EXHIBIT 99.3
SHAMIR OPTICAL INDUSTRY LTD
2005 GENERAL SHARE AND INCENTIVE PLAN
1. PURPOSE; TYPES OF AWARDS; CONSTRUCTION.
1.1 Purpose. The purpose of the Shamir 2005 General Award and Incentive
Plan (the "PLAN") is to create a general framework under which Shamir
Optical Industry Ltd (the "COMPANY") may issue shares and/or share
option plans pursuant to the terms and conditions set forth hereunder
and in the annexes hereto. The Plan is intended to provide an
incentive to retain, in the employ of the Company and its Affiliates
(as defined below), persons of training, experience, and ability, to
attract new employees, directors, consultants, service providers and
any other entity whose services the Board determine are valuable to
the Company; to encourage the sense of proprietorship of such persons;
and to stimulate the active interest of such persons in the
development and financial success of the Company by providing them
with opportunities to purchase shares in the Company, pursuant to the
Plan.
1.2 Under the Plan, the Company may provide an incentive to employees,
officers, directors, consultants and subcontractors of the Company, or
any subsidiary of the Company which now exists or hereafter is
organized or acquired by the Company, to acquire a proprietary
interest in the Company in the form of shares and/or options to
acquire shares, to continue as employees, directors, consultants or
subcontractors to increase their efforts on behalf of the Company and
to promote the success of the Company's business, as more specifically
is set forth herein (the "AWARD").
1.3 Types of Awards. The Plan to be adopted hereunder, contemplates
issuance of Awards to Grantees (as defined below) in a variety of
jurisdictions. The Committee (as defined below) is empowered with
respect to the Plan hereunder (i) to make the requisite adjustments in
the Plan and set forth the relevant conditions in the Company's
agreement with the Grantees in order to comply with the requirements
of the tax regimes in any particular jurisdiction; and (ii) to
determine the terms and condition of this Plan whereby it shall
specify the type of awards capable of being granted under the Plan
taking into account the jurisdiction under which such awards are to be
issued and the relevant tax regime.
1.4 Construction. To the extent any provision herein conflicts with the
conditions of any relevant tax or other law or regulation that is
relied upon for tax relief or otherwise for securities laws purposes
in respect of a particular Award granted to a Grantee, the provisions
of that law or regulation shall prevail over those of the Plan, and
the Committee (as defined below) is empowered hereunder to interpret
and enforce the that prevailing provisions.
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
2.1 "AFFILIATE" means a Parent, Subsidiary, any entity in which the
Company holds 25% or more of all the ownership and voting rights and
any entity under the control or ownership of the Parent.
2.2 "AWARD AGREEMENT" means the Award agreement between the Company and a
Grantee that sets out the terms and conditions of an Award.
2.3 "BOARD" shall mean the Board of Directors of the Company.
2.4 "CAUSE" means, (i) conviction of any felony involving moral turpitude
or affecting the Company; (ii) any refusal to carry out a reasonable
directive of the chief executive officer, the Board or the Grantee's
direct supervisor, which involves the business of the Company or its
Affiliates and was capable of being lawfully performed; (iii)
embezzlement of funds of the Company or its Affiliates; (iv) any
breach of the Grantee's fiduciary duties or duties of care of the
Company; including without limitation disclosure of confidential
information of the Company; and (v) any conduct (other than conduct in
good faith) reasonably determined by the Board to be materially
detrimental to the Company and/or in competition with the business of
the Company.
2.5 "COMMITTEE" shall mean the compensation committee established by the
Board, among other things, to administer the Plan.
2.6 "COMPANIES LAW" shall mean the Israel Companies Law, 5759-1999, as
amended.
2.7 "DATE OF GRANT" means, the date of grant of an Award, as determined by
the Board and set forth in the Grantee's Award Agreement.
2.8 "EXERCISE PRICE" shall mean the exercise price for each Share covered
by an Award.
2.9 "FAIR MARKET VALUE" means, unless otherwise specifically determined
hereunder, as of any date, the value of a Share determined as follows:
(i) If the Shares are listed on any established stock exchange or a
national market system, including without limitation the NASDAQ
National Market system, or the NASDAQ SmallCap Market of the NASDAQ
Stock Market, the Fair Market Value shall be the closing sales price
for such Shares (or the closing bid, if no sales were reported), as
quoted on such exchange or system for the last market trading day
prior to time of determination, as reported in the Wall Street
Journal, or such other source as the Board deems reliable;
(ii) If the Shares are regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value
shall be the mean between the high bid and low asked prices for the
Shares on the last market trading day prior to the day of
determination, or;
(iii) In the absence of an established market for the Shares, the Fair
Market Value thereof shall be determined in good faith by the Board.
2.10 "GRANTEE" shall mean a person who receives a grant of Awards under the
Plan.
2.11 "PARENT" shall mean any company holding directly or indirectly 50% or
more of the total voting power in the Company.
2.12 "SHARES" shall mean Ordinary Shares of the Company, NIS 0.01 par value
per share.
2.13 "SUBSIDIARY" shall mean any company (other than the Company) in an
unbroken chain of companies beginning with the Company if, at the time
of granting an Award, each of the companies other than the last
company in the unbroken chain owns shares possessing fifty percent
(50%) or more of the total combined voting power of all classes of
shares in one of the other companies in such chain.
2.14 "SUCCESSOR COMPANY" means any entity into which, or with which, the
Company is merged, provided that the Company is not itself the
surviving entity.
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2.15 "TRANSACTION" means (i) merger, acquisition or reorganization of the
Company with one or more other entities in which the Company is not
the surviving entity, (ii) a sale of all or substantially all of the
assets of the Company.
3. ADMINISTRATION.
3.1 The Plan shall be administered by the Committee. However, in the event
that the Board does not create a committee to administer the Plan, the
Plan shall be administered by the Board. In such event, all references
herein to the Committee shall be construed as references to the Board.
In any event, the Board shall have all the powers granted to the
Committee.
3.2 The Committee shall select one of its members as its chairman (the
"CHAIRMAN") and shall hold its meetings at such times and places as
the Chairman shall determine. The Committee shall keep records of its
meetings and shall make such rules and regulations for the conduct of
its business as it shall deem advisable.
3.3 Subject to the subsequent and ultimate approval of the Board, the
Committee shall have the authority in its discretion to administer the
Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in
the administration of the Plan, including, without limitation:
3.3.1 to determine the type of Award to be granted;
3.3.2 to issue Shares and other securities convertible to shares
pursuant to Section 288(b) of the Companies Law.
3.3.3 to determine the Exercise Price of the Awards ;
3.3.4 to determine the Grantees to whom, and the time or times at
which Awards shall be granted;
3.3.5 to determine the number of Shares to be covered by each Award;
3.3.6 to interpret the Plan;
3.3.7 to prescribe, amend and rescind rules and regulations relating
to the Plan and/or any Award;
3.3.8 to determine the terms and provisions of the Award Agreements
(as defined in Section 6 below) (which need not be identical),
and to cancel or suspend Awards, as necessary;
and to make all other determinations deemed necessary or
advisable for the administration of the Plan, including to adjust
the terms of the Plan and/ or any Award Agreement so as to
reflect (i) changes in applicable laws and (ii) the laws of other
jurisdictions within which the Company wishes to grant Awards.
All decisions, determination and interpretations of the
Committee, upon their approval by the Board, shall be final and
binding on all Grantees of any Awards under this Plan. No member
of the Board nor of the Committee shall be liable for any action
taken or determination made in good faith with respect to the
Plan or any Award granted hereunder.
3.4 Subject to the Company's Articles of Association, all decisions and
selections made by the Board or the Committee pursuant to the
provisions of the Plan shall be made by a majority of its members
except that no member of the Board or the Committee shall vote on, or
be counted for quorum purposes, with respect to any proposed action of
the Board or the Committee relating to any Award to be granted to that
member. Notwithstanding the above, in the event the majority of the
members of the Board or of the Committee, as the case may be, has an
interest in the proposed action of the Board or of the Committee,
respectively, then all the members shall the right to participate and
vote with respect to such proposed action.
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3.5 Subject to the Company's Articles of Association and the Company's
decision, and to all approvals legally required, including, but not
limited to the provisions of the Companies Law, each member of the
Board or the Committee shall be indemnified and held harmless by the
Company against any cost or expense (including counsel fees)
reasonably incurred 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, to the extent
permitted by applicable law. Such indemnification shall be in addition
to any rights of indemnification the member may have as a director or
otherwise under the Company's Articles of Association, any agreement,
any vote of shareholders or disinterested director, insurance policy
or otherwise.
4. ELIGIBILITY.
4.1 The persons eligible for participating under the Plan shall include
employees, officers, directors, consultants and subcontractors of the
Company, or of any Subsidiary of the Company which now exists or
hereafter is organized or acquired by the Company, and any other
persons or entities as shall be determined by the Committee.
4.2 The grant of an Award hereunder shall neither entitle the Grantee to
participate nor disqualify the Grantee from participating in any other
grant of Awards pursuant to this Plan or any other award plan of the
Company or any of its Subsidiaries and/or Parent, if any.
4.3 Anything in this Plan to the contrary notwithstanding, all grants of
Awards to directors and office holders shall be authorized and
implemented in accordance with the provisions of the Companies Law or
any successor act or regulation, as in effect from time to time.
5. SHARES.
The maximum number of Shares reserved for the grant of Awards under the
Plan shall be 350,000. Such Shares may, in whole or in part, be authorized
but unissued Shares or Shares that shall have been or may be reacquired by
the Company (to the extent permitted pursuant to the Companies Law). Any of
such Shares which may remain unsold and which are not subject to
outstanding Award at the termination of the Plan shall cease to be reserved
for the purpose of the Plan , but until termination of the Plan, the
Company shall at all times reserve a sufficient number of Shares to meet
the requirements in case of full exercise.
If any outstanding Award under the Plan should, for any reason, expire, be
canceled or be forfeited without having been exercised in full, the Shares
subject to the unexercised, canceled or terminated portion of such Award
shall (unless the Plan shall have been terminated) become available for
subsequent grants of Awards under the Plan.
Unless otherwise determined by the Board, the total amount of Shares
reserved for the purposes of this Plan shall be automatically increased by
280,000 Shares each year.
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6. TERMS AND CONDITIONS OF AWARDS.
6.1 Each Award granted pursuant to the Plan shall be evidenced by a
written agreement between the Company and the Grantee (the "AWARD
AGREEMENT") in such form and containing such terms and conditions as
the Board and the Committee shall from time to time approve, which
Award Agreement shall include terms and conditions as set forth in the
Plan. The Award Agreements under the Plan may contain such other terms
and conditions not inconsistent with the Plan, as the Committee and/or
the Board may determine
6.2 EXERCISE PRICE. The Exercise Price of each Award shall be determined
by the Committee and the Board in their sole and absolute discretion
in accordance with applicable law, subject to any guidelines as may be
determined by the Board from time to time. Each Award Agreement will
contain the Exercise Price determined for each Award.
6.3 The Exercise Price shall be payable upon the exercise of the Award in
a form satisfactory to the Committee, including without limitation, by
cash or check. The Committee shall have the authority to postpone the
date of payment on such terms as it may determine.
6.4 The Exercise Price shall be denominated in the currency of the primary
economic environment of, either the Company or the Grantee (that is
the functional currency of the Company or the currency in which the
Grantee is paid) as determined by the Company.
6.5 TERM AND VESTING OF AWARDS. Unless otherwise stated in the the
relevant Award Agreement, Awards, to the extent not previously
exercised, shall terminate forthwith upon the earlier of: (i) the date
set forth in the Award Agreement; and (ii) the expiration of the
relevant period in the case of voluntarily liquidation or dissolution
of the Company, or in the events set forth hereunder; and (iii) the
lapse of 7 years from the date of grant.
6.6 Unless otherwise stated in the Award Agreement, Awards granted to (i)
senior management employees, as such term is defined in the Companies
Law, and directors shall vest and become exercisable under the
following schedule: twenty five (25%) of the Shares covered by the
Award on the first anniversary of the Date of Grant and the remaining
75% shall vest on a monthly basis, with 1/36 of the remaining Shares
covered by the Award vesting each month commencing at the end of the
first anniversary of the Date of Grant; and (ii) to any eligible
person other than senior management personnel and directors
twenty-five percent (25%) of the Shares covered by the Award shall
vest and become exercisable at the end of each year thereafter
starting on the first anniversary of the Date of Grant (all the above
the "Vesting Dates"); provided, however, that the Committee, in its
absolute discretion, may, on such terms and conditions as it may
determine to be appropriate, accelerate or otherwise change the
Vesting Dates. The Award Agreement may contain performance goals and
measurements, and the provisions with respect to any Award need not be
the same as the provisions with respect to any other Award. Unless
determined by the Board, the period in which the Award shall be
exercisable (the "EXERCISE PERIOD") will be determined by the
Committee.
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6.7 EXERCISE. Awards shall be exercised by the Grantee by giving written
notice to the Company and/or to any third party designated by the
Company (the "REPRESENTATIVE"), in such form and method as may be
determined by the Company, which exercise shall be effective upon
receipt of such notice by the Company and/or the Representative and
the payment of the Exercise Price at the Company's or the
Representative's principal office. The notice shall specify the number
of Shares with respect to which the Award is being exercised.
6.8 The Award may be exercised by the Grantee in whole at any time or in
part from time to time, to the extent that the Awards become vested
and exercisable, prior to the Expiration Date, and provided that,
subject to the provisions below, the Grantee is employed by or
providing services to the Company or any of its Affiliates, at all
times during the period beginning with the granting of the Awards and
ending upon the date of exercise, unless otherwise stated in the Award
Agreement or otherwise resolved by the Committee.
6.9 Subject to the provisions below, in the event of termination of
Grantee's employment or services, with the Company or any of its
Affiliates, all Awards granted to such Grantee will immediately
expire. For the purpose of the Plan, a notice of termination of
employment or service shall be deemed to constitute termination of
employment or service. For the avoidance of doubt, in case of such
termination of employment or service, the unvested portion of the
Grantee's Awards shall not vest and shall not become exercisable.
6.10 Notwithstanding anything to the contrary above and unless otherwise
determined in the Award Agreement, an Award may be exercised after the
date of termination of Grantee's employment or service with the
Company or any Affiliates during an additional period of time beyond
the date of such termination, but only with respect to the number of
vested Awards at the time of such termination according to the Vesting
Dates, if:
6.10.1 termination is without Cause, in which event any vested Award
still in force and unexpired may be exercised within a period of
ninety (90) days after the date of such termination; or-
6.10.2 termination is the result of death or disability of the
Grantee, in which event any vested Awards still in effect and
unexpired may be exercised within a period of one hundred and
eighty (180) days after the date of such termination. For the
purpose of this Section, "disability" shall mean a Grantee
inability to perform his duties with the Company or any of its
Affiliates by reason of any medically determinable physical or
mental impairment, as determined by a physician selected by the
Grantee and acceptable to the Company; or -
6.10.3 prior to the final exercise date pursuant to provisions above,
the Committee or the Board shall authorize an extension of the
terms of all or part of the vested Awards beyond the date of such
termination for a period not to exceed the period during which
the Awards by their terms would otherwise have been exercisable.
For avoidance of any doubt, if termination of employment or service is
for Cause, any outstanding unexercised Awards (whether vested or
non-vested), will immediately expire and terminate, and the Grantee
shall not have any rights in connection to such outstanding Awards.
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6.11 To avoid doubt, the Grantees shall not have any of the rights or
privileges of shareholders of the Company in respect of any Shares
purchasable upon the exercise of any Award, nor shall they be deemed
to be a class of shareholders or creditors of the Company for purpose
of the operation of sections 350 and 351 of the Companies Law or any
successor to such section, until registration of the Grantee as holder
of such Shares in the Company's register of shareholders upon exercise
of the Awards in accordance with the provisions of the Plan.
6.12 The Awards may be exercised only to purchase whole Shares, and in no
case may a fraction of a Share be purchased. If any fractional Shares
would be deliverable upon exercise, such fraction shall be rounded up
one-half or more, or otherwise rounded down, to the nearest whole
number all at the discretion of the Committee.
7. DIVIDENDS
With respect to all Shares (but excluding, for avoidance of any doubt, any
unexercised Awards) allocated or issued upon the exercise of Awards
purchased by the Grantee and held by the Grantee, as the case may be, the
Grantee shall be entitled to receive dividends in accordance with the
quantity of such Shares, subject to the provisions of the Company's
Articles of Association (and all amendments thereto) and subject to any
applicable taxation on distribution of dividends.
8. EFFECT OF CERTAIN CHANGES.
8.1 General. In the event of a subdivision of the outstanding share
capital of the Company, any payment of a share dividend (distribution
of bonus Shares), a recapitalization, a reorganization (which may
include a combination or exchange of shares), a consolidation, a stock
split, a spin-off or other corporate divestiture or division, a
reclassification or other similar occurrence, the Committee shall make
appropriate adjustments in one or more of (i) the number of Shares
available for Awards, (ii) the number of such Shares covered by
outstanding Awards, and (iii) the Exercise Price per Share covered by
the Award; provided, however, that any fractional shares resulting
from such adjustment shall be rounded down to the nearest whole share
and provided that such adjustment is made appropriately and equitably
so as to maintain the proportionate shareholding.
8.2 Merger and Sale of Company. Unless otherwise is stated in the Award
Agreement, in the event of (i) a sale of all or substantially all of
the assets of the Company (ii) purchase of outstanding share capital
of the Company after which the voting securities of the Company
outstanding immediately prior thereto represent (either by remaining
outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting
power of the voting securities of the Company or such surviving or
acquiring entity outstanding immediately after such event (iii) the
merger, consolidation, amalgamation or like transaction of the Company
with or into another corporation or (iv) scheme of arrangement for the
purpose of effecting such sale, merger or amalgamation (all such
transactions being herein referred to as a "Merger/Sale"), then,
without the Grantee's consent and action:
8.2.1 the Committee will use its efforts to cause that any Award then
outstanding be assumed or an equivalent award to be substituted
by such successor corporation or, in the event that such
transaction is effected through a subsidiary, the Parent of such
successor corporation, under substantially the same terms as the
Award; and
8.2.2 in case the successor corporation or other entity does not agree
to assume the award or to substitute an equivalent Award and,
then the Committee shall, in lieu of such assumption or
substitution of the Award and in its sole discretion, provide for
the Grantee to have the right to exercise the Award in full or
any part thereof, including Shares covered by the Award that
would not otherwise be exercisable, under such terms and
conditions as the Committee shall determine.
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8.2.3 Notwithstanding the foregoing, in the event of a Merger/Sale,
the Committee may determine in its sole discretion that upon
completion of such Merger/Sale, the terms of any Award be
otherwise amended and modified, as the Committee shall deem in
good faith to be appropriate, or that the Award shall confer the
right to purchase any other security or asset, or any combination
thereof, or that its terms be otherwise amended or modified, as
the Committee shall deem in good faith to be appropriate.
8.3 Reservation of Rights. Except as expressly provided in this Section 8
or if expressly stated otherwise in an Award Agreement, the Grantee of
an Award hereunder shall have no rights by reason of any subdivision
or consolidation of shares of any class or the payment of any stock
dividend (bonus Shares) or any other increase or decrease in the
number of shares of any class or by reason of any dissolution,
liquidation, merger, or consolidation, divestiture or spin-off of
assets or shares of another company; and any issue by the Company of
shares of any class, or securities convertible into shares of any
class, shall not effect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to an
Award. The grant of an Award pursuant to the Plan shall not affect in
any way the right of power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structures or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or part of its business or assets
or engage in any similar transactions.
9. AGREEMENT BY GRANTEE REGARDING TAXES.
ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE
GRANT OF ANY AWARD INCLUDING, WITHOUT LIMITATION, FROM THE EXERCISE OF
AWARDS, FROM THE PAYMENT FOR SHARES COVERED THEREBY OR ANY OTHER ACT OF THE
COMPANY AND/OR ITS SUBSIDIARIES AND/OR THE GRANTEE IN CONNECTION WITH THE
FOREGOING SHALL BE BORNE SOLELY BY THE GRANTEE, AND THE GRANTEE SHALL
INDEMNIFY THE COMPANY AND/OR ITS SUBSIDIARIES, AND SHALL HOLD THEM HARMLESS
AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PENALTY, INTEREST OR
INDEXATION THEREON OR THEREUPON. THE COMPANY AND/OR ITS SUBSIDIARIES, AS
THE CASE MAY BE, SHALL WITHHOLD TAXES ACCORDING TO THE REQUIREMENTS UNDER
ALL APPLICABLE LAWS, RULES AND REGULATIONS, INCLUDING WITHHOLDING TAXES AT
SOURCE.
10. NO RIGHTS TO EMPLOYMENT.
Nothing in the Plan or in any Award granted or in any Award Agreement
entered into pursuant hereto shall confer upon any Grantee the right to
continue in the employment of, or in a consultant relationship with, the
Company or any Subsidiary or to be entitled to any remuneration or benefits
not set forth in the Plan or such Agreement or to interfere with or limit
in any way the right of the Company or any such Subsidiary to terminate
such Grantee's employment. Awards granted under the Plan shall not be
affected by any change in duties or position of a Grantee as long as such
Grantee continues to be employed by or in a consultant or director
relationship with, the Company or any Subsidiary.
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11. APPROVAL AND TERM DURING WHICH AWARDS MAY BE GRANTED.
The Plan shall take effect upon its adoption by the Board and shall
terminate on the tenth anniversary of such date. Notwithstanding the
foregoing, in the event that approval of the Plan by the shareholders of
the Company is required under applicable law, in connection with the
application of certain tax treatment or pursuant to applicable stock
exchange rules or regulations or otherwise, such approval shall be obtained
within the time required under the applicable law.
Notwithstanding anything to the contrary herein or in any Award Agreement,
neither this Plan nor any Award Agreement nor the adoption of the Plan by
the Company imposes any obligation on the Company to actually grant any
Awards pursuant to this Plan.
12. NON-EXCLUSIVITY OF THE PLAN
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangements or
as creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without
limitation, the granting of Awards otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.
For the avoidance of doubt, unless otherwise shall be determined by the
Board, prior grant of awards to grantees of the Company under their
employment agreements, and not in the framework of any previous incentive
plan, shall not be deemed an approved incentive arrangement for the purpose
of this Plan.
13. PURCHASE FOR INVESTMENT
The Company's obligation to issue or allocate Shares upon exercise of an
Award granted under the Plan is expressly conditioned upon: (a) the
Company's completion of any registration or other qualifications of such
Shares under all applicable laws, rules and regulations or (b)
representations and undertakings by the Grantee (or his legal
representative, heir or legatee, in the event of the Grantee's death) to
assure that the sale of the Shares complies with any registration exemption
requirements that the Company, in its sole discretion, shall deem necessary
or advisable. Such required representations and undertakings may include
representations and agreements as shall be determined by the Board or the
Committee
14. MULTIPLE AGREEMENTS
The terms of each Award Agreement may differ from other Awards granted
under the Plan at the same time, or at any other time. The Board may also
grant more than one Award to a given Grantee during the term of the Plan,
either in addition to, or in substitution for, one or more Awards
previously granted to that Grantee.
15. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan. Except as provided above, no suspension, termination,
modification or amendment of the Plan may adversely affect any Award
previously granted, unless the written consent of the Grantee is obtained.
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16. GOVERNMENT REGULATIONS
The Plan and any Award Agreement, and the granting and exercise of Awards
hereunder and/or thereunder, and the obligation of the Company to sell and
deliver Shares under such Awards, shall be subject to all applicable laws,
rules, and regulations, whether of the State of Israel or of the United
States or any other State having jurisdiction over the Company and the
Grantee, including the registration of the Shares under the United States
Securities Act of 1933, and the Ordinance and to such approvals by any
governmental agencies or national securities exchanges as may be required.
Nothing herein shall be deemed to require the Company to register the
Shares under the securities laws of any jurisdiction.
17. GOVERNING LAW.
The Plan shall be governed by and construed and enforced in accordance with
the laws of the State of Israel applicable to contracts made and to be
performed therein, without giving effect to the principles of conflict of
laws. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction
in any matters pertaining to the Plan.
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SHAMIR OPTICAL INDUSTRY LTD
2005 SHARE OPTION AND INCENTIVE PLAN
ANNEX A
This Appendix, as amended from time to time, is deemed a part of the Plan.
Unless otherwise expressly defined herein, all capitalized terms in this
Appendix have the meanings ascribed to them in the Plan.
1. PURPOSE
This Appendix is intended to make certain adjustments to the Plan which are
required with respect to Grantees with respect to whom the provisions of
the Ordinance shall apply.
2. DEFINITIONS
For purposes of the Appendix and related documents, including the relevant
Award Agreement, the following definitions shall apply:
2.1 "102 AWARD" means any Award granted to Employees pursuant to Section
102 of the Ordinance.
2.2 "3(I) OPTION" means an Option granted pursuant to Section 3(i) of the
Ordinance to any person who is a Non- Employee.
2.3 "ADJUSTED PLAN" means the Plan as adjusted by this Appendix.
2.4 "AFFILIATE" means any "employing company" within the meaning of
Section 102(a) of the Ordinance.
2.5 "APPROVED 102 AWARD" means an Award granted pursuant to Section 102(b)
of the Ordinance and held in trust by a Trustee for the benefit of the
Grantee.
2.6 "CAPITAL GAIN AWARD (CGA)" as defined in Section 5.4 below.
2.7 "CONTROLLING SHAREHOLDER" shall have the meaning ascribed to it in
Section 32(9) of the Ordinance.
2.8 "EMPLOYEE" means a person who is employed by the Company or its
Affiliates, including an individual who serves as a director or an
office holder, but excluding a Controlling Shareholder.
2.9 "FAIR MARKET VALUE" means as of any date, solely for the purpose of
determining the tax liability pursuant to Section 102(b)(3) of the
Ordinance, the value of a Share determined as follows:
If at the Date of Grant the Shares are listed on any established stock
exchange or a national market system or if the Shares will be
registered for trading within ninety (90) days following the Date of
Grant, the Fair Market Value of a Share at the Date of Grant shall be
determined in accordance with the average value of the Shares on the
thirty (30) trading days preceding the Date of Grant or on the thirty
(30) trading days following the date of registration for trading, as
the case may be.
2.10 "ITA" means the Israeli Tax Authorities.
2.11 "NON-EMPLOYEE" means a Controlling Shareholder, consultant, adviser,
or other service provider and any other person who is not included in
the definition of an Employee.
2.12 "ORDINANCE" means the Israeli Income Tax Ordinance [New Version] 1961
as now in effect or as hereafter amended.
2.13 "ORDINARY INCOME AWARDS (OIA)" as defined in Section 5.5 below.
2.14 "SECTION 102" means section 102 of the Ordinance as now in effect or
as hereafter amended.
2.15 "TRUSTEE" means any individual appointed by the Company to serve as a
trustee and approved by the ITA, all in accordance with the provisions
of Section 102(a) of the Ordinance.
2.16 "UNAPPROVED 102 AWARD" means an Award granted pursuant to Section
102(c) of the Ordinance and not held in trust by a Trustee.
3. DESIGNATION OF PARTICIPANTS
3.1 The persons with respect to whom the Adjusted Plan shall apply as
Grantees shall include any Employees and/or Non-Employees of the
Company or of any Affiliate; provided, however, that (i) Employees may
only be granted 102 Awards; (ii) Non-Employees may only be granted
3(i) Options; and (iii) Controlling Shareholders may only be granted
3(i) Options.
3.2 It is clarified that this Appendix applies only to Grantees who are
residents of the State of Israel or those who are deemed, for tax
purposes, to be residents of the State of Israel.
4. DESIGNATION OF AWARDS PURSUANT TO SECTION 102
4.1 The Company may designate Awards granted to Employees pursuant to
Section 102 as Unapproved 102 Awards or Approved 102 Awards.
4.2 The grant of Approved 102 Awards shall be made under the Adjusted Plan
, and shall be conditioned upon the approval of the Adjusted Plan by
the ITA.
4.3 Approved 102 Award may be classified as either Capital Gain Awards
("CGA") or Ordinary Income Awards ("OIA").
4.4 Approved 102 Award elected and designated by the Company to qualify
under the capital gain tax treatment in accordance with the provisions
of Section 102(b)(2) shall be referred to herein as CGAs.
4.5 Approved 102 Award elected and designated by the Company to qualify
under the ordinary income tax treatment in accordance with the
provisions of Section 102(b)(1) shall be referred to herein as OIAs.
4.6 No Approved 102 Awards may be granted under the Adjusted Plan to any
eligible Employee, unless and until the Company's election of the type
of Approved 102 Awards as CGA or OIA granted to Employees (the
"ELECTION"), shall be appropriately filed with the ITA before the Date
of Grant of an Approved 102 Award. Such Election shall become
effective beginning the first Date of Grant of an Approved 102 Award
under this Adjusted Plan and shall remain in effect until the Company
elects otherwise, but no sooner than the end of the year following the
year during which the Company first granted Approved 102 Awards
pursuant to the Election. The Election shall obligate the Company to
grant ONLY the type of Approved 102 Award it has elected, and shall
apply to all Grantees who were granted Approved 102 Awards during the
period indicated herein, all in accordance with the provisions of
Section 102(g) of the Ordinance. For the avoidance of doubt, such
Election shall not prevent the Company from granting Unapproved 102
Awards simultaneously.
4.7 All Approved 102 Awards must be held in trust by a Trustee, as
described in Section 5 below and at the Company's discretion.
4.8 For the avoidance of doubt, the designation of Unapproved 102 Awards
and Approved 102 Awards shall be subject to the terms and conditions
set forth in Section 102 of the Ordinance and the regulations
promulgated thereunder.
5. TRUSTEE
5.1 Approved 102 Awards which shall be granted under the Adjusted Plan
and/or any Shares allocated or issued upon exercise of such Approved
102 Awards and/or other Shares received subsequently following any
realization of rights, including without limitation bonus Shares,
shall be allocated or issued to the Trustee and held for the benefit
of the Grantees for such period of time as required by Section 102 or
any regulations, rules or orders or procedures promulgated thereunder
(the "HOLDING PERIOD"). In the event that the requirements for
Approved 102 Awards are not met, then the Approved 102 Awards may be
treated as Unapproved 102 Awards, all in accordance with the
provisions of Section 102 and regulations promulgated thereunder.
5.2 Notwithstanding anything to the contrary, the Trustee shall not
release any Shares allocated or issued upon exercise of Approved 102
Awards prior to the full payment of the Grantee's tax liabilities
arising from Approved 102 Awards which were granted to him and/or any
Shares allocated or issued upon exercise of such Awards.
5.3 With respect to any Approved 102 Award, subject to the provisions of
Section 102 and any rules or regulation or orders or procedures
promulgated thereunder, an Grantee shall not sell or release from
trust any Share received upon the exercise of an Approved 102 Award
and/or any Share received subsequently following any realization of
rights, including without limitation, bonus Shares, until the lapse of
the Holding Period required under Section 102 of the Ordinance.
Notwithstanding the above, if any such sale or release occurs during
the Holding Period, the sanctions under Section 102 of the Ordinance
and under any rules or regulation or orders or procedures promulgated
thereunder shall apply to and shall be borne by such Grantee.
5.4 Upon receipt of Approved 102 Award, the Grantee will sign an
undertaking to release the Trustee from any liability in respect of
any action or decision duly taken and bona fide executed in relation
with the Adjusted Plan, or any Approved 102 Award or Share granted to
him thereunder.
6. TERMS AND CONDITIONS
6.1 Approved 102 Awards shall be voted in accordance with the provisions
of Section 102 and any rules, regulations or orders promulgated
thereunder.
6.2 With respect to Unapproved 102 Awards, if the Grantee ceases to be
employed by the Company or any Affiliate, the Grantee shall extend to
the Company and/or its Affiliate a security or guarantee for the
payment of tax due at the time of sale of Awards, all in accordance
with the provisions of Section 102 and the rules, regulation or orders
promulgated thereunder.
7. DIVIDENDS
With respect to all Shares (but excluding, for avoidance of any doubt, any
unexercised Options) allocated or issued upon the exercise of Awards
purchased by the Grantee and held by the Grantee or by the Trustee, as the
case may be, the Grantee shall be entitled to receive dividends in
accordance with the quantity of such Shares, subject to the provisions of
the Company's Articles of Association (and all amendments thereto) and
subject to any applicable taxation on distribution of dividends, and when
applicable subject to the provisions of Section 102 and the rules,
regulations or orders promulgated thereunder.
8. RESTRICTIONS ON ASSIGNABILITY AND SALE OF AWARDS
8.1 No Award or any right with respect thereto, purchasable hereunder,
whether fully paid or not, shall be assignable, transferable or given
as collateral or any right with respect to it given to any third party
whatsoever, except as specifically allowed under the Adjusted Plan,
and during the lifetime of the Grantee each and all of such Grantee's
rights to purchase Shares hereunder shall be exercisable only by the
Grantee.
Any such action made directly or indirectly, for an immediate
validation or for a future one, shall be void.
8.2 As long as the Shares are held by the Trustee on behalf of the
Grantee, all rights of the Grantee over the Shares are personal, can
not be transferred, assigned, pledged or mortgaged, other than by will
or pursuant to the laws of descent and distribution.
9. TAX CONSEQUENCES
9.1 Any tax consequences arising from the grant or exercise of any Award,
from the payment for Shares covered thereby or from any other event or
act (of the Company and/or its Affiliates, the Trustee or the
Grantee), hereunder, shall be borne solely by the Grantee. The Company
and/or its Affiliates and/or the Trustee shall withhold taxes
according to the requirements under the applicable laws, rules, and
regulations, including withholding taxes at source. Furthermore, the
Grantee shall agree to indemnify the Company and/or its Affiliates
and/or the Trustee 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
Grantee.
9.2 The Company and/or, when applicable, the Trustee shall not be required
to release any Share certificate to an Grantee until all required
payments have been fully made.
SHAMIR OPTICAL INDUSTRY LTD
2005 SHARE OPTION AND INCENTIVE PLAN
ANNEX B
This Appendix, as amended from time to time, is deemed a part of the Plan.
Unless otherwise expressly defined herein, all capitalized terms in this
Appendix shall bear the meaning ascribed to them in the Plan.
1. PURPOSE
This Appendix is intended to permit certain awards granted under the Plan
to Grantees who are subject to taxation under the United States Internal
Revenue Code of 1986, as amended (the "CODE") to be eligible for certain
beneficial tax treatment.
2. DEFINITIONS
For purposes of the Appendix and related documents, including the relevant
Award Agreement, the following definitions shall apply:
2.1 "ADJUSTED PLAN" means the Plan as adjusted by this Appendix.
2.2 "AFFILIATE" means the Company's Subsidiary and/or Parent, to the
extent they exist.
2.3 "EMPLOYEE" means any person who is employed by the Company or its
Affiliates.
2.4 "INCENTIVE STOCK OPTION" means any Option intended to be and
designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.
2.5 "NON-EMPLOYEE" means any person who is a service provider, including
any director, consultant, adviser or other service provider that is
not an Employee as defined in Section 2.3 of this Adjusted Plan.
2.6 "NONQUALIFIED STOCK OPTION" means any Option that is not an Incentive
Stock Option.
2.7 "OPTION" means any option to purchase Shares granted pursuant to
Section 6 of the Plan.
2.8 "TEN PERCENT SHARE HOLDER" means a person who owns shares possessing
more than ten percent (10%) of the total combined voting power of all
classes of shares of the Company or of its Parent or Subsidiary
3. SHARES SUBJECT TO INCENTIVE STOCK OPTIONS
All of the Shares reserved for issuance under Section 5 of the Plan will be
available for issuance pursuant to the exercise of Incentive Stock Options
granted hereunder.
4. DESIGNATION OF PARTICIPANTS AND AWARDS
4.1 Only Employees are eligible to be granted Incentive Stock Options. Any
Award Agreement evidencing an Option intended to be an Incentive Stock
Option will specifically reflect that intent and will thereby be
deemed to incorporate the terms of this Adjusted Plan. Nonqualified
Stock Options may be granted to Employees and Non-Employees of the
Company and/or any Affiliate.
4.2 To the extent the aggregate Fair Market Value (determined at the time
of grant) of the Company's Shares with respect to which Incentive
Stock Options are exercisable for the first time by any Grantee during
any calendar year under all plans of the Company and its Affiliates
exceeds US$100,000 (one hundred thousand U.S. dollar), the Options or
portions thereof which exceed such limit (in the order in which they
were granted) shall be treated as non-qualified stock options.
5. INCENTIVE STOCK OPTION EXERCISE PRICE AND DURATION
5.1 Incentive Stock Options shall be subject to the general terms and
conditions of Section 6 of the Plan, as adjusted by the following
provisions of Section y5.2 and y5.3 below.
5.2 Exercise Price. The Exercise Price shall be determined subject to the
following:
5.2.1 in the case of an Incentive Stock Option granted to a Ten
Percent Shareholder, the Exercise Price shall be no less than one
hundred and ten percent (110%) of the Fair Market Value per Share
on the Date of Grant.
5.2.2 in the case of an Incentive Stock Option granted to any other
Employee, the Exercise Price shall be no less than one hundred
percent (100%) of the Fair Market Value per Share on the Date of
Grant.
5.3 Option Term. Notwithstanding Section 6.5 of the Plan, in the case of
an Incentive Stock Option granted to a Ten Percent Shareholder, such
Incentive Stock Option shall not have a term of more than five years.
6. NONQUALIFIED STOCK OPTIONS
Nonqualified Stock Options shall be subject to the general terms and
conditions specified in Section 6 of the Plan.
7. RESTRICTIONS ON TRANSFER
No Incentive Stock Option shall be transferable by the Employee other than
by will or by the laws of descent and distribution; and all Incentive Stock
Options will be exercisable during the Employee's lifetime only by the
Employee or, in the event of his disability, by his personal
representative.
8. TERMINATION OF EMPLOYMENT OR SERVICES
Notwithstanding Section 6.10 of the Plan, in the case of an Incentive Stock
Option, the term "disability" shall have the meaning ascribed to it in
Section 22(e)(3) of the Code.
9. AMENDMENT TO THE PLAN AND APPENDIX
The Board may amend, alter or discontinue this Adjusted Plan at any time.
However, except as otherwise provided in Section 8.2 of the Plan, no
amendment, alteration or discontinuation shall be made that, without the
approval of such amendment within one year (365 days) of its adoption by
the Board, by the Company's stockholders in a manner consistent with
Section 1.422-5 of the Treasury Regulations, would: (i) increase the total
number of Shares reserved for the purposes of the Plan (except as otherwise
provided in Section 8.1 of the Plan, (ii) change the persons or class of
persons eligible to receive Options under this Adjusted Plan or (iii)
extend the term of the Plan (at least with respect to the period during
which Incentive Stock Options may be granted under this Adjusted Plan)
beyond the period stated in Section 11 of the Plan. .
10. EFFECTIVE DATE OF PLAN
Notwithstanding anything to the contrary in Section 11 of the Plan, no
Incentive Stock Options shall be exercised unless and until this Adjusted
Plan has been approved by the shareholders of the Company, which approval
shall be within twelve (12) months following the date this Adjusted Plan is
adopted by the Board.