Document:

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                                                                     EXHIBIT 4.1

               [NON-BINDING TRANSLATION FROM THE HEBREW ORIGINAL]

                          ACCORD TELECOMMUNICATION LTD

                                   APPENDIX D
              TO THE COMPANY'S EMPLOYEE OPTIONS AND/OR SHARES PLAN

                            (SECTION 7.1 OF THE PLAN)

                                 EXERCISE NOTICE

                                                              Date: ____________

Eliyahu Lerner, CPA
The Trustee Under The Company Employee Share And/Or Option Plan
Of Accord Telecommunication Ltd
24 Raoul Wallenberg St
TEL AVIV 67897

Dear Sir,

I hereby give you notice that I wish you to exercise on my behalf the option
granted to you on _____________ to purchase _____ ordinary shares of Accord
Telecommunication Ltd (hereinafter referred to as "the company") on my behalf
and that you should purchase _____ ordinary shares in accordance with the said
option at a price of NIS ___________ per share.

Attached to this notice herewith is a cheque in the sum of NIS ___________ in
payment of NIS ___________ for the said shares.

I acknowledge that all the shares will be allotted to you and registered in your
name and that every share certificate with respect to them will be held by you.

I also acknowledge that I may only apply for the shares to be transferred to my
name after the lock-up period as defined in the plan and after any tax and/or
other payment on account thereof has been paid and that all the provisions of
the plan and the law will apply.

Yours faithfully,

____________________

<PAGE>

               [NON-BINDING TRANSLATION FROM THE HEBREW ORIGINAL]

                          ACCORD TELECOMMUNICATION LTD

                                   APPENDIX E
              TO THE COMPANY'S EMPLOYEE OPTIONS AND/OR SHARES PLAN

                            (SECTION 7.3 OF THE PLAN)

                                 EXERCISE NOTICE

                                                              Date: ____________

Accord Telecommunication Ltd.
10 Martin Gahal St
P.O. Box 3654
PETACH TIKVA 49130

Dear Sirs,

By this notice I hereby exercise the option granted to me for an employee of the
company on ____________ to purchase _____ ordinary shares of Accord
Telecommunication Ltd. on behalf of ____________ with respect to _____ ordinary
shares in accordance with the said option at a price of NIS ____________ per
share.

Enclosed herewith is a check in the sum of NIS ____________ in payment for the
said shares.

Yours faithfully,

_________________
Eliyahu Lerner

<PAGE>

               [NON-BINDING TRANSLATION FROM THE HEBREW ORIGINAL]

                          ACCORD TELECOMMUNICATION LTD

                                   APPENDIX F
                  TO THE COMPANY'S EMPLOYEE AND/OR SHARES PLAN

                             (SECTION 9 OF THE PLAN)

                          IRREVOCABLE POWER OF ATTORNEY

I the undersigned hereby authorise and empower Adv. David Cohen (hereinafter
referred to as "the legal advisor") and/or Eliyahu Lerner, CPA or such person as
succeeds him as trustee for the purpose of the employee options/shares plan of
Accord Telecommunication Ltd (hereinafter respectively referred to as "the
trustee" and "the company") as follows:

1.    I authorise and empower the trustee, so long as any shares and/or options
      that have been allotted or granted for me are registered in his name, to
      exercise every right, power and authority attached to the shares and/or
      options and to sign any document (including any agreement, including
      merger agreement of the company or agreement for the purchase or sale of
      its assets and all documents ancillary thereto, decision, application,
      deed, receipt and the like), affidavit or certificate for and on my behalf
      with regard to the shares and/or options or the rights that they represent
      in the company, insofar as he deems necessary or desirable.

2.    Without derogating from section 1 above, I authorise and empower the
      trustee, so long as the shares and/or options are registered in his name,
      and empower the legal advisor after the shares and/or options have been
      transferred into my name, to sign on my behalf and in my stead on any
      document (as set out in section 1 above), affidavit or certificate
      (including any waiver of a right of first refusal to purchase shares
      offered for sale by other shareholders of the company and/or of a
      pre-emptive right to purchase shares that the company is allotting or will
      allot in future, insofar as such rights exist or shall exist in future, in
      accordance with the company's articles as they may be in effect from time
      to time), for and on my behalf or to undertake for and on my behalf if the
      legal advisor or the trustee deems fit at their absolute discretion, that
      the document, affidavit or certificate is necessary or desirable for the
      purpose of any issue of the company, whether such is a private issue or a
      public offering, in Israel or abroad, for the purpose of the company's
      merger with another company, whether or not the company is the surviving
      company, for the purpose of the company's reorganisation and all in
      accordance with what they deem necessary or desirable.

<PAGE>

This power of attorney shall be construed as broadly as possible, based on the
provisions of the company's employee options/shares plan and its objects and
intents and in accordance with the instructions of the legal advisor at his
discretion, and it is irrevocable since the rights of the company and its other
shareholders are dependent hereon.

This power of attorney shall expire at such time as the company goes public in a
way that its shares are traded on a stock exchange in Israel or abroad, as such
time is fixed, for this purpose, by the legal advisor. The expiration of this
power of attorney shall not, in any way whatsoever, effect the validity of any
document (as set out in section 1 above), affidavit or certificate signed as
aforesaid by virtue of this power of attorney prior to its expiration.

                   As witness my hand this _____ day of _________

____________________

                       __________________________________
                       I certify the aforegoing signature

                                                                               2

<PAGE>

               [NON-BINDING TRANSLATION FROM THE HEBREW ORIGINAL]

                          ACCORD TELECOMMUNICATION LTD

                                   APPENDIX G
              TO THE COMPANY'S EMPLOYEE OPTIONS AND/OR SHARES PLAN

                           (SECTION 10.7 OF THE PLAN)

The Income Tax Commission
The Assessing Officer
Accord Telecommunication Ltd ("Accord")
Eliyahu Lerner, CPA or such person as succeeds him as trustee for the purpose of
the company's employee share and/or option plan ("the trustee")

Dear Sirs,

                    AGREEMENT, CERTIFICATION AND UNDERTAKING

I hereby confirm to you that -

1.    I agree that the arrangement mentioned in section 102 of the Income Tax
      Ordinance shall govern the options and shares due to me from Accord and
      apply to me in full.

2.    I hereby agree to the provisions of the trust instruments executed between
      Accord and the trustee (hereinafter referred to as "the trust
      instrument").

3.    I agree that if bonus shares are allotted by virtue of the shares that
      have been allotted for me in a qualifying allotment or which are subject
      to options that have been granted to me, they shall be allotted to the
      trustee and be registered in his name, and the provisions of section 102
      of the Income Tax Ordinance ("the Ordinance") and the Income Tax (Tax
      Concessions On The Allotment Of Shares To Employees) Rules, 5749-1989
      ("the Commissioner's Rules") shall govern the said shares as though they
      were the original shares in respect to which they were allotted and the
      trustee's obligations pursuant to the trust instrument shall respectively
      also govern the bonus shares.

<PAGE>

4.    I hereby undertake to the Income Tax Commission and the Assessing Officer
      not to apply for or claim a tax exemption under section 97(a) or 104 of
      the Ordinance or for an exemption for the sale of shares in the scope of
      corporate mergers on account of a transfer of shares that have been
      allotted to me or that are subject to the options that have been granted
      to me pursuant to the plan, before I have paid the applicable tax with
      respect to those shares in accordance with the Ordinance and the
      Commissioner's Rules, and I further undertake not to transfer the shares
      where a tax exemption applies to such transfer, before the tax charged has
      been paid.

5.    I agree that the trustee and the company shall notify the Assessing
      Officer, pursuant to section 4(b) of the Commissioner's Rules, that they
      are holding this confirmation.

____________________

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<PAGE>

                        INCENTIVE STOCK OPTION AGREEMENT

made and entered into on the ____ day of __________________

Between

       Accord Video Telecommunications Ltd.
       10 Martin Gehl Street
       P.O.Box 3654
       Petah Tikva 49130, ISRAEL

                                                                 (the "COMPANY")

and

       __________________________

                                                                (the "EMPLOYEE")

WHEREAS: The Employee is an employee of the Company and/or of a Subsidiary; and

WHEREAS: The Company desires to grant the Employee incentive stock options to
         purchase shares in the Company, and/or issue to the Employee shares in
         the Company and the Employee is interested in receiving the aforesaid
         options and/or purchasing the aforesaid shares, all in accordance with
         and subject to the Company's Employee Share Ownership and Option Plan
         dated March 29, 1995 and the annexes thereto (the "PLAN") and the
         provisions of this Agreement, and their intention is that the
         provisions of Section 422 of the U.S. Internal Revenue Code of 1986, as
         amended (hereinafter, the "CODE") shall apply to the shares issued
         and/or options granted; and

WHEREAS: The Employee has read the Code, wishes to be bound by it and desires
         that it applies to the options/shares which shall be granted to
         Employee hereunder; and

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration the receipt of which is hereby
acknowledged, it is agreed as follows:

1.     PREAMBLE

       The preamble to this Agreement is the basis and constitutes an integral
       part thereof.

<PAGE>

       APPLICATION OF THE PROVISIONS OF THE PLAN

       2.1    The Employee hereby declares that he/she has carefully read the
              Plan and that he/she acknowledges and agrees to all of the
              provisions, conditions, limitations, authorizations, declarations
              and commitments included therein, and upon signing this Agreement
              he/she undertakes to act pursuant to them towards, the Company's
              legal advisors, (the "LEGAL ADVISORS"), the U.S. Internal Revenue
              Service ("IRS") and the Company.

       2.2    The Employee declares and agrees that this Agreement and the Plan
              prevail over any previous agreement, arrangement and/or
              understanding, whether written or oral between the Employee and
              the Company and/or any subsidiary, or the officers and/or
              directors and/or the shareholders thereof with respect to the
              matters herein included, and with respect to the Company's shares
              and/or any option to purchase shares in the Company which have not
              yet been actually issued or granted, and that any agreement,
              arrangement and/or understanding as aforesaid are null and void
              and of no further force or effect.

       2.3    All of the provisions, conditions, limitations and declarations
              included and specified in the Plan, as the same shall be amended
              from time to time, are hereby incorporated herein by reference and
              constitute an integral part of this Agreement and of the
              Employee's commitments hereunder. Except and to the extent
              otherwise expressly provided herein, nothing in this Agreement or
              in the provisions hereof shall derogate from anything contained in
              the Plan.

       2.4    The Employee declares, covenants and agrees that in any event the
              Code, as the same shall be amended from time to time, is fully
              binding on the Employee and shall prevail in case of
              contradiction, over any other provision in the Agreement or in the
              Plan.

       2.5    A copy of the Plan is attached hereto and constitutes an integral
              part hereof.

3.     THE SHARES AND THE OPTIONS

       3.1    The Company shall grant to the Employee an option (the "OPTION")
              to purchase _________ Ordinary shares of the Company ("SHARES") at
              an exercise price of ______ per share, at the time and in the
              manner hereinafter provided. The consideration shall be paid on
              the date of the exercise of the Option. The Option shall vest and
              be exercisable by the Employee in progressive stages on the
              Exercise Dates specified in Section 3.2 below provided that the
              Employee shall have been continuously employed by the Company
              and/or a subsidiary, from the date hereof until such date of
              exercise.

              In the event that the employment of the Employee with the Company
              (including a subsidiary) is terminated for any reason, whether
              pursuant to circumstances which provide for a right to severance
              pay or otherwise then, subject to the provisions of Section 6.8 of
              the Plan, any unexercised portion of the Option shall immediately
              expire and be of no further force or effect upon such termination
              of employment.

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<PAGE>

              The Option shall expire on May 6, 2005 or at such earlier time, as
              is prescribed in this Section 3.1 above or in the Plan.

       3.2    The following are the dates as of which the Option vests and may
              be exercised by the Employee and the number of Shares which may be
              purchased thereunder on each such Exercise Date:

              3.2.1  Commencing as of ___________, ___________Shares.

              3.2.2  Thereafter, __________ additional Shares on the last day of
                     each of the twelve (12) successive three (3) month periods,
                     ending on ____________.

              3.2.3  Notwithstanding the above, 50% of any un-vested portion of
                     the Option shall immediately vest in the event that any
                     person or group of persons (related contractually or
                     otherwise) that did not hold shares of the Company prior to
                     this Agreement obtains as a result of any transaction or
                     series of related transactions more that 50% of the
                     outstanding share capital of the Company and as a result of
                     such a change the Employee is involuntarily terminated, or
                     there is a significant adverse change in Employee's title
                     or job functions or responsibilities.

       3.3    In the event the Employee shall not pay the exercise price until
              the date of the allotment of the Shares, the Company shall deduct,
              or will cause the deduction of an amount equal to exercise price
              of the Shares from the Employee's salary. This Agreement shall
              constitute Employee's consent thereto.

       3.4    The grant of the options and the register of the Shares in the
              name of the Employee shall be pursuant to the provisions of any
              applicable law, the Code and the Plan.

       3.5    The Employee acknowledges the rights attached to the Company
              Shares, as provided in the Articles of Association of the Company,
              and to the limitations applied to the Shares and their
              transferability, as provided in the Articles of Association of the
              Company, and hereby declares that the above rights and
              restrictions are clear and understandable to him/her. The Employee
              declares that he/she knows that the Articles of Association of the
              Company might be amended from time to time pursuant to applicable
              law and the provisions of the Articles of Association which shall
              be applied to the Shares shall be as amended from time to time.

4.     NON ASSIGNABILITY

       The Employee's rights to: (a) receive and exercise the Option; and (b)
       receive all or part of the Shares are subject to the Plan and are
       personal and not transferable (other than pursuant to a will or the laws
       of inheritance), and may not be made subject to any pledge, lien,
       attachment or other charge whether voluntary or by law, and no power of
       attorney or a transfer deed shall be given in respect thereof, whether it
       is to be effective immediately or in the future, whether directly or
       indirectly, and any such transfer shall be null and void.

                                       3
<PAGE>

       The Employee acknowledges and hereby agrees that, in addition to the
       limitations on transferability of the Shares, pursuant to the Company's
       incorporation documents, as shall be in effect from time to time, for as
       long as the Company is a private company or a public company whose shares
       are not traded on any stock exchange, the Employee's shares in the
       Company shall not be transferable, without the prior approval of the
       Company's Board of Directors, which approval may be withheld at its
       absolute discretion.

5.     EMPLOYEE REPRESENTATIONS, WARRANTIES AND COVENANTS

       Without derogating in any manner from the provisions of the Plan or this
       Agreement, the Employee hereby represents and warrants as follows:

       5.1    The shares are being purchased for the Employee's own account for
              investment purposes only and not with a view for resale or
              transfer, and that all the rights pertaining to the Shares, by law
              or equity, shall be purchased and possessed by the Employee for
              the Employee exclusively.

       5.2    That he/she acknowledges that the Company's shares are not
              publicly traded in any stock market and understands that the
              Company bears no responsibility and has made no commitment to
              register its shares, or the Options or Shares allotted to the
              Employee, for trading or to offer its shares to the public in any
              manner.

       5.3    That he/she acknowledges and agrees that no income or gain which
              the Employee may be credited with or which purports to be credited
              to the Employee as a result of the grant of the Option, the issue
              of the Shares, the transfer into the Employee's name thereof or
              the sale thereof, if any, shall in any manner be taken into
              account in the calculation of the basis for the Employee's
              entitlements, of any social welfare right, including without
              limitation, social security, manager's insurance, educational
              fund, pension funds, severance pay, holiday pay, etc.

              In the event that the Company and/or any Subsidiary or Related
              Company shall be required, pursuant to any law, to take into
              account for purposes of calculating any such benefits, any of the
              aforesaid elements of income or gain actually or theoretically
              credited to the Employee, the Employee shall indemnify the Company
              and/or any Subsidiary or Related Company against any expense
              caused to it in this regard.

       5.4    That he/she acknowledges that nothing in this Agreement and/or in
              the Plan shall be interpreted as a commitment and/or an agreement
              by the Company and/or Subsidiary or Related Company to employ the
              Employee, for a certain period, and that nothing in this Agreement
              and/or the Plan shall be interpreted as restricting the rights of
              the Company and/or any Subsidiary or Related Company to terminate
              the Employee's employment, at any time, at its sole discretion and
              in accordance with law. The Employee shall have no claim
              whatsoever against the Company and/or any Related Company as a
              result of the termination of his/her employment (other than
              pursuant to the Employee's Employment Agreement dated April 29,
              1997), even if such termination causes the Option or any other
              options, in whole or in part, to expire and/or prevents

                                       4
<PAGE>

              Employee from exercising the Option in whole or in part and/or
              from receiving or retaining the Shares pursuant hereto or to any
              other agreement between Employee and the Company, or results in
              any loss due to any imposition of tax liability (including any
              early imposition) pursuant to applicable law.

       5.5    That he/she acknowledges that the grant of the Option and the
              issue of the Shares, the execution of this Agreement and the
              Employee's participation in the Plan shall have tax consequences
              to the Employee, and that the Company is not able to ensure or
              represent to the Employee the nature and extent of such tax
              consequences.

              That he/she acknowledges and agrees that pursuant to the Plan, the
              Employee only shall be liable to pay all taxes, of every nature,
              and all expenses arising out of the Plan, whether or not the
              provisions of Section 422 of the Code apply. Furthermore, the
              Employee acknowledges that the Employee shall not have, and the
              Employee hereby waives, any complaint and/or cause of action the
              same has or shall have in the future against the Legal Advisors
              and/or against the Company in any way connected to any taxation
              resulting from the grant of the Option, the exercise thereof, the
              transfer of Shares into the Employee's name, the sale of Shares by
              the Employee and/or any other matter which is in any manner
              whatsoever connected to the Option, the Shares and/or the
              participation of the Employee in the Plan.

              The Employee further acknowledges and agrees that, without
              derogating from the Employee's obligation to pay all taxes payable
              with respect to the Option and the Shares, the Company and/or any
              Related Company shall at its absolute sole discretion be entitled
              (and/or obliged pursuant to applicable law), to deduct at source
              from all the payments due to the Employee, including dividends,
              consideration for the sale of shares or from any other source, any
              tax payments due to the relevant tax authorities in respect of the
              Option or the Shares pursuant to any law.

       5.6    That he/she acknowledges that he/she is aware of, and clearly
              understands the rights and limitations attached to the Shares as
              set forth in the Company's Articles of Association, as shall be in
              effect from time to time, the Plan and this Agreement and that, as
              a result, inter alia, of these limitations, it may be difficult or
              impossible for the Employee to realize his investment and/or to
              sell or otherwise transfer the Shares.

       5.7    In the event that the Company's Articles of Association, now or at
              any time hereafter, provide for a right of first refusal to
              purchase shares of the Company which are offered for sale by other
              shareholders of the Company and a pre-emptive right to purchase
              shares which are being allotted or shall in the future be allotted
              by the Company, the Employee hereby waives such rights. For the
              purpose of the approval of any transfer or the execution of any
              issue as aforesaid, this Agreement shall constitute the consent of
              the Employee therefor. The Employee shall not sell the Shares or
              any part thereof to any third party, unless such third party signs
              a waiver and a consent as aforesaid.

       5.8    That he/she has received a copy of the Plan, has examined it, and
              acknowledges and agrees to all the provisions and conditions
              thereof.

                                       5
<PAGE>

       5.9    That he/she has full knowledge of the Company and its activities,
              and is aware that the Company operates in a sophisticated, high
              tech and high risk sector, and that the market thereof is
              restricted and highly competitive, and that the exercise of the
              Option constitutes an economic risk. The Employee undertakes that
              he/she shall not have any claim against the Company and/or any
              Subsidiary or Related Company or any of its or their officers,
              employees, shareholders or advisors if the Employee's investment
              in the Shares shall fail or for the payment of any tax due or for
              any other reason.

6.     TAXES; INDEMNIFICATION OF THE COMPANY, THE TRUSTEE AND THE LEGAL ADVISOR

       6.1    The Shares allotted to the Employee pursuant to the Plan, are
              being allotted under an employee-employer relationship. Therefore,
              the Employee hereby covenants, whether the provisions of Section
              422 of the Code shall apply to the Employee or not, to bear all
              tax obligations, levies, fines and other payments which shall be
              imposed by the relevant tax authorities and any other obligation
              from whatever source including but not limited to the obligations
              of the Employee and/or the Company and/or any Subsidiary or
              Related Company arising out of the Plan (including granting of the
              Option, exercise of the Option, issue of the Shares, transfer of
              the Shares into the Employee's name and the sale thereof by the
              Employee). Without derogating from the generality of the aforesaid
              the Employee's obligations in this regard shall include, income
              tax, employer's tax, capital gains tax, social security insurance
              and any other tax, levy or payment which the Employee or the
              Company and/or any Subsidiary or Related Company is or shall be
              obliged to pay because of the Option or the Shares (including
              deductions at source which the Company is obliged to make for tax
              imposed upon the Employee) and the Employee shall indemnify the
              Company and/or any Subsidiary or Related Company and/or the
              Trustee for every charge or payment as aforesaid.

       6.2    Subject to the provisions of the Plan, the Employee hereby
              covenants to pay the Company promptly upon their first request in
              writing, any sum for which they are responsible (or, in the Board
              of Directors' opinion, they might be responsible for), and which
              is payable by the Employee as set forth in Section 6.1 hereof to
              the IRS and/or any other governmental or administrative authority,
              whether in Israel or abroad (including for deduction of tax at
              source) pursuant to the Plan, and/or in respect of the Employee's
              participation in the Plan, whether the responsibility as aforesaid
              shall arise directly or in respect of any responsibility of the
              Employee for such payment. The Employee covenants to promptly
              indemnify the Company and/or any Subsidiary or Related Company for
              any charge or payment as aforesaid.

       6.3    In no event shall the Legal Advisors be liable to the Company
              and/or the Employee and/or to any third party (including, without
              derogating from the generality of the aforesaid, the IRS and any
              other governmental or administrative authority, whether in Israel
              or abroad) or a purchaser of Shares from the Employee, with
              respect to any act which has been or which shall be carried out
              and/or any opinion which has been or shall be given in relation to
              the Plan and any matter connected thereto or arising

                                       6
<PAGE>

              therefrom, except with regard to gross negligence or willful
              misconduct of the Legal Advisors. The Company and/or any
              Subsidiary or Related Company and the Employee covenant, upon
              signing this Agreement, that they will not make, and they each
              hereby waive, any and all claims against the Legal Advisors as
              aforesaid and each of the Company, Related Company and the
              Employee expressly agree that if either shall make any claim
              against the Legal Advisors the same shall then be entitled on the
              grounds of this Section alone to apply to the competent court for
              dismissal of the action against them with costs. The Company
              covenants and agrees that if a claim is brought by any third party
              against the Legal Advisors, the same will be entitled without
              objection by the Company, to join the Company as a third party to
              any such action and any judgment against them shall be paid by the
              Company.

              The Company and the Employee hereby covenant to indemnify the
              Company's Legal Advisors against any liability in relation to any
              claim and/or demand made against the Legal Advisors by any person
              whatsoever, including the relevant tax authorities, in relation to
              their acts or omissions in connection with the Plan, except with
              regard to gross negligence of willful misconduct of the Legal
              Advisors.

              The provisions of this Section and the other provisions of this
              Agreement and the Plan which grant any right, power, immunity or
              any authority to the Legal Advisors, shall operate in favor of the
              Legal Advisors and they shall be entitled to act pursuant to and
              enforce such provisions, and the Company and the Employee shall be
              liable to the Legal Advisors as if they were parties to this
              Agreement.

7.     GOVERNING LAWS

              The Plan and all its appendices, including this Agreement shall be
              governed by and construed in accordance with the laws of the State
              of Israel (except for matters with respect to the Code and the IRS
              and in such matters the laws of the State of Georgia or United
              States Federal law as applicable shall apply) and, subject to the
              provisions of Section 9 below, the competent courts in the State
              of Israel shall have exclusive jurisdiction with respect to any
              matter or conflict with respect thereto.

8.     AMENDMENTS TO THE PLAN AND/OR REPLACEMENT THEREOF

              The Employee acknowledges, agrees and confirms that the Plan may
              be amended or replaced by the Board of Directors of the Company as
              provided for therein and the Employee hereby agrees and covenants
              not to raise any objection to any such amendment or replacement as
              aforesaid, and that the Employee shall sign any document which
              according to the Company's Legal Advisors is necessary or
              desirable in order to give full force and effect to the amendment
              of the Plan. The Employee understands that any amendment to the
              Plan or any document connected to the Plan, shall bind Employee as
              if he/she were a party thereto.

9.     ARBITRATION

              Every dispute or disagreement between the Company and the employee
              in relation to and/or in connection with this Agreement shall be
              settled by an

                                       7
<PAGE>

              arbitrator in accordance with the laws of the State of Israel. The
              arbitrator shall not be bound by laws of evidence or by
              substantive law and shall not be obliged to give grounds for his
              decision and shall be empowered to dispose of a matter by way of
              compromise in his absolute discretion. The arbitration shall take
              place in Tel-Aviv, Israel and the language of the arbitration
              shall be the English language. The execution of this Agreement by
              the parties shall be deemed the execution of an arbitration
              agreement as required by the Israeli Arbitration Law, 5728 - 1968.

10.    NOTICES AND/OR INSTRUCTIONS

       (a)    Every notice and/or instruction required or permitted to be given
              pursuant to this Agreement shall be given in writing and shall be
              deemed to have been delivered on the date of its delivery to the
              addressee by hand or 3 (three) days after having been sent by
              registered mail. The parties addresses for the purpose of this
              Section shall be, if a party hasn't communicated another address
              by a written notice 10 (ten) days in advance, as follows:

              The Company: Accord Video Telecommunications Ltd.
                           10 Martin Gehl Street
                           P.O.Box 3654
                           Petah Tikva 49130, ISRAEL

              The Employee: _____________________
                            _____________________
                            _____________________

       (b)    A stamp or a receipt on behalf of the postal service which
              evidences the time of delivery of the notice shall constitute
              conclusive evidence as to the date of delivery and no party shall
              claim that a notice delivered as aforesaid has not been received
              by such party.

____________________________________                 ___________________________
Accord Video Telecommunications Ltd.                 Employee

                                       8
<PAGE>

                                    EXHIBIT A

                              OPTION EXERCISE FORM

(To be executed by the Employee to exercise the rights to purchase ordinary
shares of the Company evidenced by the foregoing Option Agreement )

TO:    Accord Video Telecommunications, Ltd.

       Referring to the Stock Option Agreement dated ________________, by and
between Accord Telecommunications, Ltd. (the "Company") and the undersigned,
granting to me the right to purchase a total of __________ ordinary shares of
the Company at an exercise price of ______ per share, I hereby exercise my right
to purchase pursuant to said Agreement _____________ shares at said price and
deliver to you herewith in cash, or check payable to the Company, the total
amount of $_______________, representing the full purchase price of said shares.

         Date: ____________________

                                     Signature:  ______________________________

                                     Name:          ________________________

                                     Address:       ________________________

                                                    ________________________

                                     Social Security No.: _____________________

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                            PIKTEL TECHNOLOGIES LTD.
                                 (THE "COMPANY")

                            EMPLOYEE SHARE OWNERSHIP

                                 AND OPTION PLAN

              PURSUANT TO THE BOARD RESOLUTION DATED MARCH 29, 1995

<PAGE>

                            PIKTEL TECHNOLOGIES LTD.

                            EMPLOYEE SHARE OWNERSHIP

                                 AND OPTION PLAN

<PAGE>

                                TABLE OF CONTENTS

1.     Preamble.

2.     Management of the Plan.

3.     The Shares subject to the Plan.

4.     The Plan exhausts the employee's entitlement to receive options in the
       Company.

5.     Allotment of the options and shares to the trustee.

6.     Agreement with the employee (option or agreement for the purchase of
       shares) and conditions of exercise.

7.     Exercise of the option.

8.     Transfer of the shares into the name of the employee.

9.     Additional documents.

10.    Taxation and other arrangements in connection with the transfer of the
       shares to the employee.

11.    Dividends.

12.    Rights and/or benefits arising out of the employee-employer relationship
       and the absence of an obligation to employ.

13.    Adjustments for changes in the capital structure.

14.    Amendment of the Plan, amendment of existing options or the replacement
       thereof.

15.    Commencement of the Plan; termination, freezing or lapse thereof.

16.    Release of the trustee and the legal advisor from liability and
       indemnification.

17.    Arbitration.

18.    The employee's declarations and covenants.

19.    Miscellaneous.

20.    Notices and/or instructions.

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APPENDICES

Appendix A:  Section 102 of the Income Tax Ordinance and the Income Tax Rules
             (Tax Relief on the Allotment of Shares to Employees, 5749-198); the
             version as of the date of commencement of the Plan (Clause 1.4).

Appendix B:  Trust deed pursuant to Regulation 3 of the Commissioner's Rules
             (Clause 5.2).

Appendix C:  The Company's notice to the Assessing Officer as to the Allotment
             Plan (Clause 5.2).

Appendix D:  Employee's notice to the trustee as to exercise of the option
             (Clause 7.1).

Appendix E:  Notice to the Company of exercise of the option by the trustee
             (Clause 7.3).

Appendix F:  Power of attorney given by the employee to the legal advisor to
             sign the documents (Clause 9.2).

Appendix G:  Employee's confirmation to which he undertakes not to claim
             exemption pursuant to Sections 95 or 97(a) of the Ordinance, and
             the consent of the employee to the trust deed signed pursuant to
             the Commissioner's Rules by the Company and the trustee
             (Clause 10.7).

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1.     PREAMBLE

       1.1    The object of the Plan is to enable employees and advisors of the
              Company, employers and advisors of its subsidiaries, companies
              that have an interest in the Company, and companies related to the
              Company (collectively, the "COMPANY") to acquire shares of the
              Company either at the market price or at a price higher or lower
              than the market, as shall be determined from time to time by the
              Company's Board ("BOARD").

       1.2    The Company, by means of the Plan, aims to continue to enjoy the
              services of the present officers of the Company, to ensure the
              acquisition of the services of other appropriate persons to fill
              the senior positions in the Company, and to create incentives for
              the holders of the senior positions in the Company to invest their
              maximum effort towards the Company's success while remaining
              faithful to the Company throughout. The Company is a
              high-technology Company and the value of its shares is dependent,
              inter alia, upon the effort which the Company's senior employees
              invest therein, upon their initiative and upon their creativity.
              The Company aims that its success shall also be theirs.

       1.3    The Company intends to bring the Plan under Section 102 of the
              Income Tax Ordinance ("SECTION 102" and the "ORDINANCE",
              respectively) and under the Income Tax Rules (Tax Relief on the
              Allotment of Shares to Employees), 5749-1989 ("COMMISSIONER'S
              RULES"). Nonetheless, the Company does not warrant that the Plan
              will be recognized by the income tax authorities or that even if
              it should comply with current provisions of the law, there will
              not be any future changes in the provisions of the law, the
              regulations or the Commissioner's Rules, in existence from time to
              time, or that the exemption under Section 102 will not be
              abolished by the Commissioner in accordance with his authority
              pursuant to the Commissioner's Rules and that the same will not
              affect the taxation of any of the employees, or that for other
              considerations the Company shall prefer not to apply Section 102
              to the options or shares which have vested to the employees from
              time to time pursuant to the Plan. Accordingly, the Company
              reserves the right at its absolute sole discretion to operate the
              Plan in whole or part, from time to time, outside of the framework
              of Section 102, whether with respect to all the employees or part
              of them.

       1.4    In the event that the provisions of Section 102 and the
              Commissioner's Rules apply to the employees or any one of them,
              then the provisions of Section 102 and the Commissioner's Rules as
              amended from time to time, or if the Commissioner shall determine
              special conditions for the Plan or a specific allotment within the
              framework of the Plan then these shall also be an integral part of
              this Plan in as much as they affect the employees to whom they
              apply. In the event of a contradiction between the clauses of the
              Plan, the appendices attached thereto and the agreements with
              employees prepared pursuant thereto or their application, and the
              provisions of the law and the Commissioner's Rules, the provision
              of the law and the Commissioner's Rules shall apply and the
              necessary adjustments to the Plan shall be determined by the Board
              at its sole discretion and its determination in this regard shall
              be final and binding. (For the employees convenience, a current
              version of Section 102 and the Commissioner's Rules in effect at
              the time of adoption of the

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              Plan are annexed hereto as APPENDIX A.) It is emphasized that only
              the version that is published in the Official Gazette is binding.
              Each employee is required to learn and consider the provisions of
              Section 102 and the Commissioner's Rules since they constitute an
              integral part of this Plan as aforesaid.

       1.5    In the event the Company's shares are registered for trade on the
              Tel-Aviv Stock Exchange Ltd., or on any other stock exchange,
              whether in Israel or abroad (hereinafter the "STOCK EXCHANGE") the
              grant of options and/or the issue of shares under the Plan may be
              conditional upon submission to the Stock Exchange or Securities
              Authorities (the "AUTHORITIES") of an outline, an immediate
              report, or a similar document or upon meeting any other
              requirement or instruction of the Stock Exchange and the
              requirement of any other authority acting under law as exists from
              time to time. In such event, in accordance with the Board's
              resolution, the Plan and the Agreements prepared pursuant thereto,
              may be amended as necessary to meet the requirements of the Stock
              Exchange or of the Authority, or any other authority as aforesaid.
              Such an amendment shall be part of the Plan and in any event of
              contradiction between the amendment and the Plan's provisions, the
              amendment's provisions shall prevail.

              Furthermore, in the event that the granting of the options and/or
              allotment of shares as a result of exercise of the options
              pursuant to the Plan, shall be subject to proceedings and/or to
              approvals required by law, then completion of the proceedings
              and/or the receiving of the approvals required by law shall
              constitute a preliminary condition to execution of the allotment.

2.     MANAGEMENT OF THE PLAN

       2.1    The Plan will be managed by the Board, whose interpretations,
              applications and modes of management thereof shall be final and
              binding subject to the provisions of the Plan, conferring powers
              of interpretation or determination on the legal advisor. The Board
              or whomever it designates shall have the exclusive power to
              determine questions of policy and efficiency, which are likely to
              arise in the operation of the Plan.

              Every right, power or authority conferred on the Company by the
              Plan shall be exercised by the Board or whomever has been
              authorized by it to do so. Every directive or notice signed by two
              members of the Board shall constitute decisive proof and authority
              for every act or decision of the Company.

       2.2    Without derogating from the generality of the aforegoing, the
              Board shall have the following powers:

              2.2.1  To determine at their absolute and sole discretion who
                     shall serve as trustee pursuant to the Plan. To change the
                     trustee in the future at their absolute sole discretion
                     and/or to appoint someone else to serve as trustee in place
                     of the existing trustee if the existing trustee is unable
                     or unwilling to fulfill his duty as trustee, or in the
                     event that Section 102 shall apply to the Plan, if the
                     approval of the trustee is canceled by the Commissioner of

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                     Income Tax (in the event that Section 102 shall apply to
                     the Plan all the above powers shall be exercised in
                     coordination with the income tax authorities).

              2.2.2  To interpret the Plan and the options and shares which
                     shall be granted pursuant to the Plan, and to make, amend,
                     and repeal regulations and instructions in the Plan.

              2.2.3  To delegate its powers pursuant to the Plan to a committee,
                     whether the committee shall operate as an independent
                     committee or as a committee subject to the Board.

              2.2.4  To determine at their absolute sole discretion, from time
                     to time, in general or for each employee individually: (i)
                     the date and manner of the granting of the options and the
                     allotment of shares or any part thereof; (ii) to set
                     conditions, which shall not necessarily be identical, for
                     every option or share which the Company shall grant,
                     including the price and the conditions for the exercise of
                     the option and the allotment of the share; (iii) the date
                     or dates upon which the option(s) or part thereof shall be
                     exercised; (iv) the manner of exercise of the option; (v)
                     the number of the shares which may be made available to the
                     employee for acquisition at times, including the minimum
                     number of shares which may be realized at any time an
                     option is exercised; (vi) the employees' obligations to the
                     Company, including the obligation of the employee to sign
                     every document which the Board determines is of importance
                     to the Company, and upon which the exercise of the option
                     and the receipt of the share or the share certificate by
                     the employee is dependent; (vii) to sign with the employee
                     or employees an option agreement or agreements or share
                     allotment agreement or any other agreement in any form as
                     shall be determined by the employee and the Company. In
                     general this Plan provides a framework and the Board may,
                     with respect to any employee or employees, determine any
                     matter relating to the grant of options and the allotment
                     of shares in individual agreements. The Board shall be
                     empowered to allot from the shares subject to the Plan,
                     shares or options to purchase shares also to persons
                     providing services to the Company, but such grant or
                     allotment shall not be a qualifying allotment as defined in
                     Section 102 and the Commissioner's Rules, unless these are
                     so modified.

              2.2.5  In general, to exercise its authority, to take action and
                     to impose limitations and/or conditions with respect to the
                     Plan and/or the options granted pursuant to the Plan and/or
                     the shares subject to the options and/or the shares which
                     shall be allotted pursuant to the Plan, all as the Board in
                     its absolute discretion, shall consider to be correct or
                     necessary for the good of the Company and the employees.

              2.2.6  To appoint and replace, from time to time a legal advisor
                     for purposes of this Plan's provisions (the "LEGAL
                     ADVISOR").

              2.2.7  The powers vested in the Board pursuant to the Plan, shall
                     be exercised, as long as, in the Board's opinion, no
                     prejudice is

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                     caused to the rights of the employees, to whom securities
                     have been allotted pursuant to the Plan and to the option
                     agreement.

       2.3    No director or officer of the Company shall bear personal
              liability or any obligation to an employee as a result of any
              decision and/or action carried out in relation to the Plan or its
              execution.

3.     THE SHARES SUBJECT TO THE PLAN

       3.1    The shares subject to the Plan shall be the ordinary shares of the
              Company (the "SHARES"). The maximum number of Shares subject to
              the Plan is 180,000 ordinary shares of NIS 0.10 nominal value
              each. The number of shares shall be amended pursuant to
              adjustments, if any, to the Company's share capital (such as
              splits, combinations, distribution of bonus shares, etc.), as set
              forth in Clause 13 below. In the event that an option granted
              under the Plan shall lapse for any reason, or shall end without
              having been fully exercised, or if Shares which have been allotted
              to persons entitled thereto are acquired back from them, or if the
              persons entitled to the Shares have lost their rights to the
              Shares, the Shares which have not been purchased pursuant to such
              option or the Shares of which the acquisition have not been
              completed shall again be placed at the disposal of the Plan. Any
              increase in the maximum number of Shares shall be made by the
              Board and shall require the approval of the general meeting of the
              shareholders of the Company.

       3.2    As long as the shares are held by the trustee or registered in his
              name in the register of members of the Company or as long as the
              share certificates are held by the trustee or the Legal Advisor,
              the trustee alone shall be entitled to receive every notice to
              which a shareholder is entitled, and he shall be entitled to
              exercise every right of the shareholders of the Company or require
              any information, financial report or other report which a
              shareholder has the right to require from the Company, and to
              participate in every shareholders' meeting. The employee shall not
              be entitled to exercise any such right as shareholder or make any
              demand or request of the trustee in this regard. The trustee shall
              vote at the general meeting of the Company in the same proportion
              as the other shareholders, and in such a manner, so that for
              practical purposes he shall be deemed to have abstained.

4.     THE PLAN EXHAUSTS THE EMPLOYEE'S ENTITLEMENT TO RECEIVE OPTIONS IN THE
       COMPANY

       By signing the Option Agreement mentioned in Clause 6 below, the employee
       declares and agrees that the Plan and the Agreement take precedence over
       any agreement, arrangement and/or understanding which may have been made
       in the past, if any, whether in writing or verbally between the employee
       and the Company, its directors and/or shareholders, and every
       arrangement, undertaking or promise to grant options and/or shares in the
       company, which has been promised to the employee in the past by the
       shareholders or directors of the Company or related companies shall have
       no effect and are null and void. Accordingly, in all matters relating to
       options or shares of the Company, only the provisions of the Plan or the
       option agreement shall apply. Upon the earlier of receipt by the employee
       of the options, or upon their receipt by the trustee on his behalf, or
       the signing of the option agreement, the

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       employee expressly waives every right which he had in the past, if any,
       vis a vis the Company, its shareholders or directors in connection with
       options or shares in the Company.

5.     ALLOTMENT OF THE OPTIONS AND THE SHARES TO THE TRUSTEE

       5.1    The Board shall appoint a trustee for the purposes of this Plan.
              The trustee shall have all the powers provided by the law, the
              Commissioner's Rules, and the Plan and he shall act in accordance
              therewith, as shall be in effect from time to time, with respect
              to the shares or options which have been allocated to him for the
              employees, in accordance with the decision of the Board. The
              Company shall pay the trustee a salary as shall be agreed between
              the trustee and the Company.

       5.2    If the Plan or part thereof will be brought under Section 102, the
              Company and the trustee shall apply to the Commissioner of Income
              Tax for approval of the trustee pursuant to the provisions of
              Section 102 and the Commissioner's Rules. The Company and the
              trustee shall sign such trust deed as is provided by the
              Commissioner's Rules (the "TRUST DEED") and shall notify the
              Assessing Officer, at the office at which the Company's file is
              maintained, of the allotment Plan at least 30 days prior its
              execution, pursuant to the provisions of the Commissioner's Rules.

              The Trust Deed agreed with the trustee who has been appointed by
              the Board for purposes of this Plan forms an integral part hereof
              and is attached hereto as APPENDIX B. The form of the notice to
              the Assessing Officer is attached hereto as an integral part
              hereof as APPENDIX C.

              The Company and the trustee shall be entitled to amend the Trust
              Deed, from time to time, as shall be deemed necessary by the Board
              for the purpose of executing the Plan in the most efficient manner
              possible for the good of the Company and the employees.

       5.3    The share certificates and the option agreements shall be issued
              in the name of the trustee and shall be deposited with and held by
              him, and registered in his name in the register(s) of members of
              the Company for a minimum period as shall be determined by the
              Board but which shall not be less than 24 months from the earlier
              of the date on which the options are granted or shares are
              allotted to the trustee (hereinafter referred to as the
              "RESTRICTION PERIOD"). The option agreements/share certificates
              shall be allotted to the trustee and shall be deposited with him
              on the date determined by the Board, after completion, to its
              satisfaction, of all the proceedings to proceed to the
              commencement of the Plan (hereinafter referred to as the "FIXED
              DAY").

       5.4    In the event that additional Restriction Periods will apply to the
              options and/or shares pursuant to instructions of the Stock
              Exchange and/or any law, the Board shall establish the extent and
              conditions of their application with an approach to endeavor to
              apply them parallel to the Restriction Period as far or is
              possible.

       5.5    For as long as the options have not been exercised and the shares
              have not been allotted, transferred and registered in the
              employee's name in

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              the Company's registers, the employee shall not have any of the
              rights granted to a shareholder of the Company.

       5.6    Nothing in the aforegoing provisions shall derogate from the power
              of the Board to grant options and/or to allot shares to the
              trustee otherwise than under the provisions of Section 102 and the
              Commissioner's Rules, to appoint a trustee other than the trustee
              appointed by the Company for the purposes of Section 102, or to
              allot shares or grant options to employees directly and not
              through a trustee, upon such conditions as shall be determined by
              the Board.

6.     AGREEMENT WITH THE EMPLOYEE (OPTION OR AGREEMENT FOR THE PURCHASE OF
       SHARES) AND CONDITIONS OF EXERCISE

       Every employee shall be required, unless the Board has reached a contrary
       agreement, to sign an option agreement or a share purchase agreement or
       another agreement, as determined from time to time by the Board, in the
       version presented from time to time by the Legal Advisor of the Company,
       and as shall be approved by the Board (hereinafter the "OPTION AGREEMENT"
       or "SHARE PURCHASE AGREEMENT" or the "AGREEMENT").

       The Agreement, which shall be signed with the employee, will not
       necessarily be identical with respect to each employee. The following
       conditions, unless expressly otherwise determined in respect of a
       particular option, shall apply to every option and shall apply mutatis
       mutandis to the Share Purchase Agreement:

       6.1    The option shall be in force for a period of 10 (ten) years from
              the date of commencement of the Plan, as such date is defined in
              Clause 15 below. The option shall lapse upon expiration of this
              period unless this period is extended by the Board.

       6.2    Unless the provisions of Section 102 and the Commissioner's Rules
              do not apply to the option and unless the Board has reached a
              contrary agreement with the employee, the option shall be granted
              to the trustee on behalf of any employee, without consideration,
              or at such price as shall be determined by the Board at their
              absolute discretion ("OPTION PRICE"). The consideration for the
              shares, which shall be purchased upon exercise of the option,
              shall also be determined by the Board, and may be the market price
              or a price higher or lower than the market price of the shares,
              provided that it shall be not less than the nominal value of the
              shares relating to such option (hereinafter referred to as the
              "OPTION EXERCISE PRICE").

       6.3    In addition to the provisions of Clause 6.2 and without prejudice
              thereto, if the law and the Commissioner's Rules shall apply to
              the Agreement, the option shall be granted or the shares shall be
              allotted to the employee in consideration for the employee waiving
              salary in accordance with a written understanding between himself
              and the Company or pursuant to the provisions of the Agreement.

       6.4    Unless determined otherwise in the Agreement, the Option Exercise
              Price shall be paid by the employee to the Company no later than
              the date of exercise of the option.

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              In any event that an arrangement is made for deferred payment of
              the option exercise price, the Board may determine that the
              deferred payment shall be linked to the consumer price index or to
              a similar index or to a foreign currency, and may also include
              interest.

       6.5    The option and/or the right to the option and/or the Shares are
              personal, and except insofar as is specified in this Plan, and
              pursuant to Section 102 and the Commissioner's Rules (if they
              apply), may not be transferred, assigned, pledged, withheld,
              attached or otherwise charged either voluntarily or pursuant to
              any law, otherwise than by way of transfer pursuant to a will or
              the laws of inheritance (see Clause 6.8.4 below), and it is
              forbidden to grant any power of attorney or deed of transfer with
              respect thereto, whether the same has immediate effect or shall
              take effect on a future date. The option may be exercised only by
              the trustee on behalf of the employee named in the Option
              Agreement. A note as to the provisions of this Clause or a legend
              may appear on any document which grants the option including in
              the Option Agreement, and also on any share certificate or Share
              Purchase Agreement.

       6.6    The right to exercise the options is granted to the employee, but
              if the provisions of Section 102 and the Commissioner's Rules
              apply or if the Board has decided otherwise, the right to exercise
              the Options shall be granted to the trustee or the Shares shall be
              allotted to the trustee, in installments, gradually over a period
              of 4 (four) years from the date of granting the option, unless a
              different period or periods have been fixed for an employee or the
              provisions of Clause 6.7 below shall apply to him. At the end of
              every period which shall be determined in the Option Agreement for
              the exercise of the option (vesting periods), the option may, from
              time to time, be exercised in relation to all the shares allocated
              for that period in such manner that at the end of the 2 (two)
              years from the granting of the option the trustee shall, in the
              absence of contrary agreement with the employee, be entitled to
              exercise on behalf of the employee and at his request 1/2 (half)
              of the options and at the end of each of the remaining 2 (two)
              years another 1/4 (quarter).

              In addition, during every one of the vesting periods, the option
              may be exercised in relation to all or part of the shares
              allocated for every previous period in which the option was not
              fully exercised, subject to the provisions of Clause 6.8 below,
              provided that at the time of the exercise of the option the
              employee continues to be employed by the Company, or by a
              subsidiary company under its control on a continual basis from the
              date of the granting thereof until the date of the exercise
              thereof. After the end of the vesting periods and during the
              balance of the option period, the option may be exercised, from
              time to time, in relation to all the shares which have not at that
              time been exercised and which shall remain subject to the
              conditions of the Option Agreement. The provisions of this Clause
              shall remain subject to the provisions of the Option Agreement
              which provide a minimum number of shares with respect to which the
              option may be exercised by any notice of exercise and also the
              provisions as to the number of times upon which the trustee can
              send the Company notice of exercise on behalf of the employee in
              respect of the option. The Board shall be entitled at any time to
              shorten the period of the vesting schedule.

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       6.7    The Board may determine, at its discretion and subject to such
              conditions as it shall establish, that any employee shall be
              exempt from being subject to proportional allotment pursuant to
              the vesting period (as set forth in Clause 6.6) and shall be
              entitled to receive the options or the shares, through the trustee
              as specified in this Plan, or directly in his own name, upon
              signing of the Agreement or on such other date or dates as shall
              be agreed. In the event that the employees are exempt from
              proportional allotment subject to the vesting period (as set forth
              in Clause 6.6), the Board shall be entitled to determine by
              agreement with the employee that the trustee, or a subsidiary or
              affiliate of the Company shall have the right to repurchase the
              shares from the employee for a nominal consideration, if the
              employee shall not comply with the conditions which shall be
              determined by the Board or shall cease to be an employee of the
              Company. The Board shall determine additional conditions to this
              right of repurchase, including: (i) appropriate arrangements for
              the monies which shall be available to the trustee or the
              subsidiary or others for the purpose of the repurchase; (ii)
              conditions with respect to the voting rights of the employee;
              (iii) the right of first refusal or a pre-emptive right to
              purchase shares in the Company; (iv) the employees right to
              receive reports or information from the Company; and (v) the
              employees right to dividends with respect to shares which are
              likely to be reacquired as aforesaid. The employee shall not be
              entitled to sell or charge or transfer in any other manner the
              shares which are subject to the right of repurchase until the
              conditions determined by the Board as aforesaid have been complied
              with (including a minimum period of employment as a condition for
              the right of repurchase to lapse). As security for compliance with
              this undertaking the share certificate will be deposited with the
              trustee who will release the same to the employee only after the
              employee shall be finally entitled to the shares, and such shares
              shall not be subject to any other restrictive condition.

       6.8    TERMINATION OF THE EMPLOYMENT OF THE EMPLOYEE

              6.8.1  Except for the reservations hereinafter contained, in the
                     event of the termination of the employment of an employee
                     by the Company for any reason whatsoever, whether for
                     reasons entitling him to receive compensation for dismissal
                     or for reasons which do not entitle him to obtain
                     compensation for dismissal, upon the employee's
                     instructions the trustee shall have the right to exercise
                     the option on behalf of such employee during a period of 3
                     (three) months from the date of the termination of
                     employment (as he could have done on the date of
                     termination of the employment as aforesaid). For this
                     purpose, the termination of the employment, shall be the
                     date upon which the Company or the employee, as the case
                     may be, shall notify the other party in writing of
                     termination of the relationship between them (even if the
                     notice shall contain a future date for the termination of
                     their relationship, the date of termination of employment
                     for this purpose shall be deemed to be the date of service
                     of the notice). At the end of the said period of 3 (three)
                     months, the option shall lapse. The employee shall notify
                     the trustee in accordance with

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<PAGE>

                     the provisions of Clause 7.1 below if he shall desire that
                     the trustee shall exercise the option on his behalf.

              6.8.2  In the event that Section 102 and the Commissioner's Rules
                     apply to the Plan, then if the employee has ceased to be an
                     employee of the Company prior to the termination a period
                     of two years from the date of the qualifying allotment, as
                     defined in the Commissioner's Rules, (except if the
                     employment ceased by reason of death, or if the
                     Commissioner is satisfied that the employee has ceased to
                     be employed by the Company for special reasons which are
                     not under his control), then the exemption provided by
                     Section 102 shall not apply, pursuant to the Commissioner's
                     Rules, with respect to that employee. In such a case, the
                     employee shall be obliged to make arrangements with the tax
                     authorities at his expense for all matters connected with
                     the taxation of the options and/or the shares and for
                     payment of the tax which is due immediately as a condition
                     of the exercise of the option pursuant to the provisions of
                     law and the Commissioner's Rules. Without derogating from
                     the obligation of the employee pursuant to this Clause, the
                     Company and/or the Legal Advisor shall be entitled to apply
                     to the income tax authorities in order to clarify the
                     matter of the liability of the employee with regards to the
                     income tax. The trustee shall not be obliged to transfer
                     the options or the shares to the employee or to sell the
                     shares on his behalf before the tax has been fully paid or
                     before the trustee has received an approval pursuant to the
                     Commissioner's Rules from the Assessing Officer as to the
                     settlement of the tax.

              6.8.3  Notwithstanding the aforegoing, the Board is empowered at
                     its absolute discretion, to extend the option exercise
                     period with respect to any employee or employees for such
                     period as it shall determine, and it is empowered to make
                     conditional its aforesaid agreement to extend the option
                     exercise period upon any condition it deems fit.

              6.8.4  In the event that an employee shall die after he has become
                     entitled to exercise the option, but prior to the lapse
                     thereof, the option shall be exercisable by the trustee on
                     behalf of the employee's heir or heirs during the same
                     period in which the option would have been exercisable on
                     the date of the employee's death and with respect to the
                     same number of Shares which were exercisable.

              6.8.5  Notwithstanding the aforesaid and pursuant to the
                     provisions of Clause 6.1 above, in no case shall an option
                     be exercisable on the expiration of 10 (ten) years from the
                     date of commencement of the Plan, as such date is defined
                     in Clause 15 below, unless such date is extended by the
                     Board.

       6.9    The employee (whether as an option holder or even if shares have
              been allotted for him in the trustee's name) shall have none of
              the rights of a shareholder of the Company as long as the option
              has not been

                                       13
<PAGE>

              exercised and the shares allotted and registered in his name in
              the books of the Company.

7.     EXERCISE OF THE OPTION

       7.1    An employee who desires that the trustee shall exercise an option
              on his behalf, shall instruct the trustee to do so in writing in
              the form annexed hereto as APPENDIX D or in such other form as
              shall be provided by the Legal Advisor. The employee shall annex
              to the notice the payment to be made with respect to the option
              exercise price, pursuant to the provisions of the Option Agreement
              and to the provisions of Clauses 6.2 and 6.4 above, together with
              all the other documents which the employee is obliged to sign as a
              condition for the exercise of the option, as specified in the
              Plan.

       7.2    If Section 102 does not apply to the option or the shares which
              relate thereto, or if in the opinion of the Legal Advisor it does
              not apply, and the options have been granted directly to the
              employee, the employee shall exercise the option by means of a
              notice of exercise in a form similar to APPENDIX D, but in place
              of the word "trustee" the word "employee" shall be inserted. In
              such cases, as a condition to the exercise of the option, the
              employee shall pay the tax applicable to him (including all tax
              payable by the Company arising out of its obligation to deduct tax
              at source) pursuant to the instructions of the Legal Advisor and
              the provisions of the Plan.

       7.3    Upon receipt of all the requisite documents, approvals and
              payments from the employee (which is a condition to the exercise
              of the option pursuant to the Plan, the Agreement, and in
              accordance with law), the trustee shall deliver a notice to the
              Company in the form annexed hereto as APPENDIX E or in such other
              form as shall be agreed with the employee. The Company shall allot
              the shares subject to the option in the name of the trustee,
              register the trustee in the register of members of the Company and
              shall provide the trustee with a share certificate in the name of
              the trustee with respect of those shares which shall be held by
              him, all pursuant to the provisions of this Plan, the law and the
              Commissioner's Rules.

              If the Agreement provides that the Company will grant the option
              directly to the employee, the tax has been paid and other
              conditions for the exercise of the option have been fulfilled, the
              shares will be allotted in the name of the employee.

8.     TRANSFER OF THE SHARES INTO THE NAME OF THE EMPLOYEE

       In the event the shares or the options have been allotted to the trustee,
       the following provisions shall apply:

       8.1    If the employee has not exercised the option, all the conditions
              of the Agreement have been fulfilled, the restriction period has
              ended and that the applicable tax has been paid in accordance with
              the provisions of the Plan, the law and the Commissioner's Rules,
              then the employee shall be entitled to demand that the options be
              transferred from the trustee's name into the employee's name.

                                       14
<PAGE>

       8.2    When the option has been exercised by the employee, the shares
              have been allotted to the trustee, the employee has paid the
              option exercise price in full and has signed and provided all the
              documents required at such time, the restriction period has
              concluded and payment has been made of all the tax due pursuant to
              the Plan, the law and the Commissioner's Rules, then the employee
              shall be entitled to request of the trustee to transfer the Shares
              into his name.

       8.3    The right of the employee to receive from the trustee the options,
              in the event they have not been exercised, or the shares after the
              options are exercised, in whole or in part, and the employee's
              right to require that the Shares and Options shall be registered
              in his name as aforesaid, and the right to request that the
              trustee will sell options or shares on his behalf and in his name
              for the purpose of financing the payments due thereon (subject to
              the Company's Articles of Association as the same shall be in
              force from time to time and subject to the provisions of law and
              to the Commissioner's Rules), are all personal and may not be
              transferred, assigned, pledged, withheld, attached or otherwise
              charged, either voluntarily or by virtue of any law, except for a
              transfer by virtue of a will or pursuant to the laws of
              inheritance, and no power of attorney or transfer deed shall be
              given with respect thereto, whether of immediate effect or with a
              future validity. Every such transfer, whether direct or indirect,
              whether made for immediate effect or in order to become effective
              in the future, shall be null and void, and the trustee shall not
              act in accordance therewith.

       8.4    If the employee was entitled to receive the option or the share
              pursuant to this Clause and to the Plan, the Company shall issue
              an option deed or a share certificate as necessary in the
              employee's name.

       8.5    In the event that bonus shares are allotted by virtue of the
              Shares allotted to an employee within the context of this Plan and
              which are registered in the name of the trustee, the same shall be
              allotted to the trustee and shall be registered in his name and
              for as long as the Shares are registered in the name of the
              trustee, they shall be considered for all purposes, and in
              particular, in all matters relating to the subjection thereof to
              the terms and conditions of the Plan and the provisions of Section
              102 and the Commissioner's Rules, as if they were the original
              shares by virtue of which they were allotted.

              By signing the Agreement, the employee confirms that he expressly
              agrees to the provisions of this Clause and undertakes as is
              required by Rule 4(b)(2) of the Commissioner's Rules.

       8.6    As long as the Company is not a public Company traded on the Stock
              Exchange, the transfer of the shares after they have been
              registered in the name of the employee shall be restricted
              pursuant to the provisions of this Plan (including provision 18.2
              below), to the provisions of the Company's Articles of
              Association, as the same shall be in force from time to time, and
              to every agreement between the Company and the employee.

                                       15
<PAGE>

9.     ADDITIONAL DOCUMENTS

       9.1    As long as the Shares have not been registered for trade on the
              Securities Stock Exchange, whether in Israel or abroad, the
              Company shall be entitled to demand from the employee at any time
              that the same shall provide any certificate, declaration or other
              document which the Company shall consider to be necessary pursuant
              to any law, whether local or foreign, or any certificate or
              agreement, (including an undertaking on the part of the employee
              not to sell his shares during any period which shall be required
              by an underwriter or investment bank or advisor of the Company for
              the purposes of any share issue, whether private or public,
              including any certificate or agreement which the Company shall
              need to obtain, if any, from the employees as members of a class
              of shareholders), or any certificate, declaration or other
              document which is deemed by the Board to be appropriate or
              necessary for the purpose of raising capital for the Company,
              whether by private issue or by public issue, whether in Israel or
              abroad for the purpose of merging the Company with another
              company, whether the Company shall be the surviving company or
              not, for the purpose of the reorganization of the Company, all as
              shall be deemed necessary by the Board in consultation with the
              Legal Advisor. The form of any document which the employee shall
              be required to sign shall be determined by the Legal Advisor, who
              shall formulate the document in his discretion, provided that in
              his opinion the raising of the additional capital as aforesaid,
              the merger or any other modifications as aforesaid shall not
              substantially prejudice the employee's investment in the Company.
              The dilution of the employee's holding in the Company which arises
              out of the raising of any additional capital or merger or out of
              the exercise of any options shall not be considered detrimental in
              any way to the employee's holdings.

              As long as the shares and/or the options are registered in the
              trustee's name, the same shall be authorized to sign in the
              employee's name and on his behalf on any of the aforesaid
              documentation. In the event that the options or Shares have been
              transferred into the name of the employee, and he has refused to
              confirm any document required by the Company as aforesaid by
              placing his signature thereon, the Legal Advisor shall be
              entitled, at the request of the Company, to sign any document in
              the name of the employee and on his behalf. In the event that with
              respect to a certain matter the Board and/or general meeting of
              the Company have taken resolutions, the trustee and/or the Legal
              Advisor shall exercise their authority as aforesaid, in their sole
              discretion, in order to advance and/or realize the resolution
              and/or its purpose.

       9.2    In order to guarantee the aforesaid, upon the earlier of the
              employee`s signing of the Agreement as is mentioned in Clause 6
              hereof, or signing of the Power of Attorney attached hereto as
              APPENDIX F, the employee irrevocably empowers the Legal Advisor
              and/or the trustee, since the rights of the Company and of the
              other shareholders are dependent thereon, to sign in his name as
              aforesaid on any document as aforesaid, and the employee shall
              have no complaint or claim against the Legal Advisor or the
              trustee with respect to such signature. The employee will
              authenticate his signature in the presence of a notary, if he
              shall be asked to do so by the Company, in order to give full
              validity to the Power of Attorney.

                                       16
<PAGE>

              In the event that the Company shall offer securities to the
              public, so that its shares will be traded on the Stock Exchange in
              Israel or abroad, this Clause 9.2 shall cease to have effect on
              the date of the offer to the public, as this date shall be
              determined, by the Legal Advisor. In the event this Clause ceases
              to have effect, it shall not influence the validity of any
              document which has been signed pursuant to this Clause, prior to
              this Clause having ceased to have effect.

10.    TAXATION AND OTHER ARRANGEMENTS IN CONNECTION WITH THE TRANSFER OF THE
       SHARES TO THE EMPLOYEE

       10.1   GENERAL

              The options which shall be granted and the shares which shall be
              allotted pursuant to this Plan shall be granted and/or allotted in
              connection with the employee/employer relationship. The employee
              shall be liable for all taxes, duties, fines due to the employee's
              error or failure (but not due to the Company's error or failure)
              and for other payments which shall be imposed by the tax
              authorities (whether in Israel or abroad) and for every obligatory
              payment of whatever source with respect of the options, the shares
              or a dividend or any other benefit in respect thereof and/or for
              all charges which shall accrue to the employee and/or to the
              trustee in connection with the Plan, and in particular without
              prejudice to the generality of the aforesaid, for income tax,
              stamp duty, capital gains tax, value added tax and National
              Insurance contributions (some of which do not apply at the present
              date but in theory may apply in the future and are therefore
              included by way of example).

       10.2   TAXATION OF THE EMPLOYEE IF SECTION 102 OF THE ORDINANCE APPLIES
              TO THE PLAN

              A general explanation follows as to the applicable tax in Israel
              only, provided that Section 102 applies to the Plan, but without
              prejudice to the full tax duty of the employee as aforesaid and in
              Clause 1.4 above, and the same shall not be considered a
              professional opinion given to the employee as to tax law. It is,
              therefore, clarified to the employee that he is to independently
              examine and seek professional advice for his own data regarding
              all tax consequences and aspects to which he shall be subject as a
              result of his participation in this Plan.

              10.2.1 DATE OF TAX LIABILITY

                     In general and pursuant to the provisions of Section 102
                     and the Commissioner's Rules, the employee's income from
                     the granting of the option or the share allotment in the
                     trustee's name on his behalf shall be tax exempted.
                     Furthermore, Rule 3(t) to the Ordinance shall not apply to
                     the exercise of the option by the trustee. The date of the
                     tax liability is the date of the transfer of the shares
                     into the name of the employee or the date of the sale of
                     the shares by the trustee or the employee. On such date,
                     pursuant to the provisions of Section 102(C) of the
                     Ordinance, the employee shall be deemed to have sold the
                     shares for the consideration as this term is defined in
                     Section 88 of the

                                       17
<PAGE>

                     Ordinance. For this purpose, the "cost price" shall be
                     deemed to be only the sum which has been paid by the
                     employee in cash at the time of the allotment. The trustee
                     must deduct 30% at source from the said consideration or
                     such other rate as the Assessing Officer shall determine
                     from time to time. Determination of the consideration and
                     the mode of calculation of the amount of tax as hereinafter
                     provided in this Clause, shall be in any manner which the
                     trustee shall deem fit, and he is entitled to consult with
                     the Company's Accountant in this regard. The employee shall
                     not be entitled to an exemption from the tax due pursuant
                     to Section 97(c) of the Ordinance, and therefore, inter
                     alia, the provisions relating to the exemption from tax
                     provided by the Income Tax Order (Tax Exemption on Capital
                     Gains from the Sale of Shares), 5742-1981, shall not apply
                     to him. The Commissioner has the power to determine
                     additional rules, conditions and regulations as provided in
                     Section 102. In the event the employee has sold the shares
                     after they have been transferred into his name by the
                     trustee, the date on which the same have been transferred
                     into the employee's name shall be deemed to be the purchase
                     date and the sum determined for consideration as to Section
                     102(c) shall be deemed to be the original price.

              10.2.2 TAX ALTERNATIVE FOR THE EMPLOYEE

                     Pursuant to Rule 6(b) of the Commissioner's Rules, as it
                     exists at the time the Plan is adopted by the Board, the
                     employee is also entitled to the following tax alternative:
                     If the shares allotted are registered for trade on the
                     Stock Exchange, the employee shall be entitled to ask the
                     Assessing Officer by way of a notice to be sent by
                     registered mail, within 30 days from the aforesaid
                     registration date, that his shares shall be deemed to be
                     sold pursuant to their average price on the Stock Exchange
                     in the first three trade days; in the event the employee
                     has asked for the aforesaid - he shall not be entitled to
                     retract his request; the employee shall be entitled to
                     postpone the payment of the tax due until the date on which
                     the shares are deemed to have been sold pursuant to Rule
                     102(3) of the Ordinance. The aforesaid tax shall be paid by
                     the trustee in addition to linkage and interest from the
                     date of registration of the shares for trade on the Stock
                     Exchange until the payment date; the employee shall deliver
                     to the trustee a copy of the request filed pursuant to this
                     Clause on the date on which the notice has been sent to the
                     Assessing Officer.

              10.2.3 A TWO YEAR WORKING PERIOD

                     Pursuant to the Commissioner's Rules the exemption in
                     Section 102 shall not apply to options granted to the
                     employee if within 2 years from the allotment to the
                     trustee the employee has ceased to be an employee of the
                     Company, unless to the satisfaction of the Commissioner the
                     same has ceased as aforesaid due to death or to particular
                     circumstances beyond the employee's control.

                                       18
<PAGE>

       10.3   DEDUCTION AT SOURCE

              Without prejudice to the employee's obligation to pay all the
              taxes in connection with the option and/or the shares connected to
              the option in accordance with the provisions of Clause 10.1 above,
              the Company and/or any affiliated company and/or the trustee shall
              be entitled, in their absolute discretion, or shall be obliged,
              pursuant to the law and to the Commissioner's Rules, to make
              deductions at source from all payments due to the employee and to
              transfer the tax to the Assessing Officer at such time as they are
              by law or instruction of the Assessing Officer obliged to deduct
              the tax. Tax will be deducted from all payments due to the
              employee whether from salary due to the employee or from any
              payment due from any other source including funds from dividends
              or the consideration from sale of the Shares by the trustee as set
              forth in this Plan. The deduction at source shall be made as the
              Company or the trustee shall decide in accordance with the
              provisions of any law, as the same shall be construed by them and
              they are entitled to consult with the Company's Accountant. The
              employee shall not be entitled to contest the decision of the
              Company and/or the trustee or to make any claim against them even
              if they were mistaken in their considerations or were negligent in
              good faith with respect to the execution of the deduction at
              source.

       10.4   TAXATION AT THE TIME OF TRANSFER OF THE OPTIONS OR THE SHARES INTO
              THE NAME OF THE EMPLOYEE

              10.4.1 In order to ensure that the tax shall be paid and as far as
                     is possible that the income tax authorities shall not have
                     any claim against the employee, the Company or the trustee
                     - with respect to the payment of the tax, resulting from
                     the grant of the options and allotment of the shares -
                     before the options/shares are transferred into the name of
                     the employee, the trustee shall obtain a certificate of the
                     Assessing Officer to the effect that the tax due pursuant
                     to Section 102(c) of the Ordinance and pursuant to the
                     Commissioner's Rules (hereinafter, referred as the "DUE
                     TAX") has been paid and that the shares may be transferred
                     into the name of the employee, or, any other permit as
                     shall be deemed necessary by, and which meets the
                     satisfaction of, the trustee or the Company. Alternatively,
                     as shall be determined by the trustee at his discretion,
                     the trustee shall transfer to the Assessing Officer 30%, or
                     any other percentage due by law or by the Commissioner's
                     Rules, of the consideration, as defined in Section 88 of
                     the Ordinance, on account of the Due Tax as calculated by
                     the trustee, and the trustee is entitled to consult in this
                     matter with the Company's Accountant. The employee shall
                     not be entitled to raise any complaint against the trustee,
                     the Company or the Accountant with respect to the
                     calculation of the consideration and the Due Tax. The
                     employee shall contact the Assessing Officer with any
                     complaint with respect to over payment of tax.

              10.4.2 The employee shall be obliged, in coordination with the
                     trustee and the company, to provide the trustee, (if
                     required to do so by the trustee or by the Company or by
                     the Company's Accountant) with an approval of the Assessing
                     Officer as to the Due Tax from

                                       19
<PAGE>

                     the employee with respect to the options and/or the shares
                     which is to be paid to the Assessing Officer as a condition
                     for the transfer of the shares into the name of the
                     employee in such form as shall be acceptable to the
                     trustee, who shall be entitled to consult in this matter
                     with the Company's Accountant. The employee shall be
                     obliged to deliver to the trustee or to the Company, upon
                     request, any documentation, approval or other data they in
                     their discretion require, for purposes of organizing
                     payment of the Due Tax pursuant to the Plan. Upon receipt
                     by the trustee from the employee of the approval of the
                     Assessing Officer as to the amount of Due Tax, the employee
                     shall pay the trustee the amount of the Due Tax and the
                     trustee shall pay the same to the Assessing Officer.
                     Alternatively, in accordance with trustee's demand, the
                     employee shall pay the Due Tax directly to the Assessing
                     Officer and shall provide the trustee with the Assessing
                     Officer's approval of the payment, in customary form
                     releasing the trustee and the Company from all liability
                     for payment of the tax.

              10.4.3 It is hereby declared that if only part of the full amount
                     of the tax is paid by the trustee, whether by way of
                     deduction of tax at source or otherwise, then, the said
                     payments shall be deemed only an advance payment on account
                     of the employee's Due Tax liability, and the employee shall
                     bear the responsibility for clarification of the full
                     liability, including reporting to the tax authorities and
                     payment of the Due Tax.

              10.4.4 The employee shall bear all payments, levies, fees and
                     taxes, (such as the stamp duty), connected with the
                     transfer of the shares into his name.

       10.5   CERTIFICATE OF ASSESSING OFFICER - GENERAL

              The Company or the trustee shall be entitled, at any time, to
              apply to the Assessing Officer and with respect to an employee
              abroad, whether an employee of the Company or of an affiliate, the
              Company shall be entitled to apply to any foreign tax authority,
              for receipt of their approval as to the amount of tax which the
              Company or the employee or the trustee is to pay to the tax
              authorities for the granting options or the allotment of shares,
              or regarding any other question with respect to the application of
              this Plan. The approval shall be in a form acceptable to the
              trustee or the Company to the effect that upon the payment of such
              sum there shall be no further demands whatsoever by the tax
              authorities against the Company or its affiliate or the trustee
              with respect to such shares or options.

              For the avoidance of doubt, upon signing the Option Agreement, the
              employee and the Company, empower each of the Company and the
              trustee - individually, to approach at any time as they deem fit,
              the Assessing Officer, the Commissioner of Income Tax or any
              Foreign Tax Authority, in their names in order to obtain an
              approval from them regarding any matter arising out of this Plan.

                                       20
<PAGE>

              The Board or the trustee shall be entitled to delay any
              application of the employee as aforesaid to sell shares or to
              transfer them into his name (or, in the event that Section 102
              doesn't apply, to exercise the option) until receipt of the
              approval of the Assessing Officer (or of the Foreign Tax
              Authority). This reply might be delayed, for an extended period or
              until other arrangements are provided for, which in the Board's
              opinion, will ensure that the Company and the trustee shall not be
              charged with any tax payment in the future. The employee shall not
              be entitled to make any complaints on the grounds of the delay in
              the selling of the options or the shares or as a result of any
              damage caused to him as a result of the aforesaid delay.

       10.6   INDEMNIFICATION OF THE COMPANY AND THE TRUSTEE WITH RESPECT TO TAX
              PAYMENTS

              Since it is possible that the tax authorities may demand a larger
              payment than the amount estimated, and which was demanded of the
              employee; and since pursuant to the provisions of the Plan, the
              employee alone is liable for the full payment of the tax arising
              out of his participation in the Plan, the employee declares and
              covenants, upon signing the Option Agreement, that the Company,
              the related Company and the trustee shall not bear any liability
              and shall be indemnified by him against all expenses or losses
              which are caused to them with respect to any payments of tax which
              shall be made by them, including payments for non-deduction of tax
              at source in connection with the granting of the option, the
              exercise thereof, the allotment of the shares, the sale of the
              shares or the transfer of the shares into the name of the
              employee, and the payment of dividends.

       10.7   TAX EXEMPTION PURSUANT TO SECTIONS 95 AND 97(a) OF THE ORDINANCE
              AND PURSUANT TO CHAPTER SEVEN OF THE ENCOURAGEMENT OF INDUSTRY
              (TAXES) LAW, 5729-1969

              In the event that Section 102 shall apply to the Plan, then upon
              signing the Agreement the employee acknowledges in writing in
              accordance with the Commissioner's Rules that he undertakes not to
              apply for a tax exemption pursuant to Sections 95 and 97(a) of the
              Ordinance or pursuant to Chapter Seven of the Encouragement of
              Industry (Taxes) Law, 5729-1969, with respect to the transfer of
              the shares prior to the end of the Restriction Period and before
              the Due Tax has been paid. In accordance with the provisions of
              the Commissioner's Rules, the exemption provided by Section 102(b)
              of the Ordinance shall not apply to shares which are sold under
              tax exemption pursuant to Sections 95 or 97(a) of the Ordinance or
              in the context of an exemption for the sale of shares upon a
              merger of corporations. The employee shall also confirm his
              agreement in writing to the provisions of the Trust Deed signed by
              the Company and the trustee. The form of the employee's
              confirmation is annexed hereto as APPENDIX G.

11.    DIVIDENDS

       11.1   The Shares shall participate equally in every cash dividend which
              shall be declared and distributed to the holders of the ordinary
              shares of the Company, subject to the provisions hereof.

                                       21
<PAGE>

       11.2   A cash dividend shall be distributed only with respect to those
              shares that have been allotted as a result of exercise of options
              by the Fixed Date for the distribution of the dividend, and to a
              person registered in the register of members as the shareholder.

              The employee shall not have any claim against the Company, its
              directors or shareholders, if for any reason whatsoever, whether
              dependent upon the Company or upon the employee, the shares have
              not been allotted to the employee by Fixed Date.

       11.3   Notice of a resolution of the Board to distribute a dividend shall
              be sent by registered mail, by facsimile or by any means which in
              the Board's opinion ensures that the notice will reach every
              employee to whom options have been granted and who are entitled to
              exercise the same by the Fixed Date, at least seven days prior to
              the Fixed Date for the distribution of the dividend, or shall be
              delivered to them by hand at least 48 hours prior to the Fixed
              Date. An employee who is entitled pursuant to the Plan to require
              the trustee to exercise an option for the purchase of any shares
              on his behalf by the Fixed Date, may do so, and if he does so by
              the Fixed Date, the shares which are allocated with respect to the
              options that have been exercised by the Fixed Date shall be
              entitled to participate in the distribution of the dividend.

       11.4   A dividend with respect to Shares registered in the name of the
              trustee, shall be paid to the trustee, subject to any lawful
              deduction of tax, whether at the usual rate applicable to a
              dividend or at a higher rate. The trustee shall transfer the
              dividend to the employees in accordance with instructions that he
              shall receive from the Company. Alternatively, the Company shall
              be entitled to pay the dividend directly to the employee subject
              to the deduction of the applicable tax.

       11.5   Without derogating from the provisions of Clause 10.3 above, the
              Company or the trustee shall be entitled to set off and deduct at
              source from any dividend (that shall be declared and distributed
              as aforesaid) any sum that the employee owes to the Company or to
              the trustee, whether under this Plan or otherwise, and/or any sum
              that the employee owes to the income tax authorities with respect
              to the dividend, including the tax applicable, if applicable, to
              the transfer of the dividend from the trustee to the employee, the
              options, the exercise thereof, the allotment of the shares, the
              transfer of the shares into the name of the employee, or any other
              matter relating to the shares and/or the options.

12.    RIGHTS AND/OR BENEFITS ARISING OUT OF THE EMPLOYEE/EMPLOYER RELATIONSHIP
       AND THE ABSENCE OF AN OBLIGATION TO EMPLOY

       12.1   No income or profit which shall be credited or which purports to
              be credited to the employee with respect to the Plan shall in any
              manner be taken into account in the calculation of the basis of
              the employee's entitlement from the Company or from its affiliates
              of any social welfare right or of other rights or benefits arising
              out of the employee/employer relationship. Without derogating from
              the generality of the aforegoing, such income shall not be taken
              into account for the

                                       22
<PAGE>

              purposes of calculation of social security, managers' insurance,
              pension fund, advanced studies fund, severance payments, holiday
              pay and the like. If pursuant to any law the Company shall be
              obliged for the purposes of the calculation of the said items to
              take into account income or profit actually or theoretically
              credited to the employee, then and in such case, the employee
              shall indemnify the Company against any expense caused to it in
              this matter.

       12.2   Nothing in this Plan shall be interpreted as obliging the Company
              or its related Company to employ the employee. Furthermore, the
              relationship between the Company and the employee shall be
              conducted without reference to this Plan. The employee shall not
              have any claim at any time against the Company or related Company
              as a result of termination of his employment in the event that the
              termination of his employment at any time causes the options to
              expire and prevents him from realizing his expectation to exercise
              the options and to receive Share of the Company pursuant to any
              agreement between him and the Company; and causes him damage as a
              result of the early imposition of a tax liability pursuant to the
              Commissioner's Rules.

13.    ADJUSTMENTS FOR CHANGES IN THE CAPITAL STRUCTURE

       In the event that changes are made in connection with the capital
       structure of the Company, including, but without derogating from the
       generality of the aforegoing, changes in the Shares which are subject to
       the Plan (by way of merger, combination, reorganization, changes in
       capital structure, distribution of bonus shares, distribution of a
       non-cash dividends, splitting of shares, liquidation dividends,
       consolidation of shares, exchange of shares, change in the structure of
       the Company or otherwise), the Board shall make the appropriate changes
       to the options and/or the Shares in order to reflect such event. In the
       event that such adjustment shall create fractions of shares, such
       fractions of shares shall be ignored for the purposes of calculating the
       number of shares subject to a particular option in accordance with the
       instructions of the Board.

       All shares originating from a change or adjustment as aforesaid, shall be
       deemed for all purposes (including in all matters related to the
       subjection thereof to the terms of the Plan and the provisions of Section
       102 and the Commissioner's Rules, if applicable) to be the original
       shares in respect whereof the change or adjustment was made.

14.    AMENDMENT OF THE PLAN, AMENDMENT OF EXISTING OPTIONS OR THE REPLACEMENT
       THEREOF

       If in the Board's opinion the Plan as formulated does not fulfill its
       objectives or its objectives may be fulfilled in a better and more
       efficient manner, it is entitled to cancel the Plan in whole or in part
       or to change the same and/or to establish another incentive Plan in its
       place, whether it be for options, shares or other rights or benefits
       which in the opinion of the Board will correctly reflect the balance
       between the achievement of the objectives of the Plan and the other
       interests of the Company and of the employees, including tax
       considerations.

                                       23
<PAGE>

<PAGE>

15.    COMMENCEMENT OF THE PLAN; TERMINATION, FREEZING OR LAPSE THEREOF

       15.1   The Plan shall enter into force on the date which shall be fixed
              by the Board. In the event that the Board shall decide to bring
              the Plan under Section 102, shares will not be allotted to the
              trustee earlier than thirty days from the date of the notice to
              the Assessing Officer of the adoption thereof (pursuant to Section
              102 and the Commissioner's Rules) (herein referred to as the "DATE
              OF COMMENCEMENT OF THE PLAN").

              The Plan shall also apply to all the options shares in respect of
              which the Company has undertake to employees prior to the Date of
              Commencement of the Plan.

       15.2   The Board is entitled, at any time, to freeze or terminate the
              Plan and also to determine that this Plan shall apply to those
              employees to whom the Company has given a prior undertaking to
              grant options and/or shares, but that another plan shall apply to
              new employees. In the event that the Plan is not brought to an
              earlier end, it shall lapse on the expiration of 10 (ten) years
              from the Date of Commencement of the Plan as aforesaid. In the
              event that the Plan shall lapse, options shall not be allotted
              under the Plan, but options which have been granted thereunder may
              be exercised after the Plan shall have lapsed or frozen, subject
              thereto. The termination or freezing of the Plan shall not affect
              employees to whom shares have been allotted or options granted on
              a date prior to the termination or freezing of the Plan.

16.    RELEASE OF THE TRUSTEE AND THE LEGAL ADVISOR FROM LIABILITY AND
       INDEMNIFICATION

       In no event shall the trustee or the Legal Advisor be liable to the
       Company and/or the employee under the Plan and/or to any third party
       (including, without derogating from the generality of the aforegoing, the
       income tax authorities and any other governmental or administrative
       authority), or to a purchaser of shares from the employee, with respect
       to any act which has been carried out and/or which shall be carried out,
       or with respect to any opinion which has been given or which shall be
       given with respect to this Plan, the execution thereof and any matter in
       connection therewith or arising therefrom. The Company and the employee
       covenant upon signing the Option Agreement that they will not make any
       claim against the trustee and the Legal Advisor in any manner whatsoever
       and on any ground whatsoever and they expressly agree that if the trustee
       or the Legal Advisor shall be sued by them, then the trustee or the Legal
       Advisor shall be entitled by virtue of this Clause alone to apply to the
       court for dismissal of the action against the trustee or the Legal
       Advisor with costs. The Company covenants and agrees that if an action is
       commenced by any third party against the trustee or the Legal Advisor,
       they shall be entitled, without any objection on the Company's part, to
       join in the Company as third party to any action and a judgment against
       them will be paid by the Company.

       The Company and the employee covenant to indemnify the trustee and/or the
       Legal Advisor against any liability of this nature and/or in relation to
       any claim and/or demand against the trustee and/or the Legal Advisor by
       any person

                                       24
<PAGE>

       whatsoever, including the tax authorities, with respect to their acts or
       omissions in connection with this Plan.

17.    ARBITRATION

       Every dispute or disagreement between the Company and the employee in
       relation to and/or in connection with the Plan shall be referred to the
       exclusive decision of the Legal Advisor acting as a sole arbitrator. The
       arbitrator shall not be bound by laws of evidence or by substantive law
       and shall not be obliged to give grounds for his decision and shall be
       empowered to dispose of a matter by way of compromise in his absolute
       discretion. The parties are aware that the Legal Advisor is the Legal
       Advisor of the Company and that for this reason or for any other reason
       arising out of his relationship with the Company the Legal Advisor may
       find himself in a position of conflicting interests. The Legal Advisor
       alone shall decide if a conflict of interest exists which precludes him
       from serving as arbitrator or from fulfilling any other duty in
       connection with the Plan. The Company and the employee hereby waive any
       claim with respect to this matter. In the event that the Legal Advisor
       shall decide that it is not proper that he should serve as arbitrator in
       a particular dispute, he shall transfer his powers to a sole arbitrator
       who shall be appointed by the Legal Advisor pursuant to an arbitration
       deed drafted by the Legal Advisor.

18.    THE EMPLOYEE'S DECLARATIONS AND COVENANTS

       Upon signing the Agreement, the employee declares and acknowledges that
       he is aware and agrees:

       18.1   That the shares of the Company are not traded on any stock
              exchange; that the Company has no obligations either towards him
              or in general to register its shares or its options or the shares
              or options of the employee for trading on a stock exchange, or to
              offer the same to the public in any manner whatsoever.

       18.2   That in addition to the restrictions under the Plan with respect
              to the transfer of the Shares which the employee shall receive as
              a result of the exercise of the option, as these shall exist from
              time to time, as long as the Company shall be a private company or
              a public company whose shares are not traded on any stock
              exchange, every other restriction or amendment to any restriction
              pursuant to the provisions of the founding documents of the
              Company as the same shall be in force from time to time shall also
              apply. As a result of these restrictions, the employee may never
              be able to sell or otherwise transfer the shares which shall be
              allotted to him as a consequence of the exercise of the option or
              the shares which shall be allotted to him pursuant to the Plan.
              The employee is aware that the Company, as long as it shall be a
              private company (or a public company whose shares are not traded
              on any stock exchange) is interested in ensuring that its shares
              shall not be transferred to a person having no connection with it,
              in particular because of the restricted number of shares. The
              absence of consent of the Board to the sale of shares by the
              employee to any third party may place the employee in a position
              in which the shares will not be transferred from the name of the
              trustee into his name (in the event that Section 102 shall apply)
              since the employee will not have the means to pay the Due Tax.

                                       25
<PAGE>

       18.3   That there may be potential difficulties and/or impossibility in
              exercising the option in whole or in part as a result of
              restrictions and conditions to which the option is subject,
              including, inter alia, the possibility of the lapse of the option
              as a result of the employee leaving the Company, subject to the
              provisions of the Plan. The same shall apply with respect to the
              shares which have been allotted pursuant to the Plan.

       18.4   That in view of the complicated and uncertain nature of the
              taxation provisions, and the fact that they are subject to change
              from time to time, it is recommended that the employee study the
              regulations and tax laws relating to the matter and/or shall seek
              the advice of a professional advisor who has expertise in tax
              matters connected with the Plan (such as the restrictions and the
              risks inherent in the granting of the option and/or the exercise
              of options and the allotment of shares to employees pursuant to
              the Income Tax Laws and/or pursuant to any other statute and law).
              Every explanation which the employee shall receive from the
              Company or on its behalf with respect to the tax consequences is
              not a binding obligation of the Company towards the employee.

       18.5   That a situation may occur in which the tax consequences that
              arise out of the granting of the options and/or out of the
              exercise thereof and/or the allotment of the shares shall convert
              the granting of the options and/or the exercise thereof and/or the
              receipt of the shares into a clearly undesirable proposition for
              the employee. The Company, expressly, does not take upon itself
              any obligation in this matter and does not make any declaration
              with respect to the tax consequences connected with the granting
              of the options, and/or the exercise thereof, and/or the allotment
              of the shares, and/or the transfer thereof into the name of the
              employee, and upon signing the Option Agreement, and/or upon the
              exercise the options, the employee takes upon himself all risks
              and consequences inherent therein.

       18.6   That the Company is engaged in an area of intense competition,
              speedy technological changes, and a limited number of customers,
              and therefore, and because of the large number of limitations in
              the Plan, if the employee shall be required to pay the Option
              Exercise Price for the options or for their exercise, then his
              investment in the shares of the Company or in the options is a
              high risk speculative investment.

       18.7   That by signing the Agreement, the employee confirms and covenants
              that he acquires the share for the purposes of investment and not
              for the purpose of distribution, as is defined in the Securities
              Act 1933 of the United States. If the Company's shares shall be
              traded in the United States, the employee shall not sell the
              Shares, unless he has received legal advice from the Legal Advisor
              or a United States attorney acceptable to the Legal Advisor, that
              the sale of the shares does not constitute a breach of the said
              Act or the rules which were made pursuant thereto (including
              Section 144) or that the sale of the shares is exempt from the
              provisions of the said Act.

       18.8   That by signing the Agreement the employee waives any right of
              first refusal to purchase shares of the Company which other
              shareholders offer to sell, and waives any pre-emptive rights to
              purchase shares which the Company is allotting or shall allot in
              the future, in the event that such

                                       26
<PAGE>

              rights exist or shall exist pursuant to the Company's Article of
              Association as shall be in force from time to time.

19.    MISCELLANEOUS

       19.1   Every option and/or share given to the employees is subject to the
              condition that if, in the opinion of the Legal Advisor, it is
              necessary as a condition for and/or in connection with the issue
              of the shares subject to the option and/or in connection with the
              registration of the shares for trade on any stock exchange, to
              fulfill any precondition in order to facilitate such registration
              as aforesaid, or for purposes of writing a prospectus or for the
              receipt of the consent and/or approval of any administrative or
              governmental authority, either in Israel or abroad, or for the
              receipt of the consent of an underwriter or underwriters for the
              offer of shares to the public, then and in such case the option
              shall not be exercised in whole or in part and the shares shall
              not be registered unless the said requirements are fulfilled upon
              conditions acceptable to the Board.

              The Company shall be free of all liability whatsoever with respect
              to its inability, due to the absence of the consent or approval as
              aforesaid or due to the Company's unwillingness to comply with the
              said requirements or to bear the costs incurred therein. Nothing
              in this Plan shall impose on the Company the obligation to issue
              to the public or to register for trading (pursuant to any
              securities' law) the options granted pursuant to the Plan or the
              shares issued pursuant to the options or the shares allotted to
              the employee and a legend testifying these limitations may be
              stamped on every share certificate or Option (including the
              Agreement).

       19.2   The consideration that shall be received from the exercise of the
              options and/or the purchase of the shares pursuant to the Plan
              shall serve the Company as working capital.

       19.3   The Plan and all of its documents including the Agreement shall be
              governed by Israeli law. The Israeli courts or authorized
              tribunals of the State of Israel shall have the exclusive
              jurisdiction over this Plan.

20.    NOTICES AND/OR INSTRUCTIONS

       Every notice or instruction which is required or permitted pursuant to
       the Option Agreement or the Plan, shall be given in writing, and shall be
       deemed to have been delivered on the date it is delivered to the
       addressee by hand or by fax or within 3 (three) working days after it has
       been sent by registered mail to the parties' address as it appears in the
       preamble to the Agreement.

                                       27
<PAGE>

APPENDIX A

                   PART FIVE "A": SHARE ALLOTMENT TO EMPLOYEES

SHARE ALLOTMENT TO EMPLOYEES

102. (a)      In this section -

              "SHARES" includes rights to acquire shares;

              "SHARE ALLOTMENT" means an allotment of a company's shares in the
              name of a trustee for an employee of the company;

              "TRUSTEE" means a person approved by the Commissioner as a trustee
              for the purpose of this section.

     (b)      The income of an employee from a share allotment shall be tax
              exempt at the time of allotment, if all the following are
              fulfilled:

              (1)    the allotment was made in consideration for a waiver of
                     remuneration by the employee;

              (2)    the share certificates were not delivered to the employee
                     but deposited with the trustee for a period of not less
                     than 24 months;

              (3)    the shares were entered in the trustee's name in the
                     register of members;

              (4)    the company and the trustee gave notice of the allotment
                     plan to the Assessing Officer at least 30 days before it
                     was implemented on the form prescribed by the Commissioner.

     (c)      Should the employee or the trustee sell the shares or should the
              trustee transfer the shares into the employee's name, the employee
              will be deemed to have sold the shares for consideration as
              defined in section 88; for such purpose only the amount paid by
              the employee in cash at the time of allotment shall be deemed the
              original price and the tax exemption under section 97(c) shall not
              apply; the trustee shall withhold tax at source at the rate of 30%
              of the consideration or at such lower rate as fixed by the
              Assessing Officer.

<PAGE>

     (d)      The provisions of section 101 shall not apply with respect to the
              shares before the date on which they are deemed to have been sold
              pursuant to sub-section (c).

     (e)      Section 3(i) shall not apply to the exercise of a right to acquire
              shares, if the right was exercised by the trustee; the share which
              is the subject of the right shall be governed by the provisions of
              this section and for the purpose of sub-section (b)(2) the period
              during which the right to acquire the share was held by the
              trustee shall also be taken into account.

     (f)      Should the employee sell the shares after the trustee has
              transferred them into his name, the date on which the trustee
              transferred them into his name shall be deemed the acquisition
              date and the amount fixed as the consideration for the purpose of
              sub-section (c) shall be deemed the original price.

     (g)      The Commissioner may generally or with respect to a particular
              share allotment prescribe -

              (1)    conditions with regard to the allotment, the holding of the
                     shares by the trustee, restrictions on the shares'
                     negotiability and the period during which the employee
                     shall remain in the service of the company for which he
                     worked at the time of the allotment;

              (2)    provisions with respect to the tax liability from which the
                     employee was exempted, if any of the conditions prescribed
                     in or pursuant to this section is not fulfilled;

              (3)    capital adjustments for the purpose of the Inflationary
                     Adjustments Law which shall apply to the company which
                     allotted the shares;

              (4)    rules with regard to the deductibility of the value of the
                     shares allotted as an expense incurred by the employer in
                     the production of income, including restrictions on the
                     deduction, the amounts of deduction and the dates of its
                     refund;

              (5)    rules and dates for the filing of reports by the company or
                     the trustee.

<PAGE>

APPENDIX A

                   THE INCOME TAX (TAX CONCESSIONS ON A SHARE
                    ALLOTMENT TO EMPLOYEES) RULES, 5749-1989

By virtue of my power pursuant to section 102 of the Income Tax Ordinance
(hereinafter referred to as "the Ordinance") I make these rules:

DEFINITIONS

1.     In these rules -

       (1)    "THE HOLDING PERIOD" means the period commencing on the date when
              the qualifying allotment was made and ending on the date when the
              employee was charged tax on the shares pursuant to section 102(c)
              of the Ordinance;

       (2)    "RELATIVE" means as defined in section 76 of the Ordinance;

       (3)    "QUALIFYING ALLOTMENT" means an allotment of which notice is given
              as provided in section 4, which meets the conditions prescribed in
              these Rules;

       (4)    "THE ADJUSTMENTS LAW" means the Income Tax (Adjustments for
              Inflation) Law, 5745-1985.

TRUSTEE'S APPROVAL

2.     (a)    An application for the approval of a trustee shall be made to the
              Commissioner in writing on the form in schedule "A".

       (b)    The Commissioner may approve a person as trustee, either generally
              or for a particular share allotment, if he is satisfied that all
              the following have been fulfilled:

              (1)    the person is an advocate or certified public accountant or
                     an unlimited liability company, all of whose shareholders
                     are advocates or certified public accountants or that he
                     may serve as a trustee pursuant to section 5 of the Joint
                     Investments Trust Law, 5721-1961;

<PAGE>

              (2)    the person is not a shareholder of the allotting company,
                     is not an employee of the said company and does not serve
                     as a director of it; for the purpose hereof, "person"
                     includes his relative, partner, employer or employee and in
                     the case of a trustee which is a company or cooperative
                     society, it includes a shareholder or the holder of rights
                     in it.

       (c)    Should a person's appointment as trustee be approved without the
              approval being limited to a particular share allotment, the
              Commissioner may cancel the approval with respect to allotments
              the making of which is after the date of cancellation.

TRUST INSTRUMENT

3.     A company and trustee applying for the application of the provisions of
       section 102 of the Ordinance to apply with respect to a particular share
       allotment shall execute a trust instrument containing all the obligations
       prescribed in the form in schedule "B" and furnish a copy thereof to the
       Assessing Officer together with the notice of the allotment plan as
       provided in section 4.

NOTICE OF ALLOTMENT

4.     (a)    A company and trustee applying for the application of the
              provisions of section 102 of the Ordinance to apply with respect
              to a particular share allotment shall send to the Assessing
              Officer, at the office where the company's file is kept, notice of
              the allotment plan on the form in schedule "C"; the notice shall
              be submitted to the Assessing Officer at least 30 days before the
              allotment is made; should the company have a withholding tax file
              at another office, the company and trustee shall send a copy of
              the notice to the said office.

       (b)    The notice mentioned in sub-section (a) shall inter alia include
              the following undertakings:

                  (1)      the company's undertaking that if bonus shares are
                           allotted by virtue of the shares allotted for an
                           employee in the scope of the qualifying allotment,
                           they will be transferred to the trustee; the
                           trustee's undertaking to apply to the said shares the
                           provisions of section 102 of the Ordinance and these
                           Rules, as though they were shares which had been
                           allotted in the scope of the qualifying allotment and
                           notice that the company and trustee are in possession
                           of a written certificate from the employee that he

                                                                               2

<PAGE>

                           agrees that the provisions of this paragraph shall
                           apply to the bonus shares;

                  (2)      notice that the company and trustee hold a written
                           certificate from the employee that he undertakes not
                           to claim a tax exemption pursuant to section 95 or
                           97(a) of the Ordinance on account of a transfer of
                           the shares prior to the end of the holding period.

CONTROLLING SHAREHOLDERS

5.     The exemption prescribed in section 102(b) of the Ordinance shall not
       apply with respect to shares allotted for an employee, if on the date of
       allotment or as a result of the allotment he is a controlling shareholder
       of the company; for the purpose hereof, "controlling shareholder" has the
       definition contained in section 32(9) of the Ordinance.

MISCELLANEOUS EXCEPTIONS

6.     (a)    The exemption prescribed in section 102(b) of the Ordinance shall
              not apply with respect to an employee, if within two years of the
              date of allotment he stops being an employee of the company,
              unless he stops being such by reason of death or special
              circumstances beyond the employee's control, to the satisfaction
              of the Commissioner.

       (b)    Should the shares allotted in the scope of a qualifying allotment
              be listed for trade on a stock exchange, the employee may apply to
              the Assessing Officer, in notice to be sent by registered mail
              within 30 days of the date of such listing, for his shares to be
              deemed sold at their average stock exchange price in the first
              three trading days; should the employee so apply, he may not
              withdraw his application; the employee may defer payment of the
              tax for which he is liable until such time as the shares are
              deemed sold pursuant to section 102(c) of the Ordinance; the said
              tax shall be paid by the trustee with the addition of linkage
              differentials and interest from the date the shares are listed for
              trade on the stock exchange until the date of payment; the
              employee shall deliver to the trustee a copy of the application
              filed pursuant to this section at the time he sends the notice to
              the Assessing Officer.

       (c)    For the purpose of sections 7 and 8 the real capital gain shall be
              adjusted as prescribed for the purpose of the employee's liability
              pursuant to sub-section (b) from the date of listing until the
              date when the shares are deemed sold pursuant to section 102(c) of
              the Ordinance.

                                                                               3

<PAGE>

CAPITAL ADJUSTMENTS

7.     (a)    A company shall not be entitled to a capital supplement pursuant
              to the Adjustments Law on account of a qualifying allotment; this
              provision shall not apply with respect to an amount paid by an
              employee in cash; for the purpose hereof "payment in cash"
              excludes a waiver of remuneration.

       (b)    Notwithstanding the aforesaid in sub-section (a), the company
              shall be entitled to a capital supplement at the time when the tax
              is paid by the employee or the trustee with respect to the shares
              allotted to him in the scope of a qualifying allotment; the amount
              permitted as a capital supplement shall be equal to the real
              capital gain as determined for the purpose of the employee's tax
              liability.

EXPENSE

8.     (a)    A company shall not be entitled to claim the deduction of any
              amount on account of a qualifying allotment or on account of
              remuneration waived by the employee in consideration for shares
              allotted to him in the scope of a qualifying allotment.

       (b)    Notwithstanding as provided in sub-section (a), a company will be
              allowed an expense at the time when the tax is paid by the
              employee or the trustee with respect to the shares allotted to the
              employee in the scope of a qualifying allotment; the amount
              allowed the company as an expense shall be equal to the real
              capital gain as determined for the purpose of the employee's tax
              liability.

REDEEMABLE SHARES

9.     The exemption prescribed in section 102(b) of the Ordinance shall not
       apply with respect to an allotment of redeemable shares.

EXEMPT TRANSFER

10.    The exemption prescribed in section 102(b) of the Ordinance shall not
       apply with respect to shares sold with a tax exemption pursuant to
       sections 95 or

                                                                               4

<PAGE>

       97(a) of the Ordinance or in the scope of an exemption for the sale of
       shares in corporate mergers.

SHARE TRANSFER

11.    The exemption prescribed in section 102(b) of the Ordinance shall not
       apply, if within two years of the date of issue the trustee transfers the
       shares to the employee or to another person or signs a share certificate
       transfer form or the employee sells his right to receive the shares or
       his right as beneficiary of the shares held by the trustee.

RETROACTIVE CANCELLATION

12.    (a)    If after the date of allotment a condition for the grant of
              exemption prescribed in these Rules or in special conditions
              prescribed by the Commissioner is not fulfilled or the exemption
              is cancelled pursuant to section 13, the employee shall, within 30
              days of the date on which the condition was not fulfilled or from
              the date of cancellation, as the case may be (hereinafter referred
              to as "the date of breach"), pay the higher of the following:

              (1)    the tax exempted at the time of the allotment, plus linkage
                     differentials and interest from the date of allotment to
                     the date of payment;

              (2)    the tax which would apply pursuant to section 102(c) of the
                     Ordinance were the shares sold on the date of the breach.

       (b)    If the tax for which the employee would be liable pursuant to
              section 102(c) of the Ordinance had the trustee sold the shares on
              the expiration of two years from the date of allotment exceeds the
              tax for which he is liable pursuant to sub-section (a), as
              adjusted, the employee shall pay the difference to the Assessing
              Officer within seven days of the end of the said two years.

       (c)    Should the employee be taxed pursuant to this section, the trustee
              shall continue to hold his shares until the end of two years from
              the date of allotment or until receiving a certificate from the
              Assessing Officer that the tax has been paid in accordance with
              the provisions of this section, whichever is the later.

                                                                               5

<PAGE>

       (d)    Should the Assessing Officer determine the value of the shares
              received by an employee for the purpose of computing the tax from
              which the employee was exempted as provided in sub-section (a) or
              (b), the said determination shall be governed by the provisions
              prescribed in the Ordinance with regard to objection and appeal.

NON-FULFILLMENT OF PARTICULARS AND CONDITIONS

13.    The Commissioner may cancel the exemption prescribed in section 102(b) of
       the Ordinance with respect to a particular allotment, if special
       conditions prescribed by him in advance with respect to the allotment are
       not fulfilled or if particulars contained in the notice of the allotment
       plan are not fulfilled.

WITHHOLDING TAX

14.    A trustee shall not transfer the share certificates to any person
       whatsoever until after he has transferred to the Assessing Officer 30% of
       the consideration or such other percentage as fixed by the Assessing
       Officer or until after he has been furnished with a certificate from the
       Assessing Officer that tax has been paid at such rate and if there is an
       applicable tax pursuant to section 6(b), 12 or 13 - the tax pursuant to
       the said section has been paid; the said tax and certificates shall be
       furnished to the Assessing Officer by the trustee within seven days of
       the date of the share sale or of the release of the share certificates
       from the trustee's possession, whichever is the earlier, together with
       notice in the form set out in schedule "D".

REGISTRATION

15.    Subject to Rule 17 hereinafter, the employer shall keep a separate record
       with respect to each allotment plan and give a copy of it to the trustee;
       the said records shall include every particular relating to the
       allotment, including -

       (1)    the names of the employees to whom shares have been allotted in
              the scope of the qualifying allotment, their ID numbers and
              addresses;

       (2)    the quantity, class and description of the shares allotted to each
              employee, including the share numbers;

       (3)    a breakdown of the amounts paid by each employee for the shares
              and the dates of payment;

       (4)    the date of allotment;

                                                                               6

<PAGE>

       (5)    acts done with respect to the shares, including the transfer of
              the shares to the employee or his heirs, and the sale of the
              shares.

REPORTING

16.    Subject to Rule 17 hereinafter, a trustee shall report within 30 days of
       the start of each tax year on -

       (1)    the balance of each employee's shares at the start of the
              preceding tax year;

       (2)    acts done with respect to the shares during the previous year;

       (3)    bonus shares allotted by virtue of the shares;

       (4)    the balance of each employee's shares on the last day of the
              preceding tax year;

       (5)    dividend distributed by virtue of the shares;

       (6)    shares with respect to which a tax charge applies pursuant to
              section 102(c) of the Ordinance, the amount of consideration on
              their account of them and the amount of tax transferred by the
              trustee or for the payment of which a certificate was furnished to
              the trustee.

REPORT TO THE SECURITIES AUTHORITY

17.    Should all the particulars mentioned in sections 15 and 16 be included in
       a report which has been filed with the Securities Authority, a copy of
       the report filed with the Authority shall be filed instead of the report
       to be filed pursuant to sections 15 and 16.

                                                                               7

<PAGE>

               [NON-BINDING TRANSLATION FROM THE HEBREW ORIGINAL]

                                   APPENDIX B

                                TRUST INSTRUMENT

          Made in ________________________ this 29th day of March 1995

       BETWEEN:   ELIYAHU LERNER, CPA

                  of 7 Haomanim St, Tel Aviv

                  (hereinafter referred to as "the Trustee")

                                                               OF THE FIRST PART

         AND      PICTEL TECHNOLOGIES LTD

                  of 22 Hayetzira St, PO Box 3654, Petah Tikvah 49130

                  (hereinafter referred to as "the Company")

                                                              OF THE SECOND PART

       WHEREAS, on 9th January 1995 the Trustee was approved by the Commissioner
of Income Tax by virtue of his authority pursuant to section 102 of the Income
Tax Ordinance (hereinafter referred to as "the Ordinance") as trustee for the
purpose of the Company's employee option and/or share allotment plan;

       AND WHEREAS, on 29th March 1995 the Company adopted a share and/or option
allotment plan within the meaning of section 102 of the Ordinance (hereinafter
referred to as "the plan") for its employees;

       AND WHEREAS, pursuant to the plan the Company will from time to time
allot shares or rights to shares (hereinafter referred to as "shares") to
employees in a qualifying allotment within the meaning of this term in the
Income Tax (Tax Concessions on a Share Allotment to Employees) Rules, 5749-1989
(hereinafter referred to as "qualifying allotment") (hereinafter referred to as
"the Rules");

       AND WHEREAS, pursuant to the plan all the shares in the qualifying
allotment will be allotted to the Trustee for him to hold on trust as provided
in the Rules, the plan and this trust instrument.

<PAGE>

           NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES AS FOLLOWS:

1.     The recitals hereto, the Rules and such special conditions as the
Commissioner prescribes for the purpose of the allotment constitute an integral
part of this trust instrument.

2.     Pursuant to the plan the share certificates will not be allotted to the
Company's employees but will be allotted in the Trustee's name and be held by
him for a period of not less than 24 months (hereinafter referred to as "the
lock-up period").

3.     Before the end of the lock-up period or before payment of the applicable
tax or of 30% of the consideration has been paid as provided in clause 4,
whichever is the later, the shares may not be transferred, assigned, pledged,
attached or any other voluntarily lien and no power of attorney or instrument of
transfer shall be given with respect to them, whether their effect be immediate
or on a future date, other than a transfer by virtue of a will or pursuant to
law; should the shares be transferred by virtue of a will or pursuant to law as
aforesaid, the provisions of section 102 and the Rules shall apply to the
employee's heirs or transferees.

4.     From the end of the lock-up period each employee shall be entitled at any
time to require the Trustee to transfer the shares to which he is entitled into
his name, provided that the Trustee shall not transfer the shares as aforesaid
until after the applicable tax charged pursuant to section 102(c) of the
Ordinance and the Rules (hereinafter referred to as "the applicable tax") has
been paid and the Trustee holds a certificate to that effect from the Assessing
Officer or until after the Trustee has transferred to the Assessing Officer 30%
of the consideration on account of the applicable tax.

5.     If pursuant to the conditions of the plan an employee is granted rights
for the purchase of shares, those rights shall be allotted in the Trustees name.
The employee shall be entitled to instruct the Trustee to exercise the rights as
prescribed in the plan. The shares which are the subject of the rights shall be
allotted to the Trustee in accordance with the provisions of section 2 above and
they shall be governed by the provisions of this instrument. The lock-up period
shall include the period during which the rights granted for the purchase of the
shares were held by the Trustee.

6.     If bonus shares are allotted on account of the shares which were allotted
for an employee in the scope of a qualifying allotment, the bonus shares shall
be transferred by the Company to the Trustee and the Trustee's obligations
pursuant to this instrument shall respectively also apply to the bonus shares.

7.     The Company undertakes to the Trustee that it will not, in any way
whatsoever undertake to allot shares to employees in the scope of a qualifying
allotment unless prior to the allotment it obtains a certificate from the
employee that he undertakes to the Assessing Officer not to make a transfer of
the shares with respect to which a tax exemption applies and not to claim a tax
exemption pursuant to section 95 or 97(a) of the Ordinance or pursuant to
Chapter Seven of the Encouragement of Industry (Taxes) Law, 5729-1969, on
account of the share transfer before the applicable tax has been paid.

                                      -2-

<PAGE>

8.     A condition for this arrangement with respect to a particular employee
shall be his agreement in writing to the provisions of this agreement.

                       AS WITNESS THE HANDS OF THE PARTIES

(Signed)                                 (Signed & Stamped)

_________________________________        _______________________________________
THE TRUSTEE                              THE COMPANY

                                      -3-

<PAGE>

               [NON-BINDING TRANSLATION FROM THE HEBREW ORIGINAL]

                                   APPENDIX C

                                                                 29th March 1995

The Assessing Officer
Tel Aviv

Dear Sir,

           NOTICE OF A QUALIFYING ALLOTMENT PURSUANT TO THE INCOME TAX
               (TAX CONCESSIONS ON A SHARE ALLOTMENT TO EMPLOYEES)
            RULES, 5749-1989 (HEREINAFTER REFERRED TO AS "THE RULES")

       1.     In accordance with section 3 of the Rules we notify you that Pixel
Technologies Ltd (hereinafter referred to as "the company") has resolved to
adopt a share/option plan, that has been adopted by it, within the meaning of
section 102 of the Income Tax Ordinance and pursuant to the Rules, in the scope
whereof options and shares will be allotted to the company's employees on a
qualifying allotment within the meaning of the Rules.

       2.     The date of the option allotment in the scope of the plan will not
be before 30 days from the date of this notice or after _______________.

       3.     Eliyahu Lerner, CPA will be the trustee for the plan's
implementation (hereinafter referred to as "the trustee"). The trustee's
appointment was approved on 9th January 1995 by the Commissioner of Income Tax
in accordance with his authority pursuant to section 102 of the Ordinance.

       4.     (a)   In accordance with section 4(b) of the Rules, the company
hereby undertakes to the Assessing Officer that if an employee is allotted bonus
shares by virtue of the shares allotted for him in the scope of the qualifying
allotment, they will be transferred to the trustee so long as the trustee holds
the shares allotted to him for the employee in the scope of the qualifying
allotment. The trustee hereby undertakes to the Assessing Officer to apply the
provisions of section 102 of the Ordinance to the said bonus shares as though
the bonus shares were shares allotted to the employee in the scope of the
qualifying allotment.

              (b)    In accordance with section 4(b) of the Rules, we confirm to
you that before the allotment is made we shall arrange to obtain a written
certificate from the employee that he agrees that the arrangement will apply to
him and that he undertakes not to claim a tax exemption pursuant to section 95
or 97(a) of the Income Tax Ordinance or pursuant to Chapter Seven of the
Encouragement of Industry (Taxes) Law, 5729-1969 by reason of a transfer of the
shares prior to the end of the holding period.

       5.     A trust instrument as provided in section 3 of the Rules is
enclosed herewith.

<PAGE>

       6.     The trustee undertakes to the Assessing Officer that he will not
transfer the shares or the share certificates until after the tax charged
pursuant to section 102 of the Ordinance and in accordance with the Rules has
been paid or after the trustee has transferred to the Assessing Officer 30% of
the consideration on account of the tax charged.

       7.     The company or the employee has furnished to the trustee a
certificate from the Assessing Officer as to the level of tax payable as a
condition for the shares' transfer into the employee's name. The trustee will
only transfer the shares to the employee only after the amount of tax prescribed
in the Assessing Officer's certificate has been paid.

Yours faithfully,

(Signed)                                     (Signed & Stamped)

__________________________________           ___________________________________
The Trustee                                  The Company

                                      -2-<PAGE>

                                                                     EXHIBIT 4.2

                              ACCORD NETWORKS LTD.

                                 SHARE OWNERSHIP

                             AND OPTION PLAN (2000)

              ADOPTED BY THE BOARD OF DIRECTORS ON JANUARY 26, 2000

<PAGE>

                                TABLE OF CONTENTS

1.    Preamble.

2.    Administration of the Plan.

3.    Shares Subject to the Plan.

4.    Option Prices.

5.    Exclusivity of the Plan.

6.    Allotment of the Options and Shares to the Trustee.

7.    Option or Share Purchase Agreement; Termination of Employment or provision
      of services.

8.    Term of Options; Exercise.

9.    Additional Documents.

10.   Taxation.

11.   Dividends.

12.   Rights and/or Benefits arising out of the Employee/Employer Relationship
      and the Absence of an Obligation to Employ.

13.   Adjustments Upon Changes in Capitalization or Merger.

14.   Termination and Amendment.

15.   Effectiveness of the Plan.

16.   Release of the Trustee, the Attorney and Legal Counsel from Liability and
      Indemnification.

17.   Governing Laws.

APPENDICES

Appendix A:  Grantee's Notice to the Trustee as to Exercise of the Option
             (Section 8.2).

Appendix B:  Notice to the Company of Exercise of the Option by the Trustee
             (Section 8.4).

Appendix C:  Proxy and Power of Attorney (Section 9.2).

                                       2
<PAGE>

1.    PREAMBLE

      1.1   This plan, as amended from time to time, shall be known as the
            "Accord Networks Ltd.'s Share Ownership and Option Plan (2000)" (the
            "PLAN"). The purpose and intent of the Plan is to provide incentives
            to employees, directors and/or consultants or other service
            providers (the "GRANTEES") of the Company, and/or of its
            subsidiaries or parent company, (each a "RELATED COMPANY" and
            collectively, "RELATED COMPANIES") by providing them with the
            opportunity to purchase shares of the Company.

            The Plan is designed to comply with Section 102 of the Income Tax
            Ordinance ("SECTION 102") and the rules promulgated thereunder (the
            "COMMISSIONER'S RULES") and to enable the Company and the employees
            of the Company or any Related Company (the "EMPLOYEES") to benefit
            from Section 102 and the Commissioner's Rules and also to enable the
            Company to grant options and issue shares outside the context of
            Section 102. The Company, however, does not warrant that the Plan
            will be recognized by the income tax authorities or that future
            changes will not be made to the provisions of the law, regulations
            or the Commissioner's Rules, which are promulgated from time to
            time, or that any exemption or benefit currently available pursuant
            to Section 102 will not be abolished.

      1.2   Should any provision of Section 102 or the Commissioner's Rules
            which applies to Employees be amended, such amendment shall be
            deemed included in the Plan with respect to options granted or
            shares issued in the context of Section 102. Where a conflict arises
            between any section of the Plan, the agreement as defined in Section
            7 below (the "AGREEMENT") or their application, and the provisions
            of the law and the Commissioner's Rules, the Board of Directors of
            the Company (the "BOARD") in its sole discretion shall determine the
            necessary changes to be made to the Plan and their determination
            regarding this matter shall be final and binding.

      1.3   In the event the Company's shares should be registered for trading
            on the Tel-Aviv Stock Exchange Ltd., or on any other stock exchange,
            whether in Israel or abroad, the options and/or shares allotted in
            accordance with the Plan may be made conditional to any requirement
            or instruction of the stock exchange authorities or of any other
            relevant authority acting pursuant to applicable law as shall exist
            from time to time. In such case, by means of a Board resolution, the
            Plan and the Agreements prepared pursuant hereto, may be amended as
            necessary to meet such requirements. In the event of a contradiction
            between any such amendment and the Plan's provisions, the amendment
            shall prevail.

2.    ADMINISTRATION OF THE PLAN

      2.1   The Plan shall be administered by the Board and/or by any committee
            of the Board so designated by the Board. Any subsequent references
            herein to the Board shall also mean any such committee and, unless
            the powers

                                       3
<PAGE>

            of the committee have been specifically limited, such committee
            shall have all of the powers of the Board granted herein. Subject to
            Sections 4 and 14, the Board shall have plenary authority to
            determine the terms and conditions of all options (which need not be
            identical), including, without limitation, the purchase price of the
            shares covered by each option, the individuals to whom, and the time
            or times at which, options shall be granted, the number of shares to
            be subject to each option, whether an option shall be granted
            pursuant to Section 102 or otherwise and when an option can be
            exercised and whether in whole or in installments. Subject to
            Section 15, the Board shall have plenary authority to construe and
            interpret the Plan, to prescribe, amend and rescind the rules and
            regulations relating to it and to make all other determinations
            deemed necessary or advisable for the administration of the Plan.
            All determinations and decisions of the Board pursuant to the
            provisions of the Plan and all related orders and resolutions of the
            Board shall be final, conclusive and binding on all persons,
            including the Company, its shareholders, the Grantees and their
            estates and beneficiaries.

      2.2   Any directive or notice signed by two members of the Board shall
            constitute conclusive proof and authority for every act or decision
            of the Company.

      2.3   No director or officer of the Company shall be personally liable or
            obligated to any Grantee as a result of any decision made and/or
            action taken with respect to the Plan or its execution.

3.    SHARES SUBJECT TO THE PLAN

      The shares subject to the Plan shall be Ordinary Shares of the Company.
      The maximum number of shares that may be issued under the Plan is 750,000
      Ordinary Shares of NIS 0.01 nominal value each, as such number of shares
      may be adjusted in accordance with Section 13. Such shares may be in whole
      or in part, as the Board shall from time to time determine and subject to
      applicable law authorized and unissued Ordinary Shares or issued and fully
      paid Ordinary Shares which shall have been purchased by the Trustee (as
      such term is defined in Section 6.1) with funds provided by the Company.
      If any option granted under the Plan shall expire, terminate or be
      canceled for any reason without having been exercised in full, such shares
      subject thereto shall again be available for the purposes of the Plan. Any
      increase in the maximum number of shares shall be recommended by the Board
      and shall require the approval of the general meeting of the shareholders
      of the Company.

4.    OPTION PRICES

      The consideration to be paid by the Grantee for each share purchased by
      exercising the option (the "OPTION EXERCISE PRICE") shall be as determined
      by the Board on the date of grant, provided that the Option Exercise Price
      shall not be less than the nominal value of the shares subject to the
      option.

                                       4
<PAGE>

5.    EXCLUSIVITY OF PLAN

      Unless otherwise determined by the Board in any particular instance as
      part of the Agreement, each Grantee hereunder will be required to
      declare and agree that all prior agreements, arrangements and/or
      understandings with respect to shares of the Company or options to
      purchase shares of the Company which have not actually been issued or
      granted prior to execution of the Agreement shall be null and void and
      that only the provisions of the Plan and/or the Agreement shall apply.

      Notwithstanding the above, the adoption of this Plan, by itself, shall
      not be construed as amending, modifying or rescinding any incentive
      arrangement previously approved by the Board 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 options otherwise than under this Plan, and such
      arrangements may be either applicable generally or only in specific
      cases.

6.    ALLOTMENT OF THE OPTIONS AND THE SHARES TO THE TRUSTEE

      6.1   The Board shall appoint a Trustee for the purposes of this Plan (the
            "TRUSTEE"). The Trustee shall have all the powers provided by law,
            the Commissioner's Rules, and the Plan and shall act pursuant to the
            provisions thereof, as they shall apply from time to time. The
            Company shall pay the Trustee a fee as shall be agreed between the
            Trustee and the Company.

      6.2   The certificates representing any shares and the option deeds shall
            be issued by the Company in the name of the Trustee and shall be
            deposited with the Trustee, held by it and registered in its name in
            the register of members of the Company for a minimum period as
            determined by the Board. Options granted or shares issued in the
            context of Section 102 shall be deposited with the Trustee, held by
            him and registered in his name for a minimum period of not less than
            24 months from the date on which the option or shares issued to the
            Trustee (hereinafter the "RESTRICTION PERIOD").

      6.3   Without derogating from the provisions of Sections 6.2 above or 6.7
            below, the shares issued with respect to any options granted
            hereunder will be held by the Trustee and registered in its name
            until the consummation of the initial public offering of the
            Company's shares, pursuant to an effective registration statement,
            prospectus or similar document in Israel or such other jurisdiction
            as is determined by the Board (the "IPO").

      6.4   The option shall not confer upon the holder thereof any of the
            rights of a shareholder of the Company, for as long as it has not
            been exercised.

                                       5
<PAGE>

      6.5   For as long as any shares are held by the Trustee or registered in
            its name or for as long as the certificates representing any shares
            are held by the Trustee, the Trustee alone shall be entitled to
            receive every notice to which a shareholder is entitled, or to
            demand any information, and any financial and/or other report to
            which a shareholder is entitled from the Company, and only the
            Trustee or whomever it shall designate pursuant to the Proxy and
            Power of Attorney referred to in Section 9.2 below and attached as
            APPENDIX C hereto (the "ATTORNEY"), shall be entitled to exercise
            every other right of the shareholders vis-a-vis the Company
            including the right to participate in all shareholders' meetings. No
            Grantee shall be entitled to exercise any of these rights as
            shareholder nor make any demand or request of the Trustee and/or of
            the Attorney in this regard.

      6.6   Shares registered in the Trustee's name shall be represented at all
            meetings of shareholders of the Company and shall be voted by the
            Trustee at its discretion in the best interest of the Company.

      6.7   Nothing in the aforegoing provisions shall derogate from the power
            of the Board to grant options or to allot shares to the Trustee
            otherwise than under the provisions of Section 102 and the
            Commissioner's Rules or to allot shares or grant options to Grantees
            directly otherwise than through the Trustee or on terms which differ
            from those specified above or to approve the transfer of shares from
            the Trustee to the name of any Grantee(s) upon such conditions as
            shall be determined by the Board.

7.    OPTION OR SHARE PURCHASE AGREEMENT; TERMINATION OF EMPLOYMENT OR PROVISION
      OF SERVICES

      Unless otherwise determined by the Board, every Grantee shall be required
      to sign an option or share purchase agreement or other document as shall
      be determined by the Board, in the form approved by the Board (the
      "AGREEMENT").

      The Agreement need not be identical with respect to each Grantee. The
      following terms, however, shall apply to all options, and, mutatis
      mutandis, shares, unless expressly otherwise decided in respect of a
      particular option:

      7.1   In addition to the provisions of Section 4 and without prejudice
            thereto, where Section 102 and the Commissioner's Rules apply to the
            Agreement and so require, the option shall be granted to the
            Employee in consideration for a waiver of salary by the Grantee
            pursuant to the provisions of the Agreement.

      7.2   The Option Exercise Price shall be paid by the Grantee to the
            Company no later than the date of exercise of the option unless
            otherwise determined in the Agreement.

                                       6
<PAGE>

      7.3   The Grantee shall have no right of first refusal to purchase shares
            of the Company which may be offered for sale by shareholders of the
            Company, and shall have no pre-emptive rights to purchase shares
            which are being allotted or shall in the future be allotted by the
            Company, to the extent any such rights otherwise exist.

      7.4   The option and/or the right to the option and/or the shares are
            personal and except insofar as is specified in this Plan, and, where
            applicable, subject to Section 102 and the Commissioner's Rules, may
            not be transferred, assigned, pledged, withheld, attached or
            otherwise charged either voluntarily or pursuant to any law, except
            by way of transfer pursuant to the laws of inheritance, and no power
            of attorney or deed of transfer, whether the same has immediate
            effect or shall take effect on a future date, shall be given with
            respect thereto. The option may only be exercised by the Trustee on
            behalf of the Grantee named in the Agreement. A note as to the
            provisions of this sub-section or a legend may appear on any
            document which grants the option and in particular in the Agreement,
            and also on any share certificate.

      7.5   The right to exercise the option is granted to the Trustee on behalf
            of the Grantee. Vesting shall be in installments, gradually over a
            period of 4 (four) years from the date of grant of the option or
            such other period or periods as determined by the Board. Unless
            otherwise determined, at the conclusion of each period for the
            exercise of the option as determined in the Agreement ("VESTING
            PERIODS"), the option may, from time to time, be exercised in
            relation to all the shares allocated for that period in such manner
            that at the end of the first year from the granting of the option
            the Trustee shall, in the absence of a contrary determination in the
            Agreement, be entitled to exercise on behalf of the Grantee and at
            his or her request twenty-five percent (25%) of the options and
            6.25% of the options will vest at the end of each three-month period
            thereafter.

            In addition, during each of the periods, the option may be exercised
            in relation to all or part of the shares allocated for any previous
            period in which the option was not fully exercised, provided,
            subject to the provisions of Section 7.7 hereof, that at the time of
            the exercise of the option the Grantee continues to be: (i) a
            service provider of the company or a Related Company, if such
            Grantee is a service provider, from the date of grant thereof until
            the date of their exercise; (ii) employed by the Company or a
            Realted Company on a continual basis, if such Grantee is an
            Employee, from the date of the grant thereof until the date of their
            exercise; and (iii) serve as a director of the Company, if such
            Grantee is a director of the Company, from the date of grant thereof
            until the date of their exercise. After the end of the Vesting
            Periods and during the balance of the option period, the option may
            be exercised, from time to time, in relation to all or part of the
            shares which have not at that time been exercised and which remain
            subject to the option, subject to the provisions of Section 7.7
            hereof and to any condition in the Agreement, if such exists, which
            provides a minimum number of shares with respect to which

                                       7
<PAGE>

            the option may be exercised and any provision which determines the
            number of times that the Trustee may send the Company notice of
            exercise on behalf of the Grantee in respect of the option. The
            Board shall be entitled at any time to shorten or accelerate the
            vesting schedule or any Vesting Period.

      7.6   The Board may determine at its sole discretion, that any Grantee
            shall be entitled to receive the options or the shares, through the
            Trustee, pursuant to the provisions of this Plan or directly in the
            name of the Grantee, immediately upon execution of the Agreement or
            on such other date or dates as the Company has undertaken towards
            such Grantee. In the event that a Grantee is exempt from the Vesting
            Periods (pursuant to the provisions of Section 7.5), the Board shall
            be entitled to determine that where the Grantee does not comply with
            the conditions determined by the Board or ceases to be an employee,
            director or advisor of the Company or any Related Company, the
            Trustee, the Company or a Related Company shall have the right to
            repurchase the shares from the Grantee for nominal or any other
            consideration determined by the Board. The Board may set additional
            conditions to this right of repurchase, including the provision of
            appropriate arrangements for the monies which shall be available to
            the Trustee, the Company or a Related Company or others for the
            purpose of the repurchase and conditions with respect to the voting
            rights of the Grantee, rights of first refusal or pre-emptive rights
            to purchase shares in the Company, to the extent such rights exist,
            the Grantees right to receive reports or information from the
            Company, and the Grantees right to a dividend in respect of shares
            which are subject to a right of repurchase as aforesaid. For as long
            as the aforegoing conditions of the Board (including a minimum
            period of employment as a condition for the lapse of the right to
            repurchase) have not been complied with, the Grantee shall not be
            entitled to sell or charge or transfer in any other manner the
            shares which are subject to the right of repurchase. As security for
            the compliance with this undertaking the share certificate will be
            deposited with the Trustee who will release the same to the Grantee
            only after the Grantee becomes entitled to the shares and the same
            are not subject to any other restrictive condition.

      7.7   TERMINATION OF EMPLOYMENT OR PROVISION OF SERVICE

            7.7.1 If the Grantee ceases to be: (i) an Employee; (ii) a service
                  provider, or (iii) a director of the Company, as the case may
                  be, prior to the complete exercise of an option, (a) by reason
                  of death, disability (as determined by the Board in its
                  absolute discretion) ("DISABILITY") or retirement after age 60
                  with the approval of the Board, the option shall remain
                  exercisable for a period of one year following such
                  termination (but only to the extent exercisable at termination
                  of employment and not beyond the scheduled expiration date);
                  (b) for any other reason other than for Cause, the option
                  shall remain exercisable for a period of 30 days following the
                  date of termination; or (c) for Cause, as such term is defined
                  below, all

                                       8
<PAGE>

                  options held by or on behalf of such Grantee shall immediately
                  expire upon the earlier of such termination or notice of
                  termination (unless the Agreement provides otherwise).

                  For purposes hereof, the term "CAUSE" shall mean (i) a
                  material breach by the Grantee of its obligations under any
                  agreement with the Company or any Related Company, including
                  the Agreement; (ii) the commission by the Grantee of an act of
                  fraud or embezzlement against the Company or any Related
                  Company or the willful taking of action injurious to the
                  business or prospects of the Company or any Related Company;
                  or (iii) the Grantee conviction of a felony involving moral
                  turpitude; and, (iv) the Grantee's involvement with an act
                  which constitutes breach of trust between him and the Company
                  or any Related Company or which constitutes breach of
                  discipline.

                  In the case of Employees, the Board may determine whether any
                  given leave of absence constitutes a termination of
                  employment. Options granted under this Plan shall not be
                  affected by any change of employment so long as the Grantee
                  continues to be an Employee of the Company or Related Company.

            7.7.2 In such case as Section 102 and the Commissioner's Rules shall
                  apply to any option, where the Grantee ceases to be an
                  Employee prior to the termination of a period of two years
                  from the date of the qualifying allotment as defined in the
                  Commissioner's Rules, (except where the Commissioner is
                  satisfied that the Grantee ceased to be employed by the
                  Company or Related Company by reason of death or for special
                  reasons beyond the Grantee's control), the exemption provided
                  by Section 102 shall not apply with respect to that Grantee
                  pursuant to the Commissioner's Rules. In such case, the
                  Grantee shall be obliged to make arrangements with the tax
                  authorities at his expense for all matters to do with the
                  taxation of the options and/or the shares.

            7.7.3 Notwithstanding the foregoing, the Board may in its absolute
                  discretion, extend the period of exercise of the option by a
                  Grantee or Grantees for such time as it shall determine either
                  with or without conditions.

8.    TERM OF OPTIONS; EXERCISE

      8.1   The term of each option shall be for such period as the Board shall
            determine, but not more than 10 (ten) years from the date of grant
            thereof or such shorter period as is prescribed in Section 7.7
            hereof.

      8.2   A Grantee who desires that the Trustee exercise an option on his or
            her behalf shall instruct the Trustee to do so in writing in the
            form annexed hereto as APPENDIX A or in such other form as shall be
            approved by the

                                       9
<PAGE>

            Board. The notice shall be accompanied by payment of the full Option
            Exercise Price of such shares as provided in the Agreement.

      8.3   If Section 102 does not apply to the option or the shares which
            relate thereto, as a condition for the exercise of the option, the
            Grantee shall pay the tax applicable to him or her (including all
            tax payable by the Company arising out of its obligation to deduct
            tax at source) pursuant to applicable law and the provisions of the
            Plan.

      8.4   Upon receipt of all the requisite documents, approvals and payments
            from the Grantee, including sufficient proof of payment of any
            applicable taxes in form satisfactory to the Company and the
            Trustee, the Trustee shall deliver a notice to the Company in the
            form annexed hereto as APPENDIX B or in such other form as shall be
            approved by the Board. The Company shall allot the shares in the
            name of the Trustee.

      8.5   Without limiting the foregoing, the Board may, with the consent of
            the Grantee, from time to time cancel all or any portion of any
            option then subject to exercise, and the Company's obligation in
            respect of such option may be discharged by: (i) payment to the
            Grantee or to the Trustee on behalf of the Grantee of an amount in
            cash equal to the excess, if any, of the Fair Market Value of the
            relevant shares at the date of such cancellation subject to the
            portion of the option so canceled over the aggregate Option Exercise
            Price of such shares; (ii) the issuance or transfer to the Grantee
            or to the Trustee on behalf of the Grantee of shares of the Company
            with a Fair Market Value at the date of such transfer equal to any
            such excess; or (iii) a combination of cash and shares with a
            combined value equal to any such excess, all as determined by the
            Board in its sole discretion.

            For purposes hereof, the "Fair Market Value" of the Ordinary Shares
            shall mean, as of any date, the value of the Ordinary Shares
            determined as follows:

            (a)   If the Shares are listed on the Nasdaq National Market or The
                  Nasdaq SmallCap Market of The Nasdaq Stock Market, their Fair
                  Market Value shall be the closing sales price for such Shares
                  (or the closing bid, if no sales were reported) as quoted on
                  such system for the last market trading day prior to the time
                  of determination, as reported in THE WALL STREET JOURNAL or
                  such other source as the Board deems reliable;

            (b)   If the Shares are listed on the Tel Aviv Stock Exchange, but
                  are not traded on the Nasdaq National Market or The Nasdaq
                  Small Cap Market, their Fair Market Value shall be the closing
                  sales price for such Shares (or the closing bid if no sales
                  were reported) as quoted on such exchange for the last market
                  trading day prior to the time of determination, as reported in
                  GLOBES, HAARETZ or such other source as the Board deems
                  reliable;

                                       10
<PAGE>

            (c)   If the Shares are regularly quoted by a recognized securities
                  dealer but selling prices are not reported, their Fair Market
                  Value shall be the mean between the high bid and low asked
                  prices for the Shares on the last market trading day prior to
                  the day of determination, or;

            (d)   In the absence of an established market for the Shares, the
                  Fair Market Value thereof shall be determined in good faith by
                  the Board.

9.    ADDITIONAL DOCUMENTS

      9.1   Until the consummation of the IPO, the Company shall have the right
            to demand from the Grantee at any time that the same shall provide,
            and the Grantee shall provide, any certificate, declaration or other
            document which the Company shall consider to be necessary or
            desirable pursuant to any law, whether local or foreign, including
            any certificate or agreement which the Company shall require, if
            any, from the Grantees as members of a class of shareholders, or any
            certificate, declaration or other document the obtaining of which
            shall be deemed by the Board to be appropriate or necessary for the
            purpose of raising capital for the Company (including pursuant to a
            public offering of securities), of merging the Company with another
            company (whether the Company is the surviving entity or not), or of
            reorganization of the Company, including, in the event of a
            consolidation or merger of the Company or any sale, lease, exchange
            or other transfer of all or substantially all of the assets or
            shares of the Company the sale or exchange, as the case may be, of
            any shares the Grantee (or the Trustee on his or her behalf) may
            have purchased hereunder all as shall be deemed necessary or
            desirable by the Board.

      9.2   In order to guarantee the aforesaid, and because the rights of the
            Company and the other shareholders are dependent thereon, the
            grantee shall, upon signing the Agreement and as a condition to the
            grant of any options hereunder, execute the Proxy and Power of
            Attorney attached hereto as APPENDIX C, or in such other form as
            shall be approved by the Board, irrevocably empowering the Trustee
            and/or the Attorney, until consummation of the IPO, to sign any
            document and take any action in his or her name as aforesaid, and
            the Grantee shall have no complaint or claim against the Trustee
            and/or the Attorney in respect of such signature. The Grantee will
            authenticate his or her signature in the presence of a notary if he
            shall be asked to do so by the Company, in order to give full
            validity to the power of attorney.

10.   TAXATION

      10.1  GENERAL

            The Grantee shall be liable for all taxes, duties, fines and other
            payments which may be imposed by the tax authorities (whether in
            Israel or abroad) and for every obligatory payment of whatever
            source in respect of the

                                       11
<PAGE>

            options, the shares (including, without limitation, upon the
            exercise of the options, the sale of the shares or the registration
            of the shares in the Grantee's name) or dividends or any other
            benefit in respect thereof and/or for all charges which shall accrue
            to the Grantee, the Company, or any Related Company and/or to the
            Trustee in connection with the Plan.

      10.2  DEDUCTION AT SOURCE

            The Company and/or any Related Company and/or the Trustee shall, in
            their absolute and sole discretion, be entitled or shall be obliged,
            pursuant to the law and to the Commissioner's Rules, to make
            deductions at source from all payments due to the Grantee from any
            source.

      10.3  CERTIFICATE OF AUTHORIZATION OF ASSESSING OFFICER

            The Company (including any Related Company) or the Trustee shall at
            any time be entitled to apply to the Assessing Officer, and in the
            case of a Grantee abroad, to any foreign tax authority, for receipt
            of their certificate of authorization as to the amount of tax which
            the Company or any Related Company or the Grantee or the Trustee is
            to pay to the tax authorities resulting from granting the options or
            allotting the shares, or regarding any other question with respect
            to the application of the Plan.

11.   DIVIDENDS

      The Ordinary Shares received as a result of the exercise of the options
      shall participate equally with the Company's other Ordinary Shares in
      every cash dividend which shall be declared and distributed subject to the
      following provisions:

      11.1  A cash dividend shall be distributed only to persons registered in
            the register of members as shareholders on the record date fixed for
            the distribution of the dividend.

      11.2  A dividend with regard to shares which are registered in the name of
            the Trustee shall be paid to the Trustee, subject to any lawful
            deduction of tax, whether such rate is at the usual rate applicable
            to a dividend or at a higher rate. The Trustee shall transfer the
            dividend to the Grantees in accordance with instructions that it
            shall receive from the Company. Alternatively, the Company shall be
            entitled to pay the dividend directly to the Grantee subject to the
            deduction of the applicable tax.

      11.3  Without derogating from the provisions of Section 11.2 hereof, the
            Company or the Trustee shall be entitled to set off and deduct at
            source from any dividend any sum that the Grantee owes to the
            Company or the Trustee, whether under the Plan or otherwise, and/or
            any sum that the Grantee owes to the tax authorities.

                                       12
<PAGE>

12.   RIGHTS AND/OR BENEFITS ARISING OUT OF THE EMPLOYEE/EMPLOYER RELATIONSHIP
      AND THE ABSENCE OF AN OBLIGATION TO EMPLOY

      12.1  No income or gain which shall be credited to or which purports to be
            credited to the Employee as a result of the Plan, shall in any
            manner be taken into account in the calculation of the basis of the
            Employee's entitlements from the Company or any Related Company or
            in the calculation of any social welfare right or other rights or
            benefits arising out of the employee/employer relationship. If,
            pursuant to any law, the Company or any Related Company , shall be
            obliged for the purposes of calculation of the said items to take
            into account income or gain actually or theoretically credited to
            the Employee, the Employee shall indemnify the Company or any
            Related Company, against any expense caused to it in this regard.

      13.2  Nothing in the Plan shall be interpreted as obliging the Company or
            any Related Company to employ the Employee and nothing in the Plan
            or any option granted pursuant thereto shall confer upon any
            Employee any right to continue in the employment of the Company or
            any Related Company or restrict the right of the Company or any
            Related Company to terminate such employment at any time. The
            Employee shall have no claim whatsoever against the Company or any
            Realted Company as a result of the termination of his employment,
            even if such termination causes any options to expire and/or
            prevents him or her from exercising the options and/or from
            receiving or retaining the shares pursuant to any agreement between
            him or her and the Company, or results in any loss due to an early
            imposition of tax liability pursuant to applicable law.

13.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER

      13.1  CHANGES IN CAPITALIZATION

            In the event shares issued as a result of the exercise of options
            granted pursuant to the Plan, shall be subdivided or combined into a
            greater or smaller number of shares or if, upon a reorganization,
            recapitalization or the like, the shares shall be exchanged for
            other securities of the Company, each Grantee shall be entitled,
            subject to the conditions herein stated, to purchase such number of
            shares or amount of other securities of the Company as were
            exchangeable for the number of Shares of the Company which such
            Optionee would have been entitled to purchase except for such
            action, and appropriate adjustments shall be made in the purchase
            price per share to reflect such subdivision, combination or
            exchange.

            In the event that the Company shall issue any of its shares or other
            securities as bonus shares or a stock dividend upon or with respect
            to

                                       13
<PAGE>

            any shares which shall at the time be subject to an option
            hereunder, each Grantee upon exercising such option shall be
            entitled to receive (for the purchase price payable upon such
            exercise), the shares as to which he or she is exercising such
            option and, in addition thereto (at no additional cost), such number
            of shares of the class or classes in which such bonus shares or
            stock dividend were declared, and such amount of shares (and the
            amount in lieu of fractional shares) as is equal to the shares which
            he or she would have received had he or she been the holder of the
            shares as to which he or she is exercising his or her Option at all
            times between the date of grant of such option and the date of its
            exercise.

      13.2  DISSOLUTION OR LIQUIDATION

            In the event of the proposed dissolution or liquidation of the
            Company, the Board shall notify each Grantee as soon as practicable
            prior to the effective date of such proposed transaction. The Board
            in its discretion may provide for a Grantee to have the right to
            exercise his or her option until fifteen (15) days prior to such
            transaction as to all of the optioned shares, including shares as to
            which the Option would not otherwise be exercisable. To the extent
            it has not been previously exercised, an option will terminate
            immediately prior to the consummation of such proposed action.

      13.3  MERGER OR ASSET SALE

            In the event of a merger of the Company with or into another
            corporation, or the sale of substantially all of the assets of the
            Company, each outstanding option shall be assumed or an equivalent
            option substituted by the successor corporation or a parent or
            Subsidiary of the successor corporation. In the event that the
            successor corporation refuses to assume or substitute for the
            option, the Grantee shall fully vest in and have the right to
            exercise the option as to all of the optioned stock, including
            shares as to which it would not otherwise be vested or exercisable.
            If an option becomes fully vested and exercisable in lieu of
            assumption or substitution in the event of a merger or sale of
            assets, the Board shall notify the Grantee in writing or
            electronically that the option shall be fully exercisable for a
            period of fifteen (15) days from the date of such notice, and the
            option shall terminate upon the expiration of such period. For the
            purposes of this paragraph, the option shall be considered assumed
            if, following the merger or sale of assets, the option confers the
            right to purchase or receive, for each share of optioned shares
            immediately prior to the merger or sale of assets, the consideration
            (whether shares, cash, or other securities or property) received in
            the merger or sale of assets by holders of shares for each share
            held on the effective date of the transaction (and if such holders
            were offered a choice of consideration, the type of consideration
            chosen by the holders of a majority of the outstanding shares);
            provided, however, that if such consideration

                                       14
<PAGE>

            received in the merger or sale of assets is not solely Ordinary
            Shares (or their equivalent) of the successor corporation or its
            parent, the Board may, with the consent of the successor
            corporation, provide for the consideration to be received upon the
            exercise of the option, for each share of optioned shares, to be
            solely ordinary shares (or their equivalent) of the successor
            corporation or its parent equal in fair market value to the per
            Share consideration received by holders of Shares in the merger or
            sale of assets.

14.   TERMINATION AND AMENDMENT

      Unless the Plan shall theretofore have been terminated as hereinafter
      provided, the Plan shall terminate on, and no option shall be granted
      after, the tenth anniversary of the date the Plan is adopted by the
      Board. The Plan may be terminated, modified or amended by the
      shareholders of the Company. The Board may at any time terminate,
      modify or amend the Plan in such respects as it shall deem advisable;
      PROVIDED, HOWEVER, that the Board may not, without shareholders
      approval, increase the maximum number of Ordinary Shares as to which
      options may be granted under the Plan (except by adjustment pursuant to
      Section 14) or extend the termination date of the Plan. Options granted
      prior to termination of the Plan may, subject to the terms of the Plan
      and any Agreement, be exercised thereafter. No amendment or
      modification of the Plan may, without the consent of the Grantee to
      whom any option shall theretofore have been granted, adversely affect
      the rights of such Grantee under such option.

15.   EFFECTIVENESS OF THE PLAN

      The Plan shall become effective as of the date determined by the Board.

16.   RELEASE OF THE TRUSTEE AND THE ATTORNEY FROM LIABILITY AND INDEMNIFICATION

      In no event shall the Trustee or the Attorney be liable to the Company
      and/or any Grantee under the Plan and/or any third party (including
      without prejudice to the generality of the aforegoing, to the income tax
      authorities and any other governmental or administrative authority), or to
      a purchaser of shares from any Grantee with respect to any act which has
      been or will be carried out in relation to the Plan, its execution and any
      matter connected thereto or arising therefrom. The Company will not, and
      the Grantee will be required to covenant upon signing the Agreement that
      he or she will not, make any claim against the Trustee or the Attorney in
      any manner whatsoever and on any ground whatsoever and they expressly
      agree that if the Trustee or the Attorney are sued by them, then the
      Trustee or the Attorney shall be entitled by virtue of this Section alone
      to apply to the court for dismissal of the action against them with costs.
      The Company covenants and agrees that if an action is commenced by any
      third party against the Trustee or the Attorney they shall be entitled,
      without any objection on the Company's part to join the Company as a third
      party to any action and a judgment against them will be paid by the
      Company.

                                       15
<PAGE>

      The Company covenants and the Grantee will be required to covenant to
      indemnify the Trustee and/or the Attorney against any liability in
      relation to any claim and/or demand made against the Trustee and/or the
      Attorney by any person whatsoever, including the tax authorities, in
      relation to their acts or omissions in connection with the Plan.

17.   GOVERNING LAWS

      The Plan and all instruments issued thereunder shall be governed by and
      construed in accordance with the laws of the State of Israel.

                                       16
<PAGE>

                              ACCORD NETWORKS LTD.

                                   APPENDIX A

                    TO ACCORD NETWORKS LTD.'S SHARE OWNERSHIP
                             AND OPTION PLAN (2000)

                                  (SECTION 8.2)

                               NOTICE OF EXERCISE

                                                            Date: ______________

The Trustee under the Accord Networks Ltd.'s
Share Ownership and Option Plan (2000)
(THE "PLAN")

Dear Sirs,

                             Re: NOTICE OF EXERCISE

I hereby wish to inform you that it is my desire that of the Option which was
granted to you on ________ to acquire ______ (________) Ordinary Shares of
Accord Networks Ltd. (the "Company") on my behalf, you exercise and acquire on
my behalf ______ (________) of the Ordinary Shares subject to the said Option at
a price of NIS ____ per share, all in accordance with the Plan.

Attached to this Notice is a check in the amount of NIS ________ (NIS ________)
as payment for the abovementioned shares.

I am aware that all the shares shall be allotted to you, registered in your name
and that you shall hold all the share certificates representing such shares.

Likewise, I am aware of and agree to all the other provisions of the Plan and
applicable law.

                                                Yours sincerely,

                                                ---------------
                                                Grantee's name

                                       17
<PAGE>

                              ACCORD NETWORKS LTD.

                                   APPENDIX B

                    TO ACCORD NETWORKS LTD.'S SHARE OWNERSHIP
                             AND OPTION PLAN (2000)

                                  (SECTION 8.4)

                               NOTICE OF EXERCISE

                                                            Date: ______________

Accord Networks Ltd.
10 Martin Gehl Street
Petah Tikva, Israel

Dear Sirs,

                             Re: NOTICE OF EXERCISE

Please be advised that I hereby exercise ________ (________) of the Ordinary
Shares subject to the Option which was granted to me on behalf of __________ on
________ to acquire ________ (________) Ordinary Shares of Accord Networks Ltd.,
at a price of NIS ____ per share, all in accordance with the Plan.

Attached to this Notice is a check in the amount of NIS ________ (NIS ________)
as payment for the abovementioned shares.

                                                Yours sincerely,

                                                ---------------
                                                The Trustee

                                       18
<PAGE>

                              ACCORD NETWORKS LTD.

                                   APPENDIX C

                    TO ACCORD NETWORKS LTD.'S SHARE OWNERSHIP
                             AND OPTION PLAN (2000)

                                  (SECTION 9.2)

                     IRREVOCABLE PROXY AND POWER OF ATTORNEY

I, the undersigned, _____________, hereby appoint Mr. Eliahu Lerner, C.P.A.
and/or Mr. Yehuda Zviel, C.P.A. or whomever shall replace him as trustee
pursuant to the Company's Employee Share Ownership and Option Plan (1999) or
whomever they shall designate (the "TRUSTEE" and the "PLAN", respectively) as my
proxy to participate and vote (or abstain) for me and on my behalf as he at his
sole discretion shall deem appropriate, on all matters at all meetings of
shareholders (whether ordinary, extraordinary or otherwise), of Accord Networks
Ltd. (the "COMPANY"), on behalf of all the shares and/or options of the Company
held by the Trustee on my behalf and I hereby grant an irrevocable power of
attorney to the Trustee as follows:

I hereby authorize and grant power of attorney to the Trustee for as long as any
shares and/or options which were allotted or granted on my behalf are held by
the Trustee or registered in his name, or for as long as the certificates
representing any shares are held by the Trustee, to exercise every right, power
and authority with respect to the shares and/or options and to sign in my name
and on my behalf any document (including any agreement, including a merger
agreement of the Company or an agreement for the purchase or sale of assets or
shares including the shares of the Company held on my behalf and any and all
documentation accompanying any such agreements, such as, but not limited to,
decisions, requests, instruments, receipts and the like), and any affidavit or
approval with respect to the shares and/or options or to the rights which they
represent in the Company in as much as the Trustee shall deem it necessary or
desirable to do so. In addition and without derogating from the generality of
the foregoing, I hereby authorize and grant power of attorney to the Trustee to
sign any document as aforesaid and any affidavit or approval (such as any waiver
of rights of first refusal to acquire shares which are offered for sale by other
shareholders of the Company and/or any pre emptive rights to acquire any shares
being allotted by the Company, in as much as such rights shall exist pursuant to
the Company's Articles of Association as shall be in existence from time to
time) and/or to make and execute any undertaking in my name and on my behalf if
the Trustee shall, at his sole discretion, deem that the document, affidavit or
approval is necessary or desirable for purposes of any placement of securities
of the Company, whether private or public (including lock-up arrangements and
undertakings), whether in Israel or abroad, for purposes of a merger of the
Company with another entity, whether the Company is the surviving entity or not,
for purposes of any reorganization or recapitalization of the Company or for
purposes of any purchase or sale of assets or shares of the Company.

                                       19
<PAGE>

This Proxy and Power of Attorney shall be interpreted in the widest possible
sense, in reliance upon the Plan and upon the goals and intentions thereof.

This Proxy and Power of Attorney is irrevocable and shall expire and cease to be
of force and effect immediately after the consummation of the initial public
offering of the Company's shares, pursuant to an effective registration
statement, prospectus or similar document in Israel or such other jurisdiction
as is determined by the Board of Directors of the Company and shall be
irrevocable until such time as the rights of the Company and the Company's
shareholders are dependent hereon. The expiration of this Power of Attorney
shall in no manner effect the validity of any document (as aforesaid), affidavit
or approval which has been signed or given as aforesaid prior to the expiration
hereof and in accordance herewith.

IN WITNESS WHEREOF, I have executed this Proxy and Power of Attorney on the __
day of ________, _____.

________________________

CONFIRMATION

I, the undersigned, ________, hereby confirm the signature of ________ which
appears above.

________________________

                                       20

<PAGE>

                              ACCORD NETWORKS LTD.

                     SHARE OWNERSHIP AND OPTION PLAN (2000)
                                OPTION AGREEMENT

made and entered into on the __ day of _______, 2000

Between

       ACCORD NETWORKS LTD.
       94 Derech Em Hamoshavot,
       P.O.B. 3654, Petah Tikva
       49130, Israel

(the "COMPANY")

         and

(the "EMPLOYEE")

WHEREAS:    The Employee is an employee of the Company and/or of a subsidiary or
            a parent company of the Company (each a "RELATED COMPANY" and
            collectively, "RELATED COMPANIES"); and

WHEREAS:    The Company desires to grant the Employee options to purchase shares
            in the Company, and/or issue to the Employee shares in the Company
            and the Employee is interested in receiving the aforesaid options
            and/or purchasing the aforesaid shares, all in accordance with and
            subject to the Company's Share Ownership and Option Plan (2000) and
            the annexes thereto (the "PLAN") and the provisions of this
            Agreement, and their intention is that the provisions of Section 102
            of the Income Tax Ordinance and the Income Tax Rules (Tax Relief on
            Shares Issued to Employees), 5749-1989 (hereinafter, the "LAW", and
            the "RULES", respectively) shall apply to the shares issued and/or
            options granted; and

WHEREAS:    The Employee has read the Rules and the Plan, wishes to be bound by
            them and desires that they apply to the options and shares which
            shall be granted to him/her hereunder; and

WHEREAS:    As a condition to receiving the options and/or shares the Employee
            desires to waive a portion of his salary as provided for in this
            Agreement.

NOW, THEREFORE, it is agreed as follows:

<PAGE>

1.    PREAMBLE AND DEFINITIONS

      1.1   The preamble to this Agreement is the basis and constitutes an
            integral part thereof.

      1.2   Unless otherwise defined herein, the terms defined in the Plan shall
            have the same defined meanings in this Option Agreement.

2.    APPLICATION OF THE PROVISIONS OF THE PLAN

      2.1   The Employee hereby declares that he or she has carefully read the
            Plan and that he or she acknowledges and agrees to all of the
            provisions, conditions, limitations, authorizations, declarations
            and commitments included therein.

      2.2   The Employee declares and agrees that this Agreement and the Plan
            prevail over any previous agreement, arrangement and/or
            understanding, whether written or oral between the Employee and the
            Company and/or any Related Company, or the officers and/or directors
            and/or the shareholders thereof with respect to the matters herein
            included, and that any agreement, arrangement and/or understanding
            as aforesaid are null and void and of no further force or effect.

      2.3   All of the provisions, conditions, limitations and declarations
            included and specified in the Plan, as the same shall be amended
            from time to time, are hereby incorporated herein by reference and
            constitute an integral part of this Agreement and of the Employee's
            commitments hereunder. Except and to the extent otherwise expressly
            provided herein, nothing in this Agreement or in the provisions
            hereof shall derogate from anything contained in the Plan.

      2.4   The Employee declares, covenants and agrees that the Law and the
            Rules, as the same shall be amended from time to time, including the
            trust deed between the Company and the Trustee (the conditions
            whereof are accepted by the Employee and upon signing this Agreement
            he or she approves them as an integral part of this Agreement) and
            the notice to the Assessing Officer about the allotment, are fully
            binding on the Employee and shall prevail in case of contradiction,
            over any other provision in the Agreement or in the Plan.

      2.5   A copy of the Plan is attached hereto and constitutes an integral
            part hereof.

3.    GRANT OF OPTION; VESTING

      3.1   The date of the grant of the Option (as such term is defined below)
            shall be ____________(the "DATE OF GRANT").

      3.2   Subject to this Agreement and the Plan, the Company shall grant to
            the Trustee, by an "approved issue" within the meaning of the Law,
            an option to purchase _________Ordinary Shares of the Company,
            nominal value NIS 0.01 each (the "SHARES") at an exercise price of
            $_______per share,

                                       2
<PAGE>

            at the time and in the manner hereinafter provided (the "OPTION").
            The exercise price shall be paid on the date of the exercise of the
            Option.

            The term of the Option shall be 10 years from the Date of Grant or
            such shorter period as is prescribed in Section 3.3 below (the
            "TERM").

      3.2   The Option shall be exercisable, in whole or in part, according to
            the following vesting schedule:

            _____of the Shares subject to the Option shall vest twelve months
            after the Date of Grant, and _______of the Shares subject to the
            Option shall vest at the end of each three-month period thereafter.

      3.3   The Option shall be exercisable by the Trustee on behalf of the
            Employee in progressive stages on the exercise dates as aforesaid,
            provided that the Employee shall have been continuously employed by
            the Company and/or a Related Company, from the date hereof until
            such date of exercise.

      3.4   In the event that the Employee ceases to be an Employee of the
            Company prior to the complete exercise of the Option: (i) by reason
            of death, disability (as determined by the Board in its absolute
            discretion) ("DISABILITY") or retirement after age 60 with the
            approval of the Board of Directors of the Company (the "BOARD"), the
            option shall remain exercisable for a period of one year following
            such termination (but only to the extent exercisable at termination
            of employment and not beyond the scheduled expiration date); (ii)
            for any other reason, other than for Cause, the Option shall remain
            exercisable for a period of 30 days following the earlier of the
            date of termination of employment or notice of termination of
            employment; or (ii) for Cause, as such term is defined below, all
            options held by or on behalf of the Employee shall immediately
            expire upon the earlier of such termination or notice of
            termination.

            For purposes hereof, the term "CAUSE" shall mean (i) a material
            breach by the Employee of its obligations under any agreement with
            the Company or any Related Company, including this Option Agreement;
            (ii) the commission by the Employee of an act of fraud or
            embezzlement against the Company or any Related Company or the
            willful taking of action injurious to the business or prospects of
            the Company or any Related Company; (iii) the Employee's conviction
            of a felony involving moral turpitude; and (iv) the Employee's
            involvement with an act which constitutes breach of trust between
            him or her and the Company or any Related Company or which
            constitutes breach of discipline.

      3.5   As a condition to the Employee's receipt of the Shares and the
            Option, the Employee agrees to waive the amount of $ 0.01 for each
            Share which may be purchased pursuant to the Option i.e., an
            aggregate of $_____; as a one-time waiver from his salary, and the
            Employee hereby instructs the Company to deduct from his wages such
            aggregate sum.

                                       3
<PAGE>

            The Employee hereby agrees and acknowledges that the aforesaid sum
            shall not be returned to him even if the Option is not exercised for
            any reason.

                                       4
<PAGE>

4.    NON ASSIGNABILITY

      The Employee's rights to: (a) receive and exercise the Option; (b) receive
      all or part of the Shares from the Trustee; (c) require that the same
      shall be registered in his or her name; and (d) request that the Trustee
      sell Shares on his or her behalf, are subject to the Plan and are personal
      and not transferable (other than pursuant to the laws of inheritance), and
      may not be made subject to any pledge, lien, attachment or other charge
      whether voluntary or by law, and no power of attorney or a transfer deed
      shall be given in respect thereof, whether it is to be effective
      immediately or in the future, whether directly or indirectly, and any such
      transfer shall be null and void.

5.    EMPLOYEE REPRESENTATIONS, WARRANTIES AND COVENANTS

      Without derogating in any manner from the provisions of the Plan or this
      Agreement, the Employee hereby represents, warrants, agrees and undertakes
      as follows:

      5.1   That the Shares are being purchased for the Employee's own account
            for investment purposes only and not with a view for resale or
            transfer, and that all the rights pertaining to the Shares, by law
            or equity, shall be purchased and possessed by the Employee (through
            the Trustee) for the Employee exclusively.

      5.2   That no income or gain which the Employee may be credited with or
            which purports to be credited to the Employee as a result of the
            grant of the Option, the issue of the Shares, the transfer into the
            Employee's name thereof or the sale thereof, if any, shall in any
            manner be taken into account in the calculation of the basis for the
            Employee's entitlements from the Company or any Related Company or
            in the calculation of any social welfare right or other rights or
            benefits arising out of the employee/employer relationship,
            including without limitation, social security, manager's insurance,
            educational fund, pension funds, severance pay, holiday pay, etc.

            In the event that the Company and/or any Related Company shall be
            required, pursuant to any law, to take into account for purposes of
            calculating any such benefits, any of the aforesaid elements of
            income or gain actually or theoretically credited to the Employee,
            the Employee shall promptly indemnify the Company and/or any Related
            Company against any expense caused to it in this regard, and any
            such amount shall be deemed a debt of the Employee to the Company
            and/or any Related Company, which may be deducted or set off from
            any amounts payable to the Employee.

      5.3   That nothing in this Agreement and/or in the Plan shall be
            interpreted as a commitment and/or an agreement by the Company
            and/or any Related Company to employ the Employee, whether for a
            certain period or otherwise, and that nothing in this Agreement
            and/or the Plan or any

                                       5
<PAGE>

            option granted pursuant hereto or thereto shall be interpreted as
            conferring upon the Employee any right to continue in the employment
            of the Company or any Related Company or as obliging the Company or
            any Related Company to employ the Employee or as restricting the
            rights of the Company and/or any Related Company to terminate the
            Employee's employment, at any time, at its sole discretion and in
            accordance with law. The Employee shall have no claim whatsoever
            against the Company and/or any Related Company as a result of the
            termination of his employment, even if such termination causes the
            Option or any other options, in whole or in part, to expire and/or
            prevents him from exercising the Option in whole or in part and/or
            from receiving or retaining the Shares pursuant hereto or to any
            other agreement between him/her and the Company, or results in any
            loss due to any imposition of tax liability including any early
            imposition) pursuant to applicable law.

      5.4   That the grant of the Option and the issue of the Shares, the
            execution of this Agreement and the Employee's participation in the
            Plan shall have tax consequences to the Employee, and that the
            Company is not able to ensure or represent to the Employee the
            nature and extent of such tax consequences.

            That pursuant to the Plan, the Employee shall be liable to pay all
            taxes, of every nature, including duties, fines and any other
            payment which may be imposed by the tax authorities, whether in
            Israel or abroad, and all expenses arising out of the Plan,
            including every obligatory payment of whatever source in respect of
            the Option, the Shares (including, without limitation, upon the
            exercise of the Option, the sale of the Shares or the registration
            of the Shares in the Employee's name) or dividends or any other
            benefit in respect thereof, and/or all other charges which may
            accrue to the Employee, the Company, any Related Company and/or the
            trustee in connection with the Plan, whether or not the provisions
            of the Law or the Commissioner's Rules apply. Furthermore, the
            Employee acknowledges that the Employee shall not have, and the
            Employee hereby waives, any complaint and/or cause of action the
            same has or shall have in the future against the trustee and/or
            against the Company in any way connected to any taxation resulting
            from the grant of the Option, the exercise thereof, the transfer of
            Shares into the Employee's name, the sale of Shares by the Employee
            and/or by the trustee and/or any other matter which is in any manner
            whatsoever connected to the Option, the Shares and/or the
            participation of the Employee in the Plan.

            The Employee further acknowledges and agrees that, without
            derogating from the Employee's obligation to pay all taxes payable
            with respect to the Option and the Shares, the Company and/or any
            Related Company and/or the trustee shall at their absolute sole
            discretion be entitled (and/or obliged pursuant to the Law), to
            deduct at source from all the payments due to the Employee,
            including dividends, consideration for the sale of shares or from
            any other source, any tax payments due to the tax authorities in
            respect of the Option or the Shares pursuant to any law.

      5.5   That he is aware of, and clearly understands: (a) the rights and
            limitations

                                       6
<PAGE>

            attached to the Shares as set forth in the Company's Articles of
            Association, the Plan and this Agreement; (b) the limitations on
            transferability thereof set forth in, the Plan and this Agreement;
            (b) that the Company's Articles of Association may be amended from
            time to time as permitted by law; and (c) that the provisions of the
            Articles of Association of the Company which shall apply to the
            Shares shall be the provisions which shall be in effect from time to
            time;

      5.7   The Shares will be held by the Trustee and registered in his name in
            accordance with applicable Law.

      5.8   The Employee shall have none of the rights of a shareholder of the
            Company, for as long as the Option has not been exercised and
            subject to section 5.9 below, once exercised, for as long as the
            Shares have not been transferred and registered in the Employee's
            name in the Company's register of members pursuant to the Plan.

      5.9   For as long as any of the Shares are held by the Trustee or
            registered in his name or for as long as the certificates
            representing any of the Shares are held by the Trustee, the Trustee
            alone shall be entitled to receive every notice to which a
            shareholder is entitled, or to demand any information, and any
            financial and/or other report to which a shareholder is entitled
            from the Company, and only the Trustee shall be entitled to exercise
            every other right of the shareholders vis-a-vis the Company
            including the right to participate in all shareholders' meetings.
            The Trustee shall vote the Shares in accordance with the
            instructions of the Employee on whose behalf they are held and in
            the absence of such instructions at his/her discretion in the best
            interest of the Company.

      5.10  The Employee has received a copy of the Plan, has examined it, and
            acknowledges and agrees to all the provisions and conditions
            thereof.

      5.11  The Employee has full knowledge of the Company and its activities,
            and is aware that the Company operates in a sophisticated, high tech
            and high risk sector, and that the market thereof is restricted and
            highly competitive, and that the exercise of the Option constitutes
            an economic risk. The Employee undertakes that he or she shall not
            have any claim against the Company and/or any Related Company or any
            of its or their officers, employees, shareholders or advisors if the
            Employee's investment in the Shares shall fail or for the payment of
            any tax due or for any other reason.

6.    TAXES; INDEMNIFICATION OF THE COMPANY, THE TRUSTEE AND THE LEGAL ADVISOR

      6.1   The Employee hereby covenants, whether the provisions of the Law
            shall apply to the Employee or not, to bear all tax obligations,
            levies, fines and other payments which shall be imposed by the tax
            authorities (whether in Israel or abroad) and any other obligation
            from whatever source including but not limited to the obligations of
            the Employee and/or the Company and/or any Related Company and/or
            the Trustee arising out of the Plan (including granting of the
            Option, exercise of the Option, issue of the Shares, transfer of the
            Shares into the Employee's name and the sale

                                       7
<PAGE>

            thereof by the Employee and/or by the Trustee). Without derogating
            from the generality of the aforesaid the Employee's obligations in
            this regard shall include income tax, stamp tax, employer's tax,
            capital gains tax, social security insurance and any other tax, levy
            or payment which the Employee or the Company and/or any Related
            Company is or shall be obliged to pay because of the Option or the
            Shares (including deductions at source which the Company is obliged
            to make for tax imposed upon the Employee) and the Employee shall
            indemnify the Company and/or any Related Company and/or the Trustee
            for every charge or payment as aforesaid, which may be deducted or
            set off from any amounts payable to the Employee.

      6.2   Subject to the provisions of the Plan, the Employee hereby covenants
            to pay the Company and/or the Trustee promptly upon their first
            request in writing, any sum for which they are responsible (or, in
            the Board's opinion, they might be responsible for), and which is
            payable by the Employee as set forth in Section 6.1 hereof to the
            income tax authorities and/or any other governmental or
            administrative authority, whether in Israel or abroad (including for
            deduction of tax at source) pursuant to the Plan, and/or in respect
            of the Employee's participation in the Plan, whether the Trustee's
            responsibility as aforesaid shall arise directly or in respect of
            any responsibility of the Employee for such payment. The Employee
            covenants to promptly indemnify the Company and/or any Related
            Company and/or the Trustee for any charge or payment as aforesaid,
            which may be deducted or set off from any amounts payable to the
            Employee.

      6.3   In no event shall the Trustee be liable to the Company and/or the
            Employee and/or to any third party (including, without derogating
            from the generality of the aforesaid, the income tax authorities and
            any other governmental or administrative authority, whether in
            Israel or abroad) or a purchaser of Shares from the Employee (or the
            Trustee), with respect to any act which has been or which shall be
            carried out in relation to the Plan and any matter connected thereto
            or arising therefrom. The Company and/or any Related Company and the
            Employee covenant, upon signing this Agreement, that they will not
            make, and they each hereby waive, any and all claims against the
            trustee and the Trustee as aforesaid and each of the Company,
            Related Company and the Employee expressly agree that if either
            shall make any claim against the Trustee the same shall then be
            entitled on the grounds of this Section alone to apply to the
            competent court for dismissal of the action against them, with
            costs. The Company covenants and agrees that if a claim is brought
            by any third party against the Trustee the same will be entitled
            without objection by the Company, to join the Company as a third
            party to any such action and any judgment against them shall be paid
            by the Company.

            The Company and the Employee hereby covenant to indemnify the
            Trustee, against any liability in relation to any claim and/or
            demand made against the Trustee by any person whatsoever, including
            the tax authorities, in relation to their acts or omissions in
            connection with the Plan.

                                       8
<PAGE>

            The provisions of this Section and the other provisions of this
            Agreement and the Plan which grant any right, power, immunity or any
            authority to the Trustee, shall operate in favor of the Trustee and
            he shall be entitled to act pursuant to and enforce such provisions,
            and the Company and the Employee shall be liable to the Trustee as
            if he was party to this Agreement.

7.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER, SALE, DISSOLUTION OR
      LIQUIDATION

      In the event of a change in the Company's capitalization or sale,
      dissolution or liquidation of the Company the following adjustments will
      be made:

      7.1   CHANGES IN CAPITALIZATION. In the event that the Shares shall be
            subdivided or combined into a greater or smaller number of Shares or
            if, upon a reorganization, recapitalization or the like, the Shares
            shall be exchanged for other securities of the Company, the Employee
            shall be entitled, subject to the conditions herein stated, to
            purchase such number of shares or amount of other securities of the
            Company as were exchangeable for the number of shares of the Company
            which the Employee would have been entitled to purchase except for
            such action, and appropriate adjustments shall be made in the
            purchase price per share to reflect such subdivision, combination or
            exchange.

            In the event that the Company shall issue any of its shares or other
            securities as bonus shares or a stock dividend upon or with respect
            to any shares which shall at the time be subject to an Option
            hereunder, the Employee upon exercising the Option shall be entitled
            to receive (for the purchase price payable upon such exercise), the
            shares as to which he or she is exercising such Option and, in
            addition thereto (at no additional cost), such number of shares of
            the class or classes in which such bonus shares or stock dividend
            were declared, and such amount of shares (and the amount in lieu of
            fractional shares) as is equal to the shares which he or she would
            have received had he or she been the holder of the shares as to
            which he or she is exercising his or her Option at all times between
            the date of this Agreement and the exercise date of the Option.

      7.2   DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
            or liquidation of the Company, the Board shall notify the Employee
            as soon as practicable prior to the effective date of such proposed
            transaction. The Board in its discretion may provide for the
            Employee to have the right to exercise his or her Option until
            fifteen (15) days prior to such transaction as to all of the Shares,
            including Shares as to which the Option would not otherwise be
            exercisable. To the extent it has not been previously exercised, the
            Option will terminate immediately prior to the consummation of such
            proposed action.

                                       9
<PAGE>

      7.3   MERGER OR ASSET SALE. In the event of a merger of the Company with
            or into another corporation, or the sale of substantially all of the
            assets of the Company, the Option shall be assumed or an equivalent
            option substituted by the successor corporation or a Parent or
            Subsidiary (as such terms are defined below) of the successor
            corporation. In the event that the successor corporation refuses to
            assume or substitute for the Option, the Employee shall fully vest
            in and have the right to exercise the Option as to all of the
            Shares, including Shares as to which it would not otherwise be
            vested or exercisable. If an Option becomes fully vested and
            exercisable in lieu of assumption or substitution in the event of a
            merger or sale of assets, the Board shall notify the Employee in
            writing or electronically that the Option shall be fully exercisable
            for a period of fifteen (15) days from the date of such notice, and
            the Option shall terminate upon the expiration of such period. For
            the purposes of this paragraph, the Option shall be considered
            assumed if, following the merger or sale of assets, the option
            confers the right to purchase or receive, for each Share,
            immediately prior to the merger or sale of assets, the consideration
            (whether shares, cash, or other securities or property) received in
            the merger or sale of assets by holders of shares for each Share
            held on the effective date of the transaction (and if such holders
            were offered a choice of consideration, the type of consideration
            chosen by the holders of a majority of the outstanding shares);
            provided, however, that if such consideration received in the merger
            or sale of assets is not solely Ordinary Shares (or their
            equivalent) of the successor corporation or its Parent or Subsidiary
            (as such terms are defined below), the Board may, with the consent
            of the successor corporation, provide for the consideration to be
            received upon the exercise of the Option, for each Share to be
            solely Ordinary Shares (or their equivalent) of the successor
            corporation or its Parent or Subsidiary equal in fair market value
            to the per share consideration received by holders of in the merger
            or sale of assets.

            A "PARENT" means a parent corporation, whether now or hereafter
            existing as defined in Section 424(e) of the U.S. Internal Revenue
            Code of 1986, as amended.

            A "SUBSIDIARY" means a subsidiary corporation, whether now or
            hereafter existing as defined in Section 424(f) of the U.S. Internal
            Revenue Code of 1986, as amended.

8.    AMENDMENTS TO THE PLAN AND/OR REPLACEMENT THEREOF

      The Employee acknowledges, agrees and confirms that the Plan may be
      amended as provided for therein. Subject to Section 14 of the Plan, the
      Employee hereby agrees and covenants not to raise any objection to any
      such amendment as aforesaid and that the Employee shall sign any document
      which according to the Company is necessary or desirable in order to give
      full force and effect to the amendment of the Plan. The Employee
      understands that any amendment to the Plan or any document connected to
      the Plan, shall bind him or her as if he or she were a party thereto.

                                       10
<PAGE>

9.    SUBSTITUTION OF THE TRUSTEE

      The parties acknowledge and agree that the Company is entitled to replace
      the Trustee and/or to nominate another person to serve as a Trustee in
      lieu of the existing Trustee if the same is no longer capable or willing
      to fulfill his duties and that the new trustee shall have the same powers
      and authority which the Plan and this Agreement grant the trustee.

10.   GOVERNING LAWS

      This Agreement shall be governed by and construed in accordance with the
      laws of the State of Israel and, subject to the provisions of Section 11
      below, the competent courts in the Tel-Aviv district shall have exclusive
      jurisdiction with respect to any matter or conflict with respect thereto.

11.   DISPUTES

      As a condition of the granting of the Option, the Employee and the
      Employee's successors and assigns agree that any dispute or disagreement
      which shall arise under or as a result of this Agreement shall be
      determined by the Board, or any committee designated by the Board pursuant
      to the Plan, in its sole discretion and judgment and that any such
      determination and any interpretation by the Board or any such committee of
      the terms of this Agreement shall be final and shall be binding and
      conclusive for all purposes.

      In making any such determination or interpretation the Board or any such
      committee shall not be bound by the rules of procedure or evidence or
      substantive law and shall not be required to give any reasons therefore.

12.   THE EMPLOYEE'S CONFIRMATION PURSUANT TO SECTION 4(b) OF THE COMMISSIONER'S
      RULES

      The Employee hereby confirms and covenants to the Company, the Trustee,
      the Assessing Officer and the Income Tax Commissioner, in accordance with
      the Rules that he agrees that the arrangement set forth in Section 102 to
      the Law shall apply to him and that he or she shall not request any tax
      exemption pursuant to Sections 97(a) or 104 of the Income Tax Ordinance or
      pursuant to an exemption from taxes in the context of a merger of
      corporations for the transfer of the Shares before the termination of the
      restricted period as defined in the Law. The Trustee and the Company shall
      give notice, pursuant to Section 4(b) to the Rules, to the Assessing
      Officer, at the office where the Company's file is administered as to this
      commitment of the Employee.

      The form of this Commitment of the Employee is attached hereto as APPENDIX
      12 and shall be signed by the Employee upon signing this Agreement
      together with the other annexes attached to the Plan.

                                       11
<PAGE>

13.   NOTICES AND/OR INSTRUCTIONS

      13.1  Every notice and/or instruction required or permitted to be given
            pursuant to this Agreement shall be given in writing and shall be
            deemed to have been delivered on the date of its delivery to the
            addressee by hand or 3 (three) days after having been sent by
            registered mail. The parties addresses for the purpose of this
            Section shall be, if a party hasn't communicated another address by
            a written notice 10 (ten) days in advance, as follows:

            The Company:  ACCORD NETWORKS LTD.
                          94 Derech Em Hamoshavot,
                          P.O.B. 3654, Petah Tikva
                          49130, Israel

      The Employee:

      13.2  A stamp or a receipt on behalf of the postal service which evidences
            the time of delivery of the notice shall constitute conclusive
            evidence as to the date of delivery and no party shall claim that a
            notice delivered as aforesaid has not been received by such party.

____________________                                ____________________________
ACCORD NETWORKS LTD.                                EMPLOYEE

                                       12

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