DBT BIOPHARMACEUTICALS, INC. OPTION AGREEMENT FOR OPTIONS GRANTED UNDER SECTION 102(b)(2) OF THE ISRAELI INCOME TAX ORDINANCE TO EMPLOYEES, OFFICERS OR DIRECTORS AS 102 CAPITAL GAINS TRACK OPTIONS
EXHIBIT
10.13(ii)
DBT
BIOPHARMACEUTICALS, INC.
2004 STOCK INCENTIVE
PLAN
FOR
OPTIONS GRANTED UNDER SECTION 102(b)(2)
OF
THE ISRAELI INCOME TAX ORDINANCE
TO
EMPLOYEES, OFFICERS OR DIRECTORS
AS
102 CAPITAL GAINS TRACK OPTIONS
Unless
otherwise defined herein, capitalized terms used in this Option Agreement shall
have the same meanings as ascribed to them in the DBT Biopharmaceuticals,
Inc. 2004 Stock Incentive Plan and Appendix A (Israeli Residents)
thereto (jointly referred to herein as the “Plan”).
This
Share Option Agreement (the “Agreement”) includes the Notice of Share Option
Grant attached hereto as Exhibit A (the
“Notice of Share Option Grant”), which is incorporated herein by reference and
is made and entered into as of the Date of Grant shown in the Notice of Share
Option Grant by and between DBT Biopharmaceuticals, Inc. (the “Company”) and the
Participant named in the Notice of Share Option Grant.
1. Grant
of Options.
The Board
of Directors of the Company hereby grants to the Participant, Options to
purchase the number of Shares set forth in the Notice of Share Option Grant, at
the exercise price per Share set forth in the Notice of Share Option Grant (the
"Exercise Price"), and subject to the terms and conditions of Section 102(b)(2)
of the Income Tax ITO (New Version) - 1961, the Plan, which is incorporated
herein by reference, and the Trust Agreement, entered into between the Company
and ___________________ (the “Trustee”). The Options are granted as
102 Capital Gains Track Grants. 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. However, the Notice of Share
Option Grant in Exhibit A, to this Agreement sets out specific terms for the
Participant hereunder, and will prevail over more general terms in the Plan, if
any, or in the event of a conflict between this Agreement and the
Plan.
2. Issuance
of Options.
2.1 The
Options will be registered in the name of the Trustee as required by law to
qualify under Section 102. Participant shall comply with the ITO, the
Rules, and the terms and conditions of the Trust Agreement entered into between
the Company and the Trustee.
2.2 The
Trustee will hold the Options or the Shares to be issued upon exercise of the
Options for the Required Holding Period, as set forth in the
Plan. The Required Holding Period for 102 Capital Gains Track Grants
pursuant to the provisions of Section 102 is twenty-four (24) months
from the end of the tax year during which the Options are granted.
2.3 The
Participant hereby undertakes to release the Trustee from any liability in
respect of any action or decision duly taken and bona fide executed in
relation to the Plan, or any Option or Share granted to him
thereunder.
2.4 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 particularly the Rules.
3. Non-Transferability
of Options and Shares.
3.1 Non-Transferability of
Options. The Options may not be transferred in any manner
other than by will or the laws of descent or distribution and may be exercised
during the lifetime of the Participant, by the Participant only. The
transfer of the Options is further limited as set forth in the
Plan.
3.2 Non-Transferability of
Shares. The transfer of the Shares to be issued upon exercise
of the Options is limited as set forth in the Plan and in Section 6
below.
4. Period
of Exercise.
4.1 Term of
Options. The Options may be exercised in whole or in part once
vested at any time for a period of ten (10) years from the Date of Grant, as set
forth in the Notice of Share Option Grant, subject to Section 4.2
below. The Date of Grant, the dates at which the Options vest and the
dates at which they are exercisable are set out in the Notice of Share Option
Grant.
4.2 Termination of
Options. Options shall terminate as set forth in the Plan.
Options may be exercised following Participant’s Termination only during the
period specified in Section 9.2(a) of the Plan, unless otherwise specifically
stated in the Notice of Share Option Grant.
5. Exercise of Option
Award.
5.1 The
Options, or any part thereof, shall be exercisable by the Participant’s signing
and returning to the Company at its principal office (and to the Trustee, where
applicable), a "Notice of Exercise" in the form attached hereto as Exhibit B, or in such
other form as the Company and/or the Trustee may from time to time prescribe,
together with payment of the aggregate Purchase Price in accordance with the
provisions of the Plan.
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5.2 In
order to issue Shares upon the exercise of any of the Options, the Participant
hereby agrees to sign any and all documents required by law and/or the Company's
Articles of Association and/or the Trustee.
5.3 After
a Notice of Exercise has been delivered to the Company it may not be rescinded
or revised by the Participant.
5.4 The
Company will notify the Trustee of any exercise of Options as set forth in the
Notice of Exercise. If such notification is delivered during the
Required Holding Period, the Shares issued upon the exercise of the Options
shall be issued in the name of the Trustee, and held in trust on the
Participant’s behalf by the Trustee. In the event that such
notification is delivered after the end of the Required Holding Period, the
Shares issued upon the exercise of the Options shall either (i) be issued in the
name of the Trustee, subject to the Trustee’s prior written consent, or (ii) be
transferred to the Participant directly, provided that the Participant first
complies with the provisions of Section 7 below. In the event that
the Participant elects to have the Shares transferred to the Participant without
selling such Shares, the Participant shall become liable to pay taxes
immediately at the rate prescribed by law.
6. Market
Stand-Off.
In
connection with any underwritten public offering by the Company of its equity
securities, and if requested by the underwriters of such public offering, the
Participant shall be obligated not, directly or indirectly to sell, make any
short sale of, loan, hypothecate, pledge, offer, grant or sell any option or
other contract for the purchase of, purchase any option or other contract for
the sale of, or otherwise dispose of or transfer, or agree to engage in any of
the foregoing transactions with respect to, any Options or Shares without the
prior written consent of the Company or its underwriters. Such restriction (the
“Market Stand-Off”) will be in effect for such period of time following the date
of the final prospectus for the offering as may be required by the underwriters.
In the event of the declaration of a stock dividend, a spin-off, a stock split,
an adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company’s outstanding securities without receipt of consideration,
any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Shares subject to the Market
Stand-Off, or into which such Shares thereby become convertible, shall
immediately be subject to the Market Stand-Off. In order to enforce
the Market Stand-Off, the Company will be entitled to impose stop-transfer
instructions with respect to the Shares acquired upon the exercise of the
Options until the end of the applicable stand-off period. The
Company’s underwriters shall be beneficiaries of the agreement set forth in this
Section 6.
7. Taxes.
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7.1 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, and/or its affiliates, and the Trustee or the Participant), hereunder,
shall be borne solely by the Participant, with the exception of taxes imposed
upon the Company or its affiliate by law, such as the employer’s component of
payments to the National Insurance Institute. The Company and/or its affiliates,
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 Participant shall agree to indemnify the Company and/or its
affiliates 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 Participant for which the
Participant is responsible. The Company or any of its affiliates and the Trustee
may make such provisions and take such steps as it/they may
deem necessary or appropriate for the withholding of all taxes
required by law to be withheld with respect to Options 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 then or thereafter
payable to a Participant, and/or (ii) requiring a Participant to pay to the
Company or any of its affiliates the amount so required to be withheld as a
condition of the issuance, delivery, distribution or release of any Shares. In
addition, the Participant will be required to pay any amount that exceeds the
tax to be withheld and transferred to the tax authorities, pursuant to
applicable Israeli tax regulations.
7.2 The
Participant Is Advised To Consult With A Tax Advisor With Respect To The Tax
Consequences Of Receiving Or Exercising The Options.
8. United
States Securities Laws
8.1. Legal Compliance. Shares shall
not be issued pursuant to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such Shares shall comply with applicable
laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance. 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.
8.2 Legends. Participant
understands and agrees that the Company may cause the legends set forth below or
legends substantially equivalent thereto, to be placed upon any certificate(s)
evidencing ownership of the Shares together with any other legends that may be
required by the Company or by state, federal or foreign securities
laws:
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THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE “ACT”) OR REGISTERED OR QUALIFIED UNDER THE APPLICABLE SECURITIES LAWS
OF ANY OTHER STATE OR FOREIGN JURISDICTION AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR QUALIFIED OR REGISTERED UNDER SUCH APPLICABLE SECURITIES LAWS OF SUCH
OTHER JURISDICTIONS, OR, IN THE OPINION OF COMPANY COUNSEL SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE WITH AN EXEMPTION UNDER REGULATION S OF THE ACT,
ANOTHER EXEMPTION UNDER THE ACT OR ANY SUCH APPLICABLE SECURITIES LAWS OF SUCH
OTHER JURISDICTIONS. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT.
9. Miscellaneous.
9.1 Continuance of
Employment. Participant acknowledges and agrees that the
vesting of shares pursuant to the vesting schedule hereof is earned only by
continuing as an Eligible Employee, Consultant or director of the Company (a
"Service Provider") at the will of the Company (or its affiliate) (not through
the act of being hired, being granted this Option or acquiring Shares
hereunder). Participant further acknowledges and agrees that in the
event that Participant ceases to be a Service Provider, the unvested portion of
his Options shall not vest and shall not become exercisable. Participant 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 for the vesting
period, for any period, or at all, shall not interfere in any way with
Participant's right or the right of the Company or its affiliate to terminate
Participant's relationship as a Service Provider at any time, with or without
cause, and shall not constitute an express or implied promise or obligation of
the Company to grant additional Options to Participant in the
future.
9.2 Governing Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Israel, without giving effect to the rules respecting
conflict of law.
9.3 Entire
Agreement. This Agreement, together with the Notice of Share
Option Grant, the Plan and the Trust Agreement, constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, understandings
and arrangements, oral or written, between the parties hereto with respect to
the subject matter hereof. No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement,
the Notice of Share Option Grant or the Plan.
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9.4 Successors and
Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the Company, its successors and assigns, and the Company shall
require such successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken
place. The term “successors and assigns” as used herein shall include
a corporation or other entity acquiring all or substantially all the assets and
business of the Company (including this Agreement) whether by operation of law
or otherwise.
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By the
signature of the Participant and the signature of the Company's representative
below, Participant and the Company agree that the Options are granted under and
governed by (i) this Option Agreement, (ii) the Plan, a copy of which has been
provided to Participant or made available for his review, (iii) Section
102(b)(2) of the Income Tax Ordinance (New Version) – 1961 and the Rules
promulgated in connection therewith, and (iv) the Trust Agreement, a copy of
which has been provided to Participant or made available for his
review. Furthermore, by Participant’s signature below, Participant
agrees that the Options will be issued to the Trustee to hold on Participant’s
behalf, pursuant to the terms of the ITO, the Rules and the Trust
Agreement.
In
addition, by his signature below, Participant confirms that he is familiar with
the terms and provisions of Section 102 of the ITO, particularly the Capital
Gains Track described in subsection (b)(2) thereof, and agrees that he will not
require the Trustee to release the Options or Shares to him, or to sell the
Options or Shares to a third party, during the Restricted Holding Period, unless
permitted to do so by applicable law.
In Witness
Whereof, the Company has caused this Option Agreement to be executed by
its duly authorized officer and the Participant has executed this Option
Agreement as of the Date of Grant.
DBT
Biotechnologies, Inc.
By: _________________
Name:
_________________
Title:
_________________
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Participant
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EXHIBIT
A
NOTICE OF SHARE OPTION
GRANT
«name»
__________________
__________________
The undersigned Participant has been
granted an Option to purchase Ordinary Shares of the Company, subject to the
terms and conditions of the Plan and this Option Agreement, as
follows:
Date
of Grant
|
«grantdate»
|
Vesting
Commencement Date
|
«vestdate»
Exercise Price per Share $0.01
|
Total
Number of Shares Granted
|
«shares»
|
Total
Exercise Price
|
$«totalprice»
|
Term/Expiration
Date
|
As
set forth in the Plan
|
Type
of Options
|
Section
102 – Capital Gains
Track
|
[NOTE:
THE VESTING COMMENCEMENT DATE SHOULD BE THE FIRST DAY OF THE NEXT CALENDAR
QUARTER]
Vesting
Schedule:
This Option shall be exercisable, in
whole or in part, according to the following vesting schedule, subject to
Participant’s continuing to be an employee, officer or director on such vesting
dates:
Eight and
one-third percent (8.33%) of the Shares subject to the Option shall vest
at the end of each calendar quarter, i.e. March 31, June 30,
September 30 or December 31 of any given year after the Vesting Commencement
Date, until fully vested.
Options
that do not vest and become exercisable in accordance with the above (or as
otherwise provided under the Plan) will be terminated in accordance with the
Plan.
Acceleration:
Notwithstanding
anything to the contrary in the Plan (including the Appendix thereto) in the
event that the Participant's employment with the Company terminates as a result
of the Employee's death or disability (as defined in the Plan) or upon
termination by the Company of the Participant's employment for any reason other
than Cause, any unvested Options shall be accelerated so that all such Options
shall be immediately vested in full as of the date of such
termination.
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Additional
Terms:
Notwithstanding
anything to the contrary in Section 4.2(b) of the Plan, in the event of any such
change in the capital structure or business of the Company by reason of any
stock split, reverse stock split, stock dividend, combination or
reclassification of shares, recapitalization, or other change in capital
structure of the Company, merger, consolidation, spin-off, reorganization,
partial or complete liquidation, issuance of rights or warrants to purchase any
Common Stock or securities convertible into Common Stock, any sale or transfer
of all or part of the Company’s assets or business, or any other corporate
transaction or event having an effect similar to any of the foregoing and
effected without receipt of consideration by the Company the Committee will not
have the authority to cancel outstanding Options hereunder in consideration of
payment in cash or other property in exchange therefore without the prior
written consent of the Participant, unless all of the holders of Options which
the Plan will be subject to such cancellation on the same terms, in which event
the Participant’s consent shall not be required.
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EXHIBIT
B
EXERCISE
NOTICE
DBT
Biotechnologies, Inc.
Attention:
[Chief Financial Officer]
1. Option. I
have been granted options (the “Option”) to purchase ordinary shares (the
“Shares”) of DBT Biotechnologies, Inc. (the “Company”) pursuant
to the Company’s 2004 Stock Incentive Plan and Appendix A (Israeli Residents)
thereto (the “Plan”), the Notice of Grant of Stock Option (the “Notice”) and
Stock Option Agreement (the “Option Agreement”), as follows:
Grant
Number:
|
|
Date
of Option Grant:
|
|
Number
of Option Shares:
|
|
Exercise
Price per Share:
|
US$
|
2. Exercise
of Option. I hereby elect to exercise the Option to purchase the
following number of Shares, all of which are Vested Shares in accordance with
the Notice and the Option Agreement:
Total
Shares Purchased:
|
|
Total
Exercise Price (Total Shares X Price
Per
Share):
|
US$
|
3. Payments. Enclosed
is the payment in full of the total exercise price for the Shares in the
following form(s), as authorized by my Option Agreement:
Cash:
|
US$
|
Check:
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US$
|
4. Tax
Withholding. The Participant explicitly acknowledges Section 7
of the Option Agreement, with respect to its bearing of any tax consequences in
connection to the Option, and the exercise thereof, and without limitation
hereby authorizes payroll withholding and otherwise will make adequate provision
for all applicable tax withholding obligations of the Company, if any, in
connection with the Option, all as more completely described in the plan and the
option agreement.
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5. Participant
Information.
Participant’s
address is:
|
|
Participant’s
ID Number is:
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6. Binding
Effect. I agree that the Shares are being acquired in accordance with
and subject to the terms, provisions and conditions of the Plan and the Option
Agreement and the Trust Agreement between the Company and the Trustee, to all of
which I hereby expressly assent. This Agreement shall inure to the
benefit of and be binding upon my heirs, executors, administrators, successors
and assigns.
7. Transfer. I
understand and acknowledge that the Shares have not been registered under the
United States Securities Act of 1933, as amended (the “Securities Act”), and
that consequently the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144 or
Rule 701 under the Securities Act. I further understand and
acknowledge that the Company is under no obligation to register the
Shares. I understand that the certificate or certificates evidencing
the Shares will be imprinted with legends which prohibit the transfer of the
Shares unless they are registered or such registration is not required in the
opinion of legal counsel satisfactory to the Company. I am aware that
Rule 144 under the Securities Act, which permits limited public resale of
securities acquired in a nonpublic offering, is not currently available with
respect to the Shares and, in any event, is available only if certain conditions
are satisfied. I understand that any sale of the Shares that might be
made in reliance upon Rule 144 may only be made in limited amounts in
accordance with the terms and conditions of such rule and that a copy of
Rule 144 will be delivered to me upon request.
I FURTHER
ACKNOWLEDGE THAT THE TRANSFER OF THE SHARES IS ALSO SUBJECT TO THE APPLICABLE
RESTRICTIONS PROVIDED BY THE PLAN, AND PARTICULARLY THOSE RESTRICTIONS IMPOSED
IN THE FRAMEWORK OF AMENDED SECTION 102(B)(2) OF THE ITO.
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I
understand that I am purchasing the Shares pursuant to the terms of the Plan,
the Notice and my Option Agreement, copies of which I have received and
carefully read and understand.
Very
truly yours,
|
|
(Participant
Signature)
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|
Print
Name
|
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Receipt
of the above is hereby acknowledged.
DBT
BIOTECHNOLOGIES, INC.
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By:
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Title:
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Dated:
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