S-8

As filed with the Securities and Exchange Commission on September 11, 2007

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

NICE SYSTEMS LTD.
(Exact Name of Registrant as Specified in Its Charter)

Israel			N/A
(State or Other Jurisdiction of Incorporation)			(I.R.S. Employer Identification Number)

8 Hapnina Street
P.O. Box 690
43107 Ra’anana
Israel
(Address of Principal Executive Offices) (Zip Code)

Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan
(Full Title of the Plan)

NICE Systems Inc.
301 Route 17 North
10th Floor
Rutherford, New Jersey 07070
(Name and Address of Agent For Service)

(201) 964-2600
(Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Ido Zemach, Adv.
Goldfarb, Levy, Eran, Meiri & Co.
2 Weizmann Street
Tel Aviv 64239 Israel
+972-3-608-9999

CALCULATION OF REGISTRATION FEE

Title of Securities To Be Registered			Amount To Be Registered (2)						Proposed Maximum Offering Price Per Share						Proposed Maximum Aggregate Offering Price						Amount of     Registration     Fee
Ordinary Shares, par value NIS 1.00 per share (1)					559,533	(3)				$	36.16	(4)				$	20,232,713.28					$	621.14
Ordinary Shares, par value NIS 1.00 per share (1)					427,571	(5)				$	8.41	(6)				$	3,595,872.11					$	110.39
					987,104											$	23,828,585.39					$	731.53

(1) American Depositary Shares (‘‘ADSs’’), evidenced by American Depositary Receipts (‘‘ADRs’’), issuable upon deposit of Ordinary Shares, par value NIS 1.00 per share, of NICE Systems Ltd. are registered on a separate registration statement. Each ADS represents one Ordinary Share.

(2) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the ‘‘Securities Act’’), this Registration Statement also covers such indeterminate number of Ordinary Shares as may be offered or issued to prevent dilution resulting from stock splits, stock dividends, or similar transactions.

(3) Represents Ordinary Shares subject to issuance upon the exercise of stock options outstanding under the stock option plan of Actimize Ltd. and assumed by the Registrant pursuant to an Agreement and Plan of Merger dated as of July 2, 2007.

(4) Estimated in accordance with Rules 457(h)(1) and 457(c) promulgated under the Securities Act, solely for the purpose of calculating the registration fee, based on $36.16, the average of the high and low prices of the ADRs as reported on the Nasdaq Global Market on September 10, 2007, a date within 5 business days prior to the filing of this registration statement.

(5) Represents restricted Ordinary Shares issued in lieu of restricted shares issued under the Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan and assumed by the Registrant pursuant to an Agreement and Plan of Merger dated as of July 2, 2007.

(6) Computed in accordance with Rule 457(h) promulgated under the Securities Act. Such computation is based on the weighted average exercise price of $8.41 per share.

EXPLANATORY NOTE

This Registration Statement on Form S-8 is filed by NICE Systems Ltd. (the ‘‘Registrant’’) and relates to 987,104 ordinary shares, par value NIS 1.00 per share (the ‘‘Ordinary Shares’’), issued or issuable to participants in the Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan (the ‘‘Plan’’). Pursuant to an Agreement and Plan of Merger dated as of July 2, 2007 by and among the Registrant, Nemo Acquisitions Ltd., an Israeli company and a wholly owned subsidiary of the Registrant, and Actimize Ltd., the options and restricted shares originally granted under the Plan to officers, directors and employees of Actimize Ltd. and its subsidiaries were assumed by the Registrant and converted into options to purchase Ordinary Shares of the Registrant and restricted Ordinary Shares of the Registrant, respectively.

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PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.	INCORPORATION OF DOCUMENTS BY REFERENCE.

The Securities and Exchange Commission (the ‘‘Commission’’) allows us to ‘‘incorporate by reference’’ information into this prospectus. This means that we can disclose important information to you by referring you to another document filed by us with the Commission. Any information referenced this way is considered part of this prospectus, and any information that we file after the date of this prospectus with the Commission will automatically update and supersede this information. We incorporate by reference into this prospectus the following documents:

	•	The Registrant’s Annual Report on Form 20-F for the fiscal year ended December 31, 2006, filed with the Commission on June 13, 2007;

	•	The Registrants Current Reports on Form 6-K (or portions thereof indicated therein as being incorporated by reference into previously filed registration statements) submitted to the Commission on January 3, 2007, February 21, 2007, May 9, 2007, July 16, 2007 and the first paragraph of Exhibits 99.1 and 99.2 in the August 30, 2007 press release; and

	•	The descriptions of our ADSs, ADRs and our Ordinary Shares contained in the Registrant’s Registration Statement on Form F-3 filed with the Commission on August 26, 2005 and including any subsequent amendment or report filed for the purpose of updating such description.

In addition, any future filings made by us with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of Exchange Act, after the date of this prospectus and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, and any future reports on Form 6-K furnished by us to the Commission during such period or portions thereof that are identified in such forms as being incorporated into this Registration Statement, shall be considered to be incorporated in this Registration Statement by reference and shall be considered a part of this Registration Statement from the date of filing of such documents.

ITEM 4.	DESCRIPTION OF SECURITIES

Not applicable.

ITEM 5.	INTERESTS OF NAMED EXPERTS AND COUNSEL

Not Applicable.

ITEM 6.	INDEMNIFICATION OF DIRECTORS AND OFFICERS

Exemption of Office Holders

Under the Israeli Companies Law, as amended (the ‘‘Companies Law’’), an Israeli company may not exempt an office holder from liability for breach of his duty of loyalty, but may exempt in advance an office holder from liability to the company, in whole or in part, for a breach of his duty of care (except in connection with distributions), provided the articles of association of the company allow it to do so. Our articles of association do not allow us to do so.

Office Holder Insurance

Our articles of association provide that, subject to the provisions of the Companies Law, we may enter into a contract for the insurance of the liability of any of our office holders with respect to:

	•	a breach of his duty of care to us or to another person,

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	•	a breach of his duty of loyalty to us, provided that the office holder acted in good faith and had reasonable grounds to assume that his act would not prejudice our interests, or

	•	a financial liability imposed upon him in favor of another person concerning an act performed by him in his capacity as an office holder.

Indemnification of Office Holders

Our articles of association provide that we may indemnify an office holder against:

	•	a financial liability imposed on or incurred by an office holder in favor of another person by any judgment, including a settlement or an arbitrator’s award approved by a court concerning an act performed in his capacity as an office holder. Such indemnification may be approved (i) after the liability has been incurred or (ii) in advance, provided that the undertaking is limited to types of events which our board of directors deems to be foreseeable in light of our actual operations at the time of the undertaking and limited to an amount or criterion determined by our board of directors to be reasonable under the circumstances, and further provided that such events and amounts or criterion are set forth in the undertaking to indemnify, and provided that the total amount of indemnification for all persons we have agreed to indemnify in such circumstances does not exceed, in the aggregate twenty-five percent (25%) of our shareholders’ equity at the time of the actual indemnification;

	•	reasonable litigation expenses, including attorney’s fees, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent; and

	•	reasonable litigation expenses, including attorneys’ fees, expended by the office holder or charged to him by a court, in proceedings instituted against him by or on our behalf or by another person, or in a criminal charge from which he was acquitted, or a criminal charge in which he was convicted for a criminal offense that does not require proof of intent, in each case relating to an act performed in his capacity as an office holder.

We have undertaken to indemnify our directors and officers pursuant to applicable law. We have obtained directors and officers liability insurance for the benefit of our directors and officers.

Limitations on Exemption, Insurance and Indemnification

The Companies Law provides that a company may not exempt or indemnify an office holder, or enter into an insurance contract, which would provide coverage for any monetary liability incurred as a result of any of the following:

	•	a breach by the office holder of his duty of loyalty unless, with respect to insurance coverage or indemnification, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

	•	a breach by the office holder of his duty of care if the breach was done intentionally or recklessly;

	•	any act or omission done with the intent to derive an illegal personal benefit; or

	•	any fine levied against the office holder.

Required Approvals

In addition, under the Companies Law, any exemption of, indemnification of, or procurement of insurance coverage for, our office holders must be approved by our audit committee and our board of

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directors and, if the beneficiary is a director, by our shareholders. We have obtained such approvals for the procurement of liability insurance covering our officers and directors and for the grant of indemnification letters to our officers and directors.

ITEM 7.	EXEMPTION FROM REGISTRATION CLAIMED

Not Applicable.

ITEM 8.	EXHIBITS

The following exhibits are filed with or incorporated by reference into this Registration Statement (numbering corresponds to Exhibit Table in Item 601 of Regulation S-K):

	4	.1				Amended and Restated Memorandum of Association of NICE Systems Ltd. (an English translation), approved on December 21, 2006 (previously filed as Exhibit 1.1 to, and incorporated by reference from, NICE’s Annual Report on Form 20-F filed with the Commission on June 13, 2007).
	4	.2				Amended and Restated Articles of Association of NICE Systems Ltd., as amended through December 21, 2006 (previously filed as Exhibit 1.2 to, and incorporated by reference from, NICE’s Annual Report on Form 20-F filed with the Commission on June 13, 2007).
	4	.3				Form of Share Certificate (previously filed as Exhibit 4.1 to, and incorporated by reference from, NICE’s Amendment No. 1 to Registration Statement on Form F-1 (Registration No. 333-99640) filed with the Commission on December 29, 1995).
	4	.4				Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan.
	5					Opinion of Goldfarb, Levy, Eran, Meiri & Co.
	23	.1				Consent of Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global.
	23	.2				Consent of Goldfarb, Levy, Eran, Meiri & Co. (included in Exhibit 5).
	24					Power of Attorney (included in signature page of this Registration Statement).

ITEM 9.	UNDERTAKINGS

(a)	The undersigned Registrant hereby undertakes:

	(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

	(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act;

	(ii)	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 thereof) 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 20 percent change in the maxim um aggregate offering price set forth in the ‘‘Calculation of Registration Fee’’ table in the effective Registration Statement; and

	(iii)	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;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration information is on Form S-8 and the information required to be

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included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.

	(2)	That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment 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 bona fide offering thereof.

	(3)	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.

(b)

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act), that is incorporated by reference in the 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 bona fide offering thereof.

(c)

Insofar as indemnification for liabilities arising under the Securities Act 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 Commission such indemnification is against public policy as expressed in the Securities 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 reg istered, 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 the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, 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 the City of Ra’anana, State of Israel, on the 11 day of September, 2007.

			NICE SYSTEMS LTD.
			By:			/s/			Haim Shani
									Haim Shani CEO
			By:			/s/			Dafna Gruber
									Dafna Gruber Corporate VP and CFO

POWER OF ATTORNEY

Know all men by these present, that each individual whose signature appears below constitutes and appoints Haim Shani, Dafna Gruber, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her place and stead, in any and all capacities, to sign any all amendments (including post-effective amendments) to this Registration Statement and to file the same will all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby rectifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substi tutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following person in the capacities and on the dates identified:

Signature		Title		Date
/s/ Ron Gutler		Chairman of the Board of Directors		September 11, 2007
Ron Gutler
/s/ Joseph Atsmon		Vice-Chairman of the Board of Directors		September 11, 2007
Joseph Atsmon
/s/ Haim Shani		Chief Executive Officer (Principal Executive Officer)		September 11, 2007
Haim Shani
/s/ Dafna Gruber		Chief Financial Officer (Principal Financial Officer)		September 11, 2007
Dafna Gruber
/s/ Rimon Ben-Shaoul		Director		September 11, 2007
Rimon Ben-Shaoul
/s/ Yoseph Dauber		Director		September 11, 2007
Yoseph Dauber

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Signature		Title		Date
/s/ Dan Falk		Director		September 11, 2007
Dan Falk
		Director
John Hughes
/s/ Dr. Leora Meridor		Director		September 11, 2007
Dr. Leora Meridor
Authorized Representative in the United States:
NICE SYSTEMS INC.
By: /s/ David Ottensoser				September 11, 2007
Name: David Ottensoser         Title: Corporate Secretary

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INDEX TO EXHIBITS

EXHIBIT NO.								DESCRIPTION
	4	.1				Amended and Restated Memorandum of Association of NICE Systems Ltd. (an English translation), approved on December 21, 2006 (previously filed as Exhibit 1.1 to, and incorporated by reference from, NICE’s Annual Report on Form 20-F filed with the Commission on June 13, 2007).
	4	.2				Amended and Restated Articles of Association of NICE Systems Ltd., as amended through December 21, 2006 (previously filed as Exhibit 1.2 to, and incorporated by reference from, NICE’s Annual Report on Form 20-F filed with the Commission on June 13, 2007).
	4	.3				Form of Share Certificate (previously filed as Exhibit 4.1 to, and incorporated by reference from, NICE’s Amendment No. 1 to Registration Statement on Form F-1 (Registration No. 333-99640) filed with the Commission on December 29, 1995).
	4	.4				Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan.
	5					Opinion of Goldfarb, Levy, Eran, Meiri & Co.
	23	.1				Consent of Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global.
	23	.2				Consent of Goldfarb, Levy, Eran, Meiri & Co. (included in Exhibit 5).
	24					Power of Attorney (included in signature page of this Registration Statement).

EX-4.4

ACTIMIZE LTD.

2003 OMNIBUS STOCK OPTION

AND RESTRICTED STOCK INCENTIVE PLAN

1. PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

Purpose. The purpose of the Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan (the “Plan”) is to afford an incentive to employees, officers, Office Holders (as defined below), directors, subcontractors and consultants of Actimize Ltd. (the “Company”), or any Subsidiary (as defined below) of the Company which now exists or hereafter is organized or acquired by the Company, to acquire a proprietary interest in the Company, to continue as employees, officers, Office Holders, directors, Subcontractors or consultants, to increase their efforts on behalf of the Company and to promote the success of the Company’s business.

Types of Awards. The Plan is intended to enable the Company to issue Awards under varying tax regimes, including without limitation (i) as “incentive stock options” (“Incentive Stock Options”) within the meaning of Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”); (ii) “Nonqualified Stock Options” as defined below; (iii) pursuant to the provisions of New Section 102 (“New Section 102” and such options, “New 102 Stock Options”) of the Israeli Income Tax Ordinance (New Version) 1961, as amended, including without limitation the revisions that came into effect on January 1, 2003 and any other future amendments thereof (the “Ordinance”) and any regulations, rules, orders or procedures promulgated thereunder; (iv) pursuant to Section 3(I) of the Ordinance (“3(I) Stock Options”) (all New 102 Stock Options, 3(I) Stock Options, Incentive Stock Options and Non-Qualified Stock Options, as well as options issued under other tax regimes collectively, the “Options”); (v) shares of restricted stock (“Restricted Stock”) under the Plan; and (vi) other share-based Awards pursuant to Section 12 hereof. Apart from issuance under the relevant tax regimes in the United States of America and the State of Israel, the Plan contemplates issuance to Grantees (as defined below) in other jurisdictions with respect to which the Committee (as defined below) is empowered to make the requisite adjustments in the Plan and set forth the relevant conditions in the Company’s agreement with the Grantee in order to comply with the requirements of the tax regimes in any such jurisdictions.

The Plan contemplates the issuance of Awards by the Company, both as a private company and as a publicly traded company.

Construction. To the extent any provision herein conflicts with the conditions of any relevant tax law or regulation which are relied upon for tax relief in respect of a particular Option or Share granted to a Grantee, the provisions of such law or regulation shall prevail over those of the Plan and the Committee

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(as defined below) is empowered hereunder to interpret and enforce the said prevailing provisions.

2. DEFINITIONS.

As used in this Plan, the following words and phrases shall have the meanings indicated:

2.1. “Award” shall mean any Share, Option, share of Restricted Stock or any other Share-based award, granted to a Grantee under the Plan.

2.2. “Board” shall mean the Board of Directors of the Company, as appointed from time to time.

2.3. “Committee” shall mean a committee established by the Board to administer the Plan.

2.4. “Companies Law” shall mean the Israel Companies Law-1999, as amended.

2.5. “Date of Grant” shall mean the date specified in the Option Agreement.

2.6. “Disability” shall mean the inability of a Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 6 months, as determined by a medical doctor satisfactory to the Committee.

2.7. “Exercise Period” shall mean the period in which the Option shall be exercisable.

2.8. “Exercise Price” shall mean the amount for which one Share covered by an Option may be purchase upon exercise of the Option, as specified in the Notice of Stock Option Grant.

2.9. “Fair Market Value” per share as of a particular date shall mean (i) the closing sales price per Share on the securities exchange on which the Share is principally traded for the last preceding date on which there was a sale of such Share on such exchange; or (ii) if the Share is listed on the NASDAQ National Market, the last reported price per Share on the NASDAQ National Market on the last preceding date on which there was a sale of such Share on the NASDAQ National Market; or (iii) if the Share is then traded in an over-the-counter market, the average of the closing bid and asked prices for the Share in such over-the-counter market for the last preceding date on which there was a sale of such Share in such market; or (iv) if the Share is not then listed on a securities exchange or market or traded in an over-the-counter market, such value as the Committee, in its sole

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discretion, shall determine, which determination shall be conclusive and binding on all parties. Whenever possible, if the Shares are listed on a securities exchange or market or traded in an over-the-counter market, the Fair Market Value shall be based on prices reported in the Wall Street Journal.

2.10. “Grantee” shall mean a person who receives a grant of Options, Restricted Stock or Shares under the Plan, who at the time of grant is an employee, officer, director, Office Holder, consultant or subcontractor of the Company or any Subsidiary thereof.

2.11. “Initial Public Offering” or an “IPO” shall mean the initial public offering of the Company’s Shares.

2.12. “Nonqualified Stock Option” shall mean any Option granted to a U.S. resident, which Option is not designated as, or does not meet the conditions for an Incentive Stock Option.

2.13. “Parent” shall mean any company (other than the Company), which now exists or is hereafter organized, in an unbroken chain of companies ending with the Company if, at the time of granting an Award, each of the companies other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain.

2.14. “Retirement” shall mean a Grantee’s retirement pursuant to applicable law or in accordance with the terms of any tax-qualified retirement plan maintained by the Company or any of its Subsidiaries or affiliates in which the Grantee participates.

2.15. “Share” shall mean the Ordinary Shares of the Company, par value of NIS 0.01, as adjusted in accordance with Section 13 of the Plan (if applicable).

2.16. “Subsidiary” shall mean any company (other than the Company), which now exists or is hereafter organized or acquired by the Company, in an unbroken chain of companies beginning with the Company if, at the time of granting an Award, each of the companies other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain.

2.17. “Ten Percent Shareholder” shall mean a Grantee who, at the time an Option is granted, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary.

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2.18. “Trustee” shall mean the trustee appointed by the Committee or the Board, as the case may be, to hold the respective Options, Restricted Stock and/or Shares, if so appointed.

3. ADMINISTRATION.

To the extent permitted by law, the Plan shall be administered by the Committee. However, in the event that the Board does not create a committee to administer the Plan, the Plan shall be administered by the Board in its entirety. Furthermore, in the event that an action necessary for the administration of the Plan is required under law to be taken by the Board, then such action shall be so taken by the Board. In any of the above events, all references herein to the Committee shall be construed as references to the Board.

The Committee shall have the authority in its discretion to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation:

(i) the authority to grant Options, Shares, Restricted Stock and other Share based Awards to the Grantees;

(ii) to determine which Options shall constitute Incentive Stock Options, Nonqualified Stock Options, New 102 Stock Options, 3(I) Stock Options or otherwise;

(iii) to determine the Exercise Price of the Share covered by each Option;

(iv) to determine the Grantees to whom, and the time or times at which Awards shall be granted;

(v) to determine the number of Shares to be covered by each Award;

(vi) to interpret the Plan;

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan;

(viii) to determine the terms and provisions of the Option Agreements as defined in Section 6 below (which need not be identical), and to cancel or suspend Awards, as necessary;

(ix) to determine which route - the capital gains (in Hebrew – “honi”) route or the work income (in Hebrew – “pairoti”) route or any other route available under the New Section 102 shall be adopted for the purpose of New 102 Stock Options;

(x) and to make all other determinations deemed necessary or advisable for the administration of the Plan, including to adjust the terms of the Plan or any Agreement so as to reflect (i) changes in applicable U.S.,

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Israeli or other laws and (ii) the laws of other jurisdictions within, which the Company wishes to grant Awards.

The Committee shall have the authority to grant in its discretion to the holder of an outstanding Option, in exchange for the surrender and cancellation of such Option, a new Option having an exercise price lower than provided in the Option so surrendered and canceled and containing such other terms and conditions as the Committee may prescribe in accordance with the provisions of the Plan or to set a new exercise price for the same Option lower than that previously provided in the Option.

All decisions, determination and interpretations of the Committee shall be final and binding on all Grantees of any Awards under this Plan. No member of the Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.

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

4. ELIGIBILITY.

Options, Restricted Stock and Shares may be granted to employees, officers, Office Holders, directors, subcontractors and consultants of the Company and any Subsidiary, provided, however, that Incentive Stock Options may be granted only to employees of the Company or a Subsidiary. New 102 Stock Options may be granted only to Israeli employees and Office Holders excluding any “Controlling Holders” as such term is defined in the Ordinance. A person who has been granted an Option, Restricted Stock or Share hereunder may be granted additional Options, Restricted Stock or Shares, if the Committee shall so determine. In determining the persons to whom Awards shall be granted and the number of Shares to be covered by each Award, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as the Committee shall deem relevant in connection with accomplishing the purpose of the Plan.

5. SHARES.

The initial number of Shares, NIS 0.01 par value each, reserved for the grant of Awards under the Plan shall be 6,878,300. In addition to the initial number of Shares stated above, any Options which were granted under the Company’s 2000 Plan and 2001 Plan and which have been expired, cancelled or

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terminated or forfeited for any reason without having been exercised and therefore returned to the “pool” of reserved Shares thereunder, shall automatically, and without any further action on the part of the Company or any Grantee, be transferred to, and enlarge, the “pool” of reserved Shares under this Plan (the “Added Pool”) and shall again be available for grant for the purposes of this Plan (unless this Plan shall have been terminated) or unless the Board determines otherwise. The Board may increase or decrease the number of Shares to be reserved under the Plan. Such Shares may, in whole or in part, be authorized but unissued Shares, or Shares that shall have been or may be reacquired by the Company (to the extent permitted pursuant to the Companies Law) or by a trustee appointed by the Board under the relevant provisions of the Ordinance, the Companies Law or any equivalent provision. Any of such Shares which may remain unsold and which are not subject to outstanding options at the termination of the Plan shall cease to be reserved for the purpose of the Plan, but until termination of the Plan, the Company shall at all times reserve a sufficient number of Shares to meet the requirements of the Plan.

If any outstanding Award under the Plan (including the Added Pool) should, for any reason, expire, be canceled or be forfeited without having been exercised in full, the Shares allocable to the unexercised, canceled or terminated portion of such Award shall (unless the Plan shall have been terminated) become available for subsequent grants of Awards under the Plan.

6. TERMS AND CONDITIONS OF OPTIONS.

Each Option granted pursuant to the Plan shall be evidenced by a written agreement between the Company and the Grantee (the “Option Agreement”), in such form and containing such terms and conditions as the Committee shall from time to time approve, which Option Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Option Agreement.

6.1. NUMBER OF SHARES. Each Option Agreement shall state the number of Shares to which the Option relates.

6.2. TYPE OF OPTION. Each Option Agreement shall specifically state the type of Option granted thereunder and whether it constitutes a Incentive Stock Option, Nonqualified Stock Option, New 102 Stock Option, 3(I) Stock Option or otherwise.

6.3. EXERCISE PRICE. Each Option Agreement shall state the Exercise Price, which, in the case of an Incentive Stock Option, shall not be less than one hundred percent (100%) of the Fair Market Value of the shares of Stock covered by the Option on the Date of Grant or such other amount as may be required pursuant to the Code. In the case of a Nonqualified Stock Option granted to any Grantee, the per share exercise price shall be equal to the amount determined by the Committee or the Board, as the case may be. In the case of an Incentive Stock Option granted to any Ten-Percent Shareholder, the

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Exercise Price shall be no less than 110% of the Fair Market Value of the Shares covered by the Option on the Date of Grant. In no event shall the Exercise Price of an Option be less than the nominal value of the shares for which such Option is exercisable. Subject to Section 3 and to the foregoing, the Committee may reduce the Exercise Price of any outstanding Nonqualified Stock Option. The Exercise Price shall also be subject to adjustment as provided in Section 13 hereof.

 

6.4. MANNER OF EXERCISE. An Option may be exercised, as to any or all Shares as to which the Option has become exercisable, by written notice delivered in person or by mail to the Secretary of the Company, specifying the number of Shares with respect to which the Option is being exercised, along with payment of the Exercise Price for such Shares in the manner specified in the following sentence. The Exercise Price shall be paid in full with respect to each share, at the time of exercise in cash or in such other manner as the Committee shall determine.

6.5. TERM AND VESTING OF OPTIONS. Each Option Agreement shall provide the vesting schedule for the Option as determined by the Committee, provided that (to the extent permitted under law) the Committee shall have the authority to accelerate the vesting of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. Unless otherwise resolved by the Committee and stated in the Option Agreement and subject to Section 13.2, Options shall vest over a period of forty-eight (48) months and become exercisable under the following schedule: twenty five percent (25%) of the Shares covered by the Option at the end of the first twelve (12) months from the date on which such Option is granted and six and one-quarter percent (6.25%) of the Shares covered by the Option at the end of each subsequent 3-month period over the course of the following thirty six (36) months; provided, however, that (to the extent permitted under law) the Committee, in its absolute discretion, may, on such terms and conditions as it may determine to be appropriate, accelerate or otherwise change the time at which such Option or any portion thereof may be exercised. The Option Agreement may contain performance goals and measurements as well as other criteria other than the passage of time, and the provisions with respect to any Option need not be the same as the provisions with respect to any other Option. The Exercise Period of an Option will be ten (10) years from the date of the Grant of the Option unless otherwise determined by the Committee (to the extent permitted under law); provided, however, that in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, such Exercise Period shall not exceed five (5) years from the Date of Grant of such Option. After such five (5) year period, all Awards not exercised shall be deemed null and void. The Exercise Period shall be subject to earlier termination as provided in Sections 6.6 and 6.7 hereof.

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6.6. TERMINATION. Except as provided in this Section 6.6 and in Section 6.7 hereof an Option may not be exercised unless the Grantee is then in the service or employ of the Company or a Subsidiary thereof or, in the case of an Incentive Stock Option, a company or a parent or subsidiary company of such company issuing or assuming the Option in a transaction to which Section 424(a) of the Code applies, and unless the Grantee has remained continuously so employed or has continuously performed such services since the Date of Grant of the Option. In the event that the employment or service of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Options of such Grantee that are vested and exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within a period of three (3) months after the date of such termination (or such different period as the Committee shall prescribe); provided, however, that if the Company (or the Subsidiary, when applicable) shall terminate the Grantee’s employment for Cause (as defined below), all Options theretofore granted to such Grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate on the date of such termination or cessation unless otherwise determined by the Committee. In the case of a Grantee whose principal employer is a Subsidiary, the Grantee’s employment shall be deemed to be terminated for purposes of this Section 6.6 as of the date on which such principal employer ceases to be a Subsidiary. With respect to New 102 Stock Options granted under New Section 102(c), if the Grantee ceases to be employed by the Company or a Subsidiary, the Grantee shall extend to the Company a security or guarantee for the payment of tax due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the rules, regulation and orders promulgated thereunder. Notwithstanding anything to the contrary, the Committee, in its absolute discretion may, on such terms and conditions as it may determine appropriate, extend the periods for which the Options held by any individual may continue to vest and be exercisable; provided, that such Options may lose their status as Incentive Stock Options under applicable law and be deemed Nonqualified Stock Options in the event that the period of vesting and/or exercisability of any option is extended beyond the later of: (i) three (3) months period after the date of cessation of employment or performance of services; or (ii) the applicable period under Section 6.7 below.

For purposes of this Plan, the term “Cause” shall mean any of the following resulting from an act or omission of Grantee: (i) conviction of any felony involving moral turpitude or affecting the Company or any Subsidiary thereof; (ii) any refusal to carry out a reasonable directive of the CEO, Board or the Grantee’s direct supervisor which involves the business of the Company or its Subsidiary or any affiliates and was capable of being lawfully performed; (iii) embezzlement of funds of the Company, its Subsidiary or any of its affiliates; (iv) any breach of the Grantee’s fiduciary duties or duties of care of towards the

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Company or any Subsidiary thereof; including without limitation disclosure of confidential information of the Company or any Subsidiary thereof; and (v) any conduct (other than conduct in good faith) reasonably determined by the Board to be materially detrimental to the Company or any Subsidiary thereof.

6.7. DEATH, DISABILITY OR RETIREMENT OF GRANTEE. If a Grantee shall die while employed by, or performing service for, the Company or a Subsidiary, or within the three (3) months period after the date of termination of such Grantee’s employment or service (or within such different period as the Committee may have provided pursuant to Section 6.6 hereof), or if the Grantee’s employment or service shall terminate by reason of Disability, all Options theretofore granted to such Grantee (to the extent otherwise vested and exercisable) may, unless earlier terminated in accordance with their terms, be exercised by the Grantee or by the Grantee’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by result of death or Disability of the Grantee, at any time within one (1) year after the death or Disability of the Grantee (or such different period as the Committee shall prescribe). In the event that an Option granted hereunder shall be exercised by the legal representatives of a deceased or former Grantee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative to exercise such Option. In the event that the employment or service of a Grantee shall terminate on account of such Grantee’s Retirement, all Options of such Grantee that are exercisable at the time of such Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three (3) month period after the date of such Retirement (or such different period as the Committee shall prescribe).

 

6.8. VOTING PROXY. The right to vote any Shares acquired hereunder pursuant to an Award of Options, Restricted Stock or Share shall be given by the Grantee or the Grantee’s transferee, pursuant to an irrevocable proxy, to the person or persons designated by the Board. All Awards granted hereunder shall be conditioned upon the execution of such irrevocable proxy. So long as any such shares are held by a Trustee, such shares shall be voted by the Trustee, unless the Trustee is directed otherwise by the Board, in the same proportion as the result of the shareholder vote in respect of which the votes held by the Trustee are being cast. Notwithstanding the foregoing, the provisions of this Section 6.8 or of any irrevocable proxy granted pursuant hereto shall be of no force or effect upon the consummation of the Company’s Initial Public Offering or the consummation of a Merger/Sale (as defined below).

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6.9. OTHER PROVISIONS. The Option Agreements evidencing Awards under the Plan shall contain such other terms and conditions not inconsistent with the Plan as the Committee may determine.

 

7. NONQUALIFIED STOCK OPTIONS.

Options granted pursuant to this Section 7 are intended to constitute Nonqualified Stock Options and shall be subject to the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for said provisions of the Plan applying to Options under a different tax law or regulation.

 

8. INCENTIVE STOCK OPTIONS.

Options granted pursuant to this Section 8 are intended to constitute Incentive Stock Options and shall be granted subject to both the following special terms and conditions and the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for said provisions of the Plan applying to Options under a different tax law or regulation:

8.1. VALUE OF SHARES. The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options granted under this Plan and all other option plans of any Subsidiary become exercisable for the first time by each Grantee during any calendar year shall not exceed one hundred thousand United States dollars ($100,000) with respect to such Grantee. To the extent that the aggregate Fair Market Value of Shares with respect to which the Incentive Stock Options are exercisable for the first time by any Grantee during any calendar years exceeds one hundred thousand United States dollars ($100,000), such Options shall be treated as Non-Qualified Stock Options. The foregoing shall be applied by taking options into account in the order in which they were granted, with the Fair Market Value of any Share to be determined at the time of the grant of the Option. In the event the foregoing results in the portion of an Incentive Stock Option exceeding the one hundred thousand United States dollars ($100,000) limitation, only such excess shall be treated as a Non-Qualified Stock Option.

8.2. TEN PERCENT SHAREHOLDER. In the case of an Incentive Stock Option granted to a Ten Percent Shareholder, (i) the Exercise Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the shares of Stock on the Date of Grant of such Incentive Stock Option, and (ii) the Exercise Period shall not exceed five (5) years from the Date of Grant of such Incentive Stock Option.

9. NEW 102 STOCK OPTIONS.

Options granted pursuant to this Section 9 are intended to constitute New 102 Stock Options and subject to New Section 102 of the Ordinance and the rules

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and regulations promulgated thereunder, as amended, the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for said provisions of the Plan applying to Options under a different tax law or regulation, shall apply.

To the extent required by the Ordinance or the Income Tax Commissioner of the State of Israel, the New 102 Stock Options which shall be granted pursuant to the Plan shall be issued to a Trustee nominated by the Committee and approved by the tax authorities in accordance with the provisions of the Ordinance and the New 102 Stock Options and the Shares issued upon the exercise of such Option shall be held for the benefit of the Grantee for such period of time as may be required by the Ordinance or any other applicable law or regulation.

Notwithstanding anything to the contrary, the Trustee of the New 102 Stock Options shall not release any New 102 Options which were not already exercised into Shares by the Grantee or release any Shares issued upon exercise of New 102 Stock Options prior to the full payment of the Grantee’s tax liabilities arising from New 102 Stock Options which were granted to the Grantee and/or any Shares issued upon exercise of such Options.

During the holding period with the Trustee as set forth in New Section 102 and as long as the applicable tax has not been paid, neither the Options nor the Shares, as the case may be, may be sold, transferred, assigned, pledged or mortgaged (other than through a transfer by will or by operation of law), nor may they be the subject of an attachment, power of attorney or transfer deed (other than a power of attorney for the purpose of participation in general meetings of shareholders) unless New Section 102 and/or the regulations, rules, orders or procedures promulgated thereunder allow otherwise.

As a condition precedent to the grant of a New Section 102 Option, the Grantee will sign an undertaking under the option agreement to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with the Plan, or any Option or Share granted to the Grantee thereunder.

10. 3(I) STOCK OPTIONS.

Options granted pursuant to this Section 10 are intended to constitute 3(I) Stock Options and shall be subject to the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for said provisions of the Plan applying to Options under a different tax law or regulation.

3(I) Stock Options may be granted to non-employees, including consultants, service providers and “Controlling Holders” as such term is defined in the Ordinance).

The 3(I) Stock Options which shall be granted pursuant to the Plan may be issued to a Trustee nominated by the Committee. If the Committee has

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nominated such a Trustee, he shall hold the 3(I) Stock Options, on behalf of the Grantee, until such time the Grantee wish to sell the Shares issued to him upon exercise of the 3(I) Stock Options.

The Trustee shall not transfer, the 3(I) Stock Options or any Shares issued upon the exercise of such Options, to the Grantee unless all payments due in connection with such Options or Shares have been paid in full.

Upon receipt of the 3(I) Stock Options, the Grantee will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with the Plan, or any Option or Share granted to the Grantee thereunder.

11. RESTRICTED STOCK.

The Committee may award shares of Restricted Stock to any eligible employee, director or consultant of the Company or of any Subsidiary thereof, including under New Section 102 of the Ordinance (provided that Restricted Stock granted under New Section 102 may only be granted to Israeli employees and Office Holders excluding any “Controlling Holders” as such term is defined in the Ordinance). Each Award of Restricted Stock under the Plan shall be evidenced by a written agreement between the Company and the Grantee (the “Restricted Stock Agreement”), in such form as the Committee shall from time to time approve, which Restricted Stock Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Agreement:

11.1. NUMBER OF SHARES. Each Restricted Stock Agreement shall state the number of shares of Restricted Stock to be subject to an Award.

11.2. RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, for such period as the Committee shall determine from the date on which the Award is granted (the “Restricted Period”). The Committee may also impose such additional or alternative restrictions and conditions on the shares of Restricted Stock as it deems appropriate including the satisfaction of performance criteria. Such performance criteria may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of growth of any of the foregoing, as determined by the Committee. Certificates for Shares issued pursuant to Restricted Stock Awards shall bear an appropriate legend referring to such restrictions, and any attempt to dispose of any such shares in contravention of such restrictions shall be null and void and without effect. During the Restricted Period, such certificates shall be held in escrow by an escrow agent appointed by the Committee, or, if a Restricted Stock Award is made pursuant to New Section 102, by the Trustee. In determining the Restricted Period of an Award the

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Committee may provide that the foregoing restrictions shall lapse with respect to specified percentages of the awarded shares on successive anniversaries of the date of such Award. To the extent required by the Ordinance or the Income Tax Commissioner of the State of Israel, the Restricted Stock issued pursuant to New Section 102 of the Ordinance shall be issued to the Trustee in accordance with the provisions of the Ordinance and the Restricted Stock shall be held for the benefit of the Grantee for such period of time as may be required by the Ordinance. Grantee hereby acknowledges that he or she has been informed that, an election may be filed by Grantee with the United States Internal Revenue Service, within 30 days of the purchase of the Shares of Restricted Stock, electing pursuant to Section 83(b) of the Code to be taxed on any difference between the purchase price of the Shares of Restricted Stock and their Fair Market Value on the date of purchase.

11.3. ADJUSTMENT OF PERFORMANCE GOALS. The Committee may adjust performance goals to take into account changes in law and accounting and tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the inclusion or the exclusion of the impact of extraordinary or unusual items, events or circumstances. The Committee also may adjust the performance goals by reducing the amount to be received by any Grantee pursuant to an Award if and to the extent that the Committee deems it appropriate.

11.4. FORFEITURE. Subject to such exceptions as may be determined by the Committee, if the Grantee’s continuous employment or director or consultant relationship with the Company or any Subsidiary shall terminate for any reason prior to the expiration of the Restricted Period of an Award, any shares remaining subject to restrictions (after taking into account the provisions of Section 11.6) shall thereupon be forfeited by the Grantee and transferred to, and reacquired by, the Company or a Subsidiary at no cost to the Company or Subsidiary, subject to all applicable law.

11.5. OWNERSHIP. During the Restricted Period the Grantee shall possess all incidents of ownership of such Shares, subject to Section 6.8 and Section 11.2, including the right to receive dividends with respect to such Shares and to vote such Shares.

11.6. ACCELERATED LAPSE OF RESTRICTIONS. Upon the occurrence of any of the events listed in Sections 13.2 and 13.3 and subject to Section 13.4, all restrictions then outstanding with respect to shares of Restricted Stock awarded hereunder shall automatically expire and be of no further force and effect. The Committee shall have the authority (and the Agreement may so provide) to cancel all or any portion of any outstanding restrictions prior to the expiration of the Restricted Period with respect to any or all of the shares of

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Restricted Stock awarded on such terms and conditions as the Committee shall deem appropriate.

12. OTHER SHARE OR SHARE-BASED AWARDS.

The Committee may grant other Awards under the Plan pursuant to which Shares (which may, but need not, be Shares of Restricted Stock pursuant to Section 9 hereof), cash or a combination thereof, are or may in the future be acquired or received, or Awards denominated in stock units, including units valued on the basis of measures other than market value. The Committee may also grant stock appreciation rights without the grant of an accompanying option, which rights shall permit the Grantees to receive, at the time of any exercise of such rights, cash equal to the amount by which the Fair Market Value of all Shares in respect to which the right was granted exceeds the exercise price thereof. The Committee may and it is hereby deemed to be an Award under the terms of the Plan grant to Grantees (including employees) the opportunity to purchase Shares of the Company in connection with any public offerings of the Company’s securities. Such other Share based Awards may be granted alone, in addition to, or in tandem with any Award of any type granted under the Plan and must be consistent with the purposes of the Plan.

13. EFFECT OF CERTAIN CHANGES.

13.1. GENERAL. In the event of a subdivision of the outstanding share capital of the Company, any declaration and payment of a stock dividend (distribution of bonus shares), a recapitalization, a reorganization (which may include a combination or exchange of shares), a consolidation, a stock split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, the Committee shall make appropriate adjustments in one or more of (i) the number of Shares available for Awards, (ii) the number of such Shares covered by outstanding Awards, and (iii) the exercise price per share covered by the Option Awards; provided, however, that the aggregate exercise price for all Option Awards shall not change and that any fractional shares resulting from such adjustment shall be rounded down to the nearest whole share.

13.2. MERGER AND SALE OF COMPANY. In the event of (i) a sale of all or substantially all of the assets of the Company; or (ii) a sale (including an exchange) of all of the shares of capital stock of the Company; or (iii) a merger, consolidation, amalgamation or like transaction of the Company with or into another corporation; or (iv) a scheme of arrangement for the purpose of effecting such sale, merger or amalgamation (all such transactions being herein referred to as a “Merger/Sale”), then, without the Grantee’s consent and action

13.2.1. the Committee in its sole discretion will use its efforts to cause that any Award then outstanding shall be assumed or an equivalent Award shall be substituted by such successor corporation (the “Successor Corporation”) or, in such

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event that such transaction is effected through a subsidiary, the parent of such Successor Corporation, under substantially the same terms as the Award; and

13.2.2. in such case that such Successor Corporation or other entity does not agree to assume the Award or to substitute an equivalent Award and, if the Award is an Option (“Option Award”), then the Committee may (but shall not be obligated to), in lieu of such assumption or substitution of the Option Award and in its sole discretion, either (i) provide in each Grantee’s Option Agreement for the Grantee to have the right to exercise the Option as to all or part of the Shares, including Shares covered by the Option Agreement which would not otherwise be exercisable, under such terms and conditions as the Committee shall determine; or (ii) provide for the cancellation of each outstanding Option Award at the closing of such Merger/Sale, against payment to the Grantee of an amount in cash equal to (a) the fair market value of each share of Stock covered by the Option Award as reflected under the terms of the Merger/Sale, minus (b) the Exercise Price of each share of Stock covered by the Option Award.

13.2.3. Notwithstanding the foregoing, in the event of a Merger/Sale, the Committee may determine in its sole discretion that upon completion of such Merger/Sale, the terms of any Award be otherwise amended and modified, as the Committee shall deem in good faith to be appropriate, and if an Option Award, that the Option Award shall confer the right to purchase any other security or asset, or any combination thereof, or that its terms be otherwise amended or modified, as the Committee shall deem in good faith to be appropriate.

13.3. RESERVATION OF RIGHTS. Except as expressly provided in this Section 13 or in the Option Agreement, the Grantee of an Award hereunder shall have no rights by reason of any subdivision or consolidation of stock of any class or the payment of any stock dividend (bonus shares) or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, Merger/Sale, or consolidation, divestiture or spin-off of assets or stock of another company; and any issue by the Company of stock of any class, or securities convertible into shares of stock of any class, shall not effect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Stock subject to an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right of power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to consolidate or to dissolve,

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liquidate or sell, or transfer all or part of its business or assets or engage in any similar transactions.

14. NONTRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.

Unless otherwise approved by the Committee, and except for a U.S. resident which its right to transfer an Award granted under this Plan shall be subject to a prior written approval from the Company’s Board or Committee, all other Awards granted under the Plan shall not be transferable otherwise than by will or by the laws of descent and distribution, and Awards may be exercised or otherwise realized, during the lifetime of the Grantee, only by the Grantee or by his guardian or legal representative, to the extent provided for herein. A Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee’s estate shall be deemed to be the Grantee’s beneficiary.

15. AGREEMENT BY GRANTEE REGARDING TAXES.

If the Committee shall so require, as a condition of exercise of an Option, the release of Shares or Options by the Trustee or the expiration of the Restricted Period (each a “Tax Event”), each Grantee shall agree that, no later than the date of the Tax Event, he will pay to the Company or make arrangements satisfactory to the Committee and the Trustee (if applicable) regarding payment of any applicable taxes of any kind required by law to be withheld or paid upon the Tax Event. To the extent approved by the Committee and permitted by law, a withholding obligation may be satisfied by the withholding or delivery of Shares.

ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY OPTIONS, SHARES, OR RESTRICTED STOCK, OR IN THE CASE OF AN OPTION, FROM ITS EXERCISE, FROM THE SALE OR DISPOSITION OF THE SHARES OR RESTRICTED STOCK OR FROM ANY OTHER ACT OF THE GRANTEE IN CONNECTION WITH THE FOREGOING SHALL BE BORNE SOLELY BY THE GRANTEE, AND THE GRANTEE SHALL INDEMNIFY THE COMPANY AND ANY SUBSIDIARY THEREOF, AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PENALTY, INTEREST OR INDEXATION THEREON OR THEREUPON.

16. RIGHTS AS A STOCKHOLDER; VOTING AND DIVIDENDS

A Grantee or a transferee of an Award shall have no rights as a shareholder with respect to any Shares covered by the Award until the date of the issuance of a Share certificate to him for such shares, or, in the case of New 102 Stock Options or 3(I) Stock Options (if such 3(I) Stock Options are being held by a Trustee), until the date of the issuance of a Share certificate to the Trustee. No

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adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date such Stock Certificate is issued, except as provided in Section 13.1 hereof. With respect to all Shares issued upon the exercise of New 102 Stock Options (but excluding, for avoidance of any doubt, any unexercised Options) and held by the Grantee or by the Trustee, as the case may be, the Grantee shall be entitled to receive dividends in accordance with the quantity of such Shares, subject to the provisions of the Company’s Articles of Association (as may be amended from time to time) and subject to any applicable taxation on distribution of dividends, and when applicable subject to the provisions of New Section 102 and the rules, regulations or orders promulgated thereunder. Subject to Section 6.8 hereof, the Company may restrict or otherwise regulate the voting powers with respect to any Shares held by a Grantee pursuant to this Plan, as long as the Company’s securities are not traded on a securities exchange. All Shares issued by the Company under or in accordance with this Plan shall be subject to all the provisions of the Articles of Association, Memorandum of Association (if any) of the Company or any other governance documents of the Company.

17. MARKET STAND-OFF.

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the United States Securities Act of 1933, as amended or equivalent law in another jurisdiction, including the Company’s initial public offering, the Grantee shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Plan without the prior written consent of the Company or its underwriters. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the date of the final prospectus for the offering as may be requested by the Company or such underwriters, however in any event, such period shall not exceed 180 days. In the event of a subdivision of the outstanding share capital of the Company, the declaration and payment of a stock dividend (distribution of bonus shares), the declaration and payment of an extraordinary dividend payable in a form other than stock, a recapitalization, a reorganization (which may include a combination or exchange of shares or a similar transaction affecting the Company’s outstanding securities without receipt of consideration), a consolidation, a stock split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, an adjustment in conversion ratio, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Plan until the end of the applicable stand-off period.

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18. NO RIGHTS TO EMPLOYMENT.

Nothing in the Plan or in any Award granted or agreement entered into pursuant hereto shall confer upon any Grantee the right to continue in the employ of, or in a consultant relationship with, the Company or any Subsidiary or to be entitled to any remuneration or benefits not set forth in the Plan or such agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary to terminate such Grantee’s employment. Awards granted under the Plan shall not be affected by any change in duties or position of a Grantee as long as such Grantee continues to be employed by or in a consultant or director relationship with, the Company or any Subsidiary.

19. APPROVAL.

The Plan shall take effect upon its adoption by the Board and shall terminate on the tenth anniversary of such date. Notwithstanding the foregoing, in the event that approval of the Plan by the shareholders of the Company is required under applicable law, in connection with the application of certain tax treatment or pursuant to applicable stock exchange rules or regulations or otherwise, such approval shall be obtained within the time required under the applicable law.

20. PERIOD DURING WHICH AWARDS MAY BE GRANTED.

Awards may be granted pursuant to the Plan from time to time within a period of ten (10) years from the date the Plan is adopted by the Board.

21. AMENDMENT AND TERMINATION OF THE PLAN.

The Board at any time and from time to time may suspend, terminate, modify or amend the Plan; provided, however, that, unless otherwise determined by the Board, an amendment which requires shareholder approval in order for the Plan to continue to comply with any law, regulation or stock exchange requirement shall not be effective unless approved by the requisite vote of stockholders. Except as provided in Section 13.1 hereof, no suspension, termination, modification or amendment of the Plan may adversely affect any Award previously granted, unless the written consent of the Grantee is obtained.

22. GOVERNING LAW.

The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Israel. Certain definitions, which refer to laws other than the laws of the State of Israel, shall be construed in accordance with such other laws.

EX-5

EXHIBIT 5

Goldfarb, Levy, Eran, Meiri & Co.
Europe-Israel Tower
2 Weizmann Street 64239
Tel Aviv, Israel

September 11, 2007

NICE Systems Ltd.
8 Hapnina Street
P.O. Box 690
43107 Ra’anana
Israel

Ladies and Gentlemen:

We refer to the Registration Statement on Form S-8 (the ‘‘Registration Statement’’) to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the ‘‘Act’’), on behalf of NICE Systems Ltd. (the ‘‘Company’’), relating to 987,104 (the ‘‘Shares’’) of the Company’s Ordinary Shares, NIS 1.00 nominal value per share, issued as restricted stock grants or issuable upon the exercise of options granted or to be granted, under the Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan (the ‘‘Plan’’), which was assumed pursuant to an Agreement and Plan of Merger dated as of July 2, 2007 by and among the Company, Nemo Acquisitions Ltd., an Israeli company and a wholly owned subsidiary of the Company, and Actimize Ltd. (the ‘‘Merger Agreement’’).

We are members of the Israel Bar and we express no opinion as to any matter relating to the laws of any jurisdiction other than the laws of Israel.

In connection with this opinion, we have examined such corporate records, other documents, and such questions of Israeli law as we have considered necessary or appropriate for the purposes of this. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of documents submitted to us as certified or photostatic copies, the authenticity of the originals of such copies and the due constitution of the Board of Directors of the Company.

Based on the foregoing and subject to the qualifications stated herein, we advise you that in our opinion, the Shares have been duly and validly authorized, and when, and if, issued pursuant to the terms of the Plan and the Merger Agreement were, or will be, validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as part of the Registration Statement. This consent is not to be construed as an admission that we are a person whose consent is required to be filed with the Registration Statement under the provisions of the Act.

Very truly yours,

/s/ Goldfarb, Levy, Eran, Meiri & Co.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-8) of NICE-Systems Ltd. for the registration of 987,104 of its ordinary shares under the Actimize Ltd. 2003 Omnibus Stock Option and Restricted Stock Incentive Plan (the ‘‘Plan’’) of our report dated June 12, 2007 with respect to the consolidated financial statements of NICE-Systems Ltd. for the year ended December 31, 2006 which is included in its Annual Report (Form 20-F), filed with the Securities and Exchange Commission.

			/s/  KOST FORER, GABBAY & KASIERER
			KOST FORER, GABBAY & KASIERER A Member of Ernst & Young Global

Tel-Aviv, Israel
September 11, 2007