Document:

Exhibit 4.4

                       RE: GRANT OF OPTIONS - 2003/1 PLAN

Dear :   ________

         We are pleased to grant you options  ("Options")  to purchase  Ordinary
Shares,  nominal value NIS 1.00 each (the "Shares),  of Tower Semiconductor Ltd.
(the  "Company"),  pursuant  to the  Employee  Share  Option  Plan 2003/1 of the
Company, (the "Plan"), as of __________ (the "Date of Grant"), as follows:

<TABLE>
<CAPTION>
<S>      <C>
         1.       Total Number of Options Granted     _________________________
         2.       Type of Option:
                                     |_|                        Option  intended to qualify as an  incentive
                                                                stock option  ("ISO")  within the meaning of
                                                                Section  422 of the  Internal  Revenue  Code
                                                                of 1986, as amended ("Code").

                                     |_|                        Option  not   intended   to  qualify  as  an
                                                                Incentive Stock Option ("NSO").

         3.       The  exercise  price of the  Options  shall be  $________  per
                  Share.

         4.       The Options  are hereby  issued  (the  "Option  Award") to the
                  Trustee (as defined in the Plan) for your benefit,  subject to
                  the terms and conditions  hereunder and the Plan which we have
                  posted on our  website.  You are urged to review  the Plan and
                  shall  be  deemed  to be  fully  aware  of all the  terms  and
                  conditions  governing  the Options  set forth in the Plan.  By
                  your signature  below,  you agree to be bound by the terms and
                  conditions of the Plan.

         5.       Subject  to the  terms  and  conditions  of the  Plan and this
                  letter,  the Options  granted  pursuant  to this letter  shall
                  become  exercisable  (vest) in  accordance  with the following
                  schedule:

         (a)  ________  of the  Options  shall  vest 12 months  from the Date of
         Grant;
         (b)  ________  of the  Options  shall  vest 24 months  from the Date of
         Grant; and
         (c)  ________  of the  Options  shall  vest 36 months  from the Date of
         Grant; and.
         (d)  ________  of the  Options  shall  vest 48 months  from the Date of
         Grant.
</TABLE>

<PAGE>

         6.       The above Options will vest and become  exercisable only if on
                  the date of vesting  you are still  employed  by the  Company.
                  Vested  Options may be exercised  in whole or in part,  at any
                  time  within a period of ten (10) years from the Date of Grant
                  (the "Exercise  Period").  Any Option not exercised within the
                  Exercise Period shall lapse and become void and unexercisable.
                  In  addition,  Options  which  are  unvested  at the  time  of
                  termination  of your  employment  with the Company will become
                  void and  unexercisable  at the time of such  termination.  In
                  addition,  if your  employment  with the Company is terminated
                  voluntarily  by you or is  terminated  by the  Company for any
                  reason (other than as set forth in the Plan),  vested  Options
                  can be exercised by you within sixty (60) days after your last
                  day of employment with the Company.  Thereafter,  such options
                  shall lapse and become void and unexercisable.

         7.       The procedure for exercise of the Options shall be as detailed
                  on our website. However, the Company may change the procedures
                  for  exercise  of the Options at its  discretion.  The Company
                  will notify you of any changes in the procedure.

8. Any tax consequences  arising from the grant or exercise of any Option Award,
from the payment for Shares  covered  thereby or from any other event or act (of
the Company,  its  subsidiaries  or you)  hereunder,  and  commissions and other
expenses relating thereto shall be borne solely by you.  Furthermore,  you shall
agree to indemnify the Company and/or any of its subsidiaries 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 you. The Company and/or any of its  subsidiaries  and/or the
Trustee may withhold any taxes,  expenses and  commissions  from the exercise of
the Options and/or the sale of the underlying Shares.

9. While we are not  providing  you any tax advice with  respect to the grant of
Options, we understand that :

         a. In the case of an ISO,  the  exercise of the Option,  under  current
applicable  law that is subject to change,  will not be subject to U.S.  federal
income tax,  although  the excess,  if any, of the Fair Market Value (as defined
below) of the Shares on the date of exercise over their the Fair Market Value as
defined  below of the Shares on the date of grant will be included in  computing
the alternative  minimum tax for federal income tax purposes and may subject you
to the alternative minimum tax

                                       2
<PAGE>

in the year of  exercise

         b. The  exercise of an NSO will be subject to U.S.  federal  income tax
liability  (at ordinary  tax rates) upon the excess,  if any, of the fair market
value of the Shares on the date of exercise over their  exercise  price.  If you
are an employee or a former  employee,  we will be required to treat such excess
as compensation  income and withhold from your  compensation or collect from you
and pay to the  applicable  taxing  authorities  an  amount  in cash  equal to a
percentage of this compensation income at the time of exercise. We may refuse to
honor the exercise and refuse to deliver Shares if such withholding  amounts are
not delivered at the time of exercise.

         c. In the case of an NSO,  if  Shares  are  held for at least  one year
after exercise,  any gain realized on disposition of the Shares, i.e. the excess
of the sale proceeds over the basis in the Shares (which will generally be equal
to the the Fair  Market  Value of the Shares on the date of  exercise),  will be
treated as long-term  capital gain for U.S. federal income tax purposes.  In the
case of an ISO,  if Shares  transferred  pursuant  to the Option are held for at
least one year  after  exercise  and for at least  two  years  after the Date of
Grant,  any gain realized on  disposition  of the Shares will also be treated as
long-term capital gain for U.S. federal income tax purposes. If Shares purchased
under an ISO are disposed of within one year after  exercise or within two years
after the Date of Grant,  any gain realized on such  disposition will be treated
as  compensation  income (taxable at ordinary income rates) to the extent of the
difference  between the lesser of (1) the Fair Market Value of the Shares on the
date of exercise,  or (2) the sale price of the Shares and the  exercise  price.
Any additional gain will be taxed as capital gain

         D. In the case of an ISO, if a Grantee  sells or otherwise  disposes of
any of the Shares acquired pursuant to the ISO on or before the later of (1) the
date two years after the Date of Grant,  or (2) the date one year after the date
of exercise,  such Grantee  shall  immediately  notify the Company in writing of
such disposition. You agree that you may be subject to income tax withholding by
the Company or the Subsidiary on the compensation income recognized by you.

         e. In the case of an ISO, the Option shall not be  considered an ISO to
the extent that the aggregate Fair Market Value (determined at the time each ISO
is granted) of the Shares with respect to which  Options  designated as ISOs are
exercisable for the first time by you during any calendar year exceeds $100,000;
such Options  shall be treated as NSOs.  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 time the Option  with  respect to such Shares is
granted.  For the  purposes of this letter,  "Fair Market  Value" means the last
reported  sales  price of the  Company's  Shares  as  reported  by NASDAQ or the
principal  national  securities  exchange  upon which the  Company's  Shares are
listed or traded before the Date of Grant.

         f.  You  are  hereby   informed  that  other  and/or   additional   tax
consequences   may  be  applicable  to  you  with  respect  to  the   particular
circumstances  relating to the grant or exercise of any Option Award or from the
payment for Shares  covered  thereby or from a change in your  residence or from
any other event or act under  applicable law, and the above provisions are not a
comprehensive  description of all tax law provisions  which may apply to you and
do not replace professional tax advice in these matters.

                                       3
<PAGE>

         10. The  Options  pursuant  to this letter will be issued once you sign
         and  return to the  Company:  (I) this  letter  and (II) any other form
         which is required  under  applicable  law and which will be provided to
         you by the  Company.  The forms  referred to above must reach the Human
         Resources  Manager only,  no later than  ________ on 15:00.  No options
         will be granted to you if the forms are not  returned by such date.  If
         you are unable to return the forms by such date,  you may  contact  the
         CFO or VP,  Human  Resources  of the  Company,  who is  authorized,  at
         his/her discretion, to extend such date, but in any event no later than
         ________.

11. All notices, consents and other communications under this Agreement shall be
sent in writing  and shall be deemed to have been given  when (a)  delivered  by
hand, (b) mailed by certified or registered  mail,  return receipt  requested or
express  delivery  service,  or (c) when received by the  addressee,  if sent by
Express  Mail,  Federal  Express or other express  service,  in each case to the
appropriate addresses set forth below (or to such other addresses as a party may
designate as to itself by notice to the other parties).

                  (a) If to you, at your address  listed  beneath your signature
         below;

                  (b) If to  the  Company:  Human  Resources  Department,  Tower
         Semiconductor, P.O. Box 619, Migdal Ha'emek, Israel;

                  (c)  If  with   respect   to   Option   exercise   procedures:
         BENEFIT@MYBENEFIT.CO.IL or facsimile no.: 972-9-766-5080.

                                                      Sincerely,

                                            Tower Semiconductor Limited

                                       4
<PAGE>

                  I HEREBY  ACKNOWLEDGE  THAT A COPY OF THE PLAN HAS BEEN POSTED
         ON THE  COMPANY'S  WEBSITE AND  REPRESENT  THAT I AM FAMILIAR  WITH THE
         TERMS AND PROVISIONS THEREOF,  AND HEREBY ACCEPT THIS OPTION SUBJECT TO
         ALL OF THE TERMS AND PROVISIONS  THEREOF. I FURTHER  ACKNOWLEDGE THAT I
         AM AWARE THAT (I) THE COMPANY  INTENDS TO ISSUE  ADDITIONAL  SHARES AND
         OPTIONS IN THE  FUTURE TO  VARIOUS  ENTITIES  AND  INDIVIDUALS,  AS THE
         COMPANY IN ITS SOLE DISCRETION  SHALL  DETERMINE;  AND (II) THE COMPANY
         MAY INCREASE ITS SHARE  CAPITAL BY NEW  SECURITIES IN SUCH AMOUNT AS IT
         FINDS  EXPEDIENT;  AND I  HEREBY  WAIVE  ANY  CLAIM I MIGHT OR MAY HAVE
         REGARDING SUCH ISSUANCE OR INCREASE.  I HAVE REVIEWED THE PLAN AND THIS
         OPTION IN THEIR ENTIRETY,  HAVE HAD AN OPPORTUNITY TO OBTAIN THE ADVICE
         OF COUNSEL  PRIOR TO  EXECUTING  THIS OPTION AND FULLY  UNDERSTAND  ALL
         PROVISIONS  OF THE  OPTION.  I  HEREBY  AGREE  TO  ACCEPT  AS  BINDING,
         CONCLUSIVE AND FINAL ALL DECISIONS OR  INTERPRETATIONS  OF THE BOARD OF
         DIRECTORS UPON ANY QUESTIONS  ARISING UNDER THE PLAN OR THIS OPTION.  I
         FURTHER  AGREE TO NOTIFY THE  COMPANY  UPON ANY  CHANGE IN THE  ADDRESS
         INDICATED BELOW.

Name of Employee: ___________                             Date: _____________

Employee signature: _____________________

Employee Social Security number: ___________________

Employee address:   _____________________

                                       5EXHIBIT 10.1

                      INTERNATIONAL SPECIALTY PRODUCTS INC.
                          2000 LONG-TERM INCENTIVE PLAN
                  (as amended and restated, as of May 15, 2003)

                                  INTRODUCTION

                  International Specialty Products Inc., a Delaware corporation
(hereinafter referred to as the "Corporation"), hereby establishes an incentive
compensation plan to be known as the "INTERNATIONAL SPECIALTY PRODUCTS 2000 LONG
TERM INCENTIVE PLAN" (hereinafter referred to as the "Plan"), as set forth in
this document. The Plan permits the grant of Incentive Units (as hereafter
defined) to eligible employees of the Corporation and the Subsidiaries (as
hereafter defined). The Plan provides for a long term incentive system that
supports the Corporation's business strategy and emphasizes pay-for performance
by tying reward opportunities to corporate goals.

                  The Plan shall become effective on February 28, 2000 (the
"Effective Date"), the date on which the Plan was adopted by the Board (as
hereafter defined). This Plan shall terminate ten (10) years after Effective
Date (unless sooner terminated by the Board).

                               I. DEFINITIONS

                  For purposes of this Plan, the following terms shall be
defined as follows unless the context clearly indicates otherwise:

                 (a) "Board of Directors" or "Board" shall mean the Board of
Directors of the Corporation.

                 (b) "Change in Control of the Corporation" shall mean (i) the
sale or disposition, in one or a series of related transactions, of all or
substantially all of the assets of the Corporation to any "person" or "group"
(as such terms are defined in Sections 13(d)(3) and 14(d)(2) of The Securities
Exchange Act of 1934, as amended (the "Act")) other than the Heyman Group or
(ii) any person or group, other than Heyman Group, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Act), directly or
indirectly, of more than 50% of the total voting power of the voting stock of
the Corporation, including by way of merger, consolidation or otherwise, and the
Heyman Group ceases to control the Board.

                 (c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                 (d) "Corporation" shall have the meaning set forth in the
Introduction.

                 (e) "Committee" shall have the meaning set forth in Section
II(a) hereof.

                 (f) "Dividend Incentive Unit" shall have the meaning set forth
in Section IV(b) hereof.

<PAGE>

                 (g) "Effective Date" shall have the meaning set forth in the
Introduction.

                 (h) "Employee" shall mean a common-law employee of the
Corporation or of any Subsidiary.

                 (i) "Exercise Date" shall have the meaning set forth in
Section IV(e) hereof.

                 (j) "Final Value" shall have the meaning set forth in Section
IV(f) hereof.

                 (k) "Good Cause" shall, with respect to any Employee, mean (i)
the Employee's willful or gross misconduct or willful or gross negligence in the
performance of his duties for the Corporation or for any Subsidiary, (ii) the
Employee's intentional or habitual neglect of his duties for the Corporation or
for any Subsidiary, (iii) the Employee's theft or misappropriation of funds of
the Corporation or of any Subsidiary, fraud, criminal misconduct, breach of
fiduciary duty or dishonesty in the performance of his duties on behalf of the
Corporation or any Subsidiary or commission of a felony, or crime of moral
turpitude or any other conduct reflecting adversely upon the Corporation or any
Subsidiary or (iv) the Employee's violation of any covenant not to compete or
not to disclose confidential information with respect to the Corporation or any
Subsidiary.

                 (l) "Incentive Unit" shall mean a bookkeeping item equal in
value to the excess, if any, of the Final Value over the Initial Value.

                 (m) "Initial Value" shall have the meaning set forth in
Section IV(a) hereof.

                 (n) "Plan" shall have the meaning set forth in the
Introduction.

                 (o) "Retirement" shall mean an Employee's termination of
employment after (i) he attains age fifty-five (55) and (ii) the sum of his age
and the number of his years of service with the Corporation and/or any
Subsidiary equals sixty (60) or more.

                 (p) "Subsidiary" shall mean a corporation or other entity of
which more than fifty percent (50%) of the aggregate of its outstanding voting
securities are owned directly or indirectly by the Corporation.

                 (q) "Valuation Date" shall mean the last day of business of
each fiscal quarter of the Corporation.

                  (r) "Value" shall mean, as of a specified date, (i) the
Corporation's total stockholders' equity, adjusted to exclude accumulated
comprehensive income and losses, and changes for the impairment of goodwill
mandated by FASB 142, multiplied by .001, and divided by (ii) the total number
of outstanding shares of the Corporation's common stock, all determined as of
such Valuation Date. Specific goodwill adjustments will be made as follows:
Goodwill that existed as of December 31, 2001 will continue to be amortized in
the same manner as it was prior to adoption of FASB 142. Impairment of goodwill
that existed as of December 31, 2001 will not be charged against equity. The
value of each Incentive Unit as of a Valuation Date, the determination of
accumulated comprehensive income and losses, and changes for the impairment

                                       2
<PAGE>

of goodwill, and the total number of outstanding shares of the Corporation's
common stock as of a Valuation Date, shall each be determined by the Committee
in its sole discretion.

                               II. ADMINISTRATION

                 (a) Administration; Term of Office; Appointment of Chairperson.
The Plan shall be administered by a committee (the "Committee") appointed by the
Board from among the Employees. The Committee shall be comprised, unless
otherwise determined by the Board, of the individuals serving as the
Corporation's Chief Executive Officer, Chief Financial Officer and Sr. Vice
President Human Resources. Each member of the Committee shall hold office until
the date that he or she resigns from the Committee or is removed from membership
on the Committee by action of the Board. In the event an individual for any
reason ceases to be a member of the Committee, the Board shall appoint another
qualified individual to serve on the Committee. The members of the Committee
shall choose from among themselves one such member to serve as chairperson of
the Committee.

                 (b) Quorum and Manner of Acting. Except as hereinafter
provided, a majority of the members of the entire Committee shall constitute a
quorum for the transaction of business and the vote of a majority of the
Committee members present at the time of the vote shall be the act of the
Committee. In the absence of a quorum at any meeting of the Committee, a
majority of the Committee members present may adjourn such meeting to another
time and place. Notice of the time and place of any such adjourned meeting shall
be given to the Committee members who were not present at the time of the
adjournment and, unless such time and place were announced at the meeting at
which the adjournment was taken, to the other Committee members. At any
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally called. In the
event any Committee member is disqualified from acting on a specific matter
pursuant to Section II(f) hereof, such individual shall not be taken into
account in determining whether a quorum of the Committee exists for taking
action with respect to such matter. The Committee members shall act only as a
Committee and the individual Committee members shall have no power as such. All
decisions of the Committee or the Board in the interpretation and administration
of the Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned (including, but not
limited to, Employees and their beneficiaries or successors).

                 (c) Action Without a Meeting. Any action required or permitted
to be taken by the Committee at a meeting may be taken without a meeting if all
members of the Committee consent in writing to the adoption of a resolution
authorizing such action. The resolution and written consents thereto by the
members of the Committee shall be filed with the minutes of the proceedings of
the Committee.

                  (d) Telephonic Participation. Any one or more members of the
Committee may participate in a meeting of the Committee by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time. Participation by such means
shall constitute presence in person at the meeting.

                                       3
<PAGE>

                 (e) Compensation. Members of the Committee shall not be
compensated for service as a Committee member.

                 (f) Disqualification. Each member of the Committee shall be
disqualified from acting as such with respect to all matters that concern such
person individually.

                 (g) Responsibilities of the Committee. Except to the extent
specifically reserved herein for the Board, the Committee shall have all powers,
responsibilities and duties for controlling and administering the Plan,
including, but not limited to, the following:

                             (i)    to establish, amend and enforce certain
                                    rules, regulations, and procedures as it
                                    deems necessary or proper for the efficient
                                    administration of the Plan;

                             (ii)   to interpret the Plan and correct any defect
                                    or supply and omission or reconcile any
                                    inconsistency in the Plan in the manner and
                                    to the extent the Committee deems necessary
                                    or desirable;

                             (iii)  to determine the ongoing eligibility of any
                                    individual to participate in the Plan, and
                                    to require any person to furnish any
                                    information as it may request to properly
                                    administer the Plan as a condition to that
                                    person receiving any benefit under the Plan;

                             (iv)   to compute the amount of benefits that are
                                    payable to any Employee or beneficiary in
                                    accordance with the provisions of the Plan,
                                    and to determine the person or persons to
                                    whom those benefits will be paid; and

                             (v)    establish the terms and conditions of a
                                    grant of Incentive Units under the Plan and
                                    waive any such terms and conditions at any
                                    time and to authorize the payment of
                                    benefits from the Plan.

                             (vi)   award Incentive Units in assumption of, or
                                    in substituion for, outstanding awards
                                    previously granted by the Corporation or its
                                    Subsidiaries or a company acquired by the
                                    Corporation or which the Corporation
                                    combines.

                        III. ELIGIBILITY TO PARTICIPATE

                  Each individual who is an Employee of the Corporation, or of
any Subsidiary, shall be initially eligible to participate in the Plan.
Notwithstanding the above, the identity of the Employees who will be entitled to
receive grants of Incentive Units under this Plan shall be determined by the
Committee in its sole discretion. No individual shall automatically be entitled
to receive a grant of Incentive Units solely because he is classified as an
Employee.

                                       4
<PAGE>

                              IV. INCENTIVE UNITS

                 (a) Grant of Incentive Units. The Committee may, in its sole
discretion, grant Incentive Units to any one or more Employees. The number of
Incentive Units granted to each Employee shall be determined by the Committee
in its sole discretion. Incentive Units shall normally be granted on the hire
date, or effective date of promotion, of the employee to receive the grant. The
Committee, however, may in its sole discretion grant Incentive Units on any
other date during the year. Subject to adjustment as provided in Section IV(c)
below, the "Initial Value" of any Incentive Unit granted under this Plan shall
normally be equal to the Value of such Incentive Unit as of the Valuation Date
immediately preceding the date on which such Incentive Unit is granted. The
Committee, however, may in its sole discretion grant Incentive Units with an
"Initial Value" that is lower or higher than the Value of such Incentive Units
on the Valuation Date immediately preceding the date on which such Incentive
Unit is granted.

                 (b) Dividend Equivalents. Each Employee who has been granted
one or more Incentive Units under this Plan shall be credited with additional
whole or partial Incentive Units as of any date that dividends are declared on
the Corporation's common stock. With respect to each award of Incentive Units,
as of each such date, the number of whole and/or partial Incentive Units
credited under this Section IV(b) (the "Dividend Incentive Units") shall be
determined by multiplying the number of Incentive Units subject to such award
by a fraction, the numerator being the fair market value (as determined by the
Committee) of the dividend payable on one share of the Corporation's common
stock multiplied by .001, and the denominator being the Value of an Incentive
Unit as of the Valuation Date immediately preceding the date the dividend is
declared. The Initial Value of the Dividend Incentive Units granted with respect
to an award shall equal the Initial Value of the Incentive Units of such award.
The Dividend Incentive Units shall vest when the Incentive Units subject to the
award for which the Dividend Incentive Units were granted vest.

                 (c) Recapitalization, Etc. In the event there is any change in
the outstanding common stock of the Corporation by reason of any merger,
reorganization, recapitalization, stock split, stock dividend, combination of
shares or otherwise, each Incentive Unit then outstanding under the Plan shall
be substituted for or adjusted, in the sole discretion of the Committee, to
accurately reflect the effect of such merger, reorganization, recapitalization,
stock split, stock dividend, share combination or other such event, and the
Initial Value of each Incentive Unit shall also be adjusted by the Committee if
it determines in its sole discretion that such adjustment is appropriate. In the
event that the Corporation enters into a transaction with an affiliate of the
Corporation, the Committee, may make an equitable adjustment to the Incentive
Units if, in its sole discretion, the Committee determines that such adjustment
is appropriate.

                 (d) Vesting in Incentive Units. The Incentive Units granted to
an Employee (including any Dividend Incentive Units credited to the Employee)
shall normally vest cumulatively, in twenty percent (20%) increments, on each
anniversary of the date such Incentive Units were granted to the Employee and
such vesting shall end upon the termination of an Employee's employment with the
Corporation or any subsidiary for any reason whatsoever; provided, however, that
the Committee may in its sole discretion grant Incentive Units with any other
vesting schedule. Notwithstanding the foregoing, to the extent not previously
canceled or

                                       5
<PAGE>

forfeited, Incentive Units will become fully and immediately vested and
immediately payable in cash (pursuant to the terms of Section IV(f) hereof)
upon a Change in Control.

                 (e) Exercise of Incentive Units. Subject to the following, an
Employee may exercise his vested Incentive Units at such times as are determined
by the Committee in its sole discretion (an "Exercise Date"). Notwithstanding
the preceding sentence, each Incentive Unit shall be immediately forfeited upon
the earliest of (i) the sixth (6th) anniversary of the date the Incentive Unit
is granted, (ii) one year after the Employee's termination of employment with
the Corporation or any Subsidiary due to his (1) death, (2) long-term disability
or (3) Retirement, (iii) ninety (90) days after the Employee's termination of
employment by the Corporation or a Subsidiary without Good Cause (other than due
to death or long-term disability) or by the Employee for any reason (other than
due to Retirement) or (iv) immediately upon the Employee's termination by the
Corporation or a Subsidiary for Good Cause. An Employee shall exercise his
vested Incentive Units by completing a Notice of Exercise Form in the form of
Exhibit A hereto, and delivering such form to the Corporation in accordance with
the notice provisions set forth herein.

                 (f) Value of Incentive Unit Upon Exercise; Guarantee. Upon the
exercise of an Incentive Unit, the Employee shall receive from ISP Management
Company, Inc. in cash the excess, if any, of the "Final Value" of such Incentive
Unit (which Final Value shall equal the Value of the Incentive Unit as of the
Valuation Date immediately preceding the Exercise Date) over the Initial Value
of such Incentive Unit. The value of a partial Incentive Unit shall be
determined under the immediately preceding sentence, but pro rated to reflect
the percentage of a whole Incentive Unit reflected by such partial Incentive
Unit. The payment obligations of ISP Management Company, Inc. hereunder is fully
and unconditionally guaranteed by its parent company, ISP Inc.

                          V. MISCELLANEOUS PROVISIONS

                 (a) Assignment or Transfer. No right to any accrued but unpaid
Incentive Unit shall be sold, assigned, redeemed, pledged, transferred or
otherwise encumbered by an Employee except by will or the laws of descent and
distribution.

                 (b) Withholding Taxes. The Corporation or the appropriate
Subsidiary shall have the right to deduct from all cash payments hereunder any
federal, state, local or foreign income and employment taxes required by law to
be withheld with respect to such payments.

                 (c) Costs and Expenses. The costs and expenses of administering
the Plan shall be borne by the Corporation and shall not be charged against any
award nor to any Employee receiving an Incentive Unit.

                 (d) Funding of Plan. The Plan shall be unfunded. The
Corporation shall not be required to segregate any of its assets to assure the
payment of any Incentive Unit under the Plan. Neither the Employees nor any
other persons shall have any interest in any fund or in any specific asset or
assets of the Corporation or any other entity by reason of any accrued but
unpaid Incentive Unit. The interests of each Employee hereunder are unsecured
and shall be subject to the general creditors of the Corporation and the
applicable Subsidiaries.

                                       6
<PAGE>

                 (e) Other Incentive Plans. The adoption of the Plan does not
preclude the adoption by appropriate means of any other incentive plan for
Employees of the Corporation or any Subsidiary.

                 (f) Plurals and Gender. Where appearing in this Plan, masculine
gender shall include the feminine and neuter genders, and the singular shall
include the plural, and vice versa, unless the context clearly indicates a
different meaning.

                 (g) Headings. The headings and sub-headings in this Plan are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.

                 (h) Severability. In case any provision of this Plan shall be
held illegal or void, such illegality or invalidity shall not affect the
remaining provisions of this Plan, but shall be fully severable, and the Plan
shall be construed and enforced as if said illegal or invalid provisions had
never been inserted herein.

                 (i) Liability and Indemnification. (i) Neither the Corporation
nor any Subsidiary shall be responsible in any way for any action or omission of
the Committee, or any other fiduciaries in the performance of their duties and
obligations as set forth in this Plan. Furthermore, neither the Corporation nor
any Subsidiary shall be responsible for any act or omission of any of their
agents, or with respect to reliance upon advice of their counsel, provided that
the Corporation and/or the appropriate Subsidiary relied in good faith upon the
action of such agent or the advice of such counsel. (ii) Neither the
Corporation, any Subsidiary, the Committee, nor any agents, employees, officers,
directors or stockholders of any of them, nor any other person shall have any
liability or responsibility with respect to this Plan, except as expressly
provided herein.

                 (j) Incapacity. If the Committee shall receive evidence
satisfactory to it that a person entitled to receive payment of, or exercise,
any Incentive Unit is, at the time when such benefit becomes payable, a minor,
or is physically or mentally incompetent to receive such Incentive Unit and to
give a valid release thereof, and that another person or an institution is then
maintaining or has custody of such person and that no guardian, committee or
other representative of the estate of such person shall have been duly
appointed, the Committee may make payment of such Incentive Unit otherwise
payable to such person to such other person or institution, including a
custodian under a Uniform Gifts to Minors Act, or corresponding legislation (who
shall be an adult, a guardian of the minor or a trust company), and the release
by such other person or institution shall be a valid and complete discharge for
the payment or exercise of such Incentive Unit

                 (k) Cooperation of Parties. All parties to this Plan and any
person claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable for
carrying out this Plan or any of its provisions.

                 (l) Governing Law. All questions pertaining to the validity,
construction and administration of the Plan shall be determined in accordance
with the laws of the State of New Jersey, without giving effect to conflict of
law principles.

                                       7
<PAGE>

                 (m) Nonguarantee of Employment. Nothing contained in this Plan
shall be construed as a contract of employment between the Corporation or any
Subsidiary and any Employee, as a right of any Employee to be continued in the
employment of the Corporation or any Subsidiary, or as a limitation on the right
of the Corporation or any Subsidiary to discharge any of its Employees, at any
time, with or without cause.

                 (n) Notices. Each notice relating to this Plan shall be in
writing and delivered in person, by recognized overnight courier or by certified
mail to the proper address. Except as otherwise provided in any Incentive Unit
award agreement with respect to the exercise thereunder, all notices to the
Corporation or the Committee shall be addressed to it at 1361 Alps Road, Wayne,
New Jersey 07470, Attn: Senior Vice President Human Resources. All notices to
Employees, former Employees, beneficiaries or other persons acting for or on
behalf of such persons shall be addressed to such person at the last address for
such person maintained in the Corporation's records.

                     VI. AMENDMENT OR TERMINATION OF PLAN

                  The Board may amend the Plan from time to time or suspend or
terminate the Plan at any time. In the event the Plan is terminated for any
reason, the vesting, exercise, and expiration provisions, as described in this
Plan, for all Incentive Units granted up to and including the date of the
termination of the Plan, will remain in effect.

                                       8
<PAGE>

EXHIBIT A

INTERNATIONAL SPECIALTY PRODUCTS
NOTICE OF EXERCISE FORM
LONG-TERM INCENTIVE UNITS

Human Resources Department
International Specialty Products Inc.
1361 Alps Road
Wayne, New Jersey  07470
Attention:  Compensation

Dear Sir/Madam:

                  Pursuant to the provisions of the International Specialty
Products 2000 Long-Term Incentive Plan (the "Plan"), pursuant to which you have
granted to me Incentive Units, I hereby notify you that I elect to exercise the
Incentive Units indicated on this Notice of Exercise Form. I understand that the
terms of this exercise, and the amount of cash (subject to income tax and all
other applicable withholding) I will receive pursuant to such exercise, shall be
determined under the terms of the Plan.

1. Name (Please Print)

         Social Security # (US Only)
                                               ---------------------------

         Work Location
                                               ---------------------------

         Corporation Telephone Number
                                               ---------------------------

         Home Address
                                               ----------------------------

         Home Telephone Number
                                              -----------------------------

2. I would like to exercise the following Incentive Units:

----------------------------- -------------------------- ------------------
  Date of Incentive             # of Incentive             Initial Value
  Unit Grant                    Units
----------------------------- -------------------------- ------------------

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

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

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

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

<PAGE>

------------------------------------------------
Signature and Date
* Please call Human Resources, Compensation, at 973-628-3578, if you need to
verify the number of exercisable Incentive Units.

RECEIVED ON:

-------------------------------            ------------------------
HR Representative                          Date

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

For Payroll Use Only

Pay Group:

Employee Name:

Employee File Number:

SS Number:

Gross Payment:

Appropriate taxes should be withheld.                     54 - Book Value

<PAGE>

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