2009 STOCK INCENTIVE PLAN

DELTATHREE, INC.

2009 STOCK INCENTIVE PLAN

NONSTATUTORY STOCK OPTION GRANT

102 CAPITAL GAINS TRACK GRANT

UNDER SECTION 102(B)(2) OF THE ISRAELI INCOME TAX ORDINANCE

This NONSTATUTORY STOCK OPTION GRANT AGREEMENT (the “ Agreement ”), dated as of _________________ (the “ Grant Date ”), is delivered by deltathree, Inc. (the “ Company ”) to _______________ (the “ Participant ”).  Capitalized terms used herein and not otherwise defined herein have the meaning given to them in the Plan (as defined below).

RECITALS

WHEREAS, the Company maintains the deltathree, Inc. 2009 Stock Incentive Plan, including Appendix A – Israeli Participants thereto (the “ Plan ”) for the benefit of its and its Affiliates’ employees, directors, and consultants;

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

1.            Grant of Option; Stock Option Status ; Compliance with Section 102 Requirements .

(a)          Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Participant a stock option (the “ Option ”) to purchase ___________ shares of Stock at an exercise price of $_________ per share of Stock, subject to adjustment as set forth in Sections 8.1 and 8.2 of the Plan, and subject to the terms and conditions of Section 102, the Plan  and the trust agreement (the “Trust Agreement”), entered into between the Company and [____________]_(the “Trustee”).  The Option is granted as a 102 Capital Gains Track Grant, as defined in Appendix A to the Plan.  This Option is not intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.

(b)         The Option will be registered in the name of the Trustee (to the extent required by law to qualify under Section 102) for the benefit of the Participant.  Participant shall comply with the ITO, the Rules, and the terms and conditions of the Trust Agreement. The Trustee will hold the Option or the shares of Stock to be issued upon exercise of the Option for the Required Holding Period, as set forth in Appendix A to the Plan.  The Participant hereby undertakes to release the Trustee from any liability in respect of any action or decision duly taken by the Trustee (except for any such actions or decisions taken in gross negligence or willful misconduct) in relation to the Plan, or any Option or share of Stock granted to him thereunder.   The Participant hereby confirms that he shall execute any and all documents which the Company or the Trustee may reasonably determine to be necessary in order to comply with the ITO and the Rules.

2.           Exercisability of Option .   Subject to the provisions of this Agreement, the Option shall become exercisable on the following dates, if the Participant continues to provide Service (as defined in the Plan) to the Company or its Affiliates from the Grant Date through the applicable date:

The exercisability of the Option is cumulative, but shall not exceed 100% of the shares of Stock subject to the Option.  If the foregoing schedule would produce fractional shares of Stock, the number of shares of Stock for which the Option becomes exercisable shall be rounded down to the nearest whole share of Stock.

(a)          The Option shall have a term of ten (10) years from the Grant Date, and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

(b)         The Option shall automatically terminate upon the happening of the first of the following events:

Notwithstanding the foregoing, in no event may the Option be exercised after the tenth anniversary of the Grant Date.  Any portion of the Option that is not exercisable at the time the Participant ceases to provide Service shall immediately terminate as of such date.

(a)          Subject to the provisions of Sections 2 and 3 above, the Participant may exercise part or all of the exercisable portion of the Option by delivering to the Company (or, if applicable, the Trustee) written notice of intent to exercise in the manner provided in this Agreement (or in such other form as the Company and/or the Trustee may from time to time prescribe), specifying the number of shares of Stock as to which the Option is to be exercised and the method of payment.  Payment of the exercise price shall be made in accordance with procedures established by the Committee from time to time based on the type of payment being made but, in any event, prior to issuance of the shares of Stock.  The Participant shall pay the exercise price (i) in cash, by check or cash equivalent; (ii) by tender to the Company of shares of Stock owned by the Participant having a Market Value (as defined in the Plan) equal to the exercise price of the shares of Stock to be purchased (to the extent permitted under the terms of Section 102, as determined by the Committee); (iii) by surrender of the Option as to all or part of the shares of Stock for which the Option is then exercisable in exchange for shares of Stock having an aggregate Market Value equal to the difference between the aggregate Market Value of the surrendered portion of the Option and the aggregate exercise price for the surrendered portion of the Option (to the extent permitted under the terms of Section 102, as determined by the Committee); (iv) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board; or (v) by any combination thereof.  The Committee may impose from time to time such limitations as it deems appropriate on the use of shares of Stock to exercise the Option.

(b)         The obligation of the Company