DATA SYSTEMS & SOFTWARE INC. ADOPTS STOCKHOLDER RIGHTS PLAN.

MAHWAH, N.J.--(BUSINESS WIRE)--March 19, 1996--Data Systems & Software Inc. (NASDAQ/NMS: DSSI) announced today that its Board of Directors has adopted a Stockholder Rights Plan in which Common Stock purchase rights will be distributed as a dividend at the rate of one Right for each share of Common Stock, par value $.01 per share, of the Company held by stockholders of record as of the close of business on April 1, 1996.

The Rights Plan is designed to deter coercive takeover tactics including the accumulation of shares in the open market or through private transactions and to prevent an acquiror from gaining control of the Company without offering a fair price to all of the Company's stockholders. The Rights Plan will expire on March 19, 2006.

A Company spokesman stated that the Rights Plan was not adopted in response to any effort to acquire control of the Company.

Each Right initially will entitle stockholders to buy one-half of a share of Common Stock of the Company for $15.00. Generally, the Rights will be exercisable only if a person or group acquires beneficial ownership of 15% or more of the Company's Common Stock or commences a tender or exchange offer upon consummation of which such person or group would beneficially own 15% or more of the Company's Common Stock.

If any person (an "Acquiring Person") becomes the beneficial owner of 15% or more of the Company's Common Stock, other than pursuant to a tender or exchange offer for all outstanding shares of the Company approved by a majority of the independent directors, then, subject to certain exceptions set forth in the Rights Plan, each Right not owned by the Acquiring Person or related parties will entitle its holder to purchase, at the Right's then current exercise price, shares of the Company's Common Stock (or, in certain circumstances as determined by the Board, cash, other property, or other securities) having a value of twice the Right's then current exercise price.

The Company will generally be entitled to redeem the Rights at one-half of a cent per Right at any time until 10 days (subject to extension) following a public announcement that a 15% position has been acquired.

Data Systems & Software Inc. provides consulting and development services for computer software and systems, principally in the area of state-of the-art, embedded real-time systems. The Company is also developing and has commenced marketing a number of proprietary products intended for sale to commercial and military markets worldwide. In addition, the Company, through its Tower Semiconductor Ltd. subsidiary, manufactures integrated circuits on silicon wafers using its advance production capability and the proprietary designs of its customers. The Company's operations are conducted primarily in Israel through Tower, which is listed on NASDAQ/NMS, and Decision Systems Israel Limited, one of the largest independent software companies in Israel, which is listed on the Tel Aviv Stock Exchange.

CONTACT: George Morgenstern, CEO 

DATA SYSTEMS & SOFTWARE INC.

[phone]

or

Stephen D. Axelrod, CFA 

Jennifer Hendrickson

Barbara Yu (Media)

WOLFE AXELROD ASSOCIATES

[phone]