the  requirements
       under the applicable laws, rules, and regulations,  including withholding
       taxes at  source.  Furthermore,  each  Grantee  agrees to  indemnify  the
       Company  and/or  other  entity  within the Group that engages the Grantee
       and/or the Trustee  and/or the Company's  shareholders  and/or  directors
       and/or  officers  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.
       Except as otherwise  required by law, the Company  shall not be obligated
       to honor the  exercise  of any Option by or on behalf of a Grantee  until
       all tax  consequences  (if any) arising from the exercise of such Options
       are  resolved  in a manner  reasonably  acceptable  to the  Company.  The
       Company  shall pay

<PAGE>
                                       11

       the  stamp  duty due as a  result  of the  issuance  of the  Shares  upon
       exercise of the Options.

17.    INFORMATION RIGHTS.

       To the extent required by applicable laws, the Company shall provide each
       Grantee  that  is so  entitled  by  law,  with  copies  of the  financial
       statements of the Company at least annually,  at the same time and in the
       same form as it  furnishes  such  information  to its  shareholders.  The
       Company shall not be required to provide such statements to key employees
       whose duties assure their access to equivalent information.

       The information  contained in the financial  statements  represent highly
       confidential  information of the Company and are protected as part of the
       Grantees  confidentiality,  non-use and other such obligations.  Grantees
       who  are  afforded  such   information  must  strictly  comply  with  all
       confidentiality  and non-use obligations except for the strict purpose of
       evaluating the Company's  financial situation as per a security holder of
       the Company.

18.    MULTIPLE AGREEMENTS

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

19.    NON-EXCLUSIVITY OF THE PLAN

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

                       **********************************

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