M-WISE, INC.
(the "Company")
ISRAEL SHARE OPTION PLAN (2001)
Adopted by the Board of Directors on February 1, 2001
TABLE OF CONTENTS
1. Preamble.
2. Administration of the Plan.
3. Shares Subject to the Plan.
4. Option Exercise Prices.
5. Exclusivity of the Plan.
6. Grant of the Options and Issuance of the Shares to the
Trustee; Voting of Shares
7. Option or Share Purchase Agreement; Termination of Employment.
8. Acceleration of an Option.
9. Term of Options; Exercise.
10. Additional Documents.
11. Taxation.
12. Dividends.
13. Rights and/or Benefits arising out of the Employee/Employer
Relationship and the Absence of an Obligation to Employ.
14. Adjustments Upon Changes in Capitalization.
15. Term, Termination and Amendment.
16. Effectiveness of the Plan.
17. Release of the Trustee and the Attorney from Liability and
Indemnification.
18. Governing Law.
APPENDICES
Appendix A: Employee's Notice to the Trustee as to Exercise of
the Option (Section 9.2).
Appendix B: Notice to the Company of Exercise of the Option by
the Trustee (Section 9.4).
Appendix C: Proxy and Power of Attorney (Section 10.2).
1. PREAMBLE
1.1 This plan, as amended from time to time, shall be known as the "m-Wise, Inc.
Israel Share Option Plan (2001)" (the "Plan"). The purpose and intent of the
Plan is to provide incentives to employees and consultants of the Company,
and/or of subsidiaries, and/or of affiliated companies of the Company (each a
"Related Company" and collectively, "Related Companies") by providing them with
the opportunity to purchase shares of the Company.
The Plan is designed to comply with Section 102 of the Income Tax
Ordinance or any provision which may amend or replace it ("Section 102") and the
rules promulgated thereunder (the "Commissioner's Rules") and to enable the
Company and grantees hereunder to benefit from Section 102 and the
Commissioner's Rules and also to enable the Company to grant options and issue
shares outside the context of Section 102. The Company, however, does not
warrant that the Plan will be recognized by the income tax authorities or that
future changes will not be made to the provisions of the law, regulations or the
Commissioner's Rules, which are promulgated from time to time, or that any
exemption or benefit currently available pursuant to Section 102 will not be
abolished.
1.2 Should any provision of Section 102, regulations thereunder or the
Commissioner's Rules which applies to employees be amended, such amendment shall
be deemed included in the Plan with respect to options granted or shares issued
in the context of Section 102. Where a conflict arises between any section of
the Plan, the agreement as defined in Section 7 below (the "Agreement") or their
application, and the provisions of the law and the Commissioner's Rules, the
latter shall apply and the Board of Directors of the Company (the "Board") in
its sole discretion shall determine the
necessary changes to be made to the Plan and their determination regarding this
matter shall be final and binding.
1.3 In the event the Company's shares should be registered for trading on any
stock exchange, whether in the United States or elsewhere, the options and/or
shares allotted in accordance with the Plan may be made conditional to any
requirement or instruction of the stock exchange authorities or of any other
relevant authority acting pursuant to applicable law as shall exist from time to
time. In such case, by means of a Board resolution, the Plan and the agreements
prepared pursuant hereto, may be amended as necessary to meet such requirements.
In the event of a contradiction between any such amendment and the Plan's
provisions, the amendment shall prevail.
2. ADMINISTRATION OF THE PLAN
2.1 The Plan shall be administered by the Board and/or by any committee of the
Board so designated by the Board. Any subsequent references herein to the Board
shall also mean any such committee if appointed and, unless the powers of the
committee have been specifically limited by law or otherwise, such committee
shall have all of the powers of the Board granted herein. Subject to Sections 4
and 15, the Board shall have plenary authority to determine the terms and
conditions of all options (which need not be identical), including, without
limitation, the purchase price of the shares covered by each option, the
individuals to whom, and the time or times at which, options shall be granted,
the number of shares to be subject to each option, whether an option shall be
granted pursuant to Section 102 or otherwise and when an option can be exercised
and whether in whole or in installments. Subject to Section 15, the Board shall
have plenary authority to construe and interpret the Plan, to prescribe, amend
and rescind the rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
All determinations and decisions of the Board pursuant to the provisions of the
Plan and all related orders and resolutions of the Board shall be final,
conclusive and binding on all persons, including the Company, its shareholders,
grantees and their estates and beneficiaries.
2.2 Any directive or notice signed by two members of the Board shall constitute
conclusive proof and authority for every act or decision of the Company.
2.3 No director or officer of the Company shall be personally liable or
obligated to any grantee as a result of any decision made and/or action taken
with respect to the Plan or its execution.
3. SHARES SUBJECT TO THE PLAN
The shares subject to the Plan shall be Ordinary Shares of the Company.
The maximum number of shares that may be issued under the Plan is 220,000[ABZ1]
Common Stock of $0.01 nominal value each, as
such number of shares may be adjusted in accordance with Section 14. Such shares
may be in whole or in part, as the Board shall from time to time determine and
subject to applicable law, authorized and unissued Ordinary Shares or issued and
fully paid Ordinary Shares which shall have been purchased by the Company or the
Trustee (as hereinafter defined) hereunder with funds provided by the Company.
If any option granted under the Plan shall expire, terminate or be canceled for
any reason without having been exercised in full, such shares subject thereto
shall again be available for the purposes of the Plan. Any increase in the
maximum number of shares shall be recommended by the Board and shall require the
approval of a general meeting of the shareholders of the Company.
4. OPTION EXERCISE PRICES
The consideration to be paid by a grantee for each share purchased by
exercising an option (the "Option Exercise Price") shall be as determined by the
Board on the date of grant, provided that the Option Exercise Price shall not be
less than the nominal value of the shares subject to the option.
The Board may, in its discretion, grant to the holder of an outstanding
option, in exchange for the surrender and cancellation of such option, a new
option having an Option Exercise Price lower than provided in the option so
surrendered and canceled, and containing such other terms and conditions as the
Board may prescribe in accordance with the provisions of this Plan provided that
such new Option Exercise Price shall not be less than the nominal value of the
shares subject to the new option.
5. EXCLUSIVITY OF PLAN
Unless otherwise determined by the Board in any particular instance as
part of the Agreement, each grantee hereunder will be required to declare and
agree that all prior agreements, arrangements and/or understandings with respect
to shares of the Company or options to purchase shares of the Company which have
not actually been issued or granted prior to execution of the Agreement shall be
null and void and that only the provisions of the Plan and/or the Agreement
shall apply.
Notwithstanding the above, the adoption of this Plan, by itself, shall
not be construed as amending, modifying or rescinding any incentive arrangement
previously approved by the Board 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 options otherwise than under this
Plan, and such arrangements may be either applicable generally or only in
specific cases.
6. GRANT OF THE OPTIONS ANDISSUANCE OF THE SHARES TO THE TRUSTEE
6.1 The Board shall appoint a Trustee, approved by the Tax
Authorities for the purposes of this Plan (the "Trustee"). The Trustee shall
have all the powers provided by law, the Trust Agreement, the Commissioner's
Rules, and the Plan and shall act pursuant to the provisions thereof, as they
shall apply from time to time. The Company shall pay the Trustee a fee as shall
be agreed between the Trustee and the Company.
6.2 Unless otherwise determined by the Board, all option awards shall be issued
by the Company in the name of the Trustee and the share certificates
representing any shares issued pursuant to options exercised hereunder, shall be
issued by the Company in the name of the Trustee in trust for the designated
grantee and shall be deposited with the Trustee, held by him and registered in
his name in the register of members of the Company for such period as determined
by the Board but, in the case of grants pursuant to Section 102, not less than
the period required, or approved, with respect thereto pursuant to Israeli law,
regulations promulgated thereunder or the Commissioner's Rules, as shall be in
effect from time to time (hereinafter the "Restriction Period").
6.3 Without derogating from the provisions of Sections 6.2 above or 6.7 below,
and unless otherwise determined by the Board generally or in any particular
instance, the shares issued with respect to any options granted hereunder will
be held by the Trustee and registered in his name until the earlier of
consummation of the initial public offering of the Company's shares, pursuant to
an effective registration statement, prospectus or similar document in Israel or
such other jurisdiction as is determined by the Board (the "IPO") or 8 years
from the date of their issue, after which time the grantee for whom they are
being held may request their registration in his name and transfer to him
subject to the provisions of Section 102, regulations thereunder of the
Commissioners Rules and the Plan all as shall be in effect from time to time
(e.g., payment of taxes, etc.).
6.4 Options granted hereunder shall not confer upon the holder thereof any of
the rights of a shareholder of the Company with respect to the shares subject to
such options until such shares are issued and registered in the name of the
holder upon the exercise of the options.
6.5 For as long as any shares are held by the Trustee or registered in his name
or for as long as the certificates representing any shares are held by the
Trustee, the Trustee alone shall be entitled to receive every notice to which a
shareholder is entitled, or to demand any information, and any financial and/or
other report to which a shareholder is entitled from the Company, and only he or
whomever he shall designate pursuant to the Proxy and Power of Attorney referred
to in Section 10.2 below and attached as Appendix C hereto (the "Attorney"),
shall be entitled to exercise every other right of the shareholders vis-a-vis
the Company including the right to participate in and to vote at all
shareholders' meetings. No grantee shall be entitled to exercise any of these
rights as shareholder nor make any demand or request
of the Trustee and/or of the Attorney in this regard.
6.6 Shares registered in the Trustee's name shall be represented at all meetings
of shareholders of the Company and, until consummation of the IPO, shall be
voted by the Trustee or the Attorney at their discretion and subsequent thereto
shall be voted by the Trustee or the Attorney in accordance with the
instructions of the grantees on whose behalf they are held and in the absence of
such instructions they shall abstain.
6.7 Nothing in the aforegoing provisions shall derogate from the power of the
Board to grant options or to allot shares to the Trustee otherwise than under
the provisions of Section 102 and the Commissioner's Rules or to allot shares or
grant options to grantees directly otherwise than through the Trustee or on
terms which differ from those specified above or to approve the transfer of
shares from the Trustee to the name of any grantee(s) upon such conditions as
shall be determined by the Board.
7. OPTION OR SHARE PURCHASE AGREEMENT; TERMINATION OF EMPLOYMENT
Unless otherwise determined by the Board, every grantee shall be
required to sign an option or share purchase agreement or other document as
shall be determined by the Board, in the form approved by the Board (the
"Agreement").
The Agreement need not be identical with respect to each grantee. The
following terms, however, shall apply to all options, and, mutatis mutandis,
shares, unless expressly otherwise decided in respect of a particular option:
7.1 In addition to the provisions of Section 4 and without prejudice thereto,
where the law and the Commissioner's Rules apply to the Agreement and so
require, the option shall be granted to the grantee in consideration for a
waiver of salary by the grantee pursuant to the provisions of the Agreement.
7.2 The Option Exercise Price shall be paid by the grantee to the Company no
later than the date of exercise of the option unless otherwise determined in the
Agreement.
7.3 The grantee shall have no right of first refusal to purchase shares of the
Company which may be offered for sale by shareholders of the Company, and shall
have no pre-emptive rights to purchase shares which are being allotted or shall
in the future be allotted by the Company, to the extent any such rights
otherwise exist.
7.4 The option and/or the right to the option and/or the shares are personal and
except insofar as is specified in this Plan, and, where applicable, subject to
Section 102 and the Commissioner's Rules, may not be transferred, assigned,
pledged, withheld, attached or otherwise charged either voluntarily or pursuant
to any law, except by way of transfer pursuant to the laws of inheritance, and
no power of attorney or deed of transfer, whether the same has
immediate effect or shall take effect on a future date, shall be given with
respect thereto. During the lifetime of the grantee the option may only be
exercised by thedesignated grantee or, if granted to the Trustee, by the Trustee
on behalf of the designated grantee. A note as to the provisions of this
sub-section or a legend may appear on any document which grants the option and
in particular in the Agreement, and also on any share certificate.
7.5 The right to exercise the option is granted to the Trustee on behalf of the
grantee. Vesting shall be in installments, gradually over a period of 4 (four)
years from the date of grant of the option or such other period or periods as
determined by the Board. Unless otherwise determined, at the conclusion of each
period for the exercise of the option as determined in the Agreement ("Vesting
Periods"), the option may, from time to time, be exercised in relation to all
the shares allocated for that period in such manner that at the end of the 1
(one) year from the granting of the option the Trustee shall, in the absence of
a contrary determination in the Agreement, be entitled to exercise on behalf of
the grantee and at his request 1/4 (quarter) of the options granted by the
Company and at the end of each three months period thereafter another 1/16 of
options granted.
In addition, during each of the Vesting Periods, the option may be
exercised in relation to all or part of the shares allocated for any previous
Vesting Period in which the option was not fully exercised, provided, subject to
the provisions of Section 7.7 hereof, that at the time of the exercise of the
option the grantee has continued to be employed by the Company or a Related
Company on a continual basis from the date of the grant thereof until the date
of their exercise. After the end of the Vesting Periods and during the balance
of the option period, the option may be exercised, from time to time, in
relation to all or part of the shares which have not at that time been exercised
and which remain subject to the option, subject to the provisions of Section 7.7
hereof and to any condition in the Agreement, if such exists, which provides a
minimum number of shares with respect to which the option may be exercised and
any provision which determines the number of times that the Trustee may send the
Company notice of exercise on behalf of the grantee in respect of the option.
The Board shall be entitled at any time to shorten the vesting schedule or any
Vesting Period.
7.6 The Board may determine at its sole discretion, that any grantee shall be
entitled to receive the options or the shares, through the Trustee, pursuant to
the provisions of this Plan or directly in the name of the grantee, immediately
upon execution of the Agreement or on such other date or dates as the Company
has undertaken towards such grantee. In the event that a grantee is exempt from
the Vesting Periods (pursuant to the provisions of Section 7.5), the Board shall
be entitled to determine that where the grantee does not comply with the
conditions determined by the Board or ceases to be an employee of the Company or
a Related Company, the Trustee, the Company or a Related Company shall have
the right to repurchase the shares from the grantee for nominal or any other
consideration paid by the grantee. The Board may set additional conditions to
this right of repurchase, including the provision of appropriate arrangements
for the monies which shall be available to the Trustee or a Related Company or
others for the purpose of the repurchase and conditions with respect to the
voting rights of the grantee, rights of first refusal or pre-emptive rights to
purchase shares in the Company, to the extent such rights exist, the grantee's
right to receive reports or information from the Company, and the grantee's
right to a dividend in respect of shares which are subject to a right of
reacquisition as aforesaid. For as long as the aforegoing conditions of the
Board (including a minimum period of employment as a condition for the lapse of
the right to reacquisition) have not been complied with, the grantee shall not
be entitled to sell or charge or transfer in any other manner the shares which
are subject to the right of reacquisition. As security for the compliance with
this undertaking the share certificate will be deposited with the Trustee who
will release the same to the grantee only after the grantee becomes entitled to
the shares and the same are not subject to any other restrictive condition.
7.7 Termination of Employment
7.7.1 Termination of Relationship as a Service Provider. If a grantee ceases to
be an employee, director or advisor of the Company or a Related Company, other
than upon death, disability or as provided in Section 7.7.3 below, the grantee
may exercise his or her options within such period of time as is specified in
the Agreement 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 such option as set
forth in the Agreement). In the absence of a specified time in the Agreement,
the option shall remain exercisable for thirty (30) days following the earlier
of such termination or notice of termination (unless the Agreement provides
otherwise).
7.7.2 Termination for Cause. Upon termination for Cause as such term is defined
below, all options held by or on behalf of such grantee shall immediately expire
upon the earlier of such termination or notice of termination (unless the
Agreement provides otherwise). For purposes hereof, the term "Cause" shall mean
any of (i) a material breach by the grantee of the grantee's obligations under
any agreement with the Company or any Related Company; (ii) the commission by
the grantee of an act of fraud or embezzlement against the Company or any
Related Company or the willful taking of action injurious to the business or
prospects of the Company or any Related Company; (iii) the conviction of the
grantee of a felony; and (iv) the grantee's involvement with an act which
constitutes breach of trust between the grantee and the Company or any Related
Company.
7.7.3 Disability / Death. If the employment of a grantee is
terminated prior to the complete exercise of an option by reason of death,
disability (as determined by the Board in its absolute discretion
("Disability")) or retirement after age 60 with the approval of the Board, the
option shall remain exercisable for a period of one year following such
termination (but only to the extent exercisable at termination of employment and
not beyond the scheduled expiration date).
7.7.4. The Board may determine whether any given leave of absence constitutes a
termination of employment. Options awarded under this Plan shall not be affected
by any change of employment so long as the grantee continues to be an employee
of the Company or Related Company.
7.7.5 In such case as Section 102 and the Commissioner's Rules shall apply to
any option, where the grantee ceases to be an employee of the Company prior to
the termination of a period of two years from the date of the qualifying
allotment as defined in the Commissioner's Rules, (except where the Commissioner
is satisfied that the grantee ceased to be employed by the Company by reason of
death or for special reasons beyond the grantee's control), the exemption
provided by Section 102 shall not apply with respect to that grantee pursuant to
the Commissioner's Rules. In such case, the grantee shall be obliged to make
arrangements with the tax authorities at his expense for all matters to do with
the taxation of the options and/or the shares.
7.7.6 Notwithstanding the foregoing, the Board may in its absolute discretion,
extend the period of exercise of the option by a grantee or grantees for such
time as it shall determine either with or without conditions.
8. ACCELERATION OF AN OPTION
In the event the Board (or, if approval of the shareholders is
required, the shareholders of the Company) shall approve the adoption of any
plan or proposal for the liquidation or dissolution of the Company then,
notwithstanding any contrary Vesting Periods in any Agreement or in this Plan,
and unless in each case the applicable Agreement provides otherwise, one-half of
the outstanding options held by or for the benefit of any grantee and which have
not yet vested shall be accelerated and become immediately vested and
exercisable.
Furthermore, if a "Significant Event", as defined below, shall occur,
and either (i) the employment of a grantee with the Company or a Related Company
is terminated by the Company or a Related Company within twelve (12) months
thereafter (other than for Cause), (ii) a grantee resigns his employment with
the Company or with a Related Company within such period due to an adverse
change in his position with the Company or a Related Company (as defined in his
employment agreement) or in circumstances which would result in such resignation
being deemed termination by the Company or a Related Company pursuant to Section
11(a) of the Severance Pay Law,
1963; or (iii) the surviving corporation in a consolidation or merger, referred
to in (a) below under Significant Event, does not assume the option or
substitute it with an appropriate option in the surviving corporation; all
outstanding options held by or for the benefit of any such grantee and which
have not yet vested shall be accelerated and become immediately fully vested and
exercisable infull (notwithstanding any contrary vesting schedule previously
agreed).
Each of the following shall be a "Significant Event": approval by the Board of
Directors of the Company (the "Board") or (if approval of the shareholders is
required) shareholder approval of: (a) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which Ordinary Shares would be converted into cash, securities or
other property, other than a merger of the Company in which the holders of
Ordinary Shares immediately prior to the merger have the same proportionate
ownership of Ordinary Shares of the surviving corporation immediately after the
merger; or (b) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all the assets of
the Company; In addition effective from consummation of the IPO, each of the
following shall also be considered a "Significant Event": any person or group
other than the Company making a tender offer or exchange offer to acquire any
Ordinary Shares (or securities convertible into Ordinary Shares) for cash,
securities or any other consideration, provided that : (y) at least a portion of
such securities sought pursuant to the offer in question is acquired; and (z)
after consummation of such offer, the person in question is the beneficial
owner, directly or indirectly, of [20%] or more of the outstanding Ordinary
Shares; or (iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the entire Board ceasing for any reason
to constitute a majority thereof unless the election, or the nomination for
election by the Company's shareholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
9. TERM OF OPTIONS; EXERCISE
9.1 The term of each option shall be for such period as the Board shall
determine, but not more than 8 (eight) years from the date of grant thereof or
such shorter period as is prescribed in Section 7.6 hereof.
9.2 A grantee who desires that the Trustee exercise an option granted to the
Trustee on his behalf shall so instruct the Trustee in writing in the form
annexed hereto as Appendix A or in such other form as shall be approved by the
Board. The notice shall be accompanied by payment of the full Option Exercise
Price of such shares as provided in the Agreement.
9.3 If Section 102 does not apply to the option or the shares
which relate thereto, as a condition for the exercise of the option, the grantee
shall pay the tax applicable to him (including all tax payable by the Company
arising out of its obligation to deduct tax at source) pursuant to applicable
law and the provisions of the Plan.
9.3 Upon receipt of all the requisite documents, approvals and payments from the
grantee, including sufficient proof of payment or other arrangement with respect
to the payment of any applicable taxes in form satisfactory to the Company and
the Trustee, the Trustee shall deliver a notice to the Company in the form
annexed hereto as Appendix B or in such other form as shall be approved by the
Board. The Company shall allot the shares in the name of the Trustee.
9.4 A grantee who desires to exercise an option granted directly to him (and not
through the Trustee) shall so notify the Company in writing in such form as
shall be prescribed by the Board from time to time. As a condition for the
exercise of the option, the grantee shall pay or otherwise make arrangements, to
the Company's satisfaction, for the payment of the tax applicable to him
(including all tax payable by the Company arising out of its obligation to
deduct tax at source) pursuant to applicable law and the provisions of the Plan.
Upon receipt of all the requisite documents, approvals and payments from the
grantee, the Company shall allot the shares in the name of the Trustee.
9.5 Without limiting the foregoing, the Board may, with the consent of the
grantee, 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 grantee or to the Trustee on behalf of the
grantee of an amount in cash equal to the excess, if any, of the Fair Market
Value of the relevant 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 grantee or to the Trustee on behalf
of the grantee 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
Board in its sole discretion.
For purposes hereof, the "Fair Market Value" of the Common Stock shall
mean, as of any date, the last reported sale price, on that date, of the Common
Stock of the Company on the principal securities exchange on which such shares
are then traded, or, in the event that no sales of such shares took place on
such date, the last reported sale price of such shares on such principal
securities exchange on the most recent prior date on which a sale of shares took
place; provided, however, that if such shares are not publicly traded on the
date as of which Fair Market Value is to be determined, "Fair Market Value" of
the Common Stock shall mean the value as determined in good faith by the Board.
10. ADDITIONAL DOCUMENTS
10.1 Until the consummation of the IPO, the Company shall have the right to
demand from the grantee at any time that the same shall provide, and the grantee
shall provide, any certificate, declaration or other document 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 during any period which shall be required by an underwriter or
investment bank or advisor of 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 grantees as members of a class of
shareholders), 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), 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 the grantee (or the Trustee on his behalf) may
have purchased here under all as shall be deemed necessary or desirable by the
Board.
As long as the shares and/or the options are registered in the Trustee's name,
the same shall be authorized to sign the grantee's name and on his behalf on any
of the aforesaid documentation. In the event that the options or Shares have
been transferred into the name of the grantee, and he/she has refused to confirm
any document required by the Company as aforesaid by placing his/her signature
thereon, the Trustee shall be entitled, at the request of the Company, to sign
any document in the name of the grantee and on his/her behalf.
10.2 In order to guarantee the aforesaid, and because the rights of the Company
and the other shareholders are dependent thereon, the grantee shall, upon
signing the Agreement and as a condition to the grant of any options hereunder,
execute the Proxy and Power of Attorney attached hereto as Appendix C, or in
such other form as shall be approved by the Board, irrevocably empowering the
Trustee and/or the Attorney, until consummation of the IPO, to sign any document
and take any action in his name as aforesaid, and the grantee shall have no
complaint or claim against the Trustee and/or the Attorney in respect of any
such signature or action, or in respect of any determination of the Trustee
pursuant hereto or to Section 10.1 above in respect of such signature. The
grantee will authenticate his signature in the presence of a notary if he shall
be asked to do so by the Company, in order to give full validity to the power of
attorney.
11. TAXATION
11.1 General
The grantee shall be liable for all taxes, duties, fines and other
payments which may be imposed by the tax authorities (whether in Israel or
abroad) and for every obligatory payment of whatever source in respect of the
options, the shares (including, without limitation, upon the exercise of the
options, the sale of the shares or the registration of the shares in the
grantee's name) or dividends or any other benefit in respect thereof and/or for
all charges which shall accrue to the grantee, the Company, any Related Company
and/or to the Trustee in connection with the Plan.
11.2 Deduction at Source
The Company (including any Related Company) and/or the Trustee shall
have the right to require the grantee to pay an amount in cash or to retain or
sell without notice Ordinary Shares in value sufficient to cover any tax
required by an governmental entity to be withheld or otherwise deducted and paid
with respect to the options or the Ordinary Shares subject thereto (including,
without limitation, upon their exercise or sale or the registration of the
Ordinary Shares in the grantee's name) or with respect to dividends or any other
benefits in respect thereof ("Withholding Tax"), and to make payment (or to
reimburse itself or himself for payment made) to the appropriate tax authority
of an amount in cash equal to the amount of such Withholding Tax.
Notwithstanding the foregoing, the grantee shall be entitled to satisfy the
obligation to pay any Withholding Tax, in whole or in part, by providing the
Company and/or the Trustee with funds sufficient to enable the Company and/or
the Trustee to pay such Withholding Tax.
11.3 Certificate of Authorization of Assessing Officer
The Company (including any Related Company) or the Trustee shall at any
time be entitled to apply to the Assessing Officer, and in the case of a grantee
abroad, to any foreign tax authority, for receipt of their certificate of
authorization as to the amount of tax which the Company or any Related Company
or the grantee or the Trustee is to pay to the tax authorities resulting from
granting the options or allotting the shares, or regarding any other question
with respect to the application of the Plan.
12. DIVIDENDS
The Common Stock received as a result of the exercise of the options
shall participate equally with the Company's other Common Stock in every cash
dividend which shall be declared and distributed subject to the following
provisions:
12.1 A cash dividend shall be distributed only to persons registered in the
register of members as shareholders on the record date fixed for the
distribution of the dividend.
12.2 A dividend with regard to shares which are registered in
the name of the Trustee shall be paid to the Trustee, subject to any lawful
deduction of tax, whether such rate is at the usual rate applicable to a
dividend or at a higher rate. The Trustee shall transfer the dividend to the
grantees in accordance with instructions that he shall receive from the Company.
Alternatively, the Company shall be entitled to pay the dividend directly to the
grantee subject to the deduction of the applicable tax.
12.3 Without derogating from the provisions of Section 12.2 hereof, the Company
or the Trustee shall be entitled to set off and deduct at source from any
dividend any sum that the grantee owes to the Company (including any Related
Company) or the Trustee, whether under the Plan or otherwise, and/or any sum
that the grantee owes to the tax authorities.
13. RIGHTS AND/OR BENEFITS ARISING OUT OF THE EMPLOYEE/ EMPLOYER
RELATIONSHIP AND THE ABSENCE OF AN OBLIGATION TO EMPLOY
13.1 No income or gain which shall be credited to or which purports to be
credited to the grantee as a result of the Plan, shall in any manner be taken
into account in the calculation of the basis of the grantee'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. If, pursuant to any law, the Company or any Related Company, shall
be obliged for the purposes of calculation of the said items to take into
account income or gain actually or theoretically credited to the grantee, the
grantee shall indemnify the Company or any Related Company, against any expense
caused to it in this regard.
13.2 Nothing in the Plan shall be interpreted as obliging the Company or any
Related Company to employ the grantee and nothing in the Plan or any option
granted pursuant thereto shall confer upon any grantee any right to continue in
the employment of the Company or any Related Company or restrict the right of
the Company or any Related Company to terminate such employment at any time. The
grantee shall have no claim whatsoever against the Company or any Related
Company as a result of the termination of his employment, including, without
limitation, any claim that such termination causes any options to expire and/or
prevents the grantee from exercising the options and/or from receiving or
retaining any shares pursuant to any agreement between him and the Company, or
results in any loss due to an early imposition of tax liability pursuant to
applicable law.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
Notwithstanding any other provisions of the Plan, the Board shall take
such actions, if any, as it deems appropriate for the adjustment of the number
and class of shares subject to each unexercised or unvested option and in the
option prices in the event of an IPO, changes in the outstanding share capital
of the Company by reason of any stock dividend (bonus shares), stock
split, recapitalization, combination, exchange of shares, merger, consolidation,
liquidation, split-up, split-off, spin-off or other similar change in
capitalization. In the event of any such event, the Board may make any
adjustments it deems appropriate,including in the aggregate number and class of
shares available under the Plan, and the Board's determination in this regard
shall be conclusive.
15. TERM, TERMINATION AND AMENDMENT
Unless the Plan shall theretofore have been terminated as hereinafter
provided, the Plan shall terminate on, and no option shall be granted after, the
tenth anniversary of the date the Plan is adopted by the Board. The Plan may be
terminated, modified or amended by the shareholders of the Company. The Board
may at any time terminate, modify or amend the Plan in such respects as it shall
deem advisable; provided, however, that the Board may not, without approval of a
general meeting of the shareholders of the Company, by the holders of a majority
of the outstanding shares of the Company with voting rights present and voting
at a duly held meeting at which a quorum is present, increase the maximum number
of Common Stock as to which options may be granted under the Plan (except by
adjustment pursuant to Section 14) or extend the termination date of the Plan.
Options granted prior to termination of the Plan may, subject to the terms of
the Plan and any Agreement, be exercised thereafter. No amendment or
modification of the Plan may, without the consent of the grantee to whom any
option shall theretofore have been granted, adversely affect the rights of such
grantee under such option.
16. EFFECTIVENESS OF THE PLAN
The Plan shall become effective as of the date determined by the Board.
17. RELEASE OF THE TRUSTEE AND THE ATTORNEY FROM LIABILITY AND
INDEMNIFICATION
In no event shall the Trustee or the Attorney be liable to the Company
and/or any grantee under the Plan and/or any third party (including without
prejudice to the generality of the aforegoing, to the income tax authorities and
any other governmental or administrative authority), or to a purchaser of shares
from any grantee with respect to any act which has been or will be carried out
and/or any opinion which has been or will be given in relation to the Plan, its
execution and any matter connected thereto or arising therefrom. The Company
will not, and the grantee will be required to covenant upon signing the
Agreement that he will not, make any claim against the Trustee or the Attorney
in any manner whatsoever and on any ground whatsoever and they expressly agree
that if the Trustee or the Attorney are sued by them, then the Trustee or the
Attorney shall be entitled by virtue of this Section alone to apply to the court
for dismissal of the action against
them with costs. The Company covenants and agrees that if an action is commenced
by any third party against the Trustee or the Attorney they shall be entitled,
without any objection on the Company's part to join the Company as a third party
to any action and a judgment against them will be paid by the Company.
The Company covenants and the grantee will be required to covenant to
indemnify the Trustee and/or the Attorney against any liability in relation to
any claim and/or demand made against the Trustee and/or the Attorney by any
person whatsoever, including the tax authorities, in relation to their acts or
omissions in connection with the Plan.
18. GOVERNING LAW
The Plan and all instruments issued thereunder shall be governed by and
construed in accordance with the laws of the State of Israel.