EXHIBIT 4.2
MIND C.T.I. LTD.
2000 SHARE OPTION PLAN
1 NAME
This Plan, as amended from time to time, shall be known as the Mind 2000
Share Option Plan (the "Option Plan").
This plan is consequential to the Mind 1998 Stock Option Plan (the "1998
Option Plan").
2 PURPOSE OF THE OPTION PLAN
The Option Plan is intended as an incentive to retain, in the employ or in
the service of Mind C.T.I. Ltd. (the "Company") and its subsidiaries,
persons of training, experience, and ability, to attract new employees and
key officers (including non-Israeli employees and key officers), 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") The
Option Plan is also intended to fulfill certain previous obligations of the
Company to certain employees, directors and key officers.
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.
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.
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 interpret the
provisions and supervise the administration of the Option Plan; and - (v)
to determine any other matter which is necessary or desirable for, or
incidental to administration 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
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by him, 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.
4 DESIGNATION OF PARTICIPANTS
The persons eligible for participation in the Option Plan as recipients of
Options shall include any employees, directors or key officers 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 from participating in, any other grant of Options pursuant
to this Option Plan or any other option or stock plan of the Company or any
of its affiliates.
Anything in the Option Plan to the contrary notwithstanding, all grants of
Options to directors and office holders ("Nosei Misra" - as such term is
defined in the Companies Act, 1999 - the "Companies Act") shall be
authorized and implemented only in accordance with the provisions of the
Companies Act, as in effect from time to time.
5 SHARES RESERVED FOR THE OPTION PLAN
Subject to adjustments as set forth in Section 7 below, a total of
2,308,000 (two million, three hundred and eight thousand) Ordinary Shares,
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of NIS 0.01 par value (the "Shares") shall be subject to the Option Plan
and the 1998 Option Plan. 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 accordance with the 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 a 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.
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. As of the date of
adoption of the Option Plan, the Board has instructed the Committee to
determine the purchase price of each Share, at a price which is not less
then the price per share, according to the most recent evaluation of the
Company in any investment or other capital transaction.
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 cheque. The Committee shall have the authority to postpone the
date of payment on such terms as it may determine.
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 outstanding shares of the Company shall at anytime be changed or
exchanged by declaration of a stock dividend, stock split, combination
or exchange of shares,
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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
stock or by reason of conversion of any Management Shares of the Company
into Ordinary Shares (regardless of the ratio of such conversion). Upon
occurrence of any of the foregoing, the class and aggregate number of
Shares issuable pursuant to the Option Plan (as set forth in paragraph 6
hereof), in respect of which Options have not yet been exercised, shall
be appropriately adjusted, all as will be determined by the Board who's
determination shall be final.
7.2 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. Upon the occurrence of
any such transactions, all unexercized Options shall be immediately and
completely terminated.
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 only
following the vesting dates and for the number of Shares as shall be
provided in Exhibit B to the Option agreement (the "Expiration Date").
However no Option shall be exercisable after the Expiration Date, as
defined for each Optionee in his Option agreement.
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,
prior to the Expiration Date, and provided that, subject to the
provisions of Section 8.6 below, the Optionee is an employee, director
or key officer 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 of the relevant Options.
8.5 Subject to the provisions of Section 8.6 below, in the event of
termination of the Optionee's employment or relationship with the
Company or any of its subsidiaries, all Options granted to him, which
have not yet been exercised, will immediately expire. A notice of
termination
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of employment or relationship by either the Company or the Optionee
shall be deemed to constitute termination of employment or relationship,
as the case may be.
8.6 Notwithstanding anything to the contrary hereinabove, an Option may be
exercised after the date of termination of Optionee's employment or
relationship 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 vested at the time of such
termination, according to the vesting periods of the Options, set forth
in Section 9 below, if: (i) termination is without Cause (as defined
below), for a period of six months from the termination of Employment,
(ii) 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 one year 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 Board decides, in its sole discretion, is against
the interests of the Company.
8.7 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
Company's 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.
9 VESTING OF OPTIONS
Notwithstanding anything to the contrary, any Option may be exercised only
to the extent that such Option was vested. Each option granted hereunder
shall be vested, in whole or in part, as determined by the Committee in its
sole and absolute discretion, provided that the Optionee is an employee,
director or key officer 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 vesting of any portion of the Option.
10 DIVIDENDS
With respect to all Shares (in contrary to unexercised Options) issued upon
the exercise of Options 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.
11 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.
12 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 36 (thirty six) months from such
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day of adoption.
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13 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 consent.
14 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.
15 CONTINUANCE OF EMPLOYMENT
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 service, 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 service of the Company or a subsidiary
thereof or restrict the right of the Company or a subsidiary thereof to
terminate such employment at any time.
16 GOVERNING LAW AND 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 jurisdiction in any matters pertaining to this Option Plan.
17 ARBITRATION
Any dispute in relation with this Option Plan and the exercise of rights
thereunder, shall be brought to arbitration of the legal counsel to the
Company (the "Arbitrator"), who shall decide on such dispute in accordance
with the provisions of the Arbitration Law - 1968 and its supplement. The
decision of the Arbitrator shall be final and shall bind the Company and
the Optionee.
18 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 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.
The Committee shall not be required to release any Share certificate to an
Optionee until all required payments have been fully made.
19 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 stock Options otherwise than
under the Option Plan, and such arrangements may be either applicable
generally or only in specific cases. For the avoidance of doubt, prior
grants of options to employees of the Company under their employment
agreements, and not in the framework of
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any previous option plan, shall not be deemed an approved incentive
arrangement for the purpose of this Section.
20 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.
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