EXHIBIT 10.13
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VOICE DIARY INC.
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2003 STOCK OPTION PLAN
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1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the Company's
business. Options granted under the Plan may be Incentive Stock Options,
Nonstatutory Stock Options, 102 Options, or 3(i) Options, as determined
by the Administrator at the time of grant. Stock Purchase Rights may also
be granted under the Plan.
2. DEFINITIONS. As used herein, the following definitions shall apply:
2.1. "Administrator" means the Board or any of its Committees as shall be
administering the Plan in accordance with Section y4 hereof.
2.2. "Applicable Laws" means the requirements relating to the
administration of stock option plans under Israeli and U.S. state
corporate laws, Israeli and U.S. federal and state securities laws,
the Code, the Ordinance, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws
of any other country or jurisdiction where Options or Stock Purchase
Rights are granted under the Plan.
2.3. "Board" means the Board of Directors of the Company.
2.4. "Code" means the Internal Revenue Code of 1986, as amended.
2.5. "Committee" means a committee of Directors appointed by the Board in
accordance with Section y4 hereof.
2.6. "Common Stock" means the Class A Common Stock of the Company.
2.7. "Company" means Voice Diary Inc., a Delaware corporation.
2.8. "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services to
such entity, including any employees of such person.
2.9. "Director" means a member of the Board of Directors of the Company,
or any Parent or Subsidiary.
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2.10. "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
2.11. "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.
Without derogating from Section y9.4 below, an Optionee shall not
cease to be an Employee in the case of (i) any leave of absence
approved by the Company (or by the Parent or Subsidiary that employs
the person) or (ii) transfers between locations of the Company (or
the Parent or Subsidiary that employs the person) or between the
Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, on the 181st
day of such leave any Incentive Stock Option held by the Optionee
shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee shall be
sufficient to constitute "employment".
2.12. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.13. "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
2.13.1. If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq National Market, the Nasdaq SmallCap
Market of The Nasdaq Stock Market, or Over the Counter
Bulletin Board its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system for the
last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as
the Administrator deems reliable (and if the Common Stock is
listed or quoted on more than one established stock exchange
or national market system, the Administrator shall determine
the appropriate exchange or system.);
2.13.2. If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high bid and
low asked prices for the Common Stock on the last market
trading day prior to the day of determination; or
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2.13.3. In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good
faith by the Administrator.
2.14. "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the
Code.
2.15. "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
2.16. "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
2.17. "Option" means a stock option granted pursuant to the Plan.
2.18. "Option Agreement" means a written or electronic agreement between
the Company and an Optionee evidencing the terms and conditions of
an individual Option grant. The Option Agreement is subject to the
terms and conditions of the Plan.
2.19. "Option Exchange Program" means a program whereby outstanding
Options are exchanged for Options with a lower exercise price.
2.20. "Optioned Stock" means the Common Stock subject to an Option or a
Stock Purchase Right.
2.21. "Optionee" means the holder of an outstanding Option or a Stock
Purchase Right granted under the Plan.
2.22. "Ordinance" means the Israeli Income Tax Ordinance (New Version),
1961, as amended, the rules promulgated thereunder, or any law or
regulations that shall replace the Ordinance or Sections 3(i) or 102
promulgated thereunder.
2.23. "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
2.24. "Plan" means this 2002 Stock Option Plan.
2.25. "Restricted Stock" means shares of Common Stock acquired pursuant to
a grant of a Stock Purchase Right under Section y11 below.
2.26. "Section 16(b) " means Section 16(b) of the Securities Exchange Act
of 1934, as amended.
2.27. "Service Provider" means a Director or a Consultant.
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2.28. "Share" means a share of the Common Stock, as adjusted in accordance
with Section y12 below.
2.29. "Stock Purchase Right" means a right to purchase Common Stock
pursuant to Section y11 below.
2.30. "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
2.31. "Trustee" shall have the meaning set forth in Section y17.3 below.
2.32. "102 Option" or "102 Stock Purchase Right" means an Option or a
Stock Purchase Rights (as applicable) granted under the Section 102
of the Ordinance, as amended, or any law or regulations, which shall
replace the Section 102.
2.33. "3(i) Option" or "3(i) Stock Purchase Right" means an Option or a
Stock Purchase Rights (as applicable) granted under the Section 3(i)
of the Ordinance, as amended, or any law or regulations, which shall
replace the Section 3(i).
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section y12 of the
Plan, the maximum aggregate number of Shares that may be subject to option
and sold under the Plan, including 3(i) Options and 102 Options granted
pursuant to Section y17 below, is 1,000,000 Common Stock. The Shares may
be authorized but unissued, or reacquired Common Stock.
If an Option or a Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an
Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the
Plan has terminated). However, Shares that have actually been issued under
the Plan, upon exercise of an Option or Stock Purchase Right, shall not be
returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock are
repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
4.1. ADMINISTRATOR. The Plan shall be administered by the Board or a
Committee appointed by the Board, which Committee shall be
constituted to comply with Applicable Laws.
4.2. POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan
and, in the case of a Committee, the specific duties delegated by
the Board to such
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Committee, and subject to the approval of any relevant authorities,
the Administrator shall have the authority in its sole discretion:
4.2.1. to determine and/or amend the exercise price of the Options
and the purchase price Stock Purchase Rights;
4.2.2. to determine and/or amend the terms of payment for the Shares;
4.2.3. to select the Employees and Service Providers to whom Options
and Stock Purchase Rights may from time to time be granted
hereunder;
4.2.4. to determine the number of Shares to be covered by each such
award granted hereunder;
4.2.5. to approve forms of agreement for use under the Plan;
4.2.6. to determine the terms and conditions, of any Option or Stock
Purchase Right granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time
or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or Stock
Purchase Right or the Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole
discretion, shall determine;
4.2.7. to determine whether and under what circumstances an Option
may be settled in cash instead of Common Stock;
4.2.8. to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;
4.2.9. to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that
number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All
elections by Optionees to have Shares withheld for this
purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and
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4.2.10. to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
4.2.11. to alter, revise or otherwise adjust the terms of the Plan and
the Option Agreement, as may be required pursuant to any
applicable laws of local or foreign jurisdictions.
4.2.12. In the event of a tie vote with respect to any matter brought
before the Administrator, such matter shall be presented to
the Board and the decision of the Board shall be final with
respect to such matter.
4.2.13. Neither the Trustee nor any member of the Board or the
Committee shall be liable to the Company or to any Optionee,
for any action or determination taken or made in good faith as
a Committee member in the course of administrating the Plan.
Each member of the Board or the Committee shall be indemnified
and held harmless by the Company or by any Optionee against
any cost or expense (including counsel fees) reasonably
incurred 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 Plan unless arising out of such member's own fraud or bad
faith, all 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 charter documents, any agreement, any vote
of shareholders or disinterested directors, insurance policy
or otherwise.
4.3. EFFECT OF ADMINISTRATOR'S DECISION. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all
Optionees.
5. ELIGIBILITY.
5.1. Nonstatutory Stock Options and Stock Purchase Rights may be granted
to Employees and Service Providers. Incentive Stock Options may be
granted only to Employees.
5.2. Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate
Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Optionee
during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000,
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such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section y5.2, Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair
Market Value of the Shares shall be determined as of the time the
Option with respect to such Shares is granted.
5.3. Neither the Plan nor any Option or Stock Purchase Right shall confer
upon any Optionee any right with respect to continuing the
Optionee's relationship as an Employee or as a Service Provider with
the Company, nor shall it interfere in any way with his or her right
or the Company's right to terminate such relationship at any time,
with or without Cause (as such term is defined in Section y9.4
below).
6. TERM OF PLAN. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section y14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10)
years from the date of grant thereof. Unless the Administrator determines
otherwise at any time, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of
the Option shall be five (5) years from the date of grant or such shorter
term as may be provided in the Option Agreement.
8. OPTION EXERCISE PRICE AND CONSIDERATION.
8.1. The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the
Administrator, subject to any Applicable Laws.
8.2. The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive
Stock Option, shall be determined at the time of grant). The
Administrator may determine, in its sole discretion, that such
consideration may consist of (1) cash, (2) check, (3) promissory
note, (4) other Shares which (x) in the case of Shares acquired upon
exercise of an Option, have been owned by the Optionee for more than
six months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which such Option shall be exercised, (5)
consideration received by the Company under a cashless exercise
program implemented by the Company in
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connection with the Plan, or (6) any combination of the foregoing
methods of payment. In making its determination as to the type of
consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to
benefit the Company.
9. EXERCISE OF OPTION.
9.1. PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. In the event of any conflict
between the terms and conditions of an Option Agreement and the
terms hereof, the terms hereof shall control. Unless the
Administrator provides otherwise, vesting of Options granted
hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written notice of exercise (in accordance with the Option Agreement)
from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method
of payment authorized by the Administrator and permitted by the
Option Agreement and the Plan. Shares issued upon exercise of an
Option (excluding Shares underlying a 102 Option, which Shares shall
be issued in the name of the Trustee) shall be issued in the name of
the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall
exist with respect to the Shares, notwithstanding the exercise of
the Option. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is
prior to the date the Shares are issued, except as provided in
Section y12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised.
9.2. DIVIDENDS. All Shares issued upon the exercise of Options granted
under the Plan shall entitle the Optionee thereof, subject to
Section y17.6 below, to receive dividends with respect thereto,
provided, however, that Optionee shall have no right to dividends or
distribution or other right with respect to Shares
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for which the record date is prior to the date on which the Optionee
shall have become the holder of record.
9.3. VOTING RIGHTS. Each Optionee shall irrevocably appoint the person
who holds the office of the Company's Chairman of the Board, at any
given time, as his or her attorney, agent and proxy, with full power
of substitution, and such person may in their name, place and stead
vote all of the Shares held by them at any action by written consent
or meeting of the Shareholders of the Company held after the date
hereof, whether annual or special, and whether or not adjourned
meeting or otherwise. The proxy holder shall vote such shares on any
issue brought before the shareholders of the Company in the same
proportion as the other shareholders of the Company. The
aforementioned proxies shall expire upon the consummation of the
initial offering of the Company's shares to the public on a domestic
or foreign stock exchange.
9.4. TERMINATION OF RELATIONSHIP AS AN EMPLOYEE OR AS A SERVICE PROVIDER.
If an Optionee ceases to be an Employee or a Service Provider, such
Optionee may exercise his or her Option within such period of time
as is specified in the Option Agreement to the extent, and only 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 set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement and unless the Administrator determines
otherwise, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Optionee does
not exercise his or her Option (to the extent that the Option is
vested on the date of termination) within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
Anything in this Plan to the contrary notwithstanding, but subject
to the provisions of section 102 of the Ordinance, if an Optionee
ceases to be an Employee or a Service Provider of the Company or any
Subsidiary thereof, but continues to provide services to the Company
or any Subsidiary thereof, such Optionee will be deemed to have
continuously remained a Service Provider of the Company during such
term, and his Options shall vest pursuant to their original terms.
Notwithstanding the above, if an Optionee should be discharged from
the employ of the Company for Cause, the entire unexercised Option
(whether
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vested or not) shall ipso facto terminate and the Shares covered by
such Option shall revert to the Plan.
For the purposes hereof, Cause shall mean any of the following: (i)
the Optionee's theft, dishonesty, or falsification of any Company
documents or records; (ii) the Optionee's improper use or disclosure
of the Company's confidential or proprietary information; (iii) any
action by the Optionee which has a detrimental effect on the
Company's reputation or business; (iv) the Optionee's failure or
inability to perform any reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure,
such failure or inability; (v) any material breach of the Optionee
of any employment agreement between the Option and the Company,
which breach is not cured within 30 days pursuant to the terms of
such agreement; or (vi) the Optionee's conviction (including any
plea of guilty) of any criminal act which impairs the Optionee's
ability to perform his or her duties with the Company. For purposes
of the definition of Cause, with respect to an Optionee employed by
or providing services to a Parent or Subsidiary of the Company,
"Company" shall include the Parent or Subsidiary employing or
engaging the services of the Optionee.
In the event of resignation or discharge of a Optionee from the
employ of the Company or a Subsidiary thereof, his employment shall,
for the purposes of this paragraph y9.4, be deemed to have ceased
upon the delivery to the employer of notice of resignation, or upon
the delivery to the employee of notice of discharge, as the case may
be, irrespective of the effective date of such resignation or
discharge. The Administrator's determination as to whether an
authorized leave of absence on military, governmental or public
service or otherwise, or termination of employment under certain
conditions, shall constitute termination of employment for the
purposes hereof, shall be conclusive.
9.5. RETIREMENT. If an Employee Optionee should retire, he may, subject
to the approval of the Administrator, continue to enjoy such rights,
if any, under the Plan and on such terms and conditions, with such
limitations and subject to such requirements as the committee in its
sole discretion may determine at the time of such retirement or at
any time theretofore.
9.6. DISABILITY OF OPTIONEE. If an Optionee ceases to be an Employee or a
Service Provider as a result of the Optionee's Disability, the
Optionee may exercise his or her Option within such period of time
as is specified in the Option Agreement to the extent the Option is
vested on the date of termination (but in
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no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option, to the extent it is vested on
the date of termination, shall remain exercisable for twelve (12)
months following the Optionee's termination (but in no event later
than the expiration of the term of such Option as set forth in the
Option Agreement). If, on the date of termination, the Optionee is
not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
9.7. DEATH OF OPTIONEE. If an Optionee dies while an Employee or a
Service Provider, the Option may be exercised within such period of
time as is specified in the Option Agreement to the extent that the
Option is vested on the date of death (but in no event later than
the expiration of the term of such Option as set forth in the Option
Agreement) by the Optionee's estate or by a person who acquires the
right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Option Agreement, the Option, to
the extent that it is vested on the date of death, shall remain
exercisable for twelve (12) months following the Optionee's
termination (but in no event later than the expiration of the term
of such Option as set forth in the Option Agreement). If, at the
time of death, the Optionee is not vested as to the entire Option,
the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan.
9.8. BUYOUT PROVISIONS. Without derogating from Section y12.4 below, the
Administrator may at any time offer to buy out for a payment in cash
or Shares, an Option previously granted, based on such terms and
conditions as the Administrator shall establish and communicate to
the Optionee at the time that such offer is made. No such offer
shall obligate Optionee to relinquish his or her Option.
10. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Options and
Stock Purchase may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the
laws of descent or distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee.
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Apart from the inherent power of the shareholders of the Company to alter
or modify the rights of the Company's shares, the Administrator may impose
on any Optionee such additional restrictions on the transfer of Shares as
the Administrator may determine at the time that Options are granted to
the Optionee or as may be agreed to by the Administrator and the Optionee
following purchase of said Shares upon exercise of such Options under this
Plan or upon termination of the Optionee's employment with the Company.
Such additional rights and restrictions shall be included in the Option
Agreement entered into between the Company and the Optionee, or, upon
agreement of the Optionees, or in this Plan.
11. STOCK PURCHASE RIGHTS.
11.1. RIGHTS TO PURCHASE. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under
the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights
under the Plan, it shall advise the offeree in writing or
electronically of the terms, conditions and restrictions related to
the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within
which such person must accept such offer. The terms of the offer
shall comply in all respects with all Applicable Laws. The offer
shall be accepted by execution of a Restricted Stock purchase
agreement in the form determined by the Administrator.
11.2. REPURCHASE OPTION. Unless the Administrator determines otherwise,
the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any
reason (including death or disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock purchase
agreement shall be the original price paid by the purchaser and may
be paid by cancellation of any indebtedness of the purchaser to the
Company. The repurchase option shall lapse at such rate as the
Administrator may determine. Except with respect to Shares purchased
by Officers, Directors and Consultants, to the extent required by
Applicable Laws, the repurchase option shall in no case lapse at a
rate of less than 20% per year over five years from the date of
purchase.
11.3. OTHER PROVISIONS. The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Administrator in its sole
discretion.
11.4. RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is exercised,
the purchaser shall have rights equivalent to those of a stockholder
and shall be a
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stockholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company. No adjustment
shall be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised,
except as provided in Section y12 of the Plan.
12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
12.1. CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock
covered by each outstanding Option or Stock Purchase Right, and the
number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options or Stock Purchase
Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock Purchase
Right, as well as the price per share of Common Stock covered by
each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the number
of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible
securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to
an Option or Stock Purchase Right.
12.2. DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
or liquidation of the Company, to the extent that an Option has not
been previously exercised, the unexercised Option will terminate
immediately prior to the consummation of such proposed action. The
Committee may, in the exercise of its sole discretion in such
instances, declare that any Option shall terminate as of a date
fixed by the Committee and give each Optionee the right to exercise
his Option as to all or any part of the Shares, including Shares as
to which the Option would not otherwise be exercisable.
12.3. MERGER, ACQUISITION, OR ASSET SALE. In the event of a merger of the
Company with or into another corporation, an acquisition of all or
substantially all of the shares of the
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Company, or the sale of substantially all of the assets of the
Company (each such event, a "Transaction"), each outstanding Option
and Stock Purchase Right shall be assumed or an equivalent option or
right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. Notwithstanding the
foregoing, the Administrator may, in lieu of such assumption or
substitution, provide for the Optionee to have the right to exercise
his or her Options, as to all of the Shares or any part thereof,
including Options which would not otherwise be exercisable, under
such terms and conditions as the Administrator shall determine, in
its sole discretion. In addition, in the event that the successor
corporation refuses to assume or substitute for the Option or Stock
Purchase Right, the Optionee shall fully vest in and have the right
to exercise the Option or Stock Purchase Right as to all of the
Optioned Stock, including Shares as to which it would not otherwise
be vested or exercisable. If an Option or Stock Purchase Right
becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a Transaction, the Administrator shall
notify the Optionee in writing or electronically that the Option or
Stock Purchase Right shall be fully exercisable for a period of
fourteen (14) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or Stock
Purchase Right shall be considered assumed if, following a
Transaction, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the Transaction, the
consideration (whether stock, cash, or other securities or property)
received in the Transaction by holders of Common Stock for each
Share held on the effective date of the Transaction (and if holders
were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the
Transaction is not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received
upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock Purchase
Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the Transaction.
12.4. Anything herein to the contrary notwithstanding, if prior to the
consummation of the initial offering of the Company's shares to the
public on a domestic or foreign stock exchange, all or substantially
all of the shares of the Company
15
are to be sold, to any third party, whether or not related to or
affiliated with the Company or its shareholders each Optionee shall
be obliged to sell the Shares such Optionee purchased under the
Option Plan, in accordance with the instructions then issued by the
Administrator whose determination shall be final.
13. TIME OF GRANTING OPTIONS AND STOCK PURCHASE RIGHTS. The date of grant of
an Option or Stock Purchase Right shall, for all purposes, be the date on
which the Administrator makes the determination granting such Option or
Stock Purchase Right, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Employee
or Service Provider to whom an Option or Stock Purchase Right is so
granted within a reasonable time after the date of such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
14.1. AMENDMENT AND TERMINATION. The Board may at any time amend, alter,
suspend or terminate the Plan.
14.2. STOCKHOLDER APPROVAL. The Board shall obtain stockholder approval of
any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.
14.3. EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by
the Optionee and the Company. Termination of the Plan shall not
affect the Administrator's ability to exercise the powers granted to
it hereunder with respect to Options granted under the Plan prior to
the date of such termination.
15. CONDITIONS UPON ISSUANCE OF SHARES.
15.1. LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares shall comply with Applicable
Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
15.2. INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option, the Administrator may require the person exercising such
Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is
required.
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15.3. MARKET STAND-OFF. In connection with any underwritten public
offering of the Company's equity securities, pursuant to an
effective registration statement, for such period as the Company or
its underwriters may request (such period not to exceed 180 days
following the date of the applicable offering), the Optionee shall
not, directly or indirectly, sell, make any short sale of, loan,
hypothecate, pledge, offer, grant or sell any option or other
contract for the purchase of, purchase any option or other contract
for the sale of, or otherwise dispose of or transfer, or agree to
engage in any of the foregoing transactions with respect to, any
Shares acquired under this Plan without the prior written consent of
the Company or its underwriters.
16. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability
in respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
17. SPECIAL PROVISIONS FOR PLAN PARTICIPANTS WHO ARE ISRAELI RESIDENTS.
17.1. This Section y17 shall apply only to Optionees who are residents of
the State of Israel or those who are deemed to be residents of the
State of Israel for the payment of tax.
17.2. Notwithstanding anything herein to the contrary, the Plan may also
be administered pursuant to certain provisions of Section 102
("Section 102") or Section 3(i) ("Section 3(i)") of the Ordinance,
or any law or regulations which shall replace Sections 3(i) or 102,
and the Israeli Companies Law 1999, with respect to Employees and
Service Providers who are Israeli residents (or are deemed to be
Israeli residents under Applicable Laws), subject to the receipt of
all necessary approvals ("Approvals") that are required under any
Applicable Laws, and subject to the terms and conditions set forth
in such Approvals. Details regarding the terms and conditions of
Options and Stock Purchase Rights granted pursuant to the applicable
provisions of Section 102 in addition to those set forth herein,
will be delivered to the participants who are Israeli residents.
17.3. Notwithstanding anything herein to the contrary, in the event that
Options or Stock Purchase Rights are granted under the Plan pursuant
to the provisions of Section 102 ("102 Options" and "102 Stock
Purchase Rights"), each 102 Option and 102 Stock Purchase Right, and
each Share acquired pursuant to a 102 Option or 102 Stock Purchase
Right, shall be issued by the Company to, and held in trust (the
"Trust") for the benefit of such Optionee by a trustee
17
(the "Trustee") designated by the Board or by the board of directors
of a Subsidiary of the Company. Options granted under the Plan
pursuant to the provisions of Section 3(i) of the Tax Ordinance may
be granted to a Trustee. All certificates representing Options or
Shares issued to the Trustee shall be deposited with the Trustee,
and shall be held by the Trustee until such time that such Shares
are released from the Trust as herein provided. The Trustee shall
comply with all requirements under Applicable Laws and Approvals,
and shall hold the same pursuant to the instructions of the Board
and/or the board of directors of the Subsidiary, to the extent such
instructions do not contradict any Applicable Law.
17.4. Notwithstanding anything herein to the contrary, no 102 Options or
102 Stock Purchase Rights granted, or Shares purchased pursuant to
thereto ("102 Shares") (or, to the extent applicable, 3(i) Options
or 3(i) Stock Purchase Rights) shall be released from the Trust to
the Optionee or to any third party until such Optionee has deposited
with the Trustee an amount of money which, in the Trustee's opinion,
is necessary to discharge such Optionee's tax obligations with
respect to such 102 Options, 102 Stock Purchase Rights or 102 Shares
(or, to the extent applicable, 3(i) Options or 3(i) Stock Purchase
Rights), or the Company or Subsidiary has made other arrangements
for the deduction of tax at source acceptable to the Trustee.
17.5. Upon sale by an Optionee of any securities held in Trust, the
Trustee shall withhold from the proceeds of such sale all applicable
taxes, shall remit the amount withheld to the appropriate Israeli
tax authorities, shall pay the balance thereof directly to such
Optionee, and shall report to such Optionee the amount so withheld
and paid to said tax authorities.
17.6. Subject to the provisions of Section y9.2 above, all Shares issued
upon the exercise of Options or Stock Purchase Rights granted under
the Plan shall entitle the Optionee to receive dividends with
respect thereto, and, subject to the provisions of Section y9.3
above, to vote the same at any meeting of the shareholders of the
Company. For as long as shares issued to the Trustee on behalf of
the Optionee are held in the Trust, and unless the Committee
determines otherwise, the cash dividends paid with respect thereto
shall be remitted to the Trustee for the benefit of such Optionee,
and the Trustee shall vote all such Shares in accordance with the
provisions of Section y9.3 above.
17.7. At the Administrator's discretion, for purposes of simplicity and in
order to ensure compliance with Israel's tax regulations, the
exercise of the Options and the purchases and sales of Shares issued
upon the exercise of Stock
18
Purchase Rights made under the Plan shall be executed by the Company
or its Subsidiaries, as appropriate.
17.8. With respect to the participants who are Israeli residents, the Plan
and all instruments issued thereunder or in connection therewith
shall be governed by, and interpreted in accordance with, the laws
of the State of Israel.
18. DEFAULT. An Optionee shall be deemed to be in default under this Plan,
including the Option Agreement, in the event that the Optionee fails to
pay any sum or perform any obligation provided for in the Plan, in a
timely fashion or in a manner required. Any default under this Plan not
cured within ten (10) days after the Company gives written notice of such
default to Optionee shall entitle the Company to exercise any and all
remedies and rights against the defaulting Optionee contained in any and
all of the documents comprising this Plan or provided under applicable
law.
19. NOTICES. All notices and elections sent to the Company by an Optionee
shall be in writing and delivered in person or by certified mail to the
president or secretary of the Company at the principal office of the
Company.
All notices given by the Company to an Optionee under the Plan shall be in
writing and delivered in person or by certified mail to the Optionee's
address as reflected in the Company's records.
All notices will be deemed delivered within 7 days of their dispatch by
certified mail, postage prepaid.
20. RESERVATION OF SHARES. The Company, during the term of this Plan, shall at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
21. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the
Plan is adopted. Such stockholder approval shall be obtained in the degree
and manner required under Applicable Laws.
22. GOVERNING LAW. Except as set forth in Section y17.8 above, this Plan shall
be governed in all respects by the internal laws, but not the choice of
law rules, of the State of New York.
23. MISCELLANEOUS. Any tax consequences arising from the grant or exercise of
any Options or Stock Purchase Rights, or from the payment for Shares
covered thereby, or from any sale or disposition of the Optioned Stock, or
from any other event or act (whether of the Optionee, the Trustee, or the
Company or its Subsidiaries) hereunder, shall be borne solely by the
Optionee. Furthermore, such Optionee shall agree to
19
indemnify the Company or Subsidiary that employs the Optionee and the
Trustee, if applicable, 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.
Except as otherwise required by law, the Company shall not be obligated to
exercise any Options on behalf of an Optionee, or to release any share
certificate, until all tax consequences arising from the exercise of such
Options are resolved in a manner reasonably acceptable to the Company, and
all required payments in connection with the exercise of the Option or the
Stock Purchase Right, or the sale of the Shares, have been fully paid by
the Employee.
24. MULTIPLE AGREEMENTS. The terms of each Option may differ from other
Options granted under this Plan at the same time, or at any other time.
EXHIBIT A
IRREVOCABLE POWER OF ATTORNEY
I, the undersigned, __________________ hereby irrevocably invest the Board of
Directors of the Company with the authority to appoint, for all Regular or
Extraordinary General Meetings of Shareholders of Voice Diary Inc., on my behalf
and in my name, as it shall consider appropriate, and regarding all the
Company's shares registered in my name, any representative, to vote all such
shares as such representative deems appropriate, under its sole discretion,
starting from the date of this power of attorney and until the consummation of
the initial offering to the public of the Company's shares on a stock exchange
in the United states or in any other jurisdiction.
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The Optionee
Date:
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