EXHIBIT 10.1
INCENTIVE STOCK OPTION AGREEMENT
("OPTION AGREEMENT")
Made as of the ______ day of ______1999
By and between
XACCT TECHNOLOGIES (1997) LTD.
("THE COMPANY")
an Israeli Company located at
00 Xxxxx Xxxxxx
Xxxx-Xxxx 00000
Xxxxxx
OF THE FIRST PART
AND
("THE OPTIONEE")
OF THE SECOND PART
PREAMBLE
WHEREAS In July, 1998, the Company has adopted it's 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 an 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 hereinafter provided.
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.
2. GRANT OF OPTION
2.1 The Company hereby grants the Optionee ISOs in a number set forth
in Section 2 of EXHIBIT B hereto (for purposes of this Option
Agreement - THE OPTION(S) subject in each case to the vesting
schedule thereof. Each Option is exercisable for One Ordinary
Share of a nominal value of NIS 0.01 (THE SHARE), at a price per
Ordinary Share as set forth in Section 3 of EXHIBIT B (THE OPTION
PRICE), in each case upon the terms and subject to the conditions
set forth herein. Each Share shall be allocated from the total
number of shares reserved from of the Company's authorized share
capital for the Option Plan
The Option Price will be paid in NIS in accordance with the
representative rate of exchange of the U.S. dollar, published by
the Bank of Israel and known on the date of giving the notice of
exercise (as set forth in Section 5.1 hereinafter).
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 terms of this Option Agreement shall commence on the date
hereof (THE DATE OF GRANT) and terminate at the Expiration Date
(as defined in Section 6 below), or at the time at which the
Option is completely 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 and exercisable, 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 any of its subsidiaries, at all times during the
period beginning with the granting of the Option and ending upon
the date of exercise.
3.3 Subject to the provisions of Section 3.4 below, in the event of
termination of the Optionees employment with the Company or any of
its subsidiaries, all Options granted to him or her will
immediately be expired. A notice of termination of employment by
either the Company or the Optionee shall be deemed to constitute
termination of employment.
2
3.4 Notwithstanding anything to the contrary hereinabove, an Option
may be exercised after the date of termination of Optionee's
employment with the Company or any subsidiary of the Company
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 periods of the Options, set forth in Section 4 below, if:
(I) 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, (ii) termination is without Cause (as
defined below), 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, but only with respect to the
number of shares purchasable at the time of such termination,
according to the vesting periods of the Options, (iii) 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 3 (three) months from the date of termination,
but only with respect to the number of Options already vested at
the time of such termination according to the vesting periods of
the Options. The term CAUSE shall mean any action, omission or
state of affairs related to the Optionee which the Committee or
the Board decides, in its sole discretion, is against the best
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 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, Options shall
vest (i.e., Options shall become exercisable) at the dates set forth in
Section 6 of Exhibit B hereto.
5. METHOD OF EXERCISE
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
(THE EXERCISE NOTICE), 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 the Option is being
exercised.
3
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 If the Company is separated, reorganized, merged, consolidated or
amalgamated with or into another corporation while unexercised
Options remain outstanding under the Option Plan, there shall be
substituted 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 separated, reorganized,
merged, consolidated or amalgamated corporation which were
distributed to the shareholders of the Company in respect of such
shares, and appropriate adjustments shall be made in the purchase
price per share to reflect such action. However, subject to any
applicable law, in the event the successor corporation does not
agree to assume the award as aforesaid, the Vesting Period a set
forth in section 4 above shall be accelerated so that any
unexercisable or unvested portion of the outstanding Options shall
be immediately exercisable and vested in full as of the date ten
(10) days prior to the date of the change in control.
7.2 If the Company is liquidated or dissolved while unexercised
Options remain outstanding, then all such outstanding Options may
be exercised in by the Optionee as of the effective date of any
such liquidation or dissolution of the Company without regard to
the installment exercise provisions hereof, by the Optionee giving
notice in writing to the Company of his or her intention to so
exercise.
4
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 shares, all as will be determined by the Board whose
determination shall be final.
7.4 Anything herein to the contrary notwithstanding, if prior to the
completion of the 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, the Optionee shall be obliged to sell or exchange (in
accordance with the value of his or her Shares in accordance to
the transaction) as the case may be, the Shares such Optionee
purchased hereunder, in accordance with the instructions then
issued by the Board, which will be given according to the decided
upon policy concerning Optionees under the Option Plan.
8. RIGHTS PRIOR TO EXERCISE OF OPTION; LIMITATIONS AFTER PURCHASE OF SHARES
8.1 Subject to the provisions of Section 8.2 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,
registration of the Optionee as holder of such Shares in the
Companies register of members.
8.2 With respect to all Shares (in contrary to unexercised Options)
issued upon the exercise of Options and purchased by the Optionee,
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.
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.
Any action or dealing in contravention of the prohibitions set
forth in this Section 8.3 whether present or future, direct or
indirect, shall be null and void.
5
8.4 The Optionee may be required by the Company, at the Company's
discretion, to give a representation in writing upon exercising
the Option, that he or she is acquiring the Shares for his or her
own account, for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
8.5 The Optionee shall not dispose of any Option Shares in
transactions which, in the opinion of counsel to the Company,
violate the U.S. Securities Act of 1933, as amended (the "1933
Act"), or the rules and regulations thereunder, or any applicable
state securities or "blue sky" laws, including the securities laws
of the State of Israel.
8.6 If any Option Shares shall be registered under the 1933 Act, no
public offering (otherwise than on a national securities exchange,
as defined in the Securities Exchange Act of 1934, as amended) of
any Option Shares shall be made by the Optionee (or any other
person) under such circumstances that he or she (or such other
person) many be deemed an underwriter, as defined in the 0000 Xxx.
8.7 The Optionee agrees that the Company shall have the authority to
endorse upon the certificate or certificates representing the
Option Shares such legends referring to the foregoing
restrictions, and any other applicable restrictions, as it many
deem appropriate (which do not violate the Optionee's rights
according to this Option Agreement).
9. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL
9.1 Notwithstanding anything to the contrary in the Articles of
Association of the Company, the Optionee shall not have a right of
first refusal in relation with any sale, transfer or allotment of
shares in the Company.
9.2 Until such time as the Company shall effectuate an IPO, the sale
of Shares issuable upon exercise of an Option, by the Optionee,
shall be subject to a right of first refusal on the part of the
Company's Founders, as defined in the Articles of Association of
the Company in effect in July 1998 (save, for the avoidance of
doubt, for other Optionees who already exercised their Options),
PRO RATA in accordance with their shareholding, by the Optionee
giving a notice of sale (THE NOTICE) to the Company who will
forward the Notice to the Founders.
The notice shall specify the Number of Shares offered for sale,
the price per Share and the payment terms. The Founders will be
entitled for 30 days from the day of receipt of the Notice ("THE
30 DAYS PERIOD"), to purchase all or part of the offered Shares,
PRO RATA in accordance with their shareholding. If by the end of
the 30 Days Period not all of the offered Shares have been
purchased by the Founders, the Optionee will be entitled to sell
such Shares at any time during the 90 days following the end of
the 30 Days Period on terms not more favorable than those set out
in the Notice.
6
10. GOVERNMENT REGULATIONS
The Option Plan, and the granting and exercise of the Option thereunder,
and the Company's obligation to sell and deliver Shares or cash under the
Option, 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 1933 Act, and to such approvals by
any governmental agencies or national securities exchanges as may
required.
11. CONTINUANCE OF EMPLOYMENT
Nothing in this Option Agreement shall be construed to impose any
obligation on the Company or a subsidiary thereof to continue the
Optionee's employment with it, to confer upon the Optionee any right to
continue in the employ of the Company or a subsidiary thereof, or to
restrict the right of the Company or a subsidiary thereof to terminate
such employment at any time.
12. 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 and exclusive jurisdiction in any matters pertaining to this Option
Agreement.
13. 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 or the Optionee), hereunder, shall be borne solely by
the Optionee. The Company shall withhold taxes according to the
requirements under the applicable laws, rules, and regulations, including
the withholding of taxes at source. Furthermore, the Optionee shall agree
to indemnify the Company and hold it 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.
7
14. FAILURE TO ENFORCE NOT A WAIVER
The failure of the 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.
15. PROVISIONS OF THE OPTION PLAN
The Options provided for herein are granted pursuant to the Option Plan,
and said Options and this Option 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 and in the event there is any contradiction between
the provisions of this Option Agreement and the Option Plan, the
provisions of the Plan will prevail.
16. BINDING EFFECT
This Option Agreement shall be binding upon the heirs, executors,
administrators, and successors of the parties hereof.
17. 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 from time to
time.
18. ENTIRE AGREEMENT
This Option Agreement exclusively concludes all the terms of the
Optionee's Option Plan, and, subject to the provisions of Section 20 of
the Option Plan, annuls and supersedes any other agreement, arrangement
or understanding, whether oral or in writing, relating to the grant of
options 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 member and has received the approval of the
Board.
8
IN WITNESS WHEREOF, the Company executed this Option Agreement in duplicate on
the day and year first above written.
XACCT Technologies (1997) Ltd.
By: Xxxx Xxxxx, President and CEO
-------------------------------
The undersigned hereby accepts, and agrees to, all terms and provisions of the
foregoing Option Agreement.
-------------------------------
The Optionee
9
EXHIBIT A
XACCT TECHNOLOGIES (1997)
LTD.
THE 1998
STOCK OPTION PLAN
10
XACCT TECHNOLOGIES (1997) LTD.
THE 1998
STOCK OPTION PLAN
1. NAME
This 1998 Stock Option Plan, as amended from time to time, shall be known
as the XaCCT Technologies (1997) Ltd. 1998 Stock Option Plan (the "OPTION
PLAN"). For the purposes of this Option Plan the reference to or the use
of the term "Stock" or "stock" shall mean and refer to a "share" as
defined in Section 1 of the Israeli Companies Ordinance New Version
(5743-1983) (the "Ordinance") and not "stock" within the meaning Section
146 of the Ordinance.
2. PURPOSE OF THE OPTION PLAN
The Option Plan is intended as an incentive to retain, in the employ of
XaCCT Technologies (1997) Ltd.("THE COMPANY") and its subsidiaries,
persons of training, experience, and ability, to attract new employees,
directors and consultants 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, pursuant to the Option Plan approved by the board
of directors of the company ("THE BOARD"). Options granted under the 1998
Plan may or may not contain such terms as will qualify the Options as
Incentive Stock Options ("ISOS") within the meaning of Section 422(b) of
the United States Internal Revenue Code of 1986, as amended (the "CODE").
Options which shall not contain terms as will qualify them as ISOs shall
be referred to herein as Non - Qualified Stock Options ("NQSOS"). (All
options granted hereunder shall be referred to herein together as the
"OPTIONS").
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.
11
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 (i) to designate
participants (ii) to 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; (iii) to accelerate the right of an
Optionee to exercise, in whole or in part, any previously granted Option;
(iv) to designate Options as Incentive Stock Options or as Non -
Qualified Stock Options, (v) to interpret the provisions and supervise
the administration of the Option Plan; and - (vi) to 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 the 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.
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 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 her, 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.
12
4. DESIGNATION OF PARTICIPANTS
The persons eligible for participation in the Option Plan as recipients
of Options shall include any employees, directors and consultants of the
Company or of any subsidiary of the Company. The grant of an Option
hereunder shall neither entitle the recipient thereof to participate nor
disqualify him or her from participating in, any other grant of Options
pursuant to this Option Plan or any other option or share option plan of
the Company or any of its affiliates.
5. SHARES RESERVED FOR THE OPTION PLAN; RESTRICTION THEREON
5.1 Subject to adjustments as set forth in Section 8 below, a total of
______Ordinary Shares, of NIS 0.01n.v. each ("THE SHARES") shall
be subject to the Option Plan. The foregoing number of shares may
be increased or decreased by the events set forth in Section 8
("ADJUSTMENT") hereof. The Shares subject to the Option Plan are
hereby reserved for such purpose in the authorized share capital
of the Company and may only be issued in terms hereof. 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 therefore subject to such Option may again be subjected to
an Option under the Option Plan.
5.2 Each Option granted pursuant to the Plan, shall be evidenced by a
written agreement between the Company and the Optionee (the
"OPTION AGREEMENT"), in such form as the Board or the Committee
shall from time to time approve. Each Option Agreement shall state
the number of ordinary shares to which the Option relates and the
type of option granted thereunder (whether an ISO or an NQSO).
6. OPTION PRICE
6.1 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. In the case of an ISO, the exercise price shall not be less
than 100% of the fair market value thereof, as determined by the
Board or the Committee in its sole discretion.
6.2 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.
13
7. ADJUSTMENTS
Upon the occurrence of any of the following described events, Optionee's
rights to purchase Shares under the Option Plan shall be adjusted as
hereafter provided:
7.1 If the Company is separated, reorganized, merged, consolidated or
amalgamated with or into another corporation while unexercised
Options remain outstanding under the Option Plan, there shall be
substituted 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 separated, reorganized,
merged, consolidated or amalgamated corporation which were
distributed to the shareholders of the Company in respect of such
shares, and appropriate adjustments shall be made in the purchase
price per share to reflect such action. However, subject to any
applicable law, in the event the successor corporation does not
agree to assume the award as aforesaid, the Vesting Period a set
forth in section 4 above shall be accelerated so that any
unexercisable or unvested portion of the outstanding Options shall
be immediately exercisable and vested in full as of the date ten
(10) days prior to the date of the change in control.
7.2 If the Company is liquidated or dissolved while unexercised
Options remain outstanding under the Option Plan, then all such
outstanding Options may be exercised in full by the Optionees as
of the effective date of any such liquidation or dissolution of
the Company without regard to the installment exercise provisions
of Section 8(2), by the Optionees giving notice in writing to the
Company of their intention to so exercise.
7.3 If the outstanding shares of the Company shall at anytime be
changed or exchanged by declaration of a share dividend, share
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 happening of any
of the foregoing, the class and aggregate number of Shares
issuable pursuant to the Option Plan (as set forth in Section 5
hereof), in respect of which Options have not yet been exercised,
shall be appropriately adjusted, all as will be determined by the
Board whose determination shall be final.
7.4 Anything herein to the contrary notwithstanding, if prior to the
completion of an initial public offering of the Company's
securities (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.
14
8. TERM AND EXERCISE OF OPTIONS
8.1 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, 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
the Option is being exercised.
8.2 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, (i)
subject to the provisions of section 8.6 below, no option shall be
exercisable after the expiration of ten (10) years from the Date
of Grant as defined for each Optionee in his or her Option
Agreement and (ii) no ISO may be granted to a person who at the
time of the grant owns more than 10% of the voting power or value
of all classes of shares of the Company or its subsidiary. However
no Option shall be exercisable after the Expiration Date.
8.3 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.
8.4 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 and exercisable, prior to the Expiration Date, and
provided that, subject to the provisions of Section 8.6 below (i)
the Optionee is an employee of the Company or any of its
subsidiaries, at all times during the period beginning with the
granting of the Option and ending upon the date of exercise (ii)
the director or the consultant is serving the Company or any of
its subsidiaries, at all times during the period beginning with
the granting of the Option and ending upon the date of exercise.
8.5 Subject to the provisions of Section 8.6 below, in the event of
termination of employees employment with the Company or any of its
subsidiaries, or the termination of services given by directors or
consultants to the Company or any of its subsidiaries, all Options
granted to them will immediately be expired. A notice of
termination of employment or services shall be deemed to
constitute termination of employment or services.
15
8.6 Notwithstanding anything to the contrary hereinabove, an Option
may be exercised after the date of termination of Optionee's
service or employment with the Company or any subsidiary of the
Company 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 periods of the Options set forth in Section 4 of such
Optionee's Option Agreement, if: (i) 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, (ii)
termination is without Cause (as defined below), in which event
any Options still in force and unexpired may be exercised within a
period of ninety (90) days from the date of such termination, but
only with respect to the number of shares purchasable at the time
of such termination, according to the vesting periods of the
Options, (iii) 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 twelve (12) months
from the date of termination, but only with respect to the number
of Options already vested at the time of such termination
according to the vesting periods of the Options. The term "CAUSE"
shall mean any action, omission or state of affairs related to the
Optionee which the Committee or the Board decides, in its sole
discretion, is against the best interests of the Company.
8.7 Subject to the provisions of Section 12 below, 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 unless and until,
following exercise, registration of the Optionee as holder of such
Shares in the Companies register of members.
8.8 Any form of Option agreement authorized by the 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 cash and
shares with a combined value equal to any such excess, all as
determined by the Committee in its sole discretion.
16
9. INCENTIVE STOCK OPTIONS
Options intended to constitute ISOs, shall be subject to the following
special terms and conditions in addition to the general terms and
conditions of the Plan:
9.1 With respect to ISO granted to employees, the aggregate fair
market value of the shares (determined as of the grant of the ISO)
with respect to which ISO are exercisable, for the first time by
any grantee during any calendar year shall not exceed the
limitation provided under Section 422(d) of the Internal Revenue
Code.
9.2 The Options issued as ISOs must be granted within 10 years of the
date that the Plan was adopted or the date that the plan is
approved by the shareholders, whichever is earlier.
9.3 Any Options issued as ISOs, must by its terms be exercisable only
within 10 years from the date it is granted.
9.4 The exercise price of any ISO must not be less than the fair
market value of the shares at the time the ISO is granted. This
requirement shall be deemed satisfied if there has been a good
faith attempt to value the shares accurately for thus purpose.
9.5 The ISO by its terms must be non-transferable other than at death
and must be exercisable during the Optionee's lifetime only by the
Optionee.
10. PURCHASE OF INVESTMENT
Unless Shares covered by the Plan have been listed for trade on any stock
exchange (of any jurisdiction), or the Company has determined that such
registration is unnecessary, each person exercising an Option under the
Plan may be required by the Company to give a representation in writing
that he is acquiring such shares for his or her own account, for
investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
11. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL
11.1 Notwithstanding anything to the contrary in the Articles of
Association of the Company, none of the Optionees shall have a
right of first refusal in relation with any sale, transfer or
allotment of shares in the Company.
17
11.2 Until such time as the Company shall effectuate an IPO, the sale
of Shares issuable upon exercise of an Option, by the Optionee,
shall be subject to a right of first refusal on the part of the
Company's Founders, as defined in the Articles of Association of
the Company in effect in July 1998 (save, for the avoidance of
doubt, for other Optionees who already exercised their Options),
PRO RATA in accordance with their shareholding, by the Optionee
giving a notice of sale (THE NOTICE) to the Company who will
forward the Notice to the Founders.
The notice shall specify the number of Shares offered for sale,
the price per Share and the payment terms. The Founders will be
entitled for 30 days from the day of receipt of the Notice ("THE
30 DAYS PERIOD"), to purchase all or part of the offered Shares,
PRO RATA in accordance with their shareholding. If by the end of
the 30 Days Period not all of the offered Shares have been
purchased by the Founders, the Optionee will be entitled to sell
such Shares at any time during the 90 days following the end of
the 30 Days Period on terms not more favorable than those set out
in the Notice.
12. DIVIDENDS
With respect to all Shares (in contrary to unexercised Options) issued
upon the exercise of Options and purchased by the Optionee, 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.
13. 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.
14. 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.
18
15. AMENDMENTS OR TERMINATION
The Board may, at any time and from time to time, 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 or her consent.
16. 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.
17. CONTINUANCE OF EMPLOYMENT OR OTHER ENGAGEMENT
Neither the Option Plan nor the Option Agreement with the Optionee shall
impose any obligation on the Company or a subsidiary thereof, to continue
any Optionee in its employ or engagement, and nothing in the Option Plan
or in any Option granted pursuant thereto shall confer upon any Optionee
any right to continue in the employ or engagement of the Company or a
subsidiary thereof or restrict the right of the Company or a subsidiary
thereof to terminate such employment or such engagement at any time.
18. 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 and exclusive jurisdiction in any matters pertaining to this Plan.
19
19. 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 or the Optionee), hereunder, shall be borne solely by
the Optionee. The Company 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 hold it 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.
20. 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 share Options otherwise
then under the Option Plan, and such arrangements may be either
applicable generally or only in specific cases. For the avoidance of
doubt, prior grant of options to employees of the Company under their
employment agreements, and not in the framework of any previous option
plan, shall not be deemed an approved incentive arrangement for the
purpose of this Section.
21. MULTIPLE AGREEMENTS
The terms of each Option may differ from other Options granted under the
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
the Option Plan, either in addition to, or in substitution for, one or
more Options previously granted to that Optionee.
20
EXHIBIT B
TERMS OF THE INCENTIVE STOCK OPTIONS
------------------------------------------------------------------------------
1. Name of the Optionee:
------------------------------------------------------------------------------
2. Number of ISOs granted:
------------------------------------------------------------------------------
3. Price per Share:
------------------------------------------------------------------------------
4. Expiration Date: 8 years from the Date of Grant
------------------------------------------------------------------------------
5. Date of Grant:
------------------------------------------------------------------------------
6. Vesting schedule 4 years
------------------------------------------------------------------------------
-------------------------------------------------------------------------------
% OF THE OPTIONS VESTING DATE
------------------------------------------------------------------------------
6.25 Every 3 months, starting from the 3rd month
from the Date of Grant (unless stated
differently in employee's contract
------------------------------------------------------------------------------
Optionee Signature
------------------------
21
