FIRST AMENDMENT TO AGREEMENT
This First Amendment (the "AMENDMENT") to that certain Agreement entered into on
the 7 day of May 2006 by and between TRACEGUARD TECHNOLOGIES LTD. (the
"COMPANY") a company registered in Israel, having its principal place of
business at6 Ravnitzky Street, Segula Industrial Park, Petach Tikva, Israel and
DR. EHUD GANANI of ______, _____________ ("DR. GANANI") is made effective as of
the 6th day of July 2006 (the "EFFECTIVE DATE").
WHEREAS, Company and Dr. Ganani are parties to that certain Agreement
dated May 7, 2006 (the "Agreement"), pursuant to which Company engaged Dr.
Ganani as the Chief Executive Officer and the Chairman of the Board of Directors
of the Company as more fully described under the Agreement; and
WHEREAS, pursuant to Section 3.5.1 of the Agreement, Company undertook to
grant to Dr. Ganani options to purchase up to an aggregate of nine hundred
ninety thousand (990,000) shares of Common Stock of TraceGuard Technologies,
Inc. ("TG US"), par value US$ 0.001 each (the "UNCONDITIONAL OPTIONS"); and
WHEREAS, the parties agreed that Consultant will be granted five hundred
and fifty thousand (550,000) Restricted Stock Units ("RSUS") in lieu of those
certain Unconditional Options specified above, subject to the terms and
conditions set forth herein; and
WHEREAS, the Parties agreed to amend the Agreement, all as set forth
hereinbelow;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Unless otherwise defined herein, all capitalized terms used herein shall
have the meaning ascribed to them in the Agreement.
2. The first paragraph of Section 3.5 of the Agreement shall be replaced by
the following:
"GRANT OF SECURITIES
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In addition, Company will grant Dr. Ganani Restricted Stock Units
("RSUS") and/or options for the purchase of shares of Common Stock
of TG US (as defined below) par value US$ 0.001 each ("SHARES"), as
follows:"
3. Section 3.5.1 of the Agreement shall be replaced by the following:
"Company will grant Dr. Ganani 550,000 (Five Hundred and Fifty
Thousand RSUs of the Company, subject to the terms and conditions of
the Company's 2006 Global Stock Incentive Compensation Plan (the
"PLAN") as set forth in Section 3.5.5 below".
4. The words "the Unconditional Options" under Section 3.5.4 shall be
deleted.
5. Sections 3.5.5 and 3.6 of the Agreement shall be replaced by the
following:
"3.5.5 The Options and RSUs, as applicable, shall be granted to Dr.
Ganani in accordance with the following principle terms and
conditions:
(I) Vesting. All RSUs shall vest in accordance with the terms and
conditions of the Plan, and unless expressly stated otherwise
herein all Options granted to Dr. Ganani under this Agreement
shall vest immediately upon their grant to Dr. Ganani.
(II) Exercise Price. (i) No purchase price shall be payable by Dr.
Ganani to the Company with respect to the grant of RSUs; (ii)
Each Option shall be exercisable to one share of Common Stock
of the Company, par value $0.001, against a payment of seventy
cents (US$ 0.70).
(III) Term of Options. All Options, if and to the extent granted
according to this Section, shall be in effect for a period of
three (3) years commencing on the date of their grant and
shall expire immediately thereafter.
(IV) Tax. All RSUs granted to Dr. Ganani will be granted in
accordance with Section 102 of Israeli Internal Revenue
Ordinance ("SECTION 102") under the capital gains tax track
with a trustee, subject to the requirements and conditions of
Section 102; All Options granted to Consultant shall be
granted under Section 3(i) of Israeli Internal Revenue
Ordinance unless agreed otherwise between the parties and
subject to applicable law.
3.6 General. All RSUs granted to Dr. Ganani shall be subject to
the terms and conditions of the Plan, as will be approved by
the Company, at its sole discretion. All Options granted to
Consultant shall be in accordance with the terms and
conditions of a Grant Letter substantially in the form
attached hereto as EXHIBIT B. At the first ---------
anniversary of this Agreement (i.e, 1st day of February,
2007), the Fee, the Special Bonus Fee and the Annual Fee will
be automatically increased by ten percent (10%). At any
anniversary of this Agreement thereafter, if the term of this
Agreement is extended by the Parties, annual reviews shall be
performed by the Company on a yearly basis at its sole
discretion."
6. The words "Options" under Sections 3.8, 3.9 and 7.3 shall be replaced by
the words "Options and RSUs".
7. Other than as amended and supplemented herein, the provisions of the
Agreement and its exhibits shall remain in full force and effect,
insofar as they do not contradict the terms of this Amendment.
IN WITNESS WHEREOF, the parties have hereunto subscribed their names:
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TraceGuard Technologies Ltd. Dr. Ehud Ganani
By: ____________________
Title: ___________________
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