M-WISE, INC.
ISRAEL STOCK OPTION PLAN (2003)
OPTION AGREEMENT
made and entered into on the __ day of ______, 2004
Between
M-WISE, INC.
(the "COMPANY")
and
- ------------------
- ------------------
ISRAEL
(the "EMPLOYEE")
WHEREAS: The Employee is an employee of the Company and/or of a subsidiary
and/or of an affiliated company of the Company (each a "RELATED
COMPANY" and collectively, "RELATED COMPANIES"); and
WHEREAS: The Company desires to grant the Employee options to purchase
shares in the Company and/or issue to the Employee shares in the
Company and the Employee is interested in receiving the aforesaid
options and/or purchasing the aforesaid shares, all in accordance
with and subject to the Company's Israel Stock Option Plan
(2003), as amended from time to time, and the annexes thereto
(the "PLAN") and the provisions of this Agreement, and their
intention is that the provisions of Section 102 of the Ordinance
and the Rules shall not apply to the shares issued and/or options
granted; and
WHEREAS: The Employee has read the Plan and wishes to be bound thereby.
NOW, THEREFORE, it is agreed as follows:
1. PREAMBLE; DEFINITIONS
The preamble to this Agreement is the basis and constitutes an integral
part thereof. Any term not defined herein shall have the meaning ascribed
thereto in the Plan.
2. APPLICATION OF THE PROVISIONS OF THE PLAN
2.1 The Employee hereby confirms that he or she has carefully read the
Plan and that he or she acknowledges and agrees to all of the
provisions, conditions, limitations, authorizations, declarations
and commitments included therein.
1
2.2 The Employee declares and agrees that this Agreement and the Plan
prevail over any previous agreement, arrangement and/or
understanding, whether written or oral between the Employee and
the Company and/or any Related Company or the officers and/or
directors and/or the stockholders thereof with respect to the
matters herein included, and that any agreement, arrangement
and/or understanding as aforesaid are null and void and of no
further force or effect.
2.3 Except and to the extent otherwise expressly provided for herein,
all of the provisions, conditions, limitations and declarations
included and specified in the Plan, as shall be amended from time
to time, are hereby incorporated herein by reference and
constitute an integral part of this Agreement and of the
Employee's commitments hereunder, PROVIDED, THAT no amendment or
modification of the Plan may, without the consent of the Employee,
adversely affect the rights of the Employee pursuant to this
Agreement. Except and to the extent otherwise expressly provided
for herein, nothing in this Agreement shall derogate from anything
contained in the Plan.
2.4 A copy of the Plan is attached hereto and constitutes an integral
part hereof.
3. GRANT OF OPTION; VESTING
3.1 Subject to this Agreement and the Plan, the Company shall grant to
the Employee an option to purchase ___ shares of Common Stock of
the Company, par value $0.0017 each (the "SHARES") at an exercise
price of $_____ per share (the "OPTION"), at the time and in the
manner hereinafter provided.
The term of the Option shall be 8 years from _____________, or
such shorter period as is prescribed in Section 3.3 below.
3.2 Subject to the provisions of Section 3.3 below, the Option may
exercised by the Employee, in whole or in part, according to the
following vesting schedule:
__% of the Shares subject to the Option shall vest _______ (___)
months after _______, additional __% of the Shares subject to the
Option shall vest _________ (__) months following such date;
additional __% of the Shares subject to the Option shall vest
________ (__) months after such date; and additional __% of the
Shares subject to the Option shall vest ________ (__) months after
such date, subject to the Employee's continuing employment with
the Company or any Related Company on such dates.
3.3 The consideration for the exercise of the Option shall be paid on
the date of the exercise of the Option. The Option shall be
exercisable by the Employee in progressive stages on the exercise
dates as aforesaid, but in no event may the Optionee exercise this
Option after the term as provided for in Section 3.1 above and
PROVIDED THAT the Employee shall have been continuously employed
by the Company and/or a Related Company, from __________ until
such date of exercise.
2
In the event of termination of the Employee's employment by the
Company and/or a Related Company for any reason other than for
Cause (as such term is defined in Section 7.7 of the Plan) and
subject to the provisions of Section 7.7 of the Plan, prior to the
complete exercise of the Option, the Employee may exercise the
Option within thirty (30) days following the earlier of such
termination or notice of termination, to the extent that the
Option is vested on the date of termination (but in no event later
than the expiration of the term of the Option as prescribed in
this Agreement).
Notwithstanding any of the abovementioned, in the event that the
employment of the Employee with the Company and/or a Related
Company is terminated for Cause, any unexercised portion of the
Option shall immediately expire and be of no further force or
effect upon the earlier of such termination or notice of
termination.
4. NON ASSIGNABILITY
The Employee's rights hereunder are subject to the Plan and are personal
and not transferable (other than pursuant to the laws of inheritance),
and may not be made subject to any pledge, lien, attachment or other
charge whether voluntary or by law, and no power of attorney or a
transfer deed shall be given in respect thereof, whether it is to be
effective immediately or in the future, whether directly or indirectly,
and any such transfer shall be null and void. During the lifetime of the
Employee the Option may only be exercised by the Employee.
The Employee acknowledges and hereby agrees that, in addition to the
limitations on transferability of the Shares pursuant to the Company's
incorporation documents, as shall be in effect from time to time, the
Employee's shares in the Company shall not be transferable without the
prior approval of the Board in a specific case or generally, which
approval may be withheld at its absolute discretion and in any event, the
Employee's shares in the Company shall be transferable only in accordance
with the Company's incorporation documents.
5. EMPLOYEE REPRESENTATIONS, WARRANTIES AND COVENANTS
Without derogating in any manner from the provisions of the Plan or this
Agreement, the Employee hereby represents, warrants, agrees and
undertakes as follows:
5.1 The Shares, if and when purchased, are being purchased for the
Employee's own account for investment purposes only and not with a
view for resale or transfer, and that all the rights pertaining to
the Shares, by law or equity, shall be purchased and possessed by
the Employee for the Employee exclusively.
5.2 That he or she acknowledges that the Company's shares are not
publicly traded and understands that the Company bears no
responsibility and has made no commitment to register its shares
or the Option or Shares allotted to the Employee, for trading or
to offer its shares to the public in any manner.
3
5.3 The Employee acknowledges and agrees that no income or gain which
the Employee may be credited with or which purports to be credited
to the Employee as a result of the grant of the Option, the issue
of the Shares to the Employee or the sale thereof, if any, shall
in any manner be taken into account in the calculation of the
basis for the Employee's entitlements from the Company or any
Related Company or in the calculation of any social welfare right
or other rights or benefits arising out of the employee/employer
relationship, including without limitation, social security,
manager's insurance, educational fund, pension funds, severance
pay, holiday pay, etc.
In the event that the Company and/or any Related Company shall be
required, pursuant to any law, to take into account for purposes
of calculating any such benefits, any of the aforesaid elements of
income or gain actually or theoretically credited to the Employee,
the Employee shall promptly indemnify the Company and/or any
Related Company against any expense caused to it in this regard,
and any such amount shall be deemed a debt of the Employee to the
Company and/or any Related Company, which may be deducted or set
off from any amounts payable to the Employee.
5.4 The Employee acknowledges that nothing in this Agreement and/or in
the Plan shall be interpreted as a commitment and/or an agreement
by the Company and/or any Related Company to employ the Employee,
whether for a certain period or otherwise, and that nothing in
this Agreement and/or the Plan or any option granted pursuant
hereto or thereto shall be interpreted as conferring upon the
Employee any right to continue in the employment of the Company or
any Related Company or as obliging the Company or any Related
Company to employ the Employee or as restricting the rights of the
Company and/or any Related Company to terminate the Employee's
employment, at any time, at its sole discretion and in accordance
with law. The Employee shall have no claim whatsoever against the
Company and/or any Related Company as a result of the termination
of his or her employment, even if such termination causes the
Option or any other options, in whole or in part, to expire and/or
prevents him or her from exercising the Option in whole or in part
and/or from receiving or retaining the Shares pursuant hereto or
to any other agreement between him or her and the Company, or
results in any loss due to any imposition of tax liability
(including any early imposition) pursuant to applicable law.
5.5 The Employee acknowledges that the grant of the Option and the
issue of the Shares, the execution of this Agreement and the
Employee's participation in the Plan shall have tax consequences
to the Employee, and that the Company is not able to ensure or
represent to the Employee the nature and extent of such tax
consequences.
The Employee acknowledges and agrees that pursuant to the Plan,
the Employee shall be liable to pay all taxes, of every nature,
including duties, fines and any other payment which may be imposed
4
by the tax authorities, whether in Israel or abroad, and all
expenses arising out of the Plan, including every obligatory
payment of whatever source in respect of the Option, the Shares
(including, without limitation, upon the exercise of the Option,
the sale of the Shares or the registration of the Shares in the
Employee's name) or dividends or any other benefit in respect
thereof, and/or all other charges which may accrue to the
Employee, the Company or any Related Company in connection with
the Plan. Furthermore, the Employee acknowledges that the Employee
shall not have, and the Employee hereby waives, any complaint
and/or cause of action the same has or shall have in the future
against the Company or any Related Company in any way connected to
any taxation resulting from the grant of the Option, the exercise
thereof, the sale of Shares by the Employee and/or any other
matter which is in any manner whatsoever connected to the Option,
the Shares and/or the participation of the Employee in the Plan.
The Employee further acknowledges and agrees that, without
derogating from the Employee's obligation to pay all taxes payable
with respect to the Option and the Shares, the Company and/or any
Related Company shall at their absolute sole discretion be
entitled, to deduct at source from all the payments due to the
Employee, including dividends, consideration for the sale of
shares or from any other source, any tax payments due to the tax
authorities in respect of the Option or the Shares pursuant to any
law.
5.6 The Employee acknowledges that he or she is aware of, and clearly
understands that the Shares have certain restrictions and
limitations as set forth in the Company's incorporation documents,
the Plan and this Agreement, each as amended form time to time,
and that, as a result, inter alia, of these limitations, it may be
difficult or impossible for the Employee to realize his or her
investment and/or to sell or otherwise transfer the Shares.
5.7 In the event that the Company's incorporation documents, now or at
any time hereafter, provide for a right of first refusal to
purchase shares of the Company which are offered for sale by other
stockholders of the Company and/or a pre-emptive right to purchase
shares which are being allotted or shall in the future be allotted
by the Company, the Employee hereby waives such rights.
5.8 The Employee shall have none of the rights of a stockholder of the
Company for as long as the Option has not been exercised in
accordance with the provisions of the Plan and this Agreement and
once exercised, for as long as the Shares have not been registered
in the Employee's name in the Company's register of members.
5.9 The Employee shall provide, at the Company's request, any
certificate, declaration or other document and shall perform any
full act which the Company shall consider to be necessary or
desirable pursuant to any law, whether local or foreign (including
any undertaking on the part of the grantee not to sell his or her
shares of the Company during any period which shall be required by
an underwriter (lock up period) or investment bank or advisor of
5
the Company for the purpose of any share issue whether private or
public and including any certificate or agreement which the
Company shall require, if any, from the Employee as a member of a
class of stockholders), or any certificate, declaration or other
document the obtaining of which shall be deemed by the Board to be
appropriate or necessary for the purpose of raising capital for
the Company, of merging the Company with another company (whether
the Company is the surviving entity or not), of the registration
or offering of the Company's stock for sale to the public, or of
reorganization of the Company, including, in the event of a
consolidation or merger of the Company or any sale, lease,
exchange or other transfer of all or substantially all of the
assets or shares of the Company, the sale or exchange, as the case
may be, of any shares or rights to purchase shares the Employee
may have purchased or been granted hereunder all as shall be
deemed necessary or desirable by the Board.
5.10 The Employee has received a copy of the Plan, has examined it, and
acknowledges and agrees to all the provisions and conditions
thereof.
5.11 The Employee has extensive knowledge of the Company and its
activities, and is aware that the Company operates in a
sophisticated, high tech and high risk sector, and that the market
thereof is restricted and highly competitive, and that the
exercise of the Option constitutes an economic risk. The Employee
undertakes that he or she shall not have any claim against the
Company and/or any Related Company or any of its or their
officers, employees, stockholders or advisors if the Employee's
investment in the Shares shall fail or for the payment of any tax
due or for any other reason.
6. TAXES; INDEMNIFICATION
6.1 The Employee hereby covenants to bear all tax obligations, levies,
fines and other payments concerning the Employee which shall be
imposed by the tax authorities (whether in Israel or abroad) and
any other obligation from whatever source including but no limited
to the obligations of the Employee and/or the Company and/or any
Related Company arising out of the Plan (including, without
limitation, granting of the Option, exercise of the Option, issue
of the Shares and the sale thereof by the Employee). Without
derogating from the generality of the aforesaid, the Employee's
obligations in this regard shall include, income tax, stamp tax,
employer's tax, capital gains tax, social security insurance and
any other tax, levy or payment which the Employee or the Company
and/or any Related Company is or shall be obliged to pay because
of the Option or the Shares (including deductions at source which
the Company is or shall be obliged to make for tax imposed upon
the Employee) and the Employee shall indemnify the Company and/or
any Related Company for every charge or payment as aforesaid,
which may be deducted or set off from any amounts payable to the
Employee.
6.2 Subject to the provisions of the Plan, the Employee hereby
covenants to pay the Company promptly upon its first request in
writing, any sum for which it is are responsible (or, in the
Board's opinion, it might be responsible for), and which is
payable by the Employee as set forth in Section 6.1 hereof to the
income tax authorities and/or any other governmental or
administrative authority, whether in Israel or abroad (including
for deduction of tax at source) pursuant to the Plan, and/or in
respect of the Employee's participation in the Plan. The Employee
covenants to promptly indemnify the Company and/or any Related
Company for any charge or payment as aforesaid, which may be
deducted or set off from any amounts payable to the Employee.
6
7. AMENDMENTS TO THE PLAN AND/OR REPLACEMENT THEREOF
The Employee acknowledges, agrees and confirms that the Plan may be
amended as provided for therein and the Employee hereby agrees and
covenants not to raise any objection to any such amendment as aforesaid
and that the Employee shall sign any document which according to the
Company is necessary or desirable in order to give full force and effect
to the amendment of the Plan. The Employee understands that any amendment
to the Plan or any document connected to the Plan, shall bind him or her
as if he or she were a party thereto, PROVIDED, that no amendment or
modification of the Plan may, without the consent of the Employee,
adversely affect the rights of the Employee pursuant to this Agreement.
8. GOVERNING LAWS
This Agreement shall be governed by and construed in accordance with the
laws of the State of Israel and, subject to the provisions of Section 9
below, the competent courts in the Tel-Aviv district shall have exclusive
jurisdiction with respect to any matter or conflict with respect thereto.
9. DISPUTES
As a condition of the granting of the Option, the Employee agrees that
any dispute or disagreement which shall arise under or as a result of
this Agreement shall be determined by the Board, or any committee
designated by the Board pursuant to the Plan, in its sole discretion and
judgment and that any such determination and any interpretation by the
Board or any such committee of the terms of this Agreement shall be final
and shall be binding and conclusive for all purposes. In making any such
determination or interpretation the Board or any such committee shall not
be bound by the rules of procedure or evidence or substantive law and
shall not be required to any reasons therefore.
10. NOTICES AND/OR INSTRUCTIONS
(a) Every notice and/or instruction required or permitted to be given
pursuant to this Agreement shall be given in writing and shall be
deemed to have been delivered on the date of its delivery to the
addressee by hand; three (3) days after having been sent by
registered mail; or one (1) day after been sent by facsimile or
email, with confirmation of transmission. The parties' addresses
for the purpose of this Section shall be, if a party hasn't
communicated another address by a written notice ten (10) days in
advance, as follows:
The Company: M-WISE, INC.
10 Hasadnaot St.
Herzliya 46728
Israel
The Employee: _______________
ISRAEL
(b) A stamp or a receipt on behalf of the postal service which
evidences the time of delivery of the notice shall constitute
conclusive evidence as to the date of delivery and no party shall
claim that a notice delivered as aforesaid has not been received
by such party.
7
- ------------------------- -------------------------
M-WISE, INC. EMPLOYEE
NAME:
--------------------
8