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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001178913-03-000802.txt : 20031201
<SEC-HEADER>0001178913-03-000802.hdr.sgml : 20031201
<ACCEPTANCE-DATETIME>20031201070742
ACCESSION NUMBER:		0001178913-03-000802
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20031201
FILED AS OF DATE:		20031201

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SILICOM LTD
		CENTRAL INDEX KEY:			0000916793
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-23288
		FILM NUMBER:		031028868

	BUSINESS ADDRESS:	
		STREET 1:		08 HANAGAR ST
		CITY:			KFAR-SAVA ISRAEL
		STATE:			L3
		ZIP:			44000
		BUSINESS PHONE:		97297644555

	MAIL ADDRESS:	
		STREET 1:		P.O.BOX 2164
		CITY:			KFAR-SAVA
		STATE:			L3
		ZIP:			44000
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>d30367.htm
<TEXT>
<HTML>
<HEAD>
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     <!-- Project:        \\Backup\office\EDGAR Filing\Silicom Ltd\30367\a30367.eep        -->
     <!-- Control Number: 30367                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   6-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>6-K</TITLE>
</HEAD>
<BODY>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>SECURITIES AND
EXCHANGE COMMISSION </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WASHINGTON, D.C. 20549 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 6-K </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REPORT OF FOREIGN
PRIVATE ISSUER <BR>
PURSUANT TO RULE
13a-16 OR 15d-16 OF <BR>
THE SECURITIES
EXCHANGE ACT OF 1934 </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I><B>For the month of
December, 2003 </B></I></FONT></P>

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<HR SIZE="1" NOSHADE WIDTH="15%" ALIGN="CENTER">

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<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5><B>SILICOM LTD.</B> </FONT><BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Translation of
Registrant&#146;s name into English) </FONT></P>

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<HR SIZE="1" NOSHADE WIDTH="15%" ALIGN="CENTER">

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<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8 Hanagar Street, Kfar
Sava, Israel 44000 </B><BR>
(Address of Principal
Executive Offices) </FONT></P>

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<HR SIZE="1" NOSHADE WIDTH="15%" ALIGN="CENTER">

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant files or will file annual reports under cover Form 20-F or Form 40-F. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form 20-F <FONT size="3" face="Wingdings">x</font>
&nbsp;&nbsp;&nbsp;&nbsp;Form
40-F  <FONT size="3" face="Wingdings">o
</font> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant by furnishing the information contained in <BR>this Form is also thereby
furnishing the information to the Commission pursuant to Rule <BR>12g3-2(b) under the Securities Exchange Act
of 1934. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Yes <FONT size="3" face="Wingdings">o
</font> No  <FONT size="3" face="Wingdings">x</font> </FONT></P>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><IMG SRC="logo.gif"></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Silicom
Ltd. (the &#147;<B>Registrant</B>&#148;) will hold its General and Extraordinary Meeting
of Shareholders on December 31, 2003 at 10:00 a.m. (Israel time) at the Registrant&#146;s
offices at 8 Hanagar Street, Kfar Sava 44000, Israel. In connection with the meeting, on
or about November 25, 2003, the Registrant mailed to shareholders a Notice of General and
Extraordinary Meeting and a Proxy Card. Attached hereto as Exhibits 1, 2 and 3 are, the
Notice of General and Extraordinary Meeting, Proxy Statement and Proxy Card, respectively. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Form 6-K is being incorporated by reference in all effective registration statements
filed by the Registrant under the Securities Act of 1933.  </FONT></P>



<p align=center>
<font size=2>2</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized. </FONT></P>



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<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>SILICOM LTD.</U><BR>(Registrant)<BR><BR>
<BR>BY: /S/  Ilan Erez<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Ilan Erez <BR>Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: December 01, 2003 </FONT></P>

<p align=center>
<font size=2>3</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit 1 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SILICOM LTD. <BR>
NOTICE OF GENERAL AND
EXTRAORDINARY <BR>
MEETING OF SHAREHOLDERS <BR>
DECEMBER 31, 2003 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
is hereby given that a General and Extraordinary Meeting of Shareholders of Silicom Ltd.
(the &#147;<B>Company</B>&#148;) will be held at the offices of the Company at 8 Hanagar
Street, Kfar Sava 44000, Israel, on December 31, 2003, at 10.00 a.m., Israel time, for the
following purposes: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To consider and act upon a resolution to ratify and approve the granting of
          options to Mr. Yeshayahu (&#145;Shaike&#146;) Orbach, a member of the Board of
          Directors, and President and Chief Executive Officer of the Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To consider and act upon a resolution to amend the Company&#146;s Articles of
          Association to reflect changes in the provisions authorizing the Company to
          indemnify and insure its officers and directors in compliance with the Companies
          Law &#150; 1999. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To consider and act upon a resolution to approve the Company&#146;s standard
          form of indemnification agreement for the directors and officers of the Company
          and to authorize and empower the Company to enter into such agreements with
          directors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To consider and act upon a resolution to ratify and approve the Indemnification
          Agreement entered into by the Company and Ms. Paulette Eitan, a former Outside
          Director of the Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To consider and act upon a resolution to ratify and approve the Company&#146;s
          Directors and Officers Insurance Policy, and any further extensions, renewals,
          extended discovery periods or increases to the policy, from time to time, as the
          Audit Committee and the Board of Directors deem necessary. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To appoint Somekh Chaikin, a member of KPMG Worldwide Organization, as the
          independent public accountants of the Company for the year ending December 31,
          2003 and for the year commencing January 1, 2004, and to further authorize the
          Board of Directors to fix the remuneration of such auditors based on the volume
          and nature of their services in accordance with Israeli law. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To receive management&#146;s report on the business of the Company for the year
          ended December 31, 2002. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders
of record at the close of business on November 20, 2003 will be entitled to notice of, and
to vote at the meeting or any postponements or adjournments thereof. Shareholders who do
not expect to attend the meeting in person are requested to mark, date, sign and mail the
enclosed proxy as promptly as possible in the enclosed stamped envelope. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders
are urged to complete and return their proxies promptly in order to, among other things,
insure action by a quorum and to avoid the expense of additional solicitation. If the
accompanying proxy is properly executed and returned, and a choice is specified, the
shares represented thereby will be voted as indicated thereon. If no specification is
made, the proxy will be voted in favor of each of the proposals described in the Proxy
Statement. In the event that proxies are sent directly to the Company, they must be
received at least 24 hours prior to the commencement of the meeting in order for the proxy
to be qualified to participate in the meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has filed its audited financial statements for the fiscal year ended December 31,
2002 through the SEC&#146;s EDGAR system. In addition, the Company will be filing a Form
6-K with the SEC on or around the date of distribution of this notice to its shareholders
which will be accompanied by (a) a Proxy Statement detailing the matters to be presented
for approval at the upcoming meeting of the shareholders and (b) a copy of the form of
Indemnification Agreement which is Appendix A to the Proxy Statement. You may request a
copy of any of the above referenced documents, free of charge, by contacting the offices
of the Company at 8 Hanagar Street, Kfar Sava 44000, Israel (telephone number:
972-9-764-4555, facsimile number: 972-9-765-1977), or through the SEC&#146;s EDGAR system
at http://www.sec.gov/edgar/searchedgar/webusers.htm by searching for such recent filings
of the Company. </FONT></P>

<p align=center>
<font size=2>- 1 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the accompanying proxy card, please find enclosed a copy of the Consolidated
Balance Sheet and Profit and Loss Statement of the Company for the year ending December
31, 2002. </FONT></P>

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<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR><BR><BR><BR><BR><BR><BR>November 23, 2003  </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By Order of the Board of Directors<BR><BR><B> SILICOM LTD.</B><BR><BR>
<BR>BY: /S/  Avi Eizenman<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
 Avi Eizenman<BR> Chairman of the Board of Directors</FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 2 -</font></p>
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<page>


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<H1 ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit 2 </FONT></H1>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>PROXY STATEMENT </FONT></H1>

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<HR SIZE="1" NOSHADE WIDTH="15%" ALIGN="CENTER">

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SILICOM LTD. </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>8 Hanagar St. </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Kfar Sava </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Israel </FONT></H1>

<HR SIZE="3" NOSHADE WIDTH="100%" ALIGN="CENTER">

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL AND
EXTRAORDINARY MEETING OF SHAREHOLDERS </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>December 31, 2003 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
enclosed proxy is being solicited by the board of directors (the &#147;<B>Board of
Directors</B>&#148;) of Silicom Ltd. (the &#147;<B>Company</B>&#148;) for use at the
Company&#146;s General and Extraordinary Meeting of Shareholders (the &#147;Meeting&#148;)
to be held on December 31, 2003, or at any adjournment thereof. Upon the receipt of a
properly executed proxy in the form enclosed, the persons named as proxies therein will
vote the ordinary shares, par value New Israeli Shekels (&#147;NIS&#148;) 0.01 each, of
the Company (the &#147;<B>Ordinary Shares</B>&#148;) covered thereby in accordance with
the directions of the shareholders executing the proxy. In the absence of such
instructions, the Ordinary Shares represented thereby will be voted in favor of each of
the resolutions described in this proxy statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Proxy solicited hereby may be revoked at any time prior to its exercise, by means of a
written notice delivered to the Company, by substitution of a new proxy bearing a later
date or by a request for the return of the proxy at the Meeting. The Company expects to
solicit proxies by mail on or about November 25, 2003. Directors, officers and employees
of the Company may also solicit proxies by telephone, facsimile and personal interview. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company will bear the cost of the preparation and mailing of its proxy materials and the
solicitation of proxies. Copies of solicitation materials will be furnished to brokerage
firms, nominees, fiduciaries and other custodians for forwarding to their principals, and
the reasonable fees and expenses of such forwarding agents will be borne upon the Company.
Only holders of record of Ordinary Shares at the close of business on November 20, 2003
are entitled to notice of, and to vote at, the Meeting (the &#147;<B>Record
Date</B>&#148;). At the Record Date 4,125,300 Ordinary Shares were outstanding and
entitled to vote. Each Ordinary Share is entitled to one vote on each matter to be voted
at the Meeting. The Company&#146;s Articles of Association do not permit cumulative voting
for the election of directors or for any other purpose. Two shareholders present,
personally or by proxy, representing 51% of the voting rights of the issued share capital
of the Company, personally or by proxy, shall constitute a quorum for the Meeting. If
within half an hour from the time the Meeting is convened a quorum is not present, the
Meeting shall stand adjourned until January 7, 2004 at 10:00 a.m. If a quorum is not
present at the second meeting within half an hour from the time appointed for the meeting,
subject to applicable law, any two or more shareholders present personally or by proxy
shall be deemed a quorum, and shall be entitled to deliberate and to resolve in respect of
the matters for which the meeting was convened. Abstentions and broker non-votes are
counted as Ordinary Shares present for the purpose of determining a quorum. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Resolutions
number, One (I), Four (IV) and Six (VI) proposed at the Meeting require the affirmative
vote of shareholders present in person or by proxy and holding Ordinary Shares amounting
in the aggregate to at least a majority of the votes actually cast with respect to such
resolutions. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Resolution
number Two (II) proposed at the Meeting requires the affirmative vote of shareholders
present in person or by proxy and holding Ordinary Shares amounting in the aggregate to at
least a special majority of seventy-five per cent (75%) of the votes actually cast with
respect to such resolution, provided that if the total number of Ordinary Shares voted
against such resolution by shareholders of the Company that do not have a &#147;personal
interest&#148; (as such term is defined below) (a &#147;<B>Personal Interest</B>&#148;) in
the resolution exceeds one per cent (1%) of the aggregate voting rights in the Company,
such majority must include the affirmative vote of at least one-third of the votes of
shareholders of the Company present in person or by proxy at the Meeting that do not have
a Personal Interest in the resolution. </FONT></P>

<p align=center>
<font size=2>- 1 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
this purpose, &#147;personal interest&#148; is defined as: (1) a shareholder&#146;s
personal interest in the approval of an act or a transaction of the Company, including (i)
the personal interest of any of his or her relatives (which includes for these purposes
any members of his/her immediate family or the spouse of any such members of his or her
immediate family); and (ii) a personal interest of a body corporate in which a shareholder
or any of his/her aforementioned relatives serve as a director or the chief executive
officer, owns at least 5% of its issued share capital or its voting rights or has the
right to appoint a director or chief executive officer, but (2) excludes a personal
interest arising solely from the fact of holding shares in the Company or in a body
corporate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Resolutions
number Three (III) and Five (V) proposed at the Meeting require the affirmative vote of
shareholders present in person or by proxy and holding Ordinary Shares amounting in the
aggregate to at least a majority of the votes actually cast with respect to such
resolution, provided that if the total number of Ordinary Shares voted against such
resolution by shareholders of the Company that do not have a Personal Interest in the
resolution exceeds one per cent (1%) of the aggregate voting rights in the Company, such
majority must include the affirmative vote of at least one-third of the votes of
shareholders of the Company present in person or by proxy at the Meeting that do not have
a Personal Interest in the resolution. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PRINCIPAL SHAREHOLDERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth, as of the Record Date, (i) certain information as to each
person known to the Company to be the beneficial owner of more than 5% of the Ordinary
Shares then outstanding and (ii) all directors and officers as a group: </FONT></P>





<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="680" ALIGN="CENTER">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name of Shareholder</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Shares Beneficially<BR>
Owned on<BR>
November 20, 2003<SUP>(1)</SUP></FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Percent of Shares</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="58%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Yehuda Zisapel</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="16%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>933,723</FONT></TD>
        <TD WIDTH="8%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(2)</SUP></FONT></TD>
     <TD WIDTH="11%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.63%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Avi Eizenman</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>318,315</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(3)</SUP></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.72%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Zohar Zisapel</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>860,906</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.87%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All directors and officers as a group (2 persons)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,476,938</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(4)</SUP></FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>35</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.80%</FONT></TD></TR>
</TABLE>


<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For
this purpose, &#147;beneficial ownership&#148; means voting or investment           power
with respect to Ordinary Shares or the right to acquire Ordinary Shares at           any
time within 60 days of the Record Date.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
total number of 933,723 shares, beneficially owned by Yehuda Zisapel,           include
options granted to him to purchase 95,000 Ordinary Shares pursuant to           the
Directors Share Incentive Plan (1994), which may be exercised at any time
          within 60 days of the Record Date.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
total number of 318,315 shares, beneficially owned by Avi Eizenman, include
          options granted to him to purchase 110,000 Ordinary Shares pursuant to the
          Directors Share Incentive Plan (1994), which may be exercised at any time
within           60 days of the Record Date. In addition, 200,000 of such Ordinary Shares
are           held by a trustee for the benefit of Mr. Eizenman&#146;s descendants and
others.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
directors and officers as a group beneficially own options granted to them
          pursuant to the Directors Share Incentive Plan (1994) and the Share Option Plan
          (1993) to purchase an aggregate amount equal to 429,900 Ordinary Shares.  </FONT></TD>
</TR>
</TABLE>
<BR>
<p align=center>
<font size=2>- 2 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL I </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>APPROVAL OF A GRANT OF
OPTIONS TO A </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>MEMBER OF THE BOARD OF DIRECTORS
OF THE COMPANY </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the Companies Law &#150; 1999 (the &#147;<B>Companies Law</B>&#148;), the terms of
compensation of members of the Board of Directors require approval by each of the Audit
Committee, Board of Directors and shareholders of the Company, in such order. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 3, 2002, following the approval by our Audit Committee, the Board of Directors
resolved to grant Mr. Orbach, a director of the Company, options to purchase 60,000
Ordinary Shares of the company at an exercise price of $0.55 per share pursuant to the
Share Option Plan (1993). Half of the options are exercisable one year from the date of
the grant and the remaining half are exercisable two-years from the date of grant. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shareholders of the Company are requested to adopt the following resolution: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RESOLVED,
that pursuant to the ratification of the Company&#146;s Audit Committee and Board of
Directors, the grant to Mr. Orbach of options to purchase 60,000 Ordinary Shares of the
Company at an exercise price of $0.55 per share, is hereby ratified and approved.</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratification
and approval of the option grant to Mr. Orbach by the shareholders requires the
affirmative vote of a majority of the Ordinary Shares represented at the Meeting. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL II </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AMENDMENT TO THE
COMPANY&#146;S ARTICLES OF ASSOCIATION </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to reflect changes in the Companies Law regarding the indemnification and insurance
of the Company&#146;s officers and directors, the Company believes it is necessary to
amend its Articles of Association. These changes, as reflected in the text proposed below,
broaden the instances in which companies can indemnify and insure their officers and
directors. In particular, under the Companies Law, a company may indemnify an officer or
director retrospectively, or provide a prior undertaking to indemnify an officer or
director. The Company proposes that Article 122 of its Articles of Association be replaced
in its entirety with the new article set forth in the following resolution. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shareholders of the Company are requested to adopt the following resolution: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RESOLVED
that Article 122 of the Company&#146;s Articles of Association be replaced in its entirety
with the following new article:</B> </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=2.5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=7%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&#147;122.</B> </FONT></TD>
<TD WIDTH=90.5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Exemption,
Indemnity and Insurance</U></B> </FONT></TD>
</TR>
</TABLE>
<BR>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Subject to the provisions of the Companies Law &#150; 1999 as amended from time
          to time, and any regulations promulgated thereunder (the &#147;<B>Companies
          Law</B>&#148;), the Company may resolve in advance to exempt an Office Holder,
          as defined in the Companies Law, from all or any of his or her liability for
          damage in consequence of a breach of the duty of care vis-&agrave;-vis the
          Company. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Subject to the provisions of the Companies Law, the Company may enter into a
          contract to insure the liability of an Office Holder therein for an obligation
          imposed upon him or her in consequence of an act done in his or her capacity as
          an Office Holder therein, in any of the following cases: </FONT></P>

<p align=center>
<font size=2>- 3 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a
breach of the duty of care vis-&agrave;-vis the Company or vis-&agrave;-vis
          another person;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a
breach of the fiduciary duty vis-&agrave;-vis the Company, provided that the
               Office Holder acted in good faith and had reasonable basis to believe that
the                act would not harm the Company;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a
monetary obligation imposed on him or her in favor of another person;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any
other incident for which it is or shall be permitted to insure the liability
               of an Office Holder.  </FONT></TD>
</TR>
</TABLE>
<BR>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Subject to the provisions of the Companies Law: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the
Company may undertake in advance to indemnify an Office Holder for an
               obligation or expense as specified in article (d) below, imposed on him or
her                in consequence of an act done in his or her capacity as an Office
Holder,                including in consequence of an act done in his or her capacity as
an officer of                another company in the event such office is held on the
Company&#146;s behalf or                on its request, provided that the undertaking is
limited to types of events                which in the Directors&#146; opinion may be
foreseen at the time of giving the                indemnity undertaking, and to an amount
which the Directors have determined is                reasonable in the circumstances of
the case (hereinafter: an<B></B>&#147;<B>Indemnification Undertaking</B>&#148;);  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>without
derogating from the provisions of article (1) above, the Company may
               indemnify an Office Holder therein retroactively, for an obligation or
expense                as specified in article (d) below, imposed on him or her in
consequence of an                act done in his or her capacity as an Office Holder in
the Company.  </FONT></TD>
</TR>
</TABLE>
<BR>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Indemnification Undertaking or indemnity, as mentioned in article (c) above,
          may be given for an obligation or expense as specified in sub-articles (d)(1) to
          (d)(3) below, imposed on the Office Holder in consequence of an act done in his
          or her capacity as an Office Holder in the Company, as follows: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a
monetary obligation imposed on him or her in favor of another person pursuant
               to a judgment, including a judgment given in settlement or a court
approved                arbitrator&#146;s award;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>reasonable
litigation expenses, including attorneys professional fees, incurred                by
the Office Holder or which he or she is ordered to pay by a court in
               proceedings filed against him or her by the Company or on its behalf or by
               another person, or in a criminal indictment of which he or she is
acquitted, or                in a criminal indictment in which he or she is convicted of
an offence not                requiring proof of criminal intent;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any
other obligation or expense for which it is or shall be permitted to
               indemnify an Office Holder.&#148; </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
ratification and approval of the resolution approving the amendment of the Company&#146;s
Articles of Association requires the affirmative vote of shareholders present in person or
by proxy and holding Ordinary Shares amounting in the aggregate to at least a special
majority of seventy-five per cent (75%) of the votes actually cast with respect to such
resolution, provided that if the total number of Ordinary Shares voted against such
resolution by shareholders of the Company that do not have a Personal Interest in the
resolution exceeds one per cent (1%) of the aggregate voting rights in the Company, such
majority must include the affirmative vote of at least one-third of the votes of
shareholders of the Company present in person or by proxy at the Meeting that do not have
a Personal Interest in the resolution. </FONT></P>

<p align=center>
<font size=2>- 4 -</font></p>
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<page>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL III </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM OF
INDEMNIFICATION AGREEMENT FOR DIRECTORS AND OFFICERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the Audit Committee and the Board of Directors has approved the basic form of
agreement, attached hereto as Appendix A (the &#147;<B>Indemnification
Agreement(s)</B>&#148;) for the indemnification of the officers and directors of the
Company and their exemption from the duty of care, to the maximum extent permitted by law
and the Company&#146;s Articles of Association which among other terms, provides
indemnification to the directors and officers of the Company for up to $3 million (in
addition to any amounts paid out under an insurance policy) with respect to specified
events in each case of indemnification. In addition, each of the Audit Committee and the
Board of Directors has authorized and empowered the Company to enter into Indemnification
Agreements to that effect. The shareholders of the Company are now being asked to approve
the entering into of such Indemnification Agreements with Tsipi Kagan, a former Outside
Director of the Company, Zohar Gilon, a former Outside Directors of the Company, its
current directors and with its future directors who, upon their election to the Board of
Directors, will automatically be entitled to indemnification from the Company under the
Indemnification Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shareholders of the Company are requested to adopt the following resolution: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RESOLVED
to authorize and empower the Company to enter into the Indemnification Agreements </B><B>(Appendix
A to the Proxy Statement) for the indemnification of Tsipi Kagan, a former Outside
Director of </B><B>the Company, Zohar Gilon, a former Outside Director of the Company,
its current directors and with its </B><B>future directors who, upon their election to
the Board of Directors, will automatically be entitled to </B><B>indemnification from the
Company under the Indemnification Agreement, and their exemption from the duty of </B><B>care,
to the maximum extent permitted by law and the Company&#146;s Articles of Association,
which among other </B><B>terms, provides indemnification to the directors and officers of
the Company for up to $3 million (in </B><B>addition to any amounts paid out under an
insurance policy) with respect to specified events in each case </B><B>of indemnification.</B> </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
ratification and approval empowering the Company to enter into the Indemnification
Agreements with its directors requires the affirmative vote of shareholders present in
person or by proxy and holding Ordinary Shares amounting in the aggregate to at least a
majority of the votes actually cast with respect to such resolution, provided that if the
total number of Ordinary Shares voted against such resolution by shareholders of the
Company that do not have a Personal Interest in the resolution exceeds one per cent (1%)
of the aggregate voting rights in the Company, such majority must include the affirmative
vote of at least one-third of the votes of shareholders of the Company present in person
or by proxy at the Meeting that do not have a Personal Interest in the resolution. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL IV </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INDEMNIFICATION
AGREEMENT WITH FORMER OUTSIDE DIRECTOR </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the Audit Committee and the Board of Directors approved that, subject to approval of
the Company&#146;s shareholders, the Company may enter into an Indemnification Agreement
with its directors which included Ms. Paulette Eitan, a former Outside Director of the
Company, which among other terms, provides indemnification to Ms. Eitan for up to $2
million (in addition to any amounts paid out under an insurance policy) with respect to
specified events in each case of indemnification. Ms. Eitan resigned from her position as
the Company&#146;s Outside Director on November 5, 2002. The Company&#146;s shareholders
are requested to consider and ratify the Indemnification Agreement with Ms. Eitan which
will provide her with the indemnification and exemption provisions detailed therein for
the period of her service to the Company as an Outside Director. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shareholders of the Company are requested to adopt the following resolution: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RESOLVED
to authorize and empower the Company to enter into the Indemnification Agreement for the
indemnification of Ms. Paulette Eitan, a former Outside Director of the Company, and her
exemption from the duty of care, to the maximum extent permitted by law and the
Company&#146;s Articles of Association, which among other terms, provides her with
indemnification for the period of her term as an Outside Director of the Company for up to
$2 million (in addition to any amounts paid out under an insurance policy) with respect to
specified events in each case of indemnification.</B> </FONT></P>

<p align=center>
<font size=2>- 5 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratification
and approval empowering the Company to enter into the Indemnification Agreement with Ms.
Paulette Eitan requires the affirmative vote of a majority of the Ordinary Shares
represented at the Meeting. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL V </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPANY&#146;S
DIRECTORS AND OFFICERS INSURANCE POLICY </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Articles of Association provide that the Company may procure insurance for
its officers and directors, provided that the Audit Committee approves the procurement of
such insurance. In order to induce individuals to serve as directors and officers of the
Company, it is critical that the Company maintain adequate directors and officers
insurance. Therefore, the Company believes it is necessary to procure insurance for its
directors and officers. The Company&#146;s current Directors and Officers Insurance policy
was in effect between May 1, 2000 and April 30, 2003 (the &#147;<B>D&amp;O Insurance</B>
<B>Policy</B>&#148;) and an extended discovery period of twelve (12) months was procured
by the Company, pursuant to the approval and ratification of the Company&#146;s Audit
Committee and its Board of Directors, and will continue to remain in effect until April
30, 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shareholders of the Company are requested to adopt the following resolution: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RESOLVED
to approve and ratify the procurement of the Company&#146;s D&amp;O Insurance Policy
including the extended twelve (12) month discovery period and any further extensions,
renewals, extended discovery periods or increases to the policy, from time to time, as the
Company&#146;s Board of Directors deem necessary.</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
affirmative vote of the holders of a majority of the voting power of the Company
represented at the Meeting in person or by proxy and voting thereon is necessary for
approval and ratification of the resolution approving the procurement of the
Company&#146;s D&amp;O Insurance Policy provided that if the total number of Ordinary
Shares voted against such resolution by shareholders of the Company that do not have a
Personal Interest in the resolution exceeds one per cent (1%) of the aggregate voting
rights in the Company, such majority must include the affirmative vote of at least
one-third of the votes of shareholders of the Company present in person or by proxy at the
Meeting that do not have a Personal Interest in the resolution. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL VI </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>APPOINTING INDEPENDENT
PUBLIC ACCOUNTANTS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has selected the accounting firm of Somekh Chaikin, a member of KPMG
Worldwide Organization, as the independent certified public accountants of the Company for
the year ending December 31, 2003. The Company&#146;s management believes that the
selection of Somekh Chaikin, as independent accountants, is appropriate and in the best
interests of the Company and its shareholders. Somekh Chaikin performed the Company&#146;s
yearly audit for the fiscal years ended December 31, 2000, 2001 and 2002. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shareholders of the Company are requested to adopt the following resolution: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>RESOLVED,
to ratify the appointment of Somekh Chaikin as the independent public accountants of the
Company for the year ending December 31, 2003 and for the year commencing January 1, 2004,
and to authorize the Board of Directors to fix the remuneration of such auditors in
accordance with the volume and nature of their services.</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
appointment of Somekh Chaikin requires the affirmative vote of a majority of the Ordinary
Shares represented at the Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The
Board of Directors unanimously recommends that the shareholders vote &#147;FOR&#148; the
appointment of Somekh Chaikin as the independent public accountants of the
Company .</I></B> </FONT></P>

<p align=center>
<font size=2>- 6 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REVIEW OF THE
COMPANY&#146;S BALANCE SHEET AS OF DECEMBER 31, 2002 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AND THE CONSOLIDATED
STATEMENT OF INCOME FOR THE YEAR THEN ENDED </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, shareholders will have an opportunity to review, ask questions and comment on
the Company&#146;s Consolidated Balance Sheet as of December 31, 2002 and the Consolidated
Statement of Income for the year then ended. You may request a copy of the Company&#146;s
audited financial statements for the fiscal year ended December 31, 2002. </FONT></P>

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<HR SIZE="1" NOSHADE WIDTH="15%" ALIGN="CENTER">

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
is not aware of any other matters to be presented at the Meeting. If, however, any other
matters should properly come before the Meeting or any adjournment thereof, the proxy
confers discretionary authority with respect to acting thereon, and the persons named in
the enclosed proxy will vote on such matters in accordance with their best judgment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Your
vote is important!</B> Shareholders are urged to complete and return their proxies
promptly in order to, among other things, ensure action by a quorum and to avoid the
expense of additional solicitation. If the proxy card sent to shareholders is properly
executed and returned in time for voting, and a choice is specified, the shares
represented thereby will be voted as indicated thereon. If no specification is made, the
proxy will be voted in favor of each of the proposals described in this Proxy Statement. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ADDITIONAL INFORMATION </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the &#147;<B>Exchange Act</B>&#148;), as applicable to foreign private issuers.
Accordingly, we file reports and other information with the SEC. Shareholders may read and
copy any document we file at the SEC&#146;s public reference rooms at 450 Fifth Street,
N.W., Washington, D.C. 20549. Shareholders can call the SEC at 1-800-SEC-0330 for further
information on using the public reference room. In addition, similar information
concerning us can be inspected and copied at the offices of the National Association of
Securities Dealers, Inc., 9513 Key West Avenue, Rockville, Maryland 20850 USA. All
documents which we will file on the SEC&#146;s EDGAR system will be available for
retrieval on the SEC&#146;s website at <I>www.sec.gov</I>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing
certain disclosure and procedural requirements for proxy solicitations. Also, our
officers, directors and principal shareholders are exempt from the reporting and
&#147;short-swing&#148; profit recovery provisions contained in Section 16 of the Exchange
Act and the rules thereunder, with respect to their purchases and sales of securities. In
addition, we are not required under the Exchange Act to file periodic reports and
financial statements with the SEC as frequently or as promptly as United States companies
whose securities are registered under the Exchange Act. </FONT></P>


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<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By Order of the Board of Directors<BR><BR><B>SILICOM LTD</B>.<BR><BR>
<BR>BY: /S/  Avi Eizenman<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
 Avi Eizenman<BR> CHAIRMAN OF THE BOARD OF DIRECTORS</FONT></TD>
</TR>
</TABLE>
<BR>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Kfar Sava, Israel
<BR>Date: November 23, 2003 </FONT></P>

<p align=center>
<font size=2>- 7 -</font></p>
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<page>
<P align=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>
APPENDIX A</b></FONT></P>

<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To:____________________________</FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Indemnification
Agreement </U></FONT></H1>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Whereas  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>It
is in the best interest of Silicom Ltd. (the <B>&#147;Company&#148;</B>) to retain and
attract the most capable and talented persons as Officers (<B>&#147;Officers&#148;) </B>as
defined in the Israel Companies Law &#150; 1999 (the &#147;Law&#148;); and,  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Whereas  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company believes that in order to engage with such persons it must provide them with
adequate protection through insurance, exemption and indemnification in connection with
their service; and,  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Whereas  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You
are or have been appointed an Officer of the Company, and in order to ensure your
continuing service with the Company in the most effective manner, the Company desires to
provide for your exemption and indemnification, to the fullest extent permitted by law
and subject to the terms hereof; and,  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Whereas  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
shareholders of the Company intend to amend the Company&#146;s Articles of Association (&#147;Articles&#148;)
to provide for the indemnification of Officers to the fullest extent provided for under
the Law  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Whereas  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
effectiveness of this agreement shall be subject to the adoption of the Articles by the
Company as well as the necessary corporate approvals required under the Law.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOW THEREFORE, THE PARTIES AGREE AS
FOLLOWS: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1. </B> </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Exemption</U></B>  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.1 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject
only to mandatory provisions of applicable law to the contrary, the Company hereby
exempts you from your liability to any and all damage caused or to be caused to the
Company as a result of a breach of your duty of care towards the Company.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         1.2  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
exemption shall not be valid with respect to any of the following: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.2.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any
liability, with respect to which you are entitled to receive payment under an insurance
policy, other than amounts which are in excess of the payment you are entitled to receive
as aforesaid;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.2.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any
liability, with respect to which you are entitled to receive indemnification hereunder.  </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Indemnification</U></B>  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject
only to mandatory provisions of applicable law to the contrary, the Company shall
indemnify you for any obligation or expense specified in Sections 2.1.1 and 2.1.2 below,
imposed on you in consequence of an act you performed in your capacity as Officer of the
Company (<B>&#147;Indemnifiable Liabilities&#148;</B>), provided that the Company&#146;s
undertaking hereunder shall be limited to the types of events and the amount specified in
<B>Appendix &#147;A&#148;</B> hereto.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any
monetary obligation imposed on you in favor of another person by a judgment, including a
judgment given in settlement or an arbitrator&#146;s award that has been approved by a
court; and  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>all
reasonable litigation expenses, including advocates&#146; professional fees, incurred by
you or which you were ordered to pay by a court, in a proceeding filed against you by the
Company or on its behalf or by another person, or in any criminal indictment in which you
are acquitted, or in any criminal indictment in which you were convicted of an offence
which does not require proof of <I>mens rea </I> (criminal intent).  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
above shall also apply to any obligation or expense specified in Sections 2.1.1 and 2.1.2
above imposed on you in consequence of your service as Officer of a subsidiary of the
Company (as defined in the Securities Law &#151; 1968) (&#147;<B>Subsidiary</B>&#148;) or
in consequence of your service as Officer in an affiliated company (&#147;Chevra Mesunefet&#148;)
(as defined in the Securities Law &#151; 1968) (&#147;<B>Affiliate</B>&#148;). Regarding
Section 2.1.2 above the Company will make available to you any security or guarantee that
you may be required to post in accordance with an interim decision given by a court or an
arbitrator, including for the purpose of substituting liens imposed on your assets.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company will not indemnify you for any Indemnifiable Liabilities with respect to which
you are entitled to payment under an insurance policy or another indemnification
agreement, other than amounts which are in excess of the amounts you are entitled to
receive as aforesaid. Notwithstanding the above, the Company agrees to advance you any
amount which you would be entitled to receive as payment under an insurance policy with
respect to Indemnifiable Liabilities and you will thereafter be obligated to assign
and/or reimburse the Company for any payment actually received by you directly or by the
Company under such insurance policy with respect to such Indemnifiable Liabilities.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If
legal proceedings that may give rise to Indemnifiable Liabilities are initiated against
you (&#147;<B>Legal Proceedings</B>&#148;), the Company will make available to you, from
time to time, the funds required to cover all expenses and other payments in connection
with the Legal Proceedings, so that you will not be required to pay them.  </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.4  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If
the Company pays to you or on your behalf any amount in accordance herewith, and it is
thereafter established that you were not entitled to indemnification from the Company
with respect to such amount, you will pay such amount to the Company upon the Company&#146;s
first request, and in accordance with the payment terms the Company determines.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company will not indemnify you for any amount you may be obligated to pay in respect of:  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A
breach of your duty of loyalty, except, to the extent permitted by law, for a breach of a
duty of loyalty to the Company, a Subsidiary or an Affiliate while acting in good faith
and having reasonable cause to assume that such act would not prejudice the interests of
the Company;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         3.2  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A
willful breach of the duty of care or reckless  disregard for the  circumstances  or to
the                   consequences of a breach of the duty of care; </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 3.3 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An action
taken or not taken with the intent of unlawfully realizing personal gain or in the event
of an intentional conflict of interest;  </FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         3.4  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A
fine or penalty imposed upon you for an offense; and </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.5  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A
counterclaim made by the Company or in its name in connection with a claim against the
Company filed by you.  </FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Notices
and Defense Against Suits</U></B>  </FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You
shall notify the Company of any Legal Proceedings and of all possible or threatened Legal
Proceedings as soon as you become aware thereof, and deliver to the Company, or to such
person as it shall direct you, without delay, all documents you receive in connection
with such proceedings.  </FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.2  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company shall be entitled to assume your defense in respect of all Legal Proceedings and
to use any attorney which the Company may choose for that purpose (except an attorney who
is reasonably unacceptable to you).  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.3  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You
will fully cooperate with the Company and/or its attorney in every reasonable way as may
be required, including, but not limited to, the execution of power(s) of attorney and
other documents, provided that the Company shall cover all costs incidental thereto so
that you will not be required to pay the same or to finance the same yourself.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.4  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If
the Company has notified you that it shall assume your defense with respect to a Legal
Proceeding, it shall not indemnify you for expenses you incur in connection with such
proceeding.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.5  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company shall have the right to settle or to turn to arbitration with respect to Legal
Proceedings.  </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
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<page>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.6  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notwithstanding
the aforesaid, the Company shall not have the right to settle without your consent, not
to be unreasonably withheld, unless the settlement in question is without admission of
any responsibility or liability on your part and provides for a complete waiver of all
respective claims against you.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.7  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company will have no liability or obligation to indemnify you in the case of a settlement
or initiation of arbitration proceedings by yourself, without the Company&#146;s prior
written consent, which consent shall not be unreasonably withheld.  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.8  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For
the removal of doubt, the Company&#146;s obligations hereunder shall not derogate from
the Company&#146;s ability to indemnify you retroactively for any payment or expense as
provided in Sections 2.1.1 and 2.1.2 above, without limitation to the types of events and
the amount specified in Appendix &#147;A&#148;.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.9  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For
the removal of doubt, in the case of criminal proceedings the Company and/or the
attorneys as aforesaid will not have the right to plead guilty in your name or to agree
to a plea-bargain in your name without your consent. Furthermore, in a civil proceeding
(whether before a court or as a part of a compromise arrangement), the Company and/or its
attorneys will not have the right to admit to any occurrences that are not indemnifiable
pursuant to this agreement and/or pursuant to law, without your consent. However, the
aforesaid will not prevent the Company and/or its attorneys as aforesaid, with the
approval of the Company, to come to a financial arrangement with a plaintiff in a civil
proceeding without your consent so long as such arrangement will not be an admittance of
an occurrence not indemnifiable pursuant to this agreement and/or pursuant to law and
provided however, that such financial arrangement does not deviate from the conditions
precedent in this agreement.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>Validity</U></B>  </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.1  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company&#146;s obligations hereunder (including all annexes attached hereto) will
continue after termination of your office/employment, provided that the cause of action
of the Legal Proceedings, which led to Indemnifiable Liabilities, is based on your being
or having been a Director or an Officer of the Company, and/or on your action or omission
to act during your office/employment.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.2  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company&#146;s obligations hereunder shall also apply to Indemnifiable Liabilities
related to Legal Proceedings the cause of action of which is based on your action or
omission to act prior to execution hereof.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.3  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This
agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Israel, without application of the conflict of laws principles thereof.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.4  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gender
Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun
where appropriate.  </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         5.5  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This
agreement cancels any preceding letter of  indemnification  that may have been issued to
                  you. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.6  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
headings of the paragraphs of this agreement are inserted for convenience only and shall
not be deemed to constitute part of this agreement or to affect the construction thereof.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.7  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This
agreement is subject to an amendment of the Company&#146;s current Articles of
Association such that the section entitled &#147;Indemnity and Insurance&#148; will be
replaced and amended by new provisions which allow for the maximum indemnification and
insurance permitted under the Law. Following the adoption of the Articles, the Company
will require the approval of the audit committee, the board of directors and the
shareholders in connection with the execution of this agreement. This agreement shall in
no way be binding on the Company prior to the receipt of all necessary corporate
approvals required under the Law.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IN
WITNESS WHEREOF the parties have signed this Indemnification Agreement in one or more
counterparts on _______, 2002. </FONT></P>



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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Silicom Ltd.<BR><BR>
<BR>By:<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
 <BR> Title:</FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Accepted and agreed on__________: </FONT></P>




<TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="200">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">________________________</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Name:</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
</TABLE>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>APPENDIX &#147;A&#148; </FONT></H1>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company&#146;s obligation to indemnify you is limited to the following:  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
in connection with anything performed by the Company, its Subsidiaries           and/or
Affiliates&#146; affairs, in the ordinary course of business.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Matters
connected with investments of the Company and/or Subsidiaries and/or           Affiliates
thereof in other entities, including transactions entered and actions           taken by
you in the name of the Company and/or a Subsidiary and/or an Affiliate           thereof
as an Officer thereof, whether before or after the investment is made;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
in connection with the merger, proposed merger, spin off or a corporate
          restructuring of the Company, a Subsidiary and/or an Affiliate thereof;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>d.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without
derogating from the generality of the above, actions in connection with           the
purchase or sale of companies, legal entities or assets, and the division or
          consolidation thereof;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>e.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken in connection with labor relations and/or employment matters in
                    the Company, Subsidiaries and/or Affiliates thereof (including
compensation for                     officials and employees of the Company).  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>f.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken in connection with corporate and business relations of the
                    Company, Subsidiaries and/or Affiliates thereof, including with
shareholders,                     officers, strategic partners, associates, customers,
suppliers, independent                     contractors, and various service providers;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>g.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken pursuant to or in accordance with the policies and procedures of           the
Company, Subsidiaries and/or Affiliates thereof, whether such policies and
          procedures are published or not.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>h.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken pursuant to or in accordance with decisions of the board of           directors or
general meeting of the Company, or of its Subsidiaries or           Affiliates.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>i.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken in connection with the issuance of any type of securities of           Company, or
of its Subsidiaries or Affiliates, including, without limitation,           the grant of
options to purchase any of the same, or any other actions taken in           connection
with the Company&#146;s capital raising efforts.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>j.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
offering of securities by the Company and/or by a shareholder to the public
          and/or to private investors or the offer by the Company to purchase securities
          from the public and/or from private investors or other holders pursuant to a
          prospectus, agreements, notices, reports, tenders and/or other proceedings.  </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>k.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Occurrences
resulting from the Company&#146;s status as a public company, and/or           from the
fact that the Company&#146;s securities were offered to the public           and/or are
traded on a stock exchange, whether in Israel or abroad;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>l.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken in connection with the public relation and/or investor relation           efforts
of the Company, or of its Subsidiaries or Affiliates.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>m.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
in connection with the testing of products developed by the Company,
          Subsidiaries and/or Affiliates, actions in connection with product liability as
          they relate to products developed by the Company, Subsidiaries and/or
Affiliates           or actions in connection with the distribution, sale, license or use
of such           products;  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>n.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actions
taken in connection with the intellectual property of the Company,           Subsidiaries
and/or Affiliates, and its protection, including the registration           or assertion
of rights to intellectual property and the defense of claims           related to
intellectual property including but not limited to any infringement           by the
Company, Subsidiaries and/or Affiliates on the intellectual property of a           third
party;  </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The total amount of indemnification
for each case (including all matters connected therewith), shall not exceed US$ 3,000,000
(in addition to any amounts paid under an insurance coverage). </FONT></P>


<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit 3 </FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SILICOM LTD. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<H1 ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General and
Extraordinary Meeting of Shareholders to be held on December 31, 2003 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS PROXY IS SOLICITED
ON BEHALF OF MANAGEMENT </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned shareholder of Silicom Ltd. (the &#147;<B>Company</B>&#148;) hereby appoints
Ilan Erez, the true and lawful attorney, agent and proxy of the undersigned, to vote, as
designated below, all of the Ordinary Shares of the Company which the undersigned is
entitled in any capacity to vote at the General and Extraordinary Meeting of Shareholders
of the Company, to be held at the corporate offices of the Company at 8 Hanagar Street,
Kfar Sava 44000, Israel on December 31, 2003, at 10:00 a.m., (local time), and all
adjournments and postponements thereof.  </FONT></P>



<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(CONTINUED AND TO BE
SIGNED ON REVERSE SIDE) </FONT></P>



<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>







<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS PROXY WHEN
PROPERLY EXECUTED WILL BE VOTED AS DIRECTED HEREIN. <BR>IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED &#147;FOR&#148; THE PROPOSALS HEREIN. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please mark your vote
as in this example <FONT size="3" face="Wingdings">x</font> </FONT></H1>




<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" border=0>
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif"></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif"></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif"></FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">YES</FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">NO</FONT></TH></TR>
<TR VALIGN="TOP">
     <TD ROWSPAN="3" WIDTH="23%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS NOTICE IS VERY     <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IMPORTANT!         <BR>
PLEASE   READ  THE   DEFINITION<BR>
BELOW   PRIOR  TO  FILLING  OUT<BR>
THIS SECTION                   </B>
</FONT></TD>
     <TD ROWSPAN="3" WIDTH="42%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">Please  indicate  whether or not you have a <B><U>PERSONAL  INTERES</U>T</B> (as<BR>
defined  below) in each of the  following  proposals by marking an "X" in <BR>
the  appropriate  box  (YES/NO).  <B>If an X is not  marked in either<BR>
  column,  your vote in respect of those  proposals  will be <BR>
<U>disqualified</U>.</B>
</FONT></TD>
     <TD WIDTH="15%" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><B>PROPOSAL NO. 2</B></FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><B>PROPOSAL NO. 3</B></FONT></TD>
     <TD ALIGN="CENTER" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"><B>PROPOSAL NO. 5</B></FONT></TD>
     <TD ALIGN="CENTER" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER" VALIGN="Bottom"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR>
      <TD COLSPAN="5"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;<BR>&nbsp;<BR>Under the Israeli Companies Law &#150; 1999, a &#147;<B><U>personal
interest</U></B><U></U>&#148; is defined as: (1) a shareholder&#146;s personal interest in
the approval of an act or a transaction of the Company, including (i) the personal
interest of his or her relative (which includes for these purposes any members of his/her
immediate family or the spouses of any such members of his or her immediate family); and
(ii) a personal interest of a body corporate in which a shareholder or any of his/her
aforementioned relatives serve as a director or the chief executive officer, owns at least
5% of its issued share capital or its voting rights or has the right to appoint a director
or chief executive officer, but (2) excludes a personal interest arising solely from the
fact of holding shares in the Company or in a body corporate.  </FONT></TD>
</TR>
</TABLE>


<BR>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">FOR</FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">AGAINST</FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">ABSTAIN</FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="70%"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PROPOSAL NO. 1:</B> APPROVAL OF A GRANT OF OPTIONS TO A DIRECTOR/OFFICER OF THE COMPANY
</FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PROPOSAL NO. 2:</B> AMENDMENT TO THE COMPANY'S ARTICLES OF ASSOCIATION
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PROPOSAL NO. 3:</B> APPROVAL OF FORM OF DIRECTOR AND OFFICER INDEMNIFICATION
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PROPOSAL NO. 4:</B> APPROVAL OF INDEMNIFICATION AGREEMENT WITH FORMER OUTSIDE DIRECTOR
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PROPOSAL NO. 5:</B> APPROVAL OF COMPANY'S D&amp;O  INSURANCE POLICY AND DISCOVERY PERIOD
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PROPOSAL NO. 6:</B> APPOINTING INDEPENDENT PUBLIC ACCOUNTANTS
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"> <FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR>
      <TD COLSPAN="4"> <HR SIZE=1 NOSHADE WIDTH=100% ALIGN=LEFT> </TD>
</TR><TR>
      <TD COLSPAN="4"><FONT FACE="Times New Roman, Times, Serif" SIZE="1">&nbsp;<BR>The undersigned hereby acknowledges receipt of the Notice of the General and Extraordinary
Meeting, revokes any proxy or proxies heretofore given to , 2003 vote upon or act with
respect to the undersigned&#146;s shares and hereby ratifies and confirms all that the
proxies, their substitutes, or any of them, may lawfully do by virtue hereof. </FONT></TD>
</TR>
</TABLE>

<BR>

<!-- MARKER FORMAT-SHEET="Signature (Single)" FSL="Workstation" -->
<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH="33%" ALIGN="CENTER">
<HR SIZE="1" NOSHADE WIDTH="80%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
 (NAME OF SHAREHOLDER)<BR> </FONT></TD>
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<HR SIZE="1" NOSHADE WIDTH="80%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
 (SIGNATURE OF SHAREHOLDER)<BR> </FONT></TD>
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<HR SIZE="1" NOSHADE WIDTH="80%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>
 (DATE)<BR> </FONT></TD>
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