Document:

<PAGE>

                                                                   Exhibit 10.15

                           SAIFUN SEMICONDUCTORS LTD.
                                 (THE "COMPANY")

                             2001 SHARE OPTION PLAN

1.    NAME

      This plan, as amended from time to time, shall be known as the SAIFUN
      SEMICONDUCTORS LTD. 2001 Share Option Plan (the "PLAN").

2.    PURPOSE

      The purpose and intent of the Plan is to serve as an incentive to retain,
      in the employ of the Company, persons of training, experience and ability,
      to attract new employees, directors, consultants and contractors whose
      services are considered unusually valuable, to encourage the sense of
      proprietorship of such persons, and to stimulate the active interest of
      such persons in the development and financial success of the Company, by
      providing them with opportunities to purchase shares of the Company,
      pursuant to the Plan approved by the board of directors of the Company
      (the "BOARD").

      Options granted under this Plan may contain such terms as will qualify the
      Options as options granted pursuant to the provisions of Section 102 ("102
      OPTIONS") or Section 3(i) ("3(I) OPTIONS") of the Israeli Income Tax
      Ordinance (New Version), 1961 (the "ORDINANCE") and any regulations,
      rules, orders or procedures promulgated thereunder, including the Income
      Tax Rules (Tax Benefits in Stock Issuance to Employees) 5349-1989 (the
      "RULES"). (102 Options and 3(I) Options collectively hereinafter, the
      "OPTIONS").

3.    ADMINISTRATION

      3.1   The Plan shall be administered by the Board or by a Share Option
            Committee (the "COMMITTEE") appointed by the Board, which Committee
            shall consist of such number of directors of the Company (not less
            than two in number) and will be constituted to comply with
            applicable laws. If a Committee is not appointed, the term
            Committee, whenever used herein, shall mean the Board.

      3.2   The Committee shall select one of its members as its Chairman and
            shall hold its meetings at such times and places as it shall
            determine. Actions taken by a majority of the members of the
            Committee, at a meeting at which a majority of its members is
            present, or acts reduced to, or approved in, writing by all members
            of the Committee, shall be the valid acts of the Committee. The
            Committee shall keep records of its meetings and shall make such
            rules and regulations for the conduct of its business as it shall
            deem advisable.

      3.3   A member of the Board or the Committee shall be eligible to receive
            Options under the Plan while serving on the Committee, only in
            accordance with the provisions of the Israeli Companies Law.

      3.4   The Committee shall fulfill only ADVISORY tasks with respect to
            designating participants ("GRANTEES"). Without derogating from the
            foregoing, the

                                       1
<PAGE>

            Committee shall be authorized to issue shares underlying Options,
            which have been granted by the Board and duly exercised pursuant to
            the provisions hereof, all in accordance with section 112(a)(5) of
            the Israeli Companies Law.

      3.5   The Committee shall have full power and authority: (i) to ensure
            compliance with the Ordinance and the Rules; (ii) to determine the
            terms and provisions of respective option agreements (which need not
            be identical) including, BUT not limited to, provisions concerning
            the time or times when and the extent to which the Options may vest
            and/or be exercised; (iii) to interpret the provisions and supervise
            the administration of the Plan; (iv) to insert acceleration clauses
            in certain option agreements and to accelerate the right of a
            Grantee to exercise any previously granted Option; and (v) to
            determine any other matter which is necessary or desirable for, or
            incidental to, the administration of the Plan.

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

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

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

4.    ELIGIBLE GRANTEES

      4.1   Subject to this limitation and any restriction imposed by applicable
            law, Options may be granted to any employee, officer, director,
            consultant or contractor of the Company or any subsidiary of the
            Company; provided, however, that "102 Options" shall be granted only
            to employees of the Company, who are not being a control
            shareholder, as defined in the Ordinance.

            Anything in this Plan to the contrary notwithstanding, all grants of
            Options to directors and office holders ("Nosei Misra", as such term
            is defined in the Israeli Companies Law) shall be authorized and
            implemented in accordance with the provisions of such law or
            regulations, as in effect from time to time.

                                       2
<PAGE>

      4.2   The grant of an Option to a Grantee hereunder, shall neither entitle
            such Grantee to participate, nor disqualify him from participating,
            in any other grant of options pursuant to this Plan or any other
            share incentive or share option plan of the Company or any of its
            related companies.

5.    RESERVED SHARES

      The Company shall reserve shares out of its share capital, in an amount to
      be determined from time to time by the Board, for purposes of this Plan
      and for the purpose of the "SHARE OPTION PLAN (1997)". Such shares shall
      be (*authorized but unissued) ordinary shares nominal value NIS 0.01 per
      share of the Company (the "SHARES"), subject to adjustment as provided in
      Section 11 hereof. Any Shares under the Plan, in respect of which the
      right hereunder of a Grantee to purchase the same shall for any reason
      terminate, expire or otherwise cease to exist, shall again be available
      for grant through Options under the Plan.

6.    OPTION AWARDS

      6.1   The Board in its discretion may grant to Grantees options to
            purchase Shares in the Company available under the Plan. Options may
            be granted at any time after this Plan has been approved by the
            Board, subject to obtaining all the necessary approvals from the
            Income Tax Authorities by the Company. The date of grant of each
            Option shall be the date specified by the Committee at the time such
            grant is made.

      6.2   Each Option granted pursuant to the Plan shall be evidenced by
            written agreement between the Company and the Grantee (the "OPTION
            AGREEMENT"). The Option Agreement shall state, inter alia, the
            number of Shares covered thereby, the dates when it may be
            exercised, the exercise price, and such other terms and conditions
            as the Committee in its discretion may prescribe, provided that they
            are consistent with this Plan.

7.    OPTION EXERCISE PRICE

      7.1   The exercise price of an Option shall be determined by the Committee
            on the date of grant of such Option, on an individual basis, subject
            to any guidelines as may be determined by the Board from time to
            time; provided, however, that such exercise price shall be not less
            than the nominal value of the Shares underlying the Option

            Each Option Agreement shall contain the exercise price determined
            for each Grantee.

      7.2   The consideration to be paid for the Shares to be issued upon
            exercise of an Option, including the method of payment, shall be
            determined by the Committee and may consist entirely of (1) cash,
            (2) check, (3) promissory note, or (4) any other method satisfactory
            to the Committee. In making its determination as to the type of
            consideration to accept, the Committee shall consider if acceptance
            of such consideration may be reasonably expected to benefit the
            Company.

                                       3
<PAGE>

      7.3   To the extent required by Section 102 of the Ordinance, the Grantee
            shall waive a portion of his salary payment in consideration for the
            Options granted to him.

      7.4   The proceeds received by the Company from the issuance of Shares
            subject to the Options will be added to the general funds of the
            Company and used for its corporate purposes.

8.    TRUSTEE AND APPLICATION OF SECTION 102 OF THE ORDINANCE

      8.1.  In the case of "102 Options", the Options and/or the Shares
            resulting from the exercise of the "102 Option" ("102 SHARES"), as
            the case may be, shall be issued to and held by "Eitan, Pearl,
            Latzer & Cohen-Zedek Trustees for employee benefit programs" (the
            "TRUSTEE"). The Trustee will be approved for such purpose by the
            Israel Income Tax Authority.

      8.2.  The Trustee and each such Grantee shall comply with the Ordinance,
            the Rules and with the Trust Agreement entered into between the
            Company and the Trustee.

      8.3.  The Trustee shall hold the "102 Options" and/or the "102 Shares" in
            trust for the benefit of the Grantees at least for the period
            required by the Ordinance and the Rules. After the required holding
            period and subject to any further period included in this Plan, or
            the Option Agreement with the Grantee, the Trustee may release the
            "102 Options" or "102 Shares" to the grantee only after (i) the
            receipt by the Trustee of an acknowledgment from the Income Tax
            Authority that the Grantee has paid any applicable tax due pursuant
            to the Ordinance and the Rules, or (ii) the Trustee withholds any
            applicable tax due pursuant to the Ordinance and Rules.

      8.4.  No Grantee receiving "102 Options" and/or "102 Shares" shall claim
            an exemption from Israeli Tax pursuant to Sections 104A or 104B or
            97(a) of the Ordinance or pursuant to the Law for the Encouragement
            of Industry (Taxes) 5729-1969 in connection with a transfer by such
            employee of an Option or acquired Share prior to the end of the
            "HOLDING PERIOD" as defined in Rule 1(1) of the Rules.

      8.5.  In the event a share dividend is declared on the "102 Shares", such
            dividend shall also be subject to the provisions of the Plan and the
            Holding Period for such dividend shares shall be measured from the
            commencement of the Holding Period for the "102 Options" from which
            the dividend was declared.

      8.6.  Each Grantee shall be obligated to immediately notify the Company
            and the Trustee of his or her request, if any, to the Income Tax
            Authority pursuant to Rule 6(b) of the Rules in the event the "102
            Shares" are registered on an Israeli stock exchange. Nothing herein
            shall obligate the Company to register its shares or any portion of
            its shares on a stock exchange.

      8.7   For as long as the Trustee holds "102 Shares" in trust for the
            benefit of the Grantees, the Trustee shall not use the voting rights
            vested in such "102 Shares" and shall not exercise such rights in
            any way whatsoever, unless it is instructed to do so in writing by
            any of the Grantees, in which event, the Trustee shall use the
            voting rights vested in the Grantee's Shares as shall be

                                       4
<PAGE>

            required.

      8.8   The exemption under Section 102 of the Ordinance shall be forfeited
            and the Grantee shall be required to pay any applicable tax promptly
            at such time as (i) the Grantee's employment is terminated during
            the Holding Period with the Trustee (other than because of death or
            some other reason acceptable to the Income Tax Authority); (ii) the
            Company or the Grantee fails to comply with one or more of the
            conditions for the exemption as required by the Ordinance, Rules or
            Income Tax Authority; or (iii) the Income Tax Authority withdraws or
            cancels the exemption for the Plan or the particular Grantee.
            Notwithstanding the loss of an exemption, the Trustee shall continue
            to hold the "102 Options" or "102 Shares" (to the extent the Option
            remains exercisable following termination of employment) for the
            remainder of the applicable Holding Period under Section 102 of the
            Ordinance.

      8.9   Grantee's signature on the Option Agreement constitutes the
            Grantee's undertaking to exempt the Trustee from any liability in
            respect of any action or decision duly taken and bona fide executed
            in relation with the Plan, or any Option or Share granted to the
            Grantee thereunder.

9.    TERM AND EXERCISE OF OPTIONS

      9.1   Unless the Committee provides otherwise, an Option shall be
            exercisable within ten (10) years from the date such Option is
            granted, pursuant to the terms under which the Option was awarded
            and subject to the terms and conditions of this Plan.

      9.2   Unless the Committee provides otherwise, vesting of Options granted
            hereunder shall be tolled during any unpaid leave of absence, only
            after such leave of absence exceeds a period of ninety (90) days.

      9.3   Options shall be exercised by the Grantee by giving written notice
            to the Company at its principal office (and to the Trustee, where
            applicable), in such form and method as may be determined by the
            Committee from time to time ("EXERCISE NOTICE"), which exercise
            shall be effective upon receipt of such notice by the Company at its
            principal office. The Exercise Notice shall specify the number of
            Shares with respect to which the Option is being exercised and shall
            be accompanied by payment in full of the exercise price of such
            Shares, as well as all the documents the Grantee will be obliged to
            execute.

            In the case of 3(I) Options, the Exercise Notice shall also be
            accompanied by payment of the aggregate withholding taxes due with
            respect to the exercised Shares.

      9.4   Notwithstanding anything herein to the contrary, but without
            derogating from the provisions of Section 10 hereof, if any Option,
            or any part thereof, has not been exercised and the Shares covered
            thereby not paid for within ten (10) years after the Granting Date
            (or any other period set forth in the Option Agreement), such
            Option, or such part thereof, and the right to acquire such Shares
            shall terminate, all interests and rights of the Grantee in and to
            the same shall expire, and, in the event that in connection
            therewith any Shares

                                       5
<PAGE>

            are held in trust as aforesaid, such trust shall expire and the
            Trustee shall thereafter hold such Shares in an unallocated pool
            until instructed by the Company that some or all of such Shares are
            again to be held in trust for one or more Grantees.

      9.5   Each payment for Shares under an Option shall be in respect of a
            whole number of shares.

      9.6   Prior to exercise, a Grantee, as such, shall have none of the rights
            of a shareholder of the Company. Upon exercise of an Option, a
            Grantee shall have no shareholder rights until the Shares are
            issued, as evidenced by the appropriate entry on the books of the
            Company or of a duly authorized transfer agent of the Company. The
            Company shall issue (or cause to be issued) such Shares promptly
            after the Option is exercised. No adjustment will be made for a
            dividend or other shareholders' right, for which the record date
            precedes the date of issuance of the Shares, except as provided in
            Section 11 hereof.

10.   TERMINATION OF EMPLOYMENT

      10.1  In the event of termination of Grantee's employment with the Company
            or if applicable, the termination of services given by the Grantee
            to the Company, all Options granted to the Grantee, which are vested
            and exercisable at the time of such termination, may, unless earlier
            terminated in accordance with the Option Agreement, be exercised
            within three (3) months after the date of such termination (or such
            different period as the Committee shall prescribe), but in no event
            later than the expiration of the term of such Option as set forth in
            the Option Agreement. If, on the date of termination, the Grantee is
            not vested as to his or her entire Option, the Shares covered by the
            unvested portion of the Option shall revert to the Plan. If the
            Option is not so exercised within the time specified herein, the
            Option shall terminate, and the Shares covered by such Option shall
            revert to the Plan.

      10.2  In the event of termination of Grantee's employment with the
            Company, or if applicable, the termination of services given by the
            Grantee to the Company by reason of death or Disability (as
            hereinafter defined), the outstanding Options, which were vested on
            the date of termination, may be exercised by the Grantee, the
            Grantee's legal guardian, the Grantee's estate or a person who
            acquires the right to exercise the Option by bequest or inheritance,
            as the case may be, within six (6) months after termination (or such
            different period as the Committee shall prescribe), but in no event
            later than the expiration of the term of such Option as set forth in
            the Option Agreement. If, on the date of termination, there are
            Options which are not entirely vested, the Shares covered by the
            unvested portion of the Options shall revert to the Plan. If the
            Option is not so exercised within the time specified herein, the
            Option shall terminate, and the Shares covered by such Option shall
            revert to the Plan. For purposes hereof, "Disability" shall mean
            complete and permanent inability, due to illness or injury, to
            perform the duties of the occupation at which the Grantee was
            engaged when such disability commenced, as determined by the
            Committee based on medical evidence acceptable to it.

                                       6
<PAGE>

      10.3  Notwithstanding the above, in the event the Grantee discharged from
            the employ of the Company, or if applicable, ceases to give his
            services to the Company for reasons of negligence in the discharge
            of the Grantee's duties, breach of fiduciary duty, willful cause of
            damage or loss to the Company in any fashion or similar cause, or
            any other breach of the Grantee's employment agreement with the
            Company, the entire unexercised Option (whether vested or not) shall
            ipso facto terminate and the Shares covered by such Option shall
            revert to the Plan.

      10.4  For the purpose of this section 10, termination of employment, or if
            applicable, cessation of rendering services shall be deemed upon the
            date of delivery to the Grantee or by the Grantee a written notice
            of thereof. With regard to consultants and contractors, cessation of
            rendering services shall also be deemed upon the date stated in the
            consulting or contractor agreement.

      10.5  For the purpose of this section 10, a transfer of the Grantee from
            the employ of or engagement by the Company to a subsidiary of the
            Company (and vise versa) or from the employ of or engagement by a
            subsidiary of the Company to another subsidiary thereof, shall not
            be deemed a termination of employment or cessation of rendering
            services, as the case may be. Furthermore, the Committee may decide
            that such transfer from the Company to a related entity (and vise
            versa) shall also not be deemed a termination of employment or
            cessation of rendering services, as the case may be.

      10.6  Notwithstanding the foregoing provisions of this section 10, the
            Committee may provide, either at the time an Option is granted or
            thereafter, that an Option may be exercised after the periods
            provided in this section 10, but in no event beyond the term of the
            Option.

11.   ADJUSTMENTS

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

      11.1. Changes in Capitalization. In the event of a shares split, reverse
            share split, share dividend, recapitalization, combination or
            reclassification of the Shares, rights issues or any other increase
            or decrease in the number of issued Shares effected without receipt
            of consideration by the Company (but not the conversion of any
            convertible securities of the Company), the Board shall make an
            appropriate adjustment in the number of Shares related to each
            outstanding Option, the number of Shares reserved for issuance under
            the Plan, as well as the exercise price per Share of each
            outstanding Option. Except as expressly provided herein, no issuance
            by the Company of shares of any class, or securities convertible
            into shares of any class, shall affect, and no adjustment by reason
            thereof shall be made with respect to, the number or price of Shares
            subject to an Option.

      11.2. Merger or Asset Sale In the event of consolidation, reorganization,
            merger of the Company with or into another corporation whereby the
            Company is not the surviving entity, or the sale of all or
            substantially all of the assets or shares of the Company (the
            "TRANSACTION"), while unexercised Options remain outstanding under
            the Plan, the Options shall be assumed or substituted with

                                       7
<PAGE>

            the appropriate number of Options to purchase Shares of the
            surviving entity (or a parent or subsidiary of the surviving entity)
            with the same rights to be granted to ordinary shareholders of the
            Company. In the case of such assumption or substitution of shares,
            appropriate adjustments shall be made in the exercise price to
            reflect such action, and all other terms and conditions of the
            Option Agreements shall remain in force, all as will be determined
            by the Board, whose determination shall be final.

            For purposes of this paragraph, the Option shall be considered
            assumed or substituted if, following the Transaction, the Option
            receives the right to purchase or receive, for each Share subject to
            an Option, the consideration (whether shares, cash, or other
            securities or property) received in the Transaction by holders of
            Shares of the Company 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 is not solely
            shares of the common stock (or their equivalent) of the surviving
            entity or its parent or subsidiary, the Committee may, with the
            consent of the surviving entity, provide for each Grantee to receive
            solely shares of the common stock (or their equivalent) of the
            surviving entity or its parent or subsidiary equal in fair market
            value to the per Share consideration received by holders of Shares
            in the Transaction.

      11.3. Dissolution or Liquidation. In the event of dissolution or
            liquidation of the Company, the Board shall notify each Grantee as
            soon as practicable prior to the effective date of such transaction
            and all outstanding Options, whether or not vested, shall be
            exercisable until fifteen (15) days prior to such transaction. To
            the extent it has not been previously exercised, an Option will
            terminate immediately prior to the consummation of such proposed
            action.

      11.4  The Board shall determine the specific adjustments to be made under
            this Section 11, and its determination shall be final and
            conclusive.

12.   CHANGE IN CONTROL

      12.1  "CHANGE IN CONTROL" shall mean a change in ownership or control of
            the Company effected through any of the following transactions:

                  (i)   IPO;

                  (ii)  the acquisition, directly or indirectly by any person or
                        related group of persons (other than the Company or a
                        person that directly or indirectly controls, is
                        controlled by, or is under common control with, the
                        Company), of beneficial ownership of securities
                        possessing substantially all the voting power of the
                        Company's outstanding securities;

                  (iii) a merger, consolidation, reorganization of the Company
                        or a similar business combination, in which securities
                        possessing more than fifty percent (50%) of the total
                        combined voting power of the Company's outstanding
                        securities are transferred to a person or persons
                        different from the persons holding those securities
                        immediately prior to such transaction; or

                                       8
<PAGE>

                  (iv)  the sale, transfer or other disposition of all or
                        substantially all of the Company's assets ("SALE OF ALL
                        OF THE COMPANY'S ASSETS").

      12.2  Notwithstanding the foregoing provisions of section 11 above and
            subject to any applicable law, the Committee, in its sole
            discretion, may determine with respect to certain Option Agreements,
            to insert an acceleration clause/s in connection with any Change in
            Control.

      12.3  In the event of a Change in Control, other than IPO, each Grantee
            shall be obligated to participate in the Change in Control and sell
            or exchange, as the case may be, any Shares such Grantee purchased
            under the Plan, in accordance with the instructions issued by the
            Board in connection with such Change in Control.

13.   NON-TRANSFERABILITY OF OPTIONS

      Except as set forth in section 10.2 hereof, Options may not be sold,
      pledged, assigned, hypothecated, transferred or disposed of in any manner
      other than by will or by the laws of descent or distribution and may be
      exercised, during the lifetime of the Grantee, only by the Grantee. The
      terms of the Plan and the Option Agreement shall be binding upon the
      executors, administrators, heirs, successors and assigns of the Grantee.

14.   RIGHT OF FIRST REFUSAL

      An Option Agreement may, but need not, include provisions whereby, prior
      to the consummation of an IPO, all Shares held by the Grantee pursuant to
      this Plan shall be subject to a right of first refusal upon transfers, as
      set forth in the Company's Article of Association.

15.   SECURITIES ACT OF 1933; ISRAEL SECURITIES LAW, 1967

      As a condition to the exercise of an Option, the Committee may require the
      Grantee exercising such Option to represent and warrant at the time of
      such exercise that the Shares are being purchased only for investment and
      without any present intention to sell or distribute such Shares if, in the
      opinion of counsel for the Company, such a representation is required.
      Furthermore, the Company shall have the authority to endorse upon the
      certificate or certificates representing the Shares such legends referring
      to the foregoing restrictions, and any other applicable restriction, as it
      may deem appropriate.

16.   TERM AND AMENDMENT OF THE PLAN

      16.1  The Plan was adopted by the Board of Directors of the Company on
            March 5, 2001, and shall expire on March 4, 2011 (except as to
            Options outstanding on that date).

      16.2  The Board of Directors may, at any time and from time to time,
            terminate or amend the Plan in any respect. In no event may any
            action of the Company

                                       9
<PAGE>

            alter or impair the rights of a Grantee, without his consent,
            under any Option previously granted to him.

17.   CONTINUANCE OF EMPLOYMENT

      Neither the Plan nor the Option Agreement shall impose any obligation on
      the Company or a related company thereof, to continue any Grantee in its
      employ or to continue to receive services rendered by the Grantee, and
      nothing in the Plan or in any Option granted pursuant thereto shall confer
      upon any Grantee any right to continue in the employ or in rendering
      services to the Company or a related company thereof or restrict the right
      of the Company or a related company thereof to terminate such employment
      or rendering of services at any time.

18.   GOVERNING LAW

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

19.   TAX CONSEQUENCES

      Any tax consequences arising from the grant or exercise of any Option or
      from the payment for Shares or from sale or transfer of the Shares or from
      any other event or act (whether of the Grantee or of the Company or its
      Subsidiaries or of its Trustee) hereunder, shall be borne solely by the
      Grantee. The Company and/or the Trustee shall withhold taxes according to
      the requirements under the Applicable Laws, rules, and regulations,
      including withholding taxes at source. Furthermore, such Grantee shall
      agree to indemnify the Company and/or Subsidiary that employs the Grantee
      and/or the Trustee and hold them harmless against and from any and all
      liability for any such tax or interest or penalty thereon, including
      without limitation, liabilities relating to the necessity to withhold, or
      to have withheld, any such tax from any payment made to the Grantee.
      Except as otherwise required by law, the Company shall not be obligated to
      honor the exercise of any Option by or on behalf of a Grantee until all
      tax consequences (if any) arising from the exercise of such Options are
      resolved in a manner reasonably acceptable to the Company.

                                       10<PAGE>
                                                                   Exhibit 10.16

                           SAIFUN SEMICONDUCTORS LTD.
                             2003 SHARE OPTION PLAN
            (AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 29TH, 2005)

                        A. NAME, PURPOSE AND DEFINITIONS

1.   NAME:

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

2.   PURPOSE; DEFINITIONS:

     2.1. The purpose and intent of the Plan is:

          2.1.1. to enable the Company and its Subsidiaries (each as defined
below) to retain the services of key individuals considered essential to the
long-range success of the Company by offering them an opportunity to own shares
in the Company;

          2.1.2. to provide an additional incentive to employees, directors,
consultants, and certain other service providers of the Company and its
Subsidiaries to further the growth, development and financial success of the
Company by giving such individuals the opportunity to own shares of the Company
which recognize such growth, development and financial success, and

          2.1.3. to enable the Company to grant tax-favored equity awards in the
United States, Israel and other countries, as may be determined from time to
time.

     The Plan was adopted by the Board of Directors of the Company on June 10th,
2003, approved by the Company's shareholders on March 9th, 2004 and amended on
December 14th, 2004. This amendment and restatement of the Plan shall be
effective September 29th, 2005.

     2.2. For the purposes of the Plan, the following terms shall have the
following meanings:

          2.2.1. "ANNUAL AWARD LIMIT" has the meaning ascribed to it in Section
6.2.

          2.2.2. "AWARD" means a right granted under the Plan to an Optionee or
Purchaser, as applicable, by the Company, which may be in the form of Option or
Restricted Stock.

          2.2.3. "BOARD" means the Board of Directors of the Company.

          2.2.4. "CAUSE" means a termination of a Participant's service by the
Company or a Subsidiary, as applicable, due to (i) breach of the Participant's
duty of loyalty towards the Company or a Subsidiary, including breach of a
confidentiality obligation, (ii) breach of the Participant's duty of care
towards the Company or a Subsidiary, (iii) the Participant has committed any
flagrant criminal offense, (iv) the Participant has committed a fraudulent act
towards the Company or a Subsidiary or (v) the Participant caused intentionally,
by act or omission, any financial damage to the Company or a Subsidiary.

          2.2.5. "CHAIRMAN" means a member of the Committee designated as
chairman, as set forth in Section 3.2.
<PAGE>
          2.2.6. "CHANGE IN CONTROL" means any of the following
shareholder-approved transactions to which the Company is a party:

     (a)  a merger or consolidation in which the Company is not the surviving
          entity, except for a transaction (i) the principal purpose of which is
          to change the jurisdiction in which the Company is incorporated, form
          a holding company or effect a similar reorganization as to form and
          (ii) whereupon this Plan and all Options and shares of Restricted
          Stock are assumed or substituted by the successor entity;

     (b)  the sale, transfer, exchange or other disposition of all or
          substantially all of the assets of the Company, in complete
          liquidation or dissolution of the Company in a transaction not covered
          by the exceptions to clause (a), above; or

     (c)  any reverse merger in which the Company is the surviving entity but in
          which securities possessing more than fifty percent (50%) of the total
          combined voting power of the Company's outstanding securities are
          transferred to a person or persons different from those who held such
          securities immediately prior to such merger.

          2.2.7. "CODE" means the Internal Revenue Code of 1986, as amended.

          2.2.8. "COMMITTEE" means the committee, if any, appointed by the Board
to administer the Plan in accordance with Section 3.1.

          2.2.9. "COMPANY" means Saifun Semiconductors Ltd., a company
incorporated under the laws of the state of Israel, or any successor thereto.

          2.2.10. "CONTROLLING SHAREHOLDER" has the same meaning ascribed to it
in Section 32(9) of the Tax Ordinance.

          2.2.11. "DISABILITY" means (i) complete and permanent inability, due
to illness or injury, to perform the duties of the Participant's engagement at
such time when the disability commenced, as determined by the Committee based on
medical evidence acceptable to it; (ii) with respect to an ISO or NQSO, total
and permanent disability as defined in Section 22(e)(3) of the Code.

          2.2.12. "EXERCISE PRICE" means the purchase price per share for the
Shares underlying the Option or the Stock Purchase Right, as applicable, as set
forth in the Option Agreement or in the Restricted Stock Purchase Agreement, as
applicable.

          2.2.13. "FAIR MARKET VALUE" means, as of any date, the value of a
Share determined as follows:

     (a)  the closing price of a Share on the principal exchange on which Shares
          are then trading, if any (or as reported on any composite index which
          includes such principal exchange), on the trading day immediately
          preceding such date, or if Shares were not traded on such date, then
          on the next preceding date of which a trade occurred, as reported in
          the Wall Street Journal, or such other source as the Committee deems
          reliable;

     (b)  if the Shares are not traded on an exchange but are quoted on NASDAQ
          or a successor quotation system, the mean between the closing
          representative bid and

                                        2
<PAGE>
          asked prices for the Shares on the trading day immediately preceding
          such date as reported by NASDAQ or such successor quotation system; or

     (c)  if the Shares are not publicly traded on an exchange and not quoted on
          NASDAQ or a successor quotation system, the Fair Market Value of a
          Share as established by the Committee acting in good faith.

     Without derogating from the foregoing, in the case of Section 102(b)(2)
     Option and/or Restricted Stock, the Fair Market Value of a Share at grant
     shall be determined in accordance with the provisions of Section 102(b)(3)
     of the Tax Ordinance, but solely for the purpose of determining the
     Participant's tax liability.

          2.2.14. "INDEPENDENT DIRECTOR" means a member of the Board who is not
an employee of the Company.

          2.2.15. "ISO" means an Option intended to qualify as an "incentive
stock option" within the meaning of Section 422 of the Code.

          2.2.16. "LOCK-UP PERIOD" with respect to a Section 102(b) Option
and/or Restricted Stock, means the period during which the Trustee shall be
required to hold such Option and/or any Shares issued upon exercise thereof
and/or any Restricted Stock in trust for the benefit of the Participant, in
accordance with Section 102, and pursuant to the tax route which the Company
elects.

          2.2.17. "NOSE(I) MISRA" has the meaning ascribed to it in the Israeli
Companies Law.

          2.2.18. "NQSO" means an Option that does not qualify as an ISO.

          2.2.19. "OPTION" means a right to purchase Shares granted under
Section 7, and subject to the terms specified in the Plan. An Option granted
under the Plan, as determined by the Committee, shall be: (a) an ISO, (b) a
NQSO, (c) a Section 3(i) Option, (d) a Section 102(b) Option, (e) an Other
Section 102 Option, or (f) an Option granted under any other tax regime.

          2.2.20. "OPTION AGREEMENT" means the written agreement executed by an
authorized officer of the Company and the Optionee, which shall contain such
terms and conditions with respect to an Option as the Committee shall determine,
consistent with the Plan.

          2.2.21. "OPTIONEE" means a person who has been granted an Option under
the Plan.

          2.2.22. "OTHER SECTION 102 OPTION" means an Option and/or Restricted
Stock granted under the terms of Section 102 of the Tax Ordinance, excluding
Section 102(b) Options.

          2.2.23. "PARTICIPANT" means an Optionee or a Purchaser, as applicable.

          2.2.24. "PUBLIC TRADING DATE" means the first date upon which Shares
are listed (or approved for listing) upon notice of issuance on any securities
exchange or designated (or approved for designation) upon notice of issuance as
a national market security on an interdealer quotation system.

                                        3
<PAGE>
          2.2.25. "PURCHASER" means a person who has been granted Restricted
Stock in accordance with Section 11 below and the provisions of his or her
Restricted Stock Purchase Agreement.

          2.2.26. "RESTRICTED STOCK" means Ordinary Shares acquired by a
Purchaser in accordance with Section 11 of the Plan subject to restrictions on
transfer and/or the right of repurchase by and to the Purchaser, as described in
Section 11. Restricted Stock shall cease to be Restricted Stock at the time that
such restrictions and risks of forfeiture lapse in accordance with the terms of
the Restricted Stock Purchase Agreement or the Plan.

          2.2.27. "RESTRICTED STOCK PURCHASE AGREEMENT" means a written
agreement between the Company and the Participant in the form determined by the
Committee evidencing the terms and restrictions applying to Shares purchased
under a Stock Purchase Right which shall include, inter alia, the number of
Shares that the Participant shall be entitled to purchase and the exercise price
to be paid. The Restricted Stock Purchase Agreement is subject to the terms and
conditions of the Plan but may contain such other terms, provisions and
conditions consistent with the Plan as may be determined by the Committee in its
sole discretion.

          2.2.28. "RULE 16B-3" means that certain Rule 16b-3 under the U.S.
Securities Exchange Act of 1934, as amended.

          2.2.29. "SECTION 3(I)" means that certain Section 3(i) of the Tax
Ordinance, as amended.

          2.2.30. "SECTION 102" means that certain Section 102 of the Tax
Ordinance, and any regulations, rules, orders or procedures promulgated
thereunder, including the Income Tax Rules (Tax Relief for Issuance of Shares to
Employees), 2003, all as amended from time to time.

          2.2.31. "SECTION 3(I) OPTION" means an Option granted under the terms
of Section 3(i).

          2.2.32. "SECTION 102(B) ROUTE ELECTION" means the right of the Company
to choose either the "Capital Route" (as set under Section 102(b)(2)), or the
"Ordinary Income Route" (as set under Section 102(b)(1)), but subject to the
provisions of Section 102(g) of the Tax Ordinance as further specified in
Section 7.3 below.

          2.2.33. "SECTION 102(B) OPTION" means an Option or Restricted Stock
intended to qualify, under the provisions of Section 102(b) of the Tax Ordinance
(including the Section 102(b) Route Election), as either:

               (a) "SECTION 102(B)(1) OPTION" for the special tax management
          under the "Ordinary Income Route," or

               (b) "SECTION 102(B)(2) OPTION" for the special tax management
          under the "Capital Route."

          2.2.34. "SHARE" means the ordinary share, par value NIS 0.01, of the
Company.

          2.2.35. "SUBSIDIARY" means any corporation (other than the Company) in
which the Company directly or indirectly owns shares possessing fifty (50%)
percent or more of the total combined voting power of all classes of shares in
such corporation. In the case of an ISO, Subsidiary shall have the meaning set
forth in Section 424(f) of the Code.

                                        4
<PAGE>
          2.2.36. "TAX ORDINANCE" means the Israeli Income Tax Ordinance (New
Version), 1961, as amended.

          2.2.37. "TEN PERCENT SHAREHOLDER" means an employee who owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the Code)
shares representing more than ten percent (10%) of the total combined voting
power of all classes of shares of the Company or any parent or Subsidiary.

          2.2.38. "TRUST AGREEMENT" means a written agreement between the
Company and the Trustee, which sets forth the terms and conditions of the trust
and is in accordance with the provisions of Section 102.

          2.2.39. "TRUSTEE" means a person or an entity, appointed by the
Committee and approved in accordance with the provisions of Section 102, to hold
in trust on behalf of the Participants the granted Options, or upon exercise
thereof the underlying Shares or shares of Restricted Stock, as well as all
additional rights granted in connection therewith, in accordance with the
provisions of Section 102.

                   B. GENERAL TERMS AND CONDITIONS OF THE PLAN

3.   ADMINISTRATION:

     3.1. The Board or a Committee appointed by the Board for such purpose shall
have the power to administer the Plan. Notwithstanding the foregoing, however,
from and after the Public Trading Date, with respect to Award grants under the
Plan that are intended to comply with Rule 16b-3 and/or Section 162(m)(4)(C) of
the Code and the regulations promulgated thereunder, the Plan shall be
administered by a Committee of the Board and shall consist solely of two or more
Independent Directors each of whom is both an "outside director" within the
meaning of Section 162(m) of the Code, and a "non-employee director" within the
meaning of Rule 16b-3. Notwithstanding the foregoing, the Board shall
automatically have residual authority if no Committee shall be constituted or if
such Committee shall cease to operate for any reason whatsoever. Members of the
Committee(s) shall serve at the pleasure of the Board. The Board may abolish the
Committee(s) at anytime and revert in the Board the administration of the Plan.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.

     3.2. The Committee shall select one of its members as Chairman and shall
hold its meetings at such times and places as it shall determine. Actions taken
at a meeting of the Committee at which a majority of its members are present or
acts reduced to or approved in writing by all members of the Committee, shall be
the valid acts of the Committee. The Committee may appoint a Secretary, who
shall keep records of its meetings and shall make such rules and regulations for
the conduct of its business, as it shall deem advisable.

          Subject to applicable laws and regulations, members of the Committee
shall be eligible to receive Awards under the Plan while serving on the
Committee.

     3.3. Subject to the general terms and conditions of this Plan, the
Committee shall have full power and authority, at all times, to: (i) recommend
persons who are to be awarded Awards under the Plan; (ii) determine the terms
and provisions of any Option Agreements and any

                                        5
<PAGE>
Restricted Stock Purchase Agreement (which, in neither case, need be identical)
including, but not limited to, the number of Shares to be covered by an Award,
the method of payment of the Exercise Price, the time or times when and the
extent to which an Option shall be vested and may be exercised, the restrictions
and the Restricted Period (as defined below) which shall apply to shares of
Restricted Stock as further detailed in Section 11 and the nature and duration
of restrictions as to transferability or restrictions constituting a substantial
risk of forfeiture; (iii) accelerate the right of an Optionee to exercise, in
whole or in part, any Option or extend such right; (iv) approve forms of Option
Agreements and Restricted Stock Purchase Agreements for use under the Plan; (v)
interpret the provisions of the Plan, the Option Agreements and the Restricted
Stock Purchase Agreements and supervise the administration of the Plan; (iv)
accelerate the vesting of Restricted Stock or extend such vesting; (vii)
determine the Fair Market Value of the Shares; (viii) designate Options or
Restricted Stock, as applicable, as Section 3(i) Options, Section 102(b)(1)
Options, Section 102(b)(2) Options, Other Section 102 Options, ISOs, NQSOs or
other type of Options or Restricted Stock; (ix) amend the Plan from time to time
in order to qualify for tax benefits applicable under U.S. and Israeli laws; (x)
make a Section 102(b) Route Election (subject to the limitations set under
Section 102(g)); (xi) impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by the Participant of any Shares
issued as a result of or under an Award, including without limitation, (A)
restrictions under an insider trading policy, and (B) restrictions as to the use
of a specified brokerage firm for such resales or other transfers; and (xii)
determine any other matter which is necessary or desirable for, or incidental
to, the administration of the Plan. In determining the number of Shares covered
by the Awards to be granted to each recipient, the Committee may consider, among
other things, the nature of services provided by the recipient, the recipient's
salary and/or the duration of his service or employment by the Company.

          The Committee shall be authorized to grant Awards under the Plan in
accordance with Section 288(b) of the Israeli Companies Law, unless otherwise
determined by the Board. With respect to Award grants which are not included
under Section 288(b) of the Israeli Companies Law, the Committee shall fulfill
only advisory tasks with respect to such grants' designating participants. The
authority to grant such Awards shall be assigned solely to the Board, which will
take into consideration the recommendation of the Committee.

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

     3.5. The interpretation and construction by the Committee of any provision
of the Plan or of any Award hereunder shall be final and conclusive, unless
otherwise determined by the Board.

     3.6. Subject to the Company's decision, each member of the Committee shall
be indemnified and held harmless by the Company against any cost or expense
(including counsel fees) reasonably incurred by him, or any liability (including
any sum paid in settlement of a claim with the approval of the Company) arising
out of any act or omission to act in connection with the Plan, unless arising
out of such member's own fraud or bad faith, to the extent permitted by

                                        6
<PAGE>
applicable law. Such indemnification shall be in addition to any rights of
indemnification the member may have as a director or otherwise under the
Company's Articles of Association, any agreement, any vote of shareholders or
disinterested directors or insurance policy.

4.   ELIGIBLE PARTICIPANTS:

     4.1. Subject to any restriction imposed by applicable law, Awards may be
granted to any one or more of the following persons, as selected by the Board,
in its sole discretion: (i) employees and contractors of the Company or any
Subsidiary, (ii) any member of the Board or (iii) consultants of the Company or
any Subsidiary; provided, however, that (A) Section 102(b) Options and Other
Section 102 Options shall be granted only to an employee, a member of the Board
or other Nose Misra of the Company or any Subsidiary, who is a resident of the
State of Israel and who is not a Controlling Shareholder prior to and/or after
the grant of Awards, and provided further, that such a Subsidiary is an
"employing company" within the meaning of Section 102(a) of the Tax Ordinance;
(B) Section 3(i) Options shall be granted to any person or entity that is a
resident of the State of Israel and is not entitled to Section 102(b) Options
and/or Other Section 102 Options; and (C) Notwithstanding any provisions to the
contrary herein, ISOs shall be granted only to an individual who is an employee
of the Company or any Subsidiary on the date of grant of such ISO.

     4.2. Anything in this Plan to the contrary notwithstanding, all grants of
Awards to Nosei Misra shall be authorized and implemented in accordance with the
provisions of the applicable laws and regulations, as in effect from time to
time.

     4.3. The grant of an Award to a Participant hereunder, in and of itself,
shall neither entitle such Participant to participate, nor disqualify him from
participating, in any other grant of Awards pursuant to this Plan or any other
share incentive or share option plan maintained by the Company or any of its
related companies.

     4.4. In the case of ISOs, Options shall not be considered ISOs to the
extent that the Fair Market Value of the Shares with respect to which such
Options are exercisable for the first time by an Optionee during any calendar
year (under the Plan and all other plans of the Company and any parent or
Subsidiary of the Company), exceeds US$100,000. For purposes of this Section
4.4, ISOs shall be taken into account in the order in which they were granted
and the Fair Market Value of the Shares shall be determined as of the time the
Option with respect to such Shares is granted.

5.   TRUSTEE:

     5.1. Section 102(b) Options which shall be granted under the Plan, any
Shares issued upon exercise of such Options (including such shares of Restricted
Stock) and other shares (including bonus shares) received subsequently following
any realization of rights resulting from Section 102(b) Options and/or from
Shares issued upon exercise of Section 102(b) Options (including such shares of
Restricted Stock), shall be issued to the Trustee. The Committee shall determine
and approve the terms of engagement of the Trustee, and shall be authorized to
designate from time to time a new Trustee and replace either of them at its sole
discretion, and in the event of replacement of any existing Trustee, to instruct
the transfer of all Options and Shares held by such Trustee at such time to its
successor.

                                        7
<PAGE>
     5.2. Upon receipt of the Awards, the Participant will sign an Option
Agreement or a Restricted Stock Purchase Agreement, as applicable, or with
respect to a Section 102(b) Option, such other document deemed necessary by the
Committee and/or the Trustee, which shall be deemed as Participant's undertaking
to exempt the Trustee from any liability in respect of any action or decision
duly taken and bona fide executed in relation with the Plan, or any Award, Share
or other right granted to the Participant thereunder.

     5.3. The Trustee and each such Participant shall comply with the Tax
Ordinance, Section 102 and with the Trust Agreement.

     5.4. The Trustee shall hold Section 102(b) Options and/or any Shares issued
upon exercise of such Options (including such shares of Restricted Stock) and/or
any other shares (including bonus shares) received subsequently following any
realization of rights resulting from Section 102(b) Options and/or from Shares
issued upon exercise of Section 102(b) Options (including such shares of
Restricted Stock) in trust for the benefit of the Participant at least for the
Lock-Up Period. Upon the expiration of the Lock-up Period and subject to any
further period included in the Plan, or the Option Agreement with the
Participant, or the Restricted Stock Purchase Agreement, as applicable, the
Trustee may release Section 102(b) Options and/or the Shares issued upon
exercise of such Options (including such shares of Restricted Stock) and/or any
other shares (including bonus shares) received subsequently following any
realization of rights resulting from Section 102(b) Options and/or from Shares
issued upon exercise of Section 102(b) Options (including such shares of
Restricted Stock) to Participant only after (i) the receipt by the Trustee of an
acknowledgment from the Income Tax Authority that the Participant has paid any
applicable tax due pursuant to the Tax Ordinance and Section 102, or (ii) the
Trustee withholds any applicable tax due pursuant to the Tax Ordinance and
Section 102.

          Notwithstanding the foregoing, in the event a Participant shall elect
to release the said Section 102(b) Options and/or the Shares (including such
shares of Restricted Stock) prior to the expiration of the Lock-up Period, the
sanctions under Section 102 shall apply to and shall be borne solely by such
Participant.

     5.5. The Committee may choose to deposit Section 3(i) Options granted to
Optionees with the Trustee. In such event, the Trustee shall hold such Section
3(i) Options in trust, pursuant to the Committee's instructions from time to
time and as shall be agreed with the Trustee. If determined by the Committee and
agreed by the Trustee, the Trustee shall not release any Section 3(i) Options
which were not already exercised into Shares by the Optionee, or any Shares
issued upon exercise of Section 3(i) Options, prior to the full payment of the
Optionee's tax liabilities arising from such Options which were granted to
Optionee.

     5.6. Until the Public Trading Date or the release of the Shares from the
Trustee (including such shares of Restricted Stock held by the Trustee),
whichever is earlier, the Trustee shall not use the voting rights vested in such
Shares and shall not exercise such rights in any way whatsoever, unless it is
instructed to do so in writing by any of the Participants, in which event, the
Trustee shall use the voting rights vested in the Participant's Shares according
to the majority vote of the shareholders of Ordinary Shares of the Company. Upon
the earlier of: (i) the Public Trading Date; or (ii) the release of the Shares
from the Trustee, and thereafter, the Trustee shall not use the voting rights
vested in such Shares and shall not exercise such rights in any way whatsoever,
provided that, if the right to vote any Share is held by the Trustee pursuant to

                                        8
<PAGE>
Section 102, then upon the Participant's request, the Trustee shall execute a
proxy in such form as may be prescribed by the Company for the benefit of the
Participant, all in accordance with the provisions of Section 102.

6.   RESERVED SHARES:

     6.1. The aggregate number of Shares, which may be (i) issued upon exercise
of such Options under the Plan and shares of Restricted Stock issued under the
Plan; and (ii) available by the Company for sale under the Company's 2005
Employee Stock Purchase Plan ((i) and (ii) shall be collectively referred to as
the "AGGREGATE NUMBER OF SHARES"), shall not exceed fifteen million (15,000,000)
shares. Notwithstanding the foregoing, the Aggregate Number of Shares shall be
increased annually on January 1st by a number of Shares equal to the lowest of
(a) 4% of the total number of shares of the Company outstanding (on an as
converted basis) as of December 31st of the preceding calendar year, (b)
1,333,333 Shares, subject to adjustment as provided in Section 12, or (c) number
of Shares determined by the Board. The allocation of the Aggregate Number of
Shares and any increase thereof between the Plan and the Company's 2005
Employees Stock Purchase Plan shall be decided at the discretion of the Board.
The Shares issuable upon exercise of such Options and shares of Restricted Stock
may be previously authorized but unissued shares, Repurchased Shares (as defined
in Section 11 below) or shares previously issued to a trustee for the purpose of
employee benefit plans of the Company. Any Shares under the Plan, in respect of
which the right hereunder of a Participant to purchase the same shall for any
reason terminate, become cancelled, expire or otherwise cease to exist,
including Repurchased Shares repurchased by the Company or on its behalf, shall
again be available for grant through Awards under the Plan. Furthermore, Shares
subject to Awards which are adjusted pursuant to Section 12.1 and become
exercisable with respect to shares of another corporation shall be considered
cancelled and may again be optioned, granted or awarded hereunder, subject to
the share limit set forth in this Section 6.1. Shares which are actually or
constructively delivered by the Participant or withheld by the Company upon the
exercise of an Option or issuance of a Restricted Stock in payment of the
exercise price thereof or tax withholding thereon may again be optioned, granted
or awarded hereunder.

     6.2. No person who is deemed by the Committee, in its sole discretion, to
be a "covered employee" within the meaning of Section 162(m) of the Code shall
be granted, in any calendar year, Awards covering the purchase of more than five
hundred thousand (500,000) Shares (the "ANNUAL AWARD LIMIT"); provided, however,
that the foregoing limitation shall not apply prior to the Public Trading Date
and, following the Public Trading Date, the foregoing limitation shall not apply
until the earliest of: (i) the first material modification of the Plan
(including any increase in the number of shares reserved for issuance under the
Plan in accordance with Section 6.1); (ii) the issuance of all of the Shares
reserved for issuance under the Plan; (iii) the expiration of the Plan; (iv) the
first meeting of shareholders at which directors of the Company are to be
elected that occurs after the close of the third calendar year following the
calendar year in which the first registration of an equity security of the
Company under Section 12 of the U.S. Securities Exchange Act of 1934 occurred;
or (v) such other date required by Section 162(m) of the Code and the rules and
regulations promulgated thereunder. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.1. For purposes of this Section 6.2, to the extent
required by applicable law, if an Award is canceled in the same fiscal year of
the Company it was granted (other than in

                                        9
<PAGE>
connection with a transaction described in Section 12), the canceled Award will
be counted against the limit set forth in this Section 6.2. For this purpose, if
the exercise price of an Award is reduced, the transaction shall be treated as a
cancellation of the Award and the grant of a new Award.

     6.3. All Shares issued upon exercise of an Option and shares of Restricted
Stock shall entitle the holder thereof to all of the rights and privileges of a
shareholder of the Company in respect of such Shares, subject to the limitations
set forth herein, including but not limited to the provisions of Section 11.3.4
with respect to shares of Restricted Stock.

7.   AWARDS:

     7.1. Awards may be granted at any time after the Plan has been approved by
the Board, subject to obtaining all the necessary approvals from the Israeli
Income Tax Authorities by the Company. The date of grant of each Award shall be
the date specified by the Committee at the time such award is made and subject
to the applicable law.

     7.2. Each Option granted pursuant to the Plan shall be evidenced by an
Option Agreement Each Restricted Stock granted pursuant to the Plan shall be
evidenced by a Restricted Stock Purchase Agreement. Each Option Agreement shall
state, inter alia, the number of Shares covered thereby, the type of Option
granted thereunder, the Section 102(b) Route Election under which the Option was
granted, if applicable, the vesting date(s) for such Option, the Exercise Price,
the schedule on which such Shares may be paid for and such other terms and
conditions as the Committee in its discretion may prescribe, provided that they
are consistent with this Plan.

     7.3. No Section 102(b) Option may be granted under this Plan to any
eligible Participant, unless and until, the Company's election of the type of
Section 102(b) Option either as Section 102(b)(1) Option or as Section 102(b)(2)
Option is appropriately filed with the Income Tax Authorities before the first
date of grant of Section 102(b) Option. Such Section 102(b) Route Election shall
become effective beginning the first date of grant of a Section 102(b) Option
under this Plan and shall remain in effect at least until the end of the year
following the year during which the Company first granted Section 102(b)
Options. The Section 102(b) Route Election shall obligate the Company to grant
only the type of Section 102(b) Option it has elected, and shall apply to all
Participants who were granted Section 102(b) Options during the period indicated
herein, all in accordance with the provisions of Section 102(g) of the Tax
Ordinance. For avoidance of doubt, it is clarified that such Section 102(b)
Route Election shall be at the sole discretion of the Company. It is further
clarified that such Section 102(b) Route Election shall not prevent the Company
from granting Other Section 102 Options simultaneously.

8.   EXERCISE PRICE:

     8.1. The Exercise Price with respect to an Award shall be as determined by
the Committee on the date of grant of such Award, subject to any guidelines as
may be determined by the Committee from time to time; provided, however, that
such Exercise Price shall be not less than the nominal value of the Shares
underlying the Award. Each Option Agreement shall contain the Exercise Price of
the Option. Each Restricted Stock Purchase Agreement shall contain the Exercise
Price, if any, of the Restricted Stock. Notwithstanding the foregoing, (i) in
the case of an ISO (A) granted to an employee of the Company or any Subsidiary
who, at the

                                       10
<PAGE>
time of grant of such Option, is a Ten Percent Shareholder, the Exercise Price
shall be not less than one hundred and ten percent (110%) of the Fair Market
Value per Share on the date of grant, and (B) granted to any other employee of
the Company or any Subsidiary, the Exercise Price shall be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant
and (ii) in the case of Awards intended to qualify as performance-based
compensation within the meaning of Section 162(m)(4)(C) of the Code, such price
shall not be less than 100% of the Fair Market Value of a Share on the date the
Award is granted.

     8.2. The Exercise Price shall be payable upon the exercise of the Option.
The Committee, in its discretion, shall determine the acceptable form of
consideration for exercising an Option, including the method of payment, subject
to the restrictions contained in any applicable law. In making its determination
as to the type of consideration to accept, the Committee shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company, provided however, that in the case of ISOs, any such determination
shall be made by the Committee at the time of grant of the Option and shall be
set forth in the terms of the Option Agreement evidencing such Option.
Acceptable forms of consideration may include: (i) cash; (ii) check or wire
transfer; (iii) consideration received by the Company under a cashless exercise
program, adopted by the Committee in connection with the Plan; (iv) such other
consideration and method of payment for the issuance of Shares to the extent
permitted by applicable laws; or (v) any combination of the foregoing methods of
payment.

9.   EXERCISE OF OPTIONS:

     9.1. Options shall be exercisable pursuant to the terms under which they
were awarded and subject to the terms and conditions of this Plan; provided,
however, that in no event shall an Option be exercisable after the earliest to
occur of the following: (i) the expiration of ten (10) years from the date such
Option was granted; (ii) in the event of the grant of an ISO to a Ten Percent
Shareholder, the expiration of five (5) years from the date of grant; or (iii)
the Expiration Date of the Option (as defined in the Option Agreement).

          Unless the Committee provides otherwise, vesting of Options granted
hereunder shall be tolled during any unpaid leave of absence.

     9.2. Prior to the expiration date of an Option, the Option may be exercised
by the Optionee in whole or in part at any time or from time to time, provided
the Option (or portion thereof) is vested and exercisable at such time;
provided, further, that subject to the provisions of Section 10 below and except
as otherwise determined by the Committee, the Optionee is an employee of, or is
in the service of, the Company or any Subsidiary at all times during the period
beginning with the granting of the Option and ending upon the date of exercise.
An Option may not be exercised for a fraction of a Share.

     9.3. An Option, or any part thereof, shall be exercisable by the Optionee's
signing and returning to the Company at its principal office (and to the
Trustee, where applicable), a "Notice of Exercise" in such form and substance as
may be prescribed by the Committee from time to time and in accordance with the
requirements of applicable laws, including Section 102, if applicable. Such
exercise shall be effective upon receipt of such notice by the Company at its
principal office accompanied by payment (whether by cash, check or other method
of payment acceptable to the Company) of the aggregate Exercise Price due with
respect to such exercise.

                                       11
<PAGE>
The notice shall specify the number of Shares with respect to which the Option
is being exercised.

          In the case of Section 3(i) Options, the "Notice of Exercise" shall
also be accompanied by payment of the aggregate withholding taxes due with
respect to the exercised Shares.

     9.4. Anything herein to the contrary notwithstanding, but without
derogating from the provisions of Section 10 hereof, if any Option (or portion
thereof) has not been exercised prior to its expiration date, such Option (or
such portion thereof) and the right to acquire the Shares underlying the Option
shall terminate and all interests and rights of the Optionee therein shall
expire. In the event that in connection with the expiration of an Option any
Shares are held in trust as aforesaid, such trust shall expire and the Trustee
shall thereafter hold such Shares in an unallocated pool until instructed by the
Company that some or all of such Shares are again to be held in trust for one or
more Optionees.

     9.5. Subject to the terms of the Plan, any Option Agreement may contain
such other provisions, as the Committee may, from time to time, deem advisable.

     9.6. Payment for Shares under an Option shall be in respect of a whole
number of shares, shall be effected in cash or by a cashier's or certified check
payable to the order of the Company, or such other method of payment acceptable
to the Company as determined by the Committee, and shall be accompanied by a
notice stating the number of Shares being paid for thereby.

     9.7. Prior to exercise, the Optionees shall have none of the rights and/or
privileges of a shareholder of the Company in respect to any Shares purchasable
upon the exercise of any part of an Option nor shall they be deemed to be a
class of shareholders or creditors of the Company under applicable law,
including Sections 350 and 351 of the Israeli Companies Law.

     9.8. Upon exercise of an Option, an Optionee shall have no shareholder
rights until the Shares are issued, as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company. The
Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other
shareholders' right, for which the record date precedes the date of issuance of
the Shares, except as provided in Section 12 hereof.

     9.9. If any law or regulation requires the Company to take any action with
respect to the Shares specified in the Notice of Exercise before the issuance
thereof, then the date of their issuance shall be extended for the period
necessary to take such action.

     9.10. The Company shall not be required to issue or deliver any Shares (or
any certificate or certificates for such Shares) purchased upon exercise of any
Option (or portion thereof) or issue any Restricted Stock prior to the
completion of any registration or other qualification of such Shares required
under all applicable law, including U.S. federal, state or local law or Israeli
law, or under the rulings or regulations of the U.S. Securities and Exchange
Commission or any other governmental regulatory body which the Committee shall,
in its absolute discretion, determine to be necessary or advisable.

10.  TERMINATION OF ENGAGEMENT:

                                       12
<PAGE>
     10.1. Unless otherwise provided for by the Committee in the Option
Agreement, if an Optionee ceases to be a service provider to the Company or any
Subsidiary, all Options granted to the Optionee which are vested and exercisable
at the time of such termination, may, unless earlier terminated in accordance
with the Option Agreement, be exercised within three (3) months after the date
of such termination (or such different period as the Committee shall prescribe),
but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by the
unexercised portion of such Option shall revert to the Plan. If, on the date of
termination, the Optionee is not vested as to his entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan.

     10.2. In the event an Optionee ceases to be a service provider to the
Company or any Subsidiary, as a result of the Optionee's Disability, the
Optionee may exercise his Option within such period of time as is specified in
the Option Agreement (of at least six (6) months) to the extent the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's termination. If, after
termination, the Optionee does not exercise his Option within the time specified
herein, the Option shall terminate, and the Shares covered by the unexercised
portion of such Option shall revert to the Plan. If, on the date of termination,
the Optionee is not vested as to his entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.

     10.3. In the event an Optionee ceases to be a service provider to the
Company or any Subsidiary, as a result of the Optionee's death, the Option may
be exercised within such period of time as is specified in the Option Agreement
(of at least six (6) months) to the extent the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement) by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance.
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for twelve (12) months following the Optionee's termination.
If, after termination, the Option is not exercised within the time specified
herein, the Option shall terminate, and the Shares covered by the unexercised
portion of such Option shall revert to the Plan. If, on the date of termination,
the Optionee is not vested as to his entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.

     10.4. Notwithstanding the foregoing, in the event the Optionee's service
with the Company or a Subsidiary, as applicable, is terminated for Cause, all
outstanding Options granted to such Optionee (whether vested or not) shall, to
the extent not theretofore exercised, terminate on the date of such termination,
unless otherwise determined by the Committee, and the Shares covered by the
unexercised portion of such Options shall revert to the Plan.

     10.5. For the purpose of this Section 10, termination of an Optionee's
service with the Company or a Subsidiary, as applicable, shall be deemed to be
effective upon the date, which is designated by the Company or a Subsidiary as
the last day of the Optionee's service with the Company or a Subsidiary.

                                       13
<PAGE>
     10.6. For the purpose of this Section 10, in the discretion of the
Committee, a transfer of the Optionee's service between the Company, or any
Subsidiary shall not be deemed a termination of service for purposes of the
Plan; provided, however, that with respect to ISOs, the foregoing shall be
subject to Section 422 of the Code.

11.  RESTRICTED STOCK PURCHASE RIGHTS.

     11.1. Restricted Stock may be issued by the Committee to any eligible
Participant either alone, in addition to, or in tandem with other awards granted
under the Plan and/or other awards made outside of the Plan.

     11.2. For the purposes of this Section 11, the Committee may decide to
appoint a trustee (the "RESTRICTED STOCK TRUSTEE"), which shall act according to
a trust agreement (the "RESTRICTED STOCK TRUST AGREEMENT"), in the form
determined by the Committee and according to the provisions set forth hereunder.

     11.3. Each award of Restricted Stock under the Plan shall be evidenced by a
Restricted Stock Purchase Agreement and shall comply with the following terms
and conditions (and with such other terms and conditions consistent with the
terms of this Plan as the Committee, in its discretion, shall establish):

          11.3.1. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, for such period as the Committee shall
determine from the date on which the award is granted (the "RESTRICTED PERIOD").
The Committee may also impose such other restrictions and conditions on the
shares as it deems appropriate. Certificates for shares issued pursuant to
Restricted Stock awards shall bear an appropriate legend referring to such
restrictions, and any attempt to dispose of any such shares in contravention of
such restrictions shall be null and void and without effect. The Committee may
decide (and require the Purchaser accordingly), in its own discretion, including
for the purpose of complying with the requirements of any applicable law, to
include in the Restricted Stock Purchase Agreement such provision, according to
which during the Restricted Period: (i) the Restricted Stock shall be held in
trust by the Trustee; and/or (ii) the certificates representing the Restricted
Stock shall be held in escrow by an escrow agent appointed by the Committee,
until all restrictions are removed or expired. In determining the Restricted
Period of an award and subject to the provisions of any applicable law, the
Committee may provide that the foregoing restrictions shall lapse with respect
to specified percentages of the awarded shares on successive anniversaries of
the date of such award or upon the achievement of certain performance goals or
upon such other terms and conditions as it shall determine.

          11.3.2. Unless the Committee determines otherwise and subject to the
provisions of any applicable law, the Restricted Stock Purchase Agreement shall
grant the Company and/or the Restricted Stock Trustee a repurchase option with
respect to shares of Restricted Stock which are subject to restrictions,
exercisable upon the voluntary or involuntary termination of the Purchaser's
service with the Company for any reason (including death or Disability), in
accordance with the provisions of the Restricted Stock Trust Agreement, if
applicable. Unless otherwise determined by the Committee and subject to the
provisions of any applicable law, the purchase price for Restricted Stocks
repurchased pursuant to the Restricted Stock Purchase Agreement ("REPURCHASED
SHARES") shall be the original price paid by the Purchaser. If the repurchase
option is exercised by the Restricted Stock Trustee, the Repurchased Shares
shall be

                                       14
<PAGE>
held by the Restricted Stock Trustee for future grant under the Plan, as shall
be instructed by the Committee.

          11.3.3. The Committee shall have the authority to cancel all or any
portion of any outstanding restrictions prior to the expiration of the
Restricted Period with respect to any or all of the shares of Restricted Stock
awarded on such terms and conditions as the Committee shall deem appropriate.

          11.3.4. A Purchaser shall be treated as a shareholder of the Company
for all purposes, except that the rights of the Purchaser may be limited under
the terms of his Restricted Stock Purchase Agreement. Notwithstanding the above,
upon exercise of a Stock Purchase Right, the Purchaser shall have no shareholder
rights until the shares are issued, as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other shareholders' right, for which
the record date precedes the date of issuance of the shares, except as provided
in Section 12 hereof.

12.  ADJUSTMENTS:

     12.1. Subject to Section 12.5, in the event that the Committee determines
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the
Company, or exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company,
or other similar corporate transaction or event, in the Committee's sole
discretion affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan or
with respect to an Award, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of:

          12.1.1. the number and kind of Shares (or other securities or property
including shares of Restricted Stock) with respect to which Awards may be
granted under the Plan (including, but not limited to, adjustments of the
limitations in Section 6.1 on the maximum number and kind of shares which may be
issued and adjustments of the Annual Award Limit as detailed in Section 6.2),

          12.1.2. the number and kind of Shares (or other securities or
property) subject to outstanding Awards, and

          12.1.3. the grant or Exercise Price with respect to any Award.

     12.2. Subject to Section 12.5, in the event of any Change in Control or
other event described in Section 12.1 which results in Shares or other
securities of the Company being exchanged for or converted into cash, securities
(including securities of another corporation) or other property, the Committee
will have the right to terminate this Plan as of the date of the event or
transaction, in which case all Options and/or Restricted Stock, as may be
applicable, granted under this Plan shall become the right to receive such cash,
securities or other property, net of any applicable exercise price.

                                       15
<PAGE>
     12.3. Subject to Section 12.5, in the event of (i) any Change in Control,
(ii) other event described in Section 12.1, (iii) any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company, or
the financial statements of the Company or any affiliate or (iv) of changes in
applicable laws, regulations or accounting principles, the Committee, in its
sole discretion, and on such terms and conditions as it deems appropriate, is
authorized to take any one or more of the following actions or determinations,
with respect to the Awards, by action taken prior to the occurrence of the
event, or at any other time, whenever the Committee determines that such action
is appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Award under this Plan, to facilitate such transactions or events, or to
give effect to such changes in laws, regulations or principles:

          12.3.1. that the Option shall be purchased for an amount of cash equal
to the amount that could have been attained upon the exercise of such Option or
the realization of the Optionee's rights had such Option been currently
exercisable or payable;

          12.3.2. that the Option shall be replaced with other rights or
property selected by the Committee in its sole discretion;

          12.3.3. that the Option cannot be exercised after such event;

          12.3.4. that, for a specified period of time prior to such transaction
or event, such Option shall be exercisable as to all Shares covered thereby,
notwithstanding anything to the contrary in this Plan or the provisions of such
Option;

          12.3.5. that upon such event, such Option shall be assumed by the
successor corporation, or a parent or subsidiary thereof, or shall be
substituted for by a similar Option covering the stock of the successor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices;

          12.3.6. make adjustments in the number and type of Shares (or other
securities or property) subject to outstanding Options and/or in the terms and
conditions of (including the Exercise Price), and the criteria included in,
outstanding Options and Options which may be granted in the future;

          12.3.7. that, for a specified period of time prior to such event, the
restrictions imposed under the Option Agreement or under the Restricted Stock
Purchase Agreement upon some or all of any Options and/or share of Restricted
Stock may be terminated, and/or any Options and/or shares of Restricted Stock
may cease to be subject to repurchase by the Company after such event; and

          12.3.8. that Awards may cease to be subject to the Company's right of
first refusal set forth in Section 13 after such event.

     12.4. Subject to Section 12.5, the Committee may, in its discretion,
include such further provisions and limitations in any Option Agreement,
Restricted Stock Purchase Agreement or certificate, as it may deem equitable and
in the best interests of the Company.

     12.5. With respect to ISOs and Awards intended to qualify as
performance-based compensation under Section 162(m), no adjustment or action
described in this Section 12 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action

                                       16
<PAGE>
would cause the Plan to violate Section 422(b)(1) of the Code or would cause
such Award to fail to so qualify under Section 162(m), as the case may be, or
any successor provisions thereto. Furthermore, no such adjustment or action
shall be authorized to the extent such adjustment or action would result in a
violation of Section 16 of the U.S. Securities Exchange Act of 1934.

13. ASSIGNABILITY, TRANSFERABILITY AND SALE OF OPTIONS AND/OR SHARES:

     13.1. Except as otherwise provided by the Committee with respect to NQSOs,
no Award may be sold, pledged, assigned, hypothecated or transferred other than
by will or by the laws of descent and distribution, and during the Participant's
lifetime an Award may be exercised only by him. The terms of the Plan, the
Option Agreement and the Restricted Stock Purchase Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Participant.

     13.2. Without derogating from the foregoing and subject to the provisions
of Section 102, as long as Section 102(b) Options and/or any Shares issued upon
exercise of such Options (including shares of Restricted Stock) are held by the
Trustee on behalf of the Participant, all rights of the Participant with respect
thereto are personal and cannot be transferred, assigned, pledged or mortgaged,
other than by will or by the laws of descent and distribution.

     13.3. Shares acquired upon exercise of an Award shall be subject to such
restrictions on transfer as are generally applicable to Ordinary Shares of the
Company, including without limitation any right of first refusal restriction, in
accordance with the Company's Articles of Association and Shareholders
agreements, as amended from time to time.

     13.4. Until the Public Trading Date, no Participant shall have the right to
sell Shares issued upon exercise of an Option and/or shares of Restricted Stock
within six (6) months and one (1) day of the date of exercise of such Option or
issuance of such Shares and/or of such shares of Restricted Stock.

14.  U.S. SECURITIES ACT OF 1933; ISRAEL SECURITIES LAW, 1967:

     By Participant's exercise of an Option hereunder and/or purchase of shares
of Restricted Stock, the Participant agrees not to sell, transfer or otherwise
dispose of any of the Shares so purchased by him except in compliance with the
U.S. Securities Act of 1933 and the Israel Securities Law of 1967, as amended,
and the rules and regulations thereunder and the Participant further agrees that
all certificates evidencing any of such Shares shall bear an appropriate legend
to reflect such restriction. The Company does not obligate itself to register
any shares under the U.S. Securities Act of 1933, as amended. However, as a
condition to the exercise of an Award, the Committee may require the Participant
exercising such Award to represent and warrant at the time of such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required. Furthermore, the Company shall
have the authority to endorse upon the certificate or certificates representing
the Shares such legends referring to the foregoing restrictions, and any other
applicable restriction, as it may deem appropriate.

15.  LIMITATIONS APPLICABLE TO SECTION 16 PERSONS AND PERFORMANCE-BASED
     COMPENSATION:

     Notwithstanding any other provision of the Plan, the Plan and any Award
awarded to any individual who is then subject to Section 16 of the U.S.
Securities Exchange Act of 1934, shall

                                       17
<PAGE>
be subject to any additional limitations set forth in any applicable exemptive
rule under Section 16 of the U.S. Securities Exchange Act of 1934 (including any
amendment to Rule 16b-3) that are requirements for the application of such
exemptive rule. To the extent permitted by applicable law, the Plan and the
Awards awarded hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule. Furthermore, notwithstanding any
other provision of this Plan, any Award intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall be subject
to any additional limitations set forth in Section 162(m) of the Code (including
any amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and this Plan
shall be deemed amended to the extent necessary to conform to such requirements.

16.  TERM AND AMENDMENT OF THE PLAN:

     16.1. The Plan shall become effective upon its adoption by the Board, but
no Award shall be exercisable unless and until the shareholders of the Company
have approved the Plan. If the Plan is not approved by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted by the
Board, the Plan and all Awards granted under the Plan shall become null and
void.

          Unless sooner terminated, the Plan shall expire on the tenth (10)
anniversary of the date on which the Plan is adopted by the Board or approved by
the shareholders of the Company, whichever is earlier.

     16.2. The Board, at any time and from time to time, may terminate or amend
the Plan provided, however, that no amendment may be made without shareholders'
approval to the extent such action would otherwise require shareholders'
approval as a matter of law, regulation or rule. In no event may any action of
the Company alter or impair the rights of a Participant, without his consent,
under any Award previously granted to him. Termination of the Plan shall not
affect the Committee's ability to exercise the powers granted to it hereunder
with respect to Awards granted under the Plan prior to the date of such
termination.

17.  NO RIGHT TO CONTINUED SERVICE:

     Nothing in the Plan or in any Option Agreement hereunder or in any
Restricted Stock Purchase Agreement shall confer upon any Participant any right
to continue in the service of the Company or any Subsidiary or interfere with or
restrict in any way the rights of the Company and any Subsidiary, which are
hereby expressly reserved, to terminate the service of any Participant at any
time for any reason whatsoever, with or without Cause, except to the extent
expressly provided otherwise in a written employment or services agreement
between the Participant and the Company or any Subsidiary.

18.  INABILITY TO OBTAIN AUTHORITY:

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

                                       18
<PAGE>
19.  NON-EXCLUSIVITY OF THE PLAN:

     This Plan shall not be construed as creating any limitations on the power
of the Board or the Committee to adopt such other incentive arrangements as
either may deem desirable, including without limitation, the granting of stock
options and/or restricted stock otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

20.  GOVERNING LAW:

     This Plan and all determinations made and actions taken pursuant hereto
shall be governed by and construed and enforced in accordance with the laws of
the state of Israel, without giving effect to the principles of conflict of laws
thereof.

21.  APPLICATION OF FUNDS:

     The proceeds received by the Company from the sale of Shares pursuant to
Awards granted under the Plan will be used for general corporate purposes of the
Company or any related company thereof.

22.  TAX CONSEQUENCES:

     22.1. Any tax consequences arising from the grant or exercise of any Award,
from the payment for Shares covered thereby, from the sale of such Shares or
from any other event or act (of the Participant, the Company, any Subsidiary
that employs or engages the Participant or the Trustee or the Restricted Stock
Trustee) hereunder, shall be borne solely by the Participant. The Company, any
Subsidiary or an affiliate of the Company and/or the Trustee, as applicable,
shall withhold taxes according to the requirements under the applicable laws,
rules, and regulations, including withholding taxes at source. The Company
and/or the Trustee shall not be required to release any Share certificate to a
Participant until all required payments have been fully made.

          Furthermore, the Participant shall agree to indemnify the Company, any
Subsidiary that employs or engages the Participant, if applicable, and the
Trustee and/or the Restricted Stock Trustee and hold them harmless against and
from any and all liability for any such tax or interest or penalty thereon,
including without limitation, liabilities relating to the necessity to withhold,
or to have withheld, any such tax from any payment made to the Participant.

     22.2. At the discretion of the Committee, and in whole or partial
satisfaction of tax withholding requirements, the Committee may require that the
Company withhold the minimum amount of Shares otherwise issuable under an Award
having a Fair Market Value in an amount not to exceed the sums necessary to pay
the tax withholding based on the minimum statutory withholding rates for
applicable tax purposes.

     22.3. With regard to Section 102(b) Options, to the extent Section 102
and/or the Assessing Officer's approval require the Plan to contain specified
provisions in order to qualify the Awards for preferential tax treatment, such
provisions shall be deemed to be stated in this Plan and to be an integral part
hereof.

     22.4. With regard to Other Section 102 Options, in the event that a
Participant ceases to be employed by the Company or any Subsidiary, the
Participant shall be obligated to provide the Company and/or its Subsidiary (as
the case may be), with a security or guarantee, in the degree

                                       19
<PAGE>
and manner satisfactory to the Company and/or its Subsidiary, to cover any
future tax obligation resulting from the disposition of the Awards and/or the
Shares acquired thereunder (including Restricted Stock), all in accordance with
Section 102.

23.  COMPLIANCE WITH CALIFORNIA SECURITIES LAWS:

     To the extent required to comply with applicable California securities
laws, the provisions of APPENDIX I shall apply to the Plan and any of the
provisions contained in this Plan that are inconsistent with such requirements
and APPENDIX I, such provisions shall be deemed null and void.

24.  SEVERABILITY:

     If any term or other provision of this Plan is determined to be invalid,
illegal or incapable of being enforced by any applicable rule, regulation or
law, the invalidity of such term or provision of the Plan shall not affect the
validity or enforceability of any other provision of the Plan, which shall
remain in full force and effect.

25.  APPENDICES; SUBPLANS:

     The Committee may adopt rules or procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of the law
and procedures of a relevant jurisdiction. Without limiting the generality of
the foregoing, the Committee is specifically authorized to adopt rules and
procedures regarding payment of Exercise Price; conversion of local currency;
payroll tax; income tax withholding; tax reporting; and Share certificates that
vary with local requirements; provided, however, that no such supplements,
amendments or appendices shall increase the share limitations contained in
Sections 6.1 and 6.2. The Committee may also adopt rules, procedures or subplans
applicable to particular Subsidiaries. The rules of such subplans may take
precedence over other provisions of the Plan, with the exception of Sections 6.1
and 6.2, but unless otherwise superseded by the terms of a subplan, the
provisions of the Plan shall govern the operation of the subplan.

26.  UNFUNDED STATUS OF AWARDS:

     The Plan is intended to be an "unfunded" plan for incentive compensation.
With respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Option Agreement or Restricted Stock
Purchase Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.

27.  INTERPRETATION:

     Unless the context otherwise indicates, words expressed in the singular
shall include the plural and vice versa and the use of the neuter, masculine, or
feminine gender is for convenience only and shall be deemed to mean and include
the neuter, masculine or feminine gender, as appropriate.

28.  HEADINGS:

     Headings of sections herein are solely for convenience of reference, do not
constitute a part hereof and shall not affect the meaning, construction or
effect hereof.

                                       20
<PAGE>
                                   APPENDIX I
                                       TO
                SAIFUN SEMICONDUCTORS LTD. 2003 SHARE OPTION PLAN

                   CALIFORNIA STATE SECURITIES LAW COMPLIANCE

     Notwithstanding anything to the contrary contained in the Plan, the
provisions set forth in this Appendix shall apply to all Awards granted under
the Saifun Semiconductors Ltd. 2003 Share Option Plan (the "PLAN") to residents
of California (i) at any time when the Shares are not a "covered security" as
defined in Section 18(b)(1) of the U.S. Securities Act of 1933, as amended (the
"SECURITIES ACT"), and (ii) for which the exemption under Section 25102(f) of
the California Corporations Code is not otherwise available. This Appendix shall
be of no force or effect at any time when the Company's Ordinary Share is a
"covered security" as defined in Section 18(b)(1) of the Securities Act.
Definitions as set out in Section 2.2 of the Plan are applicable to this
Appendix.

     The purpose of this Appendix is to set forth those provisions of the Plan
necessary to comply with applicable California securities laws. If any of the
provisions contained in this Appendix are inconsistent with such requirements,
such provisions shall be deemed null and void. The invalidity of any provision
of this Appendix shall not affect the validity or enforceability of any other
provision of this Appendix, which shall remain in full force and effect.

     1.1 Term of Options. The term of each Option shall be no more than ten (10)
years from the date of grant thereof.

     2.1 Option Exercise or Purchase Price. Except as provided in Section 12.1
of the Plan, the Exercise Price for the Shares to be issued upon exercise of an
Option shall be such price as is determined by the Committee, but shall be
subject to the following:

     In the case of an Option:

          (a) granted to an Optionee who, at the time of grant of such Option,
owns shares representing more than 10% of the voting power of all classes of
shares of the Company or any parent (as defined in Section 175 of the California
Corporations Code) or Subsidiary, the Exercise Price shall be no less than 110%
of the Fair Market Value per share on the date of the grant; and

          (b) granted to any other Optionee, the Exercise Price shall be no less
than 85% of the Fair Market Value per share on the date of grant.

     Notwithstanding the foregoing, Options may be granted with an Exercise
Price other than as required above pursuant to a merger or other corporate
transaction.

     3.1 Exercisability. Except with regard to Options granted to officers,
directors, managers or consultants, in no event shall an Option granted
hereunder become vested and exercisable at a rate of less than 20% per year over
five years from the date the Option is granted, subject to reasonable
conditions, such as continuing to be a service provider.

     4.1 Exercisability Following Termination of Relationship as a Service
Provider.

                                       21
<PAGE>
          (a) Termination Other Than Death or Disability. If an Optionee's
service terminates for any reason other than by reason of the Optionee's
disability or death, such Optionee may exercise his Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination; provided, however, that such period of time
shall not be less than thirty (30) days (but in no event later than the
expiration of the term of the Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Optionee's termination.

          (b) Disability of Optionee. If an Optionee's service terminates as a
result of the Optionee's disability, the Optionee may exercise his Option within
such period of time as is specified in the Option Agreement to the extent the
Option is vested on the date of termination; provided, however, that such period
of time shall not be less than six (6) months (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination.

          (c) Death. If an Optionee's employment or service terminates as a
result of the Optionee's death, the Option may be exercised within such period
of time as is specified in the Option Agreement; provided, however, that such
period of time shall not be less than six (6) months (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement),
by the Optionee's estate or by a person who acquires the right to exercise the
Option by bequest or inheritance, but only to the extent that the Option is
vested on the date of death. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination.

     5.1 Repurchase Provisions. In the event the Committee provides that the
Company may repurchase Shares acquired upon exercise of an Award (including
shares of Restricted Stock) upon the occurrence of certain specified events,
then any such repurchase right shall be set forth in the applicable Option
Agreement, Restricted Stock Purchase Agreement or in another agreement referred
to in such agreement and, to the extent required by Section 260.140.41 and
Section 260.140.42 of Title 10 of the California Code of Regulations, any such
repurchase right set forth in an Award (including shares of Restricted Stock)
granted to a person who is not an officer, director, manager or consultant shall
be upon the following terms: (i) if the repurchase option gives the Company the
right to repurchase the shares upon the Participant's termination of service at
not less than the Fair Market Value of the shares to be purchased on the date of
termination of service, then the right to repurchase shall be exercised for cash
or cancellation of purchase money indebtedness for the shares within ninety (90)
days of termination of service (or in the case of Shares issued upon exercise of
Awards after such date of termination, within ninety (90) days after the date of
the exercise) or such longer period as may be agreed to by the Committee and the
Participant and; (ii) if the repurchase option gives the Company the right to
repurchase the Shares upon the Participant's termination service at the original
purchase price for such Shares, then (A) the right to repurchase at the original
purchase price shall lapse at the rate of at least 20% of the shares per year
over five (5) years from the date the Award is granted (without respect to the
date the Award was exercised or became exercisable) and (B) the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within ninety (90) days of termination of service
(or, in the case of shares issued upon

                                       22
<PAGE>
exercise of Awards, after such date of termination, within ninety (90) days
after the date of the exercise) or such longer period as may be agreed to by the
Company and the Participant. This provision shall not limit the Company's right
to repurchase any shares of Restricted Stock pursuant to the terms of a
Restricted Stock Purchase Agreement.

     6.1 Information Rights. To the extent required by Section 260.140.46 of
Title 10 of the California Code of Regulations, the Company shall provide to
each Participant and to each individual who acquires Shares pursuant to the
Plan, not less frequently than annually during the period such Participant has
one or more Options outstanding, and, in the case of an individual who acquires
Shares pursuant to the Plan (including shares of Restricted Stock), during the
period such individual owns such Shares, copies of annual financial statements.
Notwithstanding the preceding sentence, the Company shall not be required to
provide such statements to key employees whose duties in connection with the
Company assure their access to equivalent information.

     7.1 Transferability. No Award shall be assigned, transferred, or otherwise
disposed of by a Participant other than by will or the laws of descent and
distribution or, with respect to Awards other than ISOs, as permitted by Rule
701 of the U.S. Securities Act of 1933.

     8.1 Limitation on Number of Shares. At no time shall the total number of
Shares issuable upon exercise of all outstanding Options under the Plan, shares
of Restricted Stock awarded under the Plan and any Shares provided for under any
bonus or similar plan or agreement of the Company exceed 30% of the
then-outstanding Shares of the Company, as calculated pursuant to Section
260.140.45 of Title 10 of the California Code of Regulations, unless a
percentage higher than 30% is approved by at least two-thirds (2/3) of the
outstanding securities of the Company entitled to vote. The number of Shares
which may be issued or transferred pursuant to Awards under the Plan shall be
reduced to the extent necessary to comply with this provision.

                                       23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]