EXHIBIT 4.2
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LAST AMENDED JUNE 30, 1996
ACCENT SOFTWARE INTERNATIONAL LTD.
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NON-EMPLOYEE SHARE OPTION PLAN (1995)
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A. NAME AND PURPOSE
1. Name: This plan, as amended from time to time, shall
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be known as the Accent Software International Ltd. Non-Employee Share
Option Plan (1995) (the "Plan").
2. Purpose: The purpose and intent of the Plan is to
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provide incentives to certain non-employee directors and consultants
of Accent Software International Ltd. ("Accent") or of any parent
corporation or subsidiary corporation of the Company now existing or
subsequently formed or acquired (Accent and its parent or subsidiary
corporations are collectively referred to as the "Company") by
providing them with opportunities to purchase shares in Accent,
pursuant to the Plan that was approved by the Board of Directors of
Accent.
B. GENERAL TERMS AND CONDITIONS OF THE PLAN
3. Administration:
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3.1 The Plan will be administered by a Share Option
Committee (the "Committee"), which will consist of such number of
Directors of Accent (not less than two (2) in number), as may be fixed
from time to time by the Board of Directors of Accent. The Board of
Directors shall appoint the members of the Committee, may from time to
time remove members from, or add members to, the Committee and shall
fill vacancies in the Committee however caused. All members of the
Committee shall be disinterested persons within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
3.2 The Committee shall select one of its members as its
Chairman and shall hold its meetings at such times and places as it
shall determine. Actions at a meeting of the Committee at which a
majority of its members are present or acts reduced to or approved in
writing by all members of the Committee, shall be the valid acts of
the Committee. The Committee may appoint a Secretary, who shall keep
records of its meetings and shall make such rules and regulations for
the conduct of its business as it shall deem advisable.
3.3 Subject to the general terms and conditions of this
Plan and to the specific limitations set forth herein, the Committee
shall have full authority in its discretion, from time to time and at
any time, to interpret this Plan, with respect to persons to whom
Option Awards are granted who are not Directors of the Company, to
determine (i) the persons to whom Option Awards (as hereinafter
defined) shall be granted ("Grantees"), (ii) the
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number of shares to be covered by each Option Award, (iii) the time or
times at which the same shall be granted, (iv) the schedule and
conditions on which such Option Awards may be exercised and on which
such shares shall be paid for, and/or (v) any other matter which is
necessary or desirable for, or incidental to, the administration of
the Plan. All Option Awards granted pursuant to this Plan must be
exercised within five (5) years of the date of grant. Notwithstanding
anything to the contrary contained herein, options granted hereunder
to non-employees serving as Directors of the Company shall only be
granted pursuant to the provisions set forth in paragraph 6.3.
3.4 The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No
member of the Board of Directors or of the Committee shall be liable
for any action or determination made in good faith with respect to the
Plan or any Option Award granted thereunder.
3.5 The interpretation and construction by the Committee of
any provision of the Plan or of any Option Award thereunder shall be
final and conclusive unless otherwise determined by the Board of
Directors.
4. Eligible Grantees:
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4.1 [Reserved.]
4.2 Subject to this limitation and any restriction imposed
by applicable law, Option Awards may be granted to any director
("Director") or consultant of the Company, provided that such director
or consultant is not an employee of the Company. The grant of an
Option Award to a Grantee hereunder, shall neither entitle such
Grantee to participate, nor disqualify him from participating, in any
other grant of options pursuant to this Plan or any other share
incentive or share option plan of the Company or any of its
subsidiaries.
5. Reserved Shares: Accent has reserved 300,000
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authorized but unissued Ordinary Shares (nominal value NIS 0.01 per
share) of Accent for purposes of the Plan, subject to adjustment as
provided in paragraph 10 hereof. Any shares under the Plan, in respect
of which the right hereunder of a Grantee to purchase the same shall
for any reason terminate, expire or otherwise cease to exist, shall
again be available for grant through Option Awards under the Plan.
6. Option Awards:
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6.1 The Committee shall award to Grantees options to
purchase shares in Accent available under the Plan ("Option Awards")
in accordance with the provisions of Sections 6.3 and 6.4 below.
Option Awards may be granted at any time after this Plan
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has been approved by the Board of Directors of Accent (or prior to
this Plan being so approved, provided that the grant of such Option
Awards is made subject to such approval) and the shares reserved for
the Plan effectively created. The date of grant of each Option Award
shall be the date specified by the Committee at the time such award is
made.
6.2 The instrument granting an Option Award shall state,
inter alia, the number of shares covered thereby, the dates when it
may be exercised (subject to Section 8.1), the option price, the
schedule on which such shares may be paid for and such other terms and
conditions as the Committee at its discretion may prescribe, provided
that they are consistent with this Plan.
6.3 Subject to the general terms and conditions of this
Plan: (i) each non-employee who is serving as a Director at the time
of the adoption of this Plan shall receive an initial grant of an
Option Award to purchase 15,000 Ordinary Shares of Accent, of which
the right to purchase 7,500 Ordinary Shares shall vest upon grant, and
the right to purchase the balance of 7,500 Ordinary Shares shall vest
one year after the date of grant; (ii) each non-employee who becomes a
member of the Board of Directors at any time after the adoption of
this Plan shall receive an initial grant of an Option Award to
purchase 15,000 Ordinary Shares of Accent, which shall vest as to the
entire grant one year after the date of grant; and (iii) upon each
anniversary of an initial grant, provided the Grantee is still serving
as a member of the Board of Directors, the Grantee shall receive an
annual Option Award to purchase 3,000 Ordinary Shares of Accent, which
shall vest as to the entire grant six months after the date of grant.
6.4 The Committee may in its discretion grant Option Awards
to any consultant of the Company.
7. Option Prices:
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7.1 The price per share covered by each Option Award shall
be 100% of the fair market value of each share as determined by the
Committee on the date of grant. If Accent's shares are publicly
traded on a securities market in the United States or in Israel, then
the fair market value of such shares on the date of grant shall be
equal to the closing sale price of such shares on the trading date
immediately preceding the date of such grant.
8. Exercise of Option Award:
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8.1 Option Awards shall be exercisable pursuant to the
terms under which they were awarded and subject to the terms and
conditions of this Plan.
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8.2 An Option Award, or any part thereof, shall be
exercisable by the Grantee's signing and returning to Accent at its
principal office a "Notice of Exercise" and a Share Incentive
Agreement (the "Agreement") in such form and substance as may be
prescribed by the Committee from time to time.
8.3 Anything herein to the contrary notwithstanding, but
without derogating from the provisions of paragraph 9 hereof, if any
Option Award, or any part thereof, has not been exercised and the
shares covered thereby not paid for within five (5) years after the
date of grant, such Option Award, or such part thereof, and the right
to acquire such shares shall terminate, all interests and rights of
the Grantee in and to the same shall expire.
8.4 Each payment for shares under an Option Award shall be
in respect of a whole number of shares, shall be effected in cash, by
a cashier's or certified check payable to the order of Accent, by
cashless exercise, or, with respect to persons to whom Option Awards
are granted who are not Directors of the Company, such other method of
payment acceptable to Accent as determined by the Committee, and shall
be accompanied by a notice stating the number of shares being paid for
thereby.
9. Termination of Service as a Director or Consultant:
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9.1 If a Director Grantee should, for any reason (other
than by reason of death or disability) cease to be a Director of
Accent, all of his rights, if any, in respect of all Option Awards
granted to him under the Plan which are not yet exercisable on the
date of the cessation of the directorship shall terminate and all of
his rights in respect of such Option Awards which are exercisable on
the date of the cessation of the directorship, but are not exercised
within 90 days after such cessation of the directorship, shall
terminate upon the expiration of such 90 day period. In the event of
the resignation or dismissal of a Director, the Director shall, for
the purposes of this paragraph 9.1, be deemed to have ceased to be a
Director of the Company upon the delivery to the Company of notice of
resignation or the delivery to the Director of notice of dismissal, as
the case may be, irrespective of the effective date of such
resignation or dismissal.
9.2 If a Director Grantee should cease to be a Director of
Accent by reason of death or disability, all outstanding Option Awards
shall be deemed fully vested, and the successor in interest of the
Grantee may exercise such Option Awards in accordance with their
terms.
9.3 If a non-director consultant Grantee should, for any
reason (other than by reason of death or disability) cease to be a
consultant of the Company, all of his rights, if any, in
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respect of all Option Awards granted to him under the Plan which are
not yet exercisable on the date of the cessation of the consultancy
shall terminate and, unless otherwise determined by the Board of
Directors of Accent, all of his rights in respect of such Option
Awards which are exercisable on the date of the cessation of the
consultancy, but are not exercised within 90 days after such cessation
of the consultancy, shall terminate upon the expiration of such 90 day
period. In the event of the resignation of a consultant or the
termination of a consultancy, the consultant shall, for the purposes
of this paragraph 9.3, be deemed to have ceased to be a consultant of
the Company upon the delivery to the Company or notice of resignation
or the delivery to the consultant of notice of termination of the
consultancy, as the case may be, irrespective of the effective date of
such resignation or discharge. In the event the consultancy of a non-
director consultant Grantee is terminated by the Company for cause,
such Grantee shall not be entitled to exercise the Option Awards
subsequent to the time of delivery of the notice of discharge.
9.4 If a non-director consultant Grantee should die, or be
unable to continue to be employed by the Company by reason of becoming
incapacitated while in the employ of the Company as a result of an
accident or illness or other cause which is approved by the Committee,
such Grantee shall, subject to approval of the Committee (which shall
not be unreasonably withheld), continue to enjoy rights under the Plan
on such terms and conditions as the Committee in its discretion may
determine.
10. Adjustments. Upon the happening of any of the
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following described events, a Grantee's rights to purchase shares
under the Plan shall be adjusted as hereinafter provided:
10.1 In the event the Ordinary Shares of Accent shall be
subdivided or combined into a greater or smaller number of shares or
if, upon a merger, consolidation, reorganization, recapitalization or
the like, the Ordinary Shares of Accent shall be exchanged for other
securities of Accent or of another corporation, each Grantee shall be
entitled, subject to the conditions herein stated, to purchase such
number of Ordinary Shares or amount of other securities of Accent or
such other corporation as were exchangeable for the number of Ordinary
Shares of Accent which such Grantee would have been entitled to
purchase except for such action, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision,
combination or exchange.
10.2 In the event that Accent shall issue any of its
Ordinary Shares or other securities as bonus shares (stock dividend)
upon or with respect to any shares which shall at the time be subject
to a right of purchase by a Grantee hereunder, each Grantee upon
exercising such right shall be entitled to
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receive (for the purchase price payable upon such exercise), the
shares as to which he or she is exercising such right and, in addition
thereto (at no additional cost), such number of shares of the class or
classes in which such bonus shares (stock dividend) were declared, and
such amount of shares and the amount of cash in lieu of fractional
shares, as is equal to the shares which he would have received had he
been the holder of the shares as to which he is exercising his right
at all times between the date of the granting of such right and the
date of its exercise.
10.3 Upon the happening of any of the foregoing events, the
class and aggregate number of Ordinary Shares issuable pursuant to the
Plan (as set forth in paragraph 5, hereof), in respect of which Option
Awards have not yet been granted, shall also be appropriately adjusted
to reflect the events specified in paragraphs 10.1 and 10.2 above.
10.4 The Committee shall determine the specific adjustments
to be made under this paragraph 10, and its determination shall be
conclusive.
11. Assignability and Sale of Shares and Option Awards:
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11.1 No shares purchasable hereunder which were not fully
paid for, shall be assignable or transferable by the Grantee. For
avoidance of doubt, the foregoing shall not be deemed to restrict the
transfer of a Grantee's rights in respect of Option Awards or shares
purchasable pursuant to the exercise thereof upon the death of such
Grantee to his estate or other successors by operation of law or will,
whose rights therein shall be governed by paragraph 9.2 hereof.
11.2 No Option Award may be transferred other than by will
or by the laws of descent and distribution, and during the Grantee's
lifetime an Option Award may be exercised only by him.
12. Securities Act of 1933; Israel Securities Law, 1967:
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By his exercise of an Option Award hereunder, the Grantee agrees not
to sell, transfer or otherwise dispose of any of the shares so
purchased by him except in compliance with the United States
Securities Act of 1933, as amended, and the rules and regulations
thereunder and the Grantee further agrees that all certificates
evidencing any of such shares shall be appropriately legended to
reflect such restriction. Accent does not obligate itself to register
any shares under the United States Securities Act of 1933, as amended.
However, the securities being offered and/or issued hereby have been
issued in compliance with the Israel Securities Law, 1967.
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13. Term and Amendment of the Plan:
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13.1 The Plan was adopted by the Board of Directors of
Accent on May 15, 1995, and shall expire on May 14, 2005 (except as to
Option Awards outstanding on that date). This Plan was approved by a
majority of Accent's shareholders on May 15, 1995 in accordance with
Regulation 240.16b-3(b) promulgated under the Exchange Act.
13.2 The Board of Directors may, at any time and from time
to time, terminate or amend the Plan in any respect except that,
without the prior approval of the Shareholders of Accent: (i) the
total number of Ordinary Shares which may be issued under the Plan may
not be increased (except by adjustment pursuant to paragraph 10
hereof); (ii) the provisions of paragraph 4.2 regarding the
eligibility may not be modified; and (iii) the provisions of paragraph
6.3 shall not be amended more than once in any six-month period other
than to comport with changes in the United States Internal Revenue
Code or the Employee Retirement Income Security Act of the United
States or the rules thereunder. In no event may any action of the
Company alter or impair the rights of a Grantee, without his consent,
under any Option Award previously granted to him.
14. Continuance of Status: Neither the Plan nor the
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Agreement shall impose any obligation on Accent or a subsidiary
thereof (to the extent there shall be one or more), to continue any
Grantee as a Director or as a consultant, and nothing in the Plan or
in any Option Award granted pursuant thereto shall confer upon any
Grantee any right to continue as a Director of or consultant to the
Company, as the case may be, or restrict the right of the
Shareholders, other directors or the Company, to remove the Director
as provided for in Accent's Articles of Association or to terminate
the consultancy.
15. Governing Law: The Plan and all instruments issued
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thereunder or in connection therewith, shall be governed by, and
interpreted in accordance with, the laws of the State of Israel.
16. Application of Funds: The proceeds received by Accent
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from the sale of shares pursuant to Option Awards granted under the
Plan will be used for general corporate purposes of the Company.
17. Tax Consequences: Any tax consequences arising from
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the grant or exercise of any Option Award, from the payment for shares
covered thereby or from any other event or act (of the Company or the
Grantee) hereunder, shall be borne solely by the Grantee.
Furthermore, the Grantee 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 Grantee.
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