S-8

As filed with the Securities and Exchange Commission on April 1, 2008

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

Under

The Securities Act of 1933

SPANSION INC.

(Exact name of Registrant as specified in its charter)

Delaware	20-3898239
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

915 DeGuigne Drive

P.O. Box 3453

Sunnyvale, California 94088-3453

(408) 962-2500

(Address including zip code, and telephone number, including area code, of principal executive offices)

Saifun Semiconductors Ltd. 1997 Share Option Plan

Saifun Semiconductors Ltd. 2001 Share Option Plan

Saifun Semiconductors Ltd. 2003 Share Option Plan

(Full title of the plan)

Bertrand F. Cambou

President and Chief Executive Officer

Spansion Inc.

915 DeGuigne Drive

P.O. Box 3453

Sunnyvale, California 94088-3453

(408) 962-2500

(Name, address, and telephone number, including area code, of agent for service)

Copy to:

Karen K. Dreyfus, Esq.

Mark B. Baudler, Esq.

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304-1050

(650) 493-9300

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered	Amount to be Registered (1)	Proposed Maximum Offering Price Per Share	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Class A Common Stock, $0.001 par value per share
— Saifun Semiconductors Ltd. 1997 Share Option Plan	32,364(2)	0.21(3)	$6,796.44	$0.27
— Saifun Semiconductors Ltd. 2001 Share Option Plan	10,560(2)	0.09(4)	$950.40	$0.04
— Saifun Semiconductors Ltd. 2003 Share Option Plan	6,882,313(2)	0.68(5)	$4,679,972.84	$183.92
TOTAL:	6,925,237		$4,687,719.28	$184.23

(1) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended, this Registration Statement shall also cover any additional shares of the Registrant’s Class A Common Stock that become issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without receipt of consideration that increases the number of the Registrant’s outstanding shares of Class A Common Stock.

(2) Pursuant to an Agreement and Plan of Merger and Reorganization dated as of October 7, 2007 by and among Spansion Inc. (“Spansion”), Atlantic Star Merger Sub Ltd. and Saifun Semiconductors Ltd. (“Saifun”), Spansion assumed certain outstanding options to purchase ordinary shares of Saifun granted under the Saifun Semiconductors Ltd. 1997 Share Option Plan, the Saifun Semiconductors Ltd. 2001 Share Option Plan and the Saifun Semiconductors Ltd. 2003 Share Option Plan, and such options became exercisable to purchase shares of Spansion’s Class A common stock, subject to appropriate adjustments to the number of shares and exercise price of each assumed option.

(3) Estimated in accordance with Rule 457(h) solely for the purpose of calculating the filing fee on the basis of the weighted average exercise price of $0.21 per share.

(4) Estimated in accordance with Rule 457(h) solely for the purpose of calculating the filing fee on the basis of the weighted average exercise price of $0.09 per share.

(5) Estimated in accordance with Rule 457(h) solely for the purpose of calculating the filing fee on the basis of the weighted average exercise price of $0.68 per share.

SPANSION INC.

REGISTRATION STATEMENT ON FORM S-8

PART I

INFORMATION REQUIRED IN THE PROSPECTUS

Item 1. Plan Information.

The documents containing the information specified in this Item 1 will be sent or given to employees, officers, directors or others as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the “Securities Act”). In accordance with the rules and regulations of the Securities and Exchange Commission (the “Commission”) and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424.

Item 2. Registration Information and Employee Plan Annual Information.

The documents containing the information specified in this Item 2 will be sent or given to employees, officers, directors or others as specified by Rule 428(b)(1) under the Securities Act. In accordance with the rules and regulations of the Commission and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.

PART II

INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

There are hereby incorporated by reference in this Registration Statement the following documents and information heretofore filed by Spansion Inc. (the “Registrant”) with the Commission:

(1) The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 30, 2007, filed with the Commission on February 28, 2008 pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

(2) The Registrant’s Current Reports on Form 8-K filed with the Commission on January 4, 2008, March 14, 2008 and March 24, 2008; and

(3) The description of the Registrant’s Class A Common Stock contained in the Company’s Registration Statement on Form 8-A filed with the Commission on December 13, 2005, pursuant to Section 12(g) of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act on or after the date of this Registration Statement and prior to the filing of a post-effective amendment to this Registration Statement that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing of such documents.

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Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

The Registrant is a Delaware corporation. Subsection (b)(7) of Section 102 of the Delaware General Corporation Law (the “DGCL”), enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for violations of the director’s fiduciary duty, except (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit.

Section 145 of the DGCL authorizes a court to award, or a corporation’s board of directors to grant, indemnity to officers, directors and other corporate agents in terms sufficiently broad to permit such indemnification under certain circumstances and subject to certain limitations.

As permitted by Section 145 of the DGCL, the Registrant’s certificate of incorporation includes a provision that eliminates the personal liability of its directors for monetary damages for breach of their fiduciary duty as directors and that provides for the indemnification of directors to the fullest extent permissible under Delaware law.

In addition, as permitted by Section 145 of the DGCL, the bylaws of the Registrant provide that:

• the Registrant shall indemnify its directors and officers for serving the Registrant in those capacities or for serving other business enterprises at the Registrant’s request, to the fullest extent permitted by the Delaware General Corporation Law;

• the Registrant is required to advance expenses, as incurred, to its directors and officers in connection with defending a proceeding, except that such director or officer shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

• the Registrant is not obligated pursuant to the bylaws to indemnify a person with respect to proceedings initiated by that person, except with respect to proceedings authorized by the Registrant’s board of directors or brought to enforce a right to indemnification;

• the rights conferred in the bylaws are not exclusive, and the Registrant is authorized to enter into indemnification agreements with its directors, officers, employees and agents and to obtain insurance to indemnify such persons; and

• the Registrant may, in its discretion, indemnify employees and agents in those circumstances where indemnification is not required by law.

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The Registrant has entered into separate indemnification agreements with each of its directors and executive officers that provide the maximum indemnity allowed to directors and executive officers by Section 145 of the DGCL and which allow for certain additional procedural protections. The Registrant intends to enter into indemnification agreements with any new directors and executive officers in the future.

The indemnification provisions of the Registrant’s certificate of incorporation and bylaws and the indemnification agreements entered or to be entered into between the Registrant and its officers and directors may be sufficiently broad to permit indemnification of the Registrant’s officers and directors for liabilities (including reimbursement of expenses incurred) arising under the Securities Act.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

Exhibit Number	Description
5.1	Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
10.1	Form of Saifun Semiconductors Ltd. 1997 Share Option Plan Agreement
10.2	Form of Saifun Semiconductors Ltd. 2001 Share Option Plan Option Agreement
10.3(a)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(b)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(c)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(d)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(e)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
23.2	Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (see Exhibit 5.1)
24.1	Power of Attorney (see page II-5)
99.1	Saifun Semiconductors Ltd. 1997 Share Option Plan
99.2	Saifun Semiconductors Ltd. 2001 Share Option Plan
99.3	Saifun Semiconductors Ltd. 2003 Share Option Plan

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 of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the 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 the 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 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to be 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 Securities Exchange Act of 1934 that are incorporated by reference in this registration statement.

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(2) 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 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 of 1933, each filing of the Registrant’s annual report 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’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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 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 the Securities Act of 1933 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, 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 Sunnyvale, State of California, on April 1, 2008.

SPANSION INC.
By:	/s/ Dario Sacomani
	Dario Sacomani
	Executive Vice President, Chief Financial Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Bertrand F. Cambou and Robert C. Melendres, or either of them, as his or her lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and his or her name, place and stead, in any and all capacities, to sign any and all 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 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, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Bertrand F. Cambou Bertrand F. Cambou	President, Chief Executive Officer and Director (Principal Executive Officer)	April 1, 2008
/s/ Dario Sacomani Dario Sacomani	Executive Vice President and Chief Financial Officer (Principal Accounting and Financial Officer)	April 1, 2008
/s/ Donald L. Lucas Donald L. Lucas	Chairman of the Board of Directors	April 1, 2008
/s/ David K. Chao David K. Chao	Director	April 1, 2008
/s/ Gilles Delfassy Gilles Delfassy	Director	April 1, 2008
/s/ Robert L. Edwards Robert L. Edwards	Director	April 1, 2008
/s/ Boaz Eitan Boaz Eitan	Director	April 1, 2008
/s/ Patti S. Hart Patti S. Hart	Director	April 1, 2008
/s/ David E. Roberson David E. Roberson	Director	April 1, 2008
/s/ John M. Stich John M. Stich	Director	April 1, 2008

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INDEX TO EXHIBITS

Exhibit Number	Description
5.1	Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
10.1	Form of Saifun Semiconductors Ltd. 1997 Share Option Plan Agreement
10.2	Form of Saifun Semiconductors Ltd. 2001 Share Option Plan Option Agreement
10.3(a)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(b)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(c)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(d)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
10.3(e)	Form of Saifun Semiconductors Ltd. 2003 Share Option Plan Share Option Agreement
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
23.2	Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (see Exhibit 5.1)
24.1	Power of Attorney (see page II-5)
99.1	Saifun Semiconductors Ltd. 1997 Share Option Plan
99.2	Saifun Semiconductors Ltd. 2001 Share Option Plan
99.3	Saifun Semiconductors Ltd. 2003 Share Option Plan

EX-5.1

Exhibit 5.1

OPINION OF WILSON SONSINI GOODRICH & ROSATI, PROFESSIONAL CORPORATION

March 31, 2008

Spansion Inc.

915 DeGuigne Drive

P.O. Box 3453

Sunnyvale, California 94088-3453

Re: Registration Statement on Form S-8

Ladies and Gentlemen:

We have examined the Registration Statement on Form S-8 (the “Registration Statement”) to be filed by Spansion Inc., a Delaware corporation, with the Securities and Exchange Commission on or about the date hereof, in connection with the registration under the Securities Act of 1933, as amended, of an aggregate of 6,925,237 shares of your Class A common stock, par value $0.001 per share (the “Shares”), reserved for issuance under the Saifun Semiconductors Ltd. 1997 Share Option Plan, the Saifun Semiconductors Ltd. 2001 Share Option Plan and the Saifun Semiconductors Ltd. 2003 Share Option Plan (the “Plans”). As your legal counsel, we have reviewed the actions proposed to be taken by you in connection with the issuance and sale of the Shares to be issued under the Plans.

It is our opinion that the Shares, when issued and sold in the manner referred to in the Plans and pursuant to the agreements which accompany the Plans, will be legally and validly issued, fully paid and nonassessable.

We consent to the use of this opinion as an exhibit to the Registration Statement, and further consent to the use of our name wherever appearing in the Registration Statement and any amendments thereto.

Very truly yours,

WILSON SONSINI GOODRICH & ROSATI,

Professional Corporation

/s/ Wilson Sonsini Goodrich & Rosati, P. C.

EX-10.1

Exhibit 10.1

SAIFUN SEMICODUCTORS LTD.

1997 SHARE OPTION PLAN AGREEMENT

To :                     

We are pleased to notify you that Saifun Semiconductors Ltd. (the “Company”) has, on the              (the “Granting Date”), granted to you options (the “Options”) to purchase              (            ) Ordinary Shares of NIS 0.01 par value each, of the Company (the “Option Shares”), at the price of USD 6.67 per share (the “Exercise Price”), under the Company’s 1997 Share Option Plan (the “Plan”). The Options are issued pursuant to Section 102 of the Israel Income Tax Ordinance [New Version], as amended (the “Ordinance”) and are intended to comply with the Ordinance and its regulations and the Income Tax Rules (Tax Benefits in Share Issuance to Employees) 5349-1989 (the “Rules”). The Options are subject to the terms and conditions set forth below. EXECUTION OF OPTION AGREEMENT

The Options are granted to you upon execution hereof, which execution does not oblige you to purchase any of the Option Shares.

TERM OF OPTIONS AND EXERCISE OF OPTIONS

The Options will be exercisable (i.e. vest) subject to the provisions hereof, over a period of five years (5), as provided herein below:

up to 40% of the Options upon the 24th month anniversary date of the Granting Date;

additional 20% (totaling 60% of the Options) upon the 36th month anniversary date of the Granting Date;

additional 20% (totaling 80% of the Options) upon the 48th month anniversary date of the Granting Date; and

The remaining 20% (totaling 100% of the Options) upon the 60th month anniversary date of the Granting Date.

Subject to the provisions hereof, the Options shall be exercisable by signing and returning to the Secretary of the Company a Notice of Exercise in the form attached hereto as Exhibit “A”.

Upon exercise of the Options, in whole or in part, each payment of the Exercise Price shall be in respect of a whole number of Option Shares only and shall be effected by cash payment or by a cashier’s or certified check payable to the order of the Company. Each payment shall be accompanied by a notice stating the number of Option Shares to be held by the Trustee on your behalf in accordance with the provisions of Section 102 of the Ordinance.

Until such time as the Trustee transfers the Option Shares to you, you will not be entitled to any rights as a shareholder of the Company in respect of any Option Shares, including any right to vote such shares. Upon transfer to you of the Option Shares by the Trustee as aforesaid and thereafter, you will be entitled to all the rights of a shareholder in respect of such shares.

The Company may place a legend on each share certificate delivered hereunder representing an Option Share, to the effect that such shares were acquired pursuant to an investment

TERMINATION OF EMPLOYMENT

Subject to the provisions of Section 0 hereof, if you should die or become totally disabled while in the employ of the Company or of a subsidiary thereof, or if you should be discharged or resign from the employ of the Company or of a subsidiary thereof, you, your estate or your personal representative as the case may be, shall have the right, for a period of six (6) months from the date of your death or disability, or for three (3) months from the date of discharge or resignation, to exercise any unexpired Options to the extent not exercised, but only with respect to the number of shares purchasable at the time of such termination, (i.e. the number of Options vested at such time), and to pay for any or all Option Shares covered thereby, and to the extent that such rights are exercised as provided herein, to receive a certificate therefor as provided in Section 0 hereof.

In the event of your resignation or discharge from the employ of the Company or a subsidiary, your employment shall, for the purpose of Section 0 and 0, be deemed to have ceased upon the date of delivery by you or to you of a written notice of resignation or discharge, as the case my be.

Your transfer from the employ of the Company to a subsidiary (and vise versa) or from the employ of a subsidiary of the Company to another subsidiary thereof, shall not be deemed a termination of employment for purposes hereof.

DISCHARGE FOR CAUSE

hereof to the contrary if you should be 0 and 0Notwithstanding, anything in Sections discharged from the employ of the Company or a subsidiary for reasons of negligence in the discharge of your duties, breach of fiduciary duty, willful cause of damage or loss to the Company in any fashion or similar cause, or any other breach of your employment agreement with the Company or a subsidiary, all Options granted to you under the Plan and all Options to which you may be entitled after the effective date of discharge shall ipso facto expire and terminate.

ASSIGNABILITY

Neither the Options nor the right to pay for the Option Shares and to acquire certificates therefor, shall be assignable or transferable, except by and to the extent permitted by, testamentary disposition or pursuant to the applicable laws of descent, and during your lifetime such rights shall be exercised only by yourself.

DISPUTES

Any dispute or disagreement which may arise under or as a result of or pursuant to this Agreement shall be determined by the Company’s Board of Directors in its sole discretion and any interpretation by the Board of Directors of the terms of this Agreement shall be final, binding and conclusive.

If the Company is separated or reorganized, or merged, consolidated or amalgamated with or into another corporation while unexercised, vested Options remain outstanding, there shall be substituted for the shares subject to the unexercised portions of such outstanding Options an appropriate number of shares of each class or other securities of the separated or reorganized, or merged, consolidated or amalgamated corporation which were distributed to the shareholders of the Company in respect of such shares; provided, however, that all such vested Options may be exercised in full as of the effective date of any such separation, reorganization, merger, consolidation or amalgamation, upon your written notice to the Company.

If the Company is liquidated or dissolved while unexercised vested Options remain outstanding pursuant to this Agreement, then all such outstanding Options may be exercised in full by you as of the effective date of any such liquidation or dissolution of the Company without regard to the exercise provisions of section 0 above, by you giving notice in writing to the Company of your intention to so exercise.

If the outstanding shares of the Company shall at any time be changed or exchanged by declaration of bonus shares, stock split, combination or exchange of shares, recapitalization, extraordinary dividend payable in stock of a corporation other than the Company, or otherwise in cash, or any other like event by or of the Company, and as often as the same shall occur, then the number, class and kind of shares subject to this Plan or subject to any Options granted, and the Exercise Price shall be appropriately and equitable adjusted so as to maintain the proportionate number of Option Shares without changing the aggregate Exercise Price; provided, however, that no adjustment shall be made by reason of the distribution of subscription rights on outstanding shares.

Except as provided in this Section 0, no adjustments shall be made for dividends or other rights for which the record date shall be prior to the issuance of a share certificate in respect of an Option Share.

CONTINUANCE OF EMPLOYMENT

Neither the Plan nor the granting of the Options or this Agreement shall impose any obligation on the Company or a subsidiary to continue your employment and nothing in the Plan or in the Options granted to you pursuant thereto or in this Agreement shall confer upon you any right to continue in the employ of the Company or a subsidiary or to compensation in respect of the expiration and termination of an Option or restrict your right or the right of the Company or a subsidiary to terminate such employment at any time.

TRANSFER OF SHARES

Option Shares issued to you pursuant to the exercise of the Options granted hereunder cannot be offered, sold or otherwise transferred for a period of two (2) years from the Granting Date, and thereafter only if such shares are registered for public trading or the Company determines that an exemption therefrom applies and only to the extent such exemption applies and subject to the terms and conditions of such exemption.

One of the conditions of Section 102 to the Ordinance (the Section according to which the Options are granted to you) is that the Options and/or Option Shares granted you hereunder be held on your behalf by a trustee for a period of at least twenty-four (24) months. Therefore, the Options and the Option Shares, as the case may be, shall be issued to and held for your benefit by an escrow agent designated by the Company pursuant to the Plan (the “Trustee”) for a period of twenty four (24) months from the Granting Date.

After the above holding period the Trustee may release the Options or Option Shares to you only after receipt by the Trustee of an acknowledgment from the Income Tax authorities that you have paid any applicable tax due pursuant to the Ordinance and the Rules. Another condition pursuant to Section 102 to the Ordinance is that the grant of the Options is made in consideration of a waiver of salary by the employee. Therefore, by executing this Agreement you hereby authorize the Company to deduct directly from your forthcoming salary three (3) Agorot for each Option granted to you.

You understand and acknowledge that any tax consequences resulting from the grant or exercise of the Options, from payment for shares underlying the Options or other event or act relating to the Options or the Option Shares (by the Company, any subsidiary, or yourself), shall be borne solely by you.

You hereby agree and undertake to indemnify the Company and its subsidiaries and hold it and each of them harmless against and from any tax liability, including interest and penalties thereon, which may be incurred as a result of the granting or exercise of an Option or the issuance of Option Shares pursuant to such Options, or otherwise arising out of this Agreement.

You hereby undertake towards the Company and the Income Tax Authorities not to transfer any of the shares if such transfer is tax free or to request any tax exemption on such transfer until the required tax has been paid.

Upon registration of the Option Shares on any stock exchange, you undertake to immediately notify the Company and the Trustee of your request, if any, to the Income Tax authority pursuant to Rule 6(b) of the Rules to delay the payment of tax.

In the event that the share dividend (bonus shares) is declared on Option Shares, such dividend shares shall be subject to the provisions of this Agreement and the holding period for such dividend shares shall be determined from the beginning of the holding period for Option Shares from which the dividend was declared.

The exemption under Section 102 of the Ordinance shall be forfeited and you shall be required to pay any applicable tax promptly at such time as (a) your employment is terminated during the two year holding period (other than because of death or some other reason acceptable to the Income Tax authority); (b) the Company or you fail to comply with one or more of the conditions for the exemption as required by the Ordinance, Rules or Income Tax authority; or (c) the Income Tax authority withdraws or cancels the exemption for the Plan or for you specifically. Notwithstanding the loss of an exemption, the Trustee shall continue to hold the Options (to the extent the Options remain exercisable following termination of employment) or the Option Shares for the remainder of the applicable holding period under Section 102 of the Ordinance.

This Agreement is issued under the Plan and is subject to all of the terms and provisions of the Plan. In the event of any conflict between the terms of this Agreement and that of the Plan, the terms of the Plan shall prevail.

GOVERNING LAWS

The Plan and all instruments issued thereunder, including but not limited to this Agreement, shall be subject to, governed by and interpreted in accordance with the laws of the State of Israel.

Sincerely yours,

SAIFUN SEMICONDUCTORS LTD.

By:

Date:

EX-10.2

Exhibit 10.2

SAIFUN SEMICONDUCTORS LTD. 2001 SHARE OPTION PLAN

OPTION AGREEMENT (Under Section 102)

1. Grant of Option.

(a) The Plan, as approved by the Company for use by the Company, is intended to qualify as an Employee Option Plan within the meaning of Section 102. Grants of Option will be made pursuant to: (a) Section 102 and the Rules; (b) the Trust Agreement (as defined below); and (c) the approval of the Trustee (as defined below) by the Income Tax Commissioner, in addition to being made pursuant to the provisions of the Plan and this Agreement. In the event that the recommendations of the Ben Bassat Committee on tax reform are enacted after the date of this Agreement, the Company may apply to the Income Tax Authorities in order to make appropriate adjustments to this Agreement, provided that the rights of the Grantee under this Agreement will not be adversely affected.

(b) Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants the Trustee (as defined below), for the benefit of the Grantee named in the Notice of Option Grant, an option qualified as a “102 Option” (the “Option”) to purchase the number of Shares set forth in the Notice of Option Grant, at the exercise price per Share set forth in the Notice of Option Grant (the “Exercise Price”).

(c) According to the requirements of Section 102, this grant of Option is subject to the Grantee’s waiver on a portion of his/her salary payment. Therefore, by executing this Agreement you hereby authorize the Company to deduct directly from your forthcoming salary one (1) Agora for each Option granted to you.

(d) The Company has entered into a Trust Agreement (the “Trust Agreement”) with Eitan, Pearl, Latzer & Cohen-Zedek Trustees for Employee Benefit Programs (the “Trustee”). Under the conditions of Section 102, the Option shall be issued to the Trustee and held in trust for the benefit of Grantee for a period of no less than two years from the date of the grant. After the two year holding period, the Trustee may release the Option to Grantee only after (i) the receipt by the Trustee of an acknowledgment from the Income Tax Authority that Grantee has paid any applicable tax due pursuant to the Ordinance and the Rules, or (ii) the Trustee withholds any applicable tax due pursuant to the Ordinance and Rules.

(e) The Options provided for herein are granted pursuant to the Plan, and said Options and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions whether such terms and provisions are incorporated in this Option Agreement solely by reference or are expressly cited herein. Subject to Section 16.2 of the Plan, any interpretation of this Option Agreement will be made in accordance with the Plan, but in the event there is any conflict between the provisions of this Option Agreement and the Plan, the provisions of this Option Agreement will prevail. However, in the event of a conflict between the terms and conditions of the Plan or of this Option Agreement and any provision of the Ordinance, Rules or any applicable law, the latter shall govern and prevail.

2. Issuance to Trustee and Restricted Period.

(a) Issuance to Trustee. The Notice of Option Grant will be issued to the Trustee as required to qualify under Section 102, in order that the Trustee will hold the Option in trust for the benefit of Grantee.

(b) Restricted Period. In accordance with the requirements of Section 102, the Trustee has agreed to hold the Notice of Option Grant, or the Shares to be issued upon exercise of the Option, as the case may be, for a period of no less than 24 months from the date of the deposit of the Notice of Option Grant in trust (the “Restricted Period”). In order for the tax benefits of Section 102 to apply, during the Restricted Period, Grantee may not cease to be an employee of the Company (other than because of death or some other reason acceptable by the Income Tax Commissioner), and neither the Option nor the Shares, as the case may be, may be sold or transferred (other than through a transfer by will or by operation of law), nor may they be the subject of an attachment or security interest, and no power of attorney or transfer deed shall be given in respect thereof (other than a power of attorney for the purpose of participation in general meetings of shareholders). In the event that Grantee elects to exercise his Option during the Restricted Period, the Company shall provide the Trustee with the Share Certificate in the name of the Trustee, for the benefit of Grantee, in order that the Trustee will hold it until no sooner than the end of the Restricted Period.

(c) End of Restricted Period. Upon the termination of the Restricted Period, Grantee shall be entitled to receive from the Trustee the Shares acquired in the exercise of the Option and/or shall be entitled to sell the Shares thereby obtained, subject to the other terms and conditions of this Agreement and the Plan, including the provisions relating to the payment of tax set forth below.

3. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Grantee only by Grantee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Grantee.

4. Term of Option. This Option may be exercised only within the term set out in the Notice of Option Grant, and may be exercised during such term only in accordance with the Plan, the terms of this Option and the Trust Agreement.

5. Exercise of Option.

(a) Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Option Grant and with the applicable provisions of the Plan, this Option Agreement and the Trust Agreement.

(b) Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A to this Agreement (the “Exercise Notice”) and such other representations and agreements as may be required by the Company and/or the Trustee. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price for the number of Shares to be purchased. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with applicable laws. If any law or regulation requires the Company to take any action with respect to the Shares specified in such notice before the issuance thereof, then the date of their issuance shall be extended for the period necessary to take such action. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Grantee on the date on which the Option is exercised with respect to such Shares.

The Shares shall be issued to the Trustee and the Trustee will transfer the Shares to Grantee upon demand but in no event earlier than twenty-four (24) months from date of grant, (unless Section 102 is amended and allows for a shorter holding period in which case such shorter holding period shall apply).

In the event a share dividend is declared on Shares, such dividend shall also be subject to the provisions of Section 102 and the holding period for such dividend shares shall be measured from the commencement of the holding period of the Option, from which the dividend was declared.

(c) Method of Payment. Payment of the aggregate Exercise Price shall be made in New Israeli Shekel (“NIS”) at the Representative Rate of Exchange for the U.S. dollar published by the Bank of Israel on the day prior to the date of actual payment, or if permitted by the Committee the payment may also be made in U.S. Dollars, by any of the following, or a combination thereof, at the election of Grantee:

(1) cash; or

(2) check;

(d) Notification to Trustee. The Company will notify the Trustee of any exercise of the Option as set forth in the Exercise Notice. If such notification is delivered during the Restricted Period, the Shares issued upon the exercise of the Option shall be issued directly to the Trustee on behalf of the Grantee, and shall be held by the Trustee in trust on behalf of the Grantee. In the event that such notification is delivered after the Restricted Period, the Shares issued upon the exercise of the Option shall be transferred either to the Trustee or to Grantee directly, at the election of Grantee; provided, however, that in the event the Grantee elects to receive the Shares directly to his possession, the transfer thereof shall be subject to the payment of the tax liability by the Grantee.

(e) Voting Rights. Upon issuance of the Shares to the Trustee on behalf of the Grantee, Grantee shall execute an irrevocable proxy in favor of the Trustee or any other person designated by the Trustee. As long as the Shares are being held in trust, the Grantee shall instruct the Trustee not to use the voting rights vested in such Shares and not to exercise such rights in any way whatsoever, unless the Grantee instructs the Trustee otherwise, in which event the Trustee shall use the voting rights vested in the Grantee’s Shares according to the majority vote of the ordinary shareholders, in that Company’s shareholders meeting.

6. Restrictions on Exercise. This Option may not be exercised if the issuance of the Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of applicable laws.

7. Lock-Up Period; Grantee’s Representations.

(a) Grantee acknowledges that should the Company’s Shares be traded in any public market, his right to sell his Shares may be subject to limitations, as set forth by the Company’s underwriters and/or applicable law. In such event, the Grantee will unconditionally agree to any such limitations.

(b) The Grantee shall not dispose of any Shares in any transaction, which violates, in the opinion of the Company, any applicable laws, rules and regulations.

(c) The Grantee agrees that the Company shall have the authority to endorse upon the certificate or certificates representing the Shares such legends referring to the foregoing restrictions, and any other applicable restriction, as it may deem appropriate.

8. Right of First Refusal. Prior to the consummation of the Company’s IPO, all Shares held by the Grantee or the Trustee, pursuant to this Plan shall be subject to a right of first refusal upon transfers, as set forth in the Company’s Article of Association.

9. Tax Consequences. Any and all taxes, fees and other liabilities (as may apply from time to time) in connection with the grant and/or exercise and/or release of the Options and the sale and/or release of Shares issued upon the exercise of the Options and/or from any other event or act (whether of the Grantee or of the Company (or a parent or subsidiary of the Company) or of its Trustee), will be borne solely by the Grantee, and Grantee will be solely liable for all such taxes, fees and other liabilities. The Company (or a parent or subsidiary of the Company) and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, such Grantee shall agree to indemnify the Company (or a parent or subsidiary of the Company that employs the Grantee) and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Grantee.

Except as otherwise required by law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of a Grantee until all tax consequences (if any) arising from the exercise of such Options are resolved in a manner reasonably acceptable to the Company.

THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THEREFORE, GRANTEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

(a) Deferral of Tax. The receipt of the Option and the acquisition of the Shares to be issued upon the exercise of the Option may result in tax consequences. With respect to grants under option plans, which comply with the provisions set forth in Section 102, such as the Plan, as implemented hereby and pursuant to the Trust Agreement, Grantee is entitled to postpone the payment of tax that would otherwise be due upon the grant of the Option or upon the issuance of Shares. Assuming compliance with the provisions of Section 102, including the requirement that during the Restricted Period Grantee does not cease to be an employee of the Company (other than because of death or some other reason acceptable by the Income Tax Commissioner), and the requirement that the Option or the Shares be held by the Trustee for the Restricted Period, then taxation will be postponed to the date of the earlier of: (i) sale of such Shares; or (ii) transfer of such Shares by the Trustee to Grantee.

(b) Notwithstanding any provisions of the Plan and this Agreement, in the event that: (i) during the Restricted Period Grantee’s employment with the Company terminates (other than because of death or some other reason acceptable by the Income Tax Commissioner); (ii) the Company or the Grantee fails to comply with one or more of the conditions required to be maintained by Section 102; or (iii) the Income Tax Authority withdraws or cancels the exemption for the Plan or for the particular Grantee , then the postponement of payment of taxes permitted pursuant to Section 102 will no longer apply and Grantee shall become liable to pay tax for the benefit Grantee has received hereunder within thirty (30) days from the day such Grantee’s employment terminates, or such other condition ceases to be in effect, at the rate prescribed by Section 102. Under such circumstances, there is also a possibility that at the end of the Restricted Period, Grantee will be obligated to pay additional taxes at the rate prescribed by Section 102. Notwithstanding the loss of the exemption, the Trustee shall continue to hold the Options or the Shares (to the extent the Option remains exercisable following termination of employment) for the remainder of the applicable holding period under Section 102 of the Ordinance.

(c) Receipt of Shares from Trustee. In the event that at the end of the Restricted Period, Grantee chooses to have the Shares, which were issued upon the exercise of the Option, released by the Trustee and delivered to Grantee without selling such Shares, Grantee shall immediately become liable to pay taxes at the rate prescribed by law.

10. Grantee’s Representations under Section 102 and the Rules.

(a) Grantee represents and confirms that he or she shall not claim an exemption from Israeli tax pursuant to Sections 104A or 104B or 97(a) of the Ordinance or pursuant to the Law for the Encouragement of Industry (Taxes) 5729-1969 in connection with a transfer by him or her of the Option or Shares prior to the end of the “Holding Period” as defined in Rule 1(1) of the Rules.

(b) Grantee represents and confirms that in the event a share dividend (bonus shares) will be declared on his or her Shares, such dividend shall be deposited with the Trustee and shall also be subject to the provisions of Section 102 of the Ordinance and the Holding Period for such dividend shares shall include the holding period of the Option related to the Shares upon which the share dividend was declared.

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

(d) Grantee acknowledges that the exemption under Section 102 of the Ordinance shall be forfeited and Grantee shall be required to pay any applicable tax promptly at such time as described in Section 9(b) above. Notwithstanding the loss of an exemption, the Trustee shall continue to hold the Option and/or Shares (to the extent the Option remains exercisable following termination of employment) for the remainder of the applicable Holding Period under Section 102 of the Ordinance.

11. Indemnification.

The Grantee hereby represents, confirms and acknowledges the following:

(a) The Trustee shall not be liable for any action or omission taken on his part in connection with the Plan this Option Agreement and the Trust Agreement, provided that the Trustee acted reasonably and in good faith.

(b) The Grantee shall be liable to indemnify the Trustee with respect to any loss, damage or expense caused to the Trustee as a result of or in consequence of performance of its duties as a Trustee.

12. Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Grantee and his or her heirs, executors, administrators, successors and assigns.

13. Entire Agreement; Governing Law. The Plan and the Trust Agreement are incorporated herein by reference. The Plan, the Trust Agreement and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Grantee with respect to the subject matter hereof, and may not be modified adversely to Grantee’s interest except by means of a writing signed by the Company and Grantee. This agreement is governed by and construed and enforced in accordance with the laws of the state of Israel, without giving effect to the principles of conflict of laws.

14. No Guarantee of Continued Service. Grantee acknowledges and agrees that the vesting of the Option pursuant to the Vesting Schedule hereof is earned only by continuing as an employee at the will of the Company or any subsidiary of the Company (not through the act of being hired, being granted this Option or acquiring shares hereunder). Grantee further acknowledges and agrees that this Agreement, the transactions contemplated hereunder and the Vesting Schedule set forth herein do not constitute an express or implied promise of continued engagement as a Service Provider and shall not interfere in any way with Grantee’s right or the Company’s right to terminate Grantee’s relationship as an employee at any time, with or without cause.

Grantee represents that he or she is familiar with the terms and provisions of the Plan, and the Trust Agreement and hereby accepts this Option subject to all of the terms and provisions thereof. Grantee has had the opportunity to review the Plan, the Trust Agreement and this Option in their entirety, and to obtain the advice of counsel prior to executing this Option. Grantee further represents that he fully understands all provisions of the Option. Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Option. Grantee represents and confirms that the Ordinance and Rules, as shall be in effect from time to time, as well as the Trust Agreement, are binding upon him or her and that he or she shall comply with them.

GRANTEE: SAIFUN SEMICONDUCTORS LTD.

Signature By

Print Name Title

Residence Address

EX-10.3(A)

Exhibit 10.3(a)

SAIFUN SEMICONDUCTORS LTD.

2003 SHARE OPTION PLAN

SHARE OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2003 Share Option Plan, as amended from time to time (the “Plan”) of Saifun Semiconductors Ltd. shall have the same defined meanings in this Share Option Agreement (the “Option Agreement”). Except where the context otherwise requires, the term “Company” shall include Saifun Semiconductors Ltd. and its Subsidiaries, if applicable.

I. NOTICE OF SHARE OPTION GRANT

1.      Name:	________________ (the “Optionee”)
Address:	________________

2. The Optionee has been granted an Option to purchase Ordinary Shares, par value NIS 0.01, of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

Date of Grant	__________________________
Vesting Commencement Date	__________________________
Exercise Price per Share1 :	$_________________________
Total Number of Shares Granted	__________________________
Type of Option2:	____ Option intended to qualify as an incentive stock option (“ISO”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (“Code”)
	____ Option not intended to qualify as an ISO (“NQSO”)
Term/Expiration Date3 :	__________________________

¹ In case of (i) an ISO granted to an employee of the Company or any Subsidiary who, at the time of grant of such Option, is a Ten Percent Shareholder, the Exercise Price shall be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant, and (ii) an ISO granted to any other employee of the Company or any Subsidiary at the time of the grant of such Option, the Exercise Price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In case of an Option granted to a resident of California, the Exercise Price shall be (i) no less than eighty five percent (85%) of the fair value (as defined in Section 260.140.50 of the California Code of Regulations) of a Share at the time the option is granted, and (ii) no less than 110% of the fair value (as defined in Section 260.140.50 of the California Code of Regulations) if the optionee is a Ten Percent Shareholder.

² NQSOs may be granted to service providers (including employees, consultants, and non-employee directors) of the Company and any Subsidiary, and ISOs may be granted only to employees of the Company or any Subsidiary on the date of grant of such ISOs.

³ No more than ten (10) years from the Date of Grant, provided however, that in the case of an ISO granted to a Ten Percent Shareholder, the Expiration Date shall be no more than five (5) years from the Date of Grant.

3. Vesting Schedule:

This Option shall be exercisable in number of whole Shares, [in equal annual installments over a period of five (5) years following the Vesting Commencement Date (i.e. 20% of the Shares subject to the Option shall vest upon the first, second, third, forth and fifth anniversaries of the Vesting Commencement Date)]⁴, subject to the Optionee’s continuous engagement with the Company during such time. In no event shall the Option vest and become exercisable for any additional Shares following Optionee’s cessation of engagement with the Company.

4. Provisions for Termination:

In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

In the event that Optionee’s engagement with the Company should terminate, all Options, which are vested and exercisable at the time of such termination, shall be exercisable for (i) three (3) months after the date of such termination (except in the case of termination by reason of death or Disability); or (ii) six (6) months after the date of such termination by reason of Optionee’s death or Disability. Notwithstanding the foregoing, in the event of Optionee’s death within three (3) months after the date of termination, the Optionee’s estate or heirs, as applicable, may exercise all Options, which are vested and exercisable at the time of Optionee’s termination of engagement, within six (6) months after the Optionee’s death, but in no event after the Expiration Date as provided above.

In the case of an ISO, if such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, such ISO shall be treated for tax purposes as an NQSO commencing on the lapse of three (3) months and one day following such termination.

Notwithstanding the above, in the event that Optionee’s engagement with the Company should terminate for Cause, the entire unexercised Option (whether vested or not) shall ipso facto terminate.

⁴ The vesting schedule for Optionees who are residents of California (and are not officers, directors, managers or consultants of the Company) must be at least 20% per year (Section 260.140.41(f) of the California Code of Regulations) (i.e., 20% after first anniversary and 20% after second anniversary).

For purposes of an ISO, an employee shall cease to be an employee if any leave of absence approved by the Company exceeds ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract; and if such reemployment is not so guaranteed, on the 91^st day of such leave any ISO held by Optionee shall be treated, for tax purposes, as a NQSO.

For purposes hereof, termination of Optionee’s engagement shall be deemed effective as detailed in Section 10.5 of the Plan.

II. AGREEMENT

1. Grant of Option.

1.1 The Company hereby grants to the Optionee named in the Notice of Share Option Grant (the “Notice of Grant”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions set forth herein and in the Plan, which is incorporated herein by reference. Subject to Section 15.2 of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail, unless specifically stated otherwise herein.

1.2 In the case of an ISO, the Option shall not be considered an ISO to the extent that the aggregate Fair Market Value of the Shares which may be purchased on exercise of all ISOs held by Optionee for the first time during any calendar year (under all plans of the Company and any parent or Subsidiary of the Company) exceeds US$100,000. For purposes of this Section 1.2, ISOs shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

2. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated or transferred in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

3. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement. In the case of an ISO granted to an Optionee, who is a Ten Percent Shareholder, at the time the Option is granted, the term of the Option shall be no more than five (5) years from the date such Option was granted. In the event the Option shall not be exercised within its term, such Option, or such part thereof, shall expire and all interests and rights of the Optionee in and to the same shall terminate.

4. Exercise of Option.

4.1 Right to Exercise. This Option shall be exercisable during its term to the extent vested in accordance with the vesting schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement.

4.2 Continuous Engagement Required. Except as otherwise provided in the Notice of Grant, this Option may not be exercised unless the Optionee, at the time he exercises this Option is, and has been at all times since the date of grant set out in the Notice of Grant engaged by the Company. Transfer between locations of the Company or between the Company, its Subsidiaries or its successor shall not be considered termination of engagement. In case of an approved leave of absence, the vesting of the Option shall be suspended during such leave of absence.

4.3 Method of Exercise. This Option shall be exercised by delivery of a signed exercise notice substantially in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and shall be accompanied with such other representations, agreements and documents as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate withholding taxes due with respect to the exercised Shares (if applicable). This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice and settlement of payment of the aggregate Exercise Price in such form satisfactory to the Company. The Optionee may purchase less than the number of Shares covered by the vested portion of the Option, provided that no partial exercise of this Option may be for a fraction of a Share.

4.4 Method of Payment;Cashless Exercise. Payment of the aggregate Exercise Price for the purchased Shares shall be made by Optionee’s relinquishment of a portion of his Option having a Fair Market Value equal to the aggregate Exercise Price, so that the Company shall issue to the Optionee only the amount of Shares of the Company having an aggregate Fair Market Value equal to the difference between (x) the aggregate Fair Market Value of the Shares so purchased; and (y) the aggregate Exercise Price applicable for such exercised Options (the “Cashless Exercise”). For the purpose of the Cashless Exercise hereof, the Committee shall determine the Fair Market Value of the Shares in accordance with the provisions of the Plan.

4.5 Rights as a Shareholder.

(a) Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), the Optionee shall not have any of the rights or privileges granted to a shareholder of the Company with respect to any Shares purchasable upon the exercise of any part of an Option. No adjustment will be made for a dividend or other shareholders’ right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

(b) Except and to the extent otherwise expressly provided herein and in the Plan, the Shares issued upon the exercise of the Option shall be subject to the provisions of the Company’s Articles of Association, as amended from time to time and all Company’s shareholders agreements, as amended from time to time, regardless of whether or not the Optionee is a party to such agreements.

5. Restrictions on Exercise. This Option may not be exercised and no Shares shall be issued pursuant to the exercise, unless such exercise, the issuance of the Shares and the method of payment of the Exercise Price comply with applicable laws. This Option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject hereto upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of Shares hereunder, this Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board. The Optionee agrees to cooperate with the Company to ensure compliance with any such condition; provided, however, that nothing herein shall be deemed to require the Company to apply for, effect or obtain such listing, registration, qualification, approval, disclosure, or to satisfy such other condition.

6. Optionee’s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option or immediately upon the Company’s first demand, deliver to the Company his Investment Representation Statement, in the form, which shall be required by the Company, that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and shall make such other representations as are deemed necessary or appropriate by the Company or its counsel.

Notwithstanding the above, the Company may, but shall not be obligated to register or qualify the sale of Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Agreement to comply with any law.

7. Standoff Period. Optionee hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration statement of the Company filed under the Securities Act or any other applicable law, Optionee shall not offer, pledge, sell, lend or otherwise transfer or dispose of, directly or indirectly, any Common Share (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Share (or other securities) of the Company held by Optionee (other than those included in the registration) during the one hundred eighty (180) days period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of any registration statement of the Company filed under the Securities Act or any other applicable law.

Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the Managing Underwriter, Optionee shall provide, within ten (10) days of such request, such information as may be required by the Company or such Managing Underwriter in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act or any other applicable law. The

Company may impose stop-transfer instructions with respect to the Shares (or other securities) subject to the foregoing restriction until the end of such Market Standoff Period. Optionee agrees that any transferee of the Option or Shares acquired pursuant to the Option shall be bound by this Section.

8. Restrictions on Resales. The Optionee hereby acknowledges and agrees that, the Committee may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by an Optionee or other subsequent transfers by the Optionee of any Shares issued as a result of or under the Option, including without limitation, restrictions under an insider trading policy and restrictions pursuant to applicable regulations of any stock exchange on which the Shares may be listed for trading. The Optionee agrees to cooperate with the Company to ensure compliance with any such restrictions, conditions or limitations.

9. Acknowledgment and Waiver. By participating in the Plan, and accepting the grant of the Option, the Optionee agrees and acknowledges that: (i) the Plan is discretionary in nature and all determinations with respect to any future grants, including but not limited to, the times when options shall be granted, the number of Shares subject to each option, the exercise price and the time or times when each right shall be exercisable will be at the sole discretion of the Company, and the Company can amend, cancel, or terminate the Plan at any time; (ii) the grant of the Option under the Plan is voluntary and occasional, and does not create any contractual or other right to receive future grants of any options, or benefits in lieu of the Options even if options have been granted repeatedly in the past; (iii) the Optionee’s participation in the Plan is voluntary; (iv) the value of the Option is an extraordinary item of compensation, which is outside the scope of the Optionee’s employment agreement, if any; (v) the Option is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any social benefits, severance, end of service payments, bonuses, long-service awards, pension or similar payments; (vi) the future value of the Shares purchased under the Plan is unknown and cannot be predicted with certainty, and the Company makes no express or implied promise about the financial gain or loss to be achieved through participation in the Plan; (vii) in the event that Optionee is not a service provider of the Company, this Option grant will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Option grant will not be interpreted to mean that an entity other than the entity that engages the Optionee has relationship with the Optionee; (viii) no claim or entitlement to compensation or damages arises from the expiration of this Option or diminution in value of this Option or Shares purchased through exercise of this Option resulting from termination of Optionee’s engagement with the Company (for any reason whatsoever and whether or not in breach of local labor laws) and Optionee irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the terms of this Option Agreement, Optionee shall be deemed irrevocably to have waived any entitlement to pursue such claim; and (ix) unless there is a written engagement agreement for a specified term in effect, Optionee’s engagement with the Company may be terminated at any time, with or without Cause, by the Company and neither the Plan nor this Option shall obligate the Company to engage Optionee for any particular length of time nor confer any right with respect to continuing the Optionee’s status as a service provider.

10. Tax Obligations.

10.1 Withholding Taxes. By accepting the grant of the Option, the Optionee acknowledges and agrees that any tax consequences arising from the grant or exercise of the Option or from the payment for Shares or from disposition of the Shares or from any other event or act (whether of the Optionee or of the Company or its Subsidiary employing or retaining Optionee (if applicable)), shall be borne solely by the Optionee. Optionee agrees to make appropriate arrangements with the Company (or the Subsidiary employing or retaining Optionee, if applicable) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable thereto. Optionee agrees to indemnify the Company and its Subsidiary employing or retaining Optionee, if applicable, 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 Optionee. Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver Shares, until all tax consequences (if any) arising from the exercise of such Options are resolved in a manner reasonably acceptable to the Company.

10.2 Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two years after the Date of Grant, or (ii) the date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company or the Subsidiary employing or retaining Optionee, if applicable, on the compensation income recognized by the Optionee.

10.3 Legal and Tax Consultation. The Optionee acknowledges that the Company has advised the Optionee to consult his independent tax advisor with respect to legal and tax consequences of the Option, and the Optionee has consulted with any legal or tax advisors that the Optionee deems necessary. Optionee acknowledges that he is not relying on the Company for any legal or tax advice, and that the Company shall not be deemed to have provided any legal or tax advice to Optionee with respect to the Option.

11. Data Privacy. As a condition of participating in the Plan, Optionee explicitly: (i) consents to the collection, use, processing, and transfer, in electronic or other form, of personal data described in this Section 11 by and among the Company for the exclusive purpose of implementing, administering or managing Optionee’s participation in the Plan; (ii) understands that the Company may hold certain personal information about the Optionee, including but not limited to name, home address and telephone number, date of birth, identification number, salary, nationality, job title, details of all options or any other entitlement to shares awarded, canceled, purchased, or outstanding in the Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”); (iii) understands that Data may be transferred to any third parties assisting the Company in the administration of the Plan; (iv) understands that the recipients of Data may be located within or outside the Optionee’s country of residence, or elsewhere, and that the recipient’s country

may have different data privacy laws and protections than the Optionee’s country of residence; (v) authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering or managing the Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or any subsequent holding of Shares on the Optionee’s behalf to a broker or other third party with whom the Optionee may elect to deposit any Shares acquired pursuant to the Plan; (vi) understands that Data will be held only as long as necessary to implement, administer or manage the Optionee’s participation in the Plan; (vii) understands that the Optionee may, at any time, review the Data, require any necessary amendments to Data or withdraw the consents herein in writing by contacting the Company; and (viii) understands that withdrawing the Optionee’s consent may affect the Optionee’s ability to participate in the Plan.

12. Successors and Assigns. The Company may assign any of its rights under this Option Agreement to single or multiple assignees, and this Option Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Option Agreement shall be binding upon Optionee and his heirs, executors, administrators, successors and assigns.

13. Administration. All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option, unless otherwise determined by the Board.

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

15. Entire Agreement; Severability. The Plan is incorporated herein by reference. The Optionee declares and agrees that the Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, agreements and understanding, whether written or oral, between the Optionee and the Company or the officers and/or directors and/or shareholders thereof with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the remainder of this Option Agreement will continue in full force and effect.

16. Governing Law; Jurisdiction. This Option Agreement is governed by and construed and enforced in accordance with the laws of the state of Israel, without giving effect to the principles of conflict of laws thereof. The competent courts of Tel-Aviv, Israel shall have the sole jurisdiction in any matter pertaining to this Option Agreement.

17. Notices. All notices given under this Option Agreement may be delivered by (a) personal delivery; or (b) registered mail or courier. Notices delivered personally shall be deemed given upon delivery. Notices sent by mail shall be deemed given ten (10) days (or if sent by courier - three (3) days) after mailing (postage prepaid), if mailed in accordance herewith. Until changed by written notice to the Company, the address of the parties shall be as set hereunder.

Optionee acknowledges that he has had the opportunity to review the Plan and this Option Agreement in their entirety and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee acknowledges that he has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions hereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Option Agreement or otherwise relating to the Option.

OPTIONEE	SAIFUN SEMICONDUCTORS LTD.
Signature	By
Print Name	Title
Residence Address

EX-10.3(B)

Exhibit 10.3(b)

SAIFUN SEMICONDUCTORS LTD.

2003 SHARE OPTION PLAN

SHARE OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2003 Share Option Plan, as amended from time to time (the “Plan”) of Saifun Semiconductors Ltd. shall have the same defined meanings in this Share Option Agreement (the “Option Agreement”). Except where the context otherwise requires, the term “Company” shall include Saifun Semiconductors Ltd. and its Subsidiaries, if applicable.

I. NOTICE OF OPTION GRANT

1.      Name :	__________________________(the “Optionee”)
Address:	__________________________
	__________________________

2. The undersigned Optionee has been granted an Option to purchase Ordinary Shares, par value NIS 0.01, of Saifun Semiconductors Ltd., subject to the terms and conditions of the Plan, this Option Agreement and Section 102 of the Israeli Income Tax Ordinance (New Version), 1961 (the “Tax Ordinance”) and any regulations, rules or orders promulgated thereunder, including the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003, all as amended from time to time (collectively, “Section 102”), as follows:

Date of Grant	____________________________
Vesting Commencement Date	____________________________
Exercise Price per Share	____________________________
Total Number of Shares Granted	____________________________
Type of Option	Section 102(b)(2) Option - Capital Route
Term/Expiration Date	10 years following the Date of Grant

3. Vesting Schedule

This Option shall be exercisable in number of whole shares, according to the following vesting schedule: 40% of the Options shall vest upon the second anniversary of the Date of Grant and an additional 20% of the Options shall vest upon the third, forth and fifth anniversaries of the Date of Grant, subject to Optionee’s continuing to be an employee of the Company on each such dates, so that at the end of five (5) years from the Date of Grant all the Options hereof shall be exercisable (fully vested).

4. Provisions for Termination

In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

In the event that Optionee’s engagement with the Company should terminate, the outstanding vested Options on the date of such termination, shall be exercisable for (i) three (3) months after such termination (except in the case of termination by reason of death or Disability); or (ii) six (6) months after such termination by reason of Optionee’s death or Disability. Notwithstanding the foregoing, in the event of Optionee’s death within three (3) months after the date of termination, the Optionee’s estate or heirs, as applicable, may exercise all Options, which are vested and exercisable at the time of Optionee’s termination of engagement, within six (6) months after the Optionee’s death, but in no event after the Expiration Date as provided above.

Notwithstanding the above, in the event that Optionee’s engagement with the Company should terminate for Cause, the entire unexercised Option (whether vested or not) shall ipso facto terminate.

For purposes hereof, termination of Optionee’s engagement shall be deemed effective as detailed in Section 10.5 of the Plan.

II. AGREEMENT

1. Preamble. The above notice of option grant (the “Notice of Option Grant”) constitutes an integral part of this Option Agreement.

2. Grant of Option.

2.1. Subject to the terms and conditions set forth herein, in the Plan and in the Notice of Option Grant, the Company hereby issues to the Trustee (as defined below), for the benefit of the Optionee named in the Notice of Option Grant, an option qualified as “Section 102(b)(2) Option” (the “Option”) to purchase the number of Shares set forth in the Notice of Option Grant, at the exercise price per Share set forth in the Notice of Option Grant (the “Exercise Price”).

2.2. The Plan, as approved by the Company for use by the Company, is intended to qualify as an Employee Option Plan within the meaning of Section 102. The grant of the Option is made pursuant to: (a) Section 102 and any tax officer’s approval issued pursuant thereto; and (b) the Trust Agreement (as defined below).

2.3. The Option is granted pursuant to the Plan, and the said Option and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions whether such terms and provisions are incorporated in this Option Agreement solely by reference or are expressly cited herein. Any interpretation of this Option Agreement will be made in accordance with the Plan. Subject to Section 16.2 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms of this Option Agreement, the terms and conditions of the Plan shall prevail, except and to the extent otherwise expressly provided herein. Notwithstanding the foregoing, in the event of a conflict between the terms and conditions of the Plan or of this Option Agreement and any provision of Section 102, the Trust Agreement or any applicable law, the latter shall govern and prevail.

3. Issuance to Trustee and Lock-Up Period.

3.1. Issuance to Trustee. The Company appointed a trustee, in accordance with the provisions of Section 102 (the “Trustee”) and has entered into a trust agreement with the Trustee (the “Trust Agreement”). Under the conditions of Section 102(b)(2), the Option and any Shares to be issued upon exercise of the Option shall be issued to the Trustee and held in trust for the benefit of Optionee for a period of no less than the lesser of (a) 30 months, or (b) twenty-four (24) months from the end of the tax year in which the Notice of Option Grant was deposited with the Trustee (the “Lock-Up Period”), provided that options granted after January 1, 2006 are only subject to being held in trust for two years.

3.2. Lock-Up Period. In order for the tax benefits of Section 102(b)(2) to apply, during the Lock-Up Period, neither the Option nor the Shares to be issued upon exercise of the Option, as the case may be, may be sold or transferred (other than through a transfer by will or by operation of law), nor may they be the subject of an attachment or security interest, and no power of attorney or transfer deed shall be given in respect thereof prior to the payment of the tax liability.

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In the event that Optionee elects to exercise his Option during the Lock-Up Period, the Company shall provide the Trustee with the share certificate in the name of the Trustee, for the benefit of Optionee, in order that the Trustee will hold it until no sooner than the end of the Lock-Up Period.

Notwithstanding the above, in the event the Optionee shall elect to release the Option and/or the Shares, as the case may be, prior to the conclusion of the Lock-up Period, the sanctions under Section 102 shall apply to and shall be borne solely by the Optionee.

3.3. End of Lock-Up Period. Upon the conclusion of the Lock-Up Period and subject to any further period included in the Plan and/or herein, the Trustee may release the Option and/or the Shares issued upon exercise of such Option to Optionee only after (i) the receipt by the Trustee of an acknowledgment from the income tax authority that Optionee has paid any applicable tax due pursuant to Section 102 and the Tax Ordinance, or (ii) the Trustee withholds any applicable tax due pursuant to Section 102 and the Tax Ordinance.

3.4. Additional Rights. In the event of a distribution of rights, including an issuance of bonus shares, in connection with the Option and/or Shares issued upon exercise of such Option (the “Additional Rights”), all such Additional Rights shall be deposited with and/or issued to the Trustee for the benefit of the Optionee, and shall be held by the Trustee and treated in accordance with the provisions of Section 102 and the capital gain tax route.

4. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

5. Term of Option. This Option may be exercised only within the term set out in the Notice of Option Grant, and may be exercised during such term only in accordance with the Plan, the terms of this Option Agreement and the Trust Agreement. In the event the Option shall not be exercised within its term, such Option, or such part thereof, shall expire and all interests and rights of the Optionee in and to the same shall terminate.

6. Exercise of Option.

6.1. Right to Exercise. This Option shall be exercisable during its term to the extent vested in accordance with the vesting schedule set out in the Notice of Option Grant and with the applicable provisions of the Plan, this Option Agreement and the Trust Agreement.

6.2. Continuous Engagement Required. Except as otherwise provided in the Notice of Option Grant, this Option may not be exercised unless the Optionee, at the time he exercises this Option is, and has been at all times since the date of grant set out in the Notice of Option Grant engaged by the Company. Transfer between locations of the Company or between the Company, its Subsidiaries or its successor shall not be considered termination of engagement. In case of an approved leave of absence, the vesting of the Option shall be suspended during such leave of absence.

6.3. Method of Exercise. This Option shall be exercised by delivery of a signed notice of exercise substantially in the form attached hereto as Exhibit A (the “Notice of Exercise”), which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and shall be accompanied with such other representations and agreements, as may be required by

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the Company and/or the Trustee. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Notice of Exercise and settlement of payment of the aggregate Exercise Price in such form satisfactory to the Company. The Optionee may purchase less than the number of Shares covered by the vested portion of the Option, provided that no partial exercise of this Option may be for a fraction of a Share.

6.4. Method of Payment; Cashless Exercise. Payment of the aggregate Exercise Price for the purchased Shares shall be made by Optionee’s relinquishment of a portion of his Option having a Fair Market Value equal to the aggregate Exercise Price, so that the Company shall issue to the Optionee only the amount of Shares of the Company having an aggregate Fair Market Value equal to the difference between (x) the aggregate Fair Market Value of the Shares so purchased; and (y) the aggregate Exercise Price applicable for such exercised Options (the “Cashless Exercise”). For the purpose of the Cashless Exercise hereof, the Committee shall determine the Fair Market Value of the Shares in accordance with the provisions of the Plan.

6.5. Notification to Trustee. The Company will notify the Trustee of any exercise of the Option as set forth in the Notice of Exercise. If such notification is delivered during the Lock-Up Period, the Shares issued upon the exercise of the Option shall be issued directly to the Trustee on behalf of the Optionee, and shall be held by the Trustee in trust on behalf of the Optionee, unless the Optionee elects to receive the Shares directly to his possession, pursuant to which the sanctions under Section 102 shall apply and shall be borne solely by the Optionee. In the event such notification is delivered after the Lock-Up Period, the Shares issued upon the exercise of the Option shall be transferred either to the Trustee or to Optionee directly, at the election of Optionee, provided, however, that in the event the Optionee elects to receive the Shares directly to his possession, the transfer thereof shall be subject to the payment of the tax liability by the Optionee.

6.6. Rights as a Shareholder.

(a) Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), the Optionee shall not have any of the rights or privileges granted to a shareholder of the Company with respect to any Shares purchasable upon the exercise of any part of an Option. No adjustment will be made for a dividend or other shareholders’ right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

(b) Except and to the extent otherwise expressly provided herein and in the Plan, the Shares issued upon the exercise of the Option shall be subject to the provisions of the Company’s Articles of Association, as amended from time to time and all Company’s shareholders agreements, as amended from time to time, regardless of whether or not the Optionee is a party to such agreements.

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7. Restrictions on Exercise. This Option may not be exercised and no Shares shall be issued pursuant to the exercise unless such exercise, the issuance of the Shares and the method of payment of the Exercise Price comply with applicable laws. This Option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject hereto upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of Shares hereunder, this Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board. The Optionee agrees to cooperate with the Company to ensure compliance with any such condition; provided, however, that nothing herein shall be deemed to require the Company to apply for, effect or obtain such listing, registration, qualification, approval, disclosure, or to satisfy such other condition.

8. Compliance with Laws and Stock Exchange Rules.

8.1. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option or immediately upon the Company’s first demand, deliver to the Company his Investment Representation Statement, in such form as may be prescribed by the Company, that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and shall make such other representations as are deemed necessary or appropriate by the Company or its counsel.

Notwithstanding the above, the Company may, but shall not be obligated to register or qualify the sale of Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Option Agreement to comply with any law.

8.2. Optionee hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration statement of the Company filed under the Securities Act or any other applicable law, Optionee shall not offer, pledge, sell, lend or otherwise transfer or dispose of, directly or indirectly, any Shares (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares (or other securities) of the Company held by Optionee (other than those included in the registration) during the one hundred eighty (180) days period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of any registration statement of the Company filed under the Securities Act or any other applicable law.

Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or, which are necessary to give further effect thereto. In addition, if requested by the Company or the Managing Underwriter, Optionee shall provide, within ten (10) days of such request, such information, as may be required by the Company or such Managing Underwriter in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act or any other applicable law. The Company may impose stop-transfer instructions with respect to the sale of Shares (or other securities) subject to the foregoing restriction until the end of such Market Standoff Period. Optionee agrees that any transferee of the Option or Shares acquired pursuant to the Option shall be bound by this Section.

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8.3. The Optionee hereby acknowledges and agrees that, the Committee may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by an Optionee or other subsequent transfers by the Optionee of any Shares issued as a result of or under the Option, including without limitation, restrictions under an insider trading policy and restrictions pursuant to applicable regulations of any stock exchange on which the Shares may be listed for trading. The Optionee agrees to cooperate with the Company to ensure compliance with any such restrictions, conditions or limitations.

9. Acknowledgment and Waiver. By participating in the Plan, and accepting the grant of the Option, the Optionee agrees and acknowledges that: (i) the Plan is discretionary in nature and all determinations with respect to any future grants, including but not limited to, the times when options shall be granted, the number of Shares subject to each option, the exercise price and the time or times when each right shall be exercisable will be at the sole discretion of the Company, and the Company can amend, cancel, or terminate the Plan at any time; (ii) the grant of the Option under the Plan is voluntary and occasional, and does not create any contractual or other right to receive future grants of any options, or benefits in lieu of the Options even if options have been granted repeatedly in the past; (iii) the Optionee’s participation in the Plan is voluntary; (iv) the value of the Option is an extraordinary item of compensation, which is outside the scope of the Optionee’s employment agreement, if any; (v) the Option is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any social benefits, severance, end of service payments, bonuses, long-service awards, pension or similar payments; (vi) the future value of the Shares purchased under the Plan is unknown and cannot be predicted with certainty, and the Company makes no express or implied promise about the financial gain or loss to be achieved through participation in the Plan; (vii) in the event that Optionee is not a service provider of the Company, this Option grant will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Option grant will not be interpreted to mean that an entity other than the entity that engages the Optionee has relationship with the Optionee; (viii) no claim or entitlement to compensation or damages arises from the expiration of this Option or diminution in value of this Option or Shares purchased through exercise of this Option resulting from termination of Optionee’s engagement with the Company (for any reason whatsoever and whether or not in breach of local labor laws) and Optionee irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the terms of this Option Agreement, Optionee shall be deemed irrevocably to have waived any entitlement to pursue such claim; and (ix) unless there is a written engagement agreement for a specified term in effect, Optionee’s engagement with the Company may be terminated at any time, with or without Cause, by the Company and neither the Plan nor this Option shall obligate the Company to engage Optionee for any particular length of time nor confer any right with respect to continuing the Optionee’s status as a service provider.

10. Tax Consequences. By accepting the grant of the Option, the Optionee acknowledges and agrees that any and all taxes, fees and other liabilities (as may apply from time to time) in connection with the grant and/or exercise and/or release of the Option and the sale and/or release of Shares issued upon the exercise of the Option and/or from any other event or act (whether of the Optionee, the Company, its Subsidiary that engages the Optionee (if applicable) r the Trustee), shall be borne solely by the Optionee, and Optionee will be solely liable for all such taxes, fees and other liabilities. The Company, its Subsidiary that engages the Optionee (if applicable) and/or the Trustee shall withhold taxes according to the

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requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, by executing this Option Agreement the Optionee hereby agrees to indemnify the Company, its Subsidiary that engages the Optionee (if applicable) and the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee.

Except as otherwise required by law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of the Optionee until all tax consequences (if any) arising from the exercise of such Option are resolved in a manner reasonably acceptable to the Company.

11. Legal and Tax Consultation. The Optionee acknowledges that the Company has advised the Optionee to consult his independent tax advisor with respect to legal and tax consequences of the Option, and the Optionee has consulted with any legal or tax advisors that the Optionee deems necessary. Optionee acknowledges that he is not relying on the Company and/or the Trustee for any legal or tax advice, and that the Company and/or the Trustee shall not be deemed to have provided any legal or tax advice to Optionee with respect to the Option.

12. Optionee’s Representations Under Section 102; Indemnification. By accepting the grant of the Option, the Optionee represents and confirms that: (i) Optionee is familiar with the terms and provisions of Section 102, and in particular Section 102(b)(2)- capital gain route, and hereby accepts this Option subject to all of the terms and provisions of Section 102(b)(2) and the Trust Agreement; (ii) in the event any Additional Rights shall be distributed with respect to the Option and/or the Shares, such Additional Rights shall be deposited with the Trustee and shall also be subject to the provisions of Section 102, including the Lock-Up Period; (iii) Optionee shall not sell nor transfer from the Trustee the Options, Shares or any Additional Right distributed to him or her in connection therewith, until the end of the Lock Up Period; (iv) the Trustee shall not be liable for any action or omission taken on his part in connection with the Plan, this Option Agreement and the Trust Agreement, provided that the Trustee acted reasonably and in good faith; and (v) Optionee shall be liable to indemnify the Trustee with respect to any loss, damage or expense caused to the Trustee as a result of or in consequence of performance of its duties as a Trustee, unless arising out of the Trustee own fraud or bad faith.

13. Data Privacy. As a condition of participating in the Plan, Optionee explicitly: (i) consents to the collection, use, processing, and transfer, in electronic or other form, of personal data described in this Section 13 by and among the Company and the Trustee for the exclusive purpose of implementing, administering or managing Optionee’s participation in the Plan; (ii) understands that the Company may hold certain personal information about the Optionee, including but not limited to name, home address and telephone number, date of birth, identification number, salary, nationality, job title, details of all options or any other entitlement to shares awarded, canceled, purchased, or outstanding in the Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”); (iii) understands that Data may be transferred to any third parties assisting the Company in the administration of the Plan; (iv) understands that the recipients of Data may be located within or outside the Optionee’s country of residence, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Optionee’s country of residence; (v) authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering or managing the Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or any subsequent holding of Shares on the Optionee’s behalf to a broker or other third party with whom the Optionee may elect to deposit any Shares acquired pursuant to the Plan; (vi) understands that Data will be held

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only as long as necessary to implement, administer or manage the Optionee’s participation in the Plan; (vii) understands that the Optionee may, at any time, review the Data, require any necessary amendments to Data or withdraw the consents herein in writing by contacting the Company; and (viii) understands that withdrawing the Optionee’s consent may affect the Optionee’s ability to participate in the Plan.

14. Successors and Assigns. The Company may assign any of its rights under this Option Agreement to single or multiple assignees, and this Option Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Option Agreement shall be binding upon Optionee and his heirs, executors, administrators, successors and assigns.

15. Administration. All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option, unless otherwise determined by the Board.

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

17. Entire Agreement; Severability. The Plan and the Trust Agreement are incorporated herein by reference. The Optionee declares and agrees that the Plan, the Trust Agreement and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and/or agreements and/or understanding, whether written or oral, between the Optionee and the Company or the officers and/or directors and/or shareholders thereof with respect to the subject matter hereof, and may not be modified adversely to Optionee’s interest except by means of a writing signed by the Company and Optionee. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the remainder of this Option Agreement will continue in full force and effect.

18. Governing Law; Jurisdiction. This Option Agreement is governed by and construed and enforced in accordance with the laws of the state of Israel without giving effect to the principles of conflict of laws thereof. The competent courts of Tel-Aviv, Israel shall have the sole jurisdiction in any matter pertaining to this Option Agreement.

19. Notices. All notices given under this Option Agreement may be delivered by (a) personal delivery; or (b) registered mail or courier. Notices delivered personally shall be deemed given upon delivery. Notices sent by mail shall be deemed given ten (10) days (or if sent by courier - three (3) days) after mailing (postage prepaid), if mailed in accordance herewith. Until changed by written notice to the Company, the address of the parties shall be as set hereunder.

Optionee acknowledges that he has had the opportunity to review the Plan, the Trust Agreement and this Option Agreement in their entirety and represents that he is familiar with the terms and provisions thereof. By signing this Option Agreement, the Optionee acknowledges that he has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement, he fully understands all provisions of the Plan, the Trust Agreement and this Option Agreement and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Option Agreement or otherwise relating to the Option.

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OPTIONEE:	SAIFUN SEMICONDUCTORS LTD.
Signature	By
Print Name	Title
Residence Address

9

EX-10.3(C)

Exhibit 10.3(c)

SAIFUN SEMICONDUCTORS LTD.

2003 SHARE OPTION PLAN

SHARE OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2003 Share Option Plan, as amended from time to time (the “Plan”) of Saifun Semiconductors Ltd. shall have the same defined meaning in this Share Option Agreement (the “Option Agreement”). Except where the context otherwise requires, the term “Company” shall include Saifun Semiconductors Ltd. and its Subsidiaries, if applicable.

I. NOTICE OF OPTION GRANT

1.      Name :	____________________________ (the “Optionee”)
Address:	____________________________
	____________________________

2. The Optionee has been granted an Option to purchase Ordinary Shares, par value NIS 0.01, of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

Date of Grant	____________________________
Vesting Commencement Date	____________________________
Exercise Price per Share	$___________________________
Total Number of Shares Granted	____________________________
Type of Option	Option intended to qualify under Section 3(i) of the Israeli Income Tax Ordinance (New Version), 1961, and regulations, rules and orders of procedures promulgated thereunder (“Section 3(i)”, the “Tax Ordinance”, respectively).
Term/Expiration Date	[10 years following the Date of Grant]

3. Vesting Schedule

This Option shall become exercisable in number of whole Shares, [in equal annual installments over a period of five (5) years following the Vesting Commencement Date (i.e. 20% of the Shares subject to the Option shall vest upon the first, second, third and forth anniversaries of the Vesting Commencement Date)], subject to the Optionee’s continuous engagement with the Company during such time. In no event shall the Option vest and become exercisable for any additional Shares following Optionee’s cessation of engagement with the Company.

4. Provisions for Termination

In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

In the event that Optionee’s engagement with the Company should terminate, all Options, which are vested and exercisable at the time of such termination, shall be exercisable within: (i) three (3) months after the date of such termination (except in the case of termination by reason of death or Disability); or (ii) six (6) months after the date of such termination by reason of Optionee’s death or Disability. Notwithstanding the foregoing, in the event of Optionee’s death within three (3) months after the date of termination, the Optionee’s estate or heirs, as applicable, may exercise all Options, which are vested and exercisable at the time of Optionee’s termination of engagement, within six (6) months after the Optionee’s death, but in no event after the Expiration Date as provided above.

Notwithstanding the above, in the event that Optionee’s engagement with the Company should terminate for Cause, the entire unexercised Option (whether vested or not) shall ipso facto terminate.

For purposes hereof, termination of Optionee’s engagement shall be deemed effective as detailed in Section 10.5 of the Plan.

II. AGREEMENT

1. Grant of Option.

1.1. The Company hereby grants to the Optionee named in the Notice of Option Grant (the “Notice of Grant”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions set forth herein and in the Plan, which is incorporated herein by reference.

1.2. Any interpretation of this Option Agreement will be made in accordance with the Plan. Subject to Section 16.2 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms of this Option Agreement, the terms and conditions of the Plan shall prevail, except and to the extent otherwise expressly provided herein. Notwithstanding the foregoing, in the event of a conflict between the terms and conditions of the Plan or of this Option Agreement and any provision of the Tax Ordinance or any applicable law, the latter shall govern and prevail.

2. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated or transferred in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

3. Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement. In the event the Option shall not be exercised within its term, such Option, or such part thereof, shall expire and all interests and rights of the Optionee in and to the same shall terminate.

4. Exercise of Option.

4.1. Right to Exercise. This Option shall be exercisable during its term, to the extent vested, in accordance with the vesting schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement.

4.2. Continuous Engagement Required. Except as otherwise provided in the Notice of Grant, this Option may not be exercised unless the Optionee, at the time he exercises this Option is, and has been at all times since the date of grant set out in the Notice of Grant engaged by the Company. Transfer between locations of the Company or between the Company, its Subsidiaries or its successor shall not be considered termination of engagement.

4.3. Method of Exercise. This Option shall be exercised by delivery of a signed exercise notice substantially in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and shall be accompanied with such other representations, agreements and documents as may be required by applicable

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laws and/or the Company. The Exercise Notice shall be accompanied by payment of the aggregate withholding taxes due with respect to the exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice, settlement of payment of the aggregate Exercise Price in such form satisfactory to the Company and payment of withholding taxes due with respect to the exercised Shares. The Optionee may purchase less than the number of Shares covered by the vested portion of the Option, provided that no partial exercise of this Option may be for a fraction of a Share.

4.4. Method of Payment; Cashless Exercise. Payment of the aggregate Exercise Price for the purchased Shares shall be made by Optionee’s relinquishment of a portion of his Option having a Fair Market Value equal to the aggregate Exercise Price, so that the Company shall issue to the Optionee only the amount of Shares of the Company having an aggregate Fair Market Value equal to the difference between (x) the aggregate Fair Market Value of the Shares so purchased; and (y) the aggregate Exercise Price applicable for such exercised Options (the “Cashless Exercise”). For the purpose of the Cashless Exercise hereof, the Committee shall determine the Fair Market Value of the Shares in accordance with the provisions of the Plan.

4.5. Rights as a Shareholder.

4.5.1. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), the Optionee shall not have any of the rights or privileges granted to a shareholder of the Company with respect to any Shares purchasable upon the exercise of any part of an Option. No adjustment will be made for a dividend or other shareholders’ right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

4.5.2. Except and to the extent otherwise expressly provided herein and in the Plan, the Shares issued upon the exercise of the Option shall be subject to the provisions of the Company’s Articles of Association, as amended from time to time and all Company’s shareholders agreements, as amended from time to time, regardless of whether or not the Optionee is a party to such agreements.

5. Restrictions on Exercise. This Option may not be exercised and no Shares shall be issued pursuant to the exercise unless such exercise, the issuance of the Shares and the method of payment of the Exercise Price comply with applicable laws. This Option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject hereto upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of Shares hereunder, this Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board. The Optionee agrees to cooperate with the Company to ensure compliance with any such condition; provided, however, that nothing herein shall be deemed to require the Company to apply for, effect or obtain such listing, registration, qualification, approval, disclosure, or to satisfy such other condition.

6. Optionee’s Representations.

6.1. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any

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portion of this Option or immediately upon the Company’s first demand, deliver to the Company his Investment Representation Statement, in the form, which shall be required by the Company, that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and shall make such other representations as are deemed necessary or appropriate by the Company or its counsel.

Notwithstanding the above, the Company may, but shall not be obligated to register or qualify the sale of Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Option Agreement to comply with any law.

6.2. In the event the Optionee is deemed an employee of the Company, no income or gain which the Optionee may be credited with or which purports to be credited to the Optionee as a result of the grant or exercise of the Option, the issuance of the Shares, the sale thereof, or any other event or act hereunder, shall in any manner be taken into account in the calculation of the basis for the Optionee’s entitlements from the Company or in the calculation of any social welfare right or other rights or benefits arising out of the engagement by the Company, including without limitation, social security, manager’s insurance, educational fund, pension funds, severance pay, holiday pay, etc. In the event that the Company shall be required, pursuant to any law, to take into account for purposes of calculating any such benefits, any of the aforesaid elements of income or gain actually or theoretically credited to the Optionee, the Optionee shall promptly indemnify the Company against any expense caused to it in this regard, and any such amount shall be deemed a debt of the Optionee to the Company, which may be deducted or set off from any amounts payable to the Optionee.

7. Standoff Period. Optionee hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration statement of the Company filed under the Securities Act or any other applicable law, Optionee shall not offer, pledge, sell, lend or otherwise transfer or dispose of, directly or indirectly, any Shares (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Share (or other securities) of the Company held by Optionee (other than those included in the registration) during the one hundred eighty (180) days period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of any registration statement of the Company filed under the Securities Act or any other applicable law.

Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the Managing Underwriter, Optionee shall provide, within ten (10) days of such request, such information as may be required by the Company or such Managing Underwriter, in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act or any other applicable law. The Company may impose stop-transfer instructions with respect to the Shares (or other securities) subject to the foregoing restriction until the end of such Market Standoff Period. Optionee agrees that this Section shall bind any transferee of the Option or Shares acquired pursuant to the Option.

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8. Restrictions on Resales. The Optionee hereby acknowledges and agrees that, the Committee may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by an Optionee or other subsequent transfers by the Optionee of any Shares issued as a result of or under the Option, including without limitation, restrictions under an insider trading policy and restrictions pursuant to applicable regulations of any stock exchange on which the Shares may be listed for trading. The Optionee agrees to cooperate with the Company to ensure compliance with any such restrictions, conditions or limitations.

9. Acknowledgment and Waiver. By participating in the Plan, and accepting the grant of the Option, the Optionee agrees and acknowledges that: (i) the Plan is discretionary in nature and all determinations with respect to any future grants, including but not limited to, the times when options shall be granted, the number of Shares subject to each option, the exercise price and the time or times when each right shall be exercisable will be at the sole discretion of the Company, and the Company can amend, cancel, or terminate the Plan at any time; (ii) the grant of the Option under the Plan is voluntary and occasional, and does not create any contractual or other right to receive future grants of any options, or benefits in lieu of the Options even if options have been granted repeatedly in the past; (iii) the Optionee’s participation in the Plan is voluntary; (iv) the value of the Option is an extraordinary item of compensation, which is outside the scope of the Optionee’s engagement agreement, if any; (v) the Option is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any social benefits, severance, end of service payments, bonuses, long-service awards, pension or similar payments; (vi) the future value of the Shares purchased under the Plan is unknown and cannot be predicted with certainty, and the Company makes no express or implied promise about the financial gain or loss to be achieved through participation in the Plan; (vii) in the event that Optionee is not an employee of the Company, this Option grant will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Option grant will not be interpreted to mean that an entity other than the entity that engages the Optionee has relationship with the Optionee; (viii) no claim or entitlement to compensation or damages arises from the expiration of this Option or diminution in value of this Option or Shares purchased through exercise of this Option resulting from termination of Optionee’s engagement with the Company (for any reason whatsoever) and Optionee irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the terms of this Option Agreement, Optionee shall be deemed irrevocably to have waived any entitlement to pursue such claim; and (ix) unless there is a written engagement agreement for a specified term in effect, Optionee’s engagement with the Company may be terminated at any time, with or without Cause, by the Company and neither the Plan nor this Option shall obligate the Company to engage Optionee for any particular length of time nor confer any right with respect to continuing the Optionee’s status as a service provider.

10. Tax Consequences. By accepting the grant of the Option, the Optionee acknowledges and agrees that any tax consequences arising from the grant or exercise of the Option or from the payment for Shares or from disposition of the Shares or from any other event or act (whether of the Optionee or of the Company or its Subsidiary engaging or retaining Optionee), shall be borne solely by the Optionee. The Company or the Subsidiary engaging or retaining Optionee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Optionee agrees to indemnify the Company and the Subsidiary engaging or retaining Optionee, if applicable, 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 Optionee. Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver Shares until all tax consequences (if any) are resolved in a manner reasonably acceptable to the Company.

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11. Legal and Tax Consultation. The Optionee acknowledges that the Company has advised the Optionee to consult his independent tax advisor with respect to legal and tax consequences of the Option, and the Optionee has consulted with any legal or tax advisors that the Optionee deems necessary. Optionee acknowledges that he is not relying on the Company for any legal or tax advice, and that the Company shall not be deemed to have provided any legal or tax advice to Optionee with respect to the Option.

12. Data Privacy. As a condition of participating in the Plan, Optionee explicitly: (i) consents to the collection, use, processing, and transfer, in electronic or other form, of personal data described in this Section 12 by and among the Company for the exclusive purpose of implementing, administering or managing Optionee’s participation in the Plan; (ii) understands that the Company may hold certain personal information about the Optionee, including but not limited to name, home address and telephone number, date of birth, identification number, nationality, job title, details of all options or any other entitlement to shares awarded, canceled, purchased, or outstanding in the Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”); (iii) understands that Data may be transferred to any third parties assisting the Company in the administration of the Plan; (iv) understands that the recipients of Data may be located within or outside the Optionee’s country of residence, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Optionee’s country of residence; (v) authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering or managing the Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or any subsequent holding of Shares on the Optionee’s behalf to a broker or other third party with whom the Optionee may elect to deposit any Shares acquired pursuant to the Plan; (vi) understands that Data will be held only as long as necessary to implement, administer or manage the Optionee’s participation in the Plan; (vii) understands that the Optionee may, at any time, review the Data, require any necessary amendments to Data or withdraw the consents herein in writing by contacting the Company; and (viii) understands that withdrawing the Optionee’s consent may affect the Optionee’s ability to participate in the Plan.

13. Successors and Assigns. The Company may assign any of its rights under this Option Agreement to single or multiple assignees, and this Option Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Option Agreement shall be binding upon Optionee and his heirs, executors, administrators, successors and assigns.

14. Administration. All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option, unless otherwise determined by he Board.

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

16. Entire Agreement; Severability. The Plan is incorporated herein by reference. The Optionee declares and agrees that the Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, agreements and/or understanding, whether written or oral, between the

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Optionee and the Company or the officers and/or directors and/or shareholders thereof with respect to the subject matter hereof, and may not be modified adversely to Optionee’s interest except by means of a writing signed by the Company and Optionee. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the remainder of this Option Agreement will continue in full force and effect.

17. Governing Law; Jurisdiction. This Option Agreement is governed by and construed and enforced in accordance with the laws of the state of Israel, without giving effect to the principles of conflict of laws thereof. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matter pertaining to this Option Agreement.

18. Notices. All notices given under this Option Agreement may be delivered by (a) personal delivery; or (b) registered mail or courier. Notices delivered personally shall be deemed given upon delivery. Notices sent by mail shall be deemed given ten (10) days (or if sent by courier - three (3) days) after mailing (postage prepaid), if mailed in accordance herewith. Until changed by written notice to the Company, the address of the parties shall be as set hereunder.

Optionee acknowledges that he has had the opportunity to review the Plan and this Option Agreement in their entirety and represents that he is familiar with the terms and provisions thereof. By signing this Option Agreement, the Optionee acknowledges that he has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement, he fully understands all provisions of the Plan and this Option Agreement and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Option Agreement or otherwise relating to the Option.

OPTIONEE	SAIFUN SEMICONDUCTORS LTD.
Signature	By
Print Name	Title
Residence Address

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EX-10.3(D)

Exhibit 10.3(d)

SAIFUN SEMICONDUCTORS LTD.

2003 SHARE OPTION PLAN

SHARE OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2003 Share Option Plan, as amended from time to time (the “Plan”) of Saifun Semiconductors Ltd. shall have the same defined meanings in this Share Option Agreement (the “Option Agreement”). Except where the context otherwise requires, the term “Company” shall include Saifun Semiconductors Ltd. and its Subsidiaries, if applicable.

I. NOTICE OF OPTION GRANT

1.	Name:	(the “Optionee”)
	Address:

2. The undersigned Optionee has been granted an Option to purchase Ordinary Shares, par value NIS 0.01, of Saifun Semiconductors Ltd., subject to the terms and conditions of the Plan, this Option Agreement and Section 102 of the Israeli Income Tax Ordinance (New Version), 1961 (the “Tax Ordinance”) and any regulations, rules or orders promulgated thereunder, including the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003, all as amended from time to time (collectively, “Section 102”), as follows:

Date of Grant	________________________________
Vesting Commencement Date	________________________________
Exercise Price per Share	________________________________
Total Number of Shares Granted	________________________________
Type of Option	Section 102(b)(2) Option -Capital Route
Term/Expiration Date	10 years following the Date of Grant

3. Vesting Schedule

This Option shall be exercisable (fully vested) in numbers of whole shares, upon the fifth (5) anniversary of the Vesting Commencement Date, subject to Optionee’s continuing to be an employee of the Company on such date.

4. Provisions for Termination

In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

In the event that Optionee’s engagement with the Company should terminate, the outstanding vested Options on the date of such termination, shall be exercisable for (i) three (3) months after such termination (except in the case of termination by reason of death or Disability); or (ii) six (6) months after such termination by reason of Optionee’s death or Disability. Notwithstanding the foregoing, in the event of Optionee’s death within three (3) months after the date of termination, the Optionee’s estate or heirs, as applicable, may exercise all Options, which are vested and exercisable at the time of Optionee’s termination of engagement, within six (6) months after the Optionee’s death, but in no event after the Expiration Date as provided above.

Notwithstanding the above, in the event that Optionee’s engagement with the Company should terminate for Cause, the entire unexercised Option (whether vested or not) shall ipso facto terminate.

For purposes hereof, termination of Optionee’s engagement shall be deemed effective as detailed in Section 10.5 of the Plan.

II. AGREEMENT

1. Preamble. The above notice of option grant (the “Notice of Option Grant”) constitutes an integral part of this Option Agreement.

2. Grant of Option.

2.1. Subject to the terms and conditions set forth herein, in the Plan and in the Notice of Option Grant, the Company hereby issues to the Trustee (as defined below), for the benefit of the Optionee named in the Notice of Option Grant, an option qualified as “Section 102(b)(2) Option” (the “Option”) to purchase the number of Shares set forth in the Notice of Option Grant, at the exercise price per Share set forth in the Notice of Option Grant (the “Exercise Price”).

2.2. The Plan, as approved by the Company for use by the Company, is intended to qualify as an Employee Option Plan within the meaning of Section 102. The grant of the Option is made pursuant to: (a) Section 102 and any tax officer’s approval issued pursuant thereto; and (b) the Trust Agreement (as defined below).

2.3. The Option is granted pursuant to the Plan, and the said Option and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions whether such terms and provisions are incorporated in this Option Agreement solely by reference or are expressly cited herein. Any interpretation of this Option Agreement will be made in accordance with the Plan. Subject to Section 16.2 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms of this Option Agreement, the terms and conditions of the Plan shall prevail, except and to the extent otherwise expressly provided herein. Notwithstanding the foregoing, in the event of a conflict between the terms and conditions of the Plan or of this Option Agreement and any provision of Section 102, the Trust Agreement or any applicable law, the latter shall govern and prevail.

3. Issuance to Trustee and Lock-Up Period.

3.1. Issuance to Trustee. The Company appointed a trustee, in accordance with the provisions of Section 102 (the “Trustee”) and has entered into a trust agreement with the Trustee (the “Trust Agreement”). Under the conditions of Section 102(b)(2), the Option and any Shares to be issued upon exercise of the Option shall be issued to the Trustee and held in trust for the benefit of Optionee for a period of no less than the lesser of (a) 30 months, or (b) twenty-four (24) months from the end of the tax year in which the Notice of Option Grant was deposited with the Trustee (the “Lock-Up Period”), provided that options granted after January 1, 2006 are only subject to being held in trust for two years.

3.2. Lock-Up Period. In order for the tax benefits of Section 102(b)(2) to apply, during the Lock-Up Period, neither the Option nor the Shares to be issued upon exercise of the Option, as the case may be, may be sold or transferred (other than through a transfer by will or by operation of law), nor may they be the subject of an attachment or security interest, and no power of attorney or transfer deed shall be given in respect thereof prior to the payment of the tax liability.

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In the event that Optionee elects to exercise his Option during the Lock-Up Period, the Company shall provide the Trustee with the share certificate in the name of the Trustee, for the benefit of Optionee, in order that the Trustee will hold it until no sooner than the end of the Lock-Up Period.

Notwithstanding the above, in the event the Optionee shall elect to release the Option and/or the Shares, as the case may be, prior to the conclusion of the Lock-up Period, the sanctions under Section 102 shall apply to and shall be borne solely by the Optionee.

3.3. End of Lock-Up Period. Upon the conclusion of the Lock-Up Period and subject to any further period included in the Plan and/or herein, the Trustee may release the Option and/or the Shares issued upon exercise of such Option to Optionee only after (i) the receipt by the Trustee of an acknowledgment from the income tax authority that Optionee has paid any applicable tax due pursuant to Section 102 and the Tax Ordinance, or (ii) the Trustee withholds any applicable tax due pursuant to Section 102 and the Tax Ordinance.

3.4. Additional Rights. In the event of a distribution of rights, including an issuance of bonus shares, in connection with the Option and/or Shares issued upon exercise of such Option (the “Additional Rights”), all such Additional Rights shall be deposited with and/or issued to the Trustee for the benefit of the Optionee, and shall be held by the Trustee and treated in accordance with the provisions of Section 102 and the capital gain tax route.

4. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

5. Term of Option. This Option may be exercised only within the term set out in the Notice of Option Grant, and may be exercised during such term only in accordance with the Plan, the terms of this Option Agreement and the Trust Agreement. In the event the Option shall not be exercised within its term, such Option, or such part thereof, shall expire and all interests and rights of the Optionee in and to the same shall terminate.

6. Exercise of Option.

6.1. Right to Exercise. This Option shall be exercisable during its term to the extent vested in accordance with the vesting schedule set out in the Notice of Option Grant and with the applicable provisions of the Plan, this Option Agreement and the Trust Agreement.

6.2. Continuous Engagement Required. Except as otherwise provided in the Notice of Option Grant, this Option may not be exercised unless the Optionee, at the time he exercises this Option is, and has been at all times since the date of grant set out in the Notice of Option Grant engaged by the Company. Transfer between locations of the Company or between the Company, its Subsidiaries or its successor shall not be considered termination of engagement. In case of an approved leave of absence, the vesting of the Option shall be suspended during such leave of absence.

6.3. Method of Exercise. This Option shall be exercised by delivery of a signed notice of exercise substantially in the form attached hereto as Exhibit A (the “Notice of Exercise”), which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and shall be accompanied with such other representations and agreements, as may be required by

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the Company and/or the Trustee. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Notice of Exercise and settlement of payment of the aggregate Exercise Price in such form satisfactory to the Company. The Optionee may purchase less than the number of Shares covered by the vested portion of the Option, provided that no partial exercise of this Option may be for a fraction of a Share.

6.4. Method of Payment; Cashless Exercise. Payment of the aggregate Exercise Price for the purchased Shares shall be made by Optionee’s relinquishment of a portion of his Option having a Fair Market Value equal to the aggregate Exercise Price, so that the Company shall issue to the Optionee only the amount of Shares of the Company having an aggregate Fair Market Value equal to the difference between (x) the aggregate Fair Market Value of the Shares so purchased; and (y) the aggregate Exercise Price applicable for such exercised Options (the “Cashless Exercise”). For the purpose of the Cashless Exercise hereof, the Committee shall determine the Fair Market Value of the Shares in accordance with the provisions of the Plan.

6.5. Notification to Trustee. The Company will notify the Trustee of any exercise of the Option as set forth in the Notice of Exercise. If such notification is delivered during the Lock-Up Period, the Shares issued upon the exercise of the Option shall be issued directly to the Trustee on behalf of the Optionee, and shall be held by the Trustee in trust on behalf of the Optionee, unless the Optionee elects to receive the Shares directly to his possession, pursuant to which the sanctions under Section 102 shall apply and shall be borne solely by the Optionee. In the event such notification is delivered after the Lock-Up Period, the Shares issued upon the exercise of the Option shall be transferred either to the Trustee or to Optionee directly, at the election of Optionee, provided, however, that in the event the Optionee elects to receive the Shares directly to his possession, the transfer thereof shall be subject to the payment of the tax liability by the Optionee.

6.6. Rights as a Shareholder.

(a) Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), the Optionee shall not have any of the rights or privileges granted to a shareholder of the Company with respect to any Shares purchasable upon the exercise of any part of an Option. No adjustment will be made for a dividend or other shareholders’ right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

(b) Except and to the extent otherwise expressly provided herein and in the Plan, the Shares issued upon the exercise of the Option shall be subject to the provisions of the Company’s Articles of Association, as amended from time to time and all Company’s shareholders agreements, as amended from time to time, regardless of whether or not the Optionee is a party to such agreements.

7. Restrictions on Exercise. This Option may not be exercised and no Shares shall be issued pursuant to the exercise unless such exercise, the issuance of the Shares and the method of payment of the Exercise Price comply with applicable laws. This Option shall be subject to

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the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject hereto upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of Shares hereunder, this Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board. The Optionee agrees to cooperate with the Company to ensure compliance with any such condition; provided, however, that nothing herein shall be deemed to require the Company to apply for, effect or obtain such listing, registration, qualification, approval, disclosure, or to satisfy such other condition.

8. Compliance with Laws and Stock Exchange Rules.

8.1. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option or immediately upon the Company’s first demand, deliver to the Company his Investment Representation Statement, in such form as may be prescribed by the Company, that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and shall make such other representations as are deemed necessary or appropriate by the Company or its counsel.

Notwithstanding the above, the Company may, but shall not be obligated to register or qualify the sale of Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Option Agreement to comply with any law.

8.2. Optionee hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration statement of the Company filed under the Securities Act or any other applicable law, Optionee shall not offer, pledge, sell, lend or otherwise transfer or dispose of, directly or indirectly, any Shares (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares (or other securities) of the Company held by Optionee (other than those included in the registration) during the one hundred eighty (180) days period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of any registration statement of the Company filed under the Securities Act or any other applicable law.

Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or, which are necessary to give further effect thereto. In addition, if requested by the Company or the Managing Underwriter, Optionee shall provide, within ten (10) days of such request, such information, as may be required by the Company or such Managing Underwriter in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act or any other applicable law. The Company may impose stop-transfer instructions with respect to the sale of Shares (or other securities) subject to the foregoing restriction until the end of such Market Standoff Period. Optionee agrees that any transferee of the Option or Shares acquired pursuant to the Option shall be bound by this Section.

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8.3. The Optionee hereby acknowledges and agrees that, the Committee may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by an Optionee or other subsequent transfers by the Optionee of any Shares issued as a result of or under the Option, including without limitation, restrictions under an insider trading policy and restrictions pursuant to applicable regulations of any stock exchange on which the Shares may be listed for trading. The Optionee agrees to cooperate with the Company to ensure compliance with any such restrictions, conditions or limitations.

9. Acknowledgment and Waiver. By participating in the Plan, and accepting the grant of the Option, the Optionee agrees and acknowledges that: (i) the Plan is discretionary in nature and all determinations with respect to any future grants, including but not limited to, the times when options shall be granted, the number of Shares subject to each option, the exercise price and the time or times when each right shall be exercisable will be at the sole discretion of the Company, and the Company can amend, cancel, or terminate the Plan at any time; (ii) the grant of the Option under the Plan is voluntary and occasional, and does not create any contractual or other right to receive future grants of any options, or benefits in lieu of the Options even if options have been granted repeatedly in the past; (iii) the Optionee’s participation in the Plan is voluntary; (iv) the value of the Option is an extraordinary item of compensation, which is outside the scope of the Optionee’s employment agreement, if any; (v) the Option is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any social benefits, severance, end of service payments, bonuses, long-service awards, pension or similar payments; (vi) the future value of the Shares purchased under the Plan is unknown and cannot be predicted with certainty, and the Company makes no express or implied promise about the financial gain or loss to be achieved through participation in the Plan; (vii) in the event that Optionee is not a service provider of the Company, this Option grant will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Option grant will not be interpreted to mean that an entity other than the entity that engages the Optionee has relationship with the Optionee; (viii) no claim or entitlement to compensation or damages arises from the expiration of this Option or diminution in value of this Option or Shares purchased through exercise of this Option resulting from termination of Optionee’s engagement with the Company (for any reason whatsoever and whether or not in breach of local labor laws) and Optionee irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the terms of this Option Agreement, Optionee shall be deemed irrevocably to have waived any entitlement to pursue such claim; and (ix) unless there is a written engagement agreement for a specified term in effect, Optionee’s engagement with the Company may be terminated at any time, with or without Cause, by the Company and neither the Plan nor this Option shall obligate the Company to engage Optionee for any particular length of time nor confer any right with respect to continuing the Optionee’s status as a service provider.

10. Tax Consequences. By accepting the grant of the Option, the Optionee acknowledges and agrees that any and all taxes, fees and other liabilities (as may apply from time to time) in connection with the grant and/or exercise and/or release of the Option and the sale and/or release of Shares issued upon the exercise of the Option and/or from any other event or act (whether of the Optionee, the Company, its Subsidiary that engages the Optionee (if applicable) r the Trustee), shall be borne solely by the Optionee, and Optionee will be solely liable for all such taxes, fees and other liabilities. The Company, its Subsidiary that engages the Optionee (if applicable) and/or the Trustee shall withhold taxes according to the

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requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, by executing this Option Agreement the Optionee hereby agrees to indemnify the Company, its Subsidiary that engages the Optionee (if applicable) and the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee.

Except as otherwise required by law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of the Optionee until all tax consequences (if any) arising from the exercise of such Option are resolved in a manner reasonably acceptable to the Company.

11. Legal and Tax Consultation. The Optionee acknowledges that the Company has advised the Optionee to consult his independent tax advisor with respect to legal and tax consequences of the Option, and the Optionee has consulted with any legal or tax advisors that the Optionee deems necessary. Optionee acknowledges that he is not relying on the Company and/or the Trustee for any legal or tax advice, and that the Company and/or the Trustee shall not be deemed to have provided any legal or tax advice to Optionee with respect to the Option.

12. Optionee’s Representations Under Section 102; Indemnification. By accepting the grant of the Option, the Optionee represents and confirms that: (i) Optionee is familiar with the terms and provisions of Section 102, and in particular Section 102(b)(2)- capital gain route, and hereby accepts this Option subject to all of the terms and provisions of Section 102(b)(2) and the Trust Agreement; (ii) in the event any Additional Rights shall be distributed with respect to the Option and/or the Shares, such Additional Rights shall be deposited with the Trustee and shall also be subject to the provisions of Section 102, including the Lock-Up Period; (iii) Optionee shall not sell nor transfer from the Trustee the Options, Shares or any Additional Right distributed to him or her in connection therewith, until the end of the Lock Up Period; (iv) the Trustee shall not be liable for any action or omission taken on his part in connection with the Plan, this Option Agreement and the Trust Agreement, provided that the Trustee acted reasonably and in good faith; and (v) Optionee shall be liable to indemnify the Trustee with respect to any loss, damage or expense caused to the Trustee as a result of or in consequence of performance of its duties as a Trustee, unless arising out of the Trustee own fraud or bad faith.

13. Data Privacy. As a condition of participating in the Plan, Optionee explicitly: (i) consents to the collection, use, processing, and transfer, in electronic or other form, of personal data described in this Section 13 by and among the Company and the Trustee for the exclusive purpose of implementing, administering or managing Optionee’s participation in the Plan; (ii) understands that the Company may hold certain personal information about the Optionee, including but not limited to name, home address and telephone number, date of birth, identification number, salary, nationality, job title, details of all options or any other entitlement to shares awarded, canceled, purchased, or outstanding in the Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”); (iii) understands that Data may be transferred to any third parties assisting the Company in the administration of the Plan; (iv) understands that the recipients of Data may be located within or outside the Optionee’s country of residence, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Optionee’s country of residence; (v) authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering or managing the Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or any subsequent holding of Shares on the Optionee’s behalf to a broker or other third party with whom the Optionee may elect to deposit any Shares acquired pursuant to the Plan; (vi) understands that Data will be held

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only as long as necessary to implement, administer or manage the Optionee’s participation in the Plan; (vii) understands that the Optionee may, at any time, review the Data, require any necessary amendments to Data or withdraw the consents herein in writing by contacting the Company; and (viii) understands that withdrawing the Optionee’s consent may affect the Optionee’s ability to participate in the Plan.

14. Successors and Assigns. The Company may assign any of its rights under this Option Agreement to single or multiple assignees, and this Option Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Option Agreement shall be binding upon Optionee and his heirs, executors, administrators, successors and assigns.

15. Administration. All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option, unless otherwise determined by the Board.

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

17. Entire Agreement; Severability. The Plan and the Trust Agreement are incorporated herein by reference. The Optionee declares and agrees that the Plan, the Trust Agreement and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and/or agreements and/or understanding, whether written or oral, between the Optionee and the Company or the officers and/or directors and/or shareholders thereof with respect to the subject matter hereof, and may not be modified adversely to Optionee’s interest except by means of a writing signed by the Company and Optionee. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the remainder of this Option Agreement will continue in full force and effect.

18. Governing Law; Jurisdiction. This Option Agreement is governed by and construed and enforced in accordance with the laws of the state of Israel without giving effect to the principles of conflict of laws thereof. The competent courts of Tel-Aviv, Israel shall have the sole jurisdiction in any matter pertaining to this Option Agreement.

19. Notices. All notices given under this Option Agreement may be delivered by (a) personal delivery; or (b) registered mail or courier. Notices delivered personally shall be deemed given upon delivery. Notices sent by mail shall be deemed given ten (10) days (or if sent by courier - three (3) days) after mailing (postage prepaid), if mailed in accordance herewith. Until changed by written notice to the Company, the address of the parties shall be as set hereunder.

Optionee acknowledges that he has had the opportunity to review the Plan, the Trust Agreement and this Option Agreement in their entirety and represents that he is familiar with the terms and provisions thereof. By signing this Option Agreement, the Optionee acknowledges that he has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement, he fully understands all provisions of the Plan, the Trust Agreement and this Option Agreement and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Option Agreement or otherwise relating to the Option.

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OPTIONEE:	SAIFUN SEMICONDUCTORS LTD.
Signature	By
Print Name	Title
Residence Address

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EX-10.3(E)

Exhibit 10.3(e)

SAIFUN SEMICONDUCTORS LTD.

2003 SHARE OPTION PLAN

SHARE OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2003 Share Option Plan, as amended from time to time (the “Plan”) of Saifun Semiconductors Ltd. shall have the same defined meanings in this Share Option Agreement (the “Option Agreement”). Except where the context otherwise requires, the term “Company” shall include Saifun Semiconductors Ltd. and its Subsidiaries, if applicable.

I. NOTICE OF OPTION GRANT

1.      Name:	____________________________ (the “Optionee”)
Address:	____________________________
	____________________________

2. The undersigned Optionee has been granted an Option to purchase Ordinary Shares, par value NIS 0.01, of Saifun Semiconductors Ltd., subject to the terms and conditions of the Plan, this Option Agreement and Section 102 of the Israeli Income Tax Ordinance (New Version), 1961 (the “Tax Ordinance”) and any regulations, rules or orders promulgated thereunder, including the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003, all as amended from time to time (collectively, “Section 102”), as follows:

Date of Grant	____________________________
Vesting Commencement Date	____________________________
Exercise Price per Share	____________________________
Total Number of Shares Granted	____________________________
Type of Option	Section 102(b)(2) Option - Capital Route
Term/Expiration Date	10 years following the Date of Grant

3. Vesting Schedule

This Option shall become exercisable in number of whole Shares, in equal annual installments over a period of five (5) years following the Vesting Commencement Date (i.e. 20% of the Shares subject to the Option shall vest upon the first, second, third, forth and fifth anniversaries of the Vesting Commencement Date), subject to the Optionee’s continuous engagement with the Company during such time. In no event shall the Option vest and become exercisable for any additional Shares following Optionee’s cessation of engagement with the Company.

4. Provisions for Termination

In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

In the event that Optionee’s engagement with the Company should terminate, the outstanding vested Options on the date of such termination, shall be exercisable for (i) three (3) months after such termination (except in the case of termination by reason of death or Disability); or (ii) six (6) months after such termination by reason of Optionee’s death or Disability. Notwithstanding the foregoing, in the event of Optionee’s death within three (3) months after the date of termination, the Optionee’s estate or heirs, as applicable, may exercise all Options, which are vested and exercisable at the time of Optionee’s termination of engagement, within six (6) months after the Optionee’s death, but in no event after the Expiration Date as provided above.

Notwithstanding the above, in the event that Optionee’s engagement with the Company should terminate for Cause, the entire unexercised Option (whether vested or not) shall ipso facto terminate.

For purposes hereof, termination of Optionee’s engagement shall be deemed effective as detailed in Section 10.5 of the Plan.

II. AGREEMENT

1. Preamble. The above notice of option grant (the “Notice of Option Grant”) constitutes an integral part of this Option Agreement.

2. Grant of Option.

2.1. Subject to the terms and conditions set forth herein, in the Plan and in the Notice of Option Grant, the Company hereby issues to the Trustee (as defined below), for the benefit of the Optionee named in the Notice of Option Grant, an option qualified as “Section 102(b)(2) Option” (the “Option”) to purchase the number of Shares set forth in the Notice of Option Grant, at the exercise price per Share set forth in the Notice of Option Grant (the “Exercise Price”).

2.2. The Plan, as approved by the Company for use by the Company, is intended to qualify as an Employee Option Plan within the meaning of Section 102. The grant of the Option is made pursuant to: (a) Section 102 and any tax officer’s approval issued pursuant thereto; and (b) the Trust Agreement (as defined below).

2.3. The Option is granted pursuant to the Plan, and the said Option and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions whether such terms and provisions are incorporated in this Option Agreement solely by reference or are expressly cited herein. Any interpretation of this Option Agreement will be made in accordance with the Plan. Subject to Section 16.2 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms of this Option Agreement, the terms and conditions of the Plan shall prevail, except and to the extent otherwise expressly provided herein. Notwithstanding the foregoing, in the event of a conflict between the terms and conditions of the Plan or of this Option Agreement and any provision of Section 102, the Trust Agreement or any applicable law, the latter shall govern and prevail.

3. Issuance to Trustee and Lock-Up Period.

3.1. Issuance to Trustee. The Company appointed a trustee, in accordance with the provisions of Section 102 (the “Trustee”) and has entered into a trust agreement with the Trustee (the “Trust Agreement”). Under the conditions of Section 102(b)(2), the Option and any Shares to be issued upon exercise of the Option shall be issued to the Trustee and held in trust for the benefit of Optionee for a period of no less than the lesser of (a) 30 months, or (b) twenty-four (24) months from the end of the tax year in which the Notice of Option Grant was deposited with the Trustee (the “Lock-Up Period”), provided that options granted after January 1, 2006 are only subject to being held in trust for two years.

3.2. Lock-Up Period. In order for the tax benefits of Section 102(b)(2) to apply, during the Lock-Up Period, neither the Option nor the Shares to be issued upon exercise of the Option, as the case may be, may be sold or transferred (other than through a transfer by will or by operation of law), nor may they be the subject of an attachment or security interest, and no power of attorney or transfer deed shall be given in respect thereof prior to the payment of the tax liability.

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In the event that Optionee elects to exercise his Option during the Lock-Up Period, the Company shall provide the Trustee with the share certificate in the name of the Trustee, for the benefit of Optionee, in order that the Trustee will hold it until no sooner than the end of the Lock-Up Period.

Notwithstanding the above, in the event the Optionee shall elect to release the Option and/or the Shares, as the case may be, prior to the conclusion of the Lock-up Period, the sanctions under Section 102 shall apply to and shall be borne solely by the Optionee.

3.3. End of Lock-Up Period. Upon the conclusion of the Lock-Up Period and subject to any further period included in the Plan and/or herein, the Trustee may release the Option and/or the Shares issued upon exercise of such Option to Optionee only after (i) the receipt by the Trustee of an acknowledgment from the income tax authority that Optionee has paid any applicable tax due pursuant to Section 102 and the Tax Ordinance, or (ii) the Trustee withholds any applicable tax due pursuant to Section 102 and the Tax Ordinance.

3.4. Additional Rights. In the event of a distribution of rights, including an issuance of bonus shares, in connection with the Option and/or Shares issued upon exercise of such Option (the “Additional Rights”), all such Additional Rights shall be deposited with and/or issued to the Trustee for the benefit of the Optionee, and shall be held by the Trustee and treated in accordance with the provisions of Section 102 and the capital gain tax route.

4. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

5. Term of Option. This Option may be exercised only within the term set out in the Notice of Option Grant, and may be exercised during such term only in accordance with the Plan, the terms of this Option Agreement and the Trust Agreement. In the event the Option shall not be exercised within its term, such Option, or such part thereof, shall expire and all interests and rights of the Optionee in and to the same shall terminate.

6. Exercise of Option.

6.1. Right to Exercise. This Option shall be exercisable during its term to the extent vested in accordance with the vesting schedule set out in the Notice of Option Grant and with the applicable provisions of the Plan, this Option Agreement and the Trust Agreement.

6.2. Continuous Engagement Required. Except as otherwise provided in the Notice of Option Grant, this Option may not be exercised unless the Optionee, at the time he exercises this Option is, and has been at all times since the date of grant set out in the Notice of Option Grant engaged by the Company. Transfer between locations of the Company or between the Company, its Subsidiaries or its successor shall not be considered termination of engagement. In case of an approved leave of absence, the vesting of the Option shall be suspended during such leave of absence.

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6.3. Method of Exercise. This Option shall be exercised by delivery of a signed notice of exercise substantially in the form attached hereto as Exhibit A (the “Notice of Exercise”), which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and shall be accompanied with such other representations and agreements, as may be required by the Company and/or the Trustee. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Notice of Exercise and settlement of payment of the aggregate Exercise Price in such form satisfactory to the Company. The Optionee may purchase less than the number of Shares covered by the vested portion of the Option, provided that no partial exercise of this Option may be for a fraction of a Share.

6.4. Method of Payment; Cashless Exercise. Payment of the aggregate Exercise Price for the purchased Shares shall be made by Optionee’s relinquishment of a portion of his Option having a Fair Market Value equal to the aggregate Exercise Price, so that the Company shall issue to the Optionee only the amount of Shares of the Company having an aggregate Fair Market Value equal to the difference between (x) the aggregate Fair Market Value of the Shares so purchased; and (y) the aggregate Exercise Price applicable for such exercised Options (the “Cashless Exercise”). For the purpose of the Cashless Exercise hereof, the Committee shall determine the Fair Market Value of the Shares in accordance with the provisions of the Plan.

6.5. Notification to Trustee. The Company will notify the Trustee of any exercise of the Option as set forth in the Notice of Exercise. If such notification is delivered during the Lock-Up Period, the Shares issued upon the exercise of the Option shall be issued directly to the Trustee on behalf of the Optionee, and shall be held by the Trustee in trust on behalf of the Optionee, unless the Optionee elects to receive the Shares directly to his possession, pursuant to which the sanctions under Section 102 shall apply and shall be borne solely by the Optionee. In the event such notification is delivered after the Lock-Up Period, the Shares issued upon the exercise of the Option shall be transferred either to the Trustee or to Optionee directly, at the election of Optionee, provided, however, that in the event the Optionee elects to receive the Shares directly to his possession, the transfer thereof shall be subject to the payment of the tax liability by the Optionee.

6.6. Rights as a Shareholder.

(a) Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), the Optionee shall not have any of the rights or privileges granted to a shareholder of the Company with respect to any Shares purchasable upon the exercise of any part of an Option. No adjustment will be made for a dividend or other shareholders’ right for which the record date is prior to the date the Shares are issued, except as provided in Section 12 of the Plan.

(b) Except and to the extent otherwise expressly provided herein and in the Plan, the Shares issued upon the exercise of the Option shall be subject to the provisions of the Company’s Articles of Association, as amended from time to time and all Company’s shareholders agreements, as amended from time to time, regardless of whether or not the Optionee is a party to such agreements.

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7. Restrictions on Exercise. This Option may not be exercised and no Shares shall be issued pursuant to the exercise unless such exercise, the issuance of the Shares and the method of payment of the Exercise Price comply with applicable laws. This Option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the Shares subject hereto upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the issuance or purchase of Shares hereunder, this Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, disclosure or satisfaction of such other condition shall have been effected or obtained on terms acceptable to the Board. The Optionee agrees to cooperate with the Company to ensure compliance with any such condition; provided, however, that nothing herein shall be deemed to require the Company to apply for, effect or obtain such listing, registration, qualification, approval, disclosure, or to satisfy such other condition.

8. Compliance with Laws and Stock Exchange Rules.

8.1. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option or immediately upon the Company’s first demand, deliver to the Company his Investment Representation Statement, in such form as may be prescribed by the Company, that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares, and shall make such other representations as are deemed necessary or appropriate by the Company or its counsel.

Notwithstanding the above, the Company may, but shall not be obligated to register or qualify the sale of Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Option Agreement to comply with any law.

8.2. Optionee hereby agrees that, if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration statement of the Company filed under the Securities Act or any other applicable law, Optionee shall not offer, pledge, sell, lend or otherwise transfer or dispose of, directly or indirectly, any Shares (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares (or other securities) of the Company held by Optionee (other than those included in the registration) during the one hundred eighty (180) days period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of any registration statement of the Company filed under the Securities Act or any other applicable law.

Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or, which are necessary to give further effect thereto. In addition, if requested by the Company or the Managing Underwriter, Optionee shall provide, within ten (10) days of such request, such information, as may be required by the Company or such Managing Underwriter in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act or any other applicable law. The Company may

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impose stop-transfer instructions with respect to the sale of Shares (or other securities) subject to the foregoing restriction until the end of such Market Standoff Period. Optionee agrees that any transferee of the Option or Shares acquired pursuant to the Option shall be bound by this Section.

8.3. The Optionee hereby acknowledges and agrees that, the Committee may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by an Optionee or other subsequent transfers by the Optionee of any Shares issued as a result of or under the Option, including without limitation, restrictions under an insider trading policy and restrictions pursuant to applicable regulations of any stock exchange on which the Shares may be listed for trading. The Optionee agrees to cooperate with the Company to ensure compliance with any such restrictions, conditions or limitations.

9. Acknowledgment and Waiver. By participating in the Plan, and accepting the grant of the Option, the Optionee agrees and acknowledges that: (i) the Plan is discretionary in nature and all determinations with respect to any future grants, including but not limited to, the times when options shall be granted, the number of Shares subject to each option, the exercise price and the time or times when each right shall be exercisable will be at the sole discretion of the Company, and the Company can amend, cancel, or terminate the Plan at any time; (ii) the grant of the Option under the Plan is voluntary and occasional, and does not create any contractual or other right to receive future grants of any options, or benefits in lieu of the Options even if options have been granted repeatedly in the past; (iii) the Optionee’s participation in the Plan is voluntary; (iv) the value of the Option is an extraordinary item of compensation, which is outside the scope of the Optionee’s employment agreement, if any; (v) the Option is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any social benefits, severance, end of service payments, bonuses, long-service awards, pension or similar payments; (vi) the future value of the Shares purchased under the Plan is unknown and cannot be predicted with certainty, and the Company makes no express or implied promise about the financial gain or loss to be achieved through participation in the Plan; (vii) in the event that Optionee is not a service provider of the Company, this Option grant will not be interpreted to form an employment contract or relationship with the Company, and furthermore, this Option grant will not be interpreted to mean that an entity other than the entity that engages the Optionee has relationship with the Optionee; (viii) no claim or entitlement to compensation or damages arises from the expiration of this Option or diminution in value of this Option or Shares purchased through exercise of this Option resulting from termination of Optionee’s engagement with the Company (for any reason whatsoever and whether or not in breach of local labor laws) and Optionee irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the terms of this Option Agreement, Optionee shall be deemed irrevocably to have waived any entitlement to pursue such claim; and (ix) unless there is a written engagement agreement for a specified term in effect, Optionee’s engagement with the Company may be terminated at any time, with or without Cause, by the Company and neither the Plan nor this Option shall obligate the Company to engage Optionee for any particular length of time nor confer any right with respect to continuing the Optionee’s status as a service provider.

10. Tax Consequences. By accepting the grant of the Option, the Optionee acknowledges and agrees that any and all taxes, fees and other liabilities (as may apply from time to time) in connection with the grant and/or exercise and/or release of the Option and the sale and/or release of Shares issued upon the exercise of the Option and/or from any other event or act (whether of the Optionee, the Company, its Subsidiary that engages the Optionee (if applicable) r the Trustee), shall be borne solely by the Optionee, and Optionee will be solely

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liable for all such taxes, fees and other liabilities. The Company, its Subsidiary that engages the Optionee (if applicable) and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, by executing this Option Agreement the Optionee hereby agrees to indemnify the Company, its Subsidiary that engages the Optionee (if applicable) and the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee.

Except as otherwise required by law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of the Optionee until all tax consequences (if any) arising from the exercise of such Option are resolved in a manner reasonably acceptable to the Company.

11. Legal and Tax Consultation. The Optionee acknowledges that the Company has advised the Optionee to consult his independent tax advisor with respect to legal and tax consequences of the Option, and the Optionee has consulted with any legal or tax advisors that the Optionee deems necessary. Optionee acknowledges that he is not relying on the Company and/or the Trustee for any legal or tax advice, and that the Company and/or the Trustee shall not be deemed to have provided any legal or tax advice to Optionee with respect to the Option.

12. Optionee’s Representations Under Section 102; Indemnification. By accepting the grant of the Option, the Optionee represents and confirms that: (i) Optionee is familiar with the terms and provisions of Section 102, and in particular Section 102(b)(2)- capital gain route, and hereby accepts this Option subject to all of the terms and provisions of Section 102(b)(2) and the Trust Agreement; (ii) in the event any Additional Rights shall be distributed with respect to the Option and/or the Shares, such Additional Rights shall be deposited with the Trustee and shall also be subject to the provisions of Section 102, including the Lock-Up Period; (iii) Optionee shall not sell nor transfer from the Trustee the Options, Shares or any Additional Right distributed to him or her in connection therewith, until the end of the Lock Up Period; (iv) the Trustee shall not be liable for any action or omission taken on his part in connection with the Plan, this Option Agreement and the Trust Agreement, provided that the Trustee acted reasonably and in good faith; and (v) Optionee shall be liable to indemnify the Trustee with respect to any loss, damage or expense caused to the Trustee as a result of or in consequence of performance of its duties as a Trustee, unless arising out of the Trustee own fraud or bad faith.

13. Data Privacy. As a condition of participating in the Plan, Optionee explicitly: (i) consents to the collection, use, processing, and transfer, in electronic or other form, of personal data described in this Section 13 by and among the Company and the Trustee for the exclusive purpose of implementing, administering or managing Optionee’s participation in the Plan; (ii) understands that the Company may hold certain personal information about the Optionee, including but not limited to name, home address and telephone number, date of birth, identification number, salary, nationality, job title, details of all options or any other entitlement to shares awarded, canceled, purchased, or outstanding in the Optionee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”); (iii) understands that Data may be transferred to any third parties assisting the Company in the administration of the Plan; (iv) understands that the recipients of Data may be located within or outside the Optionee’s country of residence, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Optionee’s country of residence; (v) authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering or managing the Optionee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or any subsequent holding of Shares on

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the Optionee’s behalf to a broker or other third party with whom the Optionee may elect to deposit any Shares acquired pursuant to the Plan; (vi) understands that Data will be held only as long as necessary to implement, administer or manage the Optionee’s participation in the Plan; (vii) understands that the Optionee may, at any time, review the Data, require any necessary amendments to Data or withdraw the consents herein in writing by contacting the Company; and (viii) understands that withdrawing the Optionee’s consent may affect the Optionee’s ability to participate in the Plan.

14. Successors and Assigns. The Company may assign any of its rights under this Option Agreement to single or multiple assignees, and this Option Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Option Agreement shall be binding upon Optionee and his heirs, executors, administrators, successors and assigns.

15. Administration. All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option, unless otherwise determined by the Board.

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

17. Entire Agreement; Severability. The Plan and the Trust Agreement are incorporated herein by reference. The Optionee declares and agrees that the Plan, the Trust Agreement and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and/or agreements and/or understanding, whether written or oral, between the Optionee and the Company or the officers and/or directors and/or shareholders thereof with respect to the subject matter hereof, and may not be modified adversely to Optionee’s interest except by means of a writing signed by the Company and Optionee. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, the remainder of this Option Agreement will continue in full force and effect.

18. Governing Law; Jurisdiction. This Option Agreement is governed by and construed and enforced in accordance with the laws of the state of Israel without giving effect to the principles of conflict of laws thereof. The competent courts of Tel-Aviv, Israel shall have the sole jurisdiction in any matter pertaining to this Option Agreement.

19. Notices. All notices given under this Option Agreement may be delivered by (a) personal delivery; or (b) registered mail or courier. Notices delivered personally shall be deemed given upon delivery. Notices sent by mail shall be deemed given ten (10) days (or if sent by courier - three (3) days) after mailing (postage prepaid), if mailed in accordance herewith. Until changed by written notice to the Company, the address of the parties shall be as set hereunder.

Optionee acknowledges that he has had the opportunity to review the Plan, the Trust Agreement and this Option Agreement in their entirety and represents that he is familiar with the terms and provisions thereof. By signing this Option Agreement, the Optionee acknowledges that he has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement, he fully understands all provisions of the Plan, the Trust Agreement and this Option Agreement and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Option Agreement or otherwise relating to the Option.

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OPTIONEE:	SAIFUN SEMICONDUCTORS LTD.
Signature	By
Print Name	Title
Residence Address

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EX-23.1

Exhibit 23.1

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Saifun Semiconductors Ltd. 1997 Share Option Plan, Saifun Semiconductors Ltd. 2001 Share Option Plan, and Saifun Semiconductors Ltd. 2003 Share Option Plan of our reports dated February 27, 2008, with respect to the consolidated financial statements of Spansion Inc. included in its Annual Report (Form 10-K) for the year ended December 30, 2007, and the effectiveness of internal control over financial reporting of Spansion Inc. filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

San Jose, California

March 27, 2008

EX-99.1

Exhibit 99.1

SAIFUN SEMICONDUCTORS LTD

SHARE OPTION PLAN (1997)

A. NAME AND PURPOSE

1. Name: This plan, as amended from time to time, shall be known as the Saifun Semiconductors Ltd. Employee Share Option Plan (1997) (the “Plan”).

2. Purpose: The purpose and intent of the Plan is to provide incentives to employees of Saifun Semiconductors Ltd. (the “Company”), by providing them with opportunities to purchase shares in the Company, pursuant to the Plan that was approved by the Board of Directors of the Company.

B. GENERAL TERMS AND CONDITIONS OF THE PLAN

3. Administration:

3.1 The Plan will be administered by a Share Option Committee (the “Committee”), which will consist of such number of Directors of the Company (not less than two 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.

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

3.3 Subject to the general terms and conditions of this Plan, the Committee shall have full authority in its discretion, from time to time and at any time, to determine (i) the persons to whom Option Awards (as hereinafter defined) shall be granted (“Grantees”), (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’s salary and the duration of the Grantee’s employment by the Company.

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

3.5 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.

4. Eligible Grantees:

Subject to this limitation and any restriction imposed by applicable law, Option Awards may be granted to any officer, key employee or other employee of the Company, whether or not a Director of the Company. The grant of an Option Award to a Grantee hereunder, shall neither entitle such Grantee to participate, nor disqualify him from participating, in any other grant of options pursuant to this Plan or any other share incentive or share option plan of the Company or any of its related companies.

5. Trustee: The Option Awards and/or shares in the Company which will be issued upon the exercise of the Option Awards may be held in trust, by Advocate Doron Latzer, of A. Tally Eitan Zeev Pearl, D. Latzer & Co. as trustee (the “Trustee”). The Trustee shall hold the same pursuant to the Company’s instructions from time to time. The Trustee shall not use the voting rights vested in such shares, unless it is instructed to do so in writing by any of the Grantees. In such event, the Trustee shall use the voting rights vested in the Grantee’s shares according to the majority vote of the ordinary shareholders, in that Company’s shareholders meeting.

6. Reserved Shares: The Company has reserved 260,000 authorized but unissued ordinary shares (nominal value NIS 0.01 per share) of the Company 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.

7. Option Awards:

7.1 The Committee in its discretion may award to Grantees options to purchase shares in the Company available under the Plan (“Option Awards”). The Plan is intended to be a Section 102 Employee Option Plan within the meaning of the Israel Income Tax Ordinance (New Version). Option Awards may be granted at any time after this Plan has been approved by the Board of Directors of the Company (or prior to this Plan being so approved, provided that the grant of such Option Awards is made subject to such approval) and the shares reserved for the Plan have been effectively created. The date of grant of each Option Award shall be the date specified by the Committee at the time such award is made.

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7.2 The instrument granting an Option Award shall state, inter alia, the number of shares covered thereby, the dates when it may be exercised (subject to paragraph 9.1), the exercise price, the schedule on which such shares may be paid for and such other terms and conditions as the Committee in its discretion may prescribe, provided that they are consistent with this Plan.

8. Option Prices: The price per share covered by each Option Award shall be determined by the Committee on the date of grant.

9. Exercise of Option Award:

9.1 Option Awards shall be exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions of this Plan; provided, however, that in no event shall an Option Award be exercisable after the expiration of ten (10) years from the date such Option Award is granted.

9.2 An Option Award, or any part thereof, shall be exercisable by the Grantee’s signing and returning to the Company at its principal office (and to the Trustee, where applicable), a “Notice of Exercise” in such form and substance as may be prescribed by the Committee from time to time.

9.3 Notwithstanding anything herein to the contrary, 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 paragraph 7), 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, and, in the event that in connection therewith any shares are held in trust as aforesaid, such trust shall expire and the Trustee shall thereafter hold such shares in an unallocated pool until instructed by the Company that some or all of such shares are again to be held in trust for one or more Grantees.

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

10. Termination of Employment:

10.1 In General: Subject to the provisions of paragraph 10.2 hereof, if a Grantee should, for any reason, cease to be employed by the Company, all of his rights, if any, in respect of all Option Awards granted to him under the Plan, other than those which are exercisable at the date of cessation of employment or may be exercised within four weeks of cessation of employment, shall terminate, and all of his rights in respect of Option Awards which are exercisable at the date of

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cessation of employment or may be exercised within four weeks of cessation of employment and which are not exercised within four weeks of cessation of employment, shall terminate upon the expiration of such four-week period. In the event of resignation or discharge of a Grantee from the employ of the Company or a related company thereof, his or her employment shall, for the purposes of this paragraph 10.1, be deemed to have ceased upon the delivery to the employee of notice of discharge, as the case may be, irrespective of the effective date of such resignation or discharge. In the event the employment of a Grantee is terminated by the Company for cause, such Grantee shall not be entitled to exercise the Option Awards subsequent to the time of delivery of the notice of discharge.

10.2 Death, Disability, Retirement: Notwithstanding anything herein to the contrary, if a Grantee should die, or if a Grantee is unable to continue to be employed by the Company by reason of becoming incapacitated while in the employ of the Company as a result of an accident or illness or other cause which is approved by the Committee, or if a Grantee should retire, such Grantee shall, subject to approval of the Committee (which shall not be unreasonably withheld), continue to enjoy rights under the Plan on such terms and conditions as the Committee in its discretion may determine.

11. Adjustments: Upon the happening of any of the following described events, a Grantee’s rights to purchase shares under the Plan shall be adjusted as hereinafter provided.

11.1 In the event that the ordinary shares of the Company are subdivided or combined into a greater or smaller number of shares or if, upon a merger, consolidation, reorganization, recapitalization or the like, the ordinary shares of the Company are exchanged for other securities of the Company or of another corporation, each Grantee shall be entitled, subject to the conditions herein stated, to purchase such number of ordinary shares or amount of other securities of the Company or such other corporation as were exchangeable for the number of ordinary shares of the Company which such Grantee would have been entitled to purchase except for such action, and appropriate adjustments shall be made in the purchase price per share to reflect such subdivision, combination or exchange.

11.2 In the event that the Company issues any of its ordinary shares or other securities as bonus shares upon or with respect to any shares which are at the time subject to a right of purchase by a Grantee hereunder, each Grantee upon exercising such right shall be entitled to receive (if he so elects), in addition to the shares as to which he is exercising such right, the appropriate number of bonus shares, on the same terms and conditions as offered to the other shareholders, which he would have received had he been the holder of the shares as to which he is exercising his right at all times between the date of the granting of such right and the date of its exercise.

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11.3 Upon the happening of any of the foregoing events, the class and aggregate number of ordinary shares issuable pursuant to the Plan (as set forth in paragraph 6 hereof), in respect of which Option Awards have not yet been granted, shall also be appropriately adjusted to reflect the events specified in paragraphs 11.1 and 11.2 above.

11.4 The Committee shall determine the specific adjustments to be made under this paragraph 11, and its determination shall be conclusive.

12. Assignability and Sale of Shares:

12.1 No shares purchasable hereunder which were not fully paid for, shall be assignable or transferable by the Grantee. For avoidance of doubt, the foregoing shall not be deemed to restrict the transfer of a Grantee’s rights in respect of Option Awards or shares purchasable pursuant to the exercise thereof upon the death of such Grantee to his estate or other successors by operation of law or will, whose rights therein shall be governed by paragraph 10.2 hereof.

12.2 No Option Award may be transferred other than by will or by the laws of descent and distribution, and during the Grantee’s lifetime an Option Award may be exercised only by him.

13. Securities Act of 1933; Israel Securities Law, 1967: By his exercise of an Option Award hereunder, the Grantee agrees not to sell, transfer or otherwise dispose of any of the shares so purchased by him except in compliance with the United States Securities Act of 1933, as amended, and the rules and regulations thereunder and the Grantee further agrees that all certificates evidencing any of such shares shall be appropriately legend to reflect such restriction. The Company does not obligate itself to register any shares under the United States Securities Act of 1933, as amended. However, the securities being offered and/or issued hereby have been issued in compliance with the Israel Securities Law, 1967.

14. Term and Amendment of the Plan:

14.1 The Plan was adopted by the Board of Directors of the Company on February 17, 1997, and shall expire on February 16, 2002 (except as to Option Awards outstanding on that date).

14.2 The Board of Directors may, at any time and from time to time, terminate or amend the Plan in any respect except that, without the prior approval of the shareholders of the Company: (i) the total number of ordinary shares which may be issued under the Plan may not be increased (except by adjustment pursuant to paragraph 11 hereof) and (ii) the provisions of paragraph 4 regarding eligibility may not be modified. In no event may any action of the Company alter or impair the rights of a Grantee, without his consent, under any Option Award previously granted to him.

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15. Continuance of Employment: Neither the Plan nor the Agreement shall impose any obligation on the Company or a related company thereof, to continue any Grantee in its employ, 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 of the Company or a related company thereof or restrict the right of the Company or a related company thereof to terminate such employment at any time.

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

17. Application of Funds: 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 related company thereof.

18. Tax Consequences: 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 Grantee or the corporation that employs the Grantee) hereunder, shall be borne solely by the Grantee. Furthermore, the Grantee shall agree to indemnify the corporation that employs the Grantee and the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Grantee.

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EX-99.2

Exhibit 99.2

SAIFUN SEMICONDUCTORS LTD.

(THE “COMPANY”)

2001 SHARE OPTION PLAN

1. NAME

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

2. PURPOSE

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

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

3. ADMINISTRATION

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

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

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

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3.4 The Committee shall fulfill only ADVISORY tasks with respect to designating participants (“GRANTEES”). Without derogating from the foregoing, the Committee shall be authorized to issue shares underlying Options, which have been granted by the Board and duly exercised pursuant to the provisions hereof, all in accordance with section 112(a)(5) of the Israeli Companies Law.

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

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

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

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

4. ELIGIBLE GRANTEES

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

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

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

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5. RESERVED SHARES

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

6. OPTION AWARDS

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

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

7. OPTION EXERCISE PRICE

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

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

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

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

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

8. TRUSTEE AND APPLICATION OF SECTION 102 OF THE ORDINANCE

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

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

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

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

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

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

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

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

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

9. TERM AND EXERCISE OF OPTIONS

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

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

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

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

9.4 Notwithstanding anything herein to the contrary, but without derogating from the provisions of Section 10 hereof, if any Option, or any part thereof, has not been exercised and the Shares covered thereby not paid for within ten (10) years after the Granting Date (or any other period set forth in the Option Agreement), such Option, or such part thereof, and the right to acquire such Shares shall terminate, all interests and rights of the Grantee in and to the same shall expire, and, in the event that in connection therewith any Shares are held in trust as aforesaid, such trust shall expire and the Trustee shall thereafter hold such Shares in an unallocated pool until instructed by the Company that some or all of such Shares are again to be held in trust for one or more Grantees.

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

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

10. TERMINATION OF EMPLOYMENT

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

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

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

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

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

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

11. ADJUSTMENTS

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

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

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

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

For purposes of this paragraph, the Option shall be considered assumed or substituted if, following the Transaction, the Option receives the right to purchase or receive, for each Share subject to an Option, the consideration (whether shares, cash, or other securities or property) received in the Transaction by holders of Shares of the Company on the effective date of the Transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration is not solely shares of the common stock (or their equivalent) of the surviving entity or its parent or subsidiary, the Committee may, with the consent of the surviving entity, provide for each Grantee to receive solely shares of the common stock (or their equivalent) of the surviving entity or its parent or subsidiary equal in fair market value to the per Share consideration received by holders of Shares in the Transaction.

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

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

12. CHANGE IN CONTROL

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

(i) IPO;

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

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

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

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

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

13. NON-TRANSFERABILITY OF OPTIONS

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

14. RIGHT OF FIRST REFUSAL

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

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

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

16. TERM AND AMENDMENT OF THE PLAN

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

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16.2 The Board of Directors may, at any time and from time to time, terminate or amend the Plan in any respect. In no event may any action of the Company alter or impair the rights of a Grantee, without his consent, under any Option previously granted to him.

17. CONTINUANCE OF EMPLOYMENT

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

18. GOVERNING LAW

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

19. TAX CONSEQUENCES

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

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EX-99.3

Exhibit 99.3

SAIFUN SEMICONDUCTORS LTD.

2003 SHARE OPTION PLAN

(As Amended and Restated Effective March 18, 2008)

Effective March 18, 2008, the Saifun Semiconductors Ltd. 2003 Share Option Plan (the “Plan”) and the outstanding Awards under the Plan as of that date were assumed by Spansion Inc., a Delaware corporation (“Spansion”), pursuant to the Agreement and Plan of Merger and Reorganization dated as of October 7, 2007 and amended as of December 12, 2007 by and among Spansion and Saifun Semiconductors Ltd, an Israeli company (“Merger Agreement”). As of such date, all references in the Plan to the “Company” shall be references to Spansion, all references in the Plan to “Shares” shall be references to the common stock of Spansion, and all share limits set forth in the Plan shall be adjusted in accordance with the exchange ratios applicable to outstanding awards under the Plan set forth in the Merger Agreement.

A. NAME, PURPOSE AND DEFINITIONS

1. Name:

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

2. Purpose; Definitions:

2.1. The purpose and intent of the Plan is:

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

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

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

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

2.2.1. “Annual Award Limit” has the meaning ascribed to it in Section 6.2.

2.2.2. “Award” means a right granted under the Plan to an Optionee, Recipient or Purchaser, as applicable, by the Company, which may be in the form of Options, Restricted Stock Units or Restricted Stock.

2.2.3. “Award Agreement” means an agreement, in written or electronic format, in a form determined by the Committee between the Company and an Optionee, Purchaser or Recipient evidencing terms and conditions consistent with the Plan that are applicable to Awards under the Plan to such Optionee, Purchaser or Recipient.

2.2.4. “Board” means the Board of Directors of the Company.

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

2.2.6. “Chair” means a member of the Committee designated as chairperson, as set forth in Section 3.2.

2.2.7. “Change in Control” means any of the following shareholder-approved transactions to which the Company is a party:

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

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

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

2.2.8. “Code” means the Internal Revenue Code of 1986, as amended.

2.2.9. “Committee” means the committee, if any, appointed by the Board to administer the Plan in accordance with Section 3.1.

2.2.10. “Company” means Spansion Inc., a Delaware Corporation.

2.2.11. “Controlling Shareholder” has the same meaning ascribed to it in Section 32(9) of the Israeli Income Tax Ordinance, as amended (“Tax Ordinance”).

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

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2.2.13. “Exercise Price” means the purchase price per share for the Shares underlying the Option or the Stock Award Right, as applicable, as set forth in the Option Agreement, or in the Restricted Stock Award Agreement, as applicable.

2.2.14. “Fair Market Value” means, as of any date, the value of a Share determined as follows:

(a) the closing price of a Share on the NASDAQ or a successor quotation system on such date, or if Shares were not traded on such date, then on the trading date immediately preceding such date, as reported on NASDAQ or a successor quotation system, or

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

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

2.2.15. “Independent Director” means a member of the Board who is not an employee of the Company.

2.2.16. “ISO” means an Option intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

2.2.17. “Lock-up Period” with respect to a Section 102(b) Option and/or Restricted Stock, means the period during which the Trustee shall be required to hold such Option and/or any Shares issued upon exercise or vesting thereof and/or any Restricted Stock in trust for the benefit of the Participant, in accordance with Section 102, and pursuant to the tax route which the Company elects.

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

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

2.2.20. “Optionee” means a person who has been granted an Option under the Plan.

2.2.21. “Other Section 102 Option” means an Option and/or Restricted Stock granted under the terms of Section 102 of the Tax Ordinance, excluding Section 102(b) Options.

2.2.22. “Participant” means an Optionee, Recipient or a Purchaser, as applicable.

2.2.23. “Public Trading Date” means the first date upon which Shares are listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

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2.2.24. “Purchaser” means a person who has been granted Restricted Stock in accordance with Section 11 below and the provisions of his or her Restricted Stock Award Agreement.

2.2.25. “Recipient” means a person who has been granted Restricted Stock Units under the Plan.

2.2.26. “Restricted Stock” means ordinary shares acquired by a Purchaser in accordance with Section 11 of the Plan subject to restrictions on transfer and/or the right of repurchase by and to the Purchaser, as described in Section 11. Restricted Stock shall cease to be Restricted Stock at the time that such restrictions and risks of forfeiture lapse in accordance with the terms of the Restricted Stock Award Agreement or the Plan.

2.2.27. “Restricted Stock Unit” represents a promise by the Company of a share of stock after all applicable restrictions, including vesting restrictions, are met.

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

2.2.29. “Section 3(i)” means that certain Section 3(i) of the Tax Ordinance, as amended.

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

2.2.31. “Section 3(i) Option” means an Option granted under the terms of Section 3(i).

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

2.2.33. “Section 102(b) Award” means an Award intended to qualify, under the provisions of Section 102(b) of the Tax Ordinance (including the Section 102(b) Route Election), as either a:

(a) “Section 102(b)(1) Award” for the special tax management under the “Ordinary Income Route,” or

(b) “Section 102(b)(2) Award” for the special tax management under the “Capital Route.”

2.2.34. “Share” means the ordinary share, par value USD $0.01, of the Company.

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

2.2.36. “Tax Ordinance” means the Israeli Income Tax Ordinance (New Version), 1961, as amended.

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

2.2.38. “Trust Agreement” means a written agreement between the Company and the Trustee, which sets forth the terms and conditions of the trust and is in accordance with the provisions of Section 102.

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

B. GENERAL TERMS AND CONDITIONS OF THE PLAN

3. Administration:

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

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

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

3.3. Subject to the general terms and conditions of this Plan, the Committee shall have full power and authority, at all times, to: (i) recommend persons who are to be granted Awards under the Plan; (ii) determine, consistent with the Plan, the terms and provisions of all Award Agreements for use under the Plan (which need not be identical) including, but not limited to, the

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number of Shares to be covered by an Award, the method of payment of an Exercise Price, where applicable, the time or times when and the extent to which an Option shall be vested and may be exercised, the restrictions which shall apply to Restricted Stock Units and the restrictions and Restricted Period (as defined below) which shall apply to shares of Restricted Stock as further detailed in Section 11 and the nature and duration of restrictions as to transferability or restrictions constituting a substantial risk of forfeiture; (iii) accelerate the right of an Optionee to exercise, in whole or in part, any Option or extend such right; (iv) interpret the provisions of the Plan and Award Agreements and supervise the administration of the Plan; (v) accelerate the vesting of Restricted Stock and Restricted Stock Units or extend such vesting; (vi) if required under 2.2.14(b), above, determine the Fair Market Value of the Shares; (vii) designate Awards as Section 3(i) Awards, Section 102(b)(1) Awards, Section 102(b)(2) Awards, Other Section 102 Awards, ISOs, NQSOs or other type of Award; (viii) amend the Plan from time to time in order to qualify for tax benefits applicable under U.S. and Israeli laws; (ix) make a Section 102(b) Route Election (subject to the limitations set under Section 102(g)); (x) impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by the Participant of any Shares issued as a result of or under an Award, including without limitation, (A) restrictions under an insider trading policy, and (B) restrictions as to the use of a specified brokerage firm for such resales or other transfers; and (xi) determine any other matter which is necessary or desirable for, or incidental to, the administration of the Plan. In determining the number of Shares covered by the Awards to be granted to each recipient, the Committee may consider, among other things, the nature of services provided by the recipient, the recipient’s salary and/or the duration of his service or employment by the Company.

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

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

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

4. Eligible Participants:

4.1. Subject to any restriction imposed by applicable law, the following persons may be eligible Participants, as determined by the Committee: (i) employees and contractors of the Company or any Subsidiary, (ii) any member of the Board or (iii) consultants of the Company or any Subsidiary; provided, however, that (A) Section 102(b) Awards and Other Section 102

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Awards shall be granted only to an employee or a member of the Board of the Company or any Subsidiary, who is a resident of the State of Israel and who is not a Controlling Shareholder prior to and/or after the grant of Awards, and provided further, that such a Subsidiary is an “employing company” within the meaning of Section 102(a) of the Tax Ordinance; (B) Section 3(i) Awards shall be granted to any person or entity that is a resident of the State of Israel and is not entitled to Section 102(b) Awards and/or Other Section 102 Awards; and (C) Notwithstanding any provisions to the contrary herein, ISOs shall be granted only to an individual who is an employee of the Company or any Subsidiary on the date of grant of such ISO.

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

4.3. In the case of ISOs, Options shall not be considered ISOs to the extent that the Fair Market Value of the Shares with respect to which such Options are exercisable for the first time by an Optionee during any calendar year (under the Plan and all other plans of the Company and any parent or Subsidiary of the Company), exceeds US$100,000. For purposes of this Section 4.3, ISOs shall be taken into account in the order in which they were granted and the Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. The option is non-transferable and must be granted within 10 years of the earlier of adoption or shareholder approval, the option must be exercisable only within 10 years of grant, the option exercise price must equal or exceed the fair market value of the underlying stock at the time of grant, the employee must not, at the time of grant, own stock representing more than 10% of voting power of all stock outstanding, unless the option exercise price is at least 110% of the fair market value and the option is not exercisable more than five (5) years from the time of the grant.

5. Trustee:

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

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

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

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

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

5.5. Until the Public Trading Date or the release of the Shares from the Trustee (including such shares of Restricted Stock held by the Trustee), whichever is earlier, the Trustee shall not use the voting rights vested in such Shares and shall not exercise such rights in any way whatsoever, unless it is instructed to do so in writing by any of the Participants, in which event, the Trustee shall use the voting rights vested in the Participant’s Shares according to the majority vote of the shareholders of Ordinary Shares of the Company. Upon the earlier of: (i) the Public Trading Date; or (ii) the release of the Shares from the Trustee, and thereafter, the Trustee shall not use the voting rights vested in such Shares and shall not exercise such rights in any way whatsoever, provided that, if the right to vote any Share is held by the Trustee pursuant to Section 102, then upon the Participant’s request, the Trustee shall execute a proxy in such form as may be prescribed by the Company for the benefit of the Participant, all in accordance with the provisions of Section 102.

6. Reserved Shares:

6.1. The aggregate number of Shares which may be (i) issued upon exercise of Options under the Plan and vesting of Restricted Stock Units under the Plan, (ii) awarded in the form of Restricted Stock issued under the Plan; and (iii) available for sale under the Saifun Semiconductors Ltd. 2005 Employee Stock Purchase Plan, collectively referred to as the “Aggregate Number of Shares”), shall not exceed fifteen million (15,000,000) shares.¹ The

¹ As of the closing of the transactions contemplated by the Merger Agreement, an aggregate of 2,560,408 ordinary shares of Saifun Semiconductors Ltd. (“Saifun”) were available for future Awards under the Plan and 2,122,612 ordinary shares of Saifun were subject to Awards then outstanding under the Plan, which, after giving effect to the exchange ratios set forth in the Merger Agreement, converted to 2,564,368 shares of Spansion common stock that were available for future Awards under the Plan and 4,360,869 shares of Spansion common stock that were subject to Awards then outstanding under the Plan.

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Shares issuable upon exercise or vesting of Awards may be previously authorized but unissued shares, issued shares that are subsequently reacquired (treasury shares), Repurchased Shares (as defined in Section 11 below) or shares previously issued to a trustee for the purpose of employee benefit plans of the Company. Any Shares under the Plan, in respect of which the right hereunder of a Participant to purchase the same shall for any reason terminate, become cancelled, expire or otherwise cease to exist, including Repurchased Shares repurchased by the Company or on its behalf, shall again be available for grant through Awards under the Plan. Furthermore, Shares subject to Awards which are adjusted pursuant to Section 13.1 and become exercisable with respect to shares of another corporation shall be considered cancelled and may again be optioned, granted or awarded hereunder, subject to the share limit set forth in this Section 6.1. Shares which are actually or constructively delivered by the Participant or withheld by the Company upon the exercise of an Option, vesting of a Restricted Stock Unit or issuance of Restricted Stock in payment of the exercise price thereof or tax withholding thereon may again be optioned, granted or awarded hereunder.

6.2. No person who is deemed by the Committee, in its sole discretion, to be a “covered employee” within the meaning of Section 162(m) of the Code shall be granted, in any calendar year, Awards covering the purchase of more than five hundred thousand (500,000) Shares (the “Annual Award Limit”); provided, however, that the foregoing limitation shall not apply prior to the Public Trading Date and, following the Public Trading Date, the foregoing limitation shall not apply until the earliest of: (i) the first material modification of the Plan (including any increase in the number of shares reserved for issuance under the Plan in accordance with Section 6.1); (ii) the issuance of all of the Shares reserved for issuance under the Plan; (iii) the expiration of the Plan; (iv) the first meeting of shareholders at which directors of the Company are to be elected that occurs after the close of the third calendar year following the calendar year in which the first registration of an equity security of the Company under Section 12 of the U.S. Securities Exchange Act of 1934 occurred; or (v) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder. The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 13.1. For purposes of this Section 6.2, to the extent required by applicable law, if an Award is canceled in the same fiscal year of the Company it was granted (other than in connection with a transaction described in Section 12), the canceled Award will be counted against the limit set forth in this Section 6.2. For this purpose, if the exercise price of an Award is reduced, the transaction shall be treated as a cancellation of the Award and the grant of a new Award.

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

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7. Awards:

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

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

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

8. Exercise Price:

8.1. The Exercise Price with respect to an Award shall be as determined by the Committee, subject to any guidelines as may be determined by the Committee from time to time; provided, however, that such Exercise Price shall be not less than the nominal value of the Shares underlying the Award. Each Award Agreement shall contain the Exercise Price, if any, for Shares underlying the Award. Notwithstanding the foregoing, (i) in the case of an ISO (A) granted to an employee of the Company or any Subsidiary who, at the time of grant of such Option, is a Ten Percent Shareholder, the Exercise Price shall be not less than one hundred and ten percent (110%) of the Fair Market Value per Share on the date of grant, and (B) granted to any other employee of the Company or any Subsidiary, the Exercise Price shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant and (ii) in the case of Awards intended to qualify as performance-based compensation within the meaning of Section 162(m)(4)(C) of the Code, such price shall not be less than 100% of the Fair Market Value of a Share on the date the Award is granted.

8.2. The Exercise Price of an Option shall be payable upon the exercise of the Option. The Committee, in its discretion, shall determine the acceptable form of consideration for exercising an Option, including the method of payment, subject to the restrictions contained in any applicable law. In making its determination as to the type of consideration to accept, the Committee shall consider if acceptance of such consideration may be reasonably expected to

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benefit the Company, provided however, that in the case of ISOs, any such determination shall be made by the Committee at the time of grant of the Option and shall be set forth in the terms of the Option Award Agreement or applicable notice of exercise form used under the Plan. Acceptable forms of consideration may include: (i) cash; (ii) check or wire transfer; (iii) consideration received by the Company under a cashless exercise program, adopted by the Committee in connection with the Plan; (iv) such other consideration and method of payment for the issuance of Shares to the extent permitted by applicable laws; or (v) any combination of the foregoing methods of payment.

9. Exercise of Options:

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

Unless the Committee provides otherwise, vesting of Options granted hereunder shall not be tolled during any unpaid leave of absence.

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

9.3. An Option, or any part thereof, shall be exercisable by the Optionee’s signing and returning to the Company or its agent, at a place selected by the Company (and to the Trustee, where applicable), a notice of exercise in such form and substance as may be prescribed by the Company from time to time and in accordance with the requirements of applicable laws, including Section 102, if applicable. Such exercise shall be effective upon receipt of such notice by the Company or its agent at the prescribed place accompanied by payment (whether by cash, check or other method of payment acceptable to the Company) of the aggregate Exercise Price due with respect to such exercise. The notice shall specify the number of Shares with respect to which the Option is being exercised.

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

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

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

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

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

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

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

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

10. Termination of Service:

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

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

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

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

10.5. For the purpose of this Section 10, termination of a Participant’s employment or other service with the Company or a Subsidiary, as applicable, shall be deemed to be effective upon the date designated by the Company or a Subsidiary as the last day the Participant’s active employment or other service with the Company or a Subsidiary and shall not be extended by any notice or similar period that may be required by applicable local law during which the Company may determine, at its sole option, that the Participant’s employment or other service is no longer active.

10.6. For the purpose of this Section 10, in the discretion of the Committee, a transfer of the Participant’s employment or other service between the Company and any Subsidiary shall not be deemed a termination of employment or service for purposes of the Plan; provided, however, that with respect to ISOs, the foregoing shall be subject to Section 422 of the Code.

11. Restricted Stock Award Rights.

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

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11.2. With respect to Restricted Stock Awards under this Section 11, the Committee may decide to appoint a trustee (the “Restricted Stock Trustee”), which shall act according to a trust agreement (the “Restricted Stock Trust Agreement”), in the form determined by the Committee and according to the provisions set forth hereunder.

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

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

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

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

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12. Restricted Stock Units

12.1. Restricted Stock Unit Awards may be granted to any eligible Participant either alone, in addition to, or in tandem with other Awards granted under the Plan and/or other Awards made outside of the Plan.

12.2. Prior to vesting of a Restricted Stock Unit Award, the Recipient shall have none of the rights and/or privileges of a shareholder of the Company in respect to any Shares underlying the Award nor shall he be deemed to be a shareholder or creditor of the Company under applicable law.

13. Adjustments:

13.1. Subject to Section 13.5, in the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event, in the Committee’s sole discretion affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Committee shall, in such manner as it may deem equitable, adjust any or all of:

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

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

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

13.2. Subject to Section 13.5, in the event of any Change in Control or other event described in Section 13.1 which results in Shares or other securities of the Company being exchanged for or converted into cash, securities (including securities of another corporation) or other property, the Committee will have the right to terminate this Plan as of the date of the event or transaction, in which case all Options, Restricted Stock Units and/or Restricted Stock, as may be applicable, granted under this Plan shall become the right to receive such cash, securities or other property, net of any applicable exercise price.

13.3. Subject to Section 13.5, in the event of (i) any Change in Control, (ii) other event described in Section 13.1, (iii) any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate or (iv) of changes in applicable laws, regulations or accounting principles, the Committee, in its sole discretion, and on such terms and conditions as it deems appropriate, is authorized to take any one or more of the following actions or determinations, with respect to the

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Awards, by action taken prior to the occurrence of the event, or at any other time, whenever the Committee determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under this Plan, to facilitate such transactions or events, or to give effect to such changes in laws, regulations or principles:

13.3.1. that the Award shall be purchased for an amount of cash equal to the amount that could have been attained upon the exercise of such Award or the realization of the Participant’s rights had such Award been currently exercisable or payable;

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

13.3.3. that the Award cannot be exercised after such event;

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

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

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

13.3.7. that, for a specified period of time prior to such event, the restrictions imposed under any Award Agreement upon some or all of any Award may be terminated, and/or any Award may cease to be subject to repurchase by the Company after such event; and

13.3.8. that Awards may cease to be subject to the Company’s right of first refusal set forth in Section 14 after such event.

13.4. Subject to Section 13.5, the Committee may, in its discretion, include such further provisions and limitations in any Award Agreement or certificate, as it may deem equitable and in the best interests of the Company.

13.5. With respect to ISOs and Awards intended to qualify as performance-based compensation under Section 162(m), no adjustment or action described in this Section 13 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code or would cause such Award to fail to so qualify under Section 162(m), as the case may be, or any successor provisions thereto. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in a violation of Section 16 of the U.S. Securities Exchange Act of 1934.

14. Assignability, Transferability and Sale of Awards and/or Shares:

14.1. No Award may be sold, pledged, assigned, hypothecated or transferred other than by will or by the laws of descent and distribution, and during the Participant’s lifetime an Award may be exercised only by him. The terms of the Plan and the Award Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Participant.

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

14.3. Shares acquired upon exercise or vesting of an Award shall be subject to such restrictions on transfer as are generally applicable to ordinary shares of the Company, including without limitation any right of first refusal restriction, in accordance with the Company’s Certificate of Incorporation and Shareholders agreements, as amended from time to time.

15. Limitations Applicable to Section 16 Persons and Performance-Based Compensation

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

16. Term and Amendment of the Plan:

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

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

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

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17. No Right to Continued Service:

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

18. Inability to Obtain Authority:

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

19. Non-Exclusivity of the Plan:

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

20. Governing Law:

This Plan and all determinations made and actions taken pursuant hereto, with the exception of determinations necessarily governed by Section 102 of the Israeli Income Tax Ordinance, shall be governed by and construed and enforced in accordance with the laws of the state of Delaware, United States of America, without giving effect to the principles of conflict of laws thereof.

21. Application of Funds:

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

22. Tax Consequences:

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

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The Company 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 Awards 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 (or Shares issuable) then or thereafter to be provided to the Participant, including by deducting any such amount from a Participant’s salary or other amounts payable to the Participant, to the maximum extent permitted under law and/or (ii) requiring the Participant to pay to the Company or a Subsidiary the amount so required to be withheld as a condition of the issuance, delivery, distribution or release of any Shares and/or (iii) by causing the exercise and sale of any Options or Shares held by on behalf of the Participant to cover such liability, up to the amount required to satisfy minimum statutory withholding requirements. In addition, the Participant will be required to pay any amount due in excess of the tax withheld and transferred to the tax authorities, pursuant to applicable tax laws, regulations and rules.

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

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

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

22.4. With regard to Other Section 102 Awards, in the event a Participant’s employment with or other serve to the Company or any Subsidiary terminates, the Participant shall be obligated to provide the Company and/or its Subsidiary (as the case may be), with a security or guarantee, in the degree and manner satisfactory to the Company and/or its Subsidiary, to cover any future tax obligation resulting from the disposition of the Awards and/or the Shares acquired thereunder (including Restricted Stock), all in accordance with Section 102.

23. Section 409A. To the extent that the Committee determines that any Award granted under the Plan is subject to Section 409A of the Internal Revenue Code (“Section 409A”), the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued thereunder. Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any Award may be subject to Section 409A and related Department of Treasury guidance, the Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments,

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policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

24. Severability:

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

25. Appendices; Subplans:

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

26. Unfunded Status of Awards:

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

27. Interpretation:

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

28. Headings:

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

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