PASSAVE INC.
OPTION AGREEMENT
MADE AS OF THE 23 DAY OF AUGUST, 2005
BETWEEN: PASSAVE INC.
A company incorporated in Delaware
(hereinafter the "COMPANY")
ON THE ONE PART
AND: Name ____________________
I.D. No. ________________
Address: ________________
(hereinafter the "OPTIONEE")
ON THE OTHER PART
WHEREAS On JUNE 2003, the Company duly adopted and the Board approved
Passave Inc. 2003 Israeli Share Option Plan, a copy of which
is attached as EXHIBIT A.1 hereto, forming an integral part
hereof (the "ISOP"); and -
WHEREAS Pursuant to the ISOP, the Company has decided to grant Options
to purchase Shares of the Company to the Optionee, and the
Optionee has agreed to such grant, subject to all the terms
and conditions as set forth in the ISOP and as provided
herein;
NOW, THEREFORE, it is agreed as follows:
1. PREAMBLE AND DEFINITIONS
1.1 The preamble to this 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 ISOP.
2. GRANT OF OPTIONS
2.1 The Company hereby grants to the Optionee the number of Options as
set forth in EXHIBIT A.2 hereto, each Option shall be exercisable
for one Share, upon payment of the Purchase Price as set forth in
EXHIBIT A.2, subject to the terms and the conditions as set forth
in the ISOP and as provided herein.
2.2 The Optionee is aware that the Company intends in the future to
issue additional shares and to grant additional options 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 of
Grant and terminate at the Expiration Date, or at the time at
which the Option expires pursuant to the terms of the ISOP or
pursuant to this Option Agreement.
3.2 Options may be exercised only to purchase whole Shares, and in no
case may a fraction of a Share be purchased. If any fractional
Share would be deliverable upon exercise, such fraction shall be
rounded up one-half or less, or otherwise rounded down, to the
nearest whole number.
4. VESTING; PERIOD OF EXERCISE
Subject to the provisions of the ISOP, Options shall vest and become
exercisable according to the Vesting Dates set forth in EXHIBIT A.2
hereto, provided that the Optionee is an Employee of or providing
services to the Company and/or its Affiliates on the applicable Vesting
Date.
All unexercised Options granted to the Optionee shall terminate and shall
no longer be exercisable on the Expiration Date, as described in Section
2.12 of the ISOP.
5. EXERCISE OF OPTIONS
5.1 Options may be exercised in accordance with the provisions of
Section 10.1 of the ISOP.
5.2 In order for the Company to issue Shares upon the exercise of any
of the Options, the Optionee hereby agrees to sign any and all
documents required by any applicable law and/or by the Company's
Articles of Association.
5.3 Pursuant to Section 7.3 of the ISOP and, when applicable, subject
to the provisions of Section 102, until the consummation of an
IPO, any Shares
acquired upon the exercise of Options shall be voted by an
irrevocable proxy, attached as EXHIBIT A.3 hereto.
5.4 The Company shall not be obligated to issue any Shares upon the
exercise of an Option if such issuance, in the opinion of the
Company, might constitute a violation by the Company of any
provision of law.
6. RESTRICTIONS ON TRANSFER OF OPTIONS AND SHARES
6.1 The transfer of Options and the transfer of Shares to be issued
upon exercise of the Options shall be subject to the limitations
set forth in the ISOP and in the Company's Articles of Association
and any shareholders' agreement to which the holders of ordinary
shares of the Company are bound.
6.2 With respect to any Approved 102 Option, subject to the provisions
of Section 102 and any rules or regulation or orders or procedures
promulgated thereunder, an Optionee shall not sell or release from
trust any Share received upon the exercise of an Approved 102
Option and/or any share received subsequently following any
realization of rights, including without limitation, bonus shares,
until the lapse of the Holding Period required under Section 102
of the Ordinance. Notwithstanding the above, if any such sale or
release occurs during the Holding Period, the sanctions under
Section 102 of the Ordinance and under any rules or regulation or
orders or procedures promulgated thereunder shall apply to and
shall be borne by such Optionee.
6.3 With respect to Unapproved 102 Option, if the Optionee ceases to
be employed by the Company or any Affiliate, the Optionee shall
extend to the Company and/or its Affiliate a security or guarantee
for the payment of tax due at the time of sale of Shares, all in
accordance with the provisions of Section 102 and the rules,
regulation or orders promulgated thereunder.
6.4 The Optionee acknowledges that in the event Company's shares shall
be registered for trading in any public market, the Optionee's
right to sell Shares may be subject to limitations (including a
lock-up period), as will be requested by the Company or its
underwriters, and the Optionee unconditionally agrees and accepts
any such limitations.
The Optionee acknowledges that in order to enforce the above
restriction, the Company may impose stop-transfer instructions
with respect to the exercised Shares.
6.5 The Optionee shall not dispose of any Shares in transactions which
violate, in the opinion of the Company, any applicable laws, rules
and regulations.
6.6 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).
7. TAXES; INDEMNIFICATION
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, the
Trustee or the Optionee), hereunder, shall be borne solely by the
Optionee. 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 Optionee hereby agrees 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
Optionee.
7.2 The Optionee will not be entitled to receive from the Company
and/or the Trustee any Shares allocated or issued upon the
exercise of Options prior to the full payments of the Optionee's
tax liabilities arising from Options which were granted to him
and/or Shares issued upon the exercise of Options. For the
avoidance of doubt, neither the Company nor the Trustee shall be
required to release any share certificate to the Optionee until
all payments required to be made by the Optionee have been fully
satisfied.
7.3 The receipt of the Options and the acquisition of the Shares to be
issued upon the exercise of the Options may result in tax
consequences. THE OPTIONEE IS ADVISED TO CONSULT A TAX ADVISER
WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
7.4 With respect to Approved 102 Options, the Optionee hereby
acknowledges that he is familiar with the provisions of Section
102 and the regulations and rules promulgated thereunder,
including without limitations the type of Option granted hereunder
and the tax implications applicable to such grant. The Optionee
accepts the provisions of the trust agreement signed between the
Company and the Trustee, attached as EXHIBIT A.4 hereto, and
agrees to be bound by its terms.
8. MISCELLANEOUS
8.1 NO OBLIGATION TO EXERCISE OPTIONS. The grant and acceptance of
these Options imposes no obligation on the Optionee to exercise
it.
8.2 CONFIDENTIALITY. The Optionee shall regard the information in this
Option Agreement and its exhibits attached hereto as confidential
information and the Optionee shall not reveal its contents to
anyone except when required by law or for the purpose of gaining
legal or tax advice.
8.3 CONTINUATION OF EMPLOYMENT OR SERVICE. Neither the ISOP nor this
Option Agreement shall impose any obligation on the Company or an
Affiliate to continue the Optionee's employment or service and
nothing in the ISOP or in this Option Agreement shall confer upon
the Optionee any right to continue in the employ or service of the
Company and/or an Affiliate or restrict the right of the Company
or an Affiliate to terminate such employment or service at any
time.
8.4 ENTIRE AGREEMENT. Subject to the provisions of the ISOP, to which
this Option Agreement is subject, this Option Agreement, together
with the exhibits hereto, constitute the entire agreement between
the Optionee and the Company with respect to Options granted
hereunder, and supersedes all prior agreements, understandings and
arrangements, oral or written, between the Optionee and the
Company with respect to the subject matter hereof.
8.5 FAILURE TO ENFORCE - NOT A WAIVER. The failure of any party to
enforce at any time any provisions of this Option Agreement or the
ISOP shall in no way be construed to be a waiver of such provision
or of any other provision hereof.
8.6 PROVISIONS OF THE ISOP. The Options provided for herein are
granted pursuant to the ISOP and said Options and this Option
Agreement are in all respects governed by the ISOP and subject to
all of the terms and provisions of the ISOP.
Any interpretation of this Option Agreement will be made in
accordance with the ISOP but in the event there is any
contradiction between the provisions of this Option Agreement and
the ISOP, the provisions of the Option Agreement will prevail.
8.7 BINDING EFFECT. The ISOP and this Option Agreement shall be
binding upon the heirs, executors, administrators and successors
of the parties hereof.
8.8 NOTICES. All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by
registered mail or delivered by email or facsimile with written
confirmation of receipt to the Optionee and/or to the Company at
the addresses shown on the letterhead above, or at such other
place as the Company may designate by written notice to the
Optionee. The Optionee is responsible for notifying the Company in
writing of any change in the Optionee's address, and the Company
shall be deemed to have complied with any obligation to provide
the Optionee with notice by sending such notice to the address
indicated below.
Company's Signature:
Name: XXXXXX XXXXXXXX
Position: CEO
Signature: ________________
I, the undersigned, hereby acknowledge receipt of a copy of the ISOP and accept
the Options subject to
all of the terms and provisions thereof. I have reviewed the ISOP and this
Option Agreement in its entirety, have had an opportunity to obtain the advice
of counsel prior to executing this Option Agreement, and fully understand all
provisions of this Option Agreement. I agree to notify the Company upon any
change in the residence address indicated above.
AUGUST 23, 2005
------------------ ---------------------
Date Optionee's Signature
EXHIBIT A.1: PASSAVE INC. 2003 ISRAELI SHARE OPTION PLAN
EXHIBIT A.2: TERMS OF THE OPTION
EXHIBIT A.3: PROXY
EXHIBIT A.4: TRUST AGREEMENT
