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EXHIBIT 10.3
3(i) OPTION AGREEMENT
(the "OPTION AGREEMENT")
Made as of the ______________ day of ______, 1999
By and between
COMMTOUCH SOFTWARE LTD.
an Israeli Company located at
00 Xxxxxxxxxx Xxxxxx
Ein Vered, Israel
(the "COMPANY")
of the first part
AND
___________
ID______________________
(the "OPTIONEE")
of the second part
PREAMBLE
WHEREAS In _____, 1999, the Company adopted its 1999 Section 3(i) Share
Option Plan (the "OPTION PLAN"), a copy of which is attached
hereto as EXHIBIT A, forming an integral part hereof; and
WHEREAS The Company has determined that the Optionee be granted Options
under the Option Plan to buy Shares of the Company, and the
Optionee has agreed to such grant, all on the terms and subject
to the conditions set forth in the Option Plan and in this
Option Agreement.
NOW, THEREFORE, it is agreed as follows:
1. PREAMBLE AND DEFINITIONS
1.1 The preamble to this Option Agreement constitutes an
integral part hereof.
1.2 Unless otherwise defined herein, capitalized terms used
herein shall have the meaning ascribed to them in the
Option Plan.
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2. GRANT OF OPTION
2.1 The Company hereby grants the Optionee the number of
Options set forth in Section 2 of EXHIBIT B attached
hereto to purchase Shares at the price per Share set forth
in Section 3 of EXHIBIT B attached hereto (the "OPTION
PRICE"), on the terms and subject to the conditions
hereinafter provided.
The Option Price will be paid in NIS in accordance with
the representative rate of exchange of the U.S. dollar,
last published by the Bank of Israel and known at the time
of giving the notice of exercise (as set forth in Section
5.1 below).
2.2 The Optionee is aware that the Company intends to issue
additional shares in the future to various entities and
individuals, as the Company in its sole discretion shall
determine.
3. PERIOD OF OPTION AND CONDITIONS OF EXERCISE
3.1 The term of this Option Agreement shall commence on the
date hereof (the "DATE OF GRANT") and terminate on the
Expiration Date (as defined in Section 6 below), or at the
time at which all of the Options have expired or been
terminated pursuant to the terms of the Option Plan or
pursuant to this Option Agreement.
3.2 The Options may be exercised by the Optionee in whole at
any time or in part from time to time, as determined by
the Board, and to the extent that the Options become
vested in accordance with Section 4 of Exhibit B, prior to
the Expiration Date, and provided that, subject to the
provisions of Section 3.4 below, the Optionee is an
employee of the Company or a Subsidiary of the Company or
a company or a Parent or a subsidiary company of such
company issuing or assuming the Options in a transaction
described in Section 7.1 of the Agreement (the foregoing
collectively, the "GROUP" ), or continuing to provide
services to the Group, at all times during the period
beginning with the granting of the Option and ending upon
the date of exercise.
The term "PARENT" shall mean for the purposes of the
Option Agreement and the Option Plan: any company (other
than the Company) in an unbroken chain of companies ending
with the Company if, at the time of granting an Option,
each of the companies (other than the Company), owns stock
possessing fifty percent (50%) or more of total combined
voting power of all classes of stock in one of the other
companies in such chain.
3.3 Subject to the provisions of Section 3.4 below, in the
event of termination of the Optionee's employment with the
Company the Group, or, if applicable, the termination of
the provision of services by the Optionee to the Group,
all Options granted to the Optionee will immediately
expire. A notice of termination of employment or services
by either the Group or the Optionee shall be deemed to
constitute termination of employment or services.
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3.4 Notwithstanding anything to the contrary previously
stated, an Option may be exercised after the date of
termination of the Optionee's service or employment with
Group, during an additional period of time beyond the date
of such termination, but only with respect to the number
of Options already vested at the time of such termination
according to the Vesting Dates, if:
3.4.1 termination is without Cause, in which event
any Options still in force and unexpired may be
exercised within a period of 90 (ninety) days
from the date of such termination.
3.4.2 termination is the result of death or
disability of the Optionee, in which event any
Options still in force and unexpired may be
exercised within a period of 90 (ninety) days
from the date of termination.
3.4.3 prior to the date of such termination, the
Committee shall authorize an extension of the
terms of all or part of the Options beyond the
date of such termination for a period not to
exceed the period during which the Options by
their terms would otherwise have been
exercisable.
The term "CAUSE" shall mean any action,
omission or state of affairs related to the
Optionee which the Committee or the Boards
decides, in its sole discretion, is against the
interests of the Company.
3.5 The Options may be exercised only to purchase whole
Shares, and in no case may a fraction of a Share be
purchased. If any fractional Shares would be deliverable
upon exercise, such fraction shall be rounded up if
one-half or more, or otherwise rounded down, to the
nearest whole number.
4. VESTING
Subject to the requirements as to the number of Shares for which an
Option is exercisable as set forth in Section 2.1 above, and unless
EXHIBIT B hereto provides otherwise, one-fourth (1/4) of the Options
shall vest (i.e., Options shall become exercisable) at the end of the
first year of the Optionee's continuous service or employment with
the Group and one-thirty-sixth (1/36) of the remaining Options shall
vest at the end of each month of such continuous service or
employment over the next thirty-six months
5. METHOD OF EXERCISE
5.1 The Options shall be exercised by the Optionee by giving
written notice to the Company, in such form and method as
may be determined by the Company and the Trustee (the
"EXERCISE NOTICE"), which exercise shall be effective upon
receipt of the Exercise Notice by the Company at its
principal office. The Exercise Notice shall specify the
number of Shares with respect to which the Options are
being exercised.
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5.2 The Shares shall immediately be issued to the Trustee and
be held by the Trustee in accordance with the provisions
of Section 5 of the Option Plan. The Trustee shall not
transfer any Options to the Optionee prior to the exercise
of the Options into Shares, and thereafter, the Trustee
will transfer the Shares to the Optionee upon demand. If
any law or regulation requires the Company to take any
action with respect to the Shares so demanded before the
issuance thereof, then the date of their issuance shall be
extended for the period necessary to take such action. The
Optionee hereby authorizes the Trustee to sign an
agreement with the Company whereby Shares will not be
transferred without deduction of taxes at source. The
Optionee hereby undertakes to exempt the Trustee from any
liability in respect of any action or decision duly taken
and bona fide executed in relation with the Option Plan,
or any Option or Share granted to the Optionee thereunder.
6. TERMINATION OF OPTION
6.1 Except as otherwise stated in this Option Agreement, the
Options, to the extent not previously exercised, shall
terminate forthwith upon the earlier of: (i) the date set
forth in Section 4 of EXHIBIT B hereto; and (ii) the
expiration of any extended period in any of the events set
forth in Section 3.4 above (and such earlier date shall be
hereinafter referred to as the "EXPIRATION DATE").
6.2 Without derogating from the above, the Committee may, with
the prior written consent of the Optionee, from time to
time cancel all or any portion of the Options then subject
to exercise, and the Company's obligation in respect of
such Options may be discharged by (i) payment to the
Optionee of an amount in cash equal to the excess, if any,
of the Fair Market Value of the Shares pertaining to such
canceled Options, at the date of such cancellation, over
the aggregate purchase price of such Shares, (ii) the
issuance or transfer to the Optionee of Shares of the
Company with a Fair Market Value at the date of such
transfer equal to any such excess, or (iii) a combination
of cash and Shares with a combined value equal to any such
excess, all determined by the Committee in its sole
discretion.
7. ADJUSTMENTS
7.1 In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of
the assets of the Company while unexercised Options remain
outstanding under the Option Plan the successor
corporation or a Parent or subsidiary of such successor
corporation or the purchasing corporation may assume the
unexercised Options outstanding under the Option Plan or
may substitute for the Shares subject to the unexercised
portions of such outstanding Options an appropriate number
of shares of each class of shares or other securities of
the successor or
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purchasing corporation or cash or property which were
distributed to the shareholders of the Company in respect
of such shares. In the event of substitution of shares or
securities appropriate adjustments shall be made to the
purchase price per share to reflect such action, all as
will be determined by the Committee whose determination
shall be final. In the event that the successor or
purchasing corporation does not agree to assume or
substitute as described in this section 7.1, the Options
shall terminate as of the date of the closing the above
merger or sale, as applicable.
7.2 In the event of the proposed liquidation or dissolution of
the Company, the Company shall notify the Optionee at
least fifteen (15) days prior to such proposed action. To
the extent not previously exercised, the Options shall
terminate immediately prior to the consummation of such
proposed action.
7.3 If the outstanding shares of the Company shall at any time
be changed or exchanged by declaration of a stock
dividend, stock split, combination or exchange of shares,
re-capitalization, 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 the Option
therefore granted, and the Option Price, shall be
appropriately and equitably adjusted so as to maintain the
proportionate number of Shares without changing the
aggregate Option Price; provided, however, that no
adjustment shall be made by reason of the distribution of
subscription rights on outstanding stock, all as will be
determined by the Board who's determination shall be
final.
7.4 Anything herein to the contrary notwithstanding, if prior
to the consummation of an initial public offering of the
securities of the Company all or substantially all of the
shares of the Company are to be sold, or upon a merger or
reorganization or the like, the shares of the Company, or
any class thereof, are to be exchanged for securities of
another Company, then in such event, the Optionee shall be
obliged to sell or exchange (in accordance with the value
of his Shares in accordance with the deal) as the case may
be, the Shares such Optionee purchased hereunder, in
accordance with the instructions then issued by the Board,
whose determination shall be final.
8. RIGHTS PRIOR TO EXERCISE OF OPTION; LIMITATIONS AFTER PURCHASE OF
SHARES
8.1 Subject to the provisions of Sections 8.2 and 8.4 below,
the Optionee shall not have any of the rights or
privileges of shareholders of the Company in respect of
any Shares purchasable upon the exercise of any part of an
Option unless and until, following exercise, but in case
of Options and Shares held by the Trustee, subject always
to the provisions of Section 5 of the Option Plan,
registration of the Optionee as holder of such Shares in
the Company's register of members.
8.2 With respect to all Shares )contrary to unexercised
Options) issued upon the exercise of Options purchased by
the Optionee and held by the Trustee, the Optionee shall
be entitled to receive dividends in accordance with the
quantity of such Shares, and subject to any applicable
taxation on distribution of dividends. During the period
in which Shares issued to the Trustee on behalf of the
Optionee are held by the Trustee, the cash dividends paid
with respect thereto shall be paid directly to the
Optionee.
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8.3 No Option purchasable hereunder, whether fully paid or
not, shall be assignable, transferable or given as
collateral or any right with respect to them given to any
third party whatsoever, and during the lifetime of the
Optionee each and all of the Optionee's rights to purchase
Shares hereunder shall be exercisable only by the
Optionee.
As long as the Shares are held by the Trustee in favor of
the Optionee, all rights the Optionee possesses over the
Shares are personal, can not be transferred, assigned,
pledged or mortgaged, other than by will or laws of
descent and distribution.
Any such action made directly or indirectly, whether for
immediate or future validity, shall be void.
8.4 Until the consummation of an IPO, Shares shall be voted by
a proxy pursuant to the directions of the Board, such
proxy to be to the person or persons designated by the
Board. A copy of the proxy is attached hereto as EXHIBIT
C.
8.5 The Optionee acknowledges that once the Company's shares
will be traded in any public market, his right to sell his
Shares may be subject to some limitations, as required by
the Company's underwriters. In such event, the Optionee
will unconditionally agree to any such limitations.
8.6 The Optionee shall not dispose of any Shares in
transactions which violate, in the opinion of the Company,
any applicable rules and regulations.
8.7 The Optionee 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
restrictions, as it may deem appropriate (which do not
violate the Optionee's rights according to this Option
Agreement).
9. GOVERNMENT REGULATIONS
The Option Plan, and the granting and exercise of the Options
thereunder, and the Company's obligation to sell and deliver Shares
or cash under the Option Plan, are subject to all applicable laws,
rules and regulations, whether of the State of Israel or of the
United States or any other State having jurisdiction over the Company
and the Optionee, including the registration of the Shares under the
United States Securities Act of 1933, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.
10. CONTINUANCE OF EMPLOYMENT
Nothing in this Option Agreement shall be construed to impose any
obligation on the Company or a subsidiary, consultant or contractor
thereof to continue the Optionee's employment with it, to confer upon
the Optionee any right to continue in the employ of the
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Company or a subsidiary thereof, or to restrict the right of the
Company or a subsidiary thereof to terminate such employment at any
time.
11. GOVERNING LAW & JURISDICTION
This Option Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Israel applicable to
contracts made and to be performed therein, without giving effect to
the principles of conflict of laws. The competent courts of Tel-Aviv,
Israel shall have sole jurisdiction in any matters pertaining to this
Option Agreement.
12. TAX CONSEQUENCES
Any tax consequences arising from the grant or exercise of any
Option, from the payment for Shares covered thereby or from any other
event or act (of the Company, the Trustee or the Optionee),
hereunder, shall be borne solely by the Optionee. The Company and/or
the Trustee shall withhold taxes according to the requirements under
applicable laws, rules, and regulations, including the withholding of
taxes at source. Furthermore, the Optionee shall agree to indemnify
the Company 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.
The Committee and/or the Trustee shall not be required to release any
Share certificate to an Optionee until all required payments have
been fully made.
13. FAILURE TO ENFORCE NOT A WAIVER
The failure of any party to enforce at any time any provisions of
this Option Agreement shall in no way be construed to be a waiver of
such provision or of any other provision hereof.
14. PROVISIONS OF THE OPTION PLAN
The Options provided for herein are granted pursuant to the Option
Plan, and said Options and this Option Agreement are in all respects
governed by the Option 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 Option Plan but in the event of any contradiction
between the provisions of this Option Agreement and the Option Plan,
the provisions of this Option Agreement will prevail.
15. BINDING EFFECT
This Option Agreement shall be binding upon the heirs, executors,
administrators, and successors of the parties hereof.
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16. NOTICES
Any notice required or permitted under this Option Agreement shall be
deemed to have been duly given if delivered, faxed or mailed, if
delivered by certified or registered mail or return receipt
requested, either to the Optionee at his or her address set forth
above or such other address as he or she may designate in writing to
the Company, or to the Company at the address set forth above or such
other address as the Company may designate in writing to the
Optionee, within one week.
17. ENTIRE AGREEMENT
This Option Agreement and the Option Plan exclusively concludes all
of the terms of the Optionee's option plan and, subject to the
provisions of Section 19 of the Option Plan, annuls and supersedes
any other agreement, arrangement or understanding whether oral or in
writing, relating to the grant of options in the Company to the
Optionee. Any change of any kind to this Option Agreement will be
valid only if made in writing and signed by both the Optionee and the
Company's authorized representative and approved by the Board.
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IN WITNESS WHEREOF, the Company has executed this Option Agreement in duplicate
on the day and year first above written.
COMMTOUCH SOFTWARE LTD.
By:______________________
The undersigned hereby accepts, and agrees to, all terms and provisions of the
foregoing Option Agreement.
_________________________
The Optionee
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EXHIBIT A TO THE OPTION AGREEMENT
COMMTOUCH SOFTWARE LTD.
THE 1999
SECTION 3(I) SHARE OPTION PLAN
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COMMTOUCH SOFTWARE LTD.
THE 1999
SECTION 3(i) SHARE OPTION PLAN
1. NAME
This share option plan, as amended from time to time, shall be known
as the CommTouch Software Ltd. 1999 Section 3(i) Share Option Plan
(the "OPTION PLAN").
2. PURPOSE OF THE OPTION PLAN
The Option Plan is intended as an incentive to retain in the employ
of CommTouch Software Ltd. (the "COMPANY") or a Subsidiary of the
Company which now exists or hereafter is organized or acquired by the
Company, persons of training, experience, and ability, to attract
new directors, employees, consultants and contractors, whose services
are considered 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 in the Company (the
"OPTIONS"), pursuant to this Option Plan approved by the Board of
Directors of the Company (the "BOARD").
The term "PARENT" shall mean for the purposes of the Option Agreement
and the Option Plan: any company (other than the Company) in an
unbroken chain of companies ending with the Company if, at the time
of granting an Option, each of the companies (other than the
Company), owns stock possessing fifty percent (50%) or more of total
combined voting power of all classes of stock in one of the other
companies in such chain.
The term "SUBSIDIARY" shall mean for the purposes of the Plan: any
company (other than the Company) in an unbroken chain of companies
beginning with the Company if, at the time of granting an option,
each of the companies other than the last company in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
companies in such chains.
3. ADMINISTRATION OF THE OPTION PLAN
The Board or a share option committee appointed and maintained by the
Board for such purpose (the "COMMITTEE") shall have the power to
administer the Option Plan. Notwithstanding the above, the Board
shall automatically have a residual authority if no Committee shall
be constituted or if such Committee shall cease to operate for any
reason whatsoever.
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The Committee shall consist of such number of members (not less than
two (2) in number) as may be fixed by the Board. The Committee shall
select one of its members as its chairman (the "CHAIRMAN") and shall
hold its meetings at such times and places as the Chairman shall
determine. 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.
Any member of such Committee shall be eligible to receive Options
under the Option Plan while serving on the Committee, unless
otherwise specified herein.
The Committee shall have full power and authority to:
3.1 Designate participants.
3.2 Determine the terms and provisions of respective Option
agreements (which need not be identical) including, but
not limited to, the number of shares in the Company to be
covered by each Option, provisions concerning the time or
times when and the extent to which the Options may be
exercised and the nature and duration of restrictions as
to transferability or restrictions constituting
substantial risk of forfeiture.
3.3 Accelerate the right of an Optionee to exercise, in whole
or in part, any previously granted Option.
3.4 Interpret the provisions and supervise the administration
of the Option Plan;
3.5 Determine the Fair Market Value (as defined below) of the
Shares (as defined below).
3.6 Determine any other matter which is necessary or desirable
for, or incidental to administration of the Option Plan.
The Committee shall have the authority to grant, in its discretion,
to the holder of an outstanding Option, in exchange for the surrender
and cancellation of such Option, a new Option having a purchase price
equal to, lower than or higher than the purchase price provided in
the Option so surrendered and canceled, and containing such other
terms and conditions as the Committee may prescribe in accordance
with the provisions of the Option Plan.
All decisions and selections made by the Board or the Committee
pursuant to the provisions of this Option Plan shall be made by a
majority of its members except that no member of the Board or the
Committee shall vote on, or be counted for quorum purposes, with
respect to any proposed action of the Board or the Committee relating
to any Option to be granted to that member. Any decision reduced to
writing and signed by a majority of the members who are authorized to
make such decision shall be fully effective as if it had been made by
a majority at a meeting duly held.
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The interpretation and construction by the Committee of any provision
of the Option Plan or of any Option thereunder shall be final and
conclusive unless otherwise determined by the Board.
Subject to the Company's decision, each member of the Board or the
Committee shall be indemnified and held harmless by the Company
against any cost or expense (including counsel fees) reasonably
incurred by him, or any liability (including any sum paid in
settlement of a claim with the approval of the Company) arising out
of any act or omission to act in connection with the Option 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.
"FAIR MARKET VALUE" shall mean in the Plan, as of any date, the value
of a Share determined as follows:
(i) If the Shares are listed on any established stock exchange
or a national market system, including without limitation
the Nasdaq National Market system, or The Nasdaq SmallCap
Market of the Nasdaq Stock Market , the Fair Market Value
shall be the closing sales price for such Shares (or the
closing bid, if no sales were reported), as quoted on such
exchange or system for the last market trading day prior
to time of determination, as reported in the Wall Street
Journal, or such other source as the Administrator deems
reliable.
(ii) If the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported ,
the Fair Market Value shall be the mean between the high
bid and low asked prices for the Shares on the last market
trading day prior to the day of determination, or;
(iii) In the absence of an established market for the Shares,
the Fair Market Value thereof shall be determined in good
faith by the committee.
4. DESIGNATION OF PARTICIPANTS
The persons eligible for participation in this Option Plan as
recipients of Options may include any employees, directors and
consultants of the Company, or a Subsidiary of the Company or a
company or a Parent or a subsidiary company of such company issuing
or assuming the Options in a transaction described in Section 9.1 of
this Option Plan (the foregoing collectively, the "GROUP"). The grant
of an Option hereunder shall neither entitle the recipient thereof to
participate nor disqualify him from participating in any other grant
of Options pursuant to this Option Plan or any other option or stock
plan of the Company or any of its affiliates.
Anything in the Option Plan to the contrary notwithstanding, all
grants of Options to directors and office holders ("NOSEI MISRA" - as
such term is defined in the Companies
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Ordinance (New Version), 1983 (the "COMPANIES ORDINANCE")) shall be
authorized and implemented only in accordance with the provisions of
the Companies Ordinance, as in effect from time to time.
5. TRUSTEE
The Options which shall be granted to employees consultants and
contractors of the Group or any Shares (as defined below) issued upon
exercise of such Options and/or other shares received subsequently
following any realization of rights, shall be issued to a Trustee
nominated by the Committee (the "TRUSTEE") and held for the benefit
of the Optionees from the date of grant.
Anything to the contrary notwithstanding, the Trustee shall not
release any Options and/or any Shares issued upon exercise of
Options, prior to the full payment of the Optionee's tax liabilities
arising from Options which were granted to him and/or any Shares
issued upon exercise of such Options.
Upon receipt of the Option, the Optionee will sign an 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
Option Plan, or any Option or Share granted to him thereunder.
6. SHARES RESERVED FOR THE OPTION PLAN; RESTRICTION THEREON
6.1 The Company has reserved 250,000 authorized but unissued
Ordinary Shares nominal value NIS 1.00 per share, of the
Company (the "SHARES"), for purposes of the Option Plan
(subject to adjustment as set forth in paragraph 9 below),
the 1996 CommTouch Software, Inc. Stock Option Plan and
Israeli Option Agreements previously issued to Israeli
employees. Any of such Shares which may remain unissued
and which are not subject to outstanding Options at the
termination of the Option Plan shall cease to be reserved
for the purpose of the Option Plan, but until termination
of the Option Plan the Company shall at all times reserve
sufficient number of Shares to meet the requirements of
the Option Plan. Should any Option for any reason expire
or be canceled prior to its exercise or relinquishment in
full, the Shares subject to such Option may again be
subjected to an Option under the Option Plan.
6.2 An optionee who purchased Shares hereunder upon exercise
of Options shall have no voting rights as a shareholder
(in any and all matters whatsoever) until the consummation
of an initial public offering of the Company's securities
(an "IPO"). Until an IPO, such Shares shall be voted by a
proxy pursuant to the directions of the Board, such proxy
to be to the person or persons designated by the Board.
All Shares issued upon exercise of the Options shall
entitle the holder thereof to receive dividends and other
distributions thereon.
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7. VESTING
Unless Exhibit B to the Option Agreement provides otherwise,
one-fourth (1/4) of the Options shall vest (i.e., Options shall
become exercisable) at the end of the first year of an Optionee's
continuous services or employment with the group, and
one-thirty-sixth (1/36) of the remaining Options shall vest per month
of such continuous employment over the next thirty-six months (the
"VESTING DATES").
8. OPTION PRICE
8.1 The purchase price of each Share subject to an Option or
any portion thereof shall be determined by the Committee
in its sole and absolute discretion in accordance with
applicable law, subject to any guidelines as may be
determined by the Board from time to time.
8.2 The Option price shall be payable upon the exercise of the
Option in a form satisfactory to the Committee, including
without limitation, by cash or check. The Committee shall
have the authority to postpone the date of payment on such
terms as it may determine.
9. ADJUSTMENTS
Upon the occurrence of any of the following described events, the
Optionee's rights to purchase Shares under the Option Plan shall be
adjusted as hereafter provided:
9.1 In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of
the assets of the Company while unexercised Options remain
outstanding under the Option Plan the successor
corporation or a Parent or subsidiary of such successor
corporation or the purchasing corporation may assume the
unexercised Options outstanding under the Option Plan or
may substitute for the Shares subject to the unexercised
portions of such outstanding Options an appropriate number
of shares of each class of shares or other securities of
the successor or purchasing corporation or cash or
property which were distributed to the shareholders of the
Company in respect of such shares. In the event of
substitution of shares or securities appropriate
adjustments shall be made to the purchase price per share
to reflect such action, all as will be determined by the
Committee whose determination shall be final. In the event
that the successor or purchasing corporation does not
agree to assume or substitute as described in this Section
9.1, the Options shall terminate as of the date of the
closing of the above merger or sale, as applicable.
9.2 In the event of the proposed liquidation or dissolution of
the Company, the Company shall notify the Optionee at
least fifteen (15) days prior to such proposed action. To
the extent not previously exercised, the Options shall
terminate immediately prior to the consummation of such
proposed action.
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9.3 If the outstanding shares of the Company shall at any time
be changed or exchanged by declaration of a stock
dividend, stock split, combination or exchange of shares,
recapitalization, 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 Option
Plan or subject to any Options therefore granted, and the
Option prices, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of
Shares without changing the aggregate Option price,
provided, however, that no adjustment shall be made by
reason of the distribution of subscription rights on
outstanding shares. Upon the occurrence of any of the
foregoing, the class and aggregate number of Shares
issuable pursuant to this Option Plan (as set forth in
Section 6 hereof), in respect of which Options have not
yet been exercised, shall be appropriately adjusted, all
as may be determined by the Board who's determination
shall be final.
9.4 Anything herein to the contrary notwithstanding, if prior
to the completion of an IPO, all or substantially all of
the shares of the Company are to be sold, or upon a merger
or reorganization or the like, the shares of the Company,
or any class thereof, are to be exchanged for securities
of another Company, then in such event, each Optionee
shall be obliged to sell or exchange, as the case may be,
the shares such Optionee purchased under the Option Plan,
in accordance with the instructions then issued by the
Board whose determination shall be final.
10. TERM AND EXERCISE OF OPTIONS
10.1 The Options shall be exercised by the Optionee by giving
written notice to the Company, in such form and method as
may be determined by the Company and the Trustee, which
exercise shall be effective upon receipt of such notice by
the Company at its principal office. The notice shall
specify the number of Shares with respect to which Options
are being exercised.
10.2 Each Option granted under this Option Plan shall be
exercisable following the exercise dates and for the
number of Shares as shall be provided in EXHIBIT B to the
Option Agreement. However no Option shall be exercisable
after the Expiration Date, as defined for each Optionee in
his Option Agreement.
10.3 Options granted under the Option Plan shall not be
transferable by Optionees other than by will or laws of
descent and distribution, and during an Optionee's
lifetime shall be exercisable only by that Optionee.
10.4 The Options may be exercised by the Optionee in whole at
any time or in part from time to time, to the extent that
the Options become vested, prior to the Expiration Date,
and provided that, subject to the provisions of Section
10.6 below, the Optionee is an employee a consultants or a
contractor of the Group at all times during the period
beginning with the granting of the Option and ending upon
the date of exercise.
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10.5 Subject to the provisions of Section 10.6 below, in the
event of termination of the Optionee's employment or
services with the Group , c all Options granted to the
Optionee will immediately expire. A notice of termination
of employment or services shall be deemed to constitute
termination of employment or services with Group.
10.6 Notwithstanding anything to the contrary previously
stated, an Option may be exercised after the date of
termination of the Optionee's services or employment with
the Group during an additional period of time beyond the
date of such termination, but only with respect to the
number of Options already vested according to the Vesting
Dates, if:
10.6.1 termination is without Cause, in which event
any Options still in force and unexpired may be
exercised within a period of 90 (ninety) days
from the date of such termination.
10.6.2 termination is the result of death or
disability of the Optionee, in which event any
Options still in force and unexpired may be
exercised within a period of 90 (ninety) days
from the date of termination.
10.6.3 prior to the date of such termination, the
Committee shall authorize an extension of the
terms of all or part of the Options beyond the
date of such termination for a period not to
exceed the period during which the Options by
their terms would otherwise have been
exercisable.
The term "CAUSE" shall mean any action,
omission or state of affairs related to the
Optionee which the Committee or the Boards
decides, in its sole discretion, is against the
interests of the Company.
10.7 To avoid doubt, the holders of Options shall not have any
of the rights or privileges of shareholders of the Company
in respect of any Shares purchasable upon the exercise of
any part of an Option, nor shall they be deemed to be a
class of shareholders or creditors of the Company for
purpose of the operation of section 233 of the Companies
Ordinance or any successor to such section, until
registration of the Optionee as holder of such Shares in
the Company's register of members.
10.8 Any form of Option Agreement authorized by this Option
Plan may contain such other provisions as the Committee
may, from time to time, deem advisable. Without limiting
the foregoing, the Committee may, with the consent of the
Optionee, from time to time cancel all or any portion of
any Option then subject to exercise, and the Company's
obligation in respect of such Option may be discharged by
(i) payment to the Optionee of an amount in cash equal to
the excess, if any, of the Fair Market Value of the Shares
at the date of such cancellation subject to the portion of
the Option so canceled over the aggregate purchase price
of such Shares, (ii) the issuance or transfer to the
Optionee of Shares of the Company with a Fair Market Value
at the date of such transfer equal to any such excess, or
(iii) a combination of
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cash and shares with a combined value equal to any such
excess, all as determined by the Committee in its sole
discretion.
11. DIVIDENDS
With respect to all Shares (but not unexercised Options) issued upon
the exercise of Options purchased by the Optionee and held by the
Trustee, the Optionee shall be entitled to receive dividends in
accordance with the quantity of such Shares, and subject to any
applicable taxation on distribution of dividends. During the period
in which Shares issued to the Trustee on behalf of a Optionee are
held by the Trustee, the cash dividends paid with respect thereto
shall be paid directly to the Optionee.
12. ASSIGNABILITY AND SALE OF OPTIONS
No Option, purchasable hereunder, whether fully paid or not, shall be
assignable, transferable or given as collateral or any right with
respect to them given to any third party whatsoever, and during the
lifetime of the Optionee each and all of such Optionee's rights to
purchase Shares hereunder shall be exercisable only by the Optionee.
As long as the Shares are held by the Trustee in favor of the
Optionee, then all rights the Optionee possesses over the Shares are
personal, can not be transferred, assigned, pledged or mortgaged,
other than by will or laws of descent and distribution.
13. TERM OF THE OPTION PLAN
The Option Plan shall be effective as of the day it was adopted by
the Board and shall terminate at the end of 60 months from such day
of adoption.
14. AMENDMENTS OR TERMINATION
The Board may, at any time and from time to time, subject to the
written consent of the Trustee, amend, alter or discontinue the
Option Plan, except that no amendment or alteration shall be made
which would impair the rights of the holder of any Option therefore
granted, without his consent.
15. GOVERNMENT REGULATIONS
The Option Plan, and the granting and exercise of Options hereunder,
and the obligation of the Company to sell and deliver Shares under
such Options, shall be subject to all applicable laws, rules, and
regulations, whether of the State of Israel or of the United States
or any other State having jurisdiction over the Company and the
Optionee, including the registration of the Shares under the United
States Securities Act of 1933, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.
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16. CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES
Neither the Option Plan nor the Option Agreement with the Optionee
shall impose any obligation on the Group, to continue any Optionee in
its employ or the hiring by the Group of the Optionee's services, and
nothing in this Option Plan or in any Option granted pursuant thereto
shall confer upon any Optionee any right to continue in the employ or
service of the Group or restrict the right of the Group to terminate
such service or employment at any time.
17. GOVERNING LAW & JURISDICTION
This Option Plan shall be governed by and construed and enforced in
accordance with the laws of the State of Israel applicable to
contracts made and to be performed therein, without giving effect to
the principles of conflict of laws. The competent courts of Tel-Aviv,
Israel shall have sole jurisdiction in any matters pertaining to this
Option Plan.
18. TAX CONSEQUENCES
Any tax consequences arising from the grant or exercise of any
Option, from the payment for Shares covered thereby or from any other
event or act (of the Company, the Trustee or the Optionee),
hereunder, shall be borne solely by the Optionee. 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, the Optionee shall agree to indemnify
the Company 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. The Committee and/or the Trustee shall
not be required to release any Share certificate to an Optionee until
all required payments have been fully made.
19. NON-EXCLUSIVITY OF THE OPTION PLAN
The adoption of the Option Plan by the Board shall not be construed
as amending, modifying or rescinding any previously approved
incentive arrangements or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock
options otherwise than under the Option Plan or under the Share
Option Agreements previously issued to Israeli employees, and such
arrangements may be either applicable generally or only in specific
cases.
20. MULTIPLE AGREEMENTS
The terms of each Option may differ from other Options granted under
this Option Plan at the same time, or at any other time. The
Committee may also grant more than one Option to a given Optionee
during the term of this Option Plan, either in addition to, or in
substitution for, one or more Options previously granted to that
Optionee.
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EXHIBIT B TO THE OPTION AGREEMENT
TERMS OF THE OPTION
1. NAME OF THE OPTIONEE: _______________________________________
2. NUMBER OF OPTIONS GRANTED: _______________________________________
3. PRICE PER SHARE: _______________________________________
4. EXPIRATION DATE: _______________________________________
5. DATE OF GRANT: _______________________________________
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EXHIBIT C TO THE OPTION AGREEMENT
PROXY
Mr.____________ and Mr. ______________, or any of them, with power of
substitution in each, are hereby authorized to represent the undersigned at any
and all general meetings of CommTouch Software Ltd. )the "Company") (including
general meetings convened for the purpose of adopting extraordinary resolutions)
and to vote thereat on any and all matters the same number of Ordinary Shares of
the Company as the undersigned would be entitled to vote if then personally
present.
___________________________ ___________________________
NAME DATE
___________________________
SIGNATURE
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