☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
Name of each exchange on which registered
|
|
Ordinary shares, par value NIS 0.01 per share
|
The NASDAQ Stock Market LLC
|
Large accelerated filer ☒
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Emerging growth company ☐
|
U.S. GAAP ☒
|
International Financial Reporting Standards as issued by the
International Accounting Standards Board ☐
|
Other ☐
|
1
|
||
1
|
||
|
||
2
|
||
2
|
||
2
|
||
29
|
||
39
|
||
39
|
||
62
|
||
80
|
||
84
|
||
85
|
||
86
|
||
97
|
||
98
|
||
|
||
99
|
||
99
|
||
99
|
||
100
|
||
100
|
||
100
|
||
100
|
||
101
|
||
101
|
||
101
|
||
101
|
||
101
|
||
101
|
||
101
|
||
101
|
• |
our expectations regarding revenues generated by our hybrid sales model;
|
• |
our expectations regarding our operating and net profit margins;
|
• |
our expectations regarding significant drivers of our future growth;
|
• |
our plans to continue to invest in research and development to develop on-premise and cloud-based products and services for both existing and new products;
|
• |
our plans to invest in sales and marketing efforts and expand our channel partnerships across existing and new geographies;
|
• |
our plans to hire additional new employees;
|
• |
our plans to pursue additional strategic acquisitions;
|
• |
our plans to leverage our global footprint in existing and new industry verticals to further expand our market share;
|
• |
our plans to pursue incremental sales by further expanding our customer success team;
|
• |
our ability to successfully integrate the operations, products and personnel of Conjur, Inc. which we acquired in 2017; and
|
• | our expectations regarding our tax classifications. |
Year ended December 31,
|
||||||||||||||||||||
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||
(in thousands except share and per share data)
|
||||||||||||||||||||
Consolidated Statements of Operations:
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
License
|
$
|
38,907
|
$
|
61,320
|
$
|
100,113
|
$
|
131,530
|
$
|
147,640
|
||||||||||
Maintenance and professional services
|
27,250
|
41,679
|
60,699
|
85,083
|
114,061
|
|||||||||||||||
Total revenues
|
66,157
|
102,999
|
160,812
|
216,613
|
261,701
|
|||||||||||||||
Cost of revenues:
|
||||||||||||||||||||
License
|
1,216
|
2,654
|
5,088
|
4,726
|
7,911
|
|||||||||||||||
Maintenance and professional services
|
7,860
|
12,053
|
17,572
|
25,425
|
33,937
|
|||||||||||||||
Total cost of revenues(1)
|
9,076
|
14,707
|
22,660
|
30,151
|
41,848
|
|||||||||||||||
Gross profit
|
57,081
|
88,292
|
138,152
|
186,462
|
219,853
|
|||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Research and development(1)
|
10,404
|
14,400
|
21,734
|
34,614
|
42,389
|
|||||||||||||||
Sales and marketing(1)
|
32,840
|
44,943
|
66,206
|
93,775
|
126,739
|
|||||||||||||||
General and administrative(1)
|
4,758
|
8,495
|
16,990
|
22,117
|
30,399
|
|||||||||||||||
Total operating expenses
|
48,002
|
67,838
|
104,930
|
150,506
|
199,527
|
|||||||||||||||
Operating income
|
9,079
|
20,454
|
33,222
|
35,956
|
20,326
|
|||||||||||||||
Financial income (expenses), net
|
(1,124
|
)
|
(5,988
|
)
|
(1,479
|
)
|
245
|
4,103
|
||||||||||||
Income before taxes on income
|
7,955
|
14,466
|
31,743
|
36,201
|
24,429
|
|||||||||||||||
Taxes on income
|
(1,320
|
)
|
(4,512
|
)
|
(5,949
|
)
|
(8,077
|
)
|
(8,414
|
)
|
||||||||||
Net income
|
$
|
6,635
|
$
|
9,954
|
$
|
25,794
|
$
|
28,124
|
$
|
16,015
|
||||||||||
Basic net income per ordinary share(2)
|
$
|
0.25
|
$
|
0.46
|
$
|
0.80
|
$
|
0.83
|
$
|
0.46
|
||||||||||
Diluted net income per ordinary share(2)
|
$
|
0.14
|
$
|
0.34
|
$
|
0.73
|
$
|
0.78
|
$
|
0.44
|
||||||||||
Weighted average number of ordinary shares used in computing basic net income per ordinary share(2)
|
6,900,433
|
13,335,059
|
32,124,772
|
33,741,359
|
34,824,312
|
|||||||||||||||
Weighted average number of ordinary shares used in computing diluted net income per ordinary share(2)
|
10,765,914
|
29,704,730
|
35,322,716
|
35,838,863
|
36,175,824
|
As of December 31,
|
||||||||||||||||||||
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||||||||||
Cash, cash equivalents, marketable securities and short-term bank deposits
|
$
|
65,368
|
$
|
177,181
|
$
|
238,252
|
$
|
295,475
|
$
|
330,340
|
||||||||||
Deferred revenue, current and long term
|
24,478
|
32,160
|
54,389
|
73,506
|
105,235
|
|||||||||||||||
Working capital(3)
|
48,900
|
156,829
|
197,095
|
235,010
|
251,247
|
|||||||||||||||
Total assets
|
89,632
|
210,552
|
334,424
|
403,031
|
502,576
|
|||||||||||||||
Preferred share warrant liability
|
2,134
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total shareholders’ equity
|
45,846
|
155,008
|
246,670
|
296,216
|
353,965
|
(1) |
Includes share-based compensation expense as follows:
|
Year ended December 31,
|
||||||||||||||||||||
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||
(in thousands
)
|
||||||||||||||||||||
Cost of revenues
|
$
|
39
|
$
|
137
|
$
|
499
|
$
|
1,386
|
$
|
2,289
|
||||||||||
Research and development
|
73
|
172
|
1,507
|
4,660
|
6,110
|
|||||||||||||||
Sales and marketing
|
126
|
347
|
2,214
|
5,765
|
8,642
|
|||||||||||||||
General and administrative
|
165
|
917
|
2,829
|
5,724
|
8,196
|
|||||||||||||||
Total share-based compensation expenses
|
$
|
403
|
$
|
1,573
|
$
|
7,049
|
$
|
17,535
|
$
|
25,237
|
(2) |
Basic and diluted net income per ordinary share is computed based on the weighted average number of ordinary shares outstanding during each period. For additional information, see note 13 to our consolidated financial statements included elsewhere in this annual report.
|
(3) |
We define working capital as total current assets minus total current liabilities. In 2015, we adopted Accounting Standard Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17) retrospectively and reclassified all of our current deferred tax assets to noncurrent deferred tax assets on our consolidated balance sheets data for all periods presented. As a result of such reclassifications, certain noncurrent deferred tax liabilities as of December 31, 2013 and 2014 were netted with noncurrent deferred tax assets.
|
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||
(in thousands
)
|
||||||||||||||||||||
Reconciliation of Operating Income to Non-GAAP Operating Income:
|
||||||||||||||||||||
Operating income
|
$
|
9,079
|
$
|
20,454
|
$
|
33,222
|
$
|
35,956
|
$
|
20,326
|
||||||||||
Share-based compensation
|
403
|
1,573
|
7,049
|
17,535
|
25,237
|
|||||||||||||||
Public offering related expenses
|
—
|
—
|
1,568
|
—
|
—
|
|||||||||||||||
Acquisition related expenses
|
—
|
—
|
677
|
—
|
686
|
|||||||||||||||
Amortization of intangible assets – Cost of revenues
|
—
|
—
|
359
|
1,420
|
4,213
|
|||||||||||||||
Amortization of intangible assets – Research and development
|
—
|
—
|
749
|
1,913
|
—
|
|||||||||||||||
Amortization of intangible assets – Sales and marketing
|
—
|
—
|
17
|
1,190
|
1,046
|
|||||||||||||||
Facility exit costs
|
—
|
—
|
—
|
—
|
342
|
|||||||||||||||
Non-GAAP operating income
|
$
|
9,482
|
$
|
22,027
|
$
|
43,641
|
$
|
58,014
|
$
|
51,850
|
Year ended December 31,
|
||||||||||||||||||||
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Reconciliation of Net Income to Non-GAAP Net Income:
|
||||||||||||||||||||
Net income
|
$
|
6,635
|
$
|
9,954
|
$
|
25,794
|
$
|
28,124
|
$
|
16,015
|
||||||||||
Share-based compensation
|
403
|
1,573
|
7,049
|
17,535
|
25,237
|
|||||||||||||||
Warrant adjustment
|
1,446
|
4,309
|
—
|
—
|
—
|
|||||||||||||||
Public offering related expenses
|
—
|
—
|
1,568
|
—
|
—
|
|||||||||||||||
Acquisition related expenses
|
—
|
—
|
677
|
—
|
686
|
|||||||||||||||
Amortization of intangible assets – Cost of revenues
|
—
|
—
|
359
|
1,420
|
4,213
|
|||||||||||||||
Amortization of intangible assets – Research and development
|
—
|
—
|
749
|
1,913
|
—
|
|||||||||||||||
Amortization of intangible assets – Sales and marketing
|
—
|
—
|
17
|
1,190
|
1,046
|
|||||||||||||||
Facility exit costs
|
—
|
—
|
—
|
—
|
342
|
|||||||||||||||
Taxes on income related to non-GAAP adjustments
|
—
|
—
|
(951
|
)
|
(4,937
|
)
|
(12,226
|
)
|
||||||||||||
Change in the U.S. federal tax rate
|
—
|
—
|
—
|
—
|
6,582
|
|||||||||||||||
Non-GAAP net income
|
$
|
8,484
|
$
|
15,836
|
$
|
35,262
|
$
|
45,245
|
$
|
41,895
|
• |
our ability to attract and retain new customers;
|
• |
our ability to sell additional products to current customers;
|
• |
the ability of our service operation to keep pace with license sales to new and existing customers and to satisfy customer demands for consultancy and professional services;
|
• |
the amount and timing of our operating costs;
|
• |
a change in our mix of products and services;
|
• |
the ability of our channel partners to accurately predict the timing and scope of significant sales;
|
• |
increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates or changes in taxes or other applicable regulations (See “—We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations”);
|
• |
introduction of new accounting pronouncements or changes in our accounting policies or practices;
|
• |
changes in the nature and methodology of cyber attacks and other threats to corporate data;
|
• |
changes in customer or channel partner requirements or market needs;
|
• |
changes in the growth rate of the information security market;
|
• |
the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of the information security market, including consolidation among our customers or competitors;
|
• |
changes in our pricing policies or those of our competitors;
|
• |
general economic conditions in our markets;
|
• |
a disruption in, or termination of, our relationship with channel partners;
|
• |
our ability to successfully expand our business globally; and
|
• |
reductions in maintenance and SaaS subscription renewal rates.
|
• |
greater name recognition, a longer operating history and a larger customer base, notwithstanding the increased visibility of our brand in recent years since our initial public offering;
|
• |
larger sales and marketing budgets and resources;
|
• |
broader distribution and established relationships with channel partners, advisory firms and customers;
|
• |
increased effectiveness in protecting, detecting and responding to cyber attacks.
|
• |
greater or localized resources for customer support and provision of services;
|
• |
greater speed at which a solution can be deployed;
|
• |
greater resources to make acquisitions;
|
• |
larger intellectual property portfolios; and
|
• |
greater financial, technical and other resources
|
• |
higher costs of doing business globally, including costs incurred in maintaining office space, securing adequate staffing and localizing our contracts;
|
• |
fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business (See “—We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations”);
|
• |
Uncertainty of the economic, financial, regulatory, trade, tax and legal implications of the withdrawal of the U.K. from the E.U. (“Brexit”) and how this could affect our business, both globally and specifically in the region;
|
• |
greater difficulty in enforcing contracts and managing collections, as well as longer collection periods;
|
• |
compliance with anti-bribery laws, including, without limitation, compliance with the U.S. Foreign Corrupt Practices Act and the U.K. Anti-Bribery Act;
|
• |
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
|
• |
risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of our platform that may be required in foreign countries;
|
• |
greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties (See “— Our business may be materially affected by changes to fiscal and tax policies. Potentially negative or unexpected tax consequences of these policies, or the uncertainty surrounding their potential effects, could adversely affect our results of operations and share price;
|
• |
compliance with, and the uncertainty of,
laws and regulations that apply to our areas of business, including corporate governance, anti-trust and competition, import and export control, employee and third-party complaints, conflicts of interest, securities regulations and other regulatory requirements affecting trade and investment;
|
• |
reduced or uncertain protection of intellectual property rights in some countries;
|
• |
social, economic and political instability, terrorist attacks and security concerns in general; and
|
• |
management communication and integration problems resulting from cultural and geographic dispersion.
|
• |
delays in releasing product enhancements or new products;
|
• |
failure to accurately predict market demand and to supply products that meet this demand in a timely fashion;
|
• |
inability to interoperate effectively with the existing or newly introduced technologies, systems or applications of our existing and prospective customers;
|
• |
defects in our products, errors or failures of our solutions to secure and protect privileged accounts against existing and new types of attacks;
|
• |
negative publicity about the performance or effectiveness of our products;
|
• |
introduction or anticipated introduction of competing products by our competitors;
|
• |
installation, configuration or usage errors by our customers; and
|
• |
easing or changing of regulatory requirements related to security.
|
• |
actual or anticipated fluctuations in our results of operations and the results of other similar companies;
|
• |
variance in our financial performance from the expectations of market analysts;
|
• |
announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions or expansion plans;
|
• |
changes in the prices of our products and services or in our pricing models;
|
• |
our involvement in litigation;
|
• |
our sale of ordinary shares or other securities in the future;
|
• |
market conditions in our industry;
|
• |
changes in key personnel;
|
• |
speculation in the press or the investment community;
|
• |
the trading volume of our ordinary shares;
|
• |
changes in the estimation of the future size and growth rate of our markets;
|
• |
any merger and acquisition activities; and
|
• |
general economic and market conditions.
|
A. |
History and Development of the Company
|
B. |
Business Overview
|
• |
the breadth and completeness of a security solution;
|
• |
reliability and effectiveness in protecting, detecting and responding to cyber attacks;
|
• |
analytics and accountability at an individual user level;
|
• |
ability of customers to achieve and maintain compliance with compliance standards and audit requirements;
|
• |
strength of sale and marketing efforts, including advisory firms and channel partner relationships;
|
• |
global reach and customer base;
|
• |
scalability and ease of integration with an organization’s existing IT infrastructure and security investments;
|
• |
brand awareness and reputation;
|
• |
innovation and thought leadership;
|
• |
quality of customer support and professional services;
|
• |
speed at which a solution can be deployed; and
|
• |
price of a solution and cost of maintenance and professional services.
|
C. |
Organizational Structure
|
Name of Subsidiary
|
Place of Incorporation
|
|
CyberArk Software, Inc.
|
Delaware, United States
|
|
Cyber-Ark Software (UK) Limited
|
United Kingdom
|
|
CyberArk Software (Singapore) PTE. LTD.
|
Singapore
|
|
Cyber-Ark Software (DACH) GmbH
|
Germany
|
|
CyberArk Software Italy S.r.l.
|
Italy
|
|
CyberArk Software (France) SARL
|
France
|
|
CyberArk Software (Netherlands) B.V.
|
Netherlands
|
|
CyberArk Software (Australia) Pty Ltd.
|
Australia
|
|
CyberArk Software (Japan) K.K.
|
Japan
|
|
CyberArk Software Canada Inc.
|
Canada | |
Conjur, Inc.
|
Delaware, United States
|
|
Vaultive, Ltd.
|
Israel
|
D. |
Property, Plants and Equipment
|
Year ended December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
(in thousands)
|
||||||||||||
Revenues
|
$
|
160,812
|
$
|
216,613
|
$
|
261,701
|
||||||
Non-GAAP operating income(1)
|
43,641
|
58,014
|
51,850
|
|||||||||
Non-GAAP net income(1)
|
35,262
|
45,245
|
41,895
|
|||||||||
Net cash provided by operating activities
|
59,160
|
56,310
|
80,737
|
|||||||||
Total deferred revenues (as of period-end)
|
54,389
|
73,506
|
105,235
|
(1) |
For a reconciliation of non-GAAP operating income to operating income and of non-GAAP net income to net income, the nearest comparable GAAP measures, see “Item 3.A. Selected Financial Data.”
|
• |
License Revenues.
License revenues are generated primarily from sales of licenses for our cybersecurity software: Privileged Account Security Solution and Sensitive Information Management Solution.
|
○ |
Privileged Account Security Solution – the substantial majority of our license revenues has been from sales of our Privileged Account Security Solution. Customers can purchase Enterprise Password Vault, Privileged Session Manager, Privileged Threat Analytics, Application Identity Manager, Conjur, Endpoint Privilege Manager and On-Demand Privileges Manager. We license our Enterprise Password Vault to our customers based on the number of privileged account users. We offer customers the choice of licensing our Privileged Session Manager based on the number of devices secured or the number of concurrent sessions it monitors. We license our Application Identity Manager, Conjur and On-Demand Privileges Manager to our customers based on the number of servers that each such product protects. We license our Privileged Threat Analytics to customers based on the number of protected endpoints, such as servers, desktops, databases or mobile devices. We license our Endpoint Privilege Manager to our customers based on the number of protected endpoints such as servers and desktops.
|
○ |
Sensitive Information Management Solution–we generate additional license revenues through sales of our Sensitive Information Management Solution, our first product to market. Customers license the Sensitive Information Management Solution based on the permitted number of users of the software.
|
• |
Maintenance and Professional Services Revenues
. Maintenance revenues are generated from maintenance and support contracts purchased by our customers in order to gain access to the latest software enhancements and updates on an ‘if and when available’ basis and to telephone and email technical support. We also offer professional services focused on both deployment and training our customers to fully leverage the use of our products.
|
Year ended December 31,
|
||||||||||||||||||||||||
2015
|
2016
|
2017
|
||||||||||||||||||||||
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
Amount
|
% of Revenues
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
United States
|
$
|
92,034
|
57.2
|
%
|
$
|
125,749
|
58.1
|
%
|
$
|
145,453
|
55.6
|
%
|
||||||||||||
EMEA
|
50,644
|
31.5
|
%
|
68,094
|
31.4
|
%
|
81,778
|
31.2
|
%
|
|||||||||||||||
Rest of World
|
18,134
|
11.3
|
%
|
22,770
|
10.5
|
%
|
34,470
|
13.2
|
%
|
|||||||||||||||
Total revenues
|
$
|
160,812
|
100.0
|
%
|
$
|
216,613
|
100.0
|
%
|
$
|
261,701
|
100.0
|
%
|
• |
Cost of License Revenues.
Cost of license revenues consists primarily of amortization of intangible assets, payments to third-party software vendors and shipping costs associated with delivery of our software. We expect the absolute cost of license revenues to increase as our license revenues increase.
|
• |
Cost of Maintenance and Professional Services Revenues.
Cost of maintenance and professional services revenues primarily consists of personnel costs for our global customer support and professional services organization. Such costs consist of salaries, benefits, bonuses, share-based compensation and subcontractors’ fees. We expect the absolute cost of maintenance and professional services revenues to increase as our customer base grows and as we hire additional professional services and technical support personnel.
|
Year ended December 31,
|
||||||||||||||||||||||||
2015
|
2016
|
2017
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
License
|
$
|
100,113
|
62.3
|
%
|
$
|
131,530
|
60.7
|
%
|
$
|
147,640
|
56.4
|
%
|
||||||||||||
Maintenance and professional services
|
60,699
|
37.7
|
85,083
|
39.3
|
114,061
|
43.6
|
||||||||||||||||||
Total revenues
|
160,812
|
100.0
|
216,613
|
100.0
|
261,701
|
100.0
|
||||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||||||
License
|
5,088
|
3.2
|
4,726
|
2.2
|
7,911
|
3.0
|
||||||||||||||||||
Maintenance and professional services
|
17,572
|
10.9
|
25,425
|
11.7
|
33,937
|
13.0
|
||||||||||||||||||
Total cost of revenues
|
22,660
|
14.1
|
30,151
|
13.9
|
41,848
|
16.0
|
||||||||||||||||||
Gross profit
|
138,152
|
85.9
|
186,462
|
86.1
|
219,853
|
84.0
|
||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development
|
21,734
|
13.5
|
34,614
|
16.0
|
42,389
|
16.2
|
||||||||||||||||||
Sales and marketing
|
66,206
|
41.2
|
93,775
|
43.3
|
126,739
|
48.4
|
||||||||||||||||||
General and administrative
|
16,990
|
10.6
|
22,117
|
10.2
|
30,399
|
11.6
|
||||||||||||||||||
Total operating expenses
|
104,930
|
65.3
|
150,506
|
69.5
|
199,527
|
76.2
|
||||||||||||||||||
Operating income
|
33,222
|
20.6
|
35,956
|
16.6
|
20,326
|
7.8
|
||||||||||||||||||
Financial income (expenses), net
|
(1,479
|
)
|
(0.9
|
)
|
245
|
0.1
|
4,103
|
1.5
|
||||||||||||||||
Income before taxes on income
|
31,743
|
19.7
|
36,201
|
16.7
|
24,429
|
9.3
|
||||||||||||||||||
Taxes on income
|
(5,949
|
)
|
(3.7
|
)
|
(8,077
|
)
|
(3.7
|
)
|
(8,414
|
)
|
(3.2
|
)
|
||||||||||||
Net income
|
$
|
25,794
|
16.0
|
%
|
$
|
28,124
|
13.0
|
%
|
$
|
16,015
|
6.1
|
%
|
Year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
Change
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
%
|
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
License
|
$
|
131,530
|
60.7
|
%
|
$
|
147,640
|
56.4
|
%
|
$
|
16,110
|
12.2
|
%
|
||||||||||||
Maintenance and professional services
|
85,083
|
39.3
|
114,061
|
43.6
|
28,978
|
34.1
|
||||||||||||||||||
Total revenues
|
$
|
216,613
|
100.0
|
%
|
$
|
261,701
|
100.0
|
%
|
$
|
45,088
|
20.8
|
%
|
Year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
Change
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
%
|
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||||||
License
|
$
|
4,726
|
2.2
|
%
|
$
|
7,911
|
3.0
|
%
|
$
|
3,185
|
67.4
|
%
|
||||||||||||
Maintenance and professional services
|
25,425
|
11.7
|
33,937
|
13.0
|
8,512
|
33.5
|
||||||||||||||||||
Total cost of revenues
|
$
|
30,151
|
13.9
|
%
|
$
|
41,848
|
16.0
|
%
|
$
|
11,697
|
38.8
|
%
|
||||||||||||
Gross profit
|
$
|
186,462
|
86.1
|
%
|
$
|
219,853
|
84.0
|
%
|
$
|
33,391
|
17.9
|
%
|
Year ended December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
Change
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
%
|
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development
|
$
|
34,614
|
16.0
|
%
|
$
|
42,389
|
16.2
|
%
|
$
|
7,775
|
22.5
|
%
|
||||||||||||
Sales and marketing
|
93,775
|
43.3
|
126,739
|
48.4
|
32,964
|
35.2
|
||||||||||||||||||
General and administrative
|
22,117
|
10.2
|
30,399
|
11.6
|
8,282
|
37.4
|
||||||||||||||||||
Total operating expenses
|
$
|
150,506
|
69.5
|
%
|
$
|
199,527
|
76.2
|
%
|
$
|
49,021
|
32.6
|
%
|
Year ended December 31,
|
||||||||||||||||||||||||
2015
|
2016
|
Change
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
%
|
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
License
|
$
|
100,113
|
62.3
|
%
|
$
|
131,530
|
60.7
|
%
|
$
|
31,417
|
31.4
|
%
|
||||||||||||
Maintenance and professional services
|
60,699
|
37.7
|
85,083
|
39.3
|
24,384
|
40.2
|
||||||||||||||||||
Total revenues
|
$
|
160,812
|
100.0
|
%
|
$
|
216,613
|
100.0
|
%
|
$
|
55,801
|
34.7
|
%
|
Year ended December 31,
|
||||||||||||||||||||||||
2015
|
2016
|
Change
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
%
|
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||||||
License
|
$
|
5,088
|
3.2
|
%
|
$
|
4,726
|
2.2
|
%
|
$
|
(362
|
)
|
(7.1
|
)%
|
|||||||||||
Maintenance and professional services
|
17,572
|
10.9
|
25,425
|
11.7
|
7,853
|
44.7
|
||||||||||||||||||
Total cost of revenues
|
$
|
22,660
|
14.1
|
%
|
$
|
30,151
|
13.9
|
%
|
$
|
7,491
|
33.1
|
%
|
||||||||||||
Gross profit
|
$
|
138,152
|
85.9
|
%
|
$
|
186,462
|
86.1
|
%
|
$
|
48,310
|
35.0
|
%
|
Year ended December 31,
|
||||||||||||||||||||||||
2015
|
2016
|
Change
|
||||||||||||||||||||||
Amount
|
% of
Revenues |
Amount
|
% of
Revenues |
Amount
|
%
|
|||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development
|
$
|
21,734
|
13.5
|
%
|
$
|
34,614
|
16.0
|
%
|
$
|
12,880
|
59.3
|
%
|
||||||||||||
Sales and marketing
|
66,206
|
41.2
|
93,775
|
43.3
|
27,569
|
41.6
|
||||||||||||||||||
General and administrative
|
16,990
|
10.6
|
22,117
|
10.2
|
5,127
|
30.2
|
||||||||||||||||||
Total operating expenses
|
$
|
104,930
|
65.3
|
%
|
$
|
150,506
|
69.5
|
%
|
$
|
45,576
|
43.4
|
%
|
• |
Expected Term
. The expected term of options granted represents the period of time that options granted are expected to be outstanding, and is determined based on the simplified method in accordance with ASC No. 718-10-S99-1, (SAB No. 110), as adequate historical experience is not available to provide a reasonable estimate;
|
• |
Volatility.
The expected share price volatility was based on the historical equity volatility of our ordinary shares as well as comparable companies that are publicly traded;
|
• |
Risk-free Rate.
The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with a term equivalent to the contractual life of the options; and
|
• |
Dividend Yield.
We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.
|
• |
the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;
|
• |
the research and development is for the promotion or development of the company; and
|
• |
the research and development is carried out by or on behalf of the company seeking the deduction.
|
• |
deduction of the cost of purchased know-how, patents and rights to use a patent and know-how which are used for the development or promotion of the Industrial Enterprise, over an eight-year period commencing on the year in which such rights were first exercised;
|
• |
under limited conditions, an election to file consolidated tax returns together with Israeli Industrial Companies controlled by it; and
|
• |
expenses related to a public offering are deductible in equal amounts over three years commencing on the year of offering.
|
B. |
Liquidity and Capital Resources
|
Year Ended December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
($ in thousands)
|
||||||||||||
Net cash provided by operating activities
|
$
|
59,160
|
$
|
56,310
|
$
|
80,737
|
||||||
Net cash used in investing activities
|
(7,012
|
)
|
(121,861
|
)
|
(95,057
|
)
|
||||||
Net cash provided by financing activities
|
58,207
|
3,969
|
2,624
|
C. |
Research and Development, Patents and Licenses, etc.
|
D. |
Trend Information
|
E. |
Off-Balance Sheet Arrangements
|
Total
|
2018
|
2019
|
2020
|
2021
|
2022
|
|||||||||||||||||||
Operating lease obligations(1)
|
$
|
17,814
|
$
|
5,646
|
$
|
5,494
|
$
|
4,299
|
$
|
1,437
|
$
|
938
|
||||||||||||
Uncertain tax obligations(2)
|
1,119
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Severance pay(3)
|
5,712
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
24,645
|
$
|
5,646
|
$
|
5,494
|
$
|
4,299
|
$
|
1,437
|
$
|
938
|
(1) |
Operating lease obligations consist of our contractual rental expenses under operating leases of facilities and certain motor vehicles.
|
(2) |
Consists of accruals for certain income tax positions under ASC 740 that are paid upon settlement, and for which we are unable to reasonably estimate the ultimate amount and timing of settlement. See Note 11(l) to our consolidated financial statements included elsewhere in this annual report for further information regarding our liability under ASC 740. Payment of these obligations would result from settlements with tax authorities. Due to the difficulty in determining the timing of resolution of audits, these obligations are only presented in their total amount.
|
(3) |
Severance pay relates to accrued severance obligations to our Israeli employees as required under Israeli labor laws. These obligations are payable only upon the termination, retirement or death of the respective employee and may be reduced if the employee’s termination is voluntary. These obligations are partially funded through accounts maintained with financial institutions and recognized as an asset on our balance sheet. As of December 31, 2017, $2.0 million is unfunded. See Note 2(l) to our consolidated financial statement included elsewhere in this report for further information.
|
A. |
Directors and Senior Management
|
Name
|
Age
|
Position
|
||
Executive Officers
|
||||
Ehud (Udi) Mokady
|
49
|
Chairman of the Board and Chief Executive Officer and Founder
|
||
Joshua Siegel
|
54
|
Chief Financial Officer
|
||
Chen Bitan
|
48
|
General Manager, EMEA, Asia Pacific and Japan
|
||
Ronen (Ron) Zoran
|
43
|
Chief Revenue Officer
|
||
Roy Adar
|
46
|
Senior Vice President, Product Management
|
||
Donna Rahav
|
39
|
General Counsel, Corporate Secretary and Compliance Officer
|
||
Directors
|
||||
Gadi Tirosh(1)(3)(4)
|
51
|
Lead Independent Director
|
||
Ron Gutler(1)(2)(3)(4)
|
60
|
Director
|
||
Kim Perdikou(1)(2)(3)(4)
|
60
|
Director
|
||
David Schaeffer(4)
|
61
|
Director
|
||
Amnon Shoshani(2)(4)
|
54
|
Director
|
(1) |
Member of our compensation committee.
|
(2) |
Member of our audit committee.
|
(3) |
Member of our nominating and governance committee.
|
(4) |
Independent director under the rules of the NASDAQ Stock Market.
|
B. |
Compensation
|
Information Regarding the Covered Executive(1)
|
||||||||||||||||
Name and Principal Position(2)
|
Base
Salary |
Benefits and
Perquisites (3) |
Variable
Compensation (4) |
Equity-Based
Compensation (5) |
||||||||||||
Ehud (Udi) Mokady, Chairman of the Board & CEO
|
$
|
375,000
|
$
|
119,354
|
$
|
304,187
|
$
|
3,669,105
|
||||||||
Joshua Siegel, Chief Financial Officer
|
319,246
|
110,167
|
165,962
|
1,555,708
|
||||||||||||
Ronen (Ron) Zoran, Chief Revenue Officer,
|
272,917
|
59,699
|
291,500
|
867,465
|
||||||||||||
Chen Bitan, General Manager, EMEA, Asia Pacific and Japan
|
259,139
|
83,380
|
110,586
|
647,587
|
||||||||||||
Roy Adar, Senior Vice President, Product Management
|
207,088
|
98,653
|
93,922
|
541,650
|
(1) |
In accordance with Israeli law, all amounts reported in the table are in terms of cost to our company, as recorded in our financial statements for the year ended December 31, 2017.
|
(2) |
All current executive officers listed in the table are full-time employees. Cash compensation amounts denominated in currencies other than the U.S. dollar were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2017.
|
(3) |
Amounts reported in this column include benefits and perquisites, including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurances (such as life, disability and accident insurances), convalescence pay, payments for social security, tax gross-up payments and other benefits and perquisites consistent with our guidelines, regardless of whether such amounts have actually been paid to the executive.
|
(4) |
Amounts reported in this column refer to Variable Compensation such as commission, incentive and bonus payments as recorded in our financial statements for the year ended December 31, 2017.
|
(5) |
Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2017 with respect to equity-based compensation, reflecting also equity awards made in previous years which have vested during the current year. Assumptions and key variables used in the calculation of such amounts are described in paragraph c of Note 10 to our audited consolidated financial statements, which are included in this annual report.
|
• |
providing leadership to the Board if circumstances arise in which the role of the Chairman may be, or may be perceived to be, in conflict, and responding to any reported conflicts of interest, or potential conflicts of interest, arising for any director;
|
• |
presiding as chairman of the meeting at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent members of the Board;
|
• |
serving as liaison between the Chairman of the Board and the independent members of the Board;
|
• |
approving meeting agendas for the Board;
|
• |
approving information sent to the Board;
|
• |
approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;
|
• |
having the authority to call meetings of the independent members of the Board of Directors;
|
• |
if requested by a major shareholder, ensuring that he or she is available for consultation and direct communication; and
|
• |
performing such other duties as the Board may from time to time delegate to assist the Board in the fulfillment of its duties.
|
• |
overseeing of our accounting and financial reporting process and the audits of our financial statements;
|
• |
retaining and terminating our independent registered public accounting firm subject to the approval of our board of directors and, in the case of retention, of our shareholders and recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors and related fees and terms;
|
• |
establishing systems of internal controls over our financial reporting, including communication and implementation thereof and the assessment of the internal controls in accordance with the Sarbanes-Oxley Act, and any attestation by the independent registered public accounting firm;
|
• |
determining whether there are deficiencies in the business management practices of our company, including in consultation with our internal auditor or the independent registered public accounting firm, and making recommendations to the board of directors to improve such practices;
|
• |
determining whether to approve certain related party transactions (see “Item 6.C. Board Practices —Approval of Related Party Transactions under Israeli Law”);
|
• |
recommending to the board of directors the retention and termination of our internal auditor, and determining the internal auditor's fees and other terms of engagement, in accordance with the Companies Law;
|
• |
approving the working plan proposed by the internal auditor and reviewing and discussion the work of the internal auditor on a quarterly basis;
|
• |
establishing procedures for the handling of employees’ complaints as to the deficiencies in the management of our business and the protection to be provided to such employees; and
|
• |
performing such other duties consistent with the audit committee charter, our governing documents, stock exchange rules and applicable law that may be requested by the board of directors from time to time, including discussing guidelines and policies to govern the process by which the Company undertakes risk assessment and management in sensitive areas.
|
• |
recommending to the board of directors for its approval a compensation policy and subsequently reviewing it from time to time, assessing its implementation and recommending periodic updates, whether a new compensation policy should be adopted or an existing compensation policy should continue in effect;
|
• |
reviewing, evaluating and making recommendations regarding the terms of office, compensation and benefits for our office holders, including the non-employee directors, taking into account our compensation policy;
|
• |
exempting certain compensation arrangements from the requirement to obtain shareholder approval under the Companies Law (including with respect to the Chief Executive Officer); and
|
• |
reviewing and the granting of equity-based awards pursuant to our equity incentive plans to the extent such authority is delegated to the compensation committee by our board of directors and the reserving of additional shares for issuance thereunder.
|
• |
overseeing and assisting our board of directors in reviewing and recommending nominees for election as directors and as members of the committees of the board of directors;
|
• |
establishing procedures for, and administering the performance of the members of our board and its committees;
|
• |
evaluating and making recommendations to our board of directors regarding the termination of membership of directors;
|
• |
reviewing, evaluating and making recommendations regarding management succession and development;
|
• |
reviewing and making recommendations to our board of directors regarding board member qualifications, composition and structure and the nature and duties of the committees and qualifications of committee members; and
|
• |
establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our company.
|
• |
a person (or a relative of a person) who holds more than 5% of the company’s outstanding shares or voting rights;
|
• |
a person (or a relative of a person) who has the power to appoint a director or the general manager of the company;
|
• |
an office holder (including a director) of the company (or a relative thereof); or
|
• |
a member of the company’s independent accounting firm, or anyone on his or her behalf.
|
• |
information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and
|
• |
all other important information pertaining to any such action.
|
• |
refrain from any conflict of interest between the performance of his or her duties to the company and his or her duties or personal affairs;
|
• |
refrain from any action which competes with the company’s business;
|
• |
refrain from exploiting any business opportunity of the company in order to receive a personal gain for himself or herself or others; and
|
• |
disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.
|
• |
a transaction other than in the ordinary course of business;
|
• |
a transaction that is not on market terms; or
|
• |
a transaction that may have a material impact on a company’s profitability, assets or liabilities.
|
• |
an amendment to the company’s articles of association;
|
• |
an increase of the company’s authorized share capital;
|
• |
a merger; or
|
• |
the approval of related party transactions and acts of office holders that require shareholder approval.
|
• |
a monetary liability incurred by or imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such undertaking must be limited to certain events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the foreseen events and described above amount or criteria;
|
• |
reasonable litigation expenses, including reasonable attorneys’ fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (2) in connection with a monetary sanction or liability imposed on him or her in favor of an injured party in certain Administrative proceedings;
|
• |
expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees; and
|
• |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third party, or in connection with criminal proceedings in which the office holder was acquitted, or as a result of a conviction for an offense that does not require proof of criminal intent.
|
• |
a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder;
|
• |
a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;
|
• |
a monetary liability imposed on the office holder in favor of a third party;
|
• |
a monetary liability imposed on the office holder in favor of an injured party in certain Administrative proceedings; and
|
• |
expenses incurred by an office holder in connection with certain Administrative proceedings, including reasonable litigation expenses and reasonable attorneys’ fees.
|
• |
a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
|
• |
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
|
• |
an act or omission committed with intent to derive illegal personal benefit; or
|
• |
a civil or criminal fine or forfeit levied against the office holder.
|
As of December 31,
|
||||||||||||
Department
|
2015
|
2016
|
2017
|
|||||||||
Sales and marketing
|
294
|
377
|
491
|
|||||||||
Research and development
|
176
|
205
|
250
|
|||||||||
Services and support
|
118
|
166
|
188
|
|||||||||
General and administrative
|
56
|
75
|
86
|
|||||||||
Total
|
644
|
823
|
1,015
|
• |
each person or entity known by us to own beneficially 5% or more of our outstanding shares;
|
• |
each of our directors and executive officers individually; and
|
• |
all of our executive officers and directors as a group.
|
Shares Beneficially Owned
|
||||||||
Name of Beneficial Owner
|
Number
|
%
|
||||||
Principal Shareholders
|
||||||||
Entities affiliated with Eminence Capital, LP (1)
|
3,352,576
|
9.42
|
%
|
|||||
Matrix Capital Management Company, LLC (2)
|
2,130,500
|
5.99
|
%
|
|||||
Executive Officers and Directors
|
||||||||
Ehud (Udi) Mokady(3)
|
647,923
|
1.82
|
%
|
|||||
Joshua Siegel
|
*
|
*
|
||||||
Chen Bitan
|
*
|
*
|
||||||
Ronen (Ron) Zoran
|
*
|
*
|
||||||
Roy Adar
|
*
|
*
|
||||||
Donna Rahav
|
*
|
*
|
||||||
Gadi Tirosh
|
*
|
*
|
||||||
Ron Gutler
|
*
|
*
|
||||||
Kim Perdikou
|
*
|
*
|
||||||
David Schaeffer
|
*
|
*
|
||||||
Amnon Shoshani
|
*
|
**
|
|
|||||
All executive officers and directors as a group (11 persons)
|
1,401,493
|
3.94
|
%
|
(1) |
Based on a Schedule 13G/A filed on February 14, 2018 by Eminence Capital LP (“Eminence Capital”), Eminence GP, LLC (“Eminence GP”) and Ricky Sandler, shares beneficially owned consist of 3,352,576 ordinary shares held for the accounts of various funds affiliated with Eminence LP, namely, Eminence Partners, L.P. (“Eminence I”). Eminence Partners II, L.P. (“Eminence II”), Eminence Eaglewood Master, L.P. (“Eminence Eaglewood”), Eminence Partners Long, L.P. (together with Eminence I, Eminence II and Eminence Eaglewood, the “Partnerships”), Eminence Fund Master, Ltd. (“Eminence Offshore Master Fund”), Eminence Fund Leveraged Master, Ltd. (together with Eminence Offshore Master Fund, the “Master Funds”), and Eminence Fund Long, Ltd. (“Eminence Offshore Long,” and together with the Partnerships and Master Funds, the “Eminence Funds”) and a separately managed account (the “SMA”). Eminence Capital serves as the management company to the Eminence Funds with respect to the ordinary shares directly owned by the Eminence Funds and the investment adviser to the SMA with respect to the ordinary shares directly owned by the SMA. Eminence Capital may be deemed to have voting and dispositive power over the 3,352,576 shares held for the accounts of the Eminence Funds and the SMA. Eminence GP serves as general partner or manager with respect to the ordinary shares directly owned by the Partnerships and Master Funds and may be deemed to have voting and dispositive power over the 2,547,327 shares held for the accounts of the Partnerships and Master Funds. Mr. Sandler is the chief executive officer of Eminence Capital and the managing member of Eminence GP and may be deemed to have voting and dispositive power with respect to the 3,352,576 ordinary shares directly owned by the Eminence Funds and the SMA, as applicable. The address of the principal business and principal office of Eminence GP and Eminence Capital is 65 East 55th Street, 25th Floor, New York, NY 10022. The business address of Mr. Sandler is 65 East 55th Street, 25th Floor, New York, NY 10022.
|
(2) |
Based on a Schedule 13F-HR filed by Matrix Capital Management Company, LP on February 14, 2018, represents 2,130,500 ordinary shares over which Matrix has sole investment discretion. The address of Matrix Capital Management Company, LP is 100 Winter Street, c/o Matrix Capital Management, Waltham, MA 02451.
|
(3) |
Mr. Mokady’s shares include 3,000 shares held in trust for family members over which Mr. Mokady is the beneficial owner.
|
Low
|
High
|
|||||||
Annual:
|
||||||||
2018 (through February 28, 2018)
|
$
|
40.63
|
$
|
50.11
|
||||
2017
|
$
|
39.34
|
$
|
55.65
|
||||
2016
|
31.50
|
59.28
|
||||||
2015
|
33.00
|
76.35
|
||||||
2014 (beginning September 24, 2014)
|
||||||||
22.12
|
47.01
|
|||||||
Quarterly:
|
||||||||
First Quarter 2018 (through February 28, 2018)
|
$
|
40.63
|
$
|
50.11
|
||||
Fourth Quarter 2017
|
40.62
|
47.74
|
||||||
Third Quarter 2017
|
39.34
|
51.26
|
||||||
Second Quarter 2017
|
45.97
|
55.63
|
||||||
First Quarter 2017
|
45.61
|
55.65
|
||||||
Fourth Quarter 2016
|
44.57
|
56.25
|
||||||
Third Quarter 2016
|
47.82
|
59.28
|
||||||
Second Quarter 2016
|
37.00
|
51.06
|
||||||
First Quarter 2016
|
31.50
|
49.56
|
||||||
Most Recent Six Months:
|
||||||||
February 2018
|
41.55
|
50.11
|
||||||
January 2018
|
40.63
|
44.30
|
||||||
December 2017
|
41.10
|
47.10
|
||||||
November 2017
|
40.66
|
47.74
|
||||||
October 2017
|
40.62
|
44.19
|
||||||
September 2017
|
40.16
|
43.30
|
• |
amendments to our articles of association;
|
• |
appointment or termination of our auditors;
|
• |
approval of certain related party transactions;
|
• |
increases or reductions of our authorized share capital;
|
• |
certain merger transactions; and
|
• |
the exercise of our board of director’s powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
|
• |
banks, financial institutions or insurance companies;
|
• |
real estate investment trusts, regulated investment companies or grantor trusts;
|
• |
brokers, dealers or traders in securities, commodities or currencies;
|
• |
tax-exempt entities or organizations, including an “individual retirement account” or “Roth IRA” as defined in Section 408 or 408A of the Code, respectively;
|
• |
certain former citizens or long-term residents of the United States;
|
• |
persons that receive our shares as compensation for the performance of services;
|
• |
persons that hold our shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for United States federal income tax purposes;
|
• |
partnerships (including entities classified as partnerships for United States federal income tax purposes) or other pass-through entities, or indirect holders that hold our shares through such an entity;
|
• |
S corporations;
|
• |
holders that acquire ordinary shares as a result of holding or owning our preferred shares;
|
• |
holders whose “functional currency” is not the U.S. Dollar; or
|
• |
holders that own directly, indirectly or through attribution 10.0% or more of the voting power or value of our shares.
|
• |
a citizen or individual resident of the United States;
|
• |
a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;
|
• |
an estate the income of which is subject to United States federal income taxation regardless of its source; or
|
• |
a trust if such trust has validly elected to be treated as a United States person for United States federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust.
|
• |
at least 75% of its gross income is “passive income”; or
|
• |
at least 50% of the average quarterly value of its total gross assets (which may be measured in part by the market value of our ordinary shares, which is subject to change) is attributable to assets that produce “passive income” or are held for the production of passive income.
|
Period
|
Change in Average Exchange
Rate of the NIS Against the U.S. dollar (%) |
|||
2017
|
(6.3
|
)
|
||
2016
|
(1.1
|
)
|
||
2015
|
8.6
|
• |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
• |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
• |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
2016
|
2017
|
|||||||
(in thousands)
|
||||||||
Audit Fees
|
$
|
504
|
$
|
559
|
||||
Audit-Related Fees
|
110
|
130
|
||||||
Tax Fees
|
133
|
179
|
||||||
All Other Fees
|
-
|
7
|
||||||
Total
|
$
|
747
|
$
|
875
|
|
CyberArk Software Ltd.
|
|
|
|
|
|
|
Date: March 15, 2018
|
By:
|
/s/ Ehud Mokady
|
|
|
|
Ehud Mokady
|
|
|
|
Chairman of the Board &
Chief Executive Officer
|
Page
|
|
F-2 – F-3
|
|
F-4 – F-5
|
|
F-6
|
|
F-7
|
|
F-8 - F-10
|
|
F-11 – F-44
|
|
Kost Forer Gabbay & Kasierer
144A Menachem Begin Road, Building A
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
|
Kost Forer Gabbay & Kasierer
144A Menachem Begin Road, Building A
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
172,957
|
$
|
161,261
|
||||
Short-term bank deposits
|
86,829
|
107,647
|
||||||
Marketable securities
|
15,246
|
34,025
|
||||||
Trade receivables (net of allowance for doubtful debt accounts of $23 and $113 at December 31, 2016 and 2017, respectively)
|
33,330
|
45,315
|
||||||
Prepaid expenses and other current assets
|
4,804
|
7,407
|
||||||
Total
current assets
|
313,166
|
355,655
|
||||||
LONG-TERM ASSETS:
|
||||||||
Property and equipment, net
|
4,760
|
9,230
|
||||||
Intangible assets, net
|
14,035
|
15,664
|
||||||
Goodwill
|
35,145
|
69,217
|
||||||
Marketable securities
|
20,443
|
27,407
|
||||||
Severance pay fund
|
3,332
|
3,692
|
||||||
Prepaid expenses and other long-term assets
|
1,761
|
2,368
|
||||||
Deferred tax assets
|
10,389
|
19,343
|
||||||
Tota
l
long-term assets
|
89,865
|
146,921
|
||||||
TOTAL ASSETS
|
$
|
403,031
|
$
|
502,576
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Revenues:
|
||||||||||||
License
|
$
|
100,113
|
$
|
131,530
|
$
|
147,640
|
||||||
Maintenance and professional services
|
60,699
|
85,083
|
114,061
|
|||||||||
160,812
|
216,613
|
261,701
|
||||||||||
Cost of revenues:
|
||||||||||||
License
|
5,088
|
4,726
|
7,911
|
|||||||||
Maintenance and professional services
|
17,572
|
25,425
|
33,937
|
|||||||||
22,660
|
30,151
|
41,848
|
||||||||||
Gross profit
|
138,152
|
186,462
|
219,853
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
21,734
|
34,614
|
42,389
|
|||||||||
Sales and marketing
|
66,206
|
93,775
|
126,739
|
|||||||||
General and administrative
|
16,990
|
22,117
|
30,399
|
|||||||||
Total
operating expenses
|
104,930
|
150,506
|
199,527
|
|||||||||
Operating income
|
33,222
|
35,956
|
20,326
|
|||||||||
Financial income (expenses), net
|
(1,479
|
)
|
245
|
4,103
|
||||||||
Income before taxes on income
|
31,743
|
36,201
|
24,429
|
|||||||||
Taxes on income
|
(5,949
|
)
|
(8,077
|
)
|
(8,414
|
)
|
||||||
Net income
|
$
|
25,794
|
$
|
28,124
|
$
|
16,015
|
||||||
Basic net income per ordinary share
|
$
|
0.80
|
$
|
0.83
|
$
|
0.46
|
||||||
Diluted net income per ordinary share
|
$
|
0.73
|
$
|
0.78
|
$
|
0.44
|
||||||
Other comprehensive income (loss)
|
||||||||||||
Change in unrealized losses on marketable securities:
|
||||||||||||
Unrealized loss arising during the year
|
-
|
(141
|
)
|
(29
|
)
|
|||||||
-
|
(141
|
)
|
(29
|
)
|
||||||||
Change in unrealized gain on cash flow hedges:
|
||||||||||||
Unrealized gain arising during the year
|
1
|
249
|
1,470
|
|||||||||
Loss (gain) reclassified into earnings
|
239
|
(190
|
)
|
(1,159
|
)
|
|||||||
240
|
59
|
311
|
||||||||||
Other comprehensive income (loss), net of taxes of $(46), $16 and $(41) for the years 2015, 2016 and 2017, respectively
|
240
|
(82
|
)
|
282
|
||||||||
Total comprehensive income
|
$
|
26,034
|
$
|
28,042
|
$
|
16,297
|
Ordinary shares
|
Additional paid-in
capital
|
Accumulated other comprehensive income (loss)
|
Retained
earnings
|
Total
shareholders'
equity
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance as of January 1, 2015
|
30,501,352
|
$
|
79
|
$
|
134,486
|
$
|
(333
|
)
|
$
|
20,776
|
$
|
155,008
|
||||||||||||
Exercise of options and vested RSU's granted to employees
|
1,888,487
|
5
|
1,819
|
-
|
-
|
1,824
|
||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
-
|
-
|
240
|
-
|
240
|
||||||||||||||||||
Share-based compensation
|
-
|
-
|
7,049
|
-
|
-
|
7,049
|
||||||||||||||||||
Issuance of ordinary shares upon public offering, net
|
900,000
|
2
|
52,573
|
-
|
-
|
52,575
|
||||||||||||||||||
Tax benefit related to share-based compensation and issuance expenses
|
-
|
-
|
4,180
|
-
|
-
|
4,180
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
25,794
|
25,794
|
||||||||||||||||||
Balance as of December 31, 2015
|
33,289,839
|
$
|
86
|
$
|
200,107
|
$
|
(93
|
)
|
$
|
46,570
|
$
|
246,670
|
Exercise of options and vested RSU's granted to employees
|
960,751
|
2
|
2,501
|
-
|
-
|
2,503
|
||||||||||||||||||
Other comprehensive loss, net of tax
|
-
|
-
|
-
|
(82
|
)
|
-
|
(82
|
)
|
||||||||||||||||
Share-based compensation
|
-
|
-
|
17,535
|
-
|
-
|
17,535
|
||||||||||||||||||
Tax benefit related to share-based compensation
|
-
|
-
|
1,466
|
-
|
-
|
1,466
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
28,124
|
28,124
|
||||||||||||||||||
Balance as of December 31, 2016
|
34,250,590
|
$
|
88
|
$
|
221,609
|
$
|
(175
|
)
|
$
|
74,694
|
$
|
296,216
|
Cumulative effect adjustment resulting from adoption of new accounting pronouncements (see Note 2y)
|
-
|
-
|
376
|
-
|
13,184
|
13,560
|
||||||||||||||||||
Exercise of options and vested RSU's granted to employees
|
1,024,298
|
3
|
2,621
|
-
|
-
|
2,624
|
||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
-
|
-
|
282
|
-
|
282
|
||||||||||||||||||
Share-based compensation
|
-
|
-
|
25,268
|
-
|
-
|
25,268
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
16,015
|
16,015
|
||||||||||||||||||
Balance as of December 31, 2017
|
35,274,888
|
$
|
91
|
$
|
249,874
|
$
|
107
|
$
|
103,893
|
$
|
353,965
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
25,794
|
$
|
28,124
|
$
|
16,015
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
2,254
|
6,488
|
7,856
|
|||||||||
Share-based compensation expense
|
7,049
|
17,535
|
25,237
|
|||||||||
Amortization of premium on marketable securities
|
-
|
275
|
382
|
|||||||||
Tax benefit related to share-based compensation
|
(3,808
|
)
|
(1,466
|
)
|
-
|
|||||||
Deferred income taxes, net
|
(4,093
|
)
|
(1,130
|
)
|
5,856
|
|||||||
Increase in trade receivables
|
(187
|
)
|
(12,920
|
)
|
(11,631
|
)
|
||||||
Increase in prepaid expenses and other current and long-term assets
|
(1,183
|
)
|
(1,485
|
)
|
(3,278
|
)
|
||||||
Increase (decrease) in trade payables
|
322
|
(177
|
)
|
(1,288
|
)
|
|||||||
Increase in short-term and long-term deferred revenues
|
21,254
|
19,117
|
31,729
|
|||||||||
Increase in employees and payroll accruals
|
5,011
|
2,610
|
6,316
|
|||||||||
Increase (decrease) in accrued expenses and other current and long-term liabilities
|
6,353
|
(927
|
)
|
3,226
|
||||||||
Increase in accrued severance pay, net
|
394
|
266
|
317
|
|||||||||
Net cash provided by operating activities
|
59,160
|
56,310
|
80,737
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Proceeds from short and long-term deposits
|
49,329
|
-
|
-
|
|||||||||
Investment in short and long-term deposits
|
(619
|
)
|
(82,940
|
)
|
(20,722
|
)
|
||||||
Investment in marketable securities
|
-
|
(40,433
|
)
|
(43,604
|
)
|
|||||||
Proceeds from maturities of marketable securities
|
-
|
4,307
|
17,355
|
|||||||||
Purchase of property and equipment
|
(2,066
|
)
|
(2,795
|
)
|
(6,757
|
)
|
||||||
Payments for business acquisitions, net of cash acquired (Schedule A)
|
(53,656
|
)
|
-
|
(41,329
|
)
|
|||||||
Net cash used in investing activities
|
(7,012
|
)
|
(121,861
|
)
|
(95,057
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Issuance of shares, net
|
52,575
|
-
|
-
|
|||||||||
Tax benefit related to share-based compensation
|
3,808
|
1,466
|
-
|
|||||||||
Proceeds from exercise of stock options
|
1,824
|
2,503
|
2,624
|
|||||||||
Net cash provided by financing activities
|
58,207
|
3,969
|
2,624
|
|||||||||
Increase (decrease) in cash and cash equivalents
|
110,355
|
(61,582
|
)
|
(11,696
|
)
|
|||||||
Cash and cash equivalents at the beginning of the year
|
124,184
|
234,539
|
172,957
|
|||||||||
Cash and cash equivalents at the end of the year
|
$
|
234,539
|
$
|
172,957
|
$
|
161,261
|
||||||
Non-cash activities:
|
||||||||||||
Purchase of property and equipment on credit
|
$
|
338
|
$
|
683
|
$
|
981
|
||||||
Supplemental disclosure of cash flow activities:
|
||||||||||||
Cash paid during the year for taxes
|
$
|
4,760
|
$
|
10,577
|
$
|
3,371
|
Year ended
December 31,
|
||||
2015
|
||||
Working capital, net (excluding ($7) of cash and cash equivalents acquired)
|
$
|
497
|
||
Property and equipment
|
124
|
|||
Other long-term assets
|
62
|
|||
Goodwill
|
20,765
|
|||
Other intangible assets
|
9,990
|
|||
Deferred revenues
|
(931
|
)
|
||
$
|
30,507
|
Year ended
December 31,
|
||||
2015
|
||||
Working capital, net (excluding $478 of cash and cash equivalents acquired)
|
$
|
(245
|
)
|
|
Property and equipment
|
340
|
|||
Other long-term assets
|
34
|
|||
Goodwill
|
13,201
|
|||
Other intangible assets
|
7,760
|
|||
Deferred tax
|
(1,009
|
)
|
||
Deferred revenues
|
(44
|
)
|
||
$
|
20,037
|
Year ended
December 31,
|
||||
2015
|
||||
Goodwill
|
$
|
1,179
|
||
Other intangible assets
|
1,933
|
|||
$
|
3,112
|
Year ended
December 31,
|
||||
2017
|
||||
Working capital, net (excluding $379 of cash and cash equivalents acquired)
|
$
|
(451
|
)
|
|
Property and equipment
|
12
|
|||
Goodwill
|
34,072
|
|||
Other intangible assets
|
6,888
|
|||
Deferred tax
|
808
|
|||
$
|
41,329
|
NOTE 1: |
GENERAL
|
a. |
CyberArk Software Ltd. (together with its subsidiaries, the
“
Company
”
) is an Israeli company that develops, markets and sells software-based security solutions and services. The Company's solutions and services enable organizations to safeguard and monitor their privileged accounts, which are those accounts within an organization that have access to the organization's high value assets and are located across its IT infrastructure. The Company's software provides customers with the ability to protect, detect, monitor and control access to privileged accounts in order to break the lifecycle of a targeted cyber attack before it can cause damage to an organization.
|
b. |
In March 2015, the Company completed a public offering in which certain shareholders sold 4,600,000 ordinary shares (
including pursuant to the underwriters option to purchase additional ordinary shares)
at a public offering price of $51.00 per share. The Company did not receive any proceeds from the sale of ordinary shares by the selling shareholders and the related offering expenses were recorded
in the statement of comprehensive income.
|
c. |
In June 2015, the Company completed an additional public offering in which the Company issued and sold 900,000 ordinary shares at a public offering price of $61.00 per share.
The total net proceeds received were $52,575 after deducting underwriting discounts of $2,196 and other offering expenses of $129. Another 4,000,000 shares were sold by certain selling shareholders. The Company did not receive any of the proceeds from the sales of shares by the selling shareholders and the related offering expenses were recorded in the statement of comprehensive income.
|
d. |
In August 2015, the Company acquired all of the share capital of Cybertinel Ltd. (“Cybertinel”) for total gross consideration of $20,515. Cybertinel, an Israeli company, specializes in cyber threat detection technology.
In September 2015, the Company acquired certain assets of Agata Ltd ( “ Agata ”) for total consideration of $3,112 . The Company accounted for the acquisition of Agata as a purchase of a business. |
NOTE 1: |
GENERAL (Cont.)
|
e. |
Unaudited pro forma results of operations:
|
Conjur:
|
December 31,
|
|||||||
2016
|
2017
|
|||||||
(Unaudited)
|
||||||||
Pro forma revenue
|
$
|
217,570
|
$
|
262,169
|
||||
Pro forma net income
|
$
|
23,705
|
$
|
13,985
|
||||
Basic net income per ordinary share
|
$
|
0.70
|
$
|
0.40
|
||||
Diluted net income per ordinary share
|
$
|
0.66
|
$
|
0.39
|
a. |
Use of estimates:
|
b. |
Principles of consolidation:
|
c. |
Financial statements in U.S. dollars:
|
d. |
Cash and cash equivalents:
|
g. |
Property and equipment:
|
%
|
||
Computers, software and related equipment
|
16 - 33
|
|
Office furniture and equipment
|
7 - 20
|
|
Leasehold improvements
|
Over the shorter of the related lease period or the life of the asset
|
h. |
Long-lived assets:
|
i. |
Business combination:
|
j. |
Goodwill and other intangible assets:
|
k. |
Derivative instruments:
|
l. |
Severance pay:
|
n. |
Revenue recognition:
|
o. |
Research and development costs:
|
p. |
Internal use software:
|
q. |
Marketing expenses:
|
r. |
Share-based compensation:
|
s. |
Income taxes:
|
t. |
Basic and diluted net income per share:
|
u. |
Comprehensive income (loss):
|
v. |
Concentration of credit risks:
|
w. |
Fair value of financial instruments:
|
Level 1 - |
Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.
|
Level 2 - |
Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.
|
Level 3 - |
Inputs are unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.
|
x. |
Legal contingencies:
|
y. |
Recently adopted accounting pronouncements:
|
z. |
Recently issued accounting standards:
|
NOTE 3: |
MARKETABLE SECURITIES
|
December 31, 2016
|
||||||||||||||||
Amortized cost
|
Gross unrealized losses
|
Gross unrealized gains
|
Fair value
|
|||||||||||||
Corporate debentures
|
$
|
32,734
|
$
|
(154
|
)
|
$
|
-
|
$
|
32,580
|
|||||||
U.S. Agencies debentures
|
2,457
|
(14
|
)
|
-
|
2,443
|
|||||||||||
Government treasuries
|
666
|
-
|
-
|
666
|
||||||||||||
Total
|
$
|
35,857
|
$
|
(168
|
)
|
$
|
-
|
$
|
35,689
|
NOTE 3: |
MARKETABLE SECURITIES (Cont.)
|
December 31, 2017
|
||||||||||||||||
Amortized cost
|
Gross
unrealized
losses
*)
|
Gross
unrealized
gains
|
Fair value
|
|||||||||||||
Corporate debentures
|
$
|
58,321
|
$
|
(175
|
)
|
$
|
6
|
$
|
58,152
|
|||||||
U.S. Agencies debentures
|
3,311
|
(31
|
)
|
-
|
3,280
|
|||||||||||
Total
|
$
|
61,632
|
$
|
(206
|
)
|
$
|
6
|
$
|
61,432
|
December 31,
|
||||||||||||||||
2016
|
2017
|
|||||||||||||||
Amortized cost
|
Fair value
|
Amortized cost
|
Fair value
|
|||||||||||||
Due within one year
|
$
|
15,269
|
$
|
15,246
|
$
|
34,082
|
$
|
34,025
|
||||||||
Due between one and four years
|
20,588
|
20,443
|
27,550
|
27,407
|
||||||||||||
$
|
35,857
|
$
|
35,689
|
$
|
61,632
|
$
|
61,432
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
Prepaid expenses
|
$
|
3,169
|
$
|
4,089
|
||||
Hedging transaction assets
|
379
|
315
|
||||||
Government authorities
|
947
|
2,533
|
||||||
Other current assets
|
309
|
470
|
||||||
$
|
4,804
|
$
|
7,407
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
Cost:
|
||||||||
Computers, software and related equipment *)
|
$
|
5,792
|
$
|
9,149
|
||||
Leasehold improvements
|
1,621
|
3,200
|
||||||
Office furniture and equipment
|
1,353
|
2,167
|
||||||
8,766
|
14,516
|
|||||||
Less - accumulated depreciation
|
4,006
|
5,286
|
||||||
Depreciated cost
|
$
|
4,760
|
$
|
9,230
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
Balance as of beginning of the year
|
$
|
35,145
|
$
|
35,145
|
||||
Goodwill acquired
|
-
|
34,072
|
||||||
Closing balance
|
$
|
35,145
|
$
|
69,217
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
Original amount:
|
||||||||
Technology
|
$
|
14,073
|
$
|
20,717
|
||||
Customer relationships
|
5,120
|
5,120
|
||||||
Other
|
490
|
664
|
||||||
19,683
|
26,501
|
|||||||
Less - accumulated amortization
|
5,648
|
10,837
|
||||||
Intangible assets, net
|
$
|
14,035
|
$
|
15,664
|
2018
|
$ |
5,486
|
||
2019
|
4,505
|
|||
2020
|
2,737
|
|||
2021
|
1,655
|
|||
2022
|
723
|
|||
Thereafter
|
558
|
|||
$
|
15,664
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
Government authorities
|
$
|
3,722
|
$
|
5,433
|
||||
Accrued expenses
|
2,602
|
2,974
|
||||||
Unrecognized tax benefits
|
474
|
1,119
|
||||||
Hedging transaction liabilities
|
78
|
683
|
||||||
$
|
6,876
|
$
|
10,209
|
NOTE 8: |
COMMITMENTS AND CONTINGENT LIABILITIES
|
a. |
Lease commitments:
|
Lease of premises
|
Lease of
motor vehicles
|
|||||||
2018
|
$
|
5,271
|
$
|
375
|
||||
2019
|
5,238
|
256
|
||||||
2020
|
4,220
|
79
|
||||||
2021
|
1,437
|
-
|
||||||
2022
|
938
|
-
|
||||||
$
|
17,104
|
$
|
710
|
b. |
Pledges and bank guarantees:
|
NOTE 8: |
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
NOTE 9: |
FAIR VALUE MEASUREMENTS
|
December 31,
|
||||||||||||||||||||||||
2016
|
2017
|
|||||||||||||||||||||||
Level 1
|
Level 2
|
Total
|
Level 1
|
Level 2
|
Total
|
|||||||||||||||||||
Cash equivalents:
|
||||||||||||||||||||||||
Money market funds
|
$
|
1,906
|
$
|
-
|
$
|
1,906
|
$
|
1,749
|
$
|
-
|
$
|
1,749
|
||||||||||||
Marketable securities:
|
||||||||||||||||||||||||
Corporate debentures
|
-
|
32,580
|
32,580
|
-
|
58
,
152
|
58
,
152
|
||||||||||||||||||
U.S. Agencies debentures
|
-
|
2,443
|
2,443
|
-
|
3
,
280
|
3
,
280
|
||||||||||||||||||
Government treasuries
|
-
|
666
|
666
|
-
|
-
|
-
|
||||||||||||||||||
Total assets measured at fair value
|
$
|
1,906
|
$
|
35,689
|
$
|
37,595
|
$
|
1,749
|
$
|
61
,
432
|
$
|
63
,
181
|
NOTE 10: |
SHAREHOLDERS' EQUITY
|
a. |
Composition of share capital of the Company:
|
December 31, | ||||||||||||||||
2016 | 2017 | |||||||||||||||
Authorized
|
Issued and outstanding
|
Authorized
|
Issued and outstanding
|
|||||||||||||
Number of shares
|
||||||||||||||||
Ordinary shares of NIS 0.01 par value each
|
250,000,000
|
34,250,590
|
250,000,000
|
35,274,888
|
b. |
Ordinary shares:
|
NOTE 10: |
SHAREHOLDERS' EQUITY (Cont.)
|
c. |
Share-based compensation:
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Cost of revenues
|
$
|
499
|
$
|
1,386
|
$
|
2,289
|
||||||
Research and development
|
1
,507
|
4,660
|
6,110
|
|||||||||
Sales and marketing
|
2,214
|
5,765
|
8,642
|
|||||||||
General and administrative
|
2,829
|
5,724
|
8,196
|
|||||||||
Total share-based compensation expense
|
$
|
7,049
|
$
|
17,535
|
$
|
25,237
|
NOTE 10: |
SHAREHOLDERS' EQUITY (Cont.)
|
d. |
Options granted to employees:
|
Amount
of
options
|
Weighted
average
exercise
price
|
Weighted average remaining contractual term
(in years)
|
Aggregate
intrinsic value
|
|||||||||||||
Balance as of December 31, 2016
|
3,038,357
|
$
|
22.58
|
6.70
|
$
|
77,346
|
||||||||||
Granted
|
427,650
|
$
|
48.91
|
|||||||||||||
Exercised
|
(753,711
|
)
|
$
|
3.48
|
||||||||||||
Forfeited
|
(171,878
|
)
|
$
|
45.23
|
||||||||||||
Balance as of December 31, 2017
|
2,540,418
|
$
|
31.15
|
6.99
|
$
|
39,659
|
||||||||||
Exercisable as of December 31, 2017
|
1,694,564
|
$
|
22.54
|
6.15
|
$
|
39,118
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Expected volatility
|
45
|
%
|
45
|
%
|
45%-48
|
%
|
||||||
Expected dividends
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||
Expected term (in years)
|
5.78-6.12
|
5.25-6.10
|
5.25-6.25
|
|||||||||
Risk free rate
|
1.37%-1.68
|
%
|
1.30%- 1.70
|
%
|
1.77%- 2.05
|
%
|
NOTE 10: |
SHAREHOLDERS' EQUITY (Cont.)
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Weighted-average grant date fair value of options granted
|
$
|
24.56
|
$
|
19.16
|
$
|
21.81
|
||||||
Total intrinsic value of the options exercised
|
$
|
110,191
|
$
|
37,618
|
$
|
33,614
|
Exercise price
|
Options outstanding as of
December 31, 2017
|
Weighted average remaining
contractual term
|
Options exercisable as of December 31,
2017
|
Weighted average remaining
contractual term
|
||||||||||||||
(years)
|
(years)
|
|||||||||||||||||
$
|
0.20 – 2.21
|
669,752
|
4.42
|
669,752
|
4.42
|
|||||||||||||
$
|
6.47 – 14.00
|
376,103
|
6.20
|
372,779
|
6.20
|
|||||||||||||
$
|
37.44 – 44.37
|
270,269
|
8.42
|
97,108
|
8.06
|
|||||||||||||
$
|
45.58 – 51.86
|
744,621
|
8.68
|
258,483
|
8.31
|
|||||||||||||
$
|
52.48 – 64.93
|
479,673
|
7.75
|
296,442
|
7.51
|
|||||||||||||
2,540,418
|
6.99
|
1,694,564
|
6.15
|
e. |
A summary of RSUs and PSUs activity for the year ended December 31, 2017 is as follows:
|
Amount
of
RSU's and PSU’s
|
Weighted
average
grant date fair value
|
|||||||
Unvested as of December 31, 2016
|
729,705
|
$
|
48.14
|
|||||
Granted
|
776,876
|
$
|
47.67
|
|||||
Vested
|
(270,587
|
)
|
$
|
49.25
|
||||
Forfeited
|
(125,095
|
)
|
$
|
47.33
|
||||
Unvested as of December 31, 2017
|
1,110,899
|
$
|
47.63
|
b. |
Income before taxes on income is comprised as follows:
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Domestic
|
$
|
28,285
|
$
|
32,077
|
$
|
13,937
|
||||||
Foreign
|
3,458
|
4,124
|
10,492
|
|||||||||
$
|
31,743
|
$
|
36,201
|
$
|
24,429
|
c. |
Deferred income taxes:
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
Deferred tax assets:
|
||||||||
Carry-forwards losses and credits
|
$
|
1,956
|
$
|
11,703
|
||||
Capital losses carry-forwards
|
50
|
90
|
||||||
Research and development expenses
|
4,119
|
1,448
|
||||||
Deferred revenues
|
4,222
|
4,316
|
||||||
Issuance expenses
|
124
|
-
|
||||||
Share-based compensation
|
2,979
|
4,347
|
||||||
Accruals and other
|
1,612
|
1,183
|
||||||
Deferred tax assets before valuation allowance
|
15,062
|
23,087
|
||||||
Less: Valuation allowance
|
50
|
90
|
||||||
Net deferred tax asset
|
$
|
15,012
|
$
|
22,997
|
||||
Deferred tax liabilities:
|
||||||||
Intangible assets
|
$
|
3,961
|
$
|
3,096
|
||||
Property and equipment and other
|
662
|
558
|
||||||
Deferred tax liabilities
|
$
|
4,623
|
$
|
3,654
|
d. |
Income taxes are comprised as follows:
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Current
|
$
|
10,042
|
$
|
9,207
|
$
|
2,558
|
||||||
Deferred
|
(4,093
|
)
|
(1,130
|
)
|
5,856
|
|||||||
$
|
5,949
|
$
|
8,077
|
$
|
8,414
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Domestic
|
$
|
5,208
|
$
|
4,906
|
$
|
3,033
|
||||||
Foreign
|
741
|
3,171
|
5,381
|
|||||||||
$
|
5,949
|
$
|
8,077
|
$
|
8,414
|
e. |
A reconciliation of the Company's theoretical income tax expense to actual income tax expense is as follows:
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Income before income taxes
|
$
|
31,743
|
$
|
36,201
|
$
|
24,429
|
||||||
Statutory tax rate
|
26.5
|
%
|
25.0
|
%
|
24.0
|
%
|
||||||
Theoretical income tax expense
|
8,412
|
9,050
|
5,863
|
|||||||||
Utilization of tax losses and deferred taxes for which valuation allowance was provided, net
|
(771
|
)
|
(72
|
)
|
(5,050
|
)
|
||||||
Deferred taxes on losses for which valuation allowance was provided, net
|
(1,713
|
)
|
-
|
-
|
||||||||
Non-deductible expenses
|
2,295
|
2,569
|
2,081
|
|||||||||
Unrecognized tax benefits
|
8
|
81
|
645
|
|||||||||
Foreign and preferred enterprise tax rates differential
|
(2,303
|
)
|
(3,468
|
)
|
(1,792
|
)
|
||||||
Impact of Tax Cuts and Jobs Act of 2017
|
-
|
-
|
6,492
|
|||||||||
Other
|
21
|
(83
|
)
|
175
|
||||||||
Income tax expense
|
$
|
5,949
|
$
|
8,077
|
$
|
8,414
|
f. |
Net operating loss carry-forwards:
|
g. |
Tax benefits under the Law for the Encouragement of Capital Investments, 1959:
|
i. |
Tax Benefits for Research and Development
|
k. |
Tax assessments:
|
l. |
Unrecognized tax benefits:
|
Year ended
December 31,
|
||||||||
2016
|
2017
|
|||||||
Opening balance
|
$
|
362
|
$
|
474
|
||||
Increase related to prior year tax positions
|
53
|
348
|
||||||
Increase related to current year tax positions
|
59
|
297
|
||||||
Closing balance
|
$
|
474
|
$
|
1,119
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Bank charges
|
$
|
(86
|
)
|
$
|
(144
|
)
|
$
|
(158
|
)
|
|||
Exchange rate income (losses), net
|
(1,723
|
)
|
(969
|
)
|
1,735
|
|||||||
(1,809
|
)
|
(1,113
|
)
|
1,577
|
||||||||
Interest income
|
330
|
1,358
|
2,526
|
|||||||||
Financial income (expenses), net
|
$
|
(1,479
|
)
|
$
|
245
|
$
|
4,103
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Numerator:
|
||||||||||||
Net income available to shareholders of ordinary shares
|
$
|
25,794
|
$
|
28,124
|
$
|
16,015
|
||||||
Denominator:
|
||||||||||||
Shares used in computing net income per ordinary shares, basic
|
32,124,772
|
33,741,359
|
34,824,312
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
Numerator:
|
||||||||||||
Net income available to shareholders of ordinary shares
|
$
|
25,794
|
$
|
28,124
|
$
|
16,015
|
||||||
Denominator:
|
||||||||||||
Shares used in computing net income per ordinary shares, diluted
|
35,322,716
|
35,838,863
|
36,175,824
|
a. |
The Company applies ASC Topic 280,
“
Segment Reporting
”
(
“
ASC No. 280
”
). The Company operates in one reportable segment.
|
b. |
The following tables present total revenues for the years ended December 31, 2015, 2016 and 2017 and long-lived assets as of December 31, 2016 and 2017:
|
Year ended
December 31,
|
||||||||||||
2015
|
2016
|
2017
|
||||||||||
United States
|
$
|
92,034
|
$
|
125,749
|
$
|
145,453
|
||||||
Israel
|
5,203
|
6,818
|
7,282
|
|||||||||
United Kingdom
|
16,746
|
21,699
|
24,837
|
|||||||||
Europe, the Middle East and Africa *)
|
28,695
|
39,577
|
49,659
|
|||||||||
Other
|
18,134
|
22,770
|
34,470
|
|||||||||
$
|
160,812
|
$
|
216,613
|
$
|
261,701
|
December 31,
|
||||||||
2016
|
2017
|
|||||||
United States
|
$
|
1,421
|
$
|
1,252
|
||||
Israel
|
3,014
|
7,493
|
||||||
United Kingdom
|
90
|
233
|
||||||
Europe, the Middle East and Africa *)
|
24
|
39
|
||||||
Other
|
211
|
213
|
||||||
$
|
4
,
760
|
$
|
9,230
|
Exhibit No.
|
Description
|
|
1. |
D
EFINITIONS
; I
NTERPRETATION
.
|
(a) |
In these Articles, the following terms (whether or not capitalized) shall bear the meanings set forth opposite to them respectively, unless inconsistent with the subject or context.
|
“Articles”
|
shall mean these Articles of Association, as amended from time to time.
|
“Board of Directors”
|
shall mean the Board of Directors of the Company.
|
“Chairman”
|
shall mean the Chairman of the Board of Directors, or the Chairman of the General Meeting, as the context provides;
|
“Company”
|
shall mean
CYBERARK SOFTWARE LTD
.
|
“Companies Law”
|
shall mean the Israeli Companies Law, 5759-1999. The Companies Law shall include reference to the Companies Ordinance (New Version), 5743-1983, of the State of Israel, to the extent in effect according to the provisions thereof.
|
“Director(s)”
|
shall mean the member(s) of the Board of Directors holding office at any given time, including alternate directors. “External Director(s)” shall mean as defined in the Companies Law.
|
“General Meeting”
|
shall mean an Annual General Meeting or Special General Meeting of the Shareholders, as the case may be.
|
“NIS”
|
shall mean New Israeli Shekels.
|
“Office”
|
shall mean the registered office of the Company at any given time.
|
“Office Holder” or “Officer”
|
shall mean as defined in the Companies Law. |
“RTP Law”
|
shall mean the Israeli Restrictive Trade Practices Law, 5758- 1988.
|
“Securities Law”
|
shall mean the Israeli Securities Law 5728-1968.
|
“Shareholder(s)”
|
shall mean the shareholder(s) of the Company, at any given time.
|
“in writing” or “writing”
|
shall mean written, printed, photocopied, photographic, typed, sent via email, facsimile or produced by any visible substitute for writing, or partly one and partly another, and signed shall be construed accordingly.
|
(b) |
Unless otherwise defined in these Articles or required by the context, terms used herein shall have the meaning provided therefor under the Companies Law.
|
(c) |
Unless the context shall otherwise require: words in the singular shall also include the plural, and vice versa; any pronoun shall include the corresponding masculine, feminine and neuter forms; the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; the words “herein”, “hereof” and “hereunder” and words of similar import refer to these Articles in its entirety and not to any part hereof; all references herein to Articles, Sections or clauses shall be deemed references to Articles, Sections or clauses of these Articles; any references to any agreement or other instrument or law, statute or regulation are to it as amended, supplemented or restated, from time to time (and, in the case of any law, to any successor provisions or re-enactment or modification thereof being in force at the time); any reference to “law” shall include any supranational, national, federal, state, local, or foreign statute or law and all rules and regulations promulgated thereunder (including, any rules, regulations or forms prescribed by any governmental authority or securities exchange commission or authority, if and to the extent applicable); any reference to a “day” or a number of “days” (without any explicit reference otherwise, such as to business days) shall be interpreted as a reference to a calendar day or number of calendar days; reference to month or year means according to the Gregorian calendar; any reference to a “company”, “corporate body” or “entity” shall include a, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof, and reference to a “person” shall mean any of the foregoing or an individual.
|
(d) |
The captions in these Articles are for convenience only and shall not be deemed a part hereof or affect the construction or interpretation of any provision hereof.
|
2. |
The Company is a limited liability company and therefore each shareholder’s obligations to the Company shall be limited to the payment of the nominal value of the shares held by such shareholder, subject to the provisions of the Companies Law.
|
3. |
P
UBLIC
C
OMPANY
; O
BJECTIVES
.
|
(a) |
The Company is a Public Company as such term is defined in and as long as it qualifies under the Companies Law.
|
(b) |
The Company's objectives are to carry on any business, and do any act, which is not prohibited by law.
|
4. |
D
ONATIONS
.
|
5. |
A
UTHORIZED
S
HARE
C
APITAL
.
|
(a) |
The share capital of the Company shall consist of NIS 2,500,000 divided into 250,000,000 Ordinary Shares, of a nominal value of NIS 0.01 each (the “
Shares
”).
|
(b) |
The Shares shall rank
pari passu
in all respects.
|
6. |
I
NCREASE OF
A
UTHORIZED
S
HARE
C
APITAL
.
|
(a) |
The Company may, from time to time, by a Shareholders' resolution, whether or not all the shares then authorized have been issued, and whether or not all the shares theretofore issued have been called up for payment, increase its authorized share capital by the creation of new shares. Any such increase shall be in such amount and shall be divided into shares of such nominal amounts, and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as such resolution shall provide.
|
(b) |
Except to the extent otherwise provided in such resolution, any new shares included in the authorized share capital increased as aforesaid shall be subject to all the provisions of these Articles which are applicable to shares of such class included in the existing share capital without regard to class (and, if such new shares are of the same class as a class of shares included in the existing share capital, to all of the provisions which are applicable to shares of such class included in the existing share capital).
|
7. |
S
PECIAL OR
C
LASS
R
IGHTS
; M
ODIFICATION OF
R
IGHTS
.
|
(a) |
The Company may, from time to time, by a Shareholders’ resolution, provide for shares with such preferred or deferred rights or other special rights and/or such restrictions, whether in regard to dividends, voting, repayment of share capital or otherwise, as may be stipulated in such resolution.
|
(b) |
If at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class, unless otherwise provided by these Articles, may be modified or cancelled by the Company by a resolution of the General Meeting of the holders of all shares as one class, without any required separate resolution of any class of shares.
|
(c) |
The provisions of these Articles relating to General Meetings shall, mutatis mutandis, apply to any separate General Meeting of the holders of the shares of a particular class, it being clarified that the requisite quorum at any such separate General Meeting shall be two or more shareholders present in person or by proxy and holding not less than twenty-five percent (25%) of the issued shares of such class.
|
(d) |
Unless otherwise provided by these Articles, an increase in the authorized share capital, the creation of a new class of shares, an increase in the authorized share capital of a class of shares, or the issuance of additional shares thereof out of the authorized and unissued share capital, shall not be deemed, for purposes of this Article 7, to modify or derogate or cancel the rights attached to previously issued shares of such class or of any other class.
|
8. |
C
ONSOLIDATION
, D
IVISION
, C
ANCELLATION AND
R
EDUCTION OF
S
HARE
C
APITAL
.
|
(a) |
The Company may, from time to time, by or pursuant to an authorization of a Shareholders’ resolution, and subject to applicable law:
|
(b) |
With respect to any consolidation of issued shares and with respect to any other action which may result in fractional shares, the Board of Directors may settle any difficulty which may arise with regard thereto, as it deems fit, and, in connection with any such consolidation or other action which could result in fractional shares, may, without limiting its aforesaid power:
|
9. |
I
SSUANCE OF
S
HARE
C
ERTIFICATES
, R
EPLACEMENT OF
L
OST
C
ERTIFICATES
.
|
(a) |
To the extent that the Board of Directors determines that all shares shall be certificated or, if the Board of Directors does not so determine, to the extent that any shareholder requests a share certificate, share certificates shall be issued under the corporate seal of the Company or its written, typed or stamped name and shall bear the signature of one Director, or of any person or persons authorized therefor by the Board of Directors. Signatures may be affixed in any mechanical or electronic form, as the Board of Directors may prescribe.
|
(b) |
Subject to the Article 9(a), each Shareholder shall be entitled to one numbered certificate for all the shares of any class registered in his name. Each certificate shall specify the serial numbers of the shares represented thereby and may also specify the amount paid up thereon. The Company (as determined by an officer of the Company to be designated by the Chief Executive Officer) shall not refuse a request by a Shareholder to obtain several certificates in place of one certificate, unless such request is, in the opinion of such officer, unreasonable. Where a Shareholder has sold or transferred some of such Shareholder’s shares, such Shareholder shall be entitled to receive a certificate in respect of such Shareholder’s remaining shares, provided that the previous certificate is delivered to the Company before the issuance of a new certificate.
|
(c) |
A share certificate registered in the names of two or more persons shall be delivered to the person first named in the Register of Shareholders in respect of such co-ownership.
|
(d) |
A share certificate which has been defaced, lost or destroyed, may be replaced, and the Company shall issue a new certificate to replace such defaced, lost or destroyed certificate upon payment of such fee, and upon the furnishing of such evidence of ownership and such indemnity, as the Board of Directors in its discretion deems fit.
|
10. |
R
EGISTERED
H
OLDER
.
|
11. |
I
SSUANCE AND
R
EPURCHASE OF
S
HARES
.
|
(a) |
The unissued shares from time to time shall be under the control of the Board of Directors (and to the full extent permitted by law any Committee thereof), which shall have the power to issue or otherwise dispose of shares and of securities convertible or exercisable into or other rights to acquire from the Company to such persons, on such terms and conditions (including inter alia terms relating to calls set forth in Article 13(f) hereof), and either at par or at a premium, or subject to the provisions of the Companies Law, at a discount and/or with payment of commission, and at such times, as the Board of Directors (or the Committee, as the case may be) deems fit, and the power to give to any person the option to acquire from the Company any shares or securities convertible or exercisable into or other rights to acquire from the Company, either at par or at a premium, or, subject as aforesaid, at a discount and/or with payment of commission, during such time and for such consideration as the Board of Directors (or the Committee, as the case may be) deems fit.
|
(b) |
The Company may at any time and from time to time, subject to the Companies Law, repurchase or finance the purchase of any shares or other securities issued by the Company, in such manner and under such terms as the Board of Directors shall determine, whether from any one or more shareholders. Such purchase shall not be deemed as payment of dividends and no shareholder will have the right to require the Company to purchase his shares or offer to purchase shares from any other shareholders.
|
12. |
P
AYMENT IN
I
NSTALLMENT
.
|
13. |
C
ALLS ON
S
HARES
.
|
(a) |
The Board of Directors may, from time to time, as it, in its discretion, deems fit, make calls for payment upon shareholders in respect of any sum (including premium) which has not been paid up in respect of shares held by such shareholders and which is not, pursuant to the terms of issuance of such shares or otherwise, payable at a fixed time, and each shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments), to the person(s) and at the time(s) and place(s) designated by the Board of Directors, as any such times may be thereafter extended and/or such person(s) or place(s) changed. Unless otherwise stipulated in the resolution of the Board of Directors (and in the notice hereafter referred to), each payment in response to a call shall be deemed to constitute a pro rata payment on account of all the shares in respect of which such call was made.
|
(b) |
Notice of any call for payment by a shareholder shall be given in writing to such shareholder not less than fourteen (14) days prior to the time of payment fixed in such notice, and shall specify the time and place of payment, and the person to whom such payment is to be made. Prior to the time for any such payment fixed in a notice of a call given to a shareholder, the Board of Directors may in its absolute discretion, by notice in writing to such shareholder, revoke such call in whole or in part, extend the time fixed for payment thereof, or designate a different place of payment or person to whom payment is to be made. In the event of a call payable in installments, only one notice thereof need be given.
|
(c) |
If pursuant to the terms of issuance of a share or otherwise, an amount is made payable at a fixed time (whether on account of such nominal value of such share or by way of premium), such amount shall be payable at such time as if it were payable by virtue of a call made by the Board of Directors and for which notice was given in accordance with paragraphs (a) and (b) of this Article 13, and the provision of these Articles with regard to calls (and the non-payment thereof) shall be applicable to such amount or such installment (and the non-payment thereof).
|
(d) |
Joint holders of a share shall be jointly and severally liable to pay all calls for payment in respect of such share and all interest payable thereon.
|
(e) |
Any amount called for payment which is not paid when due shall bear interest from the date fixed for payment until actual payment thereof, at such rate (not exceeding the then prevailing debitory rate charged by leading commercial banks in Israel), and payable at such time(s) as the Board of Directors may prescribe.
|
(f) |
Upon the issuance of shares, the Board of Directors may provide for differences among the holders of such shares as to the amounts and times for payment of calls for payment in respect of such shares.
|
14. |
P
REPAYMENT
.
|
15. |
F
ORFEITURE AND
S
URRENDER
.
|
(a) |
If any shareholder fails to pay an amount payable by virtue of a call, installment or interest thereon as provided for in accordance herewith, on or before the day fixed for payment of the same, the Board of Directors, may at any time after the day fixed for such payment, so long as such amount (or any portion thereof) or interest thereon (or any portion thereof) remains unpaid, forfeit all or any of the shares in respect of which such payment was called for. All expenses incurred by the Company in attempting to collect any such amount or interest thereon, including, without limitation, attorneys' fees and costs of legal proceedings, shall be added to, and shall, for all purposes (including the accrual of interest thereon) constitute a part of, the amount payable to the Company in respect of such call.
|
(b) |
Upon the adoption of a resolution as to the forfeiture of a shareholder's share, the Board of Directors shall cause notice thereof to be given to such shareholder, which notice shall state that, in the event of the failure to pay the entire amount so payable by a date specified in the notice (which date shall be not less than fourteen (14) days after the date such notice is given and which may be extended by the Board of Directors), such shares shall be ipso facto forfeited, provided, however, that, prior to such date, the Board of Directors may cancel such resolution of forfeiture, but no such cancellation shall stop the Board of Directors from adopting a further resolution of forfeiture in respect of the non-payment of the same amount.
|
(c) |
Without derogating from Articles 52 and 56 hereof, whenever shares are forfeited as herein provided, all dividends, if any, theretofore declared in respect thereof and not actually paid shall be deemed to have been forfeited at the same time.
|
(d) |
The Company, by resolution of the Board of Directors, may accept the voluntary surrender of any share.
|
(e) |
Any share forfeited or surrendered as provided herein, shall become the property of the Company as dormant share, and the same, subject to the provisions of these Articles, may be sold, re-issued or otherwise disposed of as the Board of Directors deems fit.
|
(f) |
Any person whose shares have been forfeited or surrendered shall cease to be a shareholder in respect of the forfeited or surrendered shares, but shall, notwithstanding, be liable to pay, and shall forthwith pay, to the Company, all calls, interest and expenses owing upon or in respect of such shares at the time of forfeiture or surrender, together with interest thereon from the time of forfeiture or surrender until actual payment, at the rate prescribed in Article 13(e) above, and the Board of Directors, in its discretion, may, but shall not be obligated to, enforce or collect the payment of such amounts, or any part thereof, as it shall deem fit. In the event of such forfeiture or surrender, the Company, by resolution of the Board of Directors, may accelerate the date(s) of payment of any or all amounts then owing to the Company by the person in question (but not yet due) in respect of all shares owned by such shareholder, solely or jointly with another.
|
(g) |
The Board of Directors may at any time, before any share so forfeited or surrendered shall have been sold, re-issued or otherwise disposed of, nullify the forfeiture or surrender on such conditions as it deems fit, but no such nullification shall stop the Board of Directors form re-exercising its powers of forfeiture pursuant to this Article 15.
|
16. |
L
IEN
.
|
(a) |
Except to the extent the same may be waived or subordinated in writing, the Company shall have a first and paramount lien upon all the shares registered in the name of each shareholder (without regard to any equitable or other claim or interest in such shares on the part of any other person), and upon the proceeds of the sale thereof, for his debts, liabilities and engagements to the Company arising from any amount payable by such shareholder in respect of any unpaid or partly paid share, whether or not such debt, liability or engagement has matured. Such lien shall extend to all dividends from time to time declared or paid in respect of such share. Unless otherwise provided, the registration by the Company of a transfer of shares shall be deemed to be a waiver on the part of the Company of the lien (if any) existing on such shares immediately prior to such transfer.
|
(b) |
The Board of Directors may cause the Company to sell a share subject to such a lien when the debt, liability or engagement giving rise to such lien has matured, in such manner as the Board of Directors deems fit, but no such sale shall be made unless such debt, liability or engagement has not been satisfied within fourteen (14) days after written notice of the intention to sell shall have been served on such shareholder, his executors or administrators.
|
(c) |
The net proceeds of any such sale, after payment of the costs and expenses thereof or ancillary thereto, shall be applied in or toward satisfaction of the debts, liabilities or engagements of such shareholder in respect of such share (whether or not the same have matured), and the residue (if any) shall be paid to the shareholder, his executors, administrators or assigns.
|
17. |
S
ALE
A
FTER
F
ORFEITURE OF
S
URRENDER OR IN
E
NFORCEMENT OF
L
IEN
.
|
18. |
R
EDEEMABLE
S
HARES
.
|
19. |
R
EGISTRATION OF
T
RANSFER
.
|
20. |
S
USPENSION OF
R
EGISTRATION
.
|
21. |
D
ECEDENTS
’ S
HARES
.
|
(a) |
In case of a share registered in the names of two or more holders, the Company may recognize the survivor(s) as the sole owner(s) thereof unless and until the provisions of Article 21(b) have been effectively invoked.
|
(b) |
Any person becoming entitled to a share in consequence of the death of any person, upon producing evidence of the grant of probate or letters of administration or declaration of succession (or such other evidence as the Board of Directors may reasonably deem sufficient (or to an officer of the Company to be designated by the Chief Executive Officer)), shall be registered as a shareholder in respect of such share, or may, subject to the provisions as to transfer contained herein, transfer such share.
|
22. |
R
ECEIVERS AND
L
IQUIDATORS
.
|
(a) |
The Company may recognize any receiver, liquidator or similar official appointed to wind-up, dissolve or otherwise liquidate a corporate shareholder, and a trustee, manager, receiver, liquidator or similar official appointed in bankruptcy or in connection with the reorganization of, or similar proceeding with respect to a shareholder or its properties, as being entitled to the shares registered in the name of such shareholder.
|
(b) |
Such receiver, liquidator or similar official appointed to wind-up, dissolve or otherwise liquidate a corporate shareholder and such trustee, manager, receiver, liquidator or similar official appointed in bankruptcy or in connection with the reorganization of, or similar proceedings with respect to a shareholder or its properties, upon producing such evidence as the Board of Directors (or an officer of the Company to be designated by the Chief Executive Officer) may deem sufficient as to his authority to act in such capacity or under this Article, shall with the consent of the Board of Directors (which the Board of Directors may grant or refuse in its absolute discretion), be registered as a shareholder in respect of such shares, or may, subject to the regulations as to transfer herein contained, transfer such shares.
|
23. |
G
ENERAL
M
EETINGS
.
|
(a) |
An annual General Meeting (“
Annual General Meeting
”) shall be held at such time and at such place, either within or out of the State of Israel, as may be determined by the Board of Directors.
|
(b) |
All General Meetings other than Annual General Meetings shall be called "
Special General Meetings
".
|
24. |
R
ECORD
D
ATE FOR
G
ENERAL
M
EETING
.
|
25. |
S
HAREHOLDER
P
ROPOSAL
R
EQUEST
.
|
(a) |
Any Shareholder or Shareholders of the Company holding at least one percent (1%) of the voting rights of the Company (the “
Proposing Shareholder(s)
”) may request, subject to the Companies Law, that the Board of Directors include a matter on the agenda of a General Meeting to be held in the future, provided that the Board determines that the matter is appropriate to be considered in a General Meeting (a “
Proposal Request
”). In order for the Board of Directors to consider a Proposal Request and whether to include the matter stated therein in the agenda of a General Meeting, notice of the Proposal Request must be timely delivered in accordance with applicable laws, and the Proposal Request must comply with the requirement of these Articles (including this Article 25) and any applicable law and stock exchange rules and regulations. The Proposal Request must be in writing, signed by all of the Proposing Shareholder(s) making such request, delivered, either in person or by certified mail, postage prepaid, and received by the Secretary (or, in the absence thereof by the Chief Executive Officer of the Company). To be considered timely, a Proposal Request must be received within the time periods prescribed by applicable law. The announcement of an adjournment or postponement of a General Meeting shall not commence a new time period (or extend any time period) for the delivery of a Proposal Request as described above. In addition to any information required to be included in accordance with applicable law, the Proposal Request must include the following: (i) the name, address, telephone number, fax number and email address of the Proposing Shareholder (or each Proposing Shareholder, as the case may be) and, if an entity, the name(s) of the person(s) that controls or manages such entity; (ii) the number of Shares held by the Proposing Shareholder(s), directly or indirectly (and, if any of such Shares are held indirectly, an explanation of how they are held and by whom), which shall be in such number no less than as is required to qualify as a Proposing Shareholder, accompanied by evidence satisfactory to the Company of the record holding of such Shares by the Proposing Shareholder(s) as of the date of the Proposal Request, and a representation that the Proposing Shareholder(s) intends to appear in person or by proxy at the meeting; (iii) the matter requested to be included on the agenda of a General Meeting, all information related to such matter, the reason that such matter is proposed to be brought before the General Meeting, the complete text of the resolution that the Proposing Shareholder proposes to be voted upon at the General Meeting and, if the Proposing Shareholder wishes to have a position statement in support of the Proposal Request, a copy of such position statement that complies with the requirement of any applicable law (if any), (iv) a description of all arrangements or understandings between the Proposing Shareholders and any other Person(s) (naming such Person or Persons) in connection with the matter that is requested to be included on the agenda and a declaration signed by all Proposing Shareholder(s) of whether any of them has a personal interest in the matter and, if so, a description in reasonable detail of such personal interest; (v) a description of all Derivative Transactions (as defined below) by each Proposing Shareholder(s) during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (vi) a declaration that all of the information that is required under the Companies Law and any other applicable law and stock exchange rules and regulations to be provided to the Company in connection with such matter, if any, has been provided to the Company. The Board of Directors, may, in its discretion, to the extent it deems necessary, request that the Proposing Shareholder(s) provide additional information necessary so as to include a matter in the agenda of a General Meeting, as the Board of Directors may reasonably require.
|
(b) |
The information required pursuant to this Article shall be updated as of (i) the record date of the General Meeting, (ii) five business days before the General Meeting, and (iii) as of the General Meeting, and any adjournment or postponement thereof.
|
26. |
N
OTICE OF
G
ENERAL
M
EETINGS
; O
MISSION TO
G
IVE
N
OTICE
.
|
(a) |
The Company is not required to give notice of a General Meeting, subject to any mandatory provision of the Companies Law. Notwithstanding anything herein to the contrary, to the extent permitted under the Companies Law, with the consent of all Shareholders entitled to vote thereon, a resolution may be proposed and passed at such meeting although a lesser notice period than hereinabove prescribed has been given.
|
(b) |
The accidental omission to give notice of a General Meeting to any Shareholder, or the non-receipt of notice sent to such Shareholder, shall not invalidate the proceedings at such meeting or any resolution adopted thereat.
|
(c) |
No Shareholder present, in person or by proxy, at any time during a General Meeting shall be entitled to seek the cancellation or invalidation of any proceedings or resolutions adopted at such General Meeting on account of any defect in the notice of such meeting relating to the time or the place thereof, or any item acted upon at such meeting.
|
(d) |
The Company may add additional places for Shareholders to review the full text of the proposed resolutions to be adopted at a General Meeting, including an internet site.
|
27. |
Q
UORUM
.
|
(a) |
No business shall be transacted at a General Meeting, or at any adjournment thereof, unless the quorum required under these Articles for such General Meeting or such adjourned meeting, as the case may be, is present when the meeting proceeds to business.
|
(b) |
In the absence of contrary provisions in these Articles, two or more shareholders (not in default in payment of any sum referred to in Article 13 hereof), present in person or by proxy and holding shares conferring in the aggregate at least twenty-five percent (25%) of the voting power of the Company, shall constitute a quorum of General Meetings. A proxy may be deemed to be two (2) or more Shareholders pursuant to the number of Shareholders represented by the proxy holder.
|
(c) |
If within half an hour from the time appointed for the meeting a quorum is not present, then without any further notice the meeting shall be adjourned either (i) to the same day in the next week, at the same time and place, (ii) to such day and at such time and place as indicated in the notice to such meeting, or (iii) to such day and at such time and place as the Chairman of the General Meeting shall determine (which may be earlier or later than the date pursuant to clause (i) above). No business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, if the original meeting was convened upon requisition under Section 63 of the Companies Law, one or more shareholders, present in person or by proxy, and holding the number of shares required for making such requisition, shall constitute a quorum, but in any other case any shareholder (not in default as aforesaid) present in person or by proxy, shall constitute a quorum.
|
28. |
C
HAIRMAN OF
G
ENERAL
M
EETING
.
|
29. |
A
DOPTION OF
R
ESOLUTIONS AT
G
ENERAL
M
EETINGS
.
|
(a) |
Except as required by the Companies Law or these Articles, including, without limitation, Article 39 below, a resolution of the Shareholders shall be adopted if approved by the holders of a simple majority of the voting power represented at the General Meeting in person or by proxy and voting thereon, as one class, and disregarding abstentions from the count of the voting power present and voting. Without limiting the generality of the foregoing, a resolution with respect to a matter or action for which the Companies Law prescribes a higher majority or pursuant to which a provision requiring a higher majority would have been deemed to have been incorporated into these Articles, but for which the Law allows these Articles to provide otherwise (including, Section 327 and 24 of the Law), shall be adopted by a simple majority of the voting power represented at the General Meeting in person or by proxy and voting thereon, as one class, and disregarding abstentions from the count of the voting power present and voting.
|
(b) |
Every question submitted to a General Meeting shall be decided by a show of hands, but the Chairman of the General Meeting may determine that a resolution shall be decided by a written ballot. A written ballot may be implemented before the proposed resolution is voted upon or immediately after the declaration by the Chairman of the results of the vote by a show of hands. If a vote by written ballot is taken after such declaration, the results of the vote by a show of hands shall be of no effect, and the proposed resolution shall be decided by such written ballot.
|
(c) |
A declaration by the Chairman of the General Meeting that a resolution has been carried unanimously, or carried by a particular majority, or rejected, and an entry to that effect in the minute book of the Company, shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.
|
30. |
P
OWER TO
A
DJOURN
.
|
(a) |
A General Meeting, the consideration of any matter on its agenda or the resolution on any matter on its agenda, may be postponed or adjourned, from time to time and from place to place: (i) by the Chairman of a General Meeting at which a quorum is present (and he shall if so directed by the meeting, with the consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment), but no business shall be transacted at any such adjourned meeting except business which might lawfully have been transacted at the meeting as originally called, or a matter on its agenda with respect to which no resolution was adopted at the meeting originally called; or (ii) by the Board (whether prior to or at the General Meeting).
|
31. |
V
OTING
P
OWER
.
|
32. |
V
OTING
R
IGHTS
.
|
(a) |
No shareholder shall be entitled to vote at any General Meeting (or be counted as a part of the quorum thereat), unless all calls then payable by him in respect of his shares in the Company have been paid.
|
(b) |
A company or other corporate body being a Shareholder of the Company may duly authorize any person to be its representative at any meeting of the Company or to execute or deliver a proxy on its behalf. Any person so authorized shall be entitled to exercise on behalf of such Shareholder all the power, which the Shareholder could have exercised if it were an individual. Upon the request of the Chairman of the General Meeting, written evidence of such authorization (in form acceptable to the Chairman) shall be delivered to him.
|
(c) |
Any Shareholder entitled to vote may vote either in person or by proxy (who need not be Shareholder of the Company), or, if the Shareholder is a company or other corporate body, by representative authorized pursuant to Article (b) above.
|
(d) |
If two or more persons are registered as joint holders of any share, the vote of the senior who tenders a vote, in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s). For the purpose of this Article 32(d), seniority shall be determined by the order of registration of the joint holders in the Register of Shareholder.
|
33. |
I
NSTRUMENT OF
A
PPOINTMENT
.
|
(a) |
An instrument appointing a proxy shall be in writing and shall be substantially in the following form:
|
“I
_________________________________________
|
of _______________________________________
|
(Name of Shareholder)
|
(Address of Shareholder)
|
Being a shareholder of CYBERARK SOFTWARE LTD. hereby appoints
|
|
_________________________________________ |
of _______________________________________
|
(Name of Proxy)
|
(Address of Proxy)
|
as my proxy to vote for me and on my behalf at the General Meeting of the Company to be held on the _____ day of _____,_______ and at any adjournment(s) thereof.
|
|
Signed this
______
day of
____________
,
_____.
|
|
(Signature of Appointor)”
|
(b) |
Subject to the Companies Law, the original instrument appointing a proxy or a copy thereof certified by an attorney (and the power of attorney or other authority, if any, under which such instrument has been signed) shall be delivered to the Company (at its Office, at its principal place of business, or at the offices of its registrar or transfer agent, or at such place as notice of the meeting may specify) not less than forty eight (48) hours (or such shorter period as the notice shall specify) before the time fixed for such meeting. Notwithstanding the above, the Chairman shall have the right to waive the time requirement provided above with respect to all instruments of proxies and to accept any and all instruments of proxy until the beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the General Meeting to which the document relates.
|
34. |
E
FFECT OF
D
EATH OF
A
PPOINTOR OF
T
RANSFER OF
S
HARE AND OR
R
EVOCATION OF
A
PPOINTMENT
.
|
(a) |
A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the prior death or bankruptcy of the appointing shareholder (or of his attorney-in-fact, if any, who signed such instrument), or the transfer of the share in respect of which the vote is cast, unless written notice of such matters shall have been received by the Company or by the Chairman of such meeting prior to such vote being cast.
|
(b) |
Subject to the Companies Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the Chairman, subsequent to receipt by the Company of such instrument, of written notice signed by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy (and such other documents, if any, required under Article 33(b) for such new appointment), provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in Article 33(b) hereof, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the Chairman of such meeting of written notice from such shareholder of the revocation of such appointment, or if and when such shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or vote of the appointing shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 34(b) at or prior to the time such vote was cast.
|
35. |
P
OWERS OF
B
OARD OF
D
IRECTORS
.
|
(a) |
The Board of Directors may exercise all such powers and do all such acts and things as the Board of Directors is authorized by law or as the Company is authorized to exercise and do and are not hereby or by law required to be exercised or done by the General Meeting. The authority conferred on the Board of Directors by this Article 35 shall be subject to the provisions of the Companies Law, these Articles and any regulation or resolution consistent with these Articles adopted from time to time at a General Meeting, provided, however, that no such regulation or resolution shall invalidate any prior act done by or pursuant to a decision of the Board of Directors which would have been valid if such regulation or resolution had not been adopted.
|
(b) |
Without limiting the generality of the foregoing, the Board of Directors may, from time to time, set aside any amount(s) out of the profits of the Company as a reserve or reserves for any purpose(s) which the Board of Directors, in its absolute discretion, shall deem fit, including without limitation, capitalization and distribution of bonus shares, and may invest any sum so set aside in any manner and from time to time deal with and vary such investments and dispose of all or any part thereof, and employ any such reserve or any part thereof in the business of the Company without being bound to keep the same separate from other assets of the Company, and may subdivide or re-designate any reserve or cancel the same or apply the funds therein for another purpose, all as the Board of Directors may from time to time think fit.
|
36. |
E
XERCISE OF
P
OWERS OF
B
OARD OF
D
IRECTORS
.
|
(a) |
A meeting of the Board of Directors at which a quorum is present shall be competent to exercise all the authorities, powers and discretion vested in or exercisable by the Board of Directors.
|
(b) |
A resolution proposed at any meeting of the Board of Directors shall be deemed adopted if approved by a majority of the Directors present, entitled to vote and voting thereon when such resolution is put to a vote.
|
(c) |
The Board of Directors may adopt resolutions, without convening a meeting of the Board of Directors, in writing or in any other manner permitted by the Companies Law.
|
37. |
D
ELEGATION OF
P
OWERS
.
|
(a) |
The Board of Directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees (in these Articles referred to as a “
Committee of the Board of Directors
”, or “
Committee
”), each consisting of one or more persons (who may or may not be Directors), and it may from time to time revoke such delegation or alter the composition of any such Committee. No regulation imposed by the Board of Directors on any Committee and no resolution of the Board of Directors shall invalidate any prior act done or pursuant to a resolution by the Committee which would have been valid if such regulation or resolution of the Board had not been adopted. The meeting and proceedings of any such Committee of the Board of Directors shall, mutatis mutandis, be governed by the provisions herein contained for regulating the meetings of the Board of Directors, so far as not superseded by any regulations adopted by the Board of Directors. Unless otherwise expressly prohibited by the Board of Directors in delegating powers to a Committee of the Board of Directors, such Committee shall be empowered to further delegate such powers.
|
(b) |
Without derogating from the provisions of Article 49, the Board of Directors may from time to time appoint a Secretary to the Company, as well as officers, agents, employees and independent contractors, as the Board of Directors deems fit, and may terminate the service of any such person. The Board of Directors may, subject to the provisions of the Companies Law, determine the powers and duties, as well as the salaries and compensation, of all such persons.
|
(c) |
The Board of Directors may from time to time, by power of attorney or otherwise, appoint any person, company, firm or body of persons to be the attorney or attorneys of the Company at law or in fact for such purposes(s) and with such powers, authorities and discretions, and for such period and subject to such conditions, as it deems fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board of Directors deems fit, and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in him.
|
38. |
N
UMBER OF
D
IRECTORS
.
|
(a) |
The Board of Directors shall consist of such number of Directors (not less than four (4) nor more than 9 (nine), including the External Directors, to the extent required by law) as may be fixed from time to time by the Board of Directors.
|
(b) |
Notwithstanding anything to the contrary herein, this Article 38 may only be amended or replaced by a resolution adopted at a General Meeting by a majority of 65% of the voting power represented at the General Meeting in person or by proxy and voting thereon, disregarding abstentions from the count of the voting power present and voting.
|
39. |
E
LECTION AND
R
EMOVAL OF
D
IRECTORS
.
|
(a) |
The Directors, excluding the External Directors, shall be classified, with respect to the term for which they each severally hold office, into three classes, as nearly equal in number as practicable, hereby designated as Class I, Class II and Class III. The Board of Directors may assign members of the Board of Directors already in office to such classes at the time such classification becomes effective.
|
(b) |
At each Annual General Meeting, commencing with the Annual General Meeting to be held in 2015, each of the successors elected to replace the Directors of a Class whose term shall have expired at such Annual General Meeting shall be elected to hold office until the third Annual General Meeting next succeeding his or her election and until his or her respective successor shall have been elected and qualified. Notwithstanding anything to the contrary, each Director shall serve until his or her successor is elected and qualified or until such earlier time as such Director's office is vacated.
|
(c) |
If the number of Directors (excluding External Directors) that consists the Board of Directors is hereafter changed, any newly created directorships or decrease in directorships shall be so apportioned by the Board of Directors among the classes as to make all classes as nearly equal in number as is practicable, provided that no decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director.
|
(d) |
Prior to every General Meeting of the Company at which Directors are to be elected, and subject to clauses (a) and (h) of this Article, the Board of Directors (or a Committee thereof) shall select, by a resolution adopted by a majority of the Board of Directors (or such Committee), a number of Persons to be proposed to the Shareholders for election as Directors at such General Meeting (the “
Nominees
”).
|
(e) |
Any Proposing Shareholder requesting to include on the agenda of a General Meeting a nomination of a Person to be proposed to the Shareholders for election as Director (such person, an “
Alternate Nominee
”), may so request provided that it complies with this Article 39(e) and Article 25 and applicable law. Unless otherwise determined by the Board, a Proposal Request relating to Alternate Nominee is deemed to be a matter that is appropriate to be considered only in an Annual General Meeting. In addition to any information required to be included in accordance with applicable law, such a Proposal Request shall include information required pursuant to Article 25, and shall also set forth: (i) the name, address, telephone number, fax number and email address of the Alternate Nominee and all citizenships and residencies of the Alternate Nominee; (ii) a description of all arrangements, relations or understandings between the Proposing Shareholder(s) or any of its affiliates and each Alternate Nominee; (iii) a declaration signed by the Alternate Nominee that he consents to be named in the Company’s notices and proxy materials relating to the General Meeting, if provided or published, and, if elected, to serve on the Board of Directors and to be named in the Company’s disclosures and filings, (iv) a declaration signed by each Alternate Nominee as required under the Companies Law and any other applicable law and stock exchange rules and regulations for the appointment of such an Alternate Nominee and an undertaking that all of the information that is required under law and stock exchange rules and regulations to be provided to the Company in connection with such an appointment has been provided (including, information in respect of the Alternate Nominee as would be provided in response to the applicable disclosure requirements under Form 20-F or any other applicable form prescribed by the U.S. Securities and Exchange Commission); (v) a declaration made by the Alternate Nominee of whether he meets the criteria for an independent director and/or External Director of the Company under the Companies Law and/or under any applicable law, regulation or stock exchange rules, and if not, then an explanation of why not; and (vi) any other information required at the time of submission of the Proposal Request by applicable law, regulations or stock exchange rules. In addition, the Proposing Shareholder shall promptly provide any other information reasonably requested by the Company. The Board of Directors may refuse to acknowledge the nomination of any person not made in compliance with the foregoing. The Company shall be entitled to publish any information provided by a Proposing Shareholder pursuant to this Article 39(e) and Article 25, and the Proposing Shareholder shall be responsible for the accuracy and completeness thereof.
|
(f) |
The Nominees or Alternate Nominees shall be elected by a resolution adopted at the General Meeting at which they are subject to election.
|
(g) |
Notwithstanding anything to the contrary herein, this Article 39 and Article 42(e) may only be amended, replaced or suspended by a resolution adopted at a General Meeting by a majority of 65% of the voting power represented at the General Meeting in person or by proxy and voting thereon, disregarding abstentions from the count of the voting power present and voting.
|
(h) |
Notwithstanding anything to the contrary in these Articles, the election, qualification, removal or dismissal of External Directors shall be only in accordance with the applicable provisions set forth in the Companies Law.
|
40. |
C
OMMENCEMENT OF
D
IRECTORSHIP
.
|
41. |
C
ONTINUING
D
IRECTORS IN THE
E
VENT OF
V
ACANCIES
.
|
42. |
V
ACATION OF
O
FFICE
.
|
(a) |
ipso facto, upon his death;
|
(b) |
if he is prevented by applicable law from serving as a Director;
|
(c) |
if the Board determines that due to his mental or physical state he is unable to serve as a director;
|
(d) |
if his directorship expires pursuant to these Articles and/or applicable law;
|
(e) |
by a resolution adopted at a General Meeting by a majority of 65% of the voting power represented at the General Meeting in person or by proxy and voting thereon, disregarding abstentions from the count of the voting power present and voting. Such removal shall become effective on the date fixed in such resolution;
|
(f) |
by his written resignation, such resignation becoming effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later; or
|
(g) |
with respect to an External Director, and notwithstanding anything to the contrary herein, only pursuant to applicable law.
|
43. |
C
ONFLICT OF
I
NTERESTS
; A
PPROVAL OF
R
ELATED
P
ARTY
T
RANSACTIONS
.
|
44. |
A
LTERNATE
D
IRECTORS
.
|
(a) |
Subject to the provisions of the Companies Law, a Director may, by written notice to the Company, appoint, remove or replace any person as an alternate for himself; provided that the appointment of such person shall have effect only upon and subject to its being approved by the Board (in these Articles, an "
Alternate Director
"). Unless the appointing Director, by the instrument appointing an Alternate Director or by written notice to the Company, limits such appointment to a specified period of time or restricts it to a specified meeting or action of the Board of Directors, or otherwise restricts its scope, the appointment shall be for all purposes, and for a period of time concurrent with the term of the appointing Director.
|
(b) |
Any notice to the Company pursuant to Article 44(a) shall be given in person to, or by sending the same by mail to the attention of the Chairman of the Board of Directors at the principal office of the Company or to such other person or place as the Board of Directors shall have determined for such purpose, and shall become effective on the date fixed therein, upon the receipt thereof by the Company (at the place as aforesaid) or upon the approval of the appointment by the Board, whichever is later.
|
(c) |
An Alternate Director shall have all the rights and obligations of the Director who appointed him, provided however, that (i) he may not in turn appoint an alternate for himself (unless the instrument appointing him otherwise expressly provides), and (ii) an Alternate Director shall have no standing at any meeting of the Board of Directors or any Committee thereof while the Director who appointed him is present.
|
(d) |
Any individual, who qualifies to be a member of the Board of Directors, may act as an Alternate Director. One person may not act as Alternate Director for several directors or if he is serving as a Director.
|
(e) |
The office of an Alternate Director shall be vacated under the circumstances, mutatis mutandis, set forth in Article 42, and such office shall ipso facto be vacated if the office of the Director who appointed such Alternate Director is vacated, for any reason.
|
45. |
M
EETINGS
.
|
(a) |
The Board of Directors may meet and adjourn its meetings and otherwise regulate such meetings and proceedings as the Directors think fit.
|
(b) |
Any Director may at any time, and the Secretary, upon the request of such Director, shall, convene a meeting of the Board of Directors, but not less than five (5) days' notice shall be given of any meeting so convened, unless such notice is waived in writing by all of the Directors as to a particular meeting or unless the matters to be discussed at such meeting are of such urgency and importance that notice ought reasonably to be waived under the circumstances.
|
(c) |
Notice of any such meeting shall be given in writing.
|
(d) |
Notwithstanding anything to the contrary herein, failure to deliver notice to a director of any such meeting in the manner required hereby may be waived by such Director, and a meeting shall be deemed to have been duly convened notwithstanding such defective notice if such failure or defect is waived prior to action being taken at such meeting, by all Directors entitled to participate at such meeting to whom notice was not duly given as aforesaid. Without derogating from the foregoing, no Director present at any time during a meeting of the Board of Directors shall be entitled to seek the cancellation or invalidation of any proceedings or resolutions adopted at such meeting on account of any defect in the notice of such meeting relating to the date, time or the place thereof or the convening of the meeting.
|
46. |
Q
UORUM
.
|
47. |
C
HAIRMAN OF THE
B
OARD OF
D
IRECTORS
.
|
48. |
V
ALIDITY OF
A
CTS
D
ESPITE
D
EFECTS
.
|
49. |
C
HIEF
E
XECUTIVE
O
FFICER
.
|
(a) |
The Board of Directors shall from time to time appoint one or more persons, whether or not Directors, as Chief Executive Officer of the Company and may confer upon such person(s), and from time to time modify or revoke, such titles and such duties and authorities of the Board of Directors as the Board of Directors may deem fit, subject to such limitations and restrictions as the Board of Directors may from time to time prescribe. Such appointment(s) may be either for a fixed term or without any limitation of time, and the Board of Directors may from time to time (subject to any additional approvals required under, and the provisions of, the Companies Law and of any contract between any such person and the Company) fix their salaries and compensation, remove or dismiss them from office and appoint another or others in his or their place or places.
|
(b) |
Unless otherwise determined by the Board of Directors, the Chief Executive Officer shall have authority with respect of the management and operations of the Company in the ordinary course of business.
|
50. |
M
INUTES
.
|
51. |
D
ECLARATION OF
D
IVIDENDS
.
|
52. |
A
MOUNT
P
AYABLE BY
W
AY OF
D
IVIDENDS
.
|
(a) |
Subject to the provisions of these Articles and subject to the rights or conditions attached at that time to any share in the capital of the Company granting preferential, special or deferred rights or not granting any rights with respect to dividends, any dividend paid by the Company shall be allocated among the shareholders (not in default in payment of any sum referred to in Article 13 hereof) entitled thereto in proportion to their respective holdings of the shares in respect of which such dividends are being paid.
|
(b) |
Whenever the rights attached to any shares or the terms of issue of the shares do not provide otherwise, shares which are fully paid up or which are credited as fully or partly paid within any period which in respect thereof dividends are paid shall entitle the holders thereof to a dividend in proportion to the amount paid up or credited as paid up in respect of the nominal value of such shares and to the date of payment thereof (pro rata temporis).
|
53. |
I
NTEREST
.
|
54. |
P
AYMENT IN
S
PECIE
.
|
55. |
I
MPLEMENTATION OF
P
OWERS
.
|
56. |
D
EDUCTIONS FROM
D
IVIDENDS
.
|
57. |
R
ETENTION OF
D
IVIDENDS
.
|
(a) |
The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share on which the Company has a lien, and may apply the same in or toward satisfaction of the debts, liabilities, or engagements in respect of which the lien exists.
|
(b) |
The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share in respect of which any person is, under Articles 21 or 22, entitled to become a Shareholder, or which any person is, under said Articles, entitled to transfer, until such person shall become a Shareholder in respect of such share or shall transfer the same.
|
58. |
U
NCLAIMED
D
IVIDENDS
.
|
59. |
M
ECHANICS OF
P
AYMENT
.
|
60. |
R
ECEIPT FROM A
J
OINT
H
OLDER
.
|
61. |
B
OOKS OF
A
CCOUNT
.
|
62. |
A
UDITORS
.
|
63. |
S
UPPLEMENTARY
R
EGISTERS
.
|
64. |
I
NSURANCE
.
|
(a) |
a breach of duty of care to the Company or to any other person;
|
(b) |
a breach of his fiduciary duty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds to assume that act that resulted in such breach would not prejudice the interests of the Company;
|
(c) |
a financial liability imposed on such Office Holder in favor of any other person; and
|
(d) |
any other event, occurrence, matters or circumstances under any law with respect to which the Company may, or will be able to, insure an Office Holder, and to the extent such law requires the inclusion of a provision permitting such insurance in these Articles, then such provision is deemed to be included and incorporated herein by reference (including, without limitation, in accordance with Section 56h(b)(1) of the Securities Law, if and to the extent applicable, and Section 50P of the RTP Law).
|
65. |
I
NDEMNITY
.
|
(a) |
Subject to the provisions of the Companies Law, the Company may retroactively indemnify an Office Holder of the Company with respect to the following liabilities and expenses, provided that such liabilities or expenses were imposed on such Office Holder or incurred by such Office Holder due to an act performed by the Office Holder in such Office Holder's capacity as an Office Holder of the Company:
|
(b) |
Subject to the provisions of the Companies Law, the Company may undertake to indemnify an Office Holder, in advance, with respect to those liabilities and expenses described in the following Articles:
|
(i) |
Sub-Article 65(a)(ii) to 65(a)(iv); and
|
(ii) |
Sub-Article 65(a)(i), provided that:
|
66. |
E
XEMPTION
.
|
67. |
G
ENERAL
.
|
(a) |
Any amendment to the Companies Law adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 64 to 66 and any amendments to Articles 64 to 66 shall be prospective in effect, and shall not affect the Company’s obligation or ability to indemnify or insure an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law.
|
(b) |
The provisions of Articles 64 to 66 (i) shall apply to the maximum extent permitted by law (including, the Companies Law, the Securities Law and the RTP Law); and (ii) are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/or in respect of indemnification (whether in advance or retroactively) and/or exemption, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; and/or any Office Holder to the extent that such insurance and/or indemnification is not specifically prohibited under law.
|
68. |
W
INDING
U
P
.
|
69. |
N
OTICES
.
|
(a) |
Any written notice or other document may be served by the Company upon any shareholder either personally, by facsimile, email or other electronic transmission, or by sending it by prepaid mail (airmail if sent internationally) addressed to such shareholder at his address as described in the Register of Shareholders or such other address as he may have designated in writing for the receipt of notices and other documents.
|
(b) |
Any written notice or other document may be served by any shareholder upon the Company by tendering the same in person to the Secretary or the Chief Executive Officer of the Company at the principal office of the Company, by facsimile transmission, or by sending it by prepaid registered mail (airmail if posted outside Israel) to the Company at its Office.
|
(c) |
Any such notice or other document shall be deemed to have been served:
|
(d) |
If a notice is, in fact, received by the addressee, it shall be deemed to have been duly served, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions of this Article 69.
|
(e) |
All notices to be given to the shareholders shall, with respect to any share to which persons are jointly entitled, be given to whichever of such persons is named first in the Register of Shareholders, and any notice so given shall be sufficient notice to the holders of such share.
|
(f) |
Any shareholder whose address is not described in the Register of Shareholders, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company.
|
(g) |
Notwithstanding anything to the contrary contained herein, notice by the Company of a General Meeting, containing the information required by applicable law and these Articles to be set forth therein, which is published, within the time otherwise required for giving notice of such meeting, in:
|
(h) |
The mailing or publication date and the date of the meeting shall be counted as part of the days comprising any notice period.
|
I. |
Existing Premises.
The Lease of the Existing Premises shall continue, and the Initial Term applicable thereto shall be extended for an additional two (2) years and shall expire on April 30, 2024, subject to any remaining extension terms applicable to the Existing Premises as set forth in the Lease as hereby amended. Yearly Fixed Rent applicable to the Existing Premises shall continue as set forth in the Lease, with the qualification that Yearly Fixed Rent shall increase to the annual rate of $735,896.04 payable monthly in advance in equal monthly installments of $61,324.67 beginning on May I, 2022 and continuing through April 30, 2023, and shall thereafter be increased to the annual rate of $746,718.00 payable monthly in advance in equal installments of $62,226.50 beginning May I, 2023 and continuing through April 30, 2024, with the further qualification that the Base Operating Cost Year for the Existing Premises shall be reset on May I, 2022 to the calendar year ending on December 31, 2022, and the Base Tax Year shall be reset on May I, 2022 to the fiscal year ending June 30, 2023. Except as specifically modified in this Second Amendment, all other terms and conditions of the Lease applicable to the Existing Premises shall continue without modification.
|
II. | Rental of Additional Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord certain premises on the first floor of the Building, as more particularly depicted as Suite No. 100 (containing approximately 2,299 rentable square feet), Suite IOOA (containing approximately 3,002 rentable square feet) and Suite No. 101 (containing approximately 5,518 rentable square feet), all as shown on the Premises Plan (collectively, the "Additional Premises"). As used in the Lease, the term "Premises" shall include the Existing Premises and the Additional Premises (effective as of the Term Commencement Date of each Suite within the Additional Premises). The following provisions of this Section II shall be applicable solely to the Additional Premises unless otherwise noted. |
1. |
Additional Premises Term Commencement Date.
The Tenn Commencement Date with respect to each Suite that comprises the Additional Premises shall be ten (10) days following Landlord's written notice to Tenant that Landlord's Work to the Additional Premises as described in Section II.I 0. hereof has been substantially completed as determined by Landlord's architect pursuant to Section II.10.G. of this Second Amendment. Suite Nos. 1OOA and 101 are currently vacant, and therefore the target Term Commencement Date applicable to both Suite Nos. 100A and 101 is between May 1, 2018 and June 1, 2018 (subject to the substantial completion of Landlord's Work). Notwithstanding the foregoing, the Term Commencement Date applicable to Suite No. 100 may occur on a later date than the Term Commencement Date applicable to Suite Nos. JOOA and 101, provided that in all events the Term Commencement Date applicable to Suite No. I00 shall occur no later than January 1, 2019 (subject to the substantial completion of Landlord's Work). The purpose of the foregoing extended Term Commencement Date for Suite 100 is to allow Landlord's management company (currently occupying Suite I00) additional time to relocate if it reqmres.
|
2. |
Additional Premises Rent Commencement Date.
The Rent Commencement Date with respect to each Suite that comprises the Additional Premises shall be the date which is five (5) months after the Additional Premises Term Commencement Date (as applicable to each of the Suites that comprise the Additional Premises).
|
3. |
Additional Premises Expiration Date.
The expiration date of the Lease Term for the Additional Premises shall be that date which is ninety (90) months (plus a portion of a month if the Suite Nos. lOOA and 101 Rent Commencement Date occurs other than on the first day of a calendar month, so that the Initial Term ends on the last day of a calendar month) following the Suite Nos. IOOA and 101 Rent Commencement Date
("Additional Premises Initial Term")
provided, however, if the Additional Premises Initial Term is extended pursuant to the terms of this Second Amendment, then the Additional Premises Expiration Date shall be at 5:00 PM on the last day of the Additional Premises Extension Term. The foregoing Additional Premises Expiration Date shall also apply to Suite No. I 00 notwithstanding that the Term Commencement Date and Rent Connnencement Date applicable to Suite No. 100 may be different than the Term Commencement and Rent Commencement Date applicable to Suite Nos. IOOA and JOI.
|
4. |
Additional Premises Yearly Fixed Rent.
Yearly Fixed Rent for the Additional Premises shall be as follows during the Additional Premises Initial Term:
|
PERIOD
|
YEARLY
FIXED RENT
|
MONTHLY
PAYMENT
|
||||||
First Lease Year | $ | 281,160.00 | $ | 23,430.00 | ||||
Second Lease Year | $ | 285,420.00 |
$
|
23,785.00
|
||||
Third Lease Year
|
$
|
289,680.00
|
$
|
24,140.00
|
||||
Fourth Lease Year
|
$
|
293,940.00
|
$
|
24,495.00
|
||||
Fifth Lease Year
|
$
|
298,200.00
|
$
|
24,850.00
|
||||
Sixth Lease Year
|
$
|
302,460.00
|
$
|
25,205.00
|
||||
Seventh Lease Year
|
$
|
306,720.00
|
$
|
25,560.00
|
||||
Eighth Lease Year (6 months)
|
$
|
310,980.00
|
$
|
25,915.00
|
PERIOD
|
YEARLY
FIXED RENT
|
MONTHLY
PAYMENT
|
||||||
First Lease Year
|
$
|
75,867.00
|
$
|
6,322.25
|
||||
Second Lease Year
|
$
|
77,016.48
|
$
|
6,418.04
|
||||
Third Lease Year
|
$
|
78,165.96
|
$
|
6,513.83
|
||||
Fourth Lease Year
|
$
|
79,315.56
|
$
|
6,609.63
|
||||
Fifth Lease Year
|
$
|
80,465.04
|
$
|
6,705.42
|
||||
Sixth Lease Year
|
$
|
81,614.52
|
$
|
6,801.21
|
||||
Seventh Lease Year
|
$
|
82,764.00
|
$
|
6,897.00
|
||||
Eighth Lease Year (6 months)
|
$
|
83,913.48
|
$
|
6,992.79
|
5. |
Additional Premises Extension Term and Extension Term Yearlv Fixed Rent.
Provided Landlord has received written notice of Tenant's intent to extend no later than twelve (12) months prior to end of the Additional Premises Initial Term, Tenant may extend the Lease of the entire Additional Premises only (Suite Nos. 100, 100A, and 101) for one (1) period of seven (7) years commencing immediately after the end of the Additional Premises Initial Term (the
"Additional Premises Extension Term").
Yearly Fixed Rent dnring the Additional Premises Extension Tenn shall be at Fair Market Rent determined in accordance with Exhibit D attached to the Original Lease. Tenant's right to extend shall be subject to Tenant having maintained its Lease obligations current and without default not cured within any applicable grace periods through the Lease Term as then in effect. Tenant's right to extend the Lease for the Additional Premises Extension Term shall be subject to all other terms and conditions of Section 23 of the Original Lease.
|
6. |
Additional Rent.
Tenant shall be responsible for Additional Rent applicable to the Additional Premises in a manner consistent with the payment of Additional Rent relating to the Existing Premises as set forth in the Lease and First Lease Amendment, beginning on the Additional Premises Term Commencement Date (as applicable to each of the Suites within the Additional Premises) with the qualification that the Base Operating Cost Year shall be the calendar year ending on December 31" of the same calendar year as the applicable Rent Commencement Date, and the Base Tax Year shall be the fiscal year ending June 30 of the year following the Additional Premises Rent Commencement Date (as applicable to each of the Suites within the Additional Premises).
|
7. |
Electricity.
Tenant shall pay for electricity consumed within the Additional Premises in accordance with Section 6 of the Original Lease beginning on the Term Commencement Date applicable to each of the Suites within the Additional Premises.
|
8. |
Secnrity Deposit.
Upon signing this Second Amendment, Tenant shall deposit with Landlord the sum of $29,752.25 to be added to the Security Deposit, so that the total Security Deposit held by Landlord is then $73,855.75.
|
9. |
Prn Rata Share.
The percentage that the Additional Premises bears to the total rentable area held for rental by the Landlord at the Property. Landlord and Tenant agree that the Pro- Rata Share of the Existing Premises is 66.7%, and the aggregate Pro Rata Share of the Additional Premises is 33.3%, allocated 7.0% to Suite No. 100, 9.3% to Suite No. lOOA and 17% to Suite No. 101. The aggregate Pro Rata Share shall be adjusted upon the Term Commencement Date applicable to each Suite within the Additional Premises as they are added to the Premises.
|
10. |
Landlord's Work to Additional Premises.
Prior to the Additional Premises Commencement Date with respect to each of the Suites therein, the interior of the Additional Premises shall be improved in accordance with Tenant's Final Layout Plan and the Construction Documents as those terms are defined below
("Tenant Improvements").
The following provisions shall be applicable to the Tenant Improvements (and to the extent Landlord perfonns the Tenant Improvements, are herein called
"Landlord's Work"):
|
A. |
Tenant shall deliver to Landlord its program requirements for the Additional Premises by no later than February 14, 2018, and thereafter, Landlord shall prepare and deliver to Tenant a proposed initial layout plan of the Additional Premises
("Tenant's Initial Layout Plan")
which plan shall be prepared based upon existing Building conditions and Tenant's program requirements. For each day after February 14, 2018 that Tenant delivers its program requirements, the Rent Commencement Date applicable to the Additional Premises (and to each Suite therein) shall be advanced to an earlier date (on a day for day basis) for each day that the program requirements are delayed. Landlord and Tenant shall work together with Landlord's architect in good faith to develop Tenant's Initial Layout Plan into a final layout plan
("Tenant's Final Layout Plan").
Tenant's Final Layout Plan shall in all events be completed within fomteen (14) days following Landlord's delivery to Tenant of Tenant's Initial Layout Plan, and if not completed within such fourteen (14) day period (unless such delay is caused by the failure of Landlord's architect to timely deliver the Plans), then the Rent Commencement Date applicable to the Additional Premises (and to each Suite therein) shall be advanced to an earlier date (on a day for day basis) for each day that Tenant's Final Layout Plan is delayed. Within ten (I 0) days after the completion of Tenant's Final Layout Plan, Landlord's architect shall develop Tenant's Final Layout Plan into construction documents
("Construction Documents")
in a form which will enable Landlord's architect to stamp the Construction Documents, and to enable Landlord to obtain fixed pricing for the construction of the Tenant Improvements
("Fixed Pricing"),
and to apply for and obtain a Building Permit for the Tenant Improvements
("Building Permit").
Within a maximum of three (3) business days after request by Landlord, Tenant shall meet with Landlord and provide such supplemental information as Landlord or its architect may reasonably require in order to develop Tenant's Final Layout Plan into the Construction Documents and to facilitate obtaining the Fixed Pricing and/or the Building Permit. Subject to the provisions of Section II.10.F., Tenant agrees to consider the recommendations of Landlord's architect regarding the selections of materials (using similar materials previously used in other tenant spaces within the Building, including the Existing Premises, but excluding upgrades to materials within that space previously paid for by Tenant or other tenants) to be used to allow for the completion of the Tenant Improvements within sixty (60) days after the receipt of the Building Permit. Upon prior notice to Tenant, Landlord reserves the right to make changes to the Construction Documents as required by Landlord's architect to accommodate Building systems (i.e. plumbing, mechanical, and electric, chases and/or structural components) and to expedite completion of the Tenant Improvements (such as to accommodate the unavailability of materials by substituting available materials of comparable quality) and otherwise as necessary to obtain Fixed Pricing, comply with applicable building, health, fire, safety and MAAB codes, orders, rules and regulations
("Codes"),
and to obtain the Building Permit, provided such changes do not adversely affect, in any material manner, the utility or quality of Tenant Improvements or the cost to complete the Tenant Improvements. The Tenant Improvements shall be deemed modified by any such changes to the Construction Documents. The cost for Landlord's architect to prepare Tenant's Final Layout Plan and to develop same into Construction Documents shall be the responsibility of Landlord provided, however, any later revisions to the Construction Documents requested by Tenant shall be at Tenant's cost. Within three (3) business days following the completion of the Construction Documents and delivery to Tenant, Tenant shall review and if acceptable approve the Construction Documents, which approval shall not be unreasonably withheld, conditioned or delayed.
If
Tenant disapproves the Construction Documents (unless such disapproval is due to the failure of the Construction Document to be consistent with Tenant's Final Layout Plan) or fails to approve the Construction Documents within three (3) business days, then the Rent Commencement Date applicable to the Additional Premises (and to each Suite therein) shall be advanced to an earlier date (on a day for day basis) for each day until the Construction Documents are approved. Promptly following the completion of the Construction Documents, Landlord shall obtain Fixed Pricing to complete the Tenant Improvements from its contractor(s) and shall deliver to Tenant a summary of the total cost to complete the Tenant Improvements. Within a maximum of three (3) business days following Landlord's delivery of the Fixed Pricing, Tenant shall have the opportunity to request that Landlord and its architect work with Tenant to modify the Construction Documents in an effort to reduce the Fixed Pricing. The parties shall then have seven (7) days to determine if such a reduction of the Fixed Pricing is feasible and finalize same, following which Landlord shall deliver to Tenant revised Fixed Pricing, which pricing shall be final. All costs to modify the Construction Documents to accomplish the foregoing shall be the responsibility of Tenant (to the extent available, Tenant shall be permitted to use any excess funds from the Improvement Allowance to pay for such costs in the event the Total Project Costs are less than $378,665.00). Landlord makes no representation as to whether or not the Total Project Costs will be less than or exceed the Improvement Allowance as those terms are defined below. For clarification purposes, it is understood that if Tenant delays or fails to comply with the time periods set forth in this Section II.IO.A. to the extent Tenant is required to do so, then the Rent Commencement Date applicable to the Additional Premises (and to each Suite therein) shall be advanced to an earlier date (on a day for day basis) for each day that Tenant's compliance is delayed.
|
B. |
Tenant shall pay to Landlord within ten (I 0) business days after invoice therefor, the amount by which the total cost to complete the Tenant Improvements
("Total Project Costs")
exceeds the amount of the Improvement Allowance as herein defined (the
"Excess Project Costs").
The Total Project Costs shall include, without limitation, all construction costs, including, without limitation, all materials, equipment, systems, labor, supervision, profit and overhead and similar costs necessary to complete the Tenant Improvements, plus all costs charged by Landlord's architect to select Tenant finishes and/or Tenant materials, and shall include a construction management fee to Landlord equal to five percent (5%) of the total cost of the Tenant Improvements.
If,
within three (3) business days after Landlord's delivery of the Tenant's Final Layout Plan, Tenant notifies Landlord that it elects for the HVAC system to be designed by a mechanical engineer rather than on a design-build basis by Landlord's HVAC contractor, then Landlord shall engage its mechanical engineer
("Landlord's Engineer")
to design the HVAC system, and the cost for such Landlord's Engineer's work shall be part of the Total Project Costs. Except as herein set forth, there shall be no changes to the Tenant Improvements or to the Construction Documents without the consent of Landlord and Tenant (which consent shall not be unreasonably withheld, conditioned or delayed), and in the event any such changes shall increase the Total Project Costs to an amount which is excess of the Improvement Allowance, then Tenant shall pay the costs of such change orders (which shall include a 5% construction management fee) within ten (IO) days after written request by Landlord, (and such cost shall be deemed Excess Project Costs as provided herein).
If
Tenant fails to timely pay the Excess Project Costs as required above, Landlord shall have the right to stop work on the Tenant Improvements until such time as the Excess Project Costs are paid, and the Rent Commencement Date shall be advanced to an earlier date on a day-for-day basis for each day the Excess Project Costs are not paid after the date due.
|
C. |
Landlord agrees that Tenant shall be entitled to receive an improvement allowance from Landlord for improvement of the Additional Premises as set forth in this Section II.IQ.
("Improvement Allowance")
in an amount which is the lesser of the following:
(a)
an aggregate total of $378,665.00; or (b) 100% of the Total Project Costs. In all events, however, Tenant shall be responsible for the amount by which the Total Project Costs exceeds the Improvement Allowance. The Improvement Allowance shall be paid by Landlord directly to those contractors/parties performing the Tenant Improvements. Notwithstanding anything to the contrary contained herein, if the Total Project Costs are less than $378,665.00, then after completion of Landlord's Work and after the Rent Commencement Date for the Additional Premises, and provided no Events of Default have occurred under the Lease, Tenant shall be permitted to use the difference between $378,665.00 and the Total Project Costs
("Remaining Balance")
towards the cost of Tenant's Common Area Work (as hereafter defined) and/or Premises signage, and/or Tenant's voice/data equipment within the Additional Premises, and/or improvements to the Existing Premises (collectively,
"Tenant's Additional Work"),
all to be performed in accordance with the terms of the Lease, including without limitation, Section 11 of the Lease as modified in this Second Amendment. Additionally, after the Rent Commencement Date for the Additional Premises and completion of Tenant's Additional Work, including issuance of final occupancy certificates, and provided Tenant has complied with all obligations under this Second Amendment, including payment of any Excess Project Costs as set forth herein, Landlord shall reimburse Tenant for the cost of Tenant's Additional Work up to a maximum of an additional $50,000.00, upon, Landlord's receipt of evidence confirming full payment of all costs (as substantiated by evidence submitted to Landlord) and the lien-free completion of the Tenant's Additional Work.
|
D. |
Notwithstanding anything set forth herein, if and to the extent that it is determined by Landlord's architect or contractor that the Tenant Improvements cannot be completed without additional costs caused only by a preexisting Unforeseen Condition (defined below), then Landlord and Tenant shall cooperate to modify the Construction Documents to acconnnodate such Unforeseen Condition without increase to the Total Project Costs. Landlord and Tenant shall each pay one-half
(Y:,)
of the expense to so modify the Construction Documents.
An
"Unforeseen Condition"
is defined as an unanticipated condition, particular to the Building, which was unknown to Landlord's architect and is not readily apparent or customary to the type of work included within the scope of the Tenant Improvements.
If
the Construction Documents cannot be modified to accommodate the Unforeseen Condition without increasing the Total Project Costs, and if the Unforeseen Condition causes the Total Project Costs to exceed the Improvement Allowance, then the amount of such excess caused by the Unforeseen Condition shall be paid 50% by Landlord and 50% by Tenant.
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E. |
If
at any time Tenant requests changes to the Construction Documents which will cause the time to complete the Tenant Improvements to exceed sixty (60) days from receipt of the Building Permit, then Landlord and Tenant shall cooperate to modify the scope of the Tenant Improvements to enable completion within sixty (60) days from receipt of the Building Permit, or at Tenant's election, continue with the Landlord's Work as contemplated and advance the Rent Commencement Date to an earlier date (on a day for day basis) for each day in excess of sixty (60) days that it takes Landlord to complete Landlord's Work.
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F. |
It is intended that Landlord's Work shall include only work which may be completed by Landlord in the ordinary course within sixty (60) days following the issuance of the Building Permit. Accordingly, notwithstanding anything set forth herein, in the event Tenant increases the scope of Tenant's program requirements, or if Tenant requests changes to the Construction Documents, or if after completion of the Construction Documents and before the commencement of Landlord's Work, Landlord determines that the Tenant Improvements will not be able to be completed within sixty (60) days after receipt of the Building Permit, then Tenant and Landlord agree to work collaboratively to immediately modify the scope of Landlord's Work to enable completion within sixty (60) days after the issuance of the Building Permit, provided, however, if such modifications are not resolved by Landlord and Tenant within five (5) days after notice from Landlord, then the Rent Commencement Date shall be advanced to an earlier date on a day-for-day basis for each day
in
excess of sixty (60) days that it takes Landlord to complete Landlord's Work (with such adjustment as may be necessary to account for delays in the Rent Commencement Date of the Suite 100 Premises on account of Landlord's delay in completion of Tenant Improvements to Suite 100).
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G. |
For purposes of this Second Amendment, the Tenant Improvements shall be deemed "substantially completed" when (i) Landlord delivers to Tenant a certificate from Landlord's architect
("Architect's Certificate")
confirming that the Tenant Improvements have been completed in accordance with the requirements of the Construction Documents and this Second Amendment, except for items of work and adjustment of equipment and fixtures which can be completed after Tenant has taken occupancy of the Additional Premises (or a part thereof) without causing material interference with its business operations and use and enjoyment of the Additional Premises
("Punch-List Items"),
as specified in the Architect's Certificate; and (ii) all permits and other authorizations, to the extent required by the City of Newton to enable Tenant to take occupancy
in
accordance with applicable laws and regulations, have been issued, provided, however, in the event Landlord is delayed in obtaining the Certificate of Occupancy on account of work to be completed by Tenant (for example installation of cubicles, voice/data equipment, or other fixtures, furnishings and equipment), then substantial completion shall be deemed to have occurred upon issuance of the Architect's Certificate. Landlord agrees to complete the Punch-List Items within thirty (30) days, subject to delays on account of unavailability of materials, supplies or equipment or other causes beyond Landlord's reasonable control.
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H. |
Tenant shall be pennitted access to the Additional Premises up to twenty-one (21) days prior to the Additional Premises Term Commencement Date for purposes of installation of Tenant's cubicles, wiring for Tenant's voice/data and other equipment, or other fixtures, furnishings and equipment, provided that such access shall in no way delay or interfere with the substantial completion of the Tenant Improvements. Such access shall be subject to all of the terms and conditions of the Lease, as amended hereby, except that no Rent shall be payable with respect to the Additional Premises prior to the Additional Premises Rent Commencement Date.
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I. |
Notwithstanding the foregoing,
in
lieu of Landlord completing the Tenant Improvements, Tenant shall at its option have the right to complete its own Tenant Improvements to the Additional Premises, provided Tenant gives written notice to Landlord of its election to so perform its own Tenant Improvements
("T.I. Notice")
which T.L Notice shall be delivered to Landlord not later than three (3) business days after Landlord delivers to Tenant the Fixed Pricing for the Tenant Improvements. In such event, then the Additional Premises Term Commencement Date shall be that date which is seventy-five (75) days after Landlord delivers the Fixed Pricing as set forth in II.IO.A. above. Upon Tenant's completion of the Tenant hnprovements mcompliance with the provisions of Section
11
of the Lease, as modified in this Second Amendment, and including the issuance of all final occupancy certificates, Landlord shall reimburse Tenant for the cost of the Tenant Improvements up to the total amount of
$378,665.00
upon Landlord's receipt of evidence confirming the full payment of all costs (as substantiated by evidence submitted to Landlord) and the lien-free completion of the Tenant Improvements. To the extent the total cost to complete the Tenant Improvements to the Additional Premises is less than
$378,665.00,
then Tenant shall be permitted to use such excess funds toward Tenant's Additional Work in accordance with the terms of Section II.IQ. of this Second Amendment.
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J. |
Some of the terms defined in this Section II.IQ. may be the same or similar to those terms as defined in the Original Lease and/or First Amendment. Accordingly, notwithstanding anything set forth in this Section ILi0. or otherwise in the Lease, specified terms which are defined in this Section II.I0. (including those terms that may have been previously defined in other sections of the Original Lease or First Amendment), shall refer only to those defined terms as they relate to the Additional Premises and/or to any one or more Suites which comprise the Additional Premises.
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III. |
Parking
.
Tenant's current parking allocation pursuant to Section
1.
of the Original Lease and Section III of the First Amendment shall be increased at the rate of
3.6
spaces per
1,000
rentable square feet of the Additional Premises, effective upon the Additional Premises Term Commencement Date (as applicable to each of the Suites that comprise the Additional Premises). For clarification, upon the Tenn Commencement Date of the entire Additional Premises, Tenant shall be entitled to use all of the parking spaces within the parking areas at the Property in accordance with the tenns of the Original Lease.
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IV. |
Landlord's Obligations
.
Landlord's obligations as set forth in the Lease with respect to the Existing Premises shall continue and shall also apply to the Additional Premises. Landlord shall continue to retain a property management firm to provide customary property management services for the Building and Property. Prior to the Additional Premises Term Commencement Date, Landlord's HVAC contractor shall perform a full inspection and routine preventative maintenance of the HVAC equipment that services the Additional Premises.
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V. |
Premises Signage
.
Promptly after execution of this Second Amendment, Landlord will work with Tenant to upgrade the primary Building signage at the Property, which shall include both the Property address and Tenant's company name. Tenant shall be permitted to install a second exterior signage on the Building subject to compliance with all applicable Codes and Landlord's reasonable aesthetic approval, and to all other signage provisions included in Section 25 of the Original Lease. Subject to certain reimbursement agreements by Landlord as set forth in Section II.IO.C. hereof, the cost of all Premises signage shall be paid by Tenant. At the expiration or other termination of the Lease, Tenant shall remove all Tenant signage (or at Landlord's option, all Tenant company names and logos from such signage), and shall repair any and all damage caused by such removal.
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VI. |
Broker
.
Each of Landlord and Tenant represent to the other that neither has dealt with any other broker in com1ection with this Second Amendment other than Landmark Real Estate Advisors
("LREA").
Landlord shall be responsible for a commission in coilllection with this Second Amendment to LREA pursuant to a separate agreement between Landlord and LREA.
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VII . |
180 Wells Revocable Parking License Agreement
.
|
A. |
24 Space Revocable Parking License Agreement.
Landlord shall, within ninety (90) days after Tenant delivers to Landlord written notice of its election to proceed under this Section VII.A., cause the owner
("180 Wells Owner")
of the property located at 180 Wells Avenue, Newton, Massachusetts (the
"180 Wells Property"),
which 180 Wells Owner is an affiliate of Landlord, to enter into a 24 Space Revocable Parking License Agreement in the form attached hereto as
Exhibit B-1
with Tenant for 24 parking spaces (to be designated by the 180 Wells Owner) within the parking lot servicing the 180 Wells Property. The 24 Space Revocable Parking License Agreement shall be for a term which is co-terminous with the Additional Premises Initial Term,
provided, however, the 24 Space Revocable Parking License Agreement shall permit the 180 Wells Owner to relocate or re-designate the licensed parking spaces within the parking lot at the 180 Wells Property on seven (7) days advance written notice, and shall allow for the revocation of the license by 180 Wells Owner at any time upon sixty (60) days advance written notice.
Additionally, Tenant shall have the right, on or after January
I,
2020, to terminate the 24 Space Revocable Parking License Agreement by giving six (6) calendar months' notice to the 180 Wells Owner. The Base License Fee under the 24 Space Revocable Parking License Agreement shall be at the rate of $110.00 per parking space per month.
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B. |
20 Space Revocable Parking License Agreement.
In addition to the foregoing 24 Space Revocable Parking License Agreement described in subsection VII.
I
above, promptly upon Landlord and Tenant executing and delivering this Second Amendment, Tenant shall be permitted to use an additional 20 parking spaces
("Additional 20 Spaces")
within the parking lot servicing the 180 Wells Property (as designated by the 180 Wells Owner). Tenant's use of the Additional 20 Spaces shall be governed by a separate revocable parking license agreement (the
"20 Space Revocable Parking License Agreement")
containing generally the same terms and conditions as the 24 Space Revocable Parking License Agreement, with the qualification that the Base License Fee shall be at the rate of $1.00 per parking space per month,
and that the 180 Wells Owner may relocate or re-designate the licensed parking spaces within the parking lot at the 180 Wells Property on five (5) days advance written notice, and may revoke the 20 Space Revocable Parking License Agreement at any time upon thirty (30) days advance written notice to Tenant.
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C. |
Pathway
. Landlord shall, at its sole cost and expense, construct a walkable pathway connecting the 60 Wells parking lot and the 180 Wells parking lots
("Pathway")
pursuant to plans and specifications prepared by Landlord in its sole discretion. Landlord shall use good faith, commercially reasonable efforts to commence and thereafter complete the Pathway, subject to weather conditions and a reasonable time to design and construct the Pathway by August 1, 2018.
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VIII. |
Common Area - Lobby Addition
.
The existing Building common areas shall be maintained in their present configuration. Notwithstanding the foregoing, and only after the Suite No.
I
00 Term Commencement Date, Tenant shall be pennitted to incorporate the front comer Wells Avenue facing lobby area (designated as "Wells Ave Lobby" on the Premises Plan) within Tenant's Premises
("Tenant's Common Area Work").
All Tenant's Common Area Work shall be perfonned and comply in all respects with the terms and provisions of the Lease, including, without limitation, Section 11 of the Lease as amended in this Second Amendment. Notwithstanding the foregoing, if Tenant elects to perform the Tenant's Common Area Work, then not later than thirty (30) days prior to the expiration date of the earliest to occur of the Existing Premises Expiration Date or the Additional Premises Expiration Date, Tenant shall, at its sole cost and expense, restore the Wells Ave Lobby to a Building common area in the condition that existed prior to construction of Tenant's Common Area Work, using finishes and materials approved in advance by the Landlord that best match or compliment the other finishes and materials within the Building common areas
("Common Area Restoration").
Tenant may elect to have Landlord complete the Common Area Restoration, in which event Tenant shall pay to Landlord in advance, the total cost (hard and soft costs) Landlord estimates it will incur to complete the Common Area Restoration, which shall include a 5% supervisory charge to Landlord. Upon completion of the Common Area Restoration, Landlord shall provide Tenant an accounting of the final costs actually incurred by Landlord for the Common Area Restoration and Landlord and Tenant shall reconcile any over-payment or under-payment by Tenant.
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IX. |
Building Security/Back-Up Power
.
Landlord shall use reasonable efforts to require its property management firm and vendors regularly providing services within Tenant's Premises (for example, its cleaning contractor) to enter into a commercially reasonable and acceptable non- disclosure and confidentiality agreement with Tenant (relative to Tenant's business conducted from the Premises). Subject to Landlord's prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed, Tenant shall have the right, at its sole cost and expense, to install, operate, repair, maintain and replace one or more natural gas back-up generators, and all reasonably necessary cabling and related appurtenances (collectively, the
"Generator")
to serve the Building, subject to the following: Tenant shall provide, for Landlord's review, all design specifications for the Generator, including the size, weight, and type of Generator to be used; Landlord's approval of the location of the Generator (which shall not be on the roof); any structural penetrations into the Building shall be subject to Landlord's approval in its sole discretion; and in the event at any time there are tenants in the Building other than Tenant, Landlord reserves the right to limit the time for any regular and routine operation of the Generator (other than for emergency operation) so that the Generator will not cause any material disturbance on account of noise, vibration or otherwise to any other tenants at the Building. The installation of the Generator shall be in accordance with all applicable laws and shall otherwise comply with Section 11 of the Lease. At the expiration or earlier termination of the Lease, Tenant, at its sole cost and expense, shall remove the Generator and properly repair any and all damage caused by such removal, and all areas affected shall be restored to the condition existing prior to installation of the Generator.
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X. |
Two Year Extension Term-Additional Premises and Existing Premises
.
In addition to the Extension Term applicable to the Existing Premises as set forth in the Lease (including in Section I hereof), and the Extension Term applicable to the Additional Premises as set forth in Section Il.5. above, Tenant may extend the term of the Lease applicable to both the Existing Premises and the entire Additional Premises
("Extra Extension Term")
for two (2) years (for clarification purposes, through April 30, 2026 applicable to the Existing Premises and an additional two (2) years beyond the Expiration Date set forth above applicable to the Additional Premises), provided Landlord has received written notice, no later than April 30, 2023, of Tenant's intention to extend for such Extra Extension Term. Yearly Fixed Rent during the Extra Extension Tenn shall be at Fair Market Rent detennined in accordance with Exhibit D attached to the Original Lease. Tenant's right to extend the Lease for the Extra Extension Term shall be subject to the other provisions of Section 23 of the Original Lease.
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XII . |
Status of Lease
.
Tenant acknowledges that Tenant has no knowledge of any claims against Landlord under the Lease, and the Lease shall remain in full force and effect as currently existing, except as modified hereby.
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XIII . |
Effect of Amendment
.
Except as otherwise specifically modified herein, all other terms and conditions of the Lease shall remain in full force and effect with respect to both the Existing Premises and the Additional Premises, and the Lease is hereby ratified and confirmed.
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LANDLORD:
Wells 60 Realty LLC
By: Intrum Corp., Manager
By: _______________________
Randy A. Goldberg, President
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TENANT:
CyberArk Software, Inc.
By: ________________________________________________________
Ehud Mokady, President and CEO duly authorized
By: _________________________________________________________
Suzy Peled-Spigelman, Vice President Finance, Americas, duly authorized
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1. |
Grant of License.
Subject to and conditioned upon the terms and provisions of this Agreement, Licensor hereby grants to Licensee a temporary, revocable license
("Revocable Parking License")
to use for parking only the twenty-four (24) parking spaces initially in the area
("Licensed Area")
as shown on the sketch attached as Exhibit
A.
Licensor may from time to time in its sole discretion relocate or re-designate all or any portion of the Licensed Area upon seven (7) days prior written notice
("Relocation Notice")
to Licensee, at which time the Licensed Area shall be changed as provided in the Relocation Notice. The Revocable Parking License creates only a revocable license arrangement with Licensee personally and no other party, and there are no tenancy, occupancy or possessory rights of any kind or nature created under this Agreement.
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2. |
Term.
The Term of this Agreement and the Revocable Parking License shall be for a period beginning on the Term Commencement Date and ending on the Expiration Date unless earlier tenninated as provided herein (the
"Term"),
without any right of renewal or extension. Notwithstanding the foregoing, at Licensor's option and in its sole discretion and in addition to Licensor's right to tenninate this Agreement and the Revocable Parking License upon Licensee's Default hereunder, Licensor may tenninate this Agreement and the Revocable Parking License by providing Licensee not less than sixty (60) days advance written notice of its intention to terminate
("Termination Notice").
Additionally, at any time on or after January 1, 2020, Licensee shall have the right to terminate this Agreement and the Revocable Parking License by providing Licensor not less than six (6) calendar months' notice of its intention to terminate
("Licensee Termination Notice").
Licensee agrees to timely cease using the Licensed Area and vacate and surrender the Licensed Area to Licensor in the condition required by this Agreement by the date set forth for termination in the Termination Notice or Licensee Termination Notice, on which date this Agreement and the Revocable Parking License will terminate (except for provisions of this Agreement that by their terms survive such termination).
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3. | Term Commencement Date. | , 20 (that date which is ninety (90) days after notice from Licensee of Licensee's election to proceed). |
4. |
Expiration Date.
That date which is the last day of the Additional Premises Initial Term (as defined in the 60 Wells Lease), subject to the rights of early termination set forth in Paragraph 2 of this Agreement.
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5. |
Base License Fee.
During the Term of this Agreement and Revocable Parking License, the Base License Fee
("Base Fee")
shall be at the annual rate of$3I,680.00, with each monthly installment being $2,640.00. Each monthly installment of the Base Fee is payable monthly in advance, without offset, setoff or deduction for any reason, on the first day of each month, and shall be made payable to Licensor at the address set forth in the first paragraph, or, upon ten (10) days prior written notice from Licensor to Licensee, to Licensor's designee. At Licensor's request the Base Fee shall be paid by ACH deposits.
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6. |
Licensed Area.
The Licensed Area is only to be for the use and during the hours set forth in Section 7 hereof and for no other purpose. Licensee has the right, in common with Licensor, licensees of the Property and others acting by, through and under Licensor and such licensees, to use the paved passageways closest to the Licensed Area
("Access Areas")
on the Property for ingress to and egress from the Licensed Area and Wells Avenue. Pursuant to the Relocation Notice as provided in Section I of this Agreement, Licensor has the right at any time and from time to time during the Term to relocate all or a portion of the Licensed Area to another area of the parking lot servicing the Property. In no event shall Licensee be permitted to use any additional parking spaces/areas at the Property other than within the Licensed Area. Licensee agrees that Licensor shall not be responsible to police or otherwise monitor the Licensed Area in any manner, including, without limitation, Licensor is not responsible to ensure that unauthorized vehicle(s) are not parked within the Licensed Area. In no event shall Licensee have any right to tow, remove or otherwise notice (or cause any such towing, removal or notice of) any unauthorized vehicle(s) parked within Licensee's Licensed Area.
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7. |
Use.
The use of the Licensed Area is only for use of transient and not overnight parking of Licensee's employees' passenger automobiles only, and for no other use. To the extent permitted by applicable laws only, the Licensed Area is only to be used daily between the hours of 5:00 a.m. - midnight. All Licensee's employees' automobiles shall be registered, insured and in good operating and aesthetic condition. Licensee shall use the Licensed Area for parking of passenger vehicles only, and no repairing, washing, refueling, or maintaining of vehicles shall be permitted at the Licensed Area at any time. Licensee shall not permit any work to be performed on the vehicles nor any water, fumes, noise nor other adverse condition to occur on or emanate from the Licensed Area. Licensee shall comply with all applicable laws in connection with its use of the Licensed Area. Licensee shall keep the Licensed Area clean and free of any litter and debris. Licensee agrees, which agreement shall survive the tennination of this Agreement and the Revocable Parking License, that Licensor has no responsibility whatsoever for any loss, theft, damage or destruction to any vehicle in, at or near the Property or Licensed Area, or in connection with or arising out of the Revocable Parking License.
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8. |
Security Deposit.
The Security Deposit shall be $2,640.00 paid to Licensor upon signing this Agreement. The Security Deposit shall be refunded to Licensee without interest within sixty (60) days after the Expiration Date conditioned upon and subject to the terms of this Agreement, including, without limitation, subject to Licensee's satisfactory compliance with the conditions of this Agreement and subject to deduction by Licensor for payment of Licensee's obligations not then fulfilled by Licensee. Licensor may use the Security Deposit to pay for any obligation hereunder not timely paid or performed by Licensee, and upon ten (I 0) days prior written notice from Licensor, Licensee shall replenish the Security Deposit to the full $2,640.00.
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9. |
Insurance.
Licensee shall procure and maintain in full force and effect during the Term of this Agreement a policy of comprehensive, general liability insurance in form, substance and amount satisfactory to Licensor, each on an occurrence basis, with minimum coverages for commercial general liability to be in an amount not less than $1,000,000.00 for each occurrence and $2,000,000.00 in the aggregate, and with an overall umbrella coverage of $5,000,000.00. The foregoing policy(ies) shall include without limitation non-owned and hired automobile coverage. All insurance policies and the amounts of insurance shall be location specific to 180 Wells Avenue, Newton, Massachusetts. Each policy of insurance shall name as additional insureds Licensor and Intrum Corp. and other related parties and/or mortgagee(s) of the Property (collectively,
"Licensor Related Parties"
) of which Licensee receives ten (IO) days advance written notice. Each such policy shall be Best Rated A- or better and non-cancelable with respect to Licensor and the Licensor Related Parties on less than thirty (30) days prior written notice to Licensor. Upon execution of this Agreement, a duplicate original or certificate of each insurance policy shall be delivered to Licensor with all premiums paid through at least the first twelve (12) months after the date hereof, and new or updated policies or certificates of insurance (each evidencing twelve (12) month's full premium payment) shall be delivered to Licensor not later than thirty (30) days prior to the expiration date of each then existing policy. Licensee hereby releases Licensor from any and all liability for any loss or damage resulting from or arising out of Licensee's or its employees' or patrons' use under this Agreement regardless of the fault or negligence of Licensor, and Licensee shall secure a waiver of subrogation provision in each applicable insurance policy. This Section shall survive the termination of this Agreement and the Revocable Parking License.
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10. | Additional Payments . In addition to the Base Fee and any other payments due from Licensee to Licensor hereunder, Licensee agrees to pay Licensor's costs, in connection with Licensor's work to identify the Licensed Area including, without limitation, costs to pay for signage and striping or other identification of the parking spaces in the Licensed Area (collectively, the "Identification Costs" ). In connection therewith and simultaneously with the execution of this Agreement, Licensee shall pay to Licensor $1,000.00 ( "Initial Additional Payment" ) towards the Identification Costs. Licensor and Licensee agree that upon Licensor's determination of the final amount of Identification Costs, either (i) Licensor shall return to Licensee such amount overpaid by Licensee that is the difference between the actual Identification Costs and the Initial Additional Payment, or (ii) Licensee shall pay to Licensor within 15 days following billing from Licensor, the amount that the Identification Costs exceeds the Initial Additional Payment. |
11. |
Exoneration/Indemnification
.
Licensee will exonerate, indemnify, save and hold harmless Licensor and its managers, members, employees, agents, successors and assigns
("Licensor Parties")
from and against any and all claims, liabilities or penalties asserted by or on behalf of any third party(ies): (i) on account of, or based upon, any injury to any person or loss of or damage to property sustained or occurring for any reason arising out of or related to Licensee's use of the Licensed Area or Access Areas; and (ii) on account of, or based upon, any injury to any person or loss of or damage to, property sustained or resulting from Licensee's breach of any provision of this Agreement, including without limitation, related to the use or release by Licensee, or those acting by, through or under Licensee, of any hazardous or toxic materials or waste as defined under any state or federal law. Notwithstanding the foregoing, Licensee shall not be liable under this Section 11 on account of claims, liabilities or penalties incurred on account of Licensor's Parties' gross negligence or willful misconduct. This Section shall survive the termination of this Agreement and the Revocable Parking License.
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12 . |
Miscellaneous
.
|
A. |
Repairs. Licensor has the right from time to time to maintain, repair and replace the paving and lighting on the Licensed Area and the Access Area as deemed necessary by Licensor, during which time certain portions of the Licensed Area or Access Area may be unavailable for use by Licensee.
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B. |
Reimbursement of Costs. Any additional costs above the Base Fee to be paid to Licensor by Licensee under this Agreement shall be reimbursed to Licensor within thirty (30) days following billing and shall be paid to Licensor in the same manner and at the same address as provided for the payment of monthly installments of the Base Fee.
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C. |
License Termination. Upon termination of this Agreement and the Revocable Parking License, Licensee shall vacate the Licensed Area and leave it in at least as good condition as when Licensee's occupancy began, subject to ordinary wear, and as later improved; and all Licensee's property and all debris shall be removed and all damage repaired. This Section shall survive the termination of the Revocable Parking License and this Agreement.
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D. |
Maintenance, Repair and Replacement. Except as otherwise set forth below, Licensee shall be responsible at its own cost and expense to keep, or cause to be kept, clean and maintain the Licensed Area in good condition. Subject to Force Majeure events, Licensee's actions, and other occurrences beyond Licensor's reasonable control including, without limitation, the acts or omissions of third parties, Licensor shall be responsible in a commercially reasonable manner for the following: (i) the plowing and removal of snow from and sanding of ice to the Licensed Area as well as the passageways thereto and therefrom; and (ii) maintaining the existing parking lot lighting on or adjacent to the Licensed Area consistent with its current maintenance practices. Licensor shall also maintain, repair and replace the paving and lighting in the Licensed Area and Access Areas as deemed necessary by Licensor. Licensee agrees to cooperate with Licensor in connection with Licensor's responsibilities in this paragraph, including, without limitation, Licensee's arranging for vehicles to temporarily vacate and not use the Licensed Area from time to time to permit Licensor to perform its responsibilities.
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E. |
As Is Condition. Licensee shall not be permitted to make any alterations or additions to the Licensed Area. Licensee agrees that Licensee has fully inspected the Licensed Area and Access Areas, has entered into this Agreement based on its own investigations and without reliance on any Licensor representation or warranty of any kind and accepts the Licensed Area in its "AS IS", with all faults, condition.
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F . |
Assignment and Sublicensing
. Licensee shall not assign this Agreement nor sublicense any rights to the whole or any part of the Licensed Area, and any purported assignment or sublicense shall be void
ab initio.
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G. |
Default.
The term
"Default" or "default"
means (i) the failure of Licensee to pay any installment of the Base Fee or any other amount due hereunder on or within ten (10) days after its due date or (ii) the failure of Licensee to cure any non-monetary breach of this Agreement within ten (10) business days after written notice to Licensee. Upon a Default, Licensor shall have the right, at its option, to declare by written notice to Licensee, this Agreement and the Revocable Parking License immediately terminated, and thereafter to use the Licensed Area for any purpose, to deny Licensee access to the Property and remove from the Property, at Licensee's sole cost and expense and without liability to Licensor, all the vehicles and other property of Licensee and Licensee's employees and patrons, and to exercise all other remedies available to Licensor as provided in this Agreement and otherwise available at law and in equity. Licensor's remedies under this Agreement and at law and in equity are cumulative and may be exercised in any manner of Licensor's election. Costs of enforcement and collection, plus interest on all amounts not paid when due at 1.5% a month, shall be paid by Licensee to Licensor. In the event of a Default by Licensee resulting in Licensor's termination of this Agreement and the Revocable Parking License, Licensee (a) shall pay Licensor within seven (7) days after being invoiced therefor, the total of all amounts due from Licensee under this Agreement until Licensee has vacated the Licensed Area and left it in the condition required hereunder, and (b) shall pay Licensor within ten (10) days after being invoiced therefor, a sum equal to twelve (12) months of the Base Fee except if there are less than twelve (12) months left in the Term, in which case such sum shall be equal to the Base Fee for the remainder of the Tenn, plus interest at the rate of 18% per annum from the date(s) due through the date of payment of the foregoing amounts under (a) and (b) of this sentence, and plus (c) the costs of collection. Timely payment of the sums set forth in (a), (b) and (c) above shall be deemed liquidated damages on account of such default and termination, except for obligations specifically set forth herein to survive termination, and except that Licensor shall retain all rights, and Licensee shall continue to be liable under, Section 12.M. for Licensee's unauthorized use after termination. This Section shall survive the termination of this Agreement and the Revocable Parking License.
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H. |
Subordination
. This Agreement is automatically subordinate to all present and future Licensor mortgage financing.
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I. |
Licensor Liability
. Notwithstanding anything to the contrary contained herein, Licensor shall have no liability except for willful misconduct or gross negligence, and then only for the cost of the repair of personal property. Performance by Licensor shall be excused by third party delays. Licensor shall not be responsible for interruption in the outdoor lighting or other services/delivered by third parties. Licensor is only liable for its obligations hereunder during its time of ownership of the Property, with each successive owner of the Property only liable for its obligations hereunder during its respective period of ownership. This Section shall survive the termination of this Agreement and the Revocable Parking License.
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J. |
Broker
. Licensee represents and warrants to Licensor that it was not shown the Licensed Area by any broker nor was any broker or finder involved in Licensee's entering into this Agreement. Licensee shall indemnify Licensor from the falseness of the foregoing representation or warranty. This Section shall survive the termination of this Agreement and the Revocable Parking License.
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K. |
Signage
. Licensee shall not place signage at/on or paint or otherwise decorate or do any other work in or to the Licensed Area.
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L. |
Notice
. Notices from Licensor to Licensee under this Agreement shall be deemed duly served if delivered to Licensee's offices located at 60 Wells Avenue, Suite 102, Newton, Massachusetts 02459, or at such other address as Licensor shall notify Licensee, in each case to the attention of Randy
A.
Goldberg. Licensee's local contact in Newton is
("Contact Person")
who may be reached at
----------' with an e-mail address of ------------ with Licensee agreeing to notify Licensor with any change of the Contact Person and/or contact information. Otherwise, notices hereunder shall be deemed duly given from and after such time as (i) deposited with the U.S. Mails, for delivery via registered or certified mail, return receipt requested, postage prepaid, (ii) deposited for overnight delivery with a national courier with delivery tracking service such as FedEx, or (iii) by in-hand delivery to Licensee or Licensor at his/their/its Initial Address on the top of the first page hereof, or at such replacement address as may from time to time be given upon ten (10) days advance written notice to the other.
|
M. |
Licensee's Unauthorized Use After Termination.
In the event that Licensee continues to access and use the Licensed Area or any portion of the Property beyond the expiration of the Term of this Agreement, or earlier termination of this Agreement or the Revocable Parking License, such use shall not create any rights in Licensee but shall subject Licensee to all the obligations set forth herein but at a rate equal to $7,920.00 for each month or part of any month
("Unauthorized Use Rate")
during which Licensee continues such unauthorized use. The foregoing is not intended to create liability from Licensee to Licensor for those parties that are not permitted to park within the Licensed Area under the terms of this Agreement. The acceptance of a purported fee check following the end of the Term shall not constitute the creation of any rights in Licensee, it being agreed that Licensee's status shall remain unlawful and a continuing Default of this Agreement, and notwithstanding anything set forth in this Agreement, Licensor shall have the right to exercise any and all rights and remedies available to Licensor hereunder and at law or in equity, including, without limitation, rights and remedies available on account of trespass. Licensee shall also pay to Licensor all damages, whether direct and/or indirect, sustained by reason of such unauthorized use. Otherwise, such unauthorized use shall be on the terms and conditions set forth in this Agreement, as far as applicable. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
N. |
Rules and Regulations
. Licensee agrees to comply with all reasonable rules and regulations which Licensor may establish from time to time for the orderly and efficient management and operation of the Property or any portion thereof.
|
0. |
Counterparts
. This Agreement may be signed in multiple originals and/or may be separately signed and assembled to contain the signatures of all the parties, with each counterpart constituting an original document.
|
P. |
Governing Law and Jurisdiction
. This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Massachusetts. Licensee agrees that (a) jurisdiction for any legal process taken with respect to this Agreement and/or enforcement or compliance by or against any of the parties to this Agreement shall be exclusively commenced and processed within the State Courts of Norfolk, Middlesex or Suffolk Counties of the Commonwealth of Massachusetts, and (b) each such party submits to such jurisdiction.
|
Q. |
Entire Agreement
. This Agreement contains the entire agreement between the parties and the terms may not in any way be altered, modified, or changed, or shall any term be added to or deleted from the agreement except by a writing signed by both parties. Licensor and Licensee agree there are no other agreements or understandings between Licensor and Licensee in the matters addressed in this Agreement.
|
R. |
No Joint Venture
. Nothing in this Agreement is intended to or shall be construed to create either an express or implied partnership or joint venture between the parties.
|
S. |
Authority
. Each individual executing this Agreement on behalf of his or her respective party represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of said entity in accordance with the governing documents of such entity, and that upon full execution and delivery this Agreement is binding upon said entity in accordance with its terms.
|
T. |
Unauthorized Parking
.
In
addition to all the rights and remedies of Licensor hereunder, Licensor and Licensee agree to the provisions of this Section. Licensor, at its option, has the right to notify Licensee of the unauthorized use by Licensee's employee(s) of either of the following (each, an
"Unauthorized Use"):
(i) parking
in
areas outside the Licensed Area; or (ii) parking in the Licensed Area at times other than the pennitted hours; or (iii) using the Licensed Area or any other portion of the Property for uses other than as permitted under Section 7 of this Agreement. Upon the second notice in any twelve (12) month period from Licensor to Licensee of Unauthorized Use, the Base Fee shall be increased to the Unauthorized Use Rate, which Unauthorized Use Rate shall continue from the date of the second notice until such time as Licensee has demonstrated to Licensor that such Unauthorized Use has been discontinued for at least four (4) full consecutive weeks, provided, however, such Unauthorized Use Rate shall be payable for not less than one
(I)
full month. In addition, Licensee shall at all times use good faith efforts to prevent those parties affiliated with Licensee (including without limitation Licensee's guests and patrons) who are not permitted to use the Licensed Area under the terms of this Agreement from parking within the Licensed Area. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
LICENSOR:
180 Wells Realty LLC
By: Intrum Corp., Manager
By: _______________________
Randy A. Goldberg, President
|
LICENSEE:
CyberArk Software, Inc.
By: ________________________________________________________
Ehud Mokady, President and CEO duly authorized
By: _________________________________________________________
Suzy Peled-Spigelman, Vice President Finance, Americas, duly authorized
|
1. |
Grant of License.
Subject to and conditioned upon the terms and provisions of this Agreement, Licensor hereby grants to Licensee a temporary, revocable license
("Revocable Parking License")
to use for parking only the twenty (20) parking spaces initially in the area
("Licensed Area")
as shown on the sketch attached as Exhibit
A.
Licensor may from time to time in its sole discretion relocate or re-designate all or any portion of the Licensed Area upon five (5) days prior written notice
("Relocation Notice")
to Licensee, at which time the Licensed Area shall be changed as provided in the Relocation Notice. The Revocable Parking License creates only a revocable license arrangement with Licensee personally and no other party, and there are no tenancy, occupancy or possessory rights of any kind or nature created under this Agreement.
|
2. |
Term.
The Term of this Agreement and the Revocable Parking License shall be for a period beginning on the Term Commencement Date and ending on the Expiration Date unless earlier terminated as provided herein (the
"Term"),
without any right of renewal or extension except as set forth herein. Notwithstanding the foregoing, at Licensor's and/or Licensee's option and
in
its sole discretion both Licensee and Licensor shall have the right to terminate this Agreement and the Revocable Parking License by providing to the other party not less than thirty (30) days advance written notice of its intention to terminate
("Termination Notice").
Licensee agrees to timely cease using the Licensed Area and vacate and surrender the Licensed Area to Licensor in the condition required by this Agreement by the date set forth for termination in the Termination Notice, on which date this Agreement and the Revocable Parking License will terminate (except for provisions of this Agreement that by their terms survive such termination).
|
3. | Term Commencement Date . _____________ | ,, 20_. |
4. |
Expiration Date.
That date which is twelve (12) months after the Term Commencement Date, renewable for successive periods of twelve (12) months each, but subject to the rights of early termination set forth in Paragraph 2 of this Agreement.
|
5. |
Base License Fee.
During the Term of this Agreement and Revocable Parking License, the Base License Fee
("Base Fee")
shall be at the annual rate of $240.00, with each monthly installment being $20.00. Each monthly installment of the Base Fee is payable monthly in advance, without offset, setoff or deduction for any reason, on the first day of each month, and shall be made payable to Licensor at the address set forth in the first paragraph, or, upon ten (10) days prior written notice from Licensor to Licensee, to Licensor's designee. At Licensor's request the Base Fee shall be paid by ACH deposits.
|
6. |
Licensed Area.
The Licensed Area is only to be for the use and during the hours set forth in Section 7 hereof and for no other purpose. Licensee has the right, in common with Licensor, licensees of the Property and others acting by, through and under Licensor and such licensees, to use the paved passageways closest to the Licensed Area
("Access Areas")
on the Property for ingress to and egress from the Licensed Area and Wells Avenue. Pursuant to the Relocation Notice as provided in Section I of this Agreement, Licensor has the right at any time and from time to time during the Term to relocate all or a portion of the Licensed Area to another area of the parking lot servicing the Property. In no event shall Licensee be permitted to use any additional parking spaces/areas at the Property other than within the Licensed Area. Licensee agrees that Licensor shall not be responsible to police or otherwise monitor the Licensed Area in any manner, including, without limitation, Licensor is not responsible to ensure that unauthorized vehicle(s) are not parked within the Licensed Area. In no event shall Licensee have any right to tow, remove or otherwise notice (or cause any such towing, removal or notice of) any unauthorized vehicle(s) parked within Licensee's Licensed Area.
|
7. |
Use.
The use of the Licensed Area is only for use of transient and not overnight parking of Licensee's employees' passenger automobiles only, and for no other use. To the extent permitted by applicable laws only, the Licensed Area is only to be used daily between the hours of 5:00 a.m. - midnight. All Licensee's employees' automobiles shall be registered, insured and in good operating and aesthetic condition. Licensee shall use the Licensed Area for parking of passenger vehicles only, and no repairing, washing, refueling, or maintaining of vehicles shall be permitted at the Licensed Area at any time. Licensee shall not permit any work to be performed on the vehicles nor any water, fumes, noise nor other adverse condition to occur on or emanate from the Licensed Area. Licensee shall comply with all applicable laws in connection with its use of the Licensed Area. Licensee shall keep the Licensed Area clean and free of any litter and debris. Licensee agrees, which agreement shall survive the termination of this Agreement and the Revocable Parking License, that Licensor has no responsibility whatsoever for any loss, theft, damage or destruction to any vehicle in, at or near the Property or Licensed Area, or in connection with or arising out of the Revocable Parking License.
|
8. |
Security Deposit.
The Security Deposit shall be $2,640.00 paid to Licensor upon signing this Agreement. The Security Deposit shall be refunded to Licensee without interest within sixty (60) days after the Expiration Date conditioned upon and subject to the terms of this Agreement, including, without limitation, subject to Licensee's satisfactory compliance with the conditions of this Agreement and subject to deduction by Licensor for payment of Licensee's obligations not then fulfilled by Licensee. Licensor may use the Security Deposit to pay for any obligation hereunder not timely paid or performed by Licensee, and upon ten (10) days prior written notice from Licensor, Licensee shall replenish the Security Deposit to the full $2,640.00.
|
9. |
Insurance.
Licensee shall procure and maintain in full force and effect during the Term of this Agreement a policy of comprehensive, general liability insurance in form, substance and amount satisfactory to Licensor, each on an occurrence basis, with minimum coverages for commercial general liability to be in an amount not less than $1,000,000.00 for each occurrence and $2,000,000.00 in the aggregate, and with an overall umbrella coverage of $5,000,000.00. The foregoing policy(ies) shall include without limitation non-owned and hired automobile coverage. All insurance policies and the amounts of insurance shall be location specific to 180 Wells Avenue, Newton, Massachusetts. Each policy of insurance shall name as additional insureds Licensor and Intrum Corp. and other related parties and/or mortgagee(s) of the Property (collectively,
"Licensor Related Parties")
of which Licensee receives ten (10) days advance written notice. Each such policy shall be Best Rated A- or better and non-cancelable with respect to Licensor and the Licensor Related Parties on less than thirty (30) days prior written notice to Licensor. Upon execution of this Agreement, a duplicate original or certificate of each insurance policy shall be delivered to Licensor with all premiums paid through at least the first twelve (12) months after the date hereof, and new or updated policies or certificates of insurance (each evidencing twelve (12) month's full premium payment) shall be delivered to Licensor not later than thirty (30) days prior to the expiration date of each then existing policy. Licensee hereby releases Licensor from any and all liability for any loss or damage resulting from or arising out of Licensee's or its employees' or patrons' use under this Agreement regardless of the fault or negligence of Licensor, and Licensee shall secure a waiver of subrogation provision in each applicable insurance policy. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
10. |
Additional Payments
.
In addition to the Base Fee and any other payments due from Licensee to Licensor hereunder, Licensee agrees to pay Licensor's costs, in connection with Licensor's work to identify the Licensed Area including, without limitation, costs to pay for signage and striping or other identification of the parking spaces in the Licensed Area (collectively, the
"Identification Costs").
In connection therewith and simultaneously with the execution of this Agreement, Licensee shall pay to Licensor $1,000.00
("Initial Additional Payment")
towards the Identification Costs. Licensor and Licensee agree that upon Licensor's determination of the final amount of Identification Costs, either (i) Licensor shall return to Licensee such amount overpaid by Licensee that is the difference between the actual Identification Costs and the Initial Additional Payment, or (ii) Licensee shall pay to Licensor within 15 days following billing from Licensor, the amount that the Identification Costs exceeds the Initial Additional Payment.
|
11. |
Exoneration/Indemnification
.
Licensee will exonerate, indemnify, save and hold hannless Licensor and its managers, members, employees, agents, snccessors and assigns
("Licensor Parties")
from and against any and all claims, liabilities or penalties asserted by or on behalf of any third party(ies): (i) on acconnt of, or based upon, any injury to any person or loss of or damage to property sustained or occurring for any reason arising out of or related to Licensee's use of the Licensed Area or Access Areas; and (ii) on account of, or based upon, any injury to any person or loss of or damage to, property sustained or resulting from Licensee's breach of any provision of this Agreement, including without limitation, related to the use or release by Licensee, or those acting by, through or under Licensee, of any hazardous or toxic materials or waste as defined under any state or federal law. Notwithstanding the foregoing, Licensee shall not be liable under this Section 11 on account of claims, liabilities or penalties incurred on account of Licensor's Parties' gross negligence or willful misconduct. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
12. |
Miscellaneous.
|
A. |
Repairs
. Licensor has the right from time to time to maintain, repair and replace the paving and lighting on the Licensed Area and the Access Area as deemed necessary by Licensor, during which time certain portions of the Licensed Area or Access Area may be unavailable for use by Licensee.
|
B. |
Reimbursement of Costs
. Any additional costs above the Base Fee to be paid to Licensor by Licensee under this Agreement shall be reimbursed to Licensor within thirty (30) days following billing and shall be paid to Licensor in the same manner and at the same address as provided for the payment of monthly installments of the Base Fee.
|
C. |
License Termination
. Upon termination of this Agreement and the Revocable Parking License by Licensor or by Licensee, Licensee shall vacate the Licensed Area and leave it in at least as good condition as when Licensee's occupancy began, subject to ordinary wear, and as later improved; and all Licensee's property and all debris shall be removed and all damage repaired. This Section shall survive the termination of the Revocable Parking License and this Agreement.
|
D. |
Maintenance, Repair and Replacement
. Except as otherwise set forth below, Licensee shall be responsible at its own cost and expense to keep, or cause to be kept, clean and maintain the Licensed Area in good condition. Subject to Force Majeure events, Licensee's actions, and other occurrences beyond Licensor's reasonable control including, without limitation, the acts or omissions of third parties, Licensor shall be responsible in a commercially reasonable manner for the following: (i) the plowing and removal of snow from and sanding of ice to the Licensed Area as well as the passageways thereto and therefrom; and (ii) maintaining the existing parking lot lighting on or adjacent to the Licensed Area consistent with its current maintenance practices. Licensor shall also maintain, repair and replace the paving and lighting in the Licensed Area and Access Areas as deemed necessary by Licensor. Licensee agrees to cooperate with Licensor in connection with Licensor's responsibilities in this paragraph, including, without limitation, Licensee's arranging for vehicles to temporarily vacate and not use the Licensed Area from time to time to permit Licensor to perfonn its responsibilities.
|
E. |
As Is Condition
. Licensee shall not be permitted to make any alterations or additions to the Licensed Area. Licensee agrees that Licensee has fully inspected the Licensed Area and Access Areas, has entered into this Agreement based on its own investigations and without reliance on any Licensor representation or warranty of any kind and accepts the Licensed Area in its "AS IS", with all faults, condition.
|
F . |
Assignment and Sublicensing
. Licensee shall not assign this Agreement nor sublicense any rights to the whole or any part of the Licensed Area, and any purported assignment or sublicense shall be void
ab initio.
|
G. |
Default
. The term
"Default" or "default"
means (i) the failure of Licensee to pay any installment of the Base Fee or any other amount due hereunder on or within ten (10) days after its due date or (ii) the failure of Licensee to cure any non-monetary breach of this Agreement within ten (10) business days after written notice to Licensee. Upon a Default, Licensor shall have the right, at its option, to declare by written notice to Licensee, this Agreement and the Revocable Parking License immediately terminated, and thereafter to use the Licensed Area for any purpose, to deny Licensee access to the Property and remove from the Property, at Licensee's sole cost and expense and without liability to Licensor, all the vehicles and other property of Licensee and Licensee's employees and patrons, and to exercise all other remedies available to Licensor as provided in this Agreement and otherwise available at law and in equity. Licensor's remedies under this Agreement and at law and in equity are cumulative and may be exercised in any manner of Licensor's election. Costs of enforcement and collection, plus interest on all amounts not paid when due at 1.5% a month, shall be paid by Licensee to Licensor.
In
the event of a Default by Licensee resulting in Licensor's termination of this Agreement and the Revocable Parking License, Licensee (a) shall pay Licensor within seven (7) days after being invoiced therefor, the total of all amounts due from Licensee under this Agreement until Licensee has vacated the Licensed Area and left it in the condition required hereunder, and (b) to the extent then known, all other amounts that may be or become due to Licensee under this Agreement, including, without limitation, sums due under Sections 11., 12.M. and 12.T. hereof, plus interest at the rate of 18% per annum from the date(s) due through the date of payment of the foregoing amounts under (a) and (b) of this sentence, and (c) plus costs of collection. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
H. |
Subordination
. This Agreement is automatically subordinate to all present and future Licensor mortgage financing.
|
I. |
Licensor Liability.
Notwithstanding anything to the contrary contained herein, Licensor shall have no liability except for willful misconduct or gross negligence, and then only for the cost of the repair of personal property. Performance by Licensor shall be excused by third party delays. Licensor shall not be responsible for interruption in the outdoor lighting or other services/delivered by third parties. Licensor is only liable for its obligations hereunder during its time of ownership of the Property, with each successive owner of the Property only liable for its obligations hereunder during its respective period of ownership. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
J. |
Broker.
Licensee represents and warrants to Licensor that it was not shown the Licensed Area by any broker nor was any broker or finder involved in Licensee's entering into this Agreement. Licensee shall indemnify Licensor from the falseness of the foregoing representation or warranty. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
K. |
Signage. Licensee shall not place signage at/on or paint or otherwise decorate or do any other work in or to the Licensed Area.
|
L. |
Notice
. Notices from Licensor to Licensee under this Agreement shall be deemed duly served if delivered to Licensee's offices located at 60 Wells Avenue, Suite 102, Newton, Massachusetts 02459, or at such other address as Licensor shall notify Licensee, in each case to the attention of Randy A. Goldberg. Licensee's local contact in Newton is ("Contact Person") who may be reached at, with an e-mail address of ---------- ------------ with Licensee agreeing to notify Licensor with any change of the Contact Person and/or contact infonnation. Otherwise, notices hereunder shall be deemed duly given from and after such time as (i) deposited with the U.S. Mails, for delivery via registered or certified mail, return receipt requested, postage prepaid, (ii) deposited for overnight delivery with a national courier with delivery tracking service such as FedEx, or (iii) by in-hand delivery to Licensee or Licensor at his/their/its Initial Address on the top of the first page hereof, or at such replacement address as may from time to time be given upon ten (I 0) days advance written notice to the other.
|
M. |
Licensee's Unauthorized Use After Termination.
In the event that Licensee continues to access and use the Licensed Area or any portion of the Property beyond the expiration of the Term of this Agreement, or earlier termination of this Agreement or the Revocable Parking License, such use shall not create any rights in Licensee but shall subject Licensee to all the obligations set forth herein but at a rate equal to $7,920.00 for each month or part of any month
("Unauthorized Use Rate")
during which Licensee continues such unauthorized use. The foregoing is not intended to create liability from Licensee to Licensor for those parties that are not permitted to park within the Licensed Area under the terms of this Agreement. The acceptance of a purported fee check following the end of the Term shall not constitute the creation of any rights in Licensee, it being agreed that Licensee's status shall remain unlawful and a continuing Default of this Agreement, and notwithstanding anything set forth in this Agreement, Licensor shall have the right to exercise any and all rights and remedies available to Licensor hereunder and at law or in equity, including, without limitation, rights and remedies available on account of trespass. Licensee shall also pay to Licensor all damages, whether direct and/or indirect, sustained by reason of such unauthorized use. Otherwise, such unauthorized use shall be on the terms and conditions set forth in this Agreement, as far as applicable. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
N. |
Rules and Regulations.
Licensee agrees to comply with all reasonable rules and regulations which Licensor may establish from time to time for the orderly and efficient management and operation of the Property or any portion thereof.
|
O. |
Countemarts
. This Agreement may be signed in multiple originals and/or may be separately signed and assembled to contain the signatures of all the parties, with each counterpart constituting an original document.
|
P. |
Governing Law and Jurisdiction
. This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Massachusetts. Licensee agrees that
(a)
jurisdiction for any legal process taken with respect to this Agreement and/or enforcement or compliance by or against any of the parties to this Agreement shall be exclusively commenced and processed within the State Courts of Norfolk, Middlesex or Suffolk Counties of the Commonwealth of Massachusetts, and (b) each such party submits to such jurisdiction.
|
Q. |
Entire Agreement.
This Agreement contains the entire agreement between the parties and the terms may not in any way be altered, modified, or changed, or shall any term be added to or deleted from the agreement except by a writing signed by both parties. Licensor and Licensee agree there are no other agreements or understandings between Licensor and Licensee in the matters addressed in this Agreement.
|
R. |
No Joint Venture
. Nothing in this Agreement is intended to or shall be construed to create either an express or implied partnership or joint venture between the parties.
|
S. |
Authority
. Each individual executing this Agreement on behalf of his or her respective party represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of said entity in accordance with the governing documents of such entity, and that upon full execution and delivery this Agreement is binding upon said entity in accordance with its terms.
|
T. |
Unauthorized Parking
. In addition to all the rights and remedies of Licensor hereunder, Licensor and Licensee agree to the provisions of this Section. Licensor, at its option, has the right to notify Licensee of the unauthorized use by Licensee's employee(s) of either of the following (each, an
"Unauthorized Use"): (i)
parking
in
areas outside the Licensed Area; or (ii) parking in the Licensed Area at times other than the permitted hours; or (iii) using the Licensed Area or any other portion of the Property for uses other than as permitted under Section 7 of this Agreement. Upon the second notice in any twelve (12) month period from Licensor to Licensee of Unauthorized Use, the Base Fee shall be increased to the Unauthorized Use Rate, which Unauthorized Use Rate shall continue from the date of the second notice until such time as Licensee has demonstrated to Licensor that such Unauthorized Use has been discontinued for at least four (4) full consecutive weeks, provided, however, such Unauthorized Use Rate shall be payable for not less than one (I) full month. In addition, Licensee shall at all times use good faith efforts to prevent those parties affiliated with Licensee (including without limitation Licensee's guests and patrons) who are not permitted to use the Licensed Area under the terms of this Agreement from parking within the Licensed Area. This Section shall survive the termination of this Agreement and the Revocable Parking License.
|
LICENSOR:
180 Wells Realty LLC
By: Intrum Corp., Manager
By: _______________________
Randy A. Goldberg, President
|
LICENSEE:
CyberArk Software, Inc.
By: ________________________________________________________
Ehud Mokady, President and CEO duly authorized
By: ________________________________________________________
Suzy Peled-Spigelman, Vice President Finance, Americas, duly authorized
|
• |
Subject Matter of the Lease
: Unprotected tenancy lease of office and parking spaces for the purpose of conducting the Company's business. Premises are located in Petach-Tikva, Israel.
|
• |
Term of the Lease
:
|
■ |
The term of the Lease is sixty (60) months commencing on July 1, 2017 other than with respect to the 3rd floor which shall commence as of July 1, 2018, with the Company's right for early termination after 36 months. The Company is given two options to extend the term of the Lease of twelve (12) months each. Such options apply automatically unless the Company notifies the Landlord 180 days prior to the commencement of each such option period that it does not wish to exercise the option.
|
■ |
The term of the Lease for all parking spaces, leased by the Company from time to time, is linked to the lease term of the main premises.
|
• |
Premises Covered by the Lease
:
|
■ |
Property
– The Company leases the upper 8 floors, levels 3 to 10. The Company has an option to lease the remaining 2 floors subject to a prior written notice to be given no later than 31.10.2018.
|
■ |
Parking
– The Company has the right to lease two hundred and forty (240) parking lots.
|
• |
Rental Fees
:
|
■ |
Property
– The Company shall pay a monthly rental fee of 74 NIS (approximately US$18) per square meter (gross). For the first option period, the monthly rental fees shall be increased by 5% compared to the monthly rental fee of the preceding period. All rental fees are exclusive of VAT and index-linked to the Consumer Price Index published by the Central Bureau of Statistics (the “
Index
”);
provided
that the rental fees shall not be less than the nominal values listed above.
|
■ |
Parking
– The monthly rental fee for the parking spaces currently leased by the Company is NIS 433 per parking space, in each case plus VAT and Index-linked.
|
■ |
Management Fees
– The management fees shall be paid on a cost plus 15% basis plus VAT and Index-linked.
|
■ |
Payment Terms
– The rental fees shall be paid three months in advance. The Company has agreed to sign a direct debit with respect to the rental and management fees. In the event the Company is over-charged, that extra amount shall be remitted to the Company within five business days.
|
• |
Guarantees
:
|
■ |
An autonomous un-conditional bank guarantee, for an amount representing three (3) months' rental fee plus VAT, to be extended from time to time by the Company to remain in force for the entire term of Lease and for ninety (90) days thereafter.
|
• |
Dispute Resolution
:
|
■ |
Technical disputes raised regarding the Lease, shall be governed by an agreed-upon professional arbitrator (a civil engineer). Legal disputes raised regarding the Lease, shall be governed by Israeli Court in Tel Aviv.
|
• |
Other Terms of the Lease
:
|
■ |
The Company has a right to sub-lease the premises (or any portion thereof) and to sub-let to a substitute lessee, subject to the Landlord's prior written consent. The Company may also transfer the Lease to an affiliate, subject to the Landlord's prior written consent.
|
■ |
Similar to other lease agreements, each party agrees to assume responsibility for any damage, injury or loss (bodily or otherwise) resulting from any act, omission or negligence on its part, and with respect of the Company—relating to its use of the leased property.
|
• |
The Lease further includes terms concerning the following matters:
|
■ |
Renovations
– Generally, the Company may not perform any major renovations on the premises without prior written authorization from the Landlord. Subject to such advance approval by the Landlord, the Company may invest certain amounts on renovations for which the Landlord has agreed to reimburse the Company for a certain percentage of the costs.
|
■ |
Utilities
– The Company is responsible for paying for water, power and telephone utility bills, in addition to any taxes or fees, tolls, levies, property taxes and any other payments owed to governmental or local authorities relating to the property during the term of the Lease, unless such fees are specifically designated for the property owner.
|
■ |
No Right of set-off
– The parties have agreed that any amounts owed shall not be subject to a set-off right.
|
■ |
Termination of the Lease, vacating of premises and fixtures
– Upon the termination or expiration of the Lease, the Company shall vacate the premises from any person or object which is not owned by the Landlord and return it to the Landlord in an undamaged, usable state. The Company has sole discretion to remove any fixtures, provided such removal does not damage the premises and provided that the Landlord will have no duty to compensate the Company for fixtures which it decides to leave.
|
|
|
|
Name of Subsidiary
|
Place of Incorporation
|
|
|
|
|
CyberArk Software, Inc.
|
Delaware, United States
|
|
Cyber-Ark Software (UK) Limited
|
United Kingdom
|
|
CyberArk Software (Singapore) PTE. LTD.
|
Singapore
|
|
Cyber-Ark Software (DACH) GmbH
|
Germany
|
|
CyberArk Software Italy S.r.l.
|
Italy
|
|
CyberArk Software (France) SARL
|
France
|
|
CyberArk Software (Netherlands) B.V.
|
Netherlands
|
|
CyberArk Software (Australia) Pty Ltd.
|
Australia
|
|
CyberArk Software (Japan) K.K.
|
Japan | |
CyberArk Software Canada Inc.
|
Canada
|
|
Conjur, Inc.
|
Delaware, United States
|
|
Vaultive, Ltd.
|
Israel
|
1. |
I have reviewed this Annual Report on Form 20-F of CyberArk Software Ltd. (the “company”);
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
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4. |
The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
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a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c. |
Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d. |
Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
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5. |
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
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a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
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/s/ Ehud Mokady
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Ehud Mokady
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Chairman of the Board & Chief Executive Officer
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1. |
I have reviewed this Annual Report on Form 20-F of CyberArk Software Ltd. (the “company”);
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
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4. |
The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
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a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c. |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d. |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
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5. |
The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
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a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
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/s/ Joshua Siegel
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Joshua Siegel
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Chief Financial Officer
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/s/ Ehud Mokady
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Ehud Mokady
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Chairman of the Board and Chief Executive Officer
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Date: March 15, 2018
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/s/ Joshua Siegel
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Joshua Siegel
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Chief Financial Officer
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Date: March 15, 2018
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Tel Aviv, Israel
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/s/ KOST FORER GABBAY AND KASIERER
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March 15, 2018
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A member of Ernst & Young Global
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