EXHIBIT 99.3
eMATION LTD.
2001 OPTION AGREEMENT
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RECITALS
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A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Company (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Company (or a Parent or
Subsidiary), and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Company's grant of an
option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Option. The Company hereby grants to Optionee, as of the
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Grant Date, an option to purchase up to the number of Option Shares specified in
the Grant Notice. The Option Shares shall be purchasable from time to time
during the option term specified in Paragraph 2 at the Exercise Price.
2. Option Term. This option shall have a maximum term of ten (10)
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years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. Limited Transferability. This option shall be neither transferable
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nor assignable by Optionee other than by will or by the laws of descent and
distribution following Optionee's death and may be exercised, during Optionee's
lifetime, only by Optionee. However, if this option is designated a
Non-Statutory Option or a Section 3(i) Option in the Grant Notice, then this
option may be assigned in whole or in part during Optionee's lifetime either as
(i) a gift to one or more family members of Optionee's Immediate Family, to a
trust in which Optionee and/or one or more such family members hold more than
fifty percent (50%) of the beneficial interest or an entity in which more than
fifty percent (50%) of the voting interests are owned by Optionee and/or one or
more such family members, or (ii) pursuant to a domestic relations order. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Plan Administrator may deem appropriate.
4. Dates of Exercise. This option shall become exercisable for the
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Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall
remain exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term under Paragraph 5 or 6.
5. Cessation of Service. The option term specified in Paragraph 2
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shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
(i) Should Optionee cease to remain in Service for any
reason (other than death, Permanent Disability or Misconduct) while this
option is outstanding, then this option shall remain exercisable until the
earlier of (i) the expiration of the three (3)-month period measured from
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the date of such cessation of Service or (ii) the Expiration Date.
(ii) Should Optionee die while holding this option, then
Optionee's Beneficiary shall have the right to exercise this option until
the earlier of (A) the expiration of the twelve (12)-month period measured
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from the date of Optionee's death or (B) the Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then this option shall remain
exercisable until the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of such cessation of Service or
(ii) the Expiration Date.
(iv) During the applicable post-Service exercise period,
this option may not be exercised in the aggregate for more than the number
of vested Option Shares for which the option is exercisable on the date of
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any vested Option Shares for
which the option has not been exercised. However, this option shall,
immediately upon Optionee's cessation of Service for any reason, terminate
and cease to be outstanding to the extent this option is not otherwise at
that time exercisable for vested shares.
(v) Should Optionee's Service be terminated for Misconduct
or should Optionee engage in Misconduct while this option is outstanding,
then this option shall terminate immediately and cease to be outstanding.
6. Special Acceleration of Option.
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(a) In the event of a Change in Control, this option, to the
extent outstanding at that time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to the
effective date of the Change in Control, become exercisable for all of the
Option Shares at the time subject to this option and may be exercised for any or
all of those Option Shares as fully-vested Ordinary Shares. No such acceleration
of this option, however, shall occur if and to the extent: (i) this option is,
in connection with the Change in Control, assumed or otherwise continued in full
force and effect by the successor corporation (or parent thereof) pursuant to
the terms of the Change in Control or (ii) this option is replaced with a cash
incentive program of the successor corporation which preserves the
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spread existing at the time of the Change in Control on the Option Shares for
which this option is not otherwise at that time exercisable (the excess of the
Fair Market Value of those Option Shares over the aggregate Exercise Price
payable for such shares) and provides for subsequent pay-out in accordance with
the same option exercise schedule set forth in the Grant Notice.
(b) Immediately following the consummation of the Change in
Control, this option shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control.
(c) If this option is assumed in connection with a Change in
Control, then this option shall be appropriately adjusted, immediately after
such Change in Control, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Change in Control
had the option been exercised immediately prior to such Change in Control, and
appropriate adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.
(d) This Agreement shall not in any way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. Adjustment in Option Shares. Should any change be made to the
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Ordinary Shares by reason of any share split, share dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Ordinary Shares as a class without the Company's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. Shareholder Rights. The holder of this option shall not have any
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shareholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares, subject to the provisions of Sections 9(d) and 15A
below in the case of exercise of a 102 Option.
9. Manner of Exercising Option. In order to exercise this option with
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respect to all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising the
option) must take the following actions:
(i) Execute and deliver to the Company a Notice of Exercise
for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
(A) cash or check made payable to the Company;
(B) Ordinary Shares held by Optionee (or any other
person or persons exercising the option) for the requisite period
necessary to
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avoid a charge to the Company's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date.
(C) where allowable in accordance with local law,
through a special sale and remittance procedure pursuant to which
Optionee (or any other person or persons exercising the option)
shall concurrently provide irrevocable instructions (I) to a
Company-approved brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all
applicable income and employment taxes required to be withheld by
the Company by reason of such exercise and (II) to the Company to
deliver the certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to
the Company in connection with the option exercise.
(iii) Furnish to the Company appropriate documentation
that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.
(iv) Make appropriate arrangements with the Company (or
Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all income and employment tax withholding requirements
applicable to the option exercise.
(b) As soon as practical after the Exercise Date, the Company
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.
(c) In no event may this option be exercised for any
fractional shares.
(d) In the event of exercise of a 102 Option, the Company will
notify the Trustee of any exercise of Options as set forth in the Notice of
Exercise. If such notification is delivered during the Required Holding Period,
the Shares issued upon the exercise of the Options shall be issued in the name
of the Trustee, and held in trust on the Optionee's behalf by the Trustee. In
the event that such notification is delivered after the end of the Required
Holding Period, the Shares issued upon the exercise of the Options shall, at the
election of the Optionee, either (i) be issued in the name of the Trustee, or
(ii) be transferred to the Optionee directly, provided that the Optionee first
complies with the provisions below regarding taxation. In the event that the
Optionee elects to have the Shares transferred to the Optionee without selling
such Shares, the Optionee shall become liable to pay taxes immediately at the
rate prescribed by law.
10. Compliance with Laws and Regulations.
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(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Company and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any share exchange on which the Ordinary Shares may be
listed for trading at the time of such exercise and issuance.
(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any Ordinary Shares pursuant to this option shall
relieve the Company of any liability with respect to the non-issuance or sale of
the Ordinary Shares as to which such approval shall not have been obtained. The
Company, however, shall use its best efforts to obtain all such approvals.
11. Successors and Assigns. Except to the extent otherwise provided in
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Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Company and its successors and assigns and Optionee
and Optionee's assigns and Beneficiaries.
12. Notices. Any notice required to be given or delivered to the
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Company under the terms of this Agreement shall be in writing and addressed to
the Company at its principal corporate offices. Any notice required to be given
or delivered to Optionee shall be in writing and addressed to Optionee at the
address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
mail, postage prepaid and properly addressed to the party to be notified.
13. Construction. This Agreement and the option evidenced hereby are
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made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
14. Governing Law. The interpretation, performance and enforcement of
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this Agreement shall be governed by the laws of the State of Israel.
15. Additional Terms Applicable to an Incentive Option. In the event
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this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is
exercised for one or more Option Shares: (A) more than three (3) months
after the date Optionee ceases to be an Employee for any reason other than
death or Permanent Disability or (B) more than twelve (12) months after
the date Optionee ceases to be an Employee by reason of Permanent
Disability.
(ii) No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Ordinary
Shares for which such installment first becomes exercisable hereunder
would, when added to the aggregate value
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(determined as of the respective date or dates of grant) of the Ordinary
Shares or other securities for which this option or any other Incentive
Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Company or any Parent or Subsidiary)
first become exercisable during the same calendar year, exceed ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$100,000) in the aggregate. Should such
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollar (US$100,000) limitation be
exceeded in any calendar year, this option shall nevertheless become
exercisable for the excess shares in such calendar year as a Non-Statutory
Option.
(iii) Should the exercisability of this option be accelerated
upon a Change in Control, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair
Market Value (determined at the Grant Date) of the Ordinary Shares for
which this option first becomes exercisable in the calendar year in which
the Change in Control occurs does not, when added to the aggregate value
(determined as of the respective date or dates of grant) of the Ordinary
Shares or other securities for which this option or one or more other
Incentive Options granted to Optionee prior to the Grant Date (whether
under the Plan or any other option plan of the Company or any Parent or
Subsidiary) first become exercisable during the same calendar year, exceed
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars (US$100,000) in the aggregate.
Should the applicable ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollar
(US$100,000) limitation be exceeded in the calendar year of such Change in
Control, the option may nevertheless be exercised for the excess shares in
such calendar year as a Non-Statutory Option.
(iv) Should Optionee hold, in addition to this option, one or
more other options to purchase Ordinary Shares which become exercisable
for the first time in the same calendar year as this option, then the
foregoing limitations on the exercisability of such options as Incentive
Options shall be applied on the basis of the order in which such options
are granted.
15A. Additional Terms Applicable to a 102 Option.
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(i) The Options will be registered in the Company's records in
the name of the Trustee as required by the Section 102 of the Ordinance or
a Ruling, if any. Optionee shall comply with the terms and conditions of
Section 102, the Rules, the Ruling, if any, and the Trust Agreement
entered into between the Company and the Trustee.
(ii) The Trustee will hold the Options or the Shares to be
issued upon exercise of the Options for the required holding period, as
determined by the Income Tax Authorities and as set forth in Section 102
or in a Ruling, if any (the "Required Holding Period").
(iii) The Optionee hereby undertakes to release the Trustee from
any liability in respect of any action or decision duly taken and executed
in relation to the Plan, or any Option or Share granted or issued to him
thereunder.
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(iv) The Optionee hereby confirms, as required by Section
102 of the Ordinance or by the Ruling, if applicable, that (a) he shall
not claim an exemption from Israeli tax pursuant to Sections 104 or 97 of
the Ordinance, or pursuant to the Law for the Encouragement of Industry
(Taxes) 5729-1969 in connection with a transfer by Optionee of an Option
or acquired Shares prior to the end of the Required Holding Period, and
(b) in the event a share dividend is declared on Shares which derive from
102 Options, such dividend shall also be subject to the provisions of the
Section 102 of the Ordinance or the Ruling, if any, and the Required
Holding Period for such dividend shares shall be measured from the
commencement of the Required Holding Period for the Option from which the
dividend was declared.
(v) Optionee acknowledges and confirms that he has waived
a portion of his salary in exchange for the grant of the Options, as
required by Section 102 of the Ordinance or the Ruling, if any.
(vi) Furthermore and for the avoidance of doubt, as long
as the Shares are held by the Trustee in favor of the Optionee, all rights
the last possesses over the Shares are personal, can not be transferred,
assigned, pledged or mortgaged, other than by will or laws of descent and
distribution.
(vii) Upon the end of the Required Holding Period, the
Optionee shall be entitled to (i) receive from the Trustee all Options
which have vested, (ii) exercise the Options and (iii) sell the Shares
thereby obtained subject to the other terms and conditions of this
Agreement and the Plan, including in particular provisions relating to the
payment of tax.
(viii) By the signature of the Optionee and the signature of
the Company's representative on this Agreement, Optionee and the Company
agree that the Options are granted under and governed by (a) this Option
Agreement, (b) the Plan , a copy of which has been provided to Optionee or
made available for his review, (c) Section 102 and the Rules promulgated
in connection therewith, or the terms of a Ruling, if any, and (d) the
Trust Agreement, a copy of which has been provided to Optionee or made
available for his review. Furthermore, by Optionee's signature on this
Agreement, Optionee hereby transfers and assigns the Options to the
Trustee to hold on Optionee's behalf and pursuant to the terms of the
Trust Agreement.
16. Leave of Absence. The following provisions shall apply upon the
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Optionee's commencement of an authorized leave of absence:
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(i) The exercise schedule in effect under the Grant
Notice shall be frozen as of the first day of the authorized leave, and
this option shall not become exercisable for any additional installments of
the Option Shares during the period Optionee remains on such leave.
(ii) Should Optionee resume active Employee status
within sixty (60) days after the start date of the authorized leave,
Optionee shall, for purposes of the exercise schedule set forth in the
Grant Notice, receive Service credit for the entire period of such leave.
If Optionee does not resume active Employee status within such sixty
(60)-day period, then no Service credit shall be given for the period of
such leave.
(iii) If this option is designated as an Incentive
Option in the Grant Notice, then the following additional provision shall
apply:
(A) If the leave of absence continues for more
than ninety (90) days, then this option shall automatically convert
to a Non-Statutory Option at the end of the three (3)-month period
measured from the ninety-first (91st) day of such leave, unless
Optionee's reemployment rights are guaranteed by statute or by
written agreement. Following any such conversion of this option, all
subsequent exercises of this option, whether effected before or after
Optionee's return to active Employee status, shall result in an
immediate taxable event, and the Company shall be required to collect
from Optionee the income and employment withholding taxes applicable
to such exercise.
(iv) In no event shall this option become exercisable
for any additional Option Shares or otherwise remain outstanding if
Optionee does not resume Employee status prior to the Expiration Date of
the option term.
17. Market Standoff. If so requested by the Company or any
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representative of the underwriters (the "Managing Underwriter") in connection
with any registration of the offering of any securities of the Company under the
securities laws of any jurisdiction, Optionee shall not sell or otherwise
transfer any shares or other securities of the Company during the 180 day period
(or such other period as may be requested in writing by the Managing Underwriter
and agreed to in writing by the Company) (the "Market Standoff Period")
following the effective date of a registration statement of the Company filed
under such securities laws. The Company may impose stop transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such Market Standoff Period.
18. Trustee. In the event that the Plan Administrator has chosen to
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use a trustee to administer the Plan pursuant to Article II Section III thereof,
then:
(i) the Plan Administrator shall deposit the option
with such trustee who shall hold the option and any shares issued upon the
exercise of the option, in trust, pursuant to the Company's instructions from
time to time. The shares issued upon exercise of the option shall be released to
Optionee provided that Optionee first complies with the provisions of the Plan
relating to the payment of tax; and
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(ii) Optionee hereby acknowledges that the trustee may
sign an agreement with the Company whereby shares will not be transferred
without deduction of taxes at source. Optionee hereby undertakes to release the
trustee from any liability in respect of any action or decision duly taken and
executed in relation with the Plan or any options or shares granted or issued
thereunder.
19. Tax Consequences.
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(i) THERE ARE INCOME TAX RAMIFICATIONS WITH RESPECT TO
THE GRANT AND EXERCISE OF THE OPTION, AND THE DISPOSITION OF THE SHARES SUBJECT
TO THE OPTION. OPTIONEE SHOULD CONSULT AN ATTORNEY OR TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE PURCHASED OPTION SHARES.
(ii) Any tax consequences arising from the grant or
exercise of the option or from the payment for shares covered thereby or from
any other event or act (whether of Optionee or of the Company or its Parent or
Subsidiaries) hereunder, shall be borne solely by Optionee. Furthermore,
Optionee agrees to indemnify the Company (or Parent or Subsidiary that employs
Optionee) and any Trustee or trustee (if applicable), and hold them harmless
against and from any and all liability for any such tax or interest or penalty
thereon, including without limitation, liabilities relating to the necessity to
withhold, or to have withheld, any such tax from any payment made to Optionee.
Except as otherwise required by law, the Company shall not be obligated to
exercise the option on behalf of Optionee until all tax consequences arising
from the exercise of the option are resolved in a manner reasonably acceptable
to the Company. The Company (or its Parent or any of its Subsidiaries), the
Trustee or the trustee, if applicable may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all taxes
required by law to be withheld with respect to the option granted in this
Agreement and the exercise thereof, including, but not limited, to (i) deducting
the amount so required to be withheld from any other amount then or thereafter
payable to Optionee, and/or (ii) requiring Optionee to pay to the Company (or
its Parent or any of its Subsidiaries) the amount so required to be withheld as
a condition of the issuance, delivery, distribution or release of any shares.
20. No Employment/Service Rights. Nothing in the Plan or in this
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Agreement shall confer upon Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company (or any Parent or Subsidiary employing or retaining
Optionee) or of the Optionee, which rights are hereby expressly reserved by
each, to terminate Optionee's Service at any time for any reason, with or
without cause. Optionee acknowledges and agrees that the vesting of shares
pursuant to the vesting schedule hereof is earned only by continuing in Service
at the will of the Company (or any Parent or Subsidiary), not through the act of
being hired, being granted this option or acquiring shares hereunder. Optionee
further acknowledges and agrees that in the event that Optionee ceases to be in
Service with the Company (or any Parent or Subsidiary), the unvested portion of
Optionee's option shall not vest and shall not become exercisable.
By the signature of Optionee and the signature of the Company's
representative below, Optionee and the Company understand and agree that the
option is granted subject to and
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in accordance with the terms of the eMation Ltd. 2001 Share Incentive Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the Plan and the
terms of the option as set forth in the Agreement and any addenda to such
Agreement. A copy of the Plan is attached hereto.
[Remainder of page intentionally left blank]
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In Witness Whereof, the Company has caused this Agreement to be executed by
its duly authorized officer and Optionee has executed this Agreement as of the
date set forth in the Notice of Grant.
eMATION LTD. Optionee
By: _____________________________ Signature:_________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Print Name:_________________
Title: CFO
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EXHIBIT I
NOTICE OF EXERCISE
I hereby notify eMation Ltd. (the "Company") that I elect to purchase
_________ of the Company's Ordinary Shares (the "Purchased Shares") at the
option exercise price of $ per share (the "Exercise Price") pursuant to that
certain option (the "Option") granted to me under the Company's 2001 Share
Incentive Plan on ____________________.
Concurrently with the delivery of this Exercise Notice to the Company,
I hereby pay to the Company the Exercise Price for the Purchased Shares in
accordance with the provisions of my agreement with the Company (or other
documents) evidencing the Option and I hereby deliver the additional documents
required by such agreement as a condition for exercise. Alternatively, if
permitted under local law, I may utilize the special broker-dealer sale and
remittance procedure specified in my Agreement to effect payment of the Exercise
Price.
_____________________________________
Date
_______________________________
Optionee
Address:_______________________
________________________________
Print name in exact manner it is to appear
on the share certificate: ________________________________
Address to which certificate is to be sent,
if different from address above: ________________________________
Social Security Number or Tax Payer ID: ________________________________
Employee Number ________________________________
APPENDIX
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Option Agreement.
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B. Beneficiary shall mean, in the event the Plan Administrator
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implements a beneficiary designation procedure, the person designated by
Optionee, pursuant to such procedure, to succeed to Optionee's rights under the
option evidenced by this Agreement to the extent the option is held by Optionee
at the time of death. In the absence of such designation or procedure, the
Beneficiary shall be the personal representative of the estate of Optionee or
the person or persons to whom the option is transferred by will or the laws of
descent and distribution.
C. Board shall mean the Company's Board of Directors.
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D. Change in Control shall mean a change in ownership or control of
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the Company effected through any of the following transactions:
(a) a merger, consolidation or reorganization approved by the
Company's shareholders, unless securities representing more than fifty percent
(50%) of the total combined voting power of the voting securities of the
successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Company's outstanding voting securities immediately prior
to such transaction.
(b) any shareholder-approved transfer or other disposition of
all or substantially all of the Company's assets, or
(c) the acquisition, directly or indirectly by any person or
related group of persons (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company), of beneficial ownership (within the meaning of Rule 13d-3 of the ▇▇▇▇
▇▇▇) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's shareholders which the
Board recommends such shareholders to accept.
E. Code shall mean the Internal Revenue Code of 1986, as amended.
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F. Company shall mean eMation Ltd., a private company organized under
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the laws of the State of Israel, and its successors.
G. Employee shall mean an individual who is in the employ of the
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Company (or any Parent or Subsidiary), subject to the control and direction of
the employer entity as to both the work to be performed and the manner and
method of performance.
H. Exercise Date shall mean the date on which the option shall have
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been exercised in accordance with Paragraph 9 of the greement.
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I. Exercise Price shall mean the exercise price per share as
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specified in the Grant Notice.
J. Expiration Date shall mean the date on which the option expires
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as specified in the Grant Notice.
K. Fair Market Value per Ordinary Share on any relevant date shall
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be determined in accordance with the following provisions:
(i) If the Ordinary Shares are at the time traded
on the Nasdaq National Market, then the Fair Market Value shall be the
closing selling price per Ordinary Share on the date in question, as the
price is reported by the National Association of Securities Dealers on the
Nasdaq National Market or any successor system. If there is no closing
selling price for the Ordinary Shares on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding
date for which such quotation exists.
(ii) If the Ordinary Shares is at the time listed on
any Stock Exchange, then the Fair Market Value shall be the closing selling
price per Ordinary Share on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Ordinary Shares, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price for
the Ordinary Shares on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for which
such quotation exists.
(iii) At any time neither clause (i) nor clause (ii)
above applies, the Fair Market Value shall be determined by the Plan
Administrator, after taking into account such factors as it deems
appropriate.
▇. ▇▇▇▇▇ Date shall mean the date of grant of the option as
----------
specified in the Grant Notice.
▇. ▇▇▇▇▇ Notice shall mean the Notice of Grant of Option
------------
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
N. Immediate Family of Optionee shall mean Optionee's child,
----------------
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships.
O. Incentive Option shall mean an option which satisfies the
----------------
requirements of Code Section 422.
P. Misconduct shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Company (or any
Parent or Subsidiary), or any intentional
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wrongdoing by Optionee, whether by omission or commission, which adversely
affects the business or affairs of the Company (or any Parent or Subsidiary) in
a material manner. The foregoing definition shall not limit the grounds for the
dismissal or discharge of Optionee or any other individual in the Service of the
Company (or any Parent or Subsidiary).
Q. Non-Statutory Option shall mean an option not intended to satisfy
--------------------
the requirements of Code Section 422.
R. Notice of Exercise shall mean the notice of exercise in the form
------------------
attached hereto as Exhibit I.
S. Option Shares shall mean the number of Ordinary Shares subject to
-------------
the option as specified in the Grant Notice.
T. Optionee shall mean the person to whom the option is granted as
--------
specified in the Grant Notice.
U. Ordinance shall mean the Israeli Income Tax Ordinance (New
---------
Version) 1961, as the same may be amended from time to time.
V. Ordinary Shares shall mean the Company's Ordinary Shares, nominal
---------------
value 0.05 New Israeli Shekels each.
W. Parent shall mean any corporation (other than the Company) in an
------
unbroken chain of corporations ending with the Company, provided each
corporation in the unbroken chain (other than the Company) owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
X. Permanent Disability shall mean the inability of Optionee to
--------------------
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.
Y. Plan shall mean the Company's 2001 Share Incentive Plan.
----
Z. Plan Administrator shall mean either the Board or a committee of
------------------
the Board acting in its administrative capacity under the Plan.
AA. Rules shall mean the regulations in accordance with Section 102
-----
of the Ordinance, Income Tax Rules (Tax Benefits in Stock Issuance to Employees)
5349-1989.
BB. Ruling shall mean any special ruling issued by the Israeli Income
------
Tax Authority in connection with Section 102 of the Ordinance, to permit the
issuance of 102 Options, in the event of a Change in Control of the Company
where the Plan is assumed by a non-Israeli successor corporation.
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CC. Section 3(i) Option shall mean an option granted pursuant to
-------------------
Section 3(i) of the Ordinance.
DD. Service shall mean Optionee's performance of services for the
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Company (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
EE. Stock Exchange shall mean the American Stock Exchange or the New
--------------
York Stock Exchange.
FF. Subsidiary shall mean any corporation (other than the Company) in
----------
an unbroken chain of corporations beginning with the Company, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
GG. Trustee shall mean the trustee appointed as required by law in
-------
order to qualify under Section 102 of the Ordinance or the terms of a Ruling to
allow the grant of 102 Options.
HH. 102 Option shall mean an Option granted pursuant to Section 102
----------
of the Ordinance or, in the event that this Plan is assumed by a non-Israeli
successor corporation in a Change in Control, an Option granted under the terms
of a Ruling.
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