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<SEC-DOCUMENT>0001178913-08-000381.txt : 20080211
<SEC-HEADER>0001178913-08-000381.hdr.sgml : 20080211
<ACCEPTANCE-DATETIME>20080211122358
ACCESSION NUMBER:		0001178913-08-000381
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		6
FILED AS OF DATE:		20080211
DATE AS OF CHANGE:		20080211
EFFECTIVENESS DATE:		20080211

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:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-149144
		FILM NUMBER:		08591979

	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>S-8
<SEQUENCE>1
<FILENAME>zk84828.htm
<TEXT>
<HTML>
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     <!-- Project:        \\Backup\office\EDGAR Filing\Silicom Ltd\84828\a84828.eep        -->
     <!-- Control Number: 84828                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   S-8                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>S-8</TITLE>
</HEAD>
<BODY>

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<P Align=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><B>SECURITIES AND EXCHANGE
COMMISSION</B> </FONT><Br>
<Font Face="Times New Roman, Times, Serif" Size=2>WASHINGTON, D.C. 20549 </font></p>

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<P Align=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><B>FORM S-8</B> </FONT> </p>

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<P Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>REGISTRATION STATEMENT </font><Br>
<Font Face="Times New Roman, Times, Serif" Size=2>UNDER </font><Br>
<Font Face="Times New Roman, Times, Serif" Size=2>THE SECURITIES ACT OF 1933 </font></p>

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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>(Exact Name of Registrant as Specified in Its Charter) </font></p>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Israel
<Br>(State or Other Jurisdiction of Incorporation or Organization)
<Br>
<Br>Not Applicable
<Br>(I.R.S. Employer Identification No.)
<Br>
<Br>8 Hanagar St., P.O.Box 2164
<Br>Kfar-Sava 44425, Israel.
<Br>(Address of Principal Executive Offices)
<Br>
<Br>U.S. Share Option Plan (2000)
<Br>Share Option Plan (2004)
<Br>(Full Title of Plans)
<Br>
<Br>Silicom Connectivity Solutions, Inc.
<Br>6 Forest Avenue Paramus
<Br>New Jersey, USA, 07652
<Br>Tel: 201-843-1175
<Br>Facsimile: 201-843-1457
<Br>(Name, address and telephone number of agent for service)
<Br>
<Br>Copies of all Correspondence to:
<Br>
<Br><B>DAVID H. SCHAPIRO, ESQ.
</B><Br>Yigal Arnon &amp; Co.
<Br>1 Azrieli Center
<Br>Tel Aviv, 67021 Israel
<Br>Tel: 972-3-608-7856 </FONT>
</P>

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


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CALCULATION OF REGISTRATION FEE</FONT></P>







<Table Cellpadding="0" Cellspacing="0" Width="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, serif" SIZE=1>Title of Securities to be<BR>
Registered</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, serif" SIZE=1>Amount to be<BR>
Registered (1)</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, serif" SIZE=1>Proposed<BR>
Maximum<BR>
Offering Price<BR>
Per Share</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, serif" SIZE=1>Proposed Maximum<BR>
Aggregate Offering<BR>
Price</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, serif" SIZE=1>Amount of<BR>
Registration<BR>
Fee</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>&nbsp;</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>
     <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>
     <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>
     <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>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Width="39%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>Ordinary Shares, par value</FONT></TD>
     <Td Width="1%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Width="2%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Width="1%" Align="Right"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Width="9%" Align="Right"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <Td Width="5%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Width="1%" Align="Right"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Width="9%" Align="Right"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <Td Width="5%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Width="1%" Align="Right"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Width="9%" Align="Right"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <Td Width="4%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Width="1%" Align="Right"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Width="9%" Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <Td Width="4%" Align="Left"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>NIS 0.01 per share</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To be issued under the</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Registrant's U.S. Share</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Option Plan (2000)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>191,200</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;(2)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 15.21</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;(3)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 2,908,152</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  114.29</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT" colspan=13><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To  be  issued  under  the</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT" colspan=13><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Registrant's  Share Option</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Plan (2004), as amended</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>143,750</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;(4)</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 15.21</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;(3)</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 2,186,437.50</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>85.93</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Issued under the</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Registrant's U.S. Share</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Option Plan (2000)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>8,800</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;(5)(6)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  4.06</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;(7)</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>    35,728</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  1.40</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT" colspan=13><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Issued under the</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT" colspan=13><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Registrant's Share Option</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<Tr Valign="Bottom" Bgcolor="#CCEEFF">
     <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Plan (2004), as amended</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>439,000</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;(8)(6)</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>  6.51</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;(9)</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 2,857,890</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><Td Align="RIGHT"><FONT FACE="Times New Roman" SIZE=2> 112.32</FONT></TD>
        <Td Align="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>TOTAL:</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>782,750</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 313.94</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE><Br>


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<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>This
registration statement shall also cover any additional Ordinary Shares           which
may become issuable under the U.S. Share Option Plan (2000) and Share           Option
Plan (2004), as amended, by reason of any share dividend, share split,
          recapitalization, or other similar transaction effected without the receipt of
          consideration which results in an increase in the number of outstanding
Ordinary           Shares of the Registrant. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(2)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Represents
Ordinary Shares that may be issued pursuant to future awards under           the U.S.
Share Option Plan (2000). </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
proposed maximum offering price per share as to shares authorized for           issuance
pursuant to future awards solely for the purpose of calculating the
          registration fee, pursuant to Rule 457(c) and Rule 457(h)(1) of the Securities
          Act of 1933, as amended (the &#147;Securities Act&#148;), based on the average
          of the high and low prices for the Registrant&#146;s Ordinary Shares on the
          Nasdaq Capital Market on February 8, 2008. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(4)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Represents
Ordinary Shares that may be issued pursuant to future awards under           the Share
Option Plan (2004), as amended. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(5)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Represents
Ordinary Shares underlying options granted under the U.S. Share           Option Plan
(2000). </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(6)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>To
the extent outstanding awards terminate, expire or otherwise cease to exist
          without having been exercised, the Ordinary Shares subject to such awards will
          become available for future issuance. </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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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
<tr Valign=TOP>
<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(7)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
proposed maximum offering price per share has been estimated, solely for the
          purpose of calculating the registration fee pursuant to Rule 457(h) of the
          Securities Act, based on a weighted average exercise price of the 8,800
Ordinary           Shares underlying options granted under the U.S. Share Option Plan
(2000). </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(8)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Represents
Ordinary Shares underlying options granted under the Share Option           Plan (2004),
as amended. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>(9)  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
proposed maximum offering price per share has been estimated, solely for the
          purpose of calculating the registration fee pursuant to Rule 457(h) of the
          Securities Act, based on a weighted average exercise price of the 439,000
          Ordinary Shares underlying options granted under the Share Option Plan (2004),
          as amended. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>3</font></p>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>PART I </font></h1>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>INFORMATION REQUIRED
IN THE SECTION 10(a) PROSPECTUS </font></h1>

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<P Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2><U>EXPLANATORY NOTE </u></font></p>

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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 1.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Plan information</B> </FONT> </td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>As permitted by the rules of the
Securities and Exchange Commission, this Registration Statement omits the information
specified in Part I of Form S-8. </font></p>

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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 2.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Information and employee plan annual information</B> </FONT> </td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>The Registrant will provide without
charge to each person to whom a copy of a Section 10(a) Prospectus hereunder is delivered,
upon the oral or written request of such person, a copy of any document incorporated in
this Registration Statement by reference. Requests for such information should be directed
to 8 Hanagar St., P.O. Box 2164 Kfar-Sava 44425, Israel. Our telephone number is
972-9-764-4555. </font></p>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>THE COMPANY HAS RECEIVED FROM THE
SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN EXEMPTION PURSUANT TO THE PREVAILING LAWS
OF THE STATE OF ISRAEL, WITH RESPECT TO THE OFFERING OF SECURITIES DESCRIBED IN THIS
PROSPECTUS. NOTHING IN SUCH EXEMPTION SHALL BE CONSTRUED AS AUTHENTICATING THE MATTERS
CONTAINED IN THIS PROSPECTUS OR AS AN APPROVAL OF THEIR RELIABILITY OR ADEQUACY OR AS AN
EXPRESSION OF OPINION AS TO THE QUALITY OF THE SECURITIES OFFERED HEREBY. </font></p>

<p align=center>
<font size=2>4</font></p>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>PART II </font></h1>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT </font></h1>

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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 3.</B> </FONT></td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Incorporation of Certain Documents By Reference</B> </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
following documents filed with the Securities and Exchange Commission (the
&#147;Commission&#148;) by the Registrant, Silicom Ltd., a company organized under the
laws of the State of Israel (the &#147;Company&#148;), pursuant to the Securities Exchange
Act of 1934, as amended (the &#147;Exchange Act&#148;), are incorporated by reference in
this registration statement: </font></p>

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<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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Annual
Report on Form 20-F for the year ended December 31, 2006 (filed on May 30, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on July 9, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on July 23, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on August 1, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on September 4, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Reports
on Form 6-K (filed on September 24, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on October 3, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on October 24, 2007). </font></td>
</tr>
</table>
<br>

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<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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on October 29, 2007). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on December 13, 2007). </font></td>
</tr>
</table>
<br>

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<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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on January 22, 2008). </font></td>
</tr>
</table>
<br>

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<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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on January 24, 2008). </font></td>
</tr>
</table>
<br>

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<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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on January 28, 2008). </font></td>
</tr>
</table>
<br>

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<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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>Report
on Form 6-K (filed on February 4, 2008). </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><FONT size="2" face="Wingdings 2">&#151;</font> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>The
description of the Registrant&#146;s Ordinary Shares contained in the Registrant&#146;s
Registration Statement on Form F-1, File No. 33-73662 (filed on December 30, 1993), as
amended, including any amendment or report filed for the purpose of updating such
description. </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;All
documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment which
indicates that all shares offered hereby have been sold or which deregisters all then
remaining unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
registration statement. </font></p>

<p align=center>
<font size=2>5</font></p>
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<Page>


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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 4.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Description of Securities.</B> </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;Not
Applicable.  </font></p>


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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 5.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Interests of Named Experts and Counsel.</B> </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;Not
Applicable. </font></p>


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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 6.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Indemnification of Directors and Officers.</B> </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
Israeli Companies Law-1999, or the Companies Law, provides that a company may include in
its articles of association provisions allowing it to: </font></p>

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<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>partially
or fully, exempt in advance, an office holder of the company from his responsibility for
damages        caused by the breach of his duty of care to the company, except for
damages caused to the company due to        any breach of such office holder's duty of
care towards the company in a "distribution" (as defined in the        Companies Law).</font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>2.  </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>enter
into a contract to insure the liability of an office holder of the company by reason of
acts or        omissions committed in his capacity as an office holder of the company
with respect to the following:</font></td>
</tr>
</table>
<br>

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<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>the
breach of his duty of care to the company or any other person; </font></td>
</tr>
</table>
<br>

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<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>the
breach of his fiduciary duty to the company to the extent he acted in good
               faith and had a reasonable basis to believe that the act or omission would
not                prejudice the interests of the company; and </font></td>
</tr>
</table>
<br>

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<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>monetary
liabilities or obligations which may be imposed upon him in favor of                other
persons. </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>indemnify
an office holder of the company for: </font></td>
</tr>
</table>
<br>

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<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>monetary
liabilities or obligations imposed upon, or actually incurred by, such
               officer holder in favor of other persons pursuant to a court judgment,
including                a compromise judgment or an arbitrator&#146;s decision approved
by a court, by                reason of acts or omissions of such officer holder in his
or her capacity as an                office holder of the company; </font></td>
</tr>
</table>
<br>

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<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>reasonable
litigation expenses, including attorneys&#146; fees, actually                incurred by
such office holder due to an investigation or a proceeding                instituted
against such office holder by an authority competent to administrate                such
an investigation or proceeding, and that was finalized without the filing
               of an indictment against such office holder and without any financial
obligation                imposed on such office holder in lieu of criminal proceedings,
or that was                finalized without the filing of an indictment against such
office holder but                with financial obligation imposed on such office holder
in lieu of criminal                proceedings of a crime which does not require proof of
criminal intent, in each                case by reason of acts of such officer holder in
his or her capacity as an                office holder of the company; and </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>6</font></p>
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<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>reasonable
litigation expenses, including attorney&#146;s fees, actually                incurred by
such office holder or imposed upon him or her by a court, in an                action,
suit or proceeding brought against him or her by or on behalf of us or                by
other persons, or in connection with a criminal action from which he or she
               was acquitted, or in connection with a criminal action which does not
require                criminal intent in which he was convicted, in each case by reason
of acts or                omissions of such officer holder in his or her capacity as an
office holder. </font></td>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Companies Law provides that a company&#146;s articles of association may provide for
indemnification of an office holder post-factum and may also provide that a company may
undertake to indemnify an office holder in advance, as described in: </font></p>

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<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>sub-section
3(a) above, provided such undertaking is limited to and actually                sets
forth the types of occurrences, which, in the opinion of the company&#146;s
               board of directors based on the current activity of the company, are, at
the                time such undertaking is provided, foreseeable, and to an amount and
degree that                the board of directors has determined is reasonable for such
indemnification                under the circumstances; and </font></td>
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<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>ii. </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>sub-sections
3(b) and 3(c) above. </font></td>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Companies Law provides that a company may not indemnify or exempt the liabilities of an
office holder or enter into an insurance contract which would provide coverage for the
liability of an office holder with respect to the following: </font></p>

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<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><FONT FACE="Wingdings 2" SIZE="1">&#154;</FONT> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>a
breach of his fiduciary duty, except to the extent described above;</font></td>
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<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><FONT FACE="Wingdings 2" SIZE="1">&#154;</FONT> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>a
breach of his duty of care, if such breach was done intentionally, recklessly or with
disregard of the circumstances of the breach or its consequences, but excluding a breach
due to negligence only; </font></td>
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<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><FONT FACE="Wingdings 2" SIZE="1">&#154;</FONT> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>an
act or omission done with the intent to unlawfully realize personal gain; or</font></td>
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<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><FONT FACE="Wingdings 2" SIZE="1">&#154;</FONT> </font></td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>a
fine or monetary settlement imposed upon him.</font></td>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Companies Law, the term &#147;office holder&#148; means a director, managing director,
general manager, chief executive officer, executive vice president, vice president, other
managers directly subordinate to the managing director and any other person fulfilling or
assuming any such position or responsibility without regard to such person&#146;s title. </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
grant of an exemption, an undertaking to indemnify or indemnification of, and procurement
of insurance coverage for, an office holder of a company requires, pursuant to the
Companies Law, the approval of our audit committee and board of directors, and, in certain
circumstances, including if the office holder is a director, the approval of our
shareholders. </font></p>

<p align=center>
<font size=2>7</font></p>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Amended and Restated Articles of Association allow us to indemnify and insure our office
holders to the fullest extent permitted by the Companies Law. We have entered into
agreements with our office holders according to which we have undertaken to indemnify them
to such extent. We have never had the occasion to indemnify any of our office holders and
are not aware of any pending or threatened litigation or proceeding involving any our
office holders in which indemnification is sought. We also maintain a directors and
officers insurance policy. </font></p>



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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 7.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Exemption From Registration Claimed.</B> </FONT> </td>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not Applicable.</font></p>



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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 8.</B> </FONT> </td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Exhibits.</B> </FONT> </td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>Exhibit No. </font></td>
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                   Exhibit </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>4.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Amended
and Restated Articles of Association. </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>4.2  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>U.S.
Share Option Plan (2000). </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>4.3  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Share
Option Plan (2004). </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>5.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Opinion
of Yigal Arnon &amp; Co. </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>23.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Consent
of Yigal  Arnon &amp; Co.  (included  in the  opinion  filed as
                               Exhibit 5.1). </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>23.2  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Consent
  of  Somekh   Chaikin,   Independent   Registered   Public
                               Accounting Firm. </font></td>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>24.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Power
of Attorney (set forth on signature page). </font></td>
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<td Width=9%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Item 9.</B> </FONT></td>
<td Width=3%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B></B> </FONT></td>
<td Width=88%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>
Undertakings.</B> </FONT> </td>
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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;
          The undersigned Registrant hereby undertakes: </font></p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
file, during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:  </font></p></td>
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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
include any prospectus required by Section 10(a)(3) of the Securities Act of
          1933;  </font></p></td>
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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
reflect in the prospectus any facts or events arising after the effective           date
of this Registration Statement (or the most recent post-effective amendment
          hereof) which, individually or in the aggregate, represent a fundamental change
          in the information set forth in this Registration Statement. Notwithstanding
the           foregoing, any increase or decrease in volume of securities offered (if the
          total dollar value of securities offered would not exceed that which was
          registered) and any deviation from the low or high end of the estimated maximum
          offering range may be reflected in the form of prospectus filed with the
          Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
          and price represent no more than a 20% change in the maximum aggregate offering
          price set forth in the &#147;Calculation of Registration Fee&#148; table in the
          effective registration statement; and  </font></p></td>
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<font size=2>8</font></p>
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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
include any material information with respect to the plan of distribution           not
previously disclosed in this Registration Statement or any material change           to
such information in this Registration Statement;  </font></p></td>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>provided,
however</i>, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration
statement is on Form S-8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration Statement. </font></p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(2) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That,
for the purpose of determining any liability under the Securities Act of           1933,
each such post-effective amendment shall be deemed to be a new           registration
statement relating to the securities offered herein, and the           offering of such
securities at that time shall be deemed to be the initial <I>bona fide </i>offering
thereof.  </font></p></td>
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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(3) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
remove from registration by means of a post-effective amendment any of the
          securities being registered which remain unsold at the termination of the
          offering.  </font></p></td>
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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(4) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That,
for the purpose of determining liability under the Securities Act of 1933           to
any purchaser:  </font></p></td>
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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>i. </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>If
the Registrant is relying on Rule 430B:  </font></td>
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<td Width=15%><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=80%><Font Face="Times New Roman, Times, Serif" Size=2>Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be
               deemed to be part of the registration statement as of the date the filed
               prospectus was deemed part of and included in the registration statement;
and  </font></td>
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<td Width=15%><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=80%><Font Face="Times New Roman, Times, Serif" Size=2>Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
               (b)(7) as part of a registration statement in reliance on Rule 430B
relating to                an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x)
for the purpose of                providing the information required by section 10(a) of
the Securities Act of                1933 shall be deemed to be part of and included in
the registration statement as                of the earlier of the date such form of
prospectus is first used after                effectiveness or the date of the first
contract of sale of securities in the                offering described in the
prospectus. As provided in Rule 430B, for liability                purposes of the issuer
and any person that is at that date an underwriter, such                date shall be
deemed to be a new effective date of the registration statement                relating
to the securities in the registration statement to which that                prospectus
relates, and the offering of such securities at that time shall be                deemed
to be the initial bona fide offering thereof. Provided, however, that no
               statement made in a registration statement or prospectus that is part of
the                registration statement or made in a document incorporated or deemed
incorporated                by reference into the registration statement or prospectus
that is part of the                registration statement will, as to a purchaser with a
time of contract of sale                prior to such effective date, supersede or modify
any statement that was made in                the registration statement or prospectus
that was part of the registration                statement or made in any such document
immediately prior to such effective date;                or  </font></td>
</tr>
</table>
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<font size=2>9</font></p>
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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>ii. </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>If
the Registrant is subject to Rule 430C, each prospectus filed pursuant to
               Rule 424(b) as part of a registration statement relating to an offering,
other                than registration statements relying on Rule 430B or other than
prospectuses                filed in reliance on Rule 430A, shall be deemed to be part of
and included in                the registration statement as of the date it is first used
after effectiveness.                Provided, however, that no statement made in a
registration statement or                prospectus that is part of the registration
statement or made in a document                incorporated or deemed incorporated by
reference into the registration statement                or prospectus that is part of
the registration statement will, as to a purchaser                with a time of contract
of sale prior to such first use, supersede or modify any                statement that
was made in the registration statement or prospectus that was                part of the
registration statement or made in any such document immediately                prior to
such date of first use.  </font></td>
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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(5) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That,
for the purpose of determining liability of the Registrant under the           Securities
Act of 1933 to any purchaser in the initial distribution of the           securities: The
undersigned Registrant undertakes that in a primary offering of           securities of
the undersigned Registrant pursuant to this registration           statement, regardless
of the underwriting method used to sell the securities to           the purchaser, if the
securities are offered or sold to such purchaser by means           of any of the
following communications, the undersigned Registrant will be a           seller to the
purchaser and will be considered to offer or sell such securities           to such
purchaser:  </font></p></td>
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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>i. </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>Any
preliminary prospectus or prospectus of the undersigned Registrant relating
               to the offering required to be filed pursuant to Rule 424;  </font></td>
</tr>
</table>
<br>

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<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>ii. </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>Any
free writing prospectus relating to the offering prepared by or on behalf of
               the undersigned Registrant or used or referred to by the undersigned
Registrant;  </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>iii. </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>The
portion of any other free writing prospectus relating to the offering
               containing material information about the undersigned Registrant or its
               securities provided by or on behalf of the undersigned Registrant; and  </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>10</font></p>
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<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=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>iv. </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>Any
other communication that is an offer in the offering made by the undersigned
               Registrant to the purchaser.  </font></td>
</tr>
</table>
<br>

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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;
          The undersigned Registrant hereby undertakes that, for purposes of determining
          any liability under the Securities Act of 1933, each filing of the
          Registrant&#146;s annual reports pursuant to Section 13(a) or Section 15(d) of
          the Securities Exchange Act of 1934 (and, where applicable, each filing of an
          employee benefit plan&#146;s annual report pursuant to Section 15(d) of the
          Securities Exchange Act of 1934) that is incorporated by reference in this
          Registration Statement shall be deemed to be a new registration statement
          relating to the securities offered therein, and the offering of such securities
          at that time shall be deemed to be the initial <I>bona fide</i> offering
          thereof. </font></p>

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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;
          Insofar as indemnification for liabilities arising under the Securities Act of
          1933 may be permitted to directors, officers and controlling persons of the
          Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
          has been advised that in the opinion of the Securities and Exchange Commission
          such indemnification is against public policy as expressed in the Act and is,
          therefore, unenforceable. In the event that a claim for indemnification against
          such liabilities (other than the payment by the Registrant of expenses incurred
          or paid by a director, officer or controlling person of the Registrant in the
          successful defense of any action, suit or proceeding) is asserted by such
          director, officer or controlling person in connection with the securities being
          registered, the Registrant will, unless in the opinion of its counsel the matter
          has been settled by controlling precedent, submit to a court of appropriate
          jurisdiction the question whether such indemnification by it is against public
          policy as expressed in such Act and will be governed by the final adjudication
          of such issue. </font></p>

<p align=center>
<font size=2>11</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<Page>


<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 Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form
S-8, and has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Kfar-Sava, Israel on the 10<Sup>th</sup> day of
February, 2008. </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><B>SILICOM LTD.</b><Br><Br>
<br>By: /s/ Shaike Orbach<br>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
Shaike Orbach<br>Director, President and Chief Executive Officer</font></td>
</tr>
</table>
<br>




<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>POWER OF ATTORNEY </font></h1>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW
ALL MEN BY THESE PRESENTS, each director and officer whose signature appears below
constitutes and appoints, Shaike Orbach, Avi Eizenman, Eran Gilad or any of them, his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, to sign in any and all capacities any and all amendments or
post-effective amendments to this registration statement on Form S-8 and to file the same
with all exhibits thereto and other documents in connection therewith with the Securities
Exchange Commission, granting such attorneys-in-fact and agents, and each of them, full
power and authority to do all such other acts and execute all such other documents as
they, or any of them, may deem necessary or desirable in connection with the foregoing, as
fully as the undersigned might or could do in person, hereby ratifying and confirming all
that such attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof. </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 Act of 1933, this Registration Statement has been
signed by the following persons in their respective capacities and on the respective dates
indicated. </font></p>


<p align=center>
<font size=2>12</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE="2"><U>Signature</U> </FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE="2"><U>Title</U> </FONT></TH>
     <Th Align="Center"><FONT FACE="Times New Roman, Times, serif" SIZE="2"><U>Date</U> </FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <Th Align="Center"><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <Th Align="Center"><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <Th Align="Center"><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH>
     <Th Align="Center"><FONT FACE="Times New Roman, Times, serif" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=35% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>/s/ Avi Eizenman</U> </FONT></TD>
     <TD WIDTH=35% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Chairman of the Board</FONT></TD>
     <Td Width="30%" Align="Center"><FONT FACE="Times New Roman" SIZE=2>February 10, 2008</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Avi Eizenman</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>/s/ Shaike Orbach</U> </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Director, President and Chief</FONT></TD>
     <Td Align="Center"><FONT FACE="Times New Roman" SIZE=2>February 10, 2008</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Shaike Orbach</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Executive Officer</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>(Principal Executive Officer)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>/s/ Eran Gilad</U> </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Chief Financial Officer</FONT></TD>     <Td Align="Center"><FONT FACE="Times New Roman" SIZE=2>February 10, 2008</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Eran Gilad</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>(Principal Financial Officer and</FONT></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Principal Accounting Officer)</FONT></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>/s/ Yehuda Zisapel</U> </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD>
     <Td Align="Center"><FONT FACE="Times New Roman" SIZE=2>February 10, 2008</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Yehuda Zisapel</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD>
     <Td Align="Center"><FONT FACE="Times New Roman" SIZE=2>February __, 2008</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Ilan Kalmanovich</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD>
     <Td Align="Center"><FONT FACE="Times New Roman" SIZE=2>February __, 2008</FONT></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Einat Domb-Har</FONT></TD>
</TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT colspan=2><FONT FACE="Times New Roman" SIZE=2>AUTHORIZED REPRESENTATIVE IN THE UNITED STATES</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT colspan=2><FONT FACE="Times New Roman" SIZE=2>Silicom Connectivity Solutions, Inc.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE="2"><U>By:/s/ Avi Eizenman</U> </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <Td Align="Center"><FONT FACE="Times New Roman" SIZE=2>February 10, 2008</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Avi Eizenman</FONT></TD></TR>
</TABLE>
<Br>

<p align=center>
<font size=2>13</font></p>
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<!-- MARKER FORMAT-SHEET="Head Center Underline-TNR" FSL="Default" -->
<P Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2><U>Exhibit Index </u></font></p>


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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>Exhibit  No.</font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>
                   Exhibit </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>4.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Amended
and Restated Articles of Association. </font></td>
</tr>
</table>
<br>

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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>4.2  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>U.S.
Share Option Plan (2000). </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>4.3  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Share
Option Plan (2004). </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
<tr Valign=TOP>
<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>5.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Opinion
of Yigal Arnon &amp; Co. </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
<tr Valign=TOP>
<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>23.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Consent
of Yigal  Arnon &amp; Co.  (included  in the  opinion  filed as
                               Exhibit 5.1). </font></td>
</tr>
</table>
<br>

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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>23.2  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Consent
  of  Somekh   Chaikin,   Independent   Registered   Public
                               Accounting Firm. </font></td>
</tr>
</table>
<br>

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<td Width=9%><Font Face="Times New Roman, Times, Serif" Size=2>24.1  </font></td>
<td Width=3%><Font Face="Times New Roman, Times, Serif" Size=2></font></td>
<td Width=88%><Font Face="Times New Roman, Times, Serif" Size=2>Power
of Attorney (set forth on signature page). </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>14</font></p>
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<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>exhibit_4-1.htm
<TEXT>
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<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
     <!-- Project:        \\Backup\office\EDGAR Filing\Silicom Ltd\84828\a84828.eep        -->
     <!-- Control Number: 84828                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   S-8                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>S-8</TITLE>
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<P Align=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 4.1</B></U> </FONT> </p>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>AMENDED AND RESTATED<Br>ARTICLES OF ASSOCIATION </font></h1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>OF </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 Center Bold-TNR" FSL="Workstation" -->
<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>A COMPANY LIMITED BY
SHARES </font></h1>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>PRELIMINARY </font></h1>

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<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>COMPANY
NAME</B> </FONT> </td>
</tr>
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<br>

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<td Width=5%>&nbsp;</td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
The
name of the company is &#147;Silicom Ltd.&#148; (the &#147;Company&#148;).   </font></td>
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<br>

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<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>INTERPRETATION</B> </FONT> </td>
</tr>
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<br>

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<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>In
these Articles, the following terms shall bear the meanings set forth below,
                    unless inconsistent with the subject or context. </font></td>
</tr>
</table>
<br>

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<td Width=10%>&nbsp;</td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
&#147;Office
Holder&#148; shall mean every director and every other person included in the definition
of &#147;office holder&#148; under the Companies Law, including the executive officers of
the Company.  </font></td>
</tr>
</table>
<br>

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<tr Valign=TOP>
<td Width=10%>&nbsp;</td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
&#147;External
Directors&#148; shall mean directors appointed and serving in accordance with Sections
239 through 249 of the Companies Law.  </font></td>
</tr>
</table>
<br>

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<td Width=10%>&nbsp;</td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
&#147;Companies
Law&#148; shall mean the Israeli Companies Law, 5759-1999, as amended and as may be
amended from time to time, and any regulations promulgated thereunder.  </font></td>
</tr>
</table>
<br>

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<td Width=10%>&nbsp;</td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
&#147;Articles&#148;shall
mean these Amended and Restated Articles of Association as originally adopted or as
amended from time to time.  </font></td>
</tr>
</table>
<br>

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<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
&#147;Office&#148;shall
mean the registered office of the Company.  </font></td>
</tr>
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<br>

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&#147;Year&#148;and
&#147;Month&#148; shall mean a Gregorian month or year.  </font></td>
</tr>
</table>
<br>

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<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>Defined
terms used herein, but not defined, shall have the meaning given them in
                    the Companies Law. </font></td>
</tr>
</table>
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<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>Unless
the subject or the context otherwise requires: words and expressions
                    importing the masculine gender shall include the feminine gender; and
words and                     expressions importing persons shall include bodies
corporate. </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">
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PUBLIC
COMPANY; LIMITED LIABILITY AND COMPANY OBJECTIVES</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Company is a Public Company, as such term is defined in the Companies Law. </font></td>
</tr>
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<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>The
liability of the Company&#146;s shareholders is limited and, accordingly,
                    the liability of each shareholder for the Company&#146;s obligations
shall be                     limited to the payment of the nominal value of the shares
held by such                     shareholder, subject to the provisions of these Articles
and the Companies Law. </font></td>
</tr>
</table>
<br>

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<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>The
Company&#146;s objectives are to carry on any business and perform any act
                    which is not prohibited by law. The Company may also make
contributions of                     reasonable sums to worthy purposes even if such
contributions are not made on                     the basis of business considerations </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>SHARE CAPITAL </font></h1>

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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>SHARE
CAPITAL</B> </FONT> </td>
</tr>
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<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>The
authorized share capital of the Company is one hundred thousand New Israeli
                    Shekels (NIS 100,000) divided into ten million (10,000,000) Ordinary
Shares,                     nominal value NIS 0.01 per share. </font></td>
</tr>
</table>
<br>

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<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>           The
Ordinary Shares all rank <I>pari passu</i> in all respects. </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>INCREASE
OF AUTHORIZED SHARE CAPITAL</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Company may, from time to time, by resolution of its shareholders, whether
                    or not all the shares then authorized have been issued and whether or
not all                     the shares theretofore issued have been called up for
payment, increase its                     authorized share capital by the creation of new
shares. Any such increase shall                     be in such amount and shall be
divided into shares of such nominal amounts, and                     such shares shall
confer such rights and preferences, and shall be subject to                     such
restrictions, as such resolution shall provide. </font></td>
</tr>
</table>
<br>

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<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>Except
to the extent otherwise provided in such resolution, any new shares
                    included in the authorized share capital increased as aforesaid shall
be subject                     to all the provisions of these Articles which are
applicable to shares of the                     same class included in the existing share
capital. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>6.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>SPECIAL
RIGHTS; MODIFICATION OF RIGHTS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Subject
to the provisions of these Articles, and without prejudice to any                special
rights previously conferred upon the holders of existing shares in the
               Company, the Company may, from time to time, by resolution of its
shareholders,                provide for shares with such preferred or deferred rights or
rights of                redemption or other special rights and/or such restrictions,
whether in regard                to liquidation, dividends, voting, repayment of share
capital or otherwise, as                may be stipulated in such resolution provided
that any resolution with respect                to the issuance of shares will be made
only by the Board of Directors. </font></td>
</tr>
</table>
<br>

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


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<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=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>
If at any time the share capital is divided into different classes of
               shares, the rights attached to any class, unless otherwise provided by
these                Articles, may be modified or abrogated by the Company, by a
resolution of the                shareholders, subject to the consent in writing of the
holders of a majority of                the issued shares of such class or the adoption
of a resolution passed at a                separate General Meeting of the holders of the
shares of such class. </font></td>
</tr>
</table>
<br>

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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>(ii) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>The
provisions of these Articles relating to General Meetings shall, <I>mutatis
               mutandis</i>, apply to any separate General Meeting of the holders of the
shares                of a particular class, provided, however, that the requisite quorum
at any such                separate General Meeting shall be two or more members present
in person or by                proxy and holding not less than thirty three and a third
percent (33 1/3%) of                the issued shares of such class.  </font></td>
</tr>
</table>
<br>

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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>(iii) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>Unless
otherwise provided by these Articles, the enlargement of an authorized
               class of shares, or the issuance of additional shares thereof out of the
               authorized and unissued share capital, shall not be deemed, for purposes
of this                Article 6(b), to modify or abrogate the rights attached to
previously issued                shares of such class or of any other class.  </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>7.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CONSOLIDATION,
SUBDIVISION, CANCELLATION AND REDUCTION OF SHARE CAPITAL</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Company may, from time to time, by resolution of its shareholders (subject,
                    however, to the provisions of Article 6(b) hereof and to applicable
law): </font></td>
</tr>
</table>
<br>

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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>(i) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>consolidate
and divide all or part of its issued or un-issued authorized share                capital
into shares of a per share nominal value which is larger than the per
               share nominal value of its existing shares;  </font></td>
</tr>
</table>
<br>

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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>(ii) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>subdivide
its shares (issued or un-issued) or any of them, into shares of                smaller
nominal value;  </font></td>
</tr>
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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>(iii) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>cancel
any shares which, at the date of the adoption of such resolution, have                not
been taken or agreed to be taken by any person, and diminish the amount of
               its share capital by the amount of the shares so canceled; or  </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>(iv) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>reduce
its share capital in any manner, subject to any consent required by law.  </font></td>
</tr>
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<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>With
respect to any consolidation of issued shares into shares of a larger
                    nominal value per share, and with respect to any other action which
may result                     in fractional shares, the Board of Directors may settle
any difficulty which may                     arise with regard thereto, as it deems fit,
and, in connection with any such                     consolidation or other action which
could result in fractional shares, may,                     without limiting its
aforesaid power: </font></td>
</tr>
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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>(i) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>determine,
as to the holder of shares so consolidated, which issued shares shall                be
consolidated into a share of a larger nominal value per share;  </font></td>
</tr>
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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>(ii) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>allot,
in contemplation of or subsequent to such consolidation or other action,
               shares or fractional shares sufficient to preclude or remove fractional
share                holdings;  </font></td>
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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>(iii) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>redeem,
in the case of redeemable preference shares, and subject to applicable
               law, such shares or fractional shares sufficient to preclude or remove
               fractional share holdings; and/or  </font></td>
</tr>
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<br>

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<font size=2>3</font></p>
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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>(iv) </font></td>
<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>cause
the transfer of fractional shares by certain shareholders of the Company
               to other shareholders thereof so as to most expediently preclude or remove
any                fractional shareholdings, and cause the transferees of such fractional
shares to                pay the transferors thereof the fair value thereof, and the
Board of Directors                is hereby authorized to act in connection with such
transfer, as agent for the                transferors and transferees of any such
fractional shares, with full power of                substitution, for the purposes of
implementing the provisions of this                sub-Article 7(b)(iv).  </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>SHARES </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>8.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ISSUANCE
OF SHARE CERTIFICATES; REPLACEMENT OF LOST CERTIFICATES</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Share
Certificates shall be issued under the corporate seal of the Company and
                    shall bear the signature of one Director, or of any other person or
persons so                     authorized by the Board of Directors. </font></td>
</tr>
</table>
<br>

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<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>Each
shareholder shall be entitled to one or several numbered certificates for
                    all the shares of any class registered in his name, each for one or
more of such                     shares. Each certificate shall specify the serial
numbers of the shares                     represented thereby and may also specify the
amount paid up thereon. </font></td>
</tr>
</table>
<br>

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<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>A
share certificate registered in the names of two or more persons shall be
                    delivered to the person first named in the Shareholder Register in
respect of                     such co-ownership. </font></td>
</tr>
</table>
<br>

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<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>A
share certificate which has been defaced, lost or destroyed, may be replaced,
                    and the Company shall issue a new certificate to replace such
defaced, lost or                     destroyed certificate upon payment of such fee, and
upon the furnishing of such                     evidence of ownership and such indemnity,
as the Board of Directors in its                     discretion deems fit. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>9.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>REGISTERED
HOLDER</B> </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>
Except
as otherwise provided in these Articles, the Company shall be entitled to treat the
registered holder of each share as the absolute owner thereof, and accordingly, shall not,
except as ordered by a court of competent jurisdiction, or as required by statute, be
obligated to recognize any equitable or other claim to, or interest in, such share on the
part of any other person. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>10.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ALLOTMENT
OF SHARES</B> </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
un-issued shares from time to time shall be under the sole control of the Board of
Directors, who shall have the power to allot, issue or otherwise dispose of shares to such
persons, on such terms and conditions (including <I>inter alia</i> terms relating to calls
as set forth in Article 12(f) hereof), and either at par or at a premium, or, subject to
the provisions of the Companies Law, at a discount and/or with payment of commission, and
at such times, as the Board of Directors deems fit, and the power to give to any person
the option to acquire from the Company any shares, either at par or at a premium, or,
subject as aforesaid, at a discount and/or with payment of commission, during such time
and for such consideration as the Board of Directors deems fit. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>4</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>11.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PAYMENT
IN INSTALLMENTS</B> </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>
If
pursuant to the terms of allotment or issue of any share, all or any portion of the price
thereof shall be payable in installments, every such installment shall be paid to the
Company on the due date thereof by the then registered holder(s) of the share or the
person(s) then entitled thereto. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>12.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CALLS
ON SHARES</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Board of Directors may, from time to time, as it, in its discretion, deems
                    fit, make calls for payment upon shareholders in respect of any sum
which has                     not been paid up in respect of shares held by such
shareholders and which is not                     pursuant to the terms of allotment or
issue of such shares or otherwise, payable                     at a fixed time, and each
shareholder shall pay the amount of every call so made                     upon him or
her (and of each installment thereof if the same is payable in
                    installments), to the Company at the time(s) and place(s) designated
by the                     Board of Directors, as any such time(s) may be thereafter
extended or place(s)                     changed. Unless otherwise stipulated in the
resolution of the Board of Directors                     (and in the notice hereafter
referred to), each payment in response to a call                     shall be deemed to
constitute a <I>pro rata</i> payment on account of all the                     shares in
respect of which such call was made. </font></td>
</tr>
</table>
<br>

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<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>Notice
of any call for payment by a shareholder shall be given in writing to
                    such shareholder not less than fourteen (14) days prior to the time
of payment                     fixed in such notice, and shall specify the time and place
of payment. Prior to                     the time for any such payment fixed in a notice
of a call given to a                     shareholder, the Board of Directors may in its
absolute discretion, by notice in                     writing to such member, revoke such
call in whole or in part, extend the time                     fixed for payment thereof,
or designate a different place of payment. In the                     event of a call
payable in installments, only one notice thereof need be given. </font></td>
</tr>
</table>
<br>

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<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>If
pursuant to the terms of allotment or issue of a share or otherwise, an
                    amount is made payable at a fixed time (whether on account of such
share or by                     way of premium), such amount shall be payable at such
time as if it were payable                     by virtue of a call made by the Board of
Directors and for which notice was                     given in accordance with
paragraphs (a) and (b) of this Article 12, and the                     provisions of
these Articles with regard to calls (and the non-payment thereof)
                    shall be applicable to such amount (and the non-payment thereof). </font></td>
</tr>
</table>
<br>

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<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>Joint
holders of a share shall be jointly and severally liable to pay all calls
                    for payment in respect of such share and all interest payable
thereon. </font></td>
</tr>
</table>
<br>

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<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>Any
amount called for payment which is not paid when due shall bear interest
                    from the date fixed for payment until actual payment thereof, at such
rate (not                     exceeding the then prevailing debitory rate charged by
leading commercial banks                     in Israel), and payable at such time(s) as
the Board of Directors may prescribe. </font></td>
</tr>
</table>
<br>

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<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>Upon
the allotment of shares, the Board of Directors may provide for differences
                    among the allottees of such shares as to the amounts and times for
payment of                     calls in respect of such shares. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>5</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>13.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PREPAYMENT</B> </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>
With
the approval of the Board of Directors, any shareholder may pay to the Company any amount
not yet payable in respect of his shares, and the Board of Directors may approve the
payment by the Company of interest on any such amount until the same would be payable if
it had not been paid in advance, at such rate and time(s) as may be approved by the Board
of Directors. The Board of Directors may at any time cause the Company to repay all or any
part of the money so advanced, without premium or penalty. Nothing in this Article 13
shall derogate from the right of the Board of Directors to make any call for payment
before or after receipt by the Company of any such advance. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>14.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>FORFEITURE
AND SURRENDER</B> </FONT> </td>
</tr>
</table>
<br>

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<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>If
any shareholder fails to pay an amount payable by virtue of a call, or
                    interest thereon as provided for in accordance herewith, on or before
the day                     fixed for payment of the same, the Board of Directors may at
any time after the                     day fixed for such payment, so long as such amount
(or any portion thereof) or                     interest thereon (or any portion thereof)
remains unpaid, resolve to forfeit all                     or any of the shares in
respect of which such payment was called for. All                     expenses incurred
by the Company in attempting to collect any such amount or                     interest
thereon, including, without limitation, attorney&#146;s fees and costs
                    of legal proceedings, shall be added to, and shall, for all purposes
(including                     the accrual of interest thereon), constitute a part of,
the amount payable to                     the Company in respect of such call. </font></td>
</tr>
</table>
<br>

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<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>Upon
the adoption of a resolution as to the forfeiture of a shareholder&#146;s
                    share, the Board of Directors shall cause notice thereof to be given
to such                     shareholder, which notice shall state that, in the event of
the failure to pay                     the entire amount so payable by a date specified
in the notice (which date shall                     be not less than fourteen (14) days
after the date such notice is given and                     which may be extended by the
Board of Directors), such shares shall be <I>ipso                     facto </i> forfeited,
provided, however, that, prior to such date, the Board of                     Directors
may nullify such resolution of forfeiture, but no such nullification
                    shall prevent the Board of Directors from adopting a further
resolution of                     forfeiture in respect of the non-payment of the same
amount. </font></td>
</tr>
</table>
<br>

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<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>Without
derogating from Articles 54 and 59 hereof, whenever shares are forfeited
                    as herein provided, all dividends, if any, theretofore declared in
respect                     thereof and not actually paid shall be deemed to have been
forfeited at the same                     time. </font></td>
</tr>
</table>
<br>

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<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>The
Company, by resolution of the Board of Directors, may accept the voluntary
                    surrender of any share not fully paid for. </font></td>
</tr>
</table>
<br>

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<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>Any
share forfeited or surrendered as provided herein, shall become the property
                    of the Company, and the same, subject to the provisions of these
Articles, may                     be sold, re-allotted or otherwise disposed of as the
Board of Directors deems                     fit. </font></td>
</tr>
</table>
<br>

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<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>Any
shareholder whose shares have been forfeited or surrendered shall cease to
                    be a shareholder in respect of the forfeited or surrendered shares,
but shall,                     notwithstanding, be liable to pay, and shall forthwith
pay, to the Company, all                     calls, interest and expenses owing upon or
in respect of such shares at the time                     of forfeiture or surrender,
together with interest thereon from the time of                     forfeiture or
surrender until actual payment, at the rate prescribed in Article
                    12(e) above, and the Board of Directors, in its discretion, may, but
shall not                     be obligated to, enforce the payment of such moneys, or any
part thereof. In the                     event of such forfeiture or surrender, the
Company, by resolution of the Board                     of Directors, may accelerate the
date(s) of payment of any or all amounts then                     owing to the Company by
the shareholder in question (but not yet due) in respect                     of all
shares owned by such shareholder, solely or jointly with another. </font></td>
</tr>
</table>
<br>

<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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<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>The
Board of Directors may at any time, before any share so forfeited or
                    surrendered shall have been sold, re-allotted or otherwise disposed
of, nullify                     the forfeiture or surrender on such conditions as it
deems fit, but no such                     nullification shall prevent the Board of
Directors from re-exercising its powers                     of forfeiture pursuant to
this Article 14. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>15.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>LIEN</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Except
to the extent the same may be waived or subordinated in writing, the
                    Company shall have a first and paramount lien upon all the shares
registered in                     the name of each shareholder (without regard to any
equitable or other claim or                     interest in such shares on the part of
any other person), and upon the proceeds                     of the sale thereof, for his
debts, liabilities and engagements to the Company                     arising from any
amount payable by such shareholder in respect of any unpaid or                     partly
paid share, whether or not such debt, liability or engagement has
                    matured. Such lien shall extend to all dividends from time to time
declared or                     paid in respect of such share. Unless otherwise provided,
the registration by                     the Company of a transfer of shares shall be
deemed to be a waiver on the part                     of the Company of the lien (if any)
existing on such shares immediately prior to                     such transfer. </font></td>
</tr>
</table>
<br>

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<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>The
Board of Directors may cause the Company to sell a share subject to such a
                    lien when the debt, liability or engagement giving rise to such lien
has                     matured, in such manner as the Board of Directors deems fit, but
no such sale                     shall be made unless such debt, liability or engagement
has not been satisfied                     within fourteen (14) days after written notice
of the intention to sell shall                     have been served on such shareholder,
his executors or administrators. </font></td>
</tr>
</table>
<br>

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<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>The
net proceeds of any such sale, after payment of the costs thereof, shall be
                    applied in or toward satisfaction of the debts, liabilities or
engagements of                     such member in respect of such share (whether or not
the same have matured), and                     the residue (if any) shall be paid to the
shareholder, his executors,                     administrators or assigns. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>16.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>SALE
AFTER FORFEITURE OR SURRENDER OR IN ENFORCEMENT OF LIEN</B> </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>
Upon
any sale of a share after forfeiture or surrender or for enforcing a lien, the Board of
Directors may appoint any person to execute an instrument of transfer of the share so sold
and cause the purchaser&#146;s name to be entered in the Shareholder Register in respect
of such share. The purchaser shall be registered as the shareholder and shall not be bound
to see to the regularity of the sale proceedings, or to the application of the proceeds of
such sale, and after his name has been entered in the Shareholder Register in respect of
such share, the validity of the sale shall not be impeached by any person, and the remedy
of any person aggrieved by the sale shall be in damages only and against the Company
exclusively. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>17.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>REDEEMABLE
SHARES</B> </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
Company may, subject to applicable law, issue redeemable shares and redeem the same.  </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>7</font></p>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>TRANSFER OF SHARES </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>18.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>REGISTRATION
OF TRANSFER</B> </FONT> </td>
</tr>
</table>
<br>

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<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>No
transfer of shares shall be registered unless a proper writing or instrument
                    of transfer (in any customary form or any other form satisfactory to
the Board                     of Directors) has been submitted to the Company (or its
transfer agent),                     together with the share certificate(s) and such
other evidence of title as the                     Board of Directors may reasonably
require. Until the transferee has been                     registered in the Shareholder
Register (or with the transfer agent) in respect                     of the shares so
transferred, the Company may continue to regard the transferor                     as the
owner thereof. The Board of Directors, may, from time to time, prescribe
                    a fee for the registration of a transfer. </font></td>
</tr>
</table>
<br>

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<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>The
Board of Directors may, in its discretion to the extent it deems necessary,
                    close the Shareholder Register for registrations of transfers of
shares during                     any year for a period determined by the Board of
Directors, and no registrations                     of transfers of shares shall be made
by the Company during any such period                     during which the Shareholder
Register is so closed. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>19.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RECORD
DATE FOR NOTICES OF GENERAL MEETINGS AND OTHER ACTION</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Notwithstanding
any provision of these Articles to the contrary, and to allow                     the
Company to determine the shareholders entitled to notice of, or to vote at,
                    any Annual or Extraordinary General Meeting or any adjournment
thereof, or to                     express consent to or dissent from any corporate
action in writing without a                     meeting, or entitled to receive payment
of any dividend or other distribution or                     allotment of any rights, or
entitled to exercise any rights in respect of, or to                     take or be the
subject to, any other action, the Board of Directors may fix, a
                    record date, which shall not be more than forty (40) days, or any
longer period                     required under the Companies Law, nor less than four
(4) days, or any longer                     period required under the Companies Law,
before the date of such meeting or                     other action. A determination of
shareholders of record entitled to notice of or                     to vote at a meeting
shall apply to any adjournment of the meeting: provided,                     however,
that the Board of Directors may fix a new record date for the adjourned
                    meeting. </font></td>
</tr>
</table>
<br>

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<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>Any
shareholder or shareholders of the Company holding, at least (i) five
                    percent (5%) of the issued share capital of the Company and one
percent (1%) of                     the voting rights in the issued share capital of the
Company or (ii) five                     percent (5%) of the voting rights in the issued
share capital of the Company,                     may, pursuant to the Companies Law,
request that the Board of Directors include                     a subject in the agenda
of a General Meeting to be held in the future. Any such                     request must
be in writing, must include all information related to subject                     matter
and the reason that such subject is proposed to be brought before the
                    General Meeting and must be signed by the shareholder or shareholders
making                     such request. In addition, subject to the Companies Law and
the provisions of                     Article 39, the Board of Directors may include such
subject in the agenda of a                     General Meeting only if the request has
been delivered to the Secretary of the                     Company not later than sixty
(60) days and not more than one hundred and twenty                     (120) days prior
to the General Meeting in which the subject is to be considered                     by
the shareholders of the Company. Each such request shall also set forth: (a)
                    the name and address of the shareholder making the request; (b) a
representation                     that the shareholder is a holder of record of shares
of the Company entitled to                     vote at such meeting and intends to appear
in person or by proxy at the meeting;                     (c) a description of all
arrangements or understandings between the shareholder                     and any other
person or persons (naming such person or persons) in connection                     with
the subject which is requested to be included in the agenda; and (d) a
                    declaration that all the information that is required under the
Companies Law                     and any other applicable law to be provided to the
Company in connection with                     such subject, if any, has been provided.
Furthermore, the Board of Directors,                     may, in its discretion to the
extent it deems necessary, request that the                     shareholders making the
request provide additional information necessary so as                     to include a
subject in the agenda of a General Meeting, as the Board of                     Directors
may reasonably require. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>8</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>TRANSMISSION OF SHARES </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>20.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>DECEDENTS&#146;SHARES</B> </FONT> </td>
</tr>
</table>
<br>

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<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>In
case of death of a registered holder of a share registered in the names of
                    two or more holders, the Company may recognize the survivor(s) as the
sole                     owner(s) thereof unless and until the provisions of Article
20(b) have been                     effectively invoked. </font></td>
</tr>
</table>
<br>

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<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>Any
person becoming entitled to a share in consequence of the death of any
                    shareholder, upon producing evidence of the grant of probate or
letters of                     administration or declaration of succession (or such other
evidence as the Board                     of Directors may reasonably deem sufficient),
shall be registered as a                     shareholder in respect of such share, or
may, subject to the regulations as to                     transfer herein contained,
transfer such share. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>21.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RECEIVERS
AND LIQUIDATORS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Company may recognize any receiver, liquidator or similar official appointed
                    to wind-up, dissolve or otherwise liquidate a corporate shareholder,
and a                     trustee, manager, receiver, liquidator or similar official
appointed in                     bankruptcy or in connection with the reorganization of,
or similar proceeding                     with respect to a shareholder or its
properties, as being entitled to the shares                     registered in the name of
such member. </font></td>
</tr>
</table>
<br>

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<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>Such
receiver, liquidator or similar official appointed to wind-up, dissolve or
                    otherwise liquidate a corporate shareholder and such trustee,
manager, receiver,                     liquidator or similar official appointed in
bankruptcy or in connection with the                     reorganization of, or similar
proceedings with respect to a shareholder or its                     properties, upon
producing such evidence as the Board of Directors may deem                     sufficient
as to his authority to act in such capacity or under this Article,
                    shall with the consent of the Board of Directors (which the Board of
Directors                     may grant or refuse in its absolute discretion), be
registered as a shareholder                     in respect of such shares, or may,
subject to the regulations as to transfer                     herein contained, transfer
such shares. </font></td>
</tr>
</table>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>GENERAL MEETINGS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>22.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ANNUAL
GENERAL MEETING</B> </FONT> </td>
</tr>
</table>
<br>

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<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>An
Annual General Meeting shall be held once in every calendar year at such time
                    (within a period of not more than fifteen (15) months after the last
preceding                     Annual General Meeting) and at such place, either within or
without the State of                     Israel, as may be determined by the Board of
Directors. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>9</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<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>Subject
to the provisions of these Articles, the function of the Annual General
                    Meeting shall be to elect the members of the Board of Directors; to
receive the                     financial statements; to appoint the Company&#146;s
auditors and to fix their                     remuneration and to transact any other
business which, in accordance with these                     Articles or the Companies
Law, are to be transacted at a General Meeting. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>23.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXTRAORDINARY
GENERAL MEETINGS</B> </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>
All
General Meetings other than Annual General Meetings shall be called &#147;Extraordinary
General Meetings&#148;. The Board of Directors may, whenever it thinks fit, convene an
Extraordinary General Meeting, at such time and place, within or out of the State of
Israel, as may be determined by the Board of Directors, and shall be obliged to do so upon
a requisition in writing in accordance with Section 63 of the Companies Law. In addition,
the Board of Directors may, whenever it thinks fit, postpone or cancel an Extraordinary
General Meeting. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>24.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NOTICE
OF GENERAL MEETINGS; OMISSION TO GIVE NOTICE</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Not
less than twenty-one (21) days&#146; prior notice, or thirty-five (35)
                    days&#146; prior notice to the extent required under regulations
promulgated                     under the Companies Law, shall be given of every General
Meeting. Each such                     notice shall specify the place and the day and
hour of the meeting and the                     general nature of each item to be acted
upon thereat, said notice to be given to                     all members who would be
entitled to attend and vote at such meeting. Anything                     therein to the
contrary notwithstanding, with the consent of all members                     entitled to
vote thereon, a resolution may be proposed and passed at such                     meeting
although a lesser notice than hereinabove prescribed has been given. </font></td>
</tr>
</table>
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<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>The
accidental omission to give notice of a meeting to any member, or the
                    non-receipt of notice sent to such member, shall not invalidate the
proceedings                     at such meeting. </font></td>
</tr>
</table>
<br>

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<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>Notwithstanding
anything to the contrary in this Article 24, and subject to any
                    applicable stock exchange rules or regulations, notice of a General
Meeting need                     not be delivered to shareholders, and notice by the
Company of such General                     Meeting that is published in two daily
newspapers in Israel shall be deemed to                     have been duly given on the
date of such publication to any shareholder whose                     address, as listed
in the Register of Shareholders (or as designated in writing                     for the
receipt of notices and other documents), is located in the State of
                    Israel, and notice by the Company of a General Meeting which is
published in one                     daily newspaper in New York, New York, USA or in one
international wire service,                     shall be deemed to have been duly given
on the date of such publication to any                     shareholder whose address, as
registered in the Register of Shareholders (or as                     designated in
writing for the receipt of notices and other documents), is                     located
outside of Israel. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>25.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MANNER
OF MEETING</B> </FONT> </td>
</tr>
</table>
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<td Width=5%>&nbsp;</td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
The
Board may, in its absolute discretion, resolve to enable persons entitled to attend a
General Meeting to do so by simultaneous attendance and participation at the principal
meeting place and a satellite meeting place or places anywhere in the world and the
shareholders present in person, by proxy or by written ballot at satellite meeting places
shall be counted in the quorum for and entitled to vote at the General Meeting in
question, and that meeting shall be duly constituted and its proceedings valid, provided
that the chairman of the General Meeting is satisfied that adequate facilities are
available throughout the General Meeting to ensure that shareholders attending at all the
meeting places are able to: </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>10</font></p>
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<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>participate
in the business for which the meeting has been convened; </font></td>
</tr>
</table>
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<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>hear
all persons who speak (whether by the use of microphones, loudspeakers
                    audio-visual communications equipment or otherwise) in the principal
meeting                     place and any satellite meeting place(s); and </font></td>
</tr>
</table>
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<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>be
heard by all other persons so present in the same way. </font></td>
</tr>
</table>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>PROCEEDINGS AT GENERAL
MEETINGS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>26.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>QUORUM</B> </FONT> </td>
</tr>
</table>
<br>

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<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>No
business shall be transacted at a General Meeting, or at any adjournment
                    thereof, unless the quorum required under these Articles for such
General                     Meeting or such adjourned meeting, as the case may be, is
present when the                     meeting proceeds to business. </font></td>
</tr>
</table>
<br>

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<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>In
the absence of contrary provisions in these Articles, two or more
                    shareholders (not in default in payment of any sum referred to in
Article 32(a)                     hereof), present in person or by proxy and holding
shares conferring in the                     aggregate more than thirty three and a third
(33 1/3 %) percent of the voting                     power of the Company, shall
constitute a quorum of General Meetings. </font></td>
</tr>
</table>
<br>

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<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>If
within half an hour from the time appointed for the meeting a quorum is not
                    present, the meeting, if convened upon requisition under Sections 64
or 65 of                     the Companies Law, shall be dissolved, but in any other case
it shall be                     adjourned to the same day in the next week, at the same
time and place, or to                     such day and at such time and place as the
Chairman may determine. No business                     shall be transacted at any
adjourned meeting except business which might                     lawfully have been
transacted at the meeting as originally called. </font></td>
</tr>
</table>
<br>

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<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>The
Board of Directors may determine, in its discretion, the matters that may be
                    voted upon at the meeting by proxy or written ballot in addition to
the matters                     listed in Section 87(a) to the Companies Law. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>27.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CHAIRMAN</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
The
Chairman of the Board of Directors, shall preside as Chairman at every General Meeting of
the Company. If at any meeting the Chairman is not present within fifteen (15) minutes
after the time fixed for holding the meeting or is unwilling to act as Chairman, the
Co-Chairman shall preside at the meeting. If at any such meeting both the Chairman and the
Co-Chairman are not present or are unwilling to act as Chairman, the shareholders present
shall choose someone of their number to be Chairman. The office of Chairman shall not, by
itself, entitle the holder thereof to vote at any General Meeting nor shall it entitle
such holder to a second or casting vote (without derogating, however, from the rights of
such Chairman to vote as a shareholder or proxy of a shareholder if, in fact, he is also a
shareholder or proxy). </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>11</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>28.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ADOPTION
OF RESOLUTIONS AT GENERAL MEETINGS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>A
resolution, including a resolution to amend these Articles, shall be deemed
                    adopted if approved by the holders of a majority of the voting power
represented                     at the meeting in person or by proxy or by written ballot
and voting thereon. </font></td>
</tr>
</table>
<br>

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<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>Every
question submitted to a General Meeting shall be decided by a show of
                    hands, but the Chairman of the Meeting may determine that a
resolution shall be                     decided by a written ballot. A written ballot may
be implemented before the                     proposed resolution is voted upon or
immediately after the declaration by the                     Chairman of the results of
the vote by a show of hands. If a vote by written                     ballot is taken
after such declaration, the results of the vote by a show of                     hands
shall be of no effect, and the proposed resolution shall be decided by
                    such written ballot. </font></td>
</tr>
</table>
<br>

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<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>A
declaration by the Chairman of the meeting that a resolution has been carried
                    unanimously, or carried by a particular majority, or lost, and an
entry to that                     effect in the minute book of the Company, shall be
conclusive evidence of the                     fact without proof of the number or
proportion of the votes recorded in favor of                     or against such
resolution. </font></td>
</tr>
</table>
<br>

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<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>Notwithstanding
any of the other provisions of these Articles, any resolution to
                    consummate a Merger, as defined in Section 1 of the Companies Law,
shall require                     the approval of the holders of a majority of the voting
power of the Company.                     For the avoidance of doubt, any amendment to
this Article 28(d) shall require                     the approval of the holders of a
majority of the voting power of the Company. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>29.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RESOLUTIONS
IN WRITING</B> </FONT> </td>
</tr>
</table>
<br>

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A
resolution in writing signed by all shareholders of the Company then entitled to attend
and vote at General Meetings or to which all such shareholders have given their written
consent (by letter, telegram, telex, facsimile, e-mail or otherwise) shall be deemed to
have been unanimously adopted by a General Meeting duly convened and held. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>30.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>POWER
TO ADJOURN</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Chairman of a General Meeting at which a quorum is present may, with the
                    consent of the holders of a majority of the voting power represented
in person                     or by proxy and voting on the question of adjournment (and
shall if so directed                     by the meeting), adjourn the meeting from time
to time and from place to place,                     but no business shall be transacted
at any adjourned meeting except business                     which might lawfully have
been transacted at the meeting as originally called. </font></td>
</tr>
</table>
<br>

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<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>It
shall not be necessary to give notice of an adjournment, whether pursuant to
                    Article 26(c) or Article 30(a), unless the meeting is adjourned for
twenty-one                     (21) days or more in which event notice thereof shall be
given in the manner                     required for the meeting as originally called. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>31.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>VOTING
POWER</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
Subject
to the provisions of Article 32(a) and subject to any provision hereof conferring special
rights as to voting, or restricting the right to vote, every shareholder shall have one
vote for each share held by him of record, on every resolution, without regard to whether
the vote thereon is conducted by a show of hands, by written ballot or by any other means. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>12</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>32.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>VOTING
RIGHTS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>No
shareholder shall be entitled to vote at any General Meeting (or be counted
                    as a part of the quorum thereat), unless all calls and other sums
then payable                     by him in respect of his shares in the Company have been
paid, but this Article                     32(a) shall not apply to separate General
Meetings of the holders of a                     particular class of shares pursuant to
Article 6(b). </font></td>
</tr>
</table>
<br>

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<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>A
company or other corporate body being a shareholder of the Company may duly
                    authorize any person to be its representative at any meeting of the
Company or                     to execute or deliver a proxy on its behalf. Any person so
authorized shall be                     entitled to exercise on behalf of such
shareholder all the power which the                     latter could have exercised if it
were an individual shareholder. Upon the                     request of the Chairman of
the meeting, written evidence of such authorization                     (in form
acceptable to the Chairman) shall be delivered to him. </font></td>
</tr>
</table>
<br>

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<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>Any
shareholder entitled to vote may vote either in person or by proxy (who need
                    not be a shareholder of the Company), or, if the shareholder is a
company or                     other corporate body, by a representative authorized
pursuant to Article 32(b). </font></td>
</tr>
</table>
<br>

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<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>If
two or more persons are registered as joint holders of any share, the vote of
                    the senior who tenders a vote, in person or by proxy, shall be
accepted to the                     exclusion of the vote(s) of the other joint
holder(s). For the purpose of this                     Article 32(d), seniority shall be
determined by the order of registration of the                     joint holders in the
Shareholder Register. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>PROXIES </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>33.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>INSTRUMENT
OF APPOINTMENTS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>An
instrument appointing a proxy shall be in writing and shall be substantially
                    in the following form: </font></td>
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<td Width=85%><Font Face="Times New Roman, Times, Serif" Size=2>
"I,
[insert name of shareholder] of [insert address of shareholder],
                      being a member of Silicom Ltd. (the "Company"), hereby appoint
[insert                       name of proxy] or [insert address of proxy] as my proxy to
vote for me                       and on my behalf at the [Annual / Extraordinary]
General Meeting of the                       Company to be held on the ___ day of
_______, 20__ and at any                       adjournment(s) thereof. </font></td>
</tr>
</table>
<br>

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Signed
this ____ day of ___________, 20__. </font></td>
</tr>
</table>
<br>

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_____________________<Br>
                      (Signature of Appointor)" </font></td>
</tr>
</table>
<br>



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<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
or
in any usual or common form or in such other form as may be approved by the Board of
Directors, including appointment by telephone, Internet or any other electronic means.
Such proxy shall be duly signed by the appointor or such person&#146;s duly authorized
attorney or, if such appointor is a company or other corporate body, under its common
seal or stamp or the hand of its duly authorized agent(s) or attorney(s).  </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>13</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<Page>


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<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>The
instrument appointing a proxy (and the power of attorney or other authority,
                    if any, under which such instrument has been signed) shall either be
presented                     to the Chairman at the meeting at which the person named in
the instrument                     proposes to vote or be delivered to the Company (at
its Registered Office, at                     its principal place of business, or at the
offices of its registrar or transfer                     agent, or at such place as the
Board of Directors may specify) not less than two                     (2) hours before
the time fixed for such meeting, except that the instrument                     shall be
delivered (i) twenty-four (24) hours before the time fixed for the
                    meeting where the meeting is to be held in the United States of
America and the                     instrument is delivered to the Company at its
Registered Office or principal                     place of business, or (ii) forty-eight
(48) hours before the time fixed for the                     meeting where the meeting is
to be held outside of the United States of America                     and Israel and the
instrument is delivered to the Company&#146;s registrar or                     transfer
agent. Notwithstanding the above, the Chairman shall have the right to
                    waive the time requirement provided above with respect to all
instruments of                     proxies and to accept any and all instruments of proxy
received prior to the                     beginning of a General Meeting. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>34.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EFFECT
OF DEATH OF APPOINTOR OR TRANSFER OF SHARE OR REVOCATION OF APPOINTMENT</B> </FONT> </td>
</tr>
</table>
<br>

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<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>A
vote cast in accordance with an instrument appointing a proxy shall be valid
                    notwithstanding the prior death or bankruptcy of the appointing
member (or of                     his attorney-in-fact, if any, who signed such
instrument), or the transfer of                     the share in respect of which the
vote is cast, unless written notice of such                     matters shall have been
received by the Company or by the Chairman of such                     meeting prior to
such vote being cast. </font></td>
</tr>
</table>
<br>

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<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>An
instrument appointing a proxy shall be deemed revoked (i) upon receipt by the
                    Company or the Chairman, subsequent to receipt by the Company of such
                    instrument, of written notice signed by the person signing such
instrument or by                     the member appointing such proxy canceling the
appointment thereunder (or the                     authority pursuant to which such
instrument was signed) or of an instrument                     appointing a different
proxy (and such other documents, if any, required under                     Article 33(b)
for such new appointment), provided such notice of cancellation or
                    instrument appointing a different proxy were so received at the place
and within                     the time for delivery of the instrument revoked thereby as
referred to in                     Article 33(b) hereof, or (ii) if the appointing
shareholder is present in person                     at the meeting for which such
instrument of proxy was delivered, upon receipt by                     the Chairman of
such meeting of written notice from such member of the                     revocation of
such appointment, or if and when such shareholder votes at such
                    meeting. A vote cast in accordance with an instrument appointing a
proxy shall                     be valid notwithstanding the revocation or purported
cancellation of the                     appointment, or the presence in person or vote of
the appointing shareholder at                     a meeting for which it was rendered,
unless such instrument of appointment was                     deemed revoked in
accordance with the foregoing provisions of this Article 34(b)                     at or
prior to the time such vote was cast. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>14</font></p>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>BOARD OF DIRECTORS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>35.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>POWERS
OF BOARD OF DIRECTORS</B> </FONT> </td>
</tr>
</table>
<br>

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<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><U>General</u>.
The management of the business of the Company shall be vested in                     the
Board of Directors, which may exercise all such powers and do all such acts
                    and things as the Company is authorized to exercise and do, and are
not by these                     Articles or by law required to be exercised or done by
the Company by action of                     its shareholders at a General Meeting. The
authority conferred on the Board of                     Directors by this Article 35
shall be subject to the provisions of the Companies                     Law, these
Articles and any regulation or resolution consistent with these
                    Articles adopted from time to time by the Company by action of its
shareholders                     at a General Meeting, provided, however, that no such
regulation or resolution                     shall invalidate any prior act done by or
pursuant to a decision of the Board of                     Directors which would have
been valid if such regulation or resolution had not                     been adopted. </font></td>
</tr>
</table>
<br>

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<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><U>Borrowing
Power</u>. The Board of Directors may from time to time, at its
                    discretion, cause the Company to borrow or secure the payment of any
sum or sums                     of money for the purposes of the Company, and may secure
or provide for the                     repayment of such sum or sums in such manner, at
such times and upon such terms                     and conditions as it deems fit, and,
in particular, by the issuance of bonds,                     perpetual or redeemable
debentures, debenture stock, or any mortgages, charges,                     or other
securities on the undertaking or the whole or any part of the property
                    of the Company, both present and future, including its uncalled or
called but                     unpaid capital for the time being. </font></td>
</tr>
</table>
<br>

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<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><U>Reserves</u>.
The Board of Directors may, from time to time, set aside any
                    amount(s) out of the profits of the Company as a reserve or reserves
for any                     purpose(s) which the Board of Directors, in its absolute
discretion, shall deem                     fit, including without limitation,
capitalization and distribution of bonus                     shares, and may invest any
sum so set aside in any manner and from time to time                     deal with and
vary such investments and dispose of all or any part thereof, and
                    employ any such reserve or any part thereof in the business of the
Company                     without being bound to keep the same separate from other
assets of the Company,                     and may subdivide or redesignate any reserve
or cancel the same or apply the                     funds therein for another purpose,
all as the Board of Directors may from time                     to time think fit. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>36.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXERCISE
OF POWERS OF BOARD OF DIRECTORS</B> </FONT> </td>
</tr>
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<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>A
meeting of the Board of Directors at which a quorum is present shall be
                    competent to exercise all the authorities, powers and discretion
vested in or                     exercisable by the Board of Directors, whether in person
or by any other means                     by which the Directors may hear each other
simultaneously. </font></td>
</tr>
</table>
<br>

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<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>A
resolution proposed at any meeting of the Board of Directors shall be deemed
                    adopted if approved by a majority of the Directors present when such
resolution                     is put to a vote and voting thereon. </font></td>
</tr>
</table>
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<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>The
Board of Directors may adopt resolutions without holding a meeting of the
                    Board of Directors, provided that all of the Directors then in office
and                     lawfully entitled to vote thereon shall have agreed to vote on
the matters                     underlying such resolutions without convening a meeting
of the Board of                     Directors. If the Board of Directors adopts
resolutions as set forth in the                     immediately preceding sentence,
minutes including such resolutions, including a                     resolution to vote on
such matters without convening a meeting of the Board of                     Directors,
shall be prepared and the Chairman of the Board of Directors (or in
                    his or her absence the Co-Chairman) will sign such minutes. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>15</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>37.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>DELEGATION
OF POWERS</B> </FONT> </td>
</tr>
</table>
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<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>The
Board of Directors may, subject to the provisions of the Companies Law,
                    delegate any or all of its powers to committees, each consisting of
one or more                     persons (who are Directors), and it may from time to time
revoke such delegation                     or alter the composition of any such
committee. Any Committee so formed (in                     these Articles referred to as
a &#147;Committee of the Board of                     Directors&#148;), shall, in the
exercise of the powers so delegated, conform to                     any regulations
imposed on it by the Board of Directors. The meetings and                     proceedings
of any such Committee of the Board of Directors shall, <I>mutatis
                    mutandis</i>, be governed by the provisions herein contained for
regulating the                     meetings of the Board of Directors, so far as not
superseded by any regulations                     adopted by the Board of Directors under
this Article. Unless otherwise expressly                     provided by the Board of
Directors in delegating powers to a Committee of the                     Board of
Directors, such Committee shall not be empowered to further delegate
                    such powers. </font></td>
</tr>
</table>
<br>

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<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>Without
derogating from the provisions of Article 51, the Board of Directors may
                    from time to time appoint a Secretary to the Company, as well as
officers,                     agents, employees and independent contractors, as the Board
of Directors deems                     fit, and may terminate the service of any such
person. The Board of Directors                     may, subject to the provisions of the
Companies Law, determine the powers and                     duties, as well as the
salaries and emoluments, of all such persons, and may                     require
security in such cases and in such amounts as it deems fit. </font></td>
</tr>
</table>
<br>

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<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>The
Board of Directors may from time to time, by power of attorney or otherwise,
                    appoint any person, company, firm or body of persons to be the
attorney or                     attorneys of the Company at law or in fact for such
purpose(s) and with such                     powers, authorities and discretions, and for
such period and subject to such                     conditions, as it deems fit, and any
such power of attorney or other appointment                     may contain such
provisions for the protection and convenience of persons                     dealing with
any such attorney as the Board of Directors deems fit, and may also
                    authorize any such attorney to delegate all or any of the powers,
authorities                     and discretion vested in him. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>38.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NUMBER
OF DIRECTORS</B> </FONT> </td>
</tr>
</table>
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<td Width=5%>&nbsp;</td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
The
Board of Directors of the Company shall consist of not less than two (2) nor more than
eight (8) Directors. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>39.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ELECTION
AND REMOVAL OF DIRECTORS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Directors
shall be elected at the Annual General Meeting or an Extraordinary
                    Meeting of the Company by the vote of the holders of a majority of
the voting                     power represented at such meeting in person or by proxy
and voting on the                     election of directors. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>16</font></p>
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<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>Nominations
for the election of Directors may be made by the Board of Directors
                    or a committee appointed by the Board of Directors or by any
shareholder holding                     at least (i) five percent (5%) of the outstanding
voting power in the Company                     and one percent (1%) of the outstanding
voting power in the Company or (ii) five                     percent (5%) of the
outstanding voting power in the Company. However, and                     without
limitation of Sections 63 or 64 of the Companies Law, any such
                    shareholder may nominate one or more persons for election as
Directors at a                     General Meeting only if a written notice of such
shareholder&#146;s intent to                     make such nomination or nominations has
been given to the Secretary of the                     Company not later than (i) with
respect to an election to be held at an Annual                     General Meeting of
shareholders, ninety (90) days prior to the anniversary date                     of the
immediately preceding annual meeting, and (ii) with respect to an
                    election to be held at a Extraordinary General Meeting of
shareholders for the                     election of Directors, at least ninety (90) days
prior to the date of such                     meeting. Each such notice shall set forth:
(a) the name and address of the                     shareholder who intends to make the
nomination and of the person or persons to                     be nominated; (b) a
representation that the shareholder is a holder of record of                     shares
of the Company entitled to vote at such meeting and intends to appear in
                    person or by proxy at the meeting to nominate the person or persons
specified in                     the notice; (c) a description of all arrangements or
understandings between the                     shareholder and each nominee and any other
person or persons (naming such person                     or persons) pursuant to which
the nomination or nominations are to be made by                     the shareholder; and
(d) the consent of each nominee to serve as a Director of                     the Company
if so elected and a declaration signed by each of the nominees
                    declaring that there is no limitation under the Companies Law for the
                    appointment of such a nominee and that all the information that is
required                     under the Companies Law to provided to the Company in
connection with such an                     appointment has been provided. The Chairman
of the meeting may refuse to                     acknowledge the nomination of any person
not made in compliance with the                     foregoing procedure. </font></td>
</tr>
</table>
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<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>The
General Meeting may, by a vote of the holders of at least a majority of the
                    voting power represented at the meeting, remove any Director(s) from
office, and                     elect Directors instead of Directors so removed or fill
any Vacancy (as defined                     in Article 41), however created, in the Board
of Directors unless such Vacancy                     was filled by the Board of Directors
under Article 41. </font></td>
</tr>
</table>
<br>

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<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>In
the event of any contradiction between the provisions of this Article 39 and
                    the provisions of the Companies Law relating to the election and term
of                     External Directors, the applicable provisions of the Companies Law
shall govern,                     and the External Directors shall be elected and hold
office in accordance with                     the provisions of the Companies Law. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>40.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>QUALIFICATION
OF DIRECTORS</B> </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>
No
person shall be disqualified to serve as a Director by reason of his not holding shares in
the Company or by reason of his having served as a Director in the past. </font></td>
</tr>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>41.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CONTINUING
DIRECTORS IN THE EVENT OF VACANCIES</B> </FONT> </td>
</tr>
</table>
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<td Width=5%>&nbsp;</td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
In
the event that one or more vacancies is created in the Board of Directors, including
without limitation, a situation in which the number of Directors is less than the minimum
number permitted under Article 38 (a &#147;Vacancy&#148;), the continuing Directors may
continue to act in every matter, and, may appoint Directors to temporarily fill any such
Vacancy, provided, however, that if the number of Directors is less than two (2), they may
only act in (i) an emergency; or (ii) to fill the office of director which has become
vacant; or (iii) in order to call a General Meeting of the Company for the purpose of
electing Directors to fill any or all Vacancies, so that at least two (2) Directors are in
office as a result of said meeting. Notwithstanding the foregoing, in the event of Vacancy
of an External Director, the Company shall call a General Meeting to elect a new External
Director or take such other action as required under the Companies Law. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>17</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>42.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>VACATION
OF OFFICE</B> </FONT> </td>
</tr>
</table>
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<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>The
office of a Director shall be vacated, <I>ipso facto</i>, upon his or her
                    death, or if he or she be found lunatic or become of unsound mind, or
if he or                     she becomes bankrupt, or if the Director is a company, upon
its winding-up, or                     if he is found by a court guilty of any of the
felonies listed in Section 226 of                     the Companies Law. </font></td>
</tr>
</table>
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<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>The
office of a Director may also be vacated by the written resignation of the
                    Director. Such resignation shall become effective on the date fixed
therein, or                     upon the delivery thereof to the Company, whichever is
later. Such written                     resignation shall include the reasons that lead
the Director to resign from his                     office. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>43.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>REMUNERATION
OF DIRECTORS</B> </FONT> </td>
</tr>
</table>
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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
A
Director shall be paid remuneration by the Company for his services as Director to the
extent such remuneration shall have been approved by the Company in accordance with the
Companies Law. </font></td>
</tr>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>44.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CONFLICT
OF INTEREST</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
Subject
to the provisions of the Companies Law, no Director shall be disqualified by virtue of his
office from holding any office or place of profit in the Company or in any company in
which the Company shall be a shareholder or otherwise interested, or from contracting with
the Company as vendor, purchaser or otherwise, nor shall any such contract, or any
contract or arrangement entered into by or on behalf of the Company in which any Director
shall be in any way interested, be voided, nor, other than as required under the Companies
Law, shall any Director be liable to account to the Company for any profit arising from
any such office or place of profit or realized by any such contract or arrangement by
reason only of such Director&#146;s holding that office or of the fiduciary relations
thereby established, but the nature of his interest, as well as any material fact or
document, must be disclosed by him at the meeting of the Board of Directors (or a
Committee of the Board of Directors) at which the contract or arrangement is first
considered, if his interest then exists, or, in any other case, at no later than the first
meeting of the Board of Directors (or a Committee of the Board of Directors) after the
acquisition of his interest. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>45.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ALTERNATE
DIRECTORS</B> </FONT> </td>
</tr>
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<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>Subject
to the provisions of the Companies Law and subject to the approval of
                    the Board of Directors, a Director may appoint an alternate (in these
Articles                     referred to an: &#147;Alternate Director&#148;). A person
that is not qualified                     to serve as a Director or a person that is
serving as a Director or Alternate                     Director shall not be appointed to
serve as an Alternate Director. </font></td>
</tr>
</table>
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<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>An
Alternate Director shall be deemed for all intents and purposes as the
                    Director which appointed him as his alternate, and he shall be
entitled to be                     present at meetings of the Board of Directors and/or
Committees of the Board of                     Directors, to participate and vote
thereat, as was the Director that appointed                     him was entitled. </font></td>
</tr>
</table>
<br>

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<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>A
Director that appointed an Alternate Director may, subject to the provisions
                    of the Companies Law, cancel the appointment at any time.
Furthermore, the                     office of an Alternate Director shall be vacated,
whenever the office of the                     Director that appointed him ceases to
serve as a Director of the Company. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>18</font></p>
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<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>Any
appointment of an Alternate Director or cancellation of the appointment, as
                    aforementioned, shall be done by written notice which shall be
delivered to the                     Alternate Director and to the Company, and shall
come into force after delivery                     of the letter of appointment or
cancellation as aforesaid, or on the date                     specified in the letter of
appointment or letter of cancellation, whichever the                     later. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>PROCEEDINGS OF THE
BOARD OF DIRECTORS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>46.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MEETINGS</B> </FONT> </td>
</tr>
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<br>

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<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>The
Board of Directors may meet and adjourn its meetings and otherwise regulate
                    such meetings and proceedings as the Directors think fit. </font></td>
</tr>
</table>
<br>

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<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>Any
Director may at any time, and the Secretary, upon the request of such
                    Director, shall, convene a meetings of the Board of Directors, but
not less than                     two (2) days&#146; notice shall be given of any
meetings so convened. Notice of                     any such meeting shall be given to
all the Directors and may be given orally, by                     telephone, in writing
or by mail, email or facsimile. Notwithstanding anything                     to the
contrary herein, failure to deliver notice to a director of any such
                    meeting in the manner required hereby may be waived by such Director,
and a                     meeting shall be deemed to have been duly convened
notwithstanding such                     defective notice if such failure or defect is
waived prior to action being taken                     at such meeting, by all Directors
entitled to participate at such meeting to                     whom notice was not duly
given as aforesaid. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>47.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RESOLUTIONS
IN WRITING</B> </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>
A
resolution in writing signed by the Chairman of the Board of Directors, or of a Committee
of the Board of Directors, provided that all the members of the Board of Directors or such
Committee have agreed to adopt such resolution without convening a meeting, shall be valid
for every purpose as a resolution adopted at a Board of Directors&#146; or Committee
meeting, as the case may be, that was duly convened and held. In place of a Director the
aforesaid resolution may be signed and delivered by his attorney. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>48.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>QUORUM</B> </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>
Until
otherwise unanimously decided by the Board of Directors, a quorum at a meeting of the
Board of Directors shall be constituted by the presence in person or by telephone
conference of half (50%) of the Directors then in office who are lawfully entitled to
participate in the meeting, including Alternate Directors, if there is a meeting at which
an appointing Director is not present. No business shall be transacted at a meeting of the
Board of Directors unless the requisite quorum is present (in person or by telephone
conference or by other means by which all directors may hear and be heard) when the
meeting proceeds to business. </font></td>
</tr>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>49.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CHAIRMAN
OF THE BOARD OF DIRECTORS</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
The
Board of Directors may from time to time, elect one of its members to be the Chairman of
the Board of Directors, and another of its members as Co-Chairman, remove such Chairman
and Co-Chairman from office and appoint others in their place. The Chairman of the Board
of Directors shall preside at every meeting of the Board of Directors, but if there is no
such Chairman, or if at any meeting he is not present within fifteen (15) minutes of the
time fixed for the meeting or if he is unwilling to take the chair, the Co-Chairman shall
preside. If both the Chairman and the Co-Chairman are not present within such fifteen (15)
minutes or are unwilling to take the chair the Directors present shall choose one of their
number to be the Chairman of such meeting. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>19</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px">
<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>50.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>VALIDITY
OF ACTS DESPITE DEFECTS</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
All
acts done <I>bona fide</i> at any meeting of the Board of Directors, or of a Committee of
the Board of Directors, or by any person(s) acting as Director(s), shall, notwithstanding
that it may afterwards be discovered that there was some defect in the appointment of the
participants in such meetings or any of them or any person(s) acting as aforesaid, or that
they or any of them were disqualified, be as valid as if there were no such defect or
disqualification. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>CHIEF EXECUTIVE
OFFICER AND PRESIDENT </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>51.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CHIEF
EXECUTIVE OFFICER AND PRESIDENT</B> </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
Board of Directors may from time to time appoint one or more persons, whether or not
Directors, as Chief Executive Officer or Officers, General Manager or Managers, or
President of the Company and may confer upon such person(s), and from time to time modify
or revoke, such title(s) and such duties and authorities of the Board of Directors as the
Board of Directors may deem fit, subject to such limitations and restrictions as the Board
of Directors may from time to time prescribe. Unless otherwise determined by the Board of
Directors, the Chief Executive Officer shall have authority with respect of the management
of the Company in the ordinary course of business. Such appointment(s) may be either for a
fixed term or without any limitation of time, and the Board of Directors may from time to
time (subject to the provisions of the Companies Law and of any contract between any such
person and the Company) fix his or their salaries and emoluments, remove or dismiss him or
them from office and appoint another or others in his or their place or places. </font></td>
</tr>
</table>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>MINUTES </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>52.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MINUTES</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Minutes
of each General Meeting and of each meeting of the Board of Directors or
                    of any Committee of the Board of Directors shall be recorded and duly
entered in                     books provided for that purpose, and shall be held by the
Company at its                     principal place of office or its Registered Office or
such other place as shall                     have been determined by the Board of
Directors. Such minutes shall, in all                     events, set forth the names of
the persons present at the meeting and all                     resolutions adopted
thereat. </font></td>
</tr>
</table>
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<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>Any
minutes as aforesaid, if purporting to be signed by the Director presiding
                    over the meeting, shall constitute prima facie evidence of the
matters recorded                     therein. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>DIVIDENDS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>53.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>DECLARATION
OF DIVIDENDS</B> </FONT> </td>
</tr>
</table>
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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
The
Board of Directors may, subject to the applicable provisions of the Companies Law, from
time to time declare, and cause the Company to pay, such dividend as may appear to the
Board of Directors to be justified by the profits of the Company. The Board of Directors
shall determine the time for payment of such dividends, both interim and final, and the
record date for determining the shareholders entitled thereto. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>20</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>54.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>FUNDS
AVAILABLE FOR PAYMENT OF DIVIDEND</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
No
dividend shall be paid otherwise than out of the profits of the Company.  </font></td>
</tr>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>55.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>AMOUNT
PAYABLE BY WAY OF DIVIDENDS</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
Subject
to the provisions of these Articles and subject to any rights or conditions attached at
that time to any share in the capital of the Company granting preferential, special or
deferred rights or not granting any rights with respect to dividends, the profits of the
Company which shall be declared as dividends shall be distributed according to the
proportion of the nominal value paid up on account of the shares held at the date so
appointed by the Company, without regard to the premium paid in excess of the nominal
value, if any. No amount paid or credited as paid on a share in advance of calls shall be
treated for purposes of this Article as paid on a share. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>56.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>INTEREST</B> </FONT> </td>
</tr>
</table>
<br>

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No
dividend shall carry interest as against the Company.  </font></td>
</tr>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>57.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PAYMENT
IN SPECIE</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
Upon
the determination of the Board of Directors, the Company (i) may cause any monies,
investments, or other assets forming part of the undivided profits of the Company,
standing to the credit of a reserve fund, or to the credit of a reserve fund for the
redemption of capital, or in the hands of the Company and available for dividends, or
representing premiums received on the issuance of shares and standing to the credit of the
share premium account, to be capitalized and distributed among such of the shareholders as
would be entitled to receive the same if distributed by way of dividend and in the same
proportion, on the footing that they become entitled thereto as capital, or may cause any
part of such capitalized fund to be applied on behalf of such shareholders in paying up in
full, either at par or at such premium as the resolution may provide, any unissued shares
or debentures or debenture stock of the Company which shall be distributed accordingly or
in payment, in full or in part, of the uncalled liability on all issued shares or
debentures or debenture stock if such liability exists, on a <I>pro rata </i> basis; and
(ii) may cause such distribution or payment to be accepted by such shareholders in full
satisfaction of their interest in the said capitalized sum. </font></td>
</tr>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>58.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>IMPLEMENTATION
OF POWERS UNDER ARTICLE 57</B> </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>
For
the purpose of giving full effect to any resolution under Article 57, and without
derogating from the provisions of Article 7(b) hereof, the Board of Directors may settle
any difficulty which may arise in regard to the distribution as it thinks expedient, and,
in particular, may issue fractional certificates, and may fix the value for distribution
of any specific assets, and may determine that cash payments shall be made to any members
upon the footing of the value so fixed, or that fractions of less value than the nominal
value of one share may be disregarded in order to adjust the rights of all parties, and
may vest any such cash, shares, debentures, debenture stock or specific assets in trustees
upon such trusts for the persons entitled to the dividend or capitalized fund as may seem
expedient to the Board of Directors. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>21</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>59.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>DIVIDEND
ON UNPAID SHARES</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
Without
derogating from Article 54 hereof, the Board of Directors may give an instruction which
shall prevent the distribution of a dividend to the registered holders of shares, the full
nominal amount of which, has not been paid up. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>60.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RETENTION
OF DIVIDENDS</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Board of Directors may retain any dividend or other monies payable or
                    property distributable in respect of a share on which the Company has
a lien,                     and may apply the same in or towards satisfaction of the
debts, liabilities, or                     engagements in respect of which the lien
exists. </font></td>
</tr>
</table>
<br>

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<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>The
Board of Directors may retain any dividend or other monies payable or
                    property distributable in respect of a share in respect of which any
person is,                     under Article 20 or 21, entitled to become a member, or
which any person, is,                     under said Articles, entitled to transfer,
until such person shall become a                     member in respect of such share or
shall transfer the same. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>61.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>UNCLAIMED
DIVIDENDS</B> </FONT> </td>
</tr>
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<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
All
unclaimed dividends or other moneys payable in respect of a share may be invested or
otherwise made use of by the Board of Directors for the benefit of the Company until
claimed. The payment by the Directors of any unclaimed dividend or such other moneys into
a separate account shall not cause the Company to be a trustee in respect thereof. The
principal (and only the principal) of an unclaimed dividend or such other moneys shall be,
if claimed, paid to the person entitled thereto. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>62.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MECHANICS
OF PAYMENT</B> </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
Board of Directors may fix the mechanics for payment of dividends as it deems fit.
However, if nothing to the contrary is provided in the resolution of the Board of
Directors, then all dividends, or other moneys payable in cash in respect of a share, may
be paid by check or warrant sent through the post to, or left at, the registered address
of the person entitled thereto or by transfer to a bank account specified by such person
(or, if two or more persons are registered as joint holders of such share or are entitled
jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, to
the joint holder whose name is registered first in the Shareholder Register or his bank
account or the person who the Company may then recognize as the owner thereof or entitled
thereto under Article 20 or 21 hereof, as applicable, or such person&#146;s bank account),
or to such person and at such other address as the person entitled thereto may by writing
direct. Every such check or warrant shall be made payable to the order of the person to
whom it is sent, or to such person as the person entitled thereto as aforesaid may direct,
and payment of the check or warrant by the banker upon whom it is drawn shall be a good
discharge to the Company. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>63.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RECEIPT
FROM A JOINT HOLDER</B> </FONT> </td>
</tr>
</table>
<br>

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If
two or more persons are registered as joint holders of any share, or are entitled jointly
thereto in consequence of the death or bankruptcy of the holder or otherwise, any one of
them may give effectual receipts for any dividend or other moneys payable or property
distributable in respect of such share. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>22</font></p>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>ACCOUNTS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>64.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>BOOKS
OF ACCOUNT</B> </FONT> </td>
</tr>
</table>
<br>

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The
Board of Directors shall cause accurate books of account to be kept in accordance with the
provisions of the Companies Law and of any other applicable law. Such books of account
shall be kept at the Registered Office of the Company, or at such other place or places as
the Board of Directors may think fit, and they shall always be open to inspection by all
Directors. No member, not being a Director, shall have any right to inspect any account or
book or other similar document of the Company, except as conferred by law or authorized by
the Board of Directors or by resolution of the shareholders of the Company. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>65.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>AUDIT</B> </FONT> </td>
</tr>
</table>
<br>

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At
least once in every fiscal year the accounts of the Company shall be audited and the
correctness of the profit and loss account and balance sheet certified by one or more duly
qualified auditors. </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>66.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>AUDITORS</B> </FONT> </td>
</tr>
</table>
<br>

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The
appointment, authorities, rights and duties of the auditor(s) of the Company, shall be
regulated by applicable law, provided, however, that in exercising its authority to fix
the remuneration of the auditor(s), the shareholders by resolution in a General Meeting
may act (and in the absence of any action in connection therewith shall be deemed to have
so acted) to authorize the Board of Directors or a Committee of the Board of Directors to
fix such remuneration subject to such criteria or standards, if any, as may be provided in
such resolution, and if no such criteria or standards are so provided, such remuneration
shall be fixed in an amount commensurate with the volume and nature of the services
rendered by such auditor(s). </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>BRANCH REGISTERS </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>67.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>BRANCH
REGISTERS</B> </FONT> </td>
</tr>
</table>
<br>

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Subject
to and in accordance with the provisions of Sections 130 to 139, inclusive, of the
Companies Law and to all orders and regulation issued thereunder, the Company may cause
branch registers to be kept in any place outside Israel as the Board of Directors may
think fit, and, subject to all applicable requirements of law, the Board of Directors may
from time to time adopt such rules and procedures as it may think fit in connection with
the keeping of such branch registers. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>INSURANCE, INDEMNITY
AND EXEMPTION </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>68.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>INDEMNITY,
INSURANCE AND EXEMPTION</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Subject
to the provisions of the Companies Law, the Company may resolve in
                    advance to exempt an Office Holder of the Company from all or any of
his                     liability for damage in consequence of a breach of the duty of
care                     vis-&agrave;-vis the Company. </font></td>
</tr>
</table>
<br>

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<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>Subject
to the provisions of the Companies Law, the Company may enter into a
                    contract to insure the liability of an Office Holder of the Company
for an                     obligation imposed upon him in consequence of an act done in
his capacity as an                     Office Holder, in any of the following cases: </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>23</font></p>
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(i)
          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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(ii)
            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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(iii)
            a monetary obligation imposed on him in favor of another person;  </font></td>
</tr>
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<br>

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(iv)
            any other incident for which it is or shall be permitted by law to insure the
          liability of an Office Holder.  </font></td>
</tr>
</table>
<br>

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<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>Subject
to the provisions of the Companies Law &#150;</font></td>
</tr>
</table>
<br>

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<td Width=10%>&nbsp;</td>
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(i)
            The Company may give an undertaking in advance to indemnify an Office Holder
of           the Company for an obligation or expense as specified in sub-Article (d)
below,           imposed on or incurred by him in consequence of an act or omission to
act in his           capacity as an Office Holder, provided that the undertaking with
respect to           obligations specified in sub-Article (d)(i) below is limited to
events which in           the Board of Directors&#146; opinion are foreseeable in view of
the           Company&#146;s activity at the time of the indemnity undertaking, and to an
          amount or degree which the Board of Directors has determined is reasonable in
          the circumstances of the case (hereinafter: &#147;an indemnification
          undertaking&#148;).  </font></td>
</tr>
</table>
<br>

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(ii)
            Without derogating from the provisions of sub-Article (c)(i) above, the
Company           may indemnify an Office Holder of the Company retroactively, for an
obligation           or expense as specified in sub-Article (d) below, imposed or
incurred on him in           consequence of an act done in his capacity as an Office
Holder in the Company.  </font></td>
</tr>
</table>
<br>

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<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>The
indemnification undertaking or indemnity, as mentioned in sub-Article (c)
                    above, may be given for an obligation or expense as specified in
sub-Articles                     (d)(i) to (d)(iv) below, imposed on or incurred by the
Office Holder of the                     Company in consequence of an act or omission to
act in his capacity as an Office                     Holder, as follows: </font></td>
</tr>
</table>
<br>

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<td Width=10%>&nbsp;</td>
<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
(i)
            A monetary liability imposed by the Office Holder of the Company pursuant to
a           judgment in favor of another person, including a judgment imposed on such
Office           Holder in a compromise or an arbitration decision that was approved by a
court           of law;  </font></td>
</tr>
</table>
<br>

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<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
(ii)Reasonable
litigation expenses, including attorneys&#146; fees, incurred by the Office Holder of the
Company due to an investigation or a proceeding instituted against the Office Holder by
an authority competent to administrate such an investigation or proceeding, and that was
&#147;finalized without the filing of an indictment against the Office Holder&#148; (as
defined in the Companies Law) and without any &#147;financial obligation imposed on the
Office Holder in lieu of criminal proceedings&#148; (as defined in the Companies Law); or
that was &#147;finalized without the filing of an indictment against the Office Holder&#148; but
with &#147;financial obligation imposed on the Office Holder in lieu of criminal
proceedings&#148; with respect to an offence that does not require proof of criminal
intent;  </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>24</font></p>
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<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
(iii)
            Reasonable litigation expenses, including attorneys&#146; professional fees,
          incurred by the Office Holder of the Company or which he is ordered to pay by a
          court in proceedings filed against him by the Company or on its behalf or by
          another person, or in a criminal indictment of which he is acquitted, or in a
          criminal indictment of which he is convicted of an offence that does not
require           proof of criminal intent.  </font></td>
</tr>
</table>
<br>

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<td Width=90%><Font Face="Times New Roman, Times, Serif" Size=2>
(iv)
            Any other obligation or expense for which it is or shall be permitted by law
to           indemnify an Office Holder of the Company.  </font></td>
</tr>
</table>
<br>

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<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>Any
amendment to the Companies Law adversely affecting the right of any Office
                    Holder to be indemnified or insured pursuant to this Article 68 shall
be                     prospective in effect, and shall not affect the Company&#146;s
obligation or                     ability to indemnify or insure an Office Holder for any
act or omission                     occurring prior to such amendment, unless otherwise
provided by the Companies                     Law. </font></td>
</tr>
</table>
<br>

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<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>The
provisions of this Article 68 are not intended, and shall not be interpreted
                    so as to restrict the Company, in any manner, in respect of the
procurement of                     insurance and/or indemnification and/or exculpation,
in favour of any person who                     is not an Office Holder, including,
without limitation, any employee, agent,                     consultant or contractor of
the Company who is not an Office Holder. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>WINDING UP </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>69.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>WINDING
UP</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>
If
the Company is wound up, then subject to applicable law and to the rights of the holders
of shares with special rights upon winding up, the assets of the Company available for
distribution among the shareholders shall be distributed to them in proportion to the
respective holdings of the shares in respect of which such distribution is being made. </font></td>
</tr>
</table>
<br>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>RIGHTS OF SIGNATURE,
STAMP, AND SEAL </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>70.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RIGHTS
OF SIGNATURE, STAMP, AND SEAL</B> </FONT> </td>
</tr>
</table>
<br>

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<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>The
Board of Directors shall be entitled to authorize any person or persons (who
                    need not be Directors) to act and sign on behalf of the Company, and
the acts                     and signature of such person(s) on behalf of the Company
shall bind the Company                     insofar as such person(s) acted and signed
within the scope of his or their                     authority. </font></td>
</tr>
</table>
<br>

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<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>The
Board of Directors may provide for a seal. If the Board of Directors so
                    provides, it shall also provide for the safe custody thereof. Such
seal shall                     not be used except by the authority of the Board of
Directors and in the                     presence of the person(s) authorized to sign on
behalf of the Company, who shall                     sign every instrument to which such
seal is affixed. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>25</font></p>
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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=2>NOTICES </font></h1>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>71.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NOTICES</B> </FONT> </td>
</tr>
</table>
<br>

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<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>Any
written notice or other document may be served by the Company upon any
                    shareholder either personally or by sending it by prepaid mail
(airmail if sent                     internationally) addressed to such member at his
address as described in the                     Shareholder Register. Any written notice
or other document may be served by any                     shareholder upon the Company
by tendering the same in person to the Secretary or                     the General
Manager or Chief Executive Officer of the Company at the principal
                    office of the Company or by sending it by prepaid registered mail
(airmail if                     posted outside Israel) to the Company at it Registered
Address. Any such notice                     or other document shall be deemed to have
been served two (2) business days                     after it has been posted (seven (7)
business days if posted internationally), or                     when actually tendered
in person, to such shareholder (or to the Secretary or                     the General
Manager or the Chief Executive Officer), whichever is earlier.                     Notice
sent by email or facsimile shall be deemed to have been served two
                    business days after the notice is sent to the addressee, or when in
fact                     received, whichever is earlier, notwithstanding that if it was
defectively                     addressed or failed, in some other respect, to comply
with the provisions of                     this Article 71(a). </font></td>
</tr>
</table>
<br>

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<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>All
notices to be given to the shareholders shall, with respect to any share to
                    which persons are jointly entitled, be given to whichever of such
persons is                     named first in the Shareholder Register, and any notice so
given shall be                     sufficient notice to the holders of such share. </font></td>
</tr>
</table>
<br>

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<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>If
requested by the Company, each shareholder shall provide the Company with the
                    shareholder&#146;s full street and mailing address, as well, if
available with                     facsimile number and email address. Any shareholder
whose address is not set out                     in the Shareholder Register, and who
shall not have designated in writing                     delivered to the Company an
address for the receipt of notices, shall not be                     entitled to receive
any notice from the Company. </font></td>
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<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>exhibit_4-2.htm
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     <!-- Control Number: 84828                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   S-8                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>S-8</TITLE>
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<P Align=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 4.2</B></U> </FONT> </p>

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<H1 Align=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>SILICOM LTD.</U> </FONT> </h1>

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<H1 Align=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>U.S. SHARE OPTION PLAN
(2000)</U> </FONT> </h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>A. &nbsp;&nbsp;&nbsp;&nbsp;NAME AND
PURPOSE</B> </FONT> </p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Name</u>: This plan, as amended from time to time, shall be known as the
          Silicom Ltd. U.S. Share Option Plan (2000) (the &#147;Plan&#148;). </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Purpose</u>: The purpose and intent of the Plan is to provide incentives to
          officers, consultants and certain other present and future employees and
          directors (each, a &#147;Service Provider&#148;) of Silicom Ltd. (the
          &#147;Company&#148;) and its subsidiaries by providing them with opportunities
          to purchase shares in the Company, pursuant to a plan approved by the Board of
          Directors of the Company (the &#147;Plan&#148;). The Plan is intended to comply
          with the provisions of the United States Internal Revenue Code, as amended from
          time to time, and any successor statute thereto (the &#147;Code&#148;). The
          Options to purchase Ordinary Shares of the Company (the &#147;Options&#148;)
          granted under the Plan may contain such terms as will qualify the Options as
          Incentive Stock Options (&#147;ISO&#148;) within the meaning of Section 422(b)
          of the Code. </font></p>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>The word &#147;Company&#148; when
used in the Plan with reference to employment or retention of Service Providers, shall
include subsidiaries of the Company. The word &#147;subsidiary&#148;, when used in the
Plan, shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the option,
each of the corporations other than the last corporation in the unbroken chain owns shares
possessing 50 percent or more of the total combined voting power of all classes of shares
in one of the other corporations in such chain. </font></p>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>B. &nbsp;&nbsp;&nbsp;&nbsp;GENERAL
TERMS AND CONDITIONS OF THE PLAN</B> </FONT> </p>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; 3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Administration</U>: </FONT> </p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;3.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan will be administered by the Board of Directors of the Company, either directly or
upon the recommendation of a share option advisory committee appointed and maintained by
the Board for such purpose (the<B> &#147;Committee&#148;</b>). If appointed, the
Committee will consist of such number of Directors of the Company (not less than two (2)
in number), as may be fixed from time to time by the Board of Directors of the Company.
The Board of Directors shall appoint the members of the Committee, may from time to time
remove members from, or add members to, the Committee and shall fill vacancies in the
Committee however caused. The Board of Directors shall automatically have residual
authority if no Committee is appointed, or if such Committee ceases to operate for any
reason whatsoever. In such events, the term Committee, whenever used herein, shall mean
the Board of Directors of the Company.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;3.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the general terms and conditions of this Plan, the Board of Directors shall have sole
authority, in its absolute discretion, to determine, and the Committee, if any, shall
have full power and authority to make recommendations to the Board concerning (i) the
Service Providers to whom Option Awards (as hereinafter defined) shall be granted (&#147;Grantees&#148;),
(ii) the number of shares to be covered by each Option Award, (iii) the time or times at
which the same shall be granted, (iv) the schedule and conditions on which such Option
Awards may be exercised and on which such shares shall be paid for, and/or (v) any other
matter which is necessary or desirable for, or incidental to, the administration of the
Plan. In determining the number of shares covered by the Option Awards to be granted to
each Grantee, the Committee shall consider, among other things, the Grantee&#146;s salary
and the duration of the Grantee&#146;s employment by the Company.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;3.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board may from time to time adopt such rules and regulations for carrying out the Plan as
it may deem best. No member of the Board of Directors or of the Committee, if any, shall
be liable for any action or determination made in good faith with respect to the Plan or
any Option Award granted thereunder.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;3.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
interpretation and construction by the Committee of any provision of the Plan or of any
Option Award thereunder shall be final and conclusive unless otherwise determined by the
Board of Directors.  </font></p></td>
</tr>
</table>
<br>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; 4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Eligible
Grantees</U>: </FONT> </p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;4.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NISOs
(as defined in Section 6.3 below) may be granted to employees, Directors or consultants
of the Company or any parent or subsidiary of the Company (&#147;Service Providers&#148;).
ISOs (as defined in Section 6.3 below) may be granted only to employees. Each Option
shall be designated in the Option Agreement as either an ISO or a NISO. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value (as
hereinafter defined) of the Shares with respect to which ISOs are exercisable for the
first time by the Grantee during any calendar year (under all plans of the Company and
any parent or subsidiary) exceeds $100,000, such Options shall be treated as NISOs. For
purposes of this Section 4.1, ISOs shall be taken into account in the order in which they
were granted.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;4.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to any restriction imposed by applicable law, Option Awards may be granted to any
officer, key employee or other employee, consultant or contractor of the Company or any
of its subsidiaries, whether or not a Director of the Company or a subsidiary. The grant
of an Option Award to a Grantee hereunder, shall neither entitle such Grantee to
participate, nor disqualify the Grantee from participating, in any other grant of options
pursuant to this Plan or any other share incentive or share option plan of the Company or
any of its subsidiaries.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;4.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
&#147;Fair Market Value&#148; shall mean the last reported sales price (as expressed in
dollars on the trading day immediately preceding the date of grant) of the Ordinary
Shares on the principal United States national securities exchange on which the Ordinary
Shares are designated for trading, or if the Ordinary Shares are not designated for
trading on a United States national securities exchange, on the National Association of
Securities Dealers Automated Quotations (&#147;NASDAQ&#148;) National Market System or
the SMALLCAP Market System, or, if the Ordinary Shares are not designated for trading on
the NASDAQ National Market System or the SMALLCAP Market System, the average of the
closing bid and asked prices as reported on the NASDAQ System or, if not so reported, as
furnished by the National Quotation Bureau.  </font></p></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>2</font></p>
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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Reserved Shares</u>: The Company has reserved 200,000 authorized but unissued
          Ordinary Shares (nominal value NIS 0.01 per share) for purposes of the Plan,
          subject to adjustment as provided in paragraph 11 hereof. Any shares under the
          Plan, in respect of which the right hereunder of a Grantee to purchase the same
          shall for any reason terminate, expire or otherwise cease to exist, shall again
          be available for grant through Option Awards under the Plan. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Option Awards</u>: </font></p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;6.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board in its discretion may award to Grantees options to purchase shares in the Company
available under the Plan (&#147;Option Awards&#148;). Option Awards may be granted at any
time after this Plan has been approved by the Board of Directors of the Company and the
shares reserved for the Plan effectively created. The date of grant of each Option Award
shall be the date specified by the Board at the time such award is made.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;6.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
instrument granting an Option Award shall state, inter alia, the number of shares covered
thereby, the dates when it may be exercised, the option price, the schedule on which such
shares may be paid for and such other terms and conditions as the Board in its discretion
may prescribe, provided that they are consistent with this Plan.  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;6.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Option
Awards granted under the Plan may be of two types: (i) Incentive Stock Options (&#147;ISO&#148;)
and (ii) Non-Incentive Stock Options (&#147;NISO&#148;). ISO means any stock option
intended to be and designated as an &#147;Incentive Stock Option&#148; within Section 422
of the Code; NISO means any stock option that is not an ISO. To the extent that any Stock
Option does not qualify as an ISO, it shall constitute a corporate NISO.  </font></p></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;</font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything
in the Plan to the contrary notwithstanding, no term of this Plan relating to an ISO
shall be interpreted, amended, or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the
Code, or, without the consent of the participant(s) affected, to disqualify any ISO under
such Section 422.  </font>
</td>
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</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;</font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options
granted under the Plan shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem appropriate:  </font>
</td>
</tr>
</table>
<br>

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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Option
Price.</b> The per share exercise price for the Shares to be issued                upon
exercise of an Option shall be such price as is determined by the Committee
               in accordance with applicable law. Notwithstanding the foregoing, the
option                price per share purchasable under an ISO shall be not less than
100% of the Fair                Market Value of the stock at the time of grant. However,
any ISO granted to any                participant who, at the time the option was granted
owns, in accordance with                Section 424(d) of the Code, more than 10% of the
voting power of all classes of                stock of the Company or of a parent or
subsidiary corporation shall have an                exercise price of no less than 110%
of the Fair Market Value of the Stock at the                time of grant.  </font></p></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>3</font></p>
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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Option
Term.</b> The term of each ISO shall be fixed by the Committee, but no                ISO
shall be exercisable more than ten years after the date the ISO is granted.
               However, any ISO granted to any participant who, at the time the option is
               granted owns, in accordance with Section 424(d) of the Code, more than 10%
of                the voting power of all classes of stock of the Company or of a parent
or                subsidiary corporation may not have a term of more than five years. No
option                may be exercised by any person after expiration of the term of the
option.  </font></p></td>
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<br>

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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Exercisability.</b> ISO&#146;s
shall be exercisable at such time or times and                subject to such terms and
conditions as shall be determined by the Committee at                or after grant. If
the Committee provides, in its discretion, that any ISO is                exercisable
only in installments, the Committee may waive such installment                exercise
provisions at any time at or after grant in whole or in part, based on
               such factors as the Committee shall determine in its sole discretion.  </font></p></td>
</tr>
</table>
<br>

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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Non-Transferability
of Options.</b> No stock option (whether an ISO or NISO)                shall be
transferable by the participant otherwise than by will or by the laws                of
descent and distribution, and all stock options shall be exercisable, during
               the participant&#146;s lifetime, only by the participant.  </font></p></td>
</tr>
</table>
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<td Width=90%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Incentive
Stock Option Limitations.</b> To the extent required for                &#147;Incentive
Stock Option&#148; status under Section 422 of the Code, the                aggregate
Fair Market Value (determined as of the time of grant) of the stock                with
respect to which ISO&#146;s are exercisable for the first time by the
               participant during any calendar year under the Plan and/or any other stock
               option plan of the Company and its parent or subsidiary, if any, shall not
               exceed $100,000.  </font></p></td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Option
Prices</u>: Subject to Section 6.3, the price per share covered by                each
Option Award shall be as determined by the Board.  </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Exercise of Option Award</u>: </font></p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;8.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Option
Awards shall be exercisable pursuant to the terms under which they were awarded, as set
forth in the Option Agreement, and subject to the terms and conditions of this Plan.
Unless the Board provides otherwise, vesting of Options granted hereunder shall be tolled
during any unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.  </font></p></td>
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</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;8.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
Option Award, or any part thereof, shall be exercisable by the Grantee&#146;s signing and
returning to the Company at its principal office, a &#147;Notice of Exercise&#148; in
such form and substance as may be prescribed by the Company from time to time from the
person entitled to exercise the Option, and (ii) full payment for the Shares with respect
to which the Option is exercised. The optionee shall sign and deliver to the company,
upon its request, a separate investment representation, certificate or such other
document as may be required by the Company&#146;s counsel. Furthermore, the Company may
place a legend on any share certificate delivered to an optionee to the effect that such
shares were acquired pursuant to such an investment representation without registration
of the shares, if necessary.  </font></p></td>
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</table>
<br>

<p align=center>
<font size=2>4</font></p>
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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;8.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything
herein to the contrary notwithstanding, but without derogating from the provisions of
paragraph 10 hereof, if any Option Award, or any part thereof, has not been exercised and
the shares covered thereby not paid for within ten (10) years after the date of grant (or
any other period set forth in the instrument granting such Option Award pursuant to
Section 7) (the &#147;Termination Date&#148;), such Option Award, or such part thereof,
and the right to acquire such shares shall terminate, all interests and rights of the
Grantee in and to the same shall expire.  </font></p></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;8.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment
for Ordinary Shares purchased under an option granted hereunder shall be made in full
upon exercise of the option, by certified or bank cashier&#146;s check payable to the
order of the Company, or by any other means acceptable to the Company. The Ordinary
Shares purchased shall thereupon be promptly delivered, provided, however, that the
Company may, in its discretion require that an optionee pay to the Company, at the time
of exercise, such amount as the Company deems necessary to satisfy its obligation to with
hold taxes incurred by reason of the exercise or the transfer of shares thereupon. Each
payment for shares under an Option Award shall be in respect of a whole number of shares.  </font></p></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;8.5 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
optionee or a transferee of an option shall have no rights as a shareholder with respect
to any share covered by his option until he shall have become the holder of record of
such share, and he shall not be entitled to any dividends or distributions or other
rights in respect of such share for which the record date is prior to the date on which
he shall have become the holder of record thereof.  </font></p></td>
</tr>
</table>
<br>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Termination of Employment</u>: </font></p>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
<tr Valign=TOP>
<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;9.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Resignation
and Termination Without Cause</u>. If an Optionee who is a Service Provider resigns, or
is terminated without &#147;cause&#148; (as defined below), the Optionee may exercise the
Option within such period of time as is specified in the Option Agreement to the extent
the Option is vested on the date of cessation of such Optionee&#146;s employment or
service relationship with the Company (the &#147;Cessation Date&#148;), but in no event
later than the Termination Date. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for a period of three (3) months after the
Cessation Date. All of such Optionee&#146;s rights with respect to the options granted to
him or her under the Plan that are not vested at the Cessation Date shall terminate and
the underlying Shares shall revert to the Plan immediately upon the Cessation Date. If
within three (3) months of the Cessation Date, such Optionee does not exercise his or her
option awards, all of such Optionee&#146;s rights with respect to any options that have
not been exercised shall terminate and the underlying Shares shall revert to the Plan  </font></p></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;9.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
For Cause</u>. If an Optionee who is a Service Provider is terminated for &#147;cause&#148; (as
defined below), his options shall terminate immediately upon the date of such termination
for cause. All of such Optionee&#146;s rights with respect to the options granted to him
or her under the Plan, whether vested or unvested at the Cessation Date, shall terminate
and the underlying Shares shall revert to the Plan immediately upon the Cessation Date.  </font></p></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>5</font></p>
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<Table Width=100% Cellpadding=0 Cellspacing=0>
<tr Valign=TOP>
<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;9.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Death,
Disability. If an Optionee ceases to be a Service Provider as a result of the Optionee&#146;s
disability, or dies while a Service Provider, the Optionee (or in the case of death, the
Optionee&#146;s estate or a person who acquires the right to exercise the Option by
bequest or inheritance) may exercise the Option within such period of time as is
specified in the Option Agreement to the extent the Option is vested on the date of
disability or death (but in no event later than the Termination Date). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee&#146;s date of disability or death. If, on the date of
disability or death, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
the date of disability or death, the Optionee (or his estate or a person who acquires the
right to exercise the Option by bequest or inheritance) does not exercise the Option
within the time specified in the Option Agreement or this Plan, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan. &#147;Disability&#148; shall
mean a physical or mental infirmity which impairs the Optionee&#146;s ability to
substantially perform the duties of employment for a period of at least ninety (90)
consecutive days.  </font></p></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
<tr Valign=TOP>
<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;9.4 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deemed
Cessation.</u> In the event of resignation or discharge of an Optionee from the employ of
the Company or a subsidiary, such Optionee&#146;s employment or termination of services
shall, for the purposes of this Article, be deemed to have ceased upon the earlier of (a)
the delivery to the employee of notice of discharge or the delivery to the Company or the
subsidiary of the letter of resignation, as the case may be, or (b) the effective date of
such resignation or discharge.  </font></p></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;9.5 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&#147;Cause&#148;.
</u>For the purposes of this Plan, &#147;cause&#148; shall mean reasons which, as
determined by the Company in its discretion, amount to untrustworthiness, bad faith or
fraud.  </font></p></td>
</tr>
</table>
<br>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Adjustments</u>: Upon the happening of any of the following described events,
          a Grantee&#146;s rights to purchase shares under the Plan shall be adjusted as
          hereinafter provided: </font></p>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
<tr Valign=TOP>
<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;10.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Changes
in Capitalization.</u> Subject to any required action by the shareholders of the Company,
the number of Ordinary Shares covered by each outstanding Option, and the number of
Ordinary Shares which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon cancellation
or expiration of an Option, as well as the price per share of Ordinary Shares covered by
each such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Ordinary Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Ordinary Shares, or
any other increase or decrease in the number of issued Ordinary Shares effected without
receipt of consideration by the Company. The conversion of any convertible securities of
the Company shall not be deemed to have been &#147;effected without receipt of
consideration.&#148; Such adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Ordinary Shares subject to an
Option.  </font></p></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>6</font></p>
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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp; 10.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Merger,
Acquisition, or Asset Sale</U>. </FONT> </p></td>
</tr>
</table>
<br>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          In the event of a merger or consolidation of the Company with or into another
          corporation resulting in such other corporation being the surviving entity or
          resulting in the Company being the surviving entity and any other person or
          entity owning fifty percent (50%) or more of the outstanding voting power of the
          Company&#146;s securities, an acquisition of all or substantially all of the
          shares of the Company, or the sale of substantially all of the assets of the
          Company (each such event, a &#147;Transaction&#148;), each outstanding Option
          shall be assumed or an equivalent option or right shall be substituted by the
          successor corporation or a parent or subsidiary of the successor corporation. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;
          For the purposes of this sub-section 10.2, the Option shall be considered
          assumed if, following a Transaction, the option or right confers the right to
          purchase or receive, for each share subject to the Option immediately prior to
          the Transaction, the consideration (whether stock, cash, or other securities or
          property) received in the Transaction by holders of Ordinary Shares for each
          share held on the effective date of the Transaction (and if holders were offered
          a choice of consideration, the type of consideration chosen by the holders of a
          majority of the outstanding Shares); provided, however, that if such
          consideration received in the Transaction is not solely common stock of the
          successor corporation or its parent, the Board may, with the consent of the
          successor corporation, provide for the consideration to be received upon the
          exercise of the Option, for each share subject to the Option, to be solely
          ordinary shares of the successor corporation or its parent equal in fair market
          value to the per share consideration received by holders of Ordinary Shares in
          the Transaction. </font></p>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
<tr Valign=TOP>
<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;10.3 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
foregoing adjustments and the manner of application of the foregoing provisions shall be
determined by the Board in its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an option.  </font></p></td>
</tr>
</table>
<br>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Assignability and Sale of Shares</u>: No option shall be transferable except
          by will or the laws of descent and distribution. During the lifetime of the
          optionee, the option shall be exercisable only by him. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Term and Amendment of the Plan</u>: </font></p>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;12.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan was adopted by the Board of Directors of the Company on October 24, 2000, and shall
expire on October 24, 2010 (except as to Option Awards outstanding on that date).  </font></p></td>
</tr>
</table>
<br>

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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;12.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board may, without the consent of the Company&#146;s shareholders or optionees under the
Plan, at any time terminate the Plan entirely and at any time, from time to time, amend
or modify the Plan, provided that no such action shall adversely affect optionees
theretofore granted hereunder without the optionee&#146;s consent, and provided further
that no such action by the Board, without approval of the shareholders, may (a) increase
the total number of Ordinary Shares which may be purchased pursuant to options granted
under the Plan; (b) expand the persons eligible to receive options under the Plan; (c)
extend the maximum term of options granted hereunder; or (d) extend the term of the Plan.  </font></p></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>7</font></p>
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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Continuance of Employment</u>: Neither the Plan nor the Agreement shall
          impose any obligation on the Company or a subsidiary thereof to continue any
          Grantee in its employ or service, and nothing in the Plan or in any Option Award
          granted pursuant thereto shall confer upon any Grantee any right to continue in
          the employ or service of the Company or a subsidiary thereof, or restrict the
          right of the Company or a subsidiary thereof, to terminate such employment or
          service at any time. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Governing Law</u>: The Plan and all instruments issued thereunder or in
          connection therewith, shall be governed by, and interpreted in accordance with,
          the laws of the State of Israel, subject to the provisions of the applicable
          United States securities laws. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Application of Funds</u>: The proceeds received by the Company from the sale
          of shares pursuant to Option Awards granted under the Plan will be used for
          general corporate purposes of the Company or any subsidiary thereof. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Tax Consequences</u>: Any tax consequences arising from the grant or exercise
          of any Option Award, from the payment for shares covered thereby or from any
          other event or act (of the Company, the subsidiary that employs or engages the
          services of the Grantee, or the Grantee) hereunder, shall be borne solely by the
          Grantee. Furthermore, the Grantee shall agree to indemnify the Company, the
          subsidiary that employs or engages the services of the Grantee, and hold them
          harmless against and from any and all liability for any such tax or interest or
          penalty thereon, including without limitation, liabilities relating to the
          necessity to withhold, or to have withheld, any such tax from any payment made
          to the Grantee. Except as otherwise required by law, the Company shall not be
          obligated to exercise any Options on behalf of a Grantee until all tax
          consequences arising from the exercise of such Options are resolved in a manner
          reasonably acceptable to the Company. The Company or any of its subsidiaries may
          make such provisions and take such steps as it may deem necessary or appropriate
          for the withholding of all taxes required by law to be withheld with respect to
          Options granted under the Plan and the exercise thereof, including, but not
          limited, to (i) deducting the amount so required to be withheld from any other
          amount then or thereafter payable to a Grantee, and/or (ii) requiring a Grantee
          to pay to the Company or any of its subsidiaries the amount so required to be
          withheld as a condition of the issuance, delivery, distribution or release of
          any Shares. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Conditions Upon Issuance of Shares.</u> </font></p>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;17.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Legal
Compliance</u>. Shares shall not be issued pursuant to the exercise of an Option unless
the exercise of such Option and the issuance and delivery of such Shares shall comply
with applicable laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.  </font></p></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0>
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<td Align=RIGHT Width=5%></td>
<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;17.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Investment
Representations</u>. As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required. The certificates for such Shares may include
any legend which the Company deems appropriate to reflect any restrictions on transfer or
any other restrictions required by applicable law or this Plan. All certificates for
Shares issued pursuant to the Plan shall be subject to such stop transfer orders and
other restrictions as the Company may deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock exchange or
interdealer quotation system upon which the Shares are then listed or quoted, and any
applicable federal or state securities laws.  </font></p></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>8</font></p>
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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Inability to Obtain Authority.</u> The inability of the Company to obtain
          authority from or comply with the rules and regulations of any regulatory body
          having jurisdiction or any applicable laws, which authority or compliance is
          deemed by the Company&#146;s counsel to be necessary to the lawful issuance and
          sale of any Shares hereunder, shall relieve the Company of any liability in
          respect of the failure to issue or sell such Shares as to which such requisite
          authority or compliance shall not have been obtained. </font></p>

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     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Reservation of Shares.</u> The Company, during the term of this Plan, shall
          at all times reserve and keep available such number of Shares as shall be
          sufficient to satisfy the requirements of the Plan. </font></p>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Default" -->
     <P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Stockholder Approval.</u> The Plan shall be subject to approval by the
          stockholders of the Company within twelve (12) months after the date the Plan is
          adopted. Such stockholder approval shall be obtained in the degree and manner
          required under applicable laws. </font></p>


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<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>4
<FILENAME>exhibit_4-3.htm
<TEXT>
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     <!-- Project:        \\Backup\office\EDGAR Filing\Silicom Ltd\84828\a84828.eep        -->
     <!-- Control Number: 84828                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   S-8                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>S-8</TITLE>
</HEAD>
<BODY>

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<P Align=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 4.3</B></U> </FONT> </p>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=4>SILICOM LTD. </font></h1>

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<H1 Align=CENTER><Font Face="Times New Roman, Times, Serif" Size=3>SHARE OPTION PLAN
(2004) </font></h1>

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<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>NAME.</B> </FONT> </td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>This plan, as amended from time to
time, shall be known as the Silicom Ltd. Share Option Plan (2004) (the &#147;Plan&#148;). </font></p>

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<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>PURPOSE
AND DEFINITIONS.</B> </FONT> </td>
</tr>
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<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>2.1 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
purposes of this Plan are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to employees,
directors, office holders and consultants of Silicom Ltd. (the &#147;Company&#148;) and
of any Subsidiary (as defined below), and to promote the Company&#146;s business by
providing such individuals with opportunities to receive options (the &#147;Options&#148;)
to purchase the Company&#146;s Ordinary Shares, nominal value NIS 0.01 (the &#147;Shares&#148;)
pursuant to the Plan. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>2.2 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Options
granted pursuant to this Plan to individuals or entities that are subject to Israeli
taxation may be granted (a) pursuant to Section 102 of the Ordinance (as defined below)
and shall be held for the benefit of the Grantees and (b) pursuant to Section 3(i) of the
Ordinance. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>2.3</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>In
the event that Options shall be granted under this Plan to Service Providers (as defined
below) who are not deemed to be residents of Israel for Israeli tax law purposes,
specific terms and conditions for such grants shall be set forth in an appendix to this
Plan, approved by the Board of Directors of the Company (the &#147;Board&#148;). </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.4</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Definitions</U>.
As used herein, the following definitions shall apply: </FONT></td>
</tr>
</table>
<br>



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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;102
Capital Gains Track Grant&#148; means a 102 Trustee Grant elected and
                    designated to qualify under the capital gains tax treatment in
accordance with                     the provisions of Section 102(b)(2) of the Ordinance.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;102
Ordinary Income Track Grant&#148; means a 102 Trustee Grant elected
                    and designated to qualify under the ordinary income tax treatment in
accordance                     with the provisions of Section 102(b)(1) of the Ordinance.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;102
Trustee Grant&#148; means Options granted pursuant to Section 102(b)
                    of the Ordinance and held in trust by a Trustee for the benefit of
the Grantee,                     and includes both 102 Capital Gains Track Grants and 102
Ordinary Income Track                     Grants.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;3(i)
Grant&#148; means any Options granted pursuant to Section 3(i) of                     the
Ordinance to any person who is not an Eligible 102 Grantee.  </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2></font></p>
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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2> </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(e) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>&#147;Cause&#148;</u> means
any of the following: (i)&nbsp;the                     Grantee&#146;s embezzlement of any
Company property or asset, or any theft or                     intentional destruction of
property, whether or not criminal action is brought                     against the
Grantee; (ii) the Grantee&#146;s negligently performing or                     neglecting
his responsibilities as Service Provider, or failure or inability to
                    perform any reasonable assigned duties, when such failure may harm
the                     Company&#146;s business or commercial relationships, after
written notice from                     the Company of, and a reasonable opportunity to
cure, such failure or inability;                     (iii)&nbsp;any material breach of
the Grantee of any employment agreement                     between the Grantee and the
Company, which breach is not cured after written                     notice from the
Company of, and a reasonable opportunity to cure, such material
                    breach; or (iv)&nbsp;the Grantee&#146;s conviction of any criminal
act which                     involves moral turpitude, or the Grantee&#146;s concealment
of such conviction                     prior to commencement of his or her relationship
as Service Provider; (v) the                     Grantee&#146;s breach of Company
regulations which breach is not cured after                     written notice from the
Company of, and a reasonable opportunity to cure, such                     breach; or
(vi) Grantee&#146;s destruction of Company materials, appliances or
                    machines or reduction of yield or production. For purposes of the
definition of                     Cause, the &#147;Company&#148; shall also refer to a
Subsidiary for which a                     Grantee is employed or provides services.  </font></td>
</tr>
</table>
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<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Cessation&#148; means
termination of the Service Provider&#146;s                     relationship with the
Company. In the event of Cessation of a Grantee&#146;s                     relationship
with the Company, such Grantee&#146;s relationship with the Company
                    shall be deemed to have ceased upon the delivery to the Grantee of
notice of                     discharge or the delivery to the Company of the letter of
resignation, as the                     case may be, irrespective of the effective date
of such resignation or                     discharge.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Companies
Law&#148; means the Israeli Companies Law 5759-1999, as amended                from time
to time.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Consultant&#148; means
any person who is engaged by the Company or by a                     Subsidiary to render
consulting, advisory or other services to such entity who                     is not an
Employee.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Controlling
Shareholder&#148; means, pursuant to Section 32(9) of the                     Ordinance,
an employee who prior to the grant or as a result of the exercise of
                    any Option, holds or would hold, directly or indirectly, in his name
or with a                     relative (as defined in the Ordinance) either: (i) 10% of
the outstanding shares                     of the Company, (ii) 10% of the voting power
of the Company, (iii) the right to                     hold or purchase 10% of the
outstanding equity or voting power, (iv) the right                     to obtain 10% of
the &#147;profit&#148; of the Company (as defined in the                     Ordinance),
or (v) the right to appoint a director of the Company, or as such
                    definition is amended or replaced from time to time.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Eligible
102 Grantee&#148; means an Employee deemed an Israeli resident                     for
taxation purposes, who is not a Controlling Shareholder of the Company.  </font></td>
</tr>
</table>
<br>

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<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Employee&#148; means
an employee, officer or director of the Company or                     of a Subsidiary.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2> </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(l)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Grantee&#148; means
a person to whom Options shall be granted pursuant to                     this Plan.  </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>2</font></p>
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<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Non-Trustee
Grant&#148; means an Option granted pursuant to Section                     102(c) of the
Ordinance to an Eligible 102 Grantee and not held in trust by a
                    Trustee.  </font></td>
</tr>
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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Ordinance&#148; means
the Israeli Income Tax Ordinance (New Version)                     1961, as amended from
time to time and, most recently, by the Law Amending the                     Income Tax
Ordinance (Number 132) 2002 and any regulations, rules, orders,
                    guidelines, interpretations or procedures promulgated thereunder by
the Israeli                     Income Tax Authorities (the &#147;ITA&#148;), including
but not limited to the                     Income Tax Rules (Tax Benefits in Stock
Issuance to Employees) 5763-2003 (the                     &#147;Rules&#148;).  </font></td>
</tr>
</table>
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<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Required
Holding Period&#148; means the requisite period prescribed by the
               Ordinance (including the Rules) or such other period as may be required by
the                ITA, during which Options granted by the Company and/or the underlying
Shares                from a 102 Trustee Grant must be held by the Trustee for the
benefit of the                person to whom they were granted subject to the applicable
laws.  </font></td>
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<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Service
Provider&#148; means an Employee or Consultant.  </font></td>
</tr>
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<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Subsidiary&#148; means
(i) any entity that, directly or indirectly, is                     controlled by the
Company or (ii) any entity in which the Company has a                     significant
equity interest, in either case as determined by the Board.  </font></td>
</tr>
</table>
<br>

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<td Align=RIGHT Width=5%><Font Face="Times New Roman, Times, Serif" Size=2>  </font></td>
<td Align=LEFT Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Trustee&#148; means
a person or entity designated by the Company to serve                     as a trustee
and who is approved by the ITA in accordance with the provisions of
                    the Ordinance.  </font></td>
</tr>
</table>
<br>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ADMINISTRATION.</B> </FONT> </td>
</tr>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.1 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
Plan will be administered by the Board. The Board may, in its discretion, appoint and
maintain a Share Option Committee (the &#147;Committee&#148;) to administer the Plan to
the extent permissible under applicable law as may be amended from time to time, which
will consist of such number of directors of the Company (not less than two (2) in
number), as may be determined from time to time by the Board. The Board shall from time
to time add, appoint or remove members of the Committee and shall fill vacancies in the
Committee however caused. </font></td>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.2 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
Committee shall select one of its members as its Chairman and shall hold its meetings at
such times and places as it shall determine. Actions at a meeting of the Committee at
which a majority of its members are present or acts approved in writing by all members of
the Committee, shall be the valid acts of the Committee. The Committee may appoint a
secretary, who shall keep records of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable. </font></td>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.3</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2> Subject
to the general terms and conditions of this Plan, the Board shall have full authority in
its discretion, from time to time and at any time, to determine (i) the identity of the
Grantees, (ii) the number of Shares to be covered by each Option, (iii) the time or times
at which Options shall be granted, (iv) the schedule and conditions on which Options may
be exercised and on which Shares shall be paid for including but not limited to vesting
terms, acceleration terms, restrictions and transferability, and (v) any other matter
which is necessary or desirable for, or incidental to, the administration of the Plan
including the interpretation of the Plan. The Board may, in its sole discretion, delegate
some or all of the powers listed above to the Committee to the extent permitted by
applicable law. The Board may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem appropriate. Grants of Options shall be made
pursuant to written notification to Grantees setting out the terms of the grant, all as
further set forth below. </font></td>
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</table>
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<p align=center>
<font size=2>3</font></p>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.4</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2> In
the event that the Board appoints a Committee, the Committee shall not be entitled to
grant Options to the Grantees unless permitted to do so under applicable law. However, in
the event that the Committee is authorized to do so by the Board, it may issue Shares
underlying Options which have been granted by the Board and duly exercised pursuant to
the provisions hereof, in accordance with Section 112(a)(5) of the Companies Law. </font></td>
</tr>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.5 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>No
member of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted thereunder. Each member
of the Board or the Committee shall be indemnified and held harmless by the Company
against any cost or expense (including counsel fees) reasonably incurred by him, or any
liability (including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with the Plan unless
arising out of such member&#146;s own fraud or bad faith, to the extent permitted by
applicable law. Such indemnification shall be in in accordance with the rights of
indemnification the member may have as a director or otherwise under the Company&#146;s
Articles of Association, any agreement, any vote of stockholders or disinterested
directors, insurance policy or otherwise. </font></td>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.6 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
interpretation and construction by the Board of any provision of the Plan or of any
Option thereunder shall be final and conclusive unless otherwise determined by the Board.
In the event that the Board appoints a Committee, the interpretation and construction by
the Committee of any provision of the Plan or of any Option thereunder shall be final and
conclusive unless otherwise determined by the Board. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>3.7</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Any
additional costs associated in the administration and implementation of this Plan
including but not limited to the costs involved in retaining a trustee, broker or any
other third party desired by the Company to facilitate the transactions contemplated
under this Plan, shall be borne solely by the Grantee unless determined otherwise by the
Board or by the Committee. </font></td>
</tr>
</table>
<br>

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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>ELIGIBLE
GRANTEES.</B> </FONT> </td>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>4.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>No
Option may be granted pursuant to this Plan to any director of the Company at the time of
the grant, unless such grant is approved in the manner prescribed for the approval of
compensation of directors under the Companies Law. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>4.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2> Subject
to the limitation set forth in Section 4.1 above and any restriction imposed by
applicable law, Options may be granted to any Service Provider.<I></i>The grant of an
Option to a Grantee hereunder shall neither entitle such Grantee to participate, nor
disqualify such Grantee from participating, in any other grant of Options pursuant to
this Plan or any other share incentive or share option plan of the Company. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>4</font></p>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>4.3 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2> 102
Trustee Grants may be granted to Eligible 102 Grantees only. Eligible 102 Grantees may
receive only 102 Trustee Grants or Non-Trustee Grants. Grantees who are not Eligible 102
Grantees may only be granted 3(i) Options under this Plan. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>4.4</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2> Subject
to the terms of the Plan, the Option Agreement (as defined below) and/or any other
documents evidencing the Options granted pursuant to this Plan shall indicate whether the
grant is a 102 Trustee Grant, a Non-Trustee Grant or a 3(i) Grant; and, if the grant is a
102 Trustee Grant, whether it is a 102 Capital Gains Track Grant or a 102 Ordinary Income
Track Grant. </font></td>
</tr>
</table>
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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>TERMS
AND CONDITIONS OF 102 TRUSTEE OPTIONS</B> </FONT> </td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Unless
determined otherwise by the Board and to the extent permitted by applicable law, each 102
Trustee Grant will be deemed granted on the date stated in a written notice by the
Company, provided that on or before such date (i) the Company has provided notification
to the Trustee and (ii) the Grantee has signed all documents required pursuant to this
Section 5. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Each
102 Trustee Grant made to a Grantee and each certificate for Shares acquired pursuant to
the exercise thereof shall be issued to and registered in the name of a Trustee and shall
be held in trust for the benefit of the Grantee for the Required Holding Period until the
date in which the Grantee will decide to sell the Shares or release the Shares from the
Trustee subject to the provisions of the Ordinance. After termination of the Required
Holding Period, the Trustee may release such Option and any such Shares acquired pursuant
to the exercise thereof, provided that (i) the Trustee has received an acknowledgment
from the ITA that the Grantee has paid any applicable tax due pursuant to the Ordinance
or (ii) the Trustee and/or the Company and/or its Subsidiary has withheld any applicable
tax due pursuant to the Ordinance. The Trustee shall at no time release any 102 Trustee
Grant or Shares issued upon exercise of such 102 Trustee Grant, prior to the full payment
of the Grantee&#146;s tax liabilities. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.3</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Each
102 Trustee Grant (whether a 102 Capital Gains Track Grant or a 102 Regular Income Track
Grant, as applicable) shall be subject to the relevant terms of Section 102 of the
Ordinance, which shall be deemed an integral part of the 102 Trustee Grant and which
shall prevail over any term contained in the Plan or any Option Agreement which is not
consistent therewith. Any provision of the Ordinance and any approval issued by the
Income Tax Commissioner not expressly specified in this Plan or in an Option Agreement,
that are necessary to receive or maintain any tax benefit pursuant to the Ordinance,
shall be binding on the Grantee. Any 102 Trustee Grant made hereunder shall comply with
the Ordinance and the terms and conditions of any trust agreement entered into between
the Company and the Trustee. For avoidance of doubt, it is reiterated that compliance
with the Ordinance specifically includes compliance with the Rules. Further, the Grantee
agrees to execute any and all documents which the Company and/or the Trustee may
reasonably determine to be necessary in order to comply with the Ordinance and,
particularly, the Rules including but not limited to the entering into of a written
undertaking to the Company stating among other things (a) the type of 102 Trustee Grant
held or to be held by the Trustee for the benefit of the Grantee, (b) that the provisions
of the Ordinance will apply to the 102 Trustee Grant and (c) that there are restrictions
on the sale of the Shares (or release of Shares by the Trustee). </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>5</font></p>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.4</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>With
respect to each 102 Trustee Grant and subject to the terms of the Ordinance, during the
Required Holding Period, the Grantee shall not require the Trustee to release or sell the
Shares including with respect to other shares received subsequently following any
realization of rights derived from the Shares (including stock dividends), to the Grantee
or to a third party, unless permitted to do so by applicable law. Notwithstanding the
foregoing and subject to applicable law, the Trustee may, pursuant to a written request,
release and transfer such Shares to the Grantee or to a designated third party, provided
that both of the following conditions have been fulfilled prior to such transfer: (i)
payment has been rendered to the tax authorities of all taxes required to be paid upon
the release and transfer of the Shares, and confirmation of such payment has been
received by the Trustee and (ii) the Trustee has received written confirmation from the
Company that all requirements for such release and transfer have been fulfilled according
to the terms of the Company&#146;s corporate documents, the Plan, the Option Agreement
and any applicable law. Notwithstanding anything herein to the contrary, any such sale or
release during the Required Holding Period by the Grantee will result in adverse tax
ramifications under the Ordinance and the Rules and such consequences shall be borne
solely by the Grantee. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.5</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Each
Grantee shall be entitled to receive dividends declared, if applicable, in accordance
with the number of Shares allocated or acquired pursuant to the exercise of a 102 Trustee
Grant, subject to any applicable taxation on distribution of dividends and when
applicable subject to the provisions of the Ordinance. In the event that the dividend is
paid in the form of Shares or such other form of equity, such Shares or equity must be
first transferred to the Trustee and shall be subject to the provisions of the Ordinance
including but not limited to the application of the Required Holding Period. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.6</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Notwithstanding
anything herein to the contrary, if an Option granted as a 102 Trustee Grant is exercised
by the Grantee during the Required Holding Period, the Shares issued upon such exercise
shall be issued in the name of the Trustee for the benefit of the Grantee. If such an
Option is exercised after the Required Holding Period ends, the Shares issued upon such
exercise shall, at the election of the Grantee, either (i) be issued in the name of the
Trustee or (ii) be transferred to the Grantee directly, provided that the Grantee first
complies with all applicable provisions of the Plan, the Option Agreement and the
Ordinance including with respect to the payment of all applicable taxes owed. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>5.7</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Notwithstanding
anything herein to the contrary, in the case of a Non-Trustee Grant, if the Grantee
ceases to be employed by the Company or the Subsidiary, as applicable, while such Option
is still valid, the Grantee shall be obligated to deliver to the Company or the
Subsidiary, as applicable, a security or guarantee for the payment of tax due at the time
of the sale of the Shares, all in accordance with the provisions of the Ordinance. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>6</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>6.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>GRANTS
MADE UNDER SECTION 3(I) OF THE ORDINANCE</B> </FONT> </td>
</tr>
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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board may choose to deposit Options from a 3(i) Grant with a trustee. In such event, the
trustee shall hold such Options in trust, until exercised by the Grantee, pursuant to the
Company&#146;s instructions from time to time as set forth in a trust agreement which will
be entered into between the Company and the trustee. If determined by the Board, the
trustee shall be responsible for withholding any taxes to which a Grantee may become
liable upon the exercise of Options. </font></p>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>7.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RESERVED
SHARES.</B> </FONT> </td>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>7.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Subject
to adjustment from time to time as provided below (including but not limited to
adjustments made pursuant to Section 12 below), five hundred eighty two thousand seven
hundred and fifty (582,750) Shares shall be available for issuance under the Plan for as
long as the Plan remains in effect. Shares issued under the Plan shall be drawn from
authorized and unissued shares of the Company. Until termination of the Plan the Company
shall at all times reserve a sufficient number of Shares to meet the requirements of the
Plan. Should any Option for any reason expire or be canceled prior to its exercise or
relinquishment in full, the Shares subject to such Option shall again be made available
for issuance under the Plan. </font></td>
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</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>7.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>No
fractional shares shall be issued or delivered pursuant to the Plan, and the Committee
shall determine whether cash, other securities or other property shall be paid or
transferred in lieu of any fractional shares, or whether such fractional shares or any
rights thereto shall be canceled, terminated or otherwise eliminated. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>8.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>GRANT
OF OPTIONS.</B> </FONT> </td>
</tr>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>8.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
Board and/or the Committee, as applicable, in its discretion may award to Grantees,
Options to purchase Shares in the Company available under the Plan. Subject to applicable
law, the date of grant of each Option shall be the date specified by the Board and/or the
Committee, as applicable, at the time such award is made. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>8.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
instrument/written document governing the granting and specific terms of an Option under
this Plan as determined by the Board and/or the Committee (the &#147;Option Agreement&#148;),
shall state, inter alia, the number of Shares at the type of option granted covered
thereby, the dates when it may be exercised, the exercise price per Share subject to the
Option, the schedule on which such Shares may be paid for and such other terms and
conditions as the Board and/or the Committee, as applicable, in its discretion may
prescribe, provided that they are consistent with this Plan. </font></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>9.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>OPTION
PRICES.</B> </FONT> </td>
</tr>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>9.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
exercise price of an Option shall be determined by the Board or by the Committee, in
either case in its sole and absolute discretion in accordance with applicable law,
subject to any guidelines as may be determined by the Board from time to time, and may be
greater than, less than or equal to the &#147;Fair Market Value&#148; (as defined below)
of each Share. Notwithstanding the foregoing, the exercise price shall not be less than
the nominal value of each Share. Each Option Agreement will contain the exercise price
determined for each Grantee. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>7</font></p>
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<td Width=5%> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>9.2</B> </FONT> </td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>"Fair
Market Value"  means,  as of any date,  the value of the Shares  determined as follows: </font></td>
</tr>
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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Shares are listed on any established stock exchange or a national market
          system, the Fair Market Value shall be the closing sales price for such stock
          (or the closing bid, if no sales were reported) as quoted on such exchange or
          system for the last market trading day prior to the time of determination, as
          reported in <I>The Wall Street Journal</i> or such other source as the Board or
          the Committee deems reliable;  </font></p></td>
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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Shares are regularly quoted by a recognized securities dealer but selling
          prices are not reported, the Fair Market Value shall be the mean between the
          high bid and low asked prices for the Shares on the last market trading day
          prior to the day of determination; or  </font></p></td>
</tr>
</table>
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<td Width=95%><P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the absence of an established market for the Shares, the Fair Market Value
          thereof shall be determined in good faith by the Board or the Committee.  </font></p></td>
</tr>
</table>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>10.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EXERCISE
OF OPTION.</B> </FONT> </td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>10.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Options
shall be exercisable pursuant to the terms under which they were awarded and subject to
the terms and conditions of this Plan, the Option Agreement and the Ordinance. </font></td>
</tr>
</table>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>10.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>An
Option, or any part thereof, shall be exercisable by the Grantee&#146;s signing and
returning to the Company at its principal office (and to the Trustee, if applicable), a
&#147;Notice of Exercise&#148; in such form and substance as may be prescribed by the
Board or by the Committee from time to time, together with full payment for the Shares
underlying such Option. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>10.3</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
exercise price shall be payable upon the exercise of the Option in a form satisfactory to
the Board or by the Committee and subject to limitations set forth by applicable law,
including without limitation, cash-less exercise (including on a net-issuance basis
without any cost to the Grantee), by cash or by check. Subject to applicable law, the
Board or the Committee shall have the authority to postpone the date of payment on such
terms as it may determine. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>10.4</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Until
the Shares are issued (as evidenced by the appropriate entry in the official share
register of the Company or of a duly authorized transfer agent of the Company) no right
to vote or right to receive dividends or any other rights as a shareholder shall exist
with respect to such Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is exercised.
No adjustment will be made for a dividend or other right the record date for which is
prior to the date the Shares are issued, except as provided in Section 12 of the Plan. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>10.5</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>If
the Company&#146;s Shares are publicly traded, payment for the Shares underlying an
Option may be made all or in part by the delivery (on a form prescribed by the Company)
of an irrevocable direction to a securities broker approved by the Company to sell Shares
and to deliver all or part of the sales proceeds to the Company as payment of the
exercise price (or the relevant portion thereof, as applicable) plus any withholding
taxes and related fees. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>8</font></p>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>11.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>TERMINATION
OF RELATIONSHIP AS SERVICE PROVIDER.</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>11.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2><B>Resignation
and Termination Without Cause.</b> Unless otherwise stated in the Option Agreement, if a
Grantee resigns, or is terminated without cause from his or her relationship as a Service
Provider, such Grantee may, at any time prior to the expiration of the term of the Option
Agreement, exercise any of his or her Options that are vested at the date of Cessation
for a period of three (3) months from the Cessation. At the end of such three (3) month
period, the Grantee&#146;s rights shall terminate with respect to any Options vested on
the date Cessation and not exercised, and the underlying Shares shall revert to the Plan.
All of such Grantee&#146;s rights with respect to the Options granted to him or her under
the Plan that are not vested at the date of Cessation, shall terminate and the underlying
Shares shall revert to the Plan immediately upon the Cessation. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>11.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2><B>Termination
For Cause.</b> Unless otherwise stated in the Option Agreement, if a Grantee&#146;s
relationship as a Service Provider is terminated for Cause, such Grantee shall no longer
have the right to exercise his or her Options following the Cessation. All of such Grantee&#146;s
rights with respect to the Options granted to him or her under the Plan as of the date of
Cessation shall terminate and the underlying Shares shall revert to the Plan immediately
upon the Cessation. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>11.3</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2><B>Death
and Disability.</b> Unless otherwise stated in the Option Agreement, if a Grantee should
die, or if a Grantee ceases to serve as a Service Provider by reason of such Grantee
becoming incapacitated while a Service Provider as a result of an accident or illness or
other cause which is approved by the Board or by Committee, such Grantee (or such Grantee&#146;s
successors, as the case may be) may, for a period of one (1) year from the Cessation,
exercise any of his or her Options that are vested at the date of Cessation. At the end
of such one (1) year period, the Grantee&#146;s rights shall terminate with respect to
any Options vested on the date Cessation and not exercised, and the underlying Shares
shall revert to the Plan. All of such Grantee&#146;s rights with respect to the Options
granted to him or her under the Plan that are not vested at the date of Cessation, shall
terminate and the underlying Shares shall revert to the Plan immediately upon the
Cessation </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>11.4</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2><B>Continuation
of Relationship</b>. A Service Provider&#146;s relationship with the Company shall not be
deemed to have ceased (i) with respect to an Employee, in the event of any leave of
absence approved by the Company (or by the subsidiary that employs the Grantee) or (ii)
in the event of employee transfers between the Company and a Subsidiary. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>9</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"><B>12.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ADJUSTMENTS.</B> </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;Upon
the occurrence of any of the following described events, a Grantee&#146;s rights to
purchase Shares under the Plan shall be adjusted as hereinafter provided: </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>12.1</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Changes
in Capitalization.</B> </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;Subject
to any required action by the shareholders of the Company and to the consent of the Board,
the number of Shares covered by each outstanding Option, the number of Shares which have
been reserved for issuance under the Plan but as to which no Options have yet been granted
or which have been returned to the Plan upon cancellation or expiration of an Option, as
well as the price per share of Shares covered by each such outstanding Option, may be
proportionately adjusted for any increase or decrease in the number of issued Shares
resulting from a share split, reverse share split, bonus shares (stock dividend),
combination or reclassification of the Shares, or any other increase or decrease in the
number of issued Shares effected for nominal or for no consideration to the Company. Such
adjustment shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the Company of
shares of any class, or securities convertible into shares of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or price of
Shares subject to an Option. </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>12.2</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Merger,
Acquisition, or Asset Sale.</B> </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;(a)
          In the event of a merger or consolidation of the Company with or into another
          corporation resulting in such other corporation being the surviving entity, or
          resulting in the Company being the surviving entity and any other person or
          entity owning fifty percent (50%) or more of the outstanding voting power of
the           Company&#146;s securities, an acquisition of all or substantially all of
the           shares of the Company, or the sale of substantially all of the assets of
the           Company (each such event, a &#147;Transaction&#148;), each outstanding
Option           shall be assumed or an equivalent option or right shall be substituted
by the           successor corporation or a parent or subsidiary of the successor
corporation.  </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)
          For the purposes of this sub-section 12.2, the Option shall be considered
          assumed if, following a Transaction, the option or right confers the right to
          purchase or receive, for each share subject to the Option immediately prior to
          the Transaction, the consideration (whether stock, cash, or other securities or
          property) received in the Transaction by holders of Ordinary Shares for each
          share held on the effective date of the Transaction (and if holders were
offered           a choice of consideration, the type of consideration chosen by the
holders of a           majority of the outstanding Shares); provided, however, that if
such           consideration received in the Transaction is not solely common stock of
the           successor corporation or its parent, the Board may, with the consent of the
          successor corporation, provide for the consideration to be received upon the
          exercise of the Option, for each share subject to the Option, to be solely
          ordinary shares of the successor corporation or its parent equal in fair market
          value to the per share consideration received by holders of Ordinary Shares in
          the Transaction.  </font></p>


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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>12.3 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
foregoing adjustments and the manner of application of the foregoing provisions shall be
determined by the Board in its sole discretion. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an option. </font></td>
</tr>
</table>
<br>

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


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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>13.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NON-TRANSFERABILITY
OF OPTIONS.</B> </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;No
Option may be transferred other than by will or by the laws of descent and distribution,
and during the Grantee&#146;s lifetime an Option may be exercised only by such Grantee. </font></p>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>14.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>TERM
AND AMENDMENT OF THE PLAN.</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>14.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>No
Option may be granted by the Board under the Plan after the tenth (10<Sup>th</sup>)
anniversary of the Effective Date, provided however, that any Option granted by the Board
prior to such date may extend beyond such date and the authority of the Board to amend,
alter, adjust suspend, discontinue, or terminate any such Option, to waive conditions or
rights attached to such Option and the authority of the shareholders to amend the Plan to
the extent applicable, shall also extend beyond such date. </font></td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>14.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Subject
to any requirements of applicable law and unless otherwise expressly provided for in an
Option Agreement, the Board may at any time, but after notification to any trustee, if
applicable, amend, alter, suspend or terminate the Plan. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Grantee, unless
mutually agreed otherwise between the Grantee and the Company, which agreement must be in
writing and signed by the Grantee and the Company. Termination of the Plan shall not
affect the Board&#146;s ability to exercise the powers granted to it hereunder with
respect to any Option granted under the Plan prior to the date of such termination. </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"><B>15.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>TERM
OF OPTION.</B> </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;Anything
herein to the contrary notwithstanding, but without derogating from the provisions of
Section 11 and Section 14 hereof, if any Option, or any part thereof, has not been
exercised and the Shares covered thereby not paid for within ten (10) years after the date
of grant (or any shorter period set forth in the Option Agreement), such Option, or such
part thereof, and the right to acquire such Shares shall terminate, and all interests and
rights of the Grantee in and to the same shall expire. </font></p>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>16.</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2><B>CONTINUANCE
OF EMPLOYMENT OR SERVICE</b>. </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;Neither
this Plan nor any offer of Options to a Grantee shall impose any obligation on the Company
or a Subsidiary, to continue to employ or engage the services of any Grantee, and nothing
in the Plan or in any Option granted pursuant thereto shall confer upon any Grantee any
right to continue in the employ or service of the Company or a Subsidiary or restrict the
right of the Company or a Subsidiary thereof to terminate such employment or services at
any time. </font></p>

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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>17.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>COMPLIANCE
WITH SECURITIES LAWS.</B> </FONT> </td>
</tr>
</table>
<br>

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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>17.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Notwithstanding
any other provision of the Plan, the Board shall have no obligation to issue or deliver
any Shares under the Plan or make any other distribution of benefits under the Plan
unless, in the opinion of the Company&#146;s counsel, such issuance, delivery or
distribution would comply with all applicable laws (including, without limitation, the
requirements of the United States Securities Act of 1933, as amended (the Securities Act&#148;)),
and the applicable requirements of any other securities laws, exchange or similar entity. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>11</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px">
<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<Page>


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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>17.2</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
Company shall be under no obligation to any Grantee to register for offering or resale or
to qualify for exemption under the Securities Act or similar law of any foreign
jurisdiction, or to register or qualify under state securities laws or foreign securities
laws, any Shares, security or interest in a security paid or issued under, or created by,
the Plan, or to continue in effect any such registrations or qualifications, if made. </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>17.3</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>As
a condition to the exercise of an Option, the Company may require (a)&nbsp;that the
Grantee represent and warrant at the time of any such exercise or receipt that such
Shares are being purchased or received only for the Grantee&#146;s own account and
without any present intention to sell or distribute such Shares and (b)&nbsp;such other
action or agreement by the Grantee as may from time to time be necessary to comply with
applicable securities laws. </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>17.4 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>At
the option of the Company, a stop-transfer order against any such Shares may be placed on
the official share register of the Company, and a legend indicating that such Shares may
not be pledged, sold or otherwise transferred, unless an opinion of counsel is provided
(concurred in by counsel for the Company) stating that such transfer is not in violation
of any applicable law or regulation, may be stamped on share certificates to ensure
exemption from registration. The Board may also require that the Grantee execute and
deliver to the Company a purchase agreement or such other agreement as may be in use by
the Company at such time that describes certain terms and conditions applicable to the
Shares. </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>18.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>GOVERNING
LAW.</B> </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
Plan and all instruments issued thereunder or in connection therewith, shall be governed
by, and interpreted in accordance with, the laws of the State of Israel. without giving
effect to the principles of conflict of laws. The competent courts of Tel-Aviv, Israel
shall have sole jurisdiction in any matters pertaining to the Plan. </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>19.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>TAXES.</B> </FONT> </td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>19.1</b> </font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>Any
tax consequences arising from the grant or exercise of any Option, from the payment for
Shares covered thereby, or from any other related event or act (of the Company, and/or a
Subsidiary, and/or the Trustee and/or the Grantee), hereunder, shall be borne solely by
the Grantee, including but not limited to the ultimate liability for income tax, social
insurance or other tax related liabilities or withholding obligations in connection with
or derived from the grant of an Option. The Company and/or its Subsidiary, and/or the
Trustee shall withhold taxes according to the requirements under the applicable laws,
rules, and regulations, including withholding taxes at source. Furthermore, the Grantee
shall agree to indemnify the Company and/or the Subsidiary and hold them harmless against
and from any and all liability for any such tax or interest or penalty thereon, including
without limitation, liabilities relating to the necessity to withhold, or to have
withheld, any such tax from any payment made to the Grantee for which the Grantee is
responsible, including specifically any additional tax liability the Company may incur as
a result of an exercise in connection with a 102 Trustee Grant or any transfer effected
prior to conclusion of the Required Holding Period. To the extent permitted by applicable
law and provided that such implementation will not create variable accounting problems
for the Company, the Company and/or the Subsidiary and/or the Trustee may make such
provisions and take such steps as it/they may deem necessary or appropriate for the
withholding of all taxes required by law to be withheld with respect to Options granted
under the Plan and the exercise thereof, including, but not limited, to (i) deducting the
amount so required to be withheld from any other amount then or thereafter payable to a
Grantee, and/or (ii) requiring a Grantee to pay to the Company or any Subsidiary the
amount so required to be withheld as a condition of the issuance, delivery, distribution
or release of any Shares. In addition, the Grantee will be required to pay any amount
that exceeds the tax to be withheld and transferred to the tax authorities, pursuant to
applicable Israeli tax regulations. </font></td>
</tr>
</table>
<br>

<p align=center>
<font size=2>12</font></p>
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<HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<Page>


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<td Width=5%><Font Face="Times New Roman, Times, Serif" Size=2><B>19.2 </b></font></td>
<td Width=95%><Font Face="Times New Roman, Times, Serif" Size=2>The
receipt of these Options and the acquisition of the shares to be issued upon the exercise
of the Options may result in tax consequences for the Grantee. The description of tax
consequences set forth in this Plan does not purport to be complete. THE GRANTEE IS
ADVISED TO CONSULT WITH A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING
OR EXERCISING THE OPTIONS. </font></td>
</tr>
</table>
<br>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>20.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NON-EXCLUSIVITY
OF THE PLAN</B> </FONT></td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>The adoption of the Plan by the
Company shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangements or as creating any limitations on the power of the
shareholders to adopt such other incentive arrangements as it may deem desirable and in
accordance with applicable law. Nothing contained in the Plan shall prevent the Company
from adopting or continuing in effect other or additional incentive compensation
arrangements for Service Providers of the Company or of any Subsidiary.  </font></p>

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<Table Width=100% Cellpadding=0 Cellspacing=0 Border=0>
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<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>21.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MULTIPLE
AGREEMENTS</B> </FONT></td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>The terms of each Option granted
under the Plan may differ from any other Option granted at the same time or at any other
time under the Plan and there shall be no obligation for uniformity of treatment of
Service Providers with respect to any grant under the Plan.  </font></p>

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<tr Valign=TOP>
<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>22.</B> </FONT> </td>
<td Width=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>EFFECTIVE
DATE</B> </FONT></td>
</tr>
</table>
<br>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>The effective date of the Plan is
the date on which the shareholders of the Company ratify the adoption of the Plan, which
was previously approved by the Board, at a duly convened meeting of the shareholders (the
&#147;<B>Effective Date</b>&#148;).  </font></p>

<p align=center>
<font size=2>13</font></p>
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<TYPE>EX-5.1
<SEQUENCE>5
<FILENAME>exhibit_5-1.htm
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     <!-- Control Number: 84828                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   S-8                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
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<P Align=right><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 5.1</B></U> </FONT> </p>

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<P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>February 11, 2008 </font></p>

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<P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>Silicom Ltd.<Br>8 Hanagar Street </font></p>

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<P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>Kfar Sava, Israel, 44000 </font></p>

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<td Width=10%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></td>
<td Width=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Re:</B> </FONT> </td>
<td Width=85%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><U>Registration
Statement on Form S-8</U></B> </FONT> </td>
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<P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>Dear Sirs: </font></p>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have acted as Israeli counsel for Silicom Ltd., a company organized under the laws of
Israel (the &#147;Company&#148;), in connection with the Registration Statement on Form
S-8 (the &#147;Registration Statement&#148;) being filed by the Company under the
Securities Act of 1933 for the purposes of registering: (i) 191,200 of its Ordinary
Shares, par value NIS 0.01 per share (each an &#147;Ordinary Share&#148;) that may be
issued pursuant to future awards under the Company&#146;s U.S. Share Option Plan (2000)
(the &#147;2000 Plan); (ii) 143,750 Ordinary Shares that may be issued pursuant to future
awards under the Company&#146;s Share Option Plan (2004) (the &#147;2004 Plan&#148; and
together with the 2000 Plan, the &#147;Plans&#148;); (iii) 8,800 Ordinary Shares
underlying options granted under the 2000 Plan; and (iv) 439,000 Ordinary Shares
underlying options granted under the 2004 Plan (together the &#147;Option Shares&#148;). </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
the basis of such investigation as we have deemed necessary, we are of the opinion that
the Option Shares have been duly and validly authorized for issuance and, when issued upon
due exercise of options granted or hereafter granted under the Plans in accordance with
the provisions of the Plans and the related option agreements (including payment of the
option exercise price provided for therein), will be fully paid and non-assessable. </font></p>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hereby consent to the filing of this opinion as an Exhibit to the Registration Statement.
In giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933, or the
Rules and Regulations of the Securities and Exchange Commission thereunder. </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
above opinion is based on facts existing on the date hereof and of which we are aware. We
express no opinion as to any laws other than the laws of the State of Israel as the same
are in force on the date hereof and we have not, for purpose of giving this opinion, made
any investigation of the laws of any other jurisdiction. </font></p>

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<td Width=50%><Font Face="Times New Roman, Times, Serif" Size=2>Very truly yours,<Br>
<br>/s/ Yigal Arnon &amp; Co.<br>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<br>
 Yigal Arnon &amp; Co.</font></td>
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<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>6
<FILENAME>exhibit_23-2.htm
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     <!-- Control Number: 84828                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Silicom Ltd                                                      -->
     <!-- Project Name:   S-8                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
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<H1 Align=right><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Exhibit 23.2</U> </FONT> </h1>

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<H1 Align=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Consent of Independent
Registered Public Accounting Firm</U> </FONT> </h1>

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<P Align=LEFT><Font Face="Times New Roman, Times, Serif" Size=2>The Board of Directors<Br>Silicom Ltd.: </font></p>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>We consent to the use of our report
dated May 29, 2007 with respect to the consolidated balance sheets of the Silicom Ltd. and
its subsidiary (the Company) as of December 31, 2006 and 2005, and the related
consolidated statements of income, changes in shareholders&#146; equity and cash flows for
each of the years in the three year period ended December 31, 2006 incorporated by
reference herein, which reports appears in the December 31, 2006 annual report on Form
20-F of Silicom Ltd. </font></p>

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<P><Font Face="Times New Roman, Times, Serif" Size=2>Our report refers to a change in the
method of accounting for share-based compensation upon adoption by the Company of
Financial Accounting Standards Board Statement No. 123(R), &#147;Share-Based
Payment&#148;, effective January 1, 2006. </font></p>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Somekh Chaikin
<Br>Certified Public Accountants (Israel)
<Br>Member Firm of KPMG International
<Br>
<Br>
<Br>Tel Aviv, Israel
<Br>February 11, 2008
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