Exhibit 10.3
___________ __, 20__
[Name of Recipient]
[Address]
Notice of Grant of Restricted Stock
-----------------------------------
Dear [Name]:
Pursuant to the terms and conditions of the Verint Systems Inc. (the
"Company") 2004 Stock Incentive Compensation Plan (as the same may be amended or
supplemented from time to time, the "Plan"), you have been granted a Restricted
Stock Award for [Number] shares (the "Award") of Common Stock of the Company as
outlined below.
Granted To: [Name]
[Social Security Number]
Grant Date: [Date]
Shares Granted: [Number]
Price Per Share: $0.00
Vesting Schedule: 50% on [Second Anniversary of Grant]
25% on [Third Anniversary of Grant]
25% on [Fourth Anniversary of Grant]
Tax Track: [Capital Gains Tax Track Through a Trustee]
1. The Restricted Stock and any additional rights including, without
limitation, any share bonus that shall be distributed to you in connection
with the Award (the "Additional Rights"), shall be allocated on your behalf
to the Trustee - the "Employees Remuneration Trust Company" (the
"Trustee").
2. The Restricted Stock and Additional Rights shall be allocated on your
behalf to the Trustee under the provision of the Capital Gains Tax Track
and will be held by the Trustee for the period (the "Holding Period")
stated in Section 102 of the Income Tax Ordinance, 1961 and the Income Tax
Regulations (Tax Relieves in Allocation of Shares to Employees), 2003
promulgated thereunder ("Section 102").
3. If you sell or withdraw the Restricted Stock or Additional Rights from the
Trustee before the end of the Holding Period (which shall be referred to as
a "Violation"), you shall pay income tax at your marginal rate on the
profits derived from the Restricted Stock or Additional Rights plus
payments to the National Insurance Institute and Health Tax. You many also
be required to reimburse the Company or your employing or engaging company,
as the case may be, (the "Employing Company") for the employer portion of
the payments to the National Insurance Institute, plus any legally required
linkage and interest. You also may be required to reimburse the Employing
Company for any other expenses that the Employing Company shall bear as a
result of a Violation.
4. The Restricted Stock and Additional Rights are granted to you and allocated
to the Trustee according to the provision of Section 102, the Plan, and the
Hebrew version of the Trust Agreement signed between the Company and the
Trustee attached herewith and made a part of this notice.
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5. The Award is granted to you on the condition that you sign the Approval of
the Designated Grantee, which constitutes a part of this Notice of Grant,
below.
Verint Systems Inc.
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APPROVAL OF THE DESIGNATED GRANTEE:
-----------------------------------
I hereby agree that all the Restricted Stock and Additional Rights granted to me
pursuant to the Award shall be allocated to the Trustee under provisions of the
Capital Gains Tax Track and shall be held by the Trustee for the period stated
in Section 102 and in accordance with the provisions of the Trust Agreement, or
for a shorter period if an approval is received from the tax authorities.
I am aware of the fact that upon termination of my Continuous Service with the
Employing Company, I shall not have a right to the Restricted Stock or the
Additional Rights, except as specified in the Restricted Stock Award Agreement
and the Plan.
I hereby confirm that:
1. I have read the Plan (which includes the Company's Option Plan Program
dated March 5, 2003, as amended) and the Restricted Stock Award
Agreement and I understand and accept the terms and conditions
thereof. I am also aware that the Company is agreeing to grant me the
Award and allocate it on my behalf to the Trustee based on this
confirmation;
2. I understand the provisions of Section 102 and the applicable tax
track of this grant of Award;
3. I agree to the terms and conditions of the Hebrew version of the Trust
Agreement a copy of which has been made available to me;
4. Subject to the provisions of Section 102, I confirm that I shall not
sell, nor transfer from the Trustee, the Restricted Stock or
Additional Rights before the end of the Holding Period;
5. If I shall sell, or withdraw from the Trust, the Restricted Stock or
the Additional Rights before the end of the Holding Period as defined
in Section 102 (a "Violation"), either (A) I shall reimburse the
Employing Company within three (3) days of its demand for the employer
portion of the payment by the Employing Company to the National
Insurance Institute plus linkage and interest in accordance with the
law, as well as any other expense that the Employing Company shall
bear as a result of the said Violation (all such amounts defined as
the "Payment") or (B) I agree that the Employing Company may, in its
sole discretion, deduct such amounts directly from any monies to be
paid to me as a result of my disposition of the Restricted Stock or
the Additional Rights;
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By my signature below, I hereby acknowledge my receipt and voluntary acceptance
of this Award granted on the date shown above, which has been issued to me under
the terms and conditions of the Plan. I further acknowledge receipt of a copy of
the Plan, the Hebrew version of the Trust Agreement, and a Restricted Stock
Award Agreement. I agree that the Award is subject to all of the terms and
conditions of, the Plan, this Notice of Grant of Restricted Stock, and the
Restricted Stock Award Agreement.
Signature: _______________________________ Date: ______________
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VERINT SYSTEMS INC.
-------------------
RESTRICTED STOCK AWARD AGREEMENT
--------------------------------
This Restricted Stock Award Agreement ("Agreement") governs the terms and
conditions of the Restricted Stock Award (the "Award") specified in the Notice
of Grant of Restricted Stock (the "Notice of Grant") delivered herewith
entitling the person to whom the Notice of Grant is addressed ("Grantee") to
receive from Verint Systems Inc. (the "Company") the number of shares of the
Company's Common Stock indicated in the Notice of Grant (the "Restricted
Stock"). Capitalized terms used but not defined in this Agreement shall have the
meanings set forth in the Verint Systems Inc. 2004 Stock Incentive Compensation
Plan, as the same may be amended or supplemented from time to time (the "Plan").
1 RESTRICTED STOCK; VESTING
1.1 Grant of Restricted Stock.
(a) The Award of the Restricted Stock is made subject to the terms and
conditions of the Plan, as supplemented by the Option Plan Program dated
March 5, 2003, as amended (the "Israeli Plan Supplement"), relating to the
Israeli Income Tax Ordinance [New Version] - 1961 (the "Israeli Tax
Ordinance"), and this Agreement. If and when the restrictions set forth in
Paragraph 1.2 expire in accordance with the terms of this Agreement and the
Notice of Grant without forfeiture of the Restricted Stock, and upon the
satisfaction of all other applicable conditions as to the Restricted Stock,
such shares shall no longer be considered Restricted Stock for purposes of
this Agreement. No expiration of the restrictions set forth in Paragraph
1.2 shall affect the restrictions contained in the Israeli Plan Supplement
(including, without limitation, the restrictions on the Grantee's right to
hold the shares directly or to sell or otherwise dispose of the shares
prior to the expiration of the Holding Period (as hereinafter defined)),
which shall be in addition to and separate from the restrictions contained
in Paragraph 1.2 hereof.
(b) As soon as practicable after the Date of Grant, the Company shall direct
that the shares of Restricted Stock be registered in the name of and issued
to The Employees Remuneration Trust Company (the "Trustee") for the benefit
of the Grantee, either in book entry format or represented by a stock
certificate or certificates. All such shares, and any certificate or
certificates representing the same, shall be held in the custody of the
Company or its designee (which may include the Trustee) until the later of
the time when (i) such shares no longer are considered Restricted Stock and
(ii) the required holding period (the "Holding Period") under the Israeli
Tax Ordinance has run and the Grantee has, in a writing provided to the
Company, requested release of the shares.
(c) As a condition to the issuance and registration of the shares of Restricted
Stock, and prior to the delivery of any stock certificate or certificates
representing the Restricted Stock, the Grantee shall, and shall cause the
Trustee to, deliver to the Company or its designee one or more stock powers
endorsed in blank relating to the Restricted Stock (as directed by the
Company), in the form attached hereto as Exhibit A. Grantee hereby, and
hereby directs the Trustee to, irrevocably appoint the Company and each of
its officers, employees and agents as his true and lawful attorneys with
power (i) to sign in the Grantee's name or the Trustee's name (on behalf of
the Grantee), as applicable, stock certificates and stock powers covering
the Restricted Stock and such other documents and instruments as the
Committee deems necessary or desirable to carry out the terms of this
Agreement and (ii) to take such other action as the Committee deems
necessary or desirable to effectuate the terms of this Agreement. This
power, being coupled with an interest, is irrevocable. Grantee will, and
will cause the Trustee to, execute such other stock powers and documents as
may be reasonably requested from time to time by the Committee to
effectuate the terms of this Agreement.
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(d) Each certificate, if any, for the Restricted Stock shall bear the following
legend (the "Legend"):
"The ownership and transferability of this certificate and the shares
of stock represented hereby are subject to the terms and conditions
(including forfeiture) of the Verint Systems Inc. 2004 Stock Incentive
Compensation Plan and a Restricted Stock Award Agreement entered into
between the registered owner and Verint Systems Inc. Copies of such
Plan and Agreement are on file in the executive offices of Verint
Systems Inc."
In addition, the Restricted Stock shall be subject to such stop-transfer
orders and other restrictions as the Company may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange or securities association upon which the
Common Stock is then listed, the Israeli Tax Ordinance, and any applicable
federal or state securities law, and the Company may cause a legend or
legends to be placed on such certificate or certificates to make
appropriate reference to such other restrictions.
(e) As soon as administratively practicable following the applicable Vesting
Date (as defined in Paragraph 1.3), and upon the satisfaction of all other
applicable conditions as to such Vested Percentage (as defined in Paragraph
1.3) of Restricted Stock, including, but not limited to, the payment by the
Grantee of all applicable U.S., Israeli, or other withholding taxes, the
Company shall, at its option, (i) deliver or cause to be delivered to the
Trustee, or if the Holding Period has run and the Grantee has requested
release of the shares in accordance with Paragraph 1.1(b), the Grantee a
certificate or certificates for the applicable shares of Restricted Stock
which shall not bear the Legend or (ii) transfer or arrange to have
transferred the vested shares to a brokerage account of the Trustee, or if
the Holding Period has run and the Grantee has requested release of the
shares in accordance with Paragraph 1.1(b), of the Grantee, designated by
the Company free of any Company-imposed transfer restrictions.
1.2 Restrictions.
(a) The Trustee or Grantee, as applicable, as registered holder of the Award
(the "Holder") shall have all rights and privileges of a stockholder as to
the Restricted Stock, including the right to vote and receive dividends or
other distributions with respect to the Restricted Stock, except that the
following restrictions shall apply:
(i) the Grantee shall not be entitled to delivery of any of the shares of
Restricted Stock (whether by transfer to Grantee's brokerage account
or by delivery of stock certificates) until the applicable Vesting
Date and upon the satisfaction of all other applicable conditions
whereupon Grantee will only be entitled to the Vested Percentage;
(ii) shares of Restricted Stock may not be sold, pledged, assigned,
transferred, or otherwise encumbered or disposed of for any reason
until the applicable Vesting Date;
(iii) all shares of Common Stock distributed as a dividend or distribution,
if any, with respect to shares of Restricted Stock prior to the
applicable Vesting Date shall be delivered to and held by the Company
or its designee (which may include the Trustee) and subject to the
same restrictions as the shares of Restricted Stock in respect of
which the dividend or distribution was made; and
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(iv) all unvested shares of Restricted Stock shall be forfeited and
returned to the Company and any and all rights of the Holder of any
kind with respect to such shares shall terminate in their entirety on
the terms and conditions set forth in Paragraph 1.4.
(b) For the avoidance of doubt, the foregoing restrictions shall be in addition
to, and separate from, the restrictions contained in the Israeli Plan
Supplement (including, without limitation, the restrictions on the
Grantee's right to hold the shares directly or to sell or otherwise dispose
of the shares prior to the expiration of the Holding Period).
(c) Any attempt to dispose of unvested shares of Restricted Stock or any
interest in such shares in a manner contrary to the restrictions set forth
in this Agreement shall be void and of no effect.
1.3 Vesting.
(a) Subject to the provisions contained in Paragraphs 1.4, 1.5 and 1.6, the
restrictions set forth in Paragraph 1.2(a) with respect to shares of
Restricted Stock shall apply for a period beginning on the Date of Grant
specified in the Notice of Grant and ending on the fourth anniversary of
the Date of Grant; provided, however, the applicable percentage of shares
of Restricted Stock awarded hereunder (the "Vesting Percentage") shall be
deemed vested and no longer subject to restriction under Paragraph 1.2(a)
or forfeiture under Paragraph 1.4 on the applicable vesting date ("Vesting
Date") in accordance with the schedule set forth in the Notice of Grant.
For the avoidance of doubt, no vesting under this Agreement shall entitle
the Grantee to take possession of any shares or become the registered
holder thereof until the Holding Period has run. Vesting shall cease upon
the date Grantee's Continuous Service terminates for any reason unless
otherwise determined by the Committee in its sole discretion.
(b) During any authorized leave of absence, the vesting of the Restricted Stock
as provided in the Notice of Grant shall be suspended after the leave of
absence exceeds a period of three (3) months. The vesting schedule set
forth in the Notice of Grant shall be extended by the length of the
suspension. Vesting of the Restricted Stock shall resume upon the Grantee's
termination of the leave of absence and return to service to the Company or
an Affiliate; provided, however, that if the leave of absence exceeds six
(6) months, and a return to service upon expiration of such leave is not
guaranteed by statute or contract, then (i) for purposes of this Agreement,
the Grantee's Continuous Service shall be deemed to terminate on the first
date following such six-month period and (ii) the Grantee will forfeit the
Restricted Stock that is unvested on such deemed termination date. An
authorized leave of absence shall include sick leave, military leave, or
other bona fide leave of absence (such as temporary employment by the
government).
1.4 Forfeiture. If Grantee's Continuous Service terminates for any reason, all
unvested shares of Restricted Stock shall be forfeited by the Holder as of the
date of termination unless otherwise determined by the Committee in its sole
discretion. In the event of any such forfeiture, all such forfeited shares of
Restricted Stock shall become the property of the Company and any certificate or
certificates representing such shares of Restricted Stock shall be returned
immediately to the Company. For the avoidance of doubt, Grantee acknowledges and
agrees that he or she has no expectation that any Restricted Stock will vest on
the termination of his or her Continuous Service for any reason and that he or
she will not be entitled to make a claim for any loss occasioned by such
forfeiture as part of any claim for breach of his or her employment or service
contract or otherwise.
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1.5 Tax; Withholding.
(a) As a condition of the Award, the Grantee agrees not to make an election,
under Section 83(b) of the Internal Revenue Code of 1986, as amended, or
any equivalent election under Israeli law, to include an amount of income
in respect of the Restricted Stock.
(b) The Committee shall determine the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any
income recognized by the Grantee with respect to the Restricted Stock.
(c) Neither the Company nor any such Affiliate or agent makes any
representation or undertaking regarding the treatment of any tax
withholding in connection with the grant or vesting of the Award or the
subsequent sale of shares subject to the Award. The Company and its
Affiliates do not commit and are under no obligation to structure the Award
to reduce or eliminate the Grantee's tax liability.
(d) The Grantee shall be required to meet any applicable tax withholding
obligation, whether United States federal, state, local, Israeli or
otherwise, including any employment tax obligation (the "Tax Withholding
Obligation"), in accordance with the provisions of the Plan prior to any
event in connection with the Award (e.g., acquisition, vesting, or
disposal) that the Company determines may result in any Tax Withholding
Obligation, and subject to the Plan, the Company reserves the right to
determine the method or methods by which such Tax Withholding Obligations
will be satisfied together with any associated timing or other details
required to effectuate such method or methods. If, pursuant to the Plan,
the Grantee wishes to satisfy his or her minimum Tax Withholding
Obligation, in whole or in part, (i) by providing the Company with funds
sufficient to enable the Company to pay such tax or (ii) by requiring
(subject to Committee disapproval as provided in the Plan) that the Company
retain or accept, or by requesting that the Company arrange for the sale by
the Grantee of, shares of its stock sufficient in value (as determined
under the Plan) to cover the amount of such tax, the Grantee will provide
written notice of the same, together with a wire transfer or certified
check for such funds in the case of clause (i) above, to the Company or its
designee in accordance with the timing and other terms of the Company's
notice of election procedures to be separately provided to the Grantee,
prior to the applicable vesting date or other event in connection with the
Award that the Company has advised Grantee may result in a Tax Withholding
Obligation.
(e) The Grantee is ultimately liable and responsible for all taxes owed by the
Grantee in connection with the Award, regardless of any action the Company
or any of its Affiliates or agents takes with respect to any Tax
Withholding Obligations that arise in connection with the Award.
Accordingly, Grantee agrees to pay to the Company or its relevant Affiliate
as soon as practicable, including through additional payroll withholding,
any amount of tax withholding that is not satisfied by any such action of
the Company or its Affiliate.
(f) The Committee shall be authorized, in its sole discretion, to establish
such rules and procedures relating to the use of shares of Common Stock to
satisfy tax withholding obligations as it deems necessary or appropriate to
facilitate and promote the conformity of the Holder's transactions under
the Plan (as supplemented by the Israeli Plan Supplement) and this
Agreement with Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, if such Rule is applicable to transactions by the Holder, and with
the Israeli Tax Ordinance.
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1.6 Committee's Discretion. Notwithstanding any provision of this Agreement to
the contrary, the Committee shall have sole and absolute discretion to waive any
forfeiture of the Restricted Stock and any other terms or conditions set forth
in this Agreement.
2 REPRESENTATIONS OF THE GRANTEE
The Grantee hereby represents to the Company that the Grantee has read and fully
understands the provisions of this Agreement and the Plan, and the Grantee
acknowledges that the Grantee is relying solely on his or her own advisors with
respect to the tax consequences of this Award.
3 NOTICES
All notices or communications under this Agreement shall be in writing,
addressed as follows:
To the Company:
Verint Systems Inc.
330 South Service Road
Melville, NY 11747-3201
(631) 962-9600 (phone)
(631) 962-9623 (fax)
Attn: General Counsel
To the Grantee:
as set forth in the Notice of Grant
(or if the Notice of Grant is provided electronically without
a mailing address, then as set forth in the Company's payroll
records)
Any such notice or communication shall be (a) delivered by hand (with written
confirmation of receipt) or sent by a nationally recognized overnight delivery
service (receipt requested) or (b) be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other address
as such party may designate in writing from time to time), and the actual date
of receipt shall determine the time at which notice was given. Grantee will
promptly notify the Company in writing upon any change in Grantee's address.
4 ASSIGNMENT; BINDING AGREEMENT
This Agreement shall be binding upon and inure to the benefit of the heirs and
representatives of the Grantee and the assigns and successors of the Company,
but neither this Agreement nor any rights hereunder shall be assignable or
otherwise subject to hypothecation or transfer by the Grantee or the Trustee.
5 ENTIRE AGREEMENT; AMENDMENT
This Agreement and the Notice of Grant represent the entire agreement of the
parties with respect to the subject matter hereof, except that the provisions of
the Plan and the Israeli Plan Supplement are incorporated in this Agreement in
their entirety. In the event of any conflict between the provisions of this
Agreement or the Notice of Grant and the Plan (as supplemented by the Israeli
Plan Supplement), the provisions of the Plan (as supplemented by the Israeli
Plan Supplement) shall control. This Agreement or the Notice of Grant may be
amended by the Committee without the consent of the Grantee or the Trustee
except in the case of an amendment adverse to the Grantee, in which case the
Grantee's consent shall be required.
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6 GOVERNING LAW
This Agreement and its validity, interpretation, performance and enforcement
shall be governed by the laws of the State of New York other than the conflict
of laws provisions of such laws.
7 SEVERABILITY
Whenever possible, each provision in this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be held to be prohibited by or invalid under applicable
law, then (a) such provision shall be deemed amended to accomplish the
objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of this Agreement shall remain in
full force and effect.
8 NO RIGHT TO CONTINUED SERVICE OR PARTICIPATION; EFFECT ON OTHER PLANS
Neither this Agreement nor the Notice of Grant shall confer upon the Grantee any
right with respect to continued service with the Company, a Subsidiary or
Affiliate, nor shall it interfere in any way with the right of the Company a
Subsidiary or Affiliate to terminate the Grantee's Continuous Service at any
time. Payments received by the Grantee pursuant to this Agreement and the Notice
of Grant shall not be included in the determination of benefits under any
pension, group insurance or other benefit plan of the Company or any
Subsidiaries or Affiliate in which the Grantee may be enrolled or for which the
Grantee may become eligible, except as may be provided under the terms of such
plans or determined by the Board of Directors of the Company.
9 NO STRICT CONSTRUCTION
No rule of strict construction shall be implied against the Company, the
Committee or any other person in the interpretation of any of the terms of the
Plan, the Israeli Plan Supplement, this Agreement, the Notice of Grant or any
rule or procedure established by the Committee.
10 USE OF THE WORD "GRANTEE"
Wherever the word "Grantee" is used in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to the
Trustee or the executors, the administrators, or the person or persons to whom
the Restricted Stock may be transferred by will or the laws of descent and
distribution, the word "Grantee" shall be deemed to include such person or
persons.
11 FURTHER ASSURANCES
The Grantee agrees to, and shall cause the Trustee to, upon demand of the
Company or the Committee, do all acts and execute, deliver and perform all
additional documents, instruments and agreements (including, without limitation,
stock powers with respect to shares of Common Stock issued as a dividend or
distribution on Restricted Stock) which may be reasonably required by the
Company or the Committee, as the case may be, to implement the provisions and
purposes of this Agreement and the Plan (as supplemented by the Israeli Plan
Supplement).
END OF AGREEMENT
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EXHIBIT A
---------
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
unto _________________________________(1), __________________________(2)
(__________)(3) shares of Common Stock of Verint Systems Inc., [represented by
Certificate No. ______](4) (the "Shares"), standing in his or her name on the
books of said corporation and does hereby irrevocably constitute and appoint
___________________________(5) as his lawful attorney-in-fact to transfer said
Shares on the books of said corporation with full power of substitution in the
premises.
DATED: ________________(6)
_____________________________________(7)
Name:____________________(8)
_______________________________________
(1) Leave this item blank. The transferee will be completed if and when the
shares are assigned.
(2) Enter the number of shares in words.
(3) Enter the number of shares in numerals.
(4) Include this item (and complete the blank and remove the brackets) only if
the shares were certificated. If not, strike this item.
(5) Leave this item blank. The attorney-in-fact will be completed if and when
the shares are assigned.
(6) Leave this item blank (do not date when signing). The date will be
completed if and when the shares are assigned.
(7) Sign here.
(8) Print your name here.
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