3.3 Non-Qualified
Stock Options
Awards,
may be granted to Employees,
and to such other persons who are not Employees as the Plan Administrator shall select,
subject to any Applicable Laws.
3.4
Section
102
Options
Awards
may be granted to Israeli Employees in accordance with Section 4 herein.
3.5 Section
3(i)
Options
Awards
may be granted to consultants and Controlling Shareholders
that do not qualify as Israeli Employees.
3.6
Options
Awards
may
be granted in substitution for outstanding
Options
Awards
of
another corporation in connection with the merger, consolidation, acquisition of property
or stock or other reorganization between such other corporation and the Corporation or
any subsidiary of the Corporation.
Options
Awards
also
may be granted in exchange for outstanding
Options
Awards
.
3.7 Any
person to whom an
Option
option
is granted under
this Plan is referred to as
an “Optionee
a “Participant
”.
Any person who is the owner of an
Option
Award
is
referred to as a “Holder”.
|
4.
|
DESIGNATION
OF
OPTIONS
AWARDS PURSUANT TO SECTION 102 (RELEVANT ONLY TO ISRAELI EMPLOYEES)
|
4.1 The
Corporation may designate
Section
102
Options
Awards
granted
to Israeli Employees pursuant to Section 102 of the Ordinance as Unapproved 102
Options
Awards
(means
an Option granted pursuant to Section 102(c) of the Ordinance and not held in trust by a
Trustee) or Approved 102
Options
Awards
(means an
Option
Award
granted pursuant to Section 102(b) of
the Ordinance and held in trust by a Trustee for the benefit of the
Optionee
Participant
).
4.2 The
grant of Approved 102
Options
Awards
shall be made
under this Plan adopted by the Board, and shall be conditioned upon the approval of this
Plan by the Israeli Tax Authorities (the “
ITA
”).
4.3 Approved
102
Option
Award
may either be classified as
Capital Gain
Option “
CGO
Award (“CGA
”)
or Ordinary Income
Option
Award
(“
OIO
OIA
”).
4.4 Approved
102
Option
Award
elected and designated by the
Corporation to qualify under the capital gain tax treatment in accordance with the
provisions of Section 102(b)(2) shall be referred to herein as
CGO
CGA
.
4.5 Approved
102
Option
Award
elected and designated by the
Corporation to qualify under the ordinary income tax treatment in accordance with the
provisions of Section 102(b)(1) shall be referred to herein as
OIO
OIA
.
4.6 The
Corporation’s election of the type of Approved 102
Options
Awards
as
CGO
CGA
or
OIO
OIA
granted
to Employees (the “
Election
”), shall be appropriately filed with the ITA
before the Date of Grant of an Approved 102
Option
Award
.
Such Election shall become effective beginning the first Date of Grant of an Approved 102
OptionAward under this Plan and shall remain in effect at least until the end of the year
following the year during which the Corporation first granted Approved 102
Options
Awards
.
The Election shall obligate the Corporation to grant
only
the type of Approved 102
Option
Award
it has elected, and shall apply to
all
Optionees
Participants
who were granted Approved 102
Options
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
Corporation from granting Unapproved 102
Options
Awards
simultaneously.
4
4.7 All
Approved 102
Options
Awards
must be held in trust
by a Trustee (means any entity appointed by the Corporation to serve as a trustee and
approved by the ITA, all in accordance with the provisions of Section 102(a) of the
Ordinance, as described in Section 5 below (the “
Trustee
”)).
4.8 For the
avoidance of doubt, the designation of Unapproved 102
Options
Awards
and
Approved 102
Options
Awards
shall be subject to the terms and
conditions set forth in Section 102 of the Ordinance and the regulations promulgated
thereunder.
4.9 With
regards to Approved 102
Options
Awards
, the
provisions of the Plan and/or the
Option
Award
Agreement
shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s
permit, and the said provisions and permit shall be deemed an integral part of the Plan
and of the
Option
Award
Agreement. Any provision
of Section 102 and/or the said permit which is necessary in order to receive and/or to
keep any tax benefit pursuant to Section 102, which is not expressly specified in the
Plan or the
Option
Award
Agreement, shall be
considered binding upon the Corporation and the
Optionees
Participants
.
5.1 Approved
102
Options
Awards
which shall be granted under
the Plan and/or any
Shares
shares
allocated or
issued upon exercise of such Approved 102
Options
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
Optionees
Participants
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
case the requirements for Approved 102
Options
Awards
are
not met, then the Approved 102
Options
Awards
may
be treated as Unapproved 102
Options
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
shares
allocated
or issued upon exercise of Approved 102
Options
Awards
prior
to the full payment of the
Optionee
Participant
’s
tax liabilities arising from Approved 102
Options
Awards
which
were granted to him and/or any
Shares
shares
allocated
or issued upon exercise
or vesting
of such
Options
Awards
as the case my be
.
5.3 Upon
receipt of Approved 102
Option
Awards
, the
Optionee 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 Plan, or
any Approved 102
Option
Awards
or Share granted to
him thereunder.
5
5.4 With
respect to any Approved 102
Option
Awards
, subject
to the provisions of Section 102 and any rules or regulation or orders or procedures
promulgated thereunder,
an Optionee
a Participant
shall
not sell or release from trust any
Share
Award and any
share
received upon the exercise
or vesting
of an Approved
102
Option
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
Optionee
Participant.
5.5 With
respect to all
Shares
Awards,
(but excluding, for
avoidance of any doubt, any unexercised
Options
options and any unvested Restricted
Stock Units
) allocated or issued upon the exercise of Options purchased by
the
Optionee
Participant, or issued to the Participant
pursuant to the Vesting of Restricted Stock Units,
and held by the
Optionee
Participant
or
by the Trustee, as the case may be, the
Optionee
Participant
shall
be entitled to receive dividends in accordance with the quantity of such
Shares
shares
,
subject to the provisions of the Corporation’s incorporation documents (and all
amendments thereto) and subject to any applicable taxation on distribution of dividends,
and when applicable subject to the provisions of Section 102.
6.1 The Plan
Administrator is authorized to grant
Options to acquire up to a total of 280,000,000
Common Shares. The number of Common Shares with respect to which Options
Awards
to acquire shares of Common Stock, shares of Restricted Stock and Restricted Stock Units
in a number not exceeding 16% of the number of shares of Common Stock of the Corporation
issued and outstanding immediately prior to the grant of such Awards on a Fully Diluted
Basis. For purposes of this Section 6.1, the term “Fully Diluted Basis” means
all issued and outstanding share capital (where options shall be deemed outstanding share
capital until exercised) and all rights to acquire share capital including, without
limitation, all securities convertible or exercisable into shares of Common Stock being
deemed so converted and exercised, the conversion of any convertible stockholder loans
into share capital, with all outstanding warrants, options or any other right granted by
the Corporation to receive shares of the Corporation’s share capital being deemed
exercised in full. The foregoing notwithstanding, the maximum number of shares that may
be subject to Incentive Stock Options granted under the Plan shall be 450,000, subject to
adjustment as provided in Section 7.1(m). Shares of Common Stock with respect to which
Awards
may be granted hereunder
is
are
subject
to adjustment as set forth in Section 7.1(m) hereof. In the event that any outstanding
Option
Award
expires
or is terminated for any reason, the
shares
Common Shares allocable
to the unexercised portion of such
Option
Award
may
again be subject to an
Option
Award
granted to the
same
Optionee
Participant or Holder
or to a
different person eligible under Section 3 of this Plan
; provided however, that any
cancelled Options will be counted against the maximum number of Common Shares with
respect to which Options may be granted to any particular person as set forth in Section
3 hereof
.
6
6.2
The
maximum number of shares of Common Stock for which Options may be granted to any person
in any calendar year shall be 1,000,000.
|
7.
|
TERMS
AND CONDITIONS OF
OPTIONS
AWARDS
|
7.1 Each
Option
Award
granted
under this Plan shall be evidenced by a written agreement approved by the Plan
Administrator (each, an “Agreement”). Agreements may contain such provisions,
not inconsistent with this Plan or any Applicable Laws, as the Plan Administrator in its
discretion may deem advisable. All
Options
Awards
also
shall comply with the following requirements:
|
|
(a)
|
Number
of
Shares
shares of Common Stock underlying the
Award
and Type of
Option
Award.
|
|
|
Each
Agreement shall state the number of
shares of
Common
Shares
Stock
to
which it pertains and whether the
Option
Award
is
intended to be an Incentive Stock Option, Section 102
Option
Awards
(CGO
CGA
or
OIO
OIA
)
or a Non-Qualified
Stock Option
Awards
;
provided
that
:
|
|
|
(i)
|
the
number of Common Shares that may be reserved pursuant to the exercise of
Options
Awards
granted
to any person shall not exceed 5% of the issued and outstanding Common Shares
of the Corporation;
|
|
|
(ii)
|
in
the absence of action to the contrary by the Plan Administrator in connection
with the grant of an
Option
Award
, all
Options
Awards
shall be Non-Qualified
Stock
Options
Awards
, Unapproved 102
Options
Awards
or
Section 3(i)
Options
Awards
, as the case maybe;
|
|
|
(iii)
|
the
aggregate fair market value (determined at the Date of Grant, as defined below)
of the
shares of
Common
Shares
Stock
with
respect to which Incentive Stock Options are exercisable for the first time by
the Optionee during any calendar year (granted under this Plan and all other
Incentive Stock Option plans of the Corporation, a Related Corporation or a
predecessor corporation) shall not exceed U.S.$100,000, or such other limit as
may be prescribed by the Code as it may be amended from time to time (the “Annual
Limit”); and
|
|
|
(iv)
|
any
portion of an
Option
Award
which exceeds
the Annual Limit shall not be void but rather shall be a Non-Qualified
Stock
Option
Award
.
|
7
|
|
Each
Agreement shall state the date the Plan Administrator has deemed to be the effective date
of
grant of
the
Option
Award
for
purposes of this Plan (the “Date of Grant”).
Option Price
|
|
|
Each
Agreement shall state the price per
shares of
Common
Share at
Stock
to
which
it
an Award
is exercisable
(if
applicable)
. The Plan Administrator shall act in good faith to establish
the exercise price in accordance with Applicable Laws;
provided
that:
|
|
|
(i)
|
the
per share exercise price for an Incentive Stock Option or any Option granted to
a “covered employee” as such term is defined for purposes of Section
162(m) of the Code shall not be less than the fair market value per Common
Share at the Date of Grant as determined by the Plan Administrator in good
faith;
|
|
|
(ii)
|
with
respect to Incentive Stock Options granted to greater-than-ten percent (>10%)
shareholders of the Corporation (as determined with reference to Section 424(d)
of the Code), the exercise price per share shall not be less than one hundred
ten percent (110%) of the fair market value per Common
Share
Stock
at
the Date of Grant as determined by the Plan Administrator in good faith; and
|
|
|
(iii)
|
Options
granted in substitution for outstanding options of another corporation in
connection with the merger, consolidation, acquisition of property or stock or
other reorganization involving such other corporation and the Corporation or
any subsidiary of the Corporation may be granted with an exercise price equal
to the exercise price for the substituted option of the other corporation,
subject to any adjustment consistent with the terms of the transaction pursuant
to which the substitution is to occur.
|
|
|
(iv)
|
solely
for the purpose of determining the tax liability pursuant to Section 102(b)(3)
of the Ordinance, if at the date of grant the Corporation’s shares are
listed on any established stock exchange or a national market system or if the
Corporation’s shares will be registered for trading within ninety (90)
days following the date of grant of the
CGOs
CGAs
,
the fair market value of the Shares at the date of grant shall be determined in
accordance with the average value of the Corporation’s 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.
|
|
|
(d)
|
Duration
of
Options
Awards
|
|
|
At
the time of the grant of the
Option
Award
, the
Plan Administrator shall designate, subject to Section 7.1(g) below, the expiration date
of the
Option
Awards
, which date shall not be
later than 10 years from the Date of Grant;
provided
, that the Plan Administrator
decided otherwise in specific
option agreements
Award
Agreements
or, that the expiration date of any Incentive Stock Option granted to a
greater-than-ten percent (>10%) shareholder of the Corporation (as determined with
reference to Section 424(d) of the Code) shall not be later than five (5) years from the
Date of Grant. In the absence of action to the contrary by the Plan Administrator in
connection with the grant of a particular
Option
Award
,
and except in the case of Incentive Stock Options as described above, all
Options
Awards
granted
under this Section 7 shall expire 10 years from the Date of Grant.
|
8
|
|
No
Option
Award
shall be exercisable until it has
vested. The vesting schedule for each
Option
Award
shall be specified
by the Plan Administrator at the time of grant of the
Option
Award
prior to the provision of services with respect to which such
Option
Award
is
granted
.
;
provided
that if no vesting schedule is specified at the
time of grant, the
Option
Award
shall vest as
follows:
|
|
|
(i)
|
on
the six month anniversary of the Date of Grant, the
Option
Award
shall
vest and shall become exercisable with respect to 25% of the Common Stock to
which it pertains;
|
|
|
(ii)
|
on
the seven month and each successive month anniversary to and including the
twenty
three
four
month anniversary, the
Option
Award
shall vest and become exercisable
with respect to an additional
four (4%) percent
1/24
of
the
shares of
Common Stock to which
it
pertains ;
and
|
|
|
(iii)
|
on
the twenty-four month anniversary of the Date of Grant, the Option shall vest
and
shall become exercisable with respect to balance of the Common
Stock to which it
pertains.
|
|
|
The
Plan Administrator may specify a vesting schedule for all or any portion of an
Option
Award
based on the achievement of performance objectives established in advance of the
commencement by the
Optionee
Participant
of
services related to the achievement of the performance objectives. Performance objectives
shall be expressed in terms of objective criteria, including but not limited to, one or
more of the following: return on equity, return on assets, share price, market share,
sales, earnings per share, costs, net earnings, net worth, inventories, cash and cash
equivalents, gross margin or the Corporation’s performance relative to its internal
business plan. Performance objectives may be in respect of the performance of the
Corporation as a whole (whether on a consolidated or unconsolidated basis), a Related
Corporation, or a subdivision, operating unit, product or product line of either of the
foregoing. Performance objectives may be absolute or relative and may be expressed in
terms of a progression or a range. An
Option
Award
that
is exercisable (in full or in part) upon the achievement of one or more performance
objectives may be exercised only following written notice to the
Optionee
Participant
and
the Corporation by the Plan Administrator that the performance objective has been
achieved.
|
9
|
|
(f)
|
Acceleration
of Vesting
|
|
|
The
vesting of one or more outstanding
Options
Award
may
be accelerated by the Plan Administrator at such times and in such amounts as it shall
determine in its sole discretion.
|
|
|
(i)
|
Vested
Options shall terminate, to the extent not previously exercised, upon the
occurrence of the first of the following events:
|
|
|
A.
|
the
expiration of the Option, as designated by the Plan Administrator in accordance
with Section 7.1(d) above;
|
|
|
B.
|
the
date
an Optionee
a Participant
receives a
notice of his or her termination of employment or contractual relationship with
the Corporation or any Related Corporation for Cause (as hereinafter defined);
or
|
|
|
C.
|
the
expiration of
five
three
(
5
3
)
years, unless otherwise determined in specific agreements by the Plan
Administrator, from the date of an
Optionee
Participant
’s
termination of employment or contractual relationship with the Corporation or
any Related Corporation for any reason whatsoever other than Cause, but
including death or disability
, unless, in the case of a Non-Qualified Stock
Option, Section 102
Option or Section 3(i) Option, the exercise period is
extended by the Plan
Administrator until a date not later than the
expiration date of the Option;
.
|
|
|
(ii)
|
Notwithstanding
Section 7.1(g)(i) above, any vested
Options
Awards
which
have been granted to
an Optionee
a Participant
in the
Optionee
Participant
’s
capacity as a director of the Corporation or any Related Corporation shall
terminate upon the occurrence of the first of the following events:
|
|
|
A.
|
the
event specified in Section 7.1(g)(i)A above;
|
|
|
B.
|
the
expiration of
five
three
(
5
3
)
years, unless otherwise determined in specific agreements by the Plan
Administrator, from the date
the Optionee
such
Participant
ceases to serve as a director of the Corporation or Related
Corporation, as the case may be
,
unless, in the case of a Non-Qualified
Stock Option or Section 102 Option, the
exercise period is extended
by the Plan Administrator until a date not later
than the
expiration date of the Option
.
|
|
|
(iii)
|
Upon
the death of
an Optionee
a Participant
,
any vested option still in force and unexpired may be exercised by the person
or persons to whom such
Optionee
Participant
’s
rights
under
such Option
shall pass by the
Optionee
Participant
’s
will or by the laws of descent and distribution
of
at
the
Optionee
Participant
’s domicile at the
time of death, within a period of
twelve (12
thirty
six (36
) months after the date of
such termination
the
Participant’s death
.
|
10
|
|
(iv)
|
For
purposes of the Plan, unless otherwise defined in the Agreement, termination
for “Cause” shall mean such termination is for ‘cause’ as
such term is expressly defined in a then-effective written agreement between
the
Optionee
Participant
and the Corporation
or any Related Corporation, or in the absence of such then-effective written
agreement and in the case of an Employee or an Israeli Employee, termination
for the following reasons (i) conviction of any felony involving moral
turpitude or affecting the Corporation; (ii) any refusal to carry out a
reasonable directive of the chief executive officer, the Board or the
Optionee
Participant
’s
direct supervisor, which involves the business of the Corporation or its
Related Corporation and was capable of being lawfully performed; (iii)
embezzlement of funds of the Corporation or its Related Corporation; (iv) any
breach of the
Optionee
Participant
’s
fiduciary duties or duties of care of the Corporation; including without
limitation disclosure of confidential information of the Corporation; and (v)
any conduct (other than conduct in good faith) reasonably determined by the
Board to be materially detrimental to the Corporation. Unless accelerated in
accordance with Section 7.1(f) above, unvested Options shall terminate
immediately upon termination of employment or contractual relationship of
an Optionee
a
Participant
with
the Corporation or a Related Corporation, or termination of
an
Optionee
a
Participant
’s services as a director of the Corporation or a
Related Corporation, for any reason whatsoever, including death or disability.
|
|
|
(v)
|
For
purposes of this Plan, transfer of employment between or among the Corporation
and/or any Related Corporation shall not be deemed to constitute a termination
of employment with the Corporation or any Related Corporation. Employment shall
be deemed to continue while the
Optionee
Participant
is
on military leave, sick leave or other
bona fide
leave of absence (as
determined by the Plan Administrator). The foregoing notwithstanding,
employment shall not be deemed to continue beyond the first ninety (90) days of
such leave, unless otherwise determined in specific agreements by the Plan
Administrator and unless the
Optionee
Participant
’s
re-employment rights are guaranteed by statute or by contract.
|
|
|
(i)
|
Options
shall be exercisable, in full or in part, at any time after vesting, until
termination
of right
to exercise
. If
less than all of the
shares of
Common
Shares
Stock
included
in the vested portion of any
Option
option
are
purchased, the remainder may be purchased at any subsequent time prior to the
expiration of the
Option term
exercise
period
. Only
a
whole
share of
Common
Shares
Stock
may be issued pursuant to an
Option
option
, and to the extent that an
Option
option
covers less than one (1)
share
of
Common
Share
Stock
, it is
unexercisable.
|
11
|
|
(ii)
|
Options
or portions thereof may be exercised by giving written notice to the
Corporation, in such form and method as may be determined by the Corporation
and when applicable, by the Trustee in accordance with the requirements of
Section 102 of the Ordinance, which notice shall specify the number of
shares
of
Common
Shares
Stock
to be
purchased, and be accompanied by payment in the amount of the aggregate
exercise price for the Common
Shares
Stock
so
purchased, which payment shall be in the form specified in Section 7.1(i)
below. The Corporation shall not be obligated to issue, transfer or deliver a
certificate representing
shares of
Common
Shares
Stock
to
the Holder of any Option, until provision has been made by the Holder, to the
satisfaction of the Corporation, for the payment of the aggregate exercise
price for all
shares of
Common
Shares
Stock
for which the
Option
option
shall
have been exercised and for satisfaction of any tax withholding obligations
associated with such exercise. During the lifetime of an
Optionee,
Options
Participant, options
are
exercisable only by the
Optionee
Participant
.
|
|
|
(iii)
|
For
Israeli Employees the above mentioned in section h(ii) is subject to section
102 and the trust mechanism as defined in section 5 of this Plan.
|
|
|
With
respect to Unapproved 102
Option
Award
, if
the
Optionee
Participant
ceases to be
employed by the Corporation or any
Afffiliate
Affiliate
,
the
Optionee
Participant
shall extend to the
Corporation and/or its Affiliate a security or guarantee for the payment of tax due at
the time of sale of
Shares
shares of Common Stock
,
all in accordance with the provisions of Section 102 and the rules, regulation or orders
promulgated thereunder.
|
|
|
(i)
|
Payment
upon Exercise of Option
|
|
|
Upon
the exercise of any
Option
option
, the
aggregate exercise price shall be paid to the Corporation in cash or by certified or
cashier’s check. In addition, if pre-approved in writing by the Plan Administrator
who may arbitrarily withhold consent, the Holder may pay for all or any portion of the
aggregate exercise price by complying with one or more of the following alternatives:
|
|
|
(i)
|
by
delivering to the Corporation
shares of
Common
Shares
Stock
previously
held by such Holder, or by the Corporation withholding
shares of
Common
Shares
Stock
otherwise deliverable pursuant
to exercise of
the Option
option
,
which
shares of
Common
Shares
Stock
received
or withheld shall have a fair market value at the date of exercise (as
determined by the Plan Administrator) equal to the aggregate exercise price to
be paid by the
Optionee
Participant
upon such exercise;
|
12
|
|
(ii)
|
by
delivering a properly executed exercise notice together with irrevocable
instructions to a broker promptly to sell or margin a sufficient portion of the
shares of
Common
Shares
Stock
and deliver directly to the Corporation the amount of sale or margin
loan proceeds to pay the exercise price; or
|
|
|
(iii)
|
by
complying with any other payment mechanism approved by the Plan Administrator
at the time of exercise.
|
|
|
An
Award of Restricted Stock, whether as 102 Award, Non-Qualified Award or Section 3(i)
Award,
may be granted by the Corporation in a specified number of
shares of Common Stock of
Corporation to the Participant, which
shares may or may no be subject to forfeiture or other
restrictions
upon the happening of specified events (the term in which such restrictions apply
shall
be referred to as the “Restriction Period”). Such an Award shall be subject to
the
following terms and conditions:
|
|
|
(i)
|
Restricted
Stock shall be evidenced by Award agreements. Such agreements shall conform to
the
requirements of the Plan and may contain such other
provisions as the Committee shall
deem advisable.
|
|
|
(ii)
|
Upon
determination of the number of shares of Restricted Stock to be granted to a
Holder, the Committee
shall direct that a certificate or
certificates representing the number of shares of
Common
Stock of Corporation be issued to the Holder with the Holder designated as the
registered owner. If any restrictions apply to such shares
of Restricted Stock, the
certificate(s) representing such
shares shall be legended as to sale, transfer,
assignment,
pledge or other encumbrances during the Restriction Period and deposited
by
the Holder, together with a stock power endorsed in blank, with the
Corporation, to
be held in escrow during the Restriction
Period.
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(iii)
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Unless
otherwise determined by the Committee at the time of an Award, during the
Restriction Period the
Holder shall have the right to receive
dividends from and to vote the shares of
Restricted Stock.
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(iv)
|
The
Award Agreement shall specify the duration of the Restriction Period, if any,
and the employment or
other conditions (including termination of
employment on account of death, disability,
retirement or other
cause) under which shares of Restricted Stock may be forfeited by
the
Corporation. At the end of the Restriction Period, if any, the restrictions
imposed
shall lapse with respect to the number of shares of Restricted Stock as
determined
by the Committee, and the legend shall be removed and such number of shares
delivered
to the Holder (or, where appropriate, the Holder’s legal representative).
The Committee may, in its sole discretion, modify or accelerate the
vesting and
delivery of shares of Restricted Stock, if
those are subject to vesting.
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(i2)
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Restricted
Stock Unit.
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The
Plan Administrator is authorized to make awards of Restricted Stock Units, whether as 102
Award,
Non-Qualified Award or Section 3(i) Award, to any Employee or
Consultant in such amounts and subject to
such terms and conditions
as the Plan Administrator shall deem appropriate. On the vesting date of a
Restricted
Stock Unit, unless otherwise noted in the Award Agreement, the Corporation shall transfer
to
the Participant one unrestricted, fully transferable, fully paid
and non-assessable share of Common
Stock for each Restricted Stock
Unit scheduled to be paid out on such date and not previously forfeited.
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(i)
|
All
Awards of restricted stock units made pursuant to this Plan will be evidenced
by an Award Agreement
and will comply with and be subject to the
terms and conditions of this Plan.
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(ii)
|
Unless
otherwise determined by the Committee at the time of an Award, during the
Restriction Period the
Holder shall not have the right to receive
dividends from and to vote the shares
underlying the
Restricted Stock Units.
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(iii)
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Restricted
Stock Units shall be subject to such terms and conditions as the Plan
Administrator may impose. These terms and
conditions may include restrictions based upon completion of a specified period of
service with the Corporation or an Affiliate as set out in advance in the
Participant’s individual Award Agreement.
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(j)
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No
Rights as a Shareholder
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A
Holder shall have no rights as a shareholder of the Corporation with respect to any
shares
of
Common
Shares
Stock
covered
by an
Option
option and to any unvested Restricted
Stock Unit
until such Holder becomes a record holder of such
Common Shares
shares
,
irrespective of whether such Holder has given notice of exercise. Subject to the
provisions of Section 7.1(m) hereof, no rights shall accrue to a Holder and no
adjustments shall be made on account of dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights declared on, or
created in, the Common Shares for which the record date is prior to the date the Holder
becomes a record holder of the
shares of
Common
Shares
covered by the
Option
Stock
,
irrespective of whether such Holder has given notice of exercise.
In case of
Options and Common Shares held
Awards and
shares of Common Stockheld
by the Trustee,
are
subject to
the provisions of Section 5 of the Plan.
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14
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(k)
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Non-transferability
of Options
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Options
and
unvested Restricted Stocks and Restricted Stock Units
granted under this
Plan and the rights and privileges conferred by this Plan may not be transferred,
assigned, pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than by will, by applicable laws of descent and distribution, and shall
not be subject to execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any
Option
Options
and unvested Restricted Stocks and Restricted Stock Units
or of any right or
privilege conferred by this Plan contrary to the provisions hereof, or upon the sale,
levy or any attachment or similar process upon the rights and privileges conferred by
this Plan, such
Option
options and unvested
Restricted Stocks and Restricted Stock Units
shall thereupon terminate and become
null and void.
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As
long as
Options and/or Common Shares
Awards
are
held by the Trustee on behalf of the
Optionee
Participant
, all rights
of the
Optionee
Participant
over the
shares
of
Common
Shares are
Stockare
personal,
can not be transferred, assigned, pledged or mortgaged, other than by will or pursuant to
the laws of descent and distribution.
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(l)
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Securities
Regulation and Tax Withholding
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(i)
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Shares
of
Common
Shares
Stock
shall
not be issued with respect to an
Option unless
Award
(also in
connection with
the exercise of
such
Option
option)
and the issuance and
delivery of such
shares of
Common
Shares
Stock
shall
comply with all Applicable Laws, and such issuance shall be further subject to
the approval of counsel for the Corporation with respect to such compliance,
including the availability of an exemption from prospectus and registration
requirements for the issuance and sale of such
shares of
Common
Shares
Stock
. The inability of the Corporation to obtain
from any regulatory body the authority deemed by the Corporation to be
necessary for the lawful issuance and sale of any
shares of
Common
Shares
Stock
under this Plan, or the
unavailability of an exemption from prospectus and registration requirements
for the issuance and sale of any
shares of
Common
Shares
Stock
under
this Plan, shall relieve the Corporation of any liability with respect to the
non-issuance or sale of such
shares of
Common
Shares
Stock
.
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(ii)
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As
a condition to the exercise of an Option
or issuance of other Awards
,
the Plan Administrator may require the Holder to represent and warrant in
writing at the time of such exercise that the
shares of
Common
Shares
Stock
are being purchased only for
investment and without any then-present intention to sell or distribute such
shares
of
Common
Shares
Stock
. If necessary under
Applicable Laws, the Plan Administrator may cause a stop-transfer order against
such Common Shares to be placed on the stock books and records of the
Corporation, and a legend indicating that the
shares of
Common
Shares
Stock
may
not be pledged, sold or otherwise transferred unless an opinion of counsel is
provided stating that such transfer is not in violation of any Applicable Laws,
may be stamped on the certificates representing such
shares of
Common
Shares
Stock
in order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may from time to
time be necessary to comply with applicable securities laws. THE CORPORATION
HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR THE COMMON SHARES
ISSUABLE UPON THE EXERCISE OF OPTIONS
OR ISSUANCE OF OTHER AWARDS
.
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(iii)
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The
Holder shall pay to the Corporation by certified or cashier’s check,
promptly upon exercise of an
Option
option
or,
if sooner or later, the date that the amount of such obligations becomes
determinable
upon any Award
, all applicable federal,
state, local and foreign withholding taxes that the Plan Administrator or the
Trustee, in their discretion, subject to section 102 in case of Israeli
Employees, determines to result upon exercise of an
Option
option
or
from a transfer or other disposition of
shares of
Common
Shares
Stock
acquired upon exercise of an
Option
option
or otherwise related to an
Option
option
or
shares of
Common
Shares
Stock
acquired in connection
with an Option
or issuance of shares underlying a
different Award
. Furthermore, the Holder shall agree to
indemnify the Corporation 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 Holder. Upon approval of the Plan Administrator, a Holder
may satisfy such obligation by complying with one or more of the following
alternatives selected by the Plan Administrator:
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A.
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by delivering to the Corporation
shares of
Common
Shares
Stock
previously held by such Holder or
by the Corporation withholding
shares of
Common
Shares
Stock
otherwise deliverable pursuant to
the exercise of the
Option
option or issuance of
shares underlying
a different Award
, which
shares of
Common
Shares
Stock
received or withheld shall have a
fair market value (as determined by the Plan Administrator) equal to the minimum
mandatory withholding tax obligations arising as a result of such exercise,
transfer or other disposition; or
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B.
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by complying with any other payment mechanism approved by the Plan Administrator
from time to time.
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(iv)
|
The
issuance, transfer or delivery of certificates representing
shares of
Common
Shares
Stock
pursuant to the
exercise of
Options
options or issuance of shares
underlying a different Award
may be delayed, at the discretion of the
Plan Administrator, until the Plan Administrator is satisfied that the
applicable requirements of all Applicable Laws and the withholding provisions
of the Code and/or the Ordinance have been met and that the Holder has paid or
otherwise satisfied any withholding tax obligation as described in Section
7.1(l)(iii) above.
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(m)
|
Adjustments
Upon Changes In Capitalization
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(i)
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The
aggregate number
(in the case of Incentive Stock Options and for purposes
of the limit in Section
6.2 above)
and class of
shares for which
Options
Awards
may be
granted under this Plan, the number and class of shares covered by each
outstanding
Option
Award
, and the exercise
price per share thereof (but not the total price), and each such
Option
Award
,
shall all be proportionately adjusted for any increase or decrease in the
number of issued Common Shares of the Corporation resulting from:
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A.
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a
subdivision or consolidation of Common Shares or any like capital adjustment,
or
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B.
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the
issuance of any
shares of
Common
Shares
Stock
,
or securities exchangeable for or convertible into
shares of
Common
Shares
Stock
, to the holders of all or
substantially all of the outstanding
shares of
Common
Shares
Stock
by way of a stock dividend
(other than the issue of
shares of
Common
Shares
Stock
,
or securities exchangeable for or convertible into
shares of
Common
Shares
Stock
, to holders of
shares of
Common
Shares
Stock
pursuant
to their exercise of options to receive dividends in the form of
shares
of
Common
Shares
Stock
, or
securities convertible into
shares of
Common
Shares
Stock
,
in lieu of dividends paid in the ordinary course on the
shares of
Common
Shares
Stock
).
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(ii)
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Except
as provided in Section 7.1(m)(iii) hereof, upon a merger (other than a merger
of the Corporation in which the holders of Common Shares immediately prior to
the merger have the same proportionate ownership of common shares in the
surviving corporation immediately after the merger), consolidation, acquisition
of property or stock, separation, reorganization (other than a mere
re-incorporation or the creation of a holding Corporation) or liquidation of
the Corporation, as a result of which the shareholders of the Corporation,
receive cash, shares or other property in exchange for or in connection with
their
shares of
Common
Shares
Stock
,
any
Option
Award
granted hereunder shall
terminate, but the Holder shall have the right to exercise such Holder’s
Option
Award
immediately prior to any such merger,
consolidation, acquisition of property or shares, separation, reorganization or
liquidation, and to be treated as a shareholder of record for the purposes
thereof, to the extent the vesting requirements set forth in the
Option
Award
agreement
have been satisfied.
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(iii)
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If
the shareholders of the Corporation receive shares in the capital of another
corporation (“Exchange Shares”) in exchange for their
shares of
Common
Shares
Stock
in any
transaction involving a merger (other than a merger of the Corporation in which
the holders of
shares of
Common
Shares
Stock
immediately
prior to the merger have the same proportionate ownership of
shares of
Common
Shares
Stock
in the
surviving corporation immediately after the merger), consolidation, acquisition
of property or shares, separation or reorganization (other than a mere
re-incorporation or the creation of a holding Corporation), all
Options
Awards
granted
hereunder shall be converted into
options
Awards
to
purchase Exchange Shares
,
unless the Corporation and the
corporation issuing the Exchange Shares, in their sole discretion, determine
that any or all such
Options
Awards
granted
hereunder shall not be converted into
options
Awards
to
purchase Exchange Shares but instead shall terminate in accordance with, and
subject to the Holder’s right to exercise the Holder’s
Options
Awards
pursuant
to, the provisions of Section 7.1(m)(ii). The amount and price of converted
options
Awards
shall be determined by
adjusting the amount and price of the
Options
Awards
granted
hereunder in the same proportion as used for determining the number of Exchange
Shares the holders of the
shares of
Common
Shares
Stock
receive
in such merger, consolidation, acquisition or property or stock, separation or
reorganization. Unless accelerated by the Board, the vesting schedule set forth
in the option agreement shall continue to apply to the
options
Awards
granted
for the Exchange Shares.
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(iv)
|
In
the event of any adjustment in the number of
shares of
Common
Shares
Stock
covered by any
Option
Award
,
any fractional shares resulting from such adjustment shall be disregarded and
each such
Option
Award
shall cover only the
number of full shares resulting from such adjustment.
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(v)
|
All
adjustments pursuant to Section 7.1(m) shall be made by the Plan Administrator,
and its determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive.
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(vi)
|
The
grant of an
Option
Award
shall not affect
in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge, consolidate or dissolve, to liquidate or to sell or
transfer all or any part of its business or assets.
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8.
|
EFFECTIVE
DATE; AMENDMENT; SHAREHOLDER APPROVAL
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8.1
Options
may be granted by the Plan Administrator from time to time on or after the date on which
this Plan is adopted by the Board (the “
Effective Date
”). In case of the
Israeli Optionees, Approved 102 Options will be granted only after the lapse of at least
30 days following the date in which the Plan and the relevant forms will be submitted to
the tax authorities as detailed in Section 4.6 above.
8.1
8.2
Unless sooner terminated by the Board, this Plan shall
terminate on
the tenth anniversary of the Effective Date.
December
31, 2018.
No Option may be granted after such termination or during any
suspension of this Plan.
8.2
8.3
Any Incentive Stock Options granted by the Plan Administrator prior to the
ratification of this Plan by the shareholders of the Corporation shall be granted subject
to approval of this Plan by the
holders of a majority
shareholders
of
the Corporation’s outstanding voting shares, voting either in person or by proxy at
a duly held shareholders’meeting within twelve (12) months before or after the
Effective Date
date this Amended and Restated 2005
Stock Option Plan is approved by the Board
. If such shareholder approval is
sought and not obtained, all Incentive Stock Options granted prior thereto and thereafter
shall be considered Non-Qualified
Stock Options
Awards
and
any
Options
Awards
granted to Covered
Employees will not be eligible for the exclusion set forth in Section 162(m) of the Code
with respect to the deductibility by the Corporation of certain compensation.
9.
NO OBLIGATIONS TO
EXERCISE OPTION
The grant of an
Option
option
shall impose no obligation upon the
Optionee
Participant
to exercise such
Option
option
.
10.
NO RIGHT TO
OPTIONS
AWARD OR TO EMPLOYMENT
Whether or not any
Options
Awards
are to be granted under this Plan shall
be exclusively within the discretion of the Plan Administrator,
and
nothing
contained in this Plan shall be construed as giving any person any right to participate
under this Plan. The grant of an
Option
Award
shall in
no way constitute any form of agreement or understanding binding on the Corporation or any
Related Corporation, express or implied, that the Corporation or any Related Corporation
will employ or contract with an
Optionee
Participant
for
any length of time, nor shall it interfere in any way with the Corporation’s or,
where applicable, a Related Corporation’s right to terminate
Optionee
Participant
’s employment at any time,
which right is hereby reserved.
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11.
APPLICATION OF FUNDS
The proceeds received by the
Corporation from the sale of Common Shares issued upon the exercise of
Options
Awards
shall be used for general corporate
purposes, unless otherwise directed by the Board.
12.
INDEMNIFICATION OF
PLAN ADMINISTRATOR
In addition to all other rights of
indemnification they may have as members of the Board, members of the Plan Administrator
shall be indemnified by the Corporation for all reasonable expenses and liabilities of any
type or nature, including attorneys’ fees, incurred in connection with any action,
suit or proceeding to which they or any of them are a party by reason of, or in connection
with, this Plan or any
Option
Award
granted under this
Plan, and against all amounts paid by them in settlement thereof (provided that such
settlement is approved by independent legal counsel selected by the Corporation), except
to the extent that such expenses relate to matters for which it is adjudged that such Plan
Administrator member is liable for wilful misconduct; provided, that within fifteen (15)
days after the institution of any such action, suit or proceeding, the Plan Administrator
member involved therein shall, in writing, notify the Corporation of such action, suit or
proceeding, so that the Corporation may have the opportunity to make appropriate
arrangements to prosecute or defend the same.
13.
AMENDMENT OF PLAN
The
Subject
to additional consents and approvals required under Applicable Law, the
Plan
Administrator may, at any time, modify, amend or terminate this Plan or modify or amend
Options
Awards
granted under this Plan, including,
without limitation, such modifications or amendments as are necessary to maintain
compliance with the Applicable Laws.
The Plan Administrator may condition the
effectiveness of any such amendment on the receipt of shareholder approval at such time
and in such manner as the Plan Administrator may consider necessary for the Corporation to
comply with or to avail the Corporation and/or the Optionees of the benefits of any
securities, tax, market listing or other administrative or regulatory requirements.
Effective Date:
September 18, 2006
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