Document:

20-F

Exhibit 4.18  

CALL OPTION AGREEMENT
AMENDMENT 

        THIS
CALL OPTION AMENDEMENT AGREEMENT (“Amendment”) is made as of January
4, 2009 by and among Mr. Toh Kian Hong (NRIC Number: 7607980C) of 30B Lorong H Telok Kurau
Singapore 426019 (“Alex”) on the one side and Top Image Systems Ltd., a
corporation organized under the laws of Israel with principal offices at 2 HaBarzel
Street, Ramat HaChayal, Tel Aviv, Israel (“TIS”) or any subsidiary of
TIS, at TIS’s sole discretion (“Buyer”). 

WHEREAS: 

	(A)  	On
the 12th day of June 2007, the parties entered into a Call Option
               Agreement (the “Option  Agreement”) according to which
Alex                granted to TIS an option to purchase 49 fully-paid ordinary shares in
the                capital of Asiasoft Global Pte (the ‘Option Shares’), which
shares                represent 49% of the total issued and paid-up share capital of
Asiasoft Global                Pte (the “Company”); and 

	(B)  	The
parties desire to amend the terms and conditions of the Option Agreement and
               terminate and revoke certain conditions and replace them with the terms
and                conditions set forth hereinafter in this Amendment according to which
TIS shall                purchase the Option Shares from Alex, in consideration for the
issuance to Alex                of 400,000 TIS Shares whereby upon the completion of the
exchange, TIS shall be                the 100% owner of Asiasoft Global Pte. Ltd. (the
               “Transaction”). 

NOW IT IS AGREED  as follows: 

	1. 	INTRODUCTION

	 	1.1. 	The
preamble to this Amendment shall constitute an integral part thereof. 

	 	1.2. 	In
the event of any contradictions between this Amendment and the Option
          Agreement, this Amendment shall prevail. Otherwise, all provisions of the
Option           Agreement, which have not been expressly amended, terminated or revoked
herein,           shall continue to apply, mutatis mutandis, to the
relationship           between the parties hereunder. 

	2. 	DEFINITIONS

	 	
For
the purposes of this Amendment, all capitalized terms not specifically defined hereunder,
shall have the meaning ascribed to them in the Option Agreement. The following terms shall
be defined as follows: 

	 	 2.1. 	“Completion” means
completion of this Amendment in accordance           with Sections 4.4 and 4.5. 

	 	 2.2.	“Consideration” means
the Consideration Shares. 

	 	2.3. 	 “Consideration
Shares” and  “Transfer Price”          means 400,000 fully paid
and non-assessable TIS Shares. 

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	 	2.4. 	“Share
Certificates” means any share certificates relating to           the Option
Shares and any and all other documents required to transfer the           Option Shares
to TIS and give effect to such transfer. 

	3. 	TERMINATION
OF CERTAIN SECTIONS

	 	
Sections
2.1, 2.2, 5.1 and 5.2 of the Option Agreement shall be terminated and revoked effective
as of the Completion and, upon such Completion, shall be replaced by the agreements and
undertakings of the parties contained herein. In the event the Completion of this
Amendment will not take place, the Option Agreement shall continue to apply with full
force and effect, and the Option Period shall be extended for an additional twelve (12)
months.  

	4.  	THE
TRANSACTION

	 	4.1. 	On
the terms and subject to the conditions set forth herein, at the Completion, Alex will
sell, convey, transfer, assign and deliver to Buyer all right,           title and
interest in and to the Option Shares and Buyer will purchase the           Option Shares
and pay the Consideration, thereby purchasing 49% of the issued           and outstanding
share capital of the Company, on a fully diluted basis. 

	 	 4.2.	Consideration.
In consideration for the purchase of the Option Shares,           Buyer will issue to
Alex the Consideration Shares. The Consideration Shares           shall be issued to Alex
at Completion. 

	 	 4.3.	 Completion.
Completion of the sale and purchase of the Option Shares           shall take place at
the registered office of Rajah & Tann (or at such other           place as may be
agreed) at 12 noon seven (7) days after the signing hereof,           provided that if
such day is not a business day then Completion shall take place           at 12 noon on
the first business day thereafter. 

	 	4.4. 	At
the Completion, Alex shall: 

	 	4.4.1. 	Transfer
or procure the transfer of the Option Shares and all Securities and
          Distributions accruing to such Option Shares during the Option Period to TIS;  

	 	4.4.2. 	deliver
or procure the delivery of all relevant share certificates and other           documents
of title in respect of the Option Shares to TIS;  

	 	4.4.3. 	transfer
to TIS for all benefits received in respect of the Option Shares           between the
Exercise Date and the date of Completion (both dates inclusive);  

	 	4.4.4. 	deliver
to TIS or as it shall direct any form of consent or waiver required from           any
other member of the Company to enable the transfer of the Option Shares to           be
registered in accordance with the Articles;  

	 	4.4.5. 	use
his best endeavours to procure registration of the transfer of the Option
          Shares and all Securities and Distributions forthwith (subject to the transfer
          being stamped with any necessary stamp duty at the expense of TIS); and  

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	 	4.4.6. 	do
such things and execute such documents as shall be necessary or as TIS may
          reasonably request to give effect to the sale of the Option Shares to TIS under
          the terms and conditions contained herein ; and  

	 	4.4.7. 	pay
all taxes and fees connected to and imposed upon the sale and purchase of           the
Option Shares hereunder.  

	 	4.5. 	At
Completion, TIS shall: 

	 	4.5.1. 	Issue
and allot to Alex TIS Shares;  

	 	4.5.2. 	File
with all relevant authorities all reports required to give effect to the
          issuance of TIS Shares;  

	 	4.6. 	Alex
hereby represents, warrants, acknowledges and agrees that (i) he is not a           U.S
Person (as such is defined in Regulation S promulgated under the Securities           Act
of 1933, as amended (the “Securities Act”) and that the           Consideration
Shares issued hereunder are offered to Alex while being outside of           the U.S.;
(ii) that he has had an opportunity to review TIS’s filings with           the
Securities Exchange Commission (the “SEC”), including TIS’s
          annual report on form 20-F for the fiscal year ended December 31, 2007 and any
          current reports on form 6-K furnished with the SEC thereafter; (iii) he has
such           knowledge and experience in financial and business matters, and with
respect to           transactions of the kind and scope contemplated by this Agreement
and is capable           of evaluating the merits and risks of an investment in TIS and
of making an           informed investment decision based on his inquiries; (iv) he has
satisfied           himself as to the full observance of the laws of his jurisdiction in
connection           with any invitation to subscribe for the Consideration Shares or the
purchase of           and continued beneficial ownership of the Consideration Shares; (v)
TIS is           relying upon the representations in this Agreement in order to comply
with the           requirements of federal and state laws which afford to TIS an
exemption from the           registration and qualification requirements of the
Securities Act and state           securities laws; (vi) the Consideration Shares issued
to Alex hereunder are           acquired by Alex for investment purposes and not with a
view to resell by Alex           in violation of the Securities Act and the rules and
regulations promulgated           thereunder, all as amended from time to time; (vii) the
Consideration Shares           have not been registered by TIS for resale by Alex; (viii)
the Consideration           Shares may not be resold by Alex absent registration under
the Securities Act or           an exemption therefrom; and (ix) any certificate
representing the Consideration           Share shall bear a restrictive legend in
customary form advising any holder           thereof as to subclauses (vii) and (viii)
herein. Notwithstanding the foregoing,           the Consideration Shares will be subject
to the following registration rights: 

	 	4.6.1. 	During
a period of 12 months from the date of signature of this Amendment (the “Registration
 Period”), if TIS proposes to register the sale           of any of its equity
securities under the Securities Act, for its own account or           for the account of
any security holders (other than any registration on Form S-8           or a successor
form, or any registration on Form F-4 or a successor form), it           shall promptly
give a written notice to Alex of its intention to do so, and, if           within twenty
(20) days after receipt of such notice, Alex so requests in           writing, and
subject to the Securities Act, TIS shall include in such           registration statement
all the Consideration Shares, provided that if such           registration statement is
for an underwritten offering (i) and the managing           underwriter informs TIS that
the inclusion of Alex’s shares would           jeopardize the success of such
offering, in which case the number of Alex’s           shares to be included shall
be reduced to the amount, if any, that the managing           underwriter believes would
not jeopardize the success of the offering, provided           that the number of shares
to be included in such registration statement by all           other holders exercising
“piggyback” registration rights also are           reduced in the same
proportion. and (ii) Alex must accept the terms of the           underwriting (including
lock-up provisions) as agreed by the underwriters.  

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	 	4.6.2. 	If
the Consideration Shares were not registered during the Registration Period,
          Alex may request, in writing within 20 days of termination of the Registration
          Period, that TIS effect the registration of the Consideration Shares. Within
120           days following such written request by Alex (“Additional Registration
          Term”), TIS shall, subject to the remainder of this Clause, use its best
          efforts to file a registration statement with the U.S. Securities and Exchange
          Commission and register the Consideration Shares for resale by Alex, TIS will
be           entitled to include other securities in a registration effected pursuant to
this           section 4.6.2.  

	 	4.6.3. 	The
foregoing registration rights shall terminate when 25% of the Consideration
          Shares held by Alex may be resold to the public over any 3 month period under
          the Securities Act pursuant to Rule 144 or otherwise.  

	 	4.6.4. 	If
TIS fails to register the Consideration Shares within the time frame           specified
under section 4.6.2 above, Alex shall be entitled to terminate this           Amendment
within 30 days following termination of the Additional Registration           Term. Upon
termination, the Transaction shall be conceded, and Alex shall be           entitled to
receive the Option Shares in return for the transfer of the           Consideration
Shares and neither party shall have any right or claim against the           other party
in connection with the Transaction, its cancellation and the           termination of
this Amendment.  

	5. 	REPRESENTATIONS
AND WARRANTIES

	 	5.1. 	Alex
hereby declares and represents that all the Warranties made by him in           Clause 4
of the Option Agreement are, mutatis  mutandis, true and correct           in all
material respects with the same force and effect as of the date of the
          Completion of the Option Agreement and will be true and correct in all material
          respects as of the date of the Completion of this Amendment. 

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	 	5.2. 	All
covenants, agreements and conditions contained in the Option Agreement and           this
Amendment to be performed or complied with by him at or prior to Completion           of
the Option Agreement and prior to the Completion hereof, respectably, have           been
performed or complied with in all material respects. 

	 	5.3. 	He
has taken or caused to be taken all steps necessary to verify the accuracy of
          the information set forth in this Clause 5. 

	6. 	MISCELLANEOUS

	 	6.1. 	This
Amendment embodies all the terms and conditions agreed upon between the           Parties
hereto as to the transactions contemplated hereunder, and supersedes and
          cancels in all respects all previous agreements and undertakings, if any,
          between the Parties hereto with respect to the subject matter hereof, whether
          such be written or oral. 

	 	6.2. 	In
the event of any contradiction between the provisions contained herein and           the
Option Agreement, the provisions of this Amendment shall prevail. 

	 	6.3. 	This
Amendment may be amended only upon written instrument executed by both           parties. 

	 	6.4. 	This
Amendment shall be governed by, and construed in accordance with, the laws           of
Israel In relation to any legal action or proceedings arising out of or in
          connection with this Agreement (the ‘Proceedings’), each party
          hereto irrevocably submits to the exclusive jurisdiction of the courts of
          Israel. Such submission shall not affect TIS’s right to take Proceedings
in           any other jurisdiction. Notwithstanding the above, all issues related to the
          registration of TIS shares shall be governed by and construed in accordance
with           US laws and regulations. 

	 	6.5. 	This
Amendment will come into force upon its approval by all authorized organs           of
TIS and is subject to such approval. If not approved within 14 days of its
          signing – this Amendment will be null and void and neither party shall
have           any right or claim against the other party in connection with negotiating
and           signing this Amendment. 

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IN WITNESS WHEREOF this
Amendment has been entered into on the date stated at the beginning. 

TOP IMAGE SYSTEMS LTD  

SIGNED BY 
Izhak Nakar 

for and on behalf of 
TOP IMAGE SYSTEMS LTD
in the presence of:  

TOH KIAN HONG  

SIGNED BY
TOH KIAN HONG
in the presence of:  

620-F

Exhibit 4.3  

[English
Translation of the Hebrew Original]

FORMULA SYSTEMS (1985)
LTD 

(Hereinafter
referred to as: the “Company”) 

Employees and Office
Holders Share Option Plan (2008) 

	1.  	PREAMBLE  

	 	1.1 	NAME  

	 	
This
plan, as it may be updated from time to time, shall be called “Formula Systems (1985) Ltd. – Employees and Office Holders Share Option Plan (2008)”(hereinafter
referred to as: the “Plan”).  

	 	1.2 	OBJECTIVE  

	 	
The
objective of the Plan is to grant options to the employees and the office holders of the
Company and of its subsidiaries, provided that they are not controlling shareholders of
the Company, to purchase ordinary shares of the company of NIS 1.00 par value each
(hereinafter referred to as: the “Shares” or the “Company’s Shares”)
pursuant to the Plan and the resolutions of the Board of Directors of the Company, as
adopted from time to time (hereinafter referred to as: the “Options”).
The Options will be granted pursuant to Section 102 of the Income Tax Ordinance [New
Version], 5721 – 1961 (hereinafter referred to as: the “Ordinance”)
and the Income Tax Regulations (Tax Relief in Allocating Shares to Employees), – 2003
(hereinafter referred to as: the “Regulations”), as amended from time to
time.  

	 	
The
grant of Options for the purchase of Shares, according to the Plan, is being done in
order to reward the optionees whose employment and/or term of employment in the Company
or the subsidiaries of the Company have been essential for further the business of the
Company and of the subsidiary of the Company as well as to strengthen the optionees’ sense
of identification with the objectives of the Company and its subsidiaries.  

	2.  	MANAGEMENT
AND SUPERVISION  

	 	         2.1 	The
Plan shall be implemented and administered by the Board of Directors of the
Company, or by the Option committee (hereinafter referred to as: the
“Committee”) subject to the provisions of the Companies Law, 5759 -
1999 (hereinafter referred to as: the “Companies Law”) and to the
Article of Association of the Company (the Committee or the Board of
Directors, as the case may be, shall hereinafter be referred to as: the
“Board”).  

	 	2.2	Without
derogating from the other terms and conditions of the Plan or from the provisions of
Section 102 of the Ordinance or the Regulations, the Board shall be authorized to decide
on and to carry out the following actions: 

	 	                  2.2.1 	To
determine who the optionees are to whom the Options shall be granted; 

	 	2.2.2	To
determine the terms and conditions relating to the Option agreements, including the
number of Options granted to each optionee, the time of grant, the vesting dates, the
method of exercising the Option and the terms and conditions of payment, the price and
conditions of payment that the optionee shall pay in order to exercise any Option in
respect of a Share (hereinafter referred to as: the “Exercise Price”),
the limitations relating to the transferability of the Options and/or the Shares and the
conditions relating to forfeiture and confiscation of the Share Options; 

	 	                  2.2.3 	To
cancel or postpone the grant; 

	 	                  2.2.4 	To
select a taxation route in respect of the Options to be granted, as
                           prescribed by Section 102 of the Ordinance; 

	 	                  2.2.5 	To
modify the limitations and the conditions applicable to the Options or
                           Shares that stem from exercising the Options; 

	 	                  2.2.6 	To
clarify the terms and conditions of the Plan and to supervise the
                           administration of the Plan; 

	 	                  2.2.7 	To
accelerate, either wholly or partially, the vesting dates of the Options
                           granted to each optionee; 

	 	2.2.8	To
freeze, terminate or cancel the entire Plan, or part thereof, to modify or amend the Plan
or the provisions thereof, including increasing the total number of Options that it is
entitled to grant under the Plan; 

	 	2.2.9	To
decide on and determine any other matter that is necessary for the administration of the
Plan. 

	 	2.3	The
resolutions of the Board concerning the Plan and with regard to the Options that are
granted by it shall be final and binding, unless determined otherwise by the Board. 

	 	2.4	The
CEO of the Company, the secretary of the Company and any other person recommended by the
CEO of the Company shall all (each one separately) have the authority to issue Shares
following the exercising of the Options that are granted by the Board pursuant to the
provisions of Section 288(b)(2) of the Companies Law. 

2

	3.  	RESERVED
SHARES  

	 	3.1	The
Company shall reserve 400,000 Shares of its registered capital that are not issued
(hereinafter referred to as: the “Reserved Shares”) to ensure the
grant in accordance with the Plan, subject to adjustments that will be made according to
Section 8 hereunder. 

	 	3.2	In
the event of expiry and/or cancellation of the right to exercise any Option for Shares,
pursuant to the Plan, for any reason whatsoever, the aforesaid Share shall be returned to
the class of Reserved Shares and the Company shall be entitled to grant a new Option
which can be exercised in respect of the same Share. 

	4. 	THE
OPTIONS OFFERED AND THE TERMS AND CONDITIONS RELATING THERETO

	 	4.1 	THE
OPTIONEES  

	 	
The
Options shall be granted, in accordance with the Plan, to the Employees and office
holders of the Company or the subsidiaries of the Company, provided that they are not
“controlling shareholders” of the Company (as defined in Section 32(9) of the
Ordinance).  

	 	
Grant
of an Option to an optionee in accordance with the Plan, shall not entitle the optionee
to receive, or disqualify him from receiving, other Options of the Company or of the
subsidiaries of the Company, besides for the Options according to the to the Plan.  

	 	4.2 	MISCELLANEOUS  

	 	4.2.1	Implementation
of the Plan and the grant of Options pursuant thereto, is subject to all the relevant
laws, regulations and rules of the State of Israel or any other area of judicial
jurisdiction relevant to the matter of the granting of Options, including the Ordinance,
and registration of the Shares in accordance with the provisions of the securities laws
of the State of Israel and of the USA, and subject also to authorizations by the
governmental offices or the Stock Exchange in which the Shares are traded, as required
under the law. 

	 	                  4.2.2 	Every
Option granted to an optionee shall bestow on him the right to purchase
one Share of the Company (hereinafter referred to as: an
“Exercise Share”).  

	 	4.2.3	The
grant of Options to optionees shall be done pursuant to Section 102 of the Ordinance or
the Regulations or other provisions in the Ordinance that are applicable or that shall be
applicable in the future with regard to the grant of Options, as aforesaid. 

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	 	4.3 	THE
TRUSTEE  

	 	4.3.1	Should
the Board decide to grant Options, as stated in Section 2.2.4, via a trustee (hereinafter
referred to as the: “Trustee”), the Trustee shall hold the Options and
the Exercise Shares in trust (hereinafter referred to as: the “Trust”)
for the optionee in favor of whom the Options were granted, in accordance with the
provisions of the Ordinance or the Regulations. 

	 	4.3.2	Pursuant
to the provisions of Section 102 of the Ordinance and the Regulations, taxation of the
Options and the Shares, that stem from the exercise thereof pursuant to one of the tax
routes, is conditional on them being held in Trust and for the period stipulated in
Section 102 of the Ordinance (according to the tax route that is chosen) (hereinafter
referred to as: the “Trust Period”) or any other period as authorized by
the Israeli Tax Authority.  

	 	4.3.3	An
optionee who is granted Options via a Trustee shall not be entitled to sell them and/or
the Exercise Shares, or to transfer them from the Trustee prior to the termination of the
Trust Period. Moreover, the rights bestowed by virtue of the Exercise Shares, including
bonus Shares, but excluding a dividend that is paid in cash, (hereinafter referred to as:
the “Rights”), shall be deposited with the Trustee until the termination
of the Trust Period and shall be subject to the tax route that is applicable to the
Options, by virtue of which they were granted. 

	 	4.3.4	Notwithstanding
what is stated above in Section 4.3.3, an optionee may transfer the Options and/or the
Exercise Shares and/or Rights, from the Trustee, and/or sell them, even prior to the
termination of the Trust Period, provided that the Trustee deducts tax at source or
guarantees the deduction of tax at source as prescribed by the provisions of Section 102
of the Ordinance and the provisions of the Regulations in relation to non-compliance with
the Trust Period. 

	 	4.3.5	Share
Certificates – In so far as they are issued, share certificates of Exercise
Shares issued to a Trustee according to the Plan, shall be deposited with the Trustee
until the date of release of the Exercise Shares from the Trustee. 

	 	4.3.6	Dividends – An
optionee shall have the right to receive dividends (if and in so far as they are
distributed), in respect of Exercise Shares issued to the Trustee on his behalf pursuant
to the Plan, provided that the date of determination of the right to receive the dividend
is not earlier than the Exercise Date (as defined hereunder). As long as the aforesaid
Exercise Shares are held in Trust by the Trustee on behalf of the optionee, the dividends
distributed in respect of the Exercise Shares, held in Trust, shall be paid to the
Trustee in favor of the optionee, as determined by the Board, according to its absolute
discretion, prior to the distribution of the dividends as stated. A dividend paid to the
Trustee shall be transferred to the optionee, subject to the deduction of the tax as
prescribed by the law. 

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	 	4.3.7	Release
of the Options and the Shares held in Trust – At any date after the termination
of the grant period of the Options (as defined hereunder in Section 2.7.1), the Options
and the Shares held in Trust may be released, subject to the provisions of Sections 4.3.3
and 4.3.4 and in the manner and on the terms and conditions set forth hereunder: 

	 	
In
accordance with a written notification by the optionee, the wording of which is to be
agreed to by the Company and the Trustee, which shall be delivered to the Company and to
the Trustee, the Trustee shall release the Options held in Trust, and/or the Shares
emanating from the Exercise thereof, provided that prior to the release of the Options
and/or the Shares, as aforesaid, the optionee has submitted confirmation of payment of
all taxes, to the Trustee and to the satisfaction of the Trustee, the payment whereof is
obligatory upon the release of the Options and/or Shares, as aforesaid.  

	 	4.4 	NON
EXISTENCE OF SHAREHOLDERS RIGHTS  

	 	
The
optionee shall not have shareholders rights in relation to the Shares that derive from
the exercise of an Option granted to him pursuant to the Plan, as long as he has not
exercised the Option to acquire the Share, has not paid the Exercise Price in full and
has not been lawfully registered in the shareholders register of the Company.  

	 	4.5 	RIGHTS
ATTACHING TO THE EXERCISE SHARES  

	 	
The
Exercise Shares shall, for all intents and purposes, have equal rights to the rights of
the existing Shares in the capital of the Company, and shall be subject to the provisions
of the Articles of Association of the Company. The Exercise Shares shall have rights to
any dividend or other bonus, where the determination date of the right to receive such
rights begins on the Exercise Date or thereafter.  

	 	4.6 	GRANT
OF THE OPTIONS  

	 	4.6.1	The
Board shall, at its exclusive discretion, grant Options to the optionees. The Options
shall be granted from time to time as deemed fit by the Board. 

5

	 	4.6.2	The
Grant Date – Without derogating from the provisions of Section 4.2.1 of the Plan
and subject to the provisions of the law, the Grant Date of an Option shall be the date
of adoption of a resolution by the Board to grant the Option or any other date that is
explicitly fixed by the Board of Directors of the Company in its resolution regarding the
granting of the Option. 

	 	4.6.3	The
Grant Agreement – The Company shall deliver a notification to the optionee, in
writing, concerning its right to receive the Options (hereinafter referred to as: the
“Grant Agreement”) in which shall be indicated, inter alia: the
fact that the Options are granted in accordance with Section 102 of the Ordinance, the
tax route selected, the number of Options granted to the optionee, the Exercise Price,
the vesting period, the method of Exercising and any other term or condition relating to
the granting of the Option as resolved by the Board.  

	 	4.6.4	Granting
of the Option to the optionee is conditional upon the signature by the optionee of the
Grant Agreement. By signing the Grant Agreement, every optionee confirms his agreement to
receiving the Options and his agreement to the terms and conditions that are applicable
to the Options and the Exercise Shares according to the Plan, Section 102 (of the
Ordinance) and the Regulations and the tax route selected, and he shall furthermore
declare that he is aware of the provisions of Section 102 of the Ordinance and the tax
route applicable to him and also that he agrees to what is written in the Trust document
signed between the Company and the Trustee, a copy whereof shall be attached to the
aforesaid declaration. 

	 	4.7 	THE
VESTING PERIOD AND THE EXERCISE PERIOD  

	 	4.7.1	The
Vesting Period – The period between the Grant Date of the Options and the date
from when the Option can be exercised (hereinafter referred to as: the “Vesting
Date” and the “Vesting Period” respectively). The Vesting
Period shall be determined by the Board. The Board shall be entitled to decide on a
different Vesting Period in relation to each and every optionee. 

	 	4.7.2	Acceleration
or Extension of the Vesting Period – The Board is entitled, at its discretion,
to determine the provisions with regard to the acceleration and/or extension of the
Vesting Periods, wholly or partially, in relation to the Options granted pursuant to the
Plan, and shall furthermore be entitled to determine different provisions in relation to
each and every optionee, provided that the extension of the Vesting Period shall be
subject to the confirmation of the optionee. 

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	 	4.7.3	The
Exercise Period – Without derogating from what is stated in Sections 6, 8 and 9
hereunder, unless it is determined otherwise by the Board, all the Options shall be
exercisable as of the Vesting Date of the Options until the end of 6 years from the date
they were granted (hereinafter referred to as: the “Termination of the Exercise
Period”). Upon the Termination of the Exercise Period in respect of the Options,
the Options shall expire and all the rights of the optionees in relation to the Options,
including the right to purchase the Exercise Shares, shall expire. In addition, in the
event that the Options are granted via the Trustee pursuant to Section 4.3 above, the
Trust will expire on the date of expiry of the Option. 

	 	4.8 	THE
OPTION PRICE AND THE EXERCISE PRICE  

	 	                  4.8.1 	The
Options shall be granted to the optionees without consideration. 

	 	4.8.2	The
Exercise Price of each Option shall be determined according to the resolution of the
Board and subject to the law. 

	 	4.8.3	Unless
determined otherwise by the Board, the Exercise Price shall be linked to the Consumer
Price Index published at the time of the Board’s resolution relating to the grant of
the Options. 

	5.  	EXERCISING
THE OPTION  

	 	5.1	The
Options shall be exercisable pursuant to the specific terms and conditions that are
determined by the Board in relation to each optionee and subject to the terms and
conditions of the Plan. 

	 	5.2	Exercising
of the Option by an optionee shall be done by providing written notification to the
Company (and to the Trustee, as the case may be) concerning the exercising of the
Options, according to the wording determined by the Company from time to time, and which
shall include, inter alia, the number of Options that the optionee wishes to
exercise (hereinafter referred to as: the “Exercise Notice”),
together with payment of an amount equal to the Exercise Price multiplied by the number
of Exercise Shares. The day on which the Exercise Notice arrives at the Company, together
with the stated amount, shall be deemed to be the day of exercising the Options referred
to in the Exercise Notice (hereinafter referred to as: the “Exercise Date”). 

	 	5.3	Subject
to the provisions of the law, the Board is entitled, at its discretion, to modify the
exercise procedure, provided that the aforesaid modification shall come into effect three
business days after delivery, to the optionees, of the notification of modification of
the exercise procedure. 

7

	 	5.4	Subject
to the optionee’s right to exercise the Options as requested in the Exercise Notice,
the Company shall, within 15 business days after the Exercise Date, issue the Exercise
Shares to the optionee (or to his Trustee as the case may be) and shortly thereafter it
shall act to register the Exercise Shares on the Tel Aviv Stock Exchange Ltd.
(hereinafter referred to as: “TASE”). 

	 	5.5	The
Company shall maintain and manage a book of Option holders at its registered office,
wherein is recorded the names of the holders of Options, their addresses and the number
of Options registered under their names. Furthermore, all transfers of ownership of
Options, as permitted pursuant to Section 7 hereunder, shall be recorded in this book. 

	6. 	TERMINATION
OF EMPLOYER-EMPLOYEE RELATIONSHIP OR THE TERMINATION OF           ENGAGEMENT WITH THE
COMPANY

	 	6.1 	EMPLOYEES
AND OFFICE HOLDERS  

	 	6.1.1	If
an optionee who was an Employee of the Company at the Grant Date, ceases to be employed
by the Company for any reason whatsoever, including circumstances (heaven forbid) of
dismissal of the optionee (hereinafter referred to as: the “Termination”)
(in this Section 6 – the term “Company” also includes a subsidiary
of the Company), unless determined otherwise by the Board, the Options granted to him
according to the Plan shall expire as set forth in Sections 6.1.2 – 6.1.4 hereunder: 

	 	6.1.2	In
the event of resignation or dismissal of an optionee, the day of termination of his
employment shall be deemed to be the day of delivery of the notification of resignation
to the employer, or the day of delivery of the notification of dismissal to the employee,
as the case may be, without any connection to the actual date of termination of the
employment (hereinafter referred to as: the “Termination Date”). 

	 	6.1.3	On
the Termination Date, all the Options that have been granted to an optionee according to
this Plan – and the Vesting Period which has not yet ended – shall expire. The
Options granted to him, the Vesting Period of which was ended by the Termination Date,
shall be exercisable by the optionee (or in the event of his death – by his lawful
heirs), within 90 days after Termination, unless determined otherwise by the Board.  

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	 	6.1.4	Notwithstanding
the foregoing, in the event that the optionee is dismissed for a “cause”, all
the Options granted to him in accordance with this Plan shall expire on the Termination
Date, including the Options, the Vesting Period in respect of which has ended.  

	 	
“Cause” shall
be construed as any of the following: (a) a material breach of the employment agreement
or engagement with the Company, including, but in no way derogating from the generality
of the foregoing, a breach of the duty of confidentiality of the optionee and a breach of
the non-compete obligation; (b) conviction of an offence that carries a stain/dishonor,
or one that has a material adverse effect on the Company and/or on related companies; (c)
a breach of the duty of care or a breach of the fiduciary duty towards the Company and/or
towards related companies; (d) embezzlement of the Company’s funds and/or or the
funds of related companies; (e) any act or omission (except where done in good faith)
which in the opinion of the Board significantly harms the Company and/or related
companies; (f) any occurrence which leads to the cancellation of an entitlement to
severance pay according to the Severance Pay Law, 5723 – 1963; (g) any other just
cause, as determined by the employment agreement and/or in the optionee’s Option
Agreement. The determination of whether the termination or the relationship constitutes
“cause” falls within the authority of the Board.  

	 	6.2 	OFFICE
HOLDERS  

	 	6.2.1	If
the service of an optionee, who is also an office holder in the Company, is terminated
for any reason whatsoever (hereinafter referred to as: the “Termination of Service”),
the provisions of Sections 6.1.2 – 6.1.4 above, with the required modifications,
shall apply. 

	 	
With
regard to the application of the aforementioned Section 6.1.2 – the “Termination Date” shall
be deemed to be the day of the submission of a letter of resignation by the office
holder, the day of expiry of his service or the day of termination of the service of the
office holder by the Board of the Company.  

	 	6.2.2	Notwithstanding
the foregoing, in the event of termination of the service of an optionee who is also a
Director, in accordance with Sections 228(a) (2)-(4) of the Companies Law, or in the
event of the termination of the service of an external Director, in accordance with
Section 246 of the Companies Law, as the case may be, all the Options granted to him
shall expire and shall not be converted to Shares. 

	 	6.2.3	On
the day of termination of service, all the Options granted to the optionee according to
this Plan – the Vesting Period whereof has not yet ended – shall expire. The
Options granted to him, the Vesting Period whereof has ended by the day of termination of
service, shall be exercisable by the optionee (or, in the case of death – by his
lawful heirs), within 90 days after the termination of service, unless determined
otherwise by the Board. 

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	 	6.3	The
Board is entitled to determine, according to its exclusive discretion, with regard to a
specific optionee or in general, different periods or terms and conditions from those set
forth in this Section 6. 

	 	6.4	Notwithstanding
what is stated in this Section 6, in any event an Option shall not be exercisable after
the termination of the Exercise Period (as defined in Section 4.7.3 above). 

	 	6.5	On
the Termination (of employment) Date, an optionee who holds Options that were granted by
means other than via a Trustee, shall provide the Company with insurance or a guarantee
in respect of the payment of tax on the Exercise Date. 

	7.  	TRANSFERABILITY
OF THE OPTIONS AND EXERCISE SHARES  

	 	
Unless
determined otherwise by the Board, the Options granted to an optionee pursuant to this
Plan, or the Shares that stem from exercising the Options, shall not be transferable
and/or assignable and/or used for a pledge and/or attachable and/or any other voluntary
encumbrance, and no power of attorney or transfer certificate shall be issued in respect
thereof, neither for immediate effect nor for future validity, in any event whatsoever,
except for transfer to the heirs, pursuant to the law. In the event of a transfer to
heirs, as aforesaid, the provisions of the Plan, the Grant Agreement and the provisions
of the Ordinance and the Regulations shall be binding upon the heirs.  

	8.  	ADJUSTMENTS
IN RESPECT OF CHANGES IN THE SHARE CAPITAL  

	 	
No
adjustments shall be made to the Options granted in accordance with this Plan during the
period prior to issuing the Exercise Shares, except for the adjustments set forth
hereunder:  

	 	8.1 	CHANGES
IN THE CAPITAL STRUCTURE  

	 	8.1.1	In
the event of changes in the capital structure of the Company (including a merging or
splitting of Shares), an adjustment shall be made to the number of Shares, resulting from
the exercise of the Options, as well as an adjustment to the Exercise Price. In the event
that as a result of the aforesaid adjustment the optionee is entitled, at the time of
exercising the Options, to a fractional Share that is less than half a Share, no Share
shall be granted to him in respect of this fraction. If, as a result of the
aforementioned adjustment, the optionee is entitled to receive a fractional Share equal
to or greater than half a Share, the Company shall issue him one Share in respect of this
fraction. 

10

	 	8.1.2	With
the exception of what is stated in Section 8.2 – 8.4 hereunder, the issuance of
securities of any kind whatsoever by the Company, shall in no way affect the number of
Exercise Shares or the Exercise Price and shall not obligate the Company to carry out an
adjustment of any kind in relation to the Options and/or the Exercise Shares. 

	 	8.2 	DISTRIBUTION
OF BONUS SHARES 

	 	8.2.1	Should
the Company distribute Bonus Shares and the date fixed for the distribution thereof
(hereinafter referred to as: the “Benefit Date”) falls after the
date of granting the Options but prior to the Exercise Date, the Exercise Price in
respect of each Option shall not be changed; however, the number of Shares that each
optionee is entitled to, pursuant to any Option, shall be increased at the time of
exercising by the number of Shares that the optionee would have been entitled to as Bonus
Shares, had he exercised the Options prior to the Benefit Date.  

	 	8.2.2	An
optionee shall not be entitled to a fractional issuance of Bonus Shares on the basis of
the aforesaid. Any extra Bonus Shares that exist at the time of the issuance to the
optionees shall be sold by the Company on the TASE within a month of the Grant Date and
the net consideration, after the deduction of expenses of the sale and all the other
levies, where applicable, shall be paid within 14 days of the date of the sale. The
Company shall not make payments to those entitled to amounts less than NIS 50.00.  

	 	8.3	
RIGHTS ISSUE – In the event that the Company offers its shareholders
securities by way of rights, then the number of Exercise Shares received from the
conversion of the Options shall be compatible with the benefit element of the rights, as
reflected in the proportion between the Share price on the TASE on the “fixed
date”, and the basic price (“ex-rights”) – as defined in the TASE
trading instruction manual, provided that as a result of the aforementioned adjustment,
the Exercise Price shall not be less than NIS 1.00 per Share.

	 	8.4 	CASH
DISTRIBUTION OF DIVIDEND 

	 	
If
the Company distributes a cash dividend, the following provisions shall apply: 

	 	8.4.1	Immediately
after the day fixed for the distribution of a cash dividend, the proportion between the
Share Price, as determined by TASE – taking into account the dividend distribution,
and the Share price shall be calculated at the end of the fixed day, as aforesaid.  

11

	 	8.4.2	The
Exercise Price of the Options shall be adjusted in accordance with the results of the
multiplication of the previous Exercise Price in relation to what is determined, as
aforesaid, in subsection 8.4.1. TASE will notify the optionees of the adjusted Exercise
Price, as stated, not later than the day on which the Company’s Shares are traded
ex-dividend.  

	 	
No
adjustment whatsoever will be made to the Exercise Price in the event of an equivalent
dividend distribution. 

	 	8.5	
TRANSACTION – In the event of a Transaction, as defined hereunder, the Options
not yet exercised shall be exchanged or converted for Options to purchase a Share or a
security of the successor corporation (including a related company of the successor
corporation), subject to the consent of the successor corporation and on condition that
the shares of the corporation are registered and tradable on any stock exchange
whatsoever. In the case of an exchange or conversion, as aforesaid, the appropriate
adjustments shall be made to the Exercise Price and to the number of Shares that reflect
the terms and conditions of the t ransaction, and all the other terms and conditions of
the Options, including the Vesting Dates, shall remain unaltered. In the absence of
agreement to exchange or convert, as aforesaid, all the Options shall expire on the date
of completion of the Transaction.

	 	
A
“Transaction” shall be the occurrence of a single transaction or a series of
related transactions, of one or more of the events set forth hereunder: (1) Sale, or
transfer by any other means, of all or the majority of the combined assets of the Company
(in the event of doubt, the Board of the Company shall decide whether all or the majority
of the combined assets of the Company have been sold); (2) A sale or issuance of
securities of the Company, or any event, act or similar transaction, the outcome of which
is the transfer of control of the Company, either directly or indirectly; (3) A merger, or
similar transaction of the Company with or into another company (or other companies),
except for a merger with a related company. 

	 	8.6	
The grant of Options according to the Plan shall not derogate and/or affect the rights of
the Company, in any way whatsoever, to alter its issued capital or the composition
thereof, to alter the structure of the Company, to merge, to dissolve or to sell all or
part of its assets and/or its activities, and it shall moreover not detract from the
authority of the Board to adopt resolutions according to its exclusive discretion on the
matters as stated.

12

	9.  	LIQUIDATION
OF THE COMPANY  

	 	
Unless
determined otherwise by the Board, in the event of the liquidation of the Company, all
the Options that were granted to the optionees shall expire immediately, prior to the
liquidation of the Company. In the aforementioned circumstances, the Board shall be
entitled to declare that the Options, wholly or in part, shall expire on a date fixed in
advance, and also entitled to give the optionees, all or in part, the right to exercise
the Options that have been granted to them, including Options that according to their
terms and conditions were not exercisable at the fixed date, as stated.  

	10.  	PROTECTION
OF THE OPTIONEES DURING THE TERM OF THE PLAN  

	 	
The
entitlement of the optionees to securities of the Company in the event of the
distribution of Bonus Shares, and/or a rights issue as specified above, shall be reserved
until the Exercise Date of the Options and shall be actually carried out only on the
Exercise Date. Namely, only upon the exercise of the Options, wholly or in part, by the
optionees, shall the optionees be entitled to receive (personally or to the Trustee, as
the case may be) and/or to purchase, as the case may be, securities to which they were
entitled as a result of the distribution of Bonus Shares and/or from the rights issue, as
the case may be, in respect of the number of the Exercise Shares that were actually
exercised at any given time. In order to protect the rights of the optionees as
aforesaid, the Company shall ensure to reserve the appropriate number of securities that
will enable the optionees to exercise their rights as stated above.  

	11. 	LIMITATIONS
ON THE OPTIONEES TRADING IN THE SECURITIES OFFERED

	 	
In
addition to and without derogating from the provisions of the Plan, the sale of Exercise
Shares shall be subject to the limitations set forth in the Securities Law, 1968 and in
the Regulations that are published and may be published by virtue thereof, if and in so
far as they are applicable.  

	12.  	THE
TERM OF THE PLAN AND CHANGES THERETO  

	 	12.1	The
Plan shall expire 10 years after the adoption thereof; however, any Options granted
according to the Plan and not yet exercised, shall remain valid pursuant to what is
stated in the Plan, and all the provisions in the Plan shall continue to apply to them. 

	 	12.2	The
Board shall be entitled, from time to time, to terminate or modify this Plan in any way
that it deems fit, subject to the Provisions of the Plan. 

13

	13. 	TAXATION
AND OTHER ARRANGEMENTS RELATING TO THE TRANSFER OF SHARES TO AN           OPTIONEE

	 	13.1	The
optionee alone shall bear all the tax charges in respect of the grant and exercise of
Options, payment in respect of Shares by virtue of exercising Options, selling Shares,
transferring Shares or in respect of any other activity relating to Options and/or to
Shares (of the Company and/or related companies and/or the Trustee and/or the optionee)
(hereinafter referred to as: the “Tax”). The Company and/or related
companies and/or the Trustee shall deduct all Taxes, including Tax at source, according
to the law, the Ordinance and the Regulations. The optionee agrees to indemnify the
Company and/or related companies and/or the Trustee and to exempt them from all liability
in relation to the payment of Taxes, as stated, interest and fines and any other payment,
including in respect of charges for which there is a requirement to deduct tax at source
or an omission of failing to deduct tax from any payments transferred to the optionee.
Without derogating from what is stated above, the Company shall be entitled to deduct the
Tax from any consideration that is owing to the optionee by the Company or by a related
company, including a deduction from a salary. 

	 	13.2	Without
derogating from the forgoing, the Company and/or the Trustee, as the case may be, shall
be entitled not to transfer the Exercise Shares to the optionee until payment of all the
taxes has been paid in full, as aforesaid. In the event of the death of the optionee,
this Section shall apply, with the required modifications, to the lawful heirs of the
optionee. 

	14.  	GENERAL  

	 	         14.1 	CONTINUATION
OF THE ENGAGEMENT AND NON-WAIVER OF RIGHTS 

	 	
This
Plan and/or the grant of Options in accordance with this Plan shall not be construed as a
direct and/or indirect obligation of the Company to continue the engagement with any
optionee pursuant to the Plan, as an employee or as an office holder. Moreover, the
optionee is not granted any right, in respect of the Plan, to continue his engagement
with the Company, as stated, and furthermore there is no condition in this Plan that
limits the Company from terminating its engagement with every optionee, according to its
discretion. Without derogating from the aforesaid, adoption of the Plan by the Board
and/or the grant of Options pursuant to this Plan, shall not be deemed a waiver by the
employee of rights bestowed on him according to other agreements with the Company and/or
under the law. The grant of an Option is a special and one time benefit that shall not
for any reason whatsoever be deemed as part of the salary of the optionee, including for
the sake of computing the social benefits or severance pay.  

14

	 	14.2 	JUDICIAL
JURISDICTION  

	 	
The
sole and exclusive competent court with regard to any matter connected to this Plan and
the Options that are granted in terms hereof, shall be the Courts in Tel Aviv and the
applicable law shall be the law of the State of Israel.  

	 	14.3 	ADDITIONAL
GRANTS  

	 	
The
terms and conditions of the Options granted to each optionee pursuant to this Plan are
likely to be different for each one of them. The Board shall be entitled to decide on the
number of grants to make to each optionee during the period of the Plan.  

	 	14.4 	NON-EXCLUSIVITY
OF THE PLAN  

	 	
Adoption
of the Plan by the Board shall not be deemed to be an amendment, alteration and/or
substitute plan relating to previous option grants, or deemed as giving the same
authority to the Board to adopt other agreements, or to grant incentives to the
optionees; and, furthermore, without derogating from the aforesaid, it shall not be
deemed to grant options that are not pursuant to the Plan.  

	 	14.5	There
is nothing in the provisions of this Plan that could be construed as derogating from the
provisions of any law. 

15

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