======================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
to be Offering Price Aggregate Registration
Title of Securities to be Registered Registered (1) Per Share Offering Price Fee
- --------------------------------------- ---------------------- ----------------- ------------------ ---------------
Ordinary Shares,(pound)0.01 par value... 48,218 Ordinary Shares $0.876 (2) $42,239 (2) $5
=======================================================================================================================
(1) Consists of (i) 48,218 Ordinary Shares, par value(pound)0.01, of Amdocs
Limited (the "Registrant") issuable under the SigValue Technologies Inc.
("SigValue") 2003 Israeli Stock Option Plan (the "Plan"). Pursuant and
subject to the terms of the Share Sale and Purchase Agreement relating to
SigValue, dated January 2, 2007, by and among the Registrant, SigValue and
certain shareholders of SigValue (the "Agreement"), the Registrant assumed
the Plan, and intends to grant replacement options under the Plan to
certain SigValue employees who continued to be employed by the Registrant
following the acquisition, each with appropriate adjustments to the number
of shares and exercise price of each option or award. Pursuant to Rule 416
of the Securities Act, this Registration Statement shall also cover any
additional Ordinary Shares that become issuable under the plan being
registered pursuant to this Registration Statement by reason of any stock
dividend, stock split, recapitalization or any other similar transaction
effected without the receipt of consideration that results in an increase
in the number of the Registrant's outstanding Ordinary Shares.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h) of the Securities Act of 1933, as amended. The
price per share and aggregate offering price are calculated on the basis of
$0.876, the exercise price of the 48,218 Ordinary Shares subject to
replacement option grants under the Plan.
EXPLANATORY NOTE
This Registration Statement on Form S-8 is being filed to register Ordinary
Shares of Amdocs Limited (the "Registrant") issuable pursuant to the SigValue
Technologies Inc. ("SigValue") 2003 Israeli Stock Option Plan (the "Plan"). On
February 7, 2007, a subsidiary of the Registrant completed its acquisition of
all the shares of capital stock of SigValue on the terms and conditions set
forth in the Share Sale and Purchase Agreement relating to SigValue, dated
January 2, 2007, by and among the Registrant, SigValue and certain shareholders
of SigValue (the "Agreement"). Pursuant to the Agreement, among other things
SigValue became an indirect wholly owned subsidiary of the Registrant, and the
Registrant assumed the Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
The information required by Item 1 is included in documents sent or provided to
participants in the Plan covered by this Registration Statement pursuant to Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act").
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
The written statement required by Item 2 is included in documents sent or
provided to participants in the Plan covered by this Registration Statement
pursuant to Rule 428(b)(1) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Registrant is subject to the informational and reporting requirements of
Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission"). The
following documents, which are on file with the Commission, are incorporated in
this registration statement by reference:
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Exchange Act or the latest prospectus filed pursuant to
Rule 424(b) under the Securities Act that contains audited financial statements
for the Registrant's latest fiscal year for which such statements have been
filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the document referred
to in (a) above.
(c) The description of the Registrant's Ordinary Shares contained in
the Registrant's Registration Statement on Form 8-A as filed with the Commission
on June 17, 1998, including any amendment or report filed for updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this registration statement
and to be part hereof from the date of the filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for the purposes
of this registration statement to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Guernsey law permits a company's articles of association to provide for the
indemnification of officers and directors except to the extent that such a
provision may be held by the courts of Guernsey to be contrary to public policy
(for instance, for purporting to provide indemnification against the
consequences of committing a crime) and except to the extent that Guernsey law
prohibits the indemnification of any director against any specific provisions of
Guernsey Company law under which personal liability may be imposed or incurred.
Under the Registrant's Articles of Association, the Registrant is obligated to
indemnify any person who is made or threatened to be made a party to a legal or
administrative proceeding by virtue of being a director, officer or agent of the
Registrant, provided that it has no such obligation to indemnify any such
persons for any claims they incur or sustain by or through their own willful act
or default.
The Registrant has entered into an indemnity agreement with its directors and
some of its officers, under which it has agreed to pay the indemnified party the
amount of Loss (as defined therein) suffered by that party due to claims made
against that party for a Wrongful Act (as defined therein).
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibit Index immediately preceding the exhibits is incorporated herein by
reference.
ITEM 9. UNDERTAKINGS.
1. Item 512(a) of Regulation S-K. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. Item 512(b) of Regulation S-K. The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
3. Item 512(h) of Regulation S-K. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of New York, State of New York, on this 15th day of
February, 2007.
AMDOCS LIMITED
By: /s/ Thomas G. O'Brien
-----------------------------------
Thomas G. O'Brien
Treasurer and Secretary
Authorized U.S. Representative
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Amdocs Limited, hereby
severally constitute Bruce K. Anderson and Thomas G. O'Brien, and each of them
singly, our true and lawful attorneys with full power to them, and each of them
singly, to sign for us and in our names in the capacities indicated below, the
Registration Statement on Form S-8 filed herewith and any and all subsequent
amendments to said Registration Statement, and generally to do all such things
in our names and behalf in our capacities as officers and directors to enable
Amdocs Limited to comply with all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by said attorneys, or any of them, to said Registration Statement and any and
all amendments thereto.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Bruce K. Anderson Chairman of the Board February 15, 2007
- ------------------------------------------
Bruce K. Anderson
/s/ Dov Baharav Director and Principal Executive Officer February 15, 2007
- ------------------------------------------
Dov Baharav
/s/ Ron Moskovitz Principal Financial and Accounting Officer February 15, 2007
- ------------------------------------------
Ron Moskovitz
/s/ Robert A. Minicucci Director February 15, 2007
- ------------------------------------------
Robert A. Minicucci
/s/ Adrian Gardner Director February 15, 2007
- ------------------------------------------
Adrian Gardner
/s/ Julian A. Brodsky Director February 15, 2007
- ------------------------------------------
Julian A. Brodsky
/s/ Charles E. Foster Director February 15, 2007
- ------------------------------------------
Charles E. Foster
/s/ Eli Gelman Director February 15, 2007
- ------------------------------------------
Eli Gelman
/s/ James S. Kahan Director February 15, 2007
- ------------------------------------------
James S. Kahan
/s/ Nehemeia Lemelbaum Director February 15, 2007
- ------------------------------------------
Nehemeia Lemelbaum
/s/ John T. McLennan Director February 15, 2007
- ------------------------------------------
John T. McLennan
/s/ Simon Olswang Director February 15, 2007
- ------------------------------------------
Simon Olswang
/s/ Mario Segal Director February 15, 2007
- ------------------------------------------
Mario Segal
/s/ Joseph Vardi Director February 15, 2007
- ------------------------------------------
Joseph Vardi
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
5.1 Opinion of Carey Olsen.
23.1 Consent of Carey Olsen (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on the signature page of this Registration
Statement).
99.1 2003 Israeli Stock Option Plan of SigValue Technologies Inc.
EXHIBIT 5.1
[Letterhead of Carey Olsen]
Amdocs Limited
Tower Hill House
The Bordage
St. Peter Port
Guernsey
15 February 2007
Dear Sirs:
RE: REGISTRATION STATEMENT ON FORM S-8
The following opinion is furnished to you in connection with the filing by
Amdocs Limited (the "Company") of its registration statement on Form S-8 (the
"Registration Statement"), under the Securities Act of 1933, as amended,
relating to the registration of 48,218 of its ordinary shares, (pound)0.01 par
value ("Ordinary Shares"), issuable upon the exercise of certain stock options
issued pursuant to the SigValue Technologies Inc. ("SigValue") 2003 Israeli
Stock Option Plan (the "Plan"), which was assumed by the Company in connection
with its February 7, 2007 acquisition of SigValue.
In that connection, we have examined originals, or copies certified or otherwise
identified to our satisfaction, of all such documents, corporate records and
other instruments as we have deemed necessary or appropriate for the purposes of
this opinion, including the Plan, Articles of Association and Memorandum of
Association of the Company.
Based upon such examination, we are of opinion that:
1. The Company has been duly organized and validly exists as a
corporation under the laws of Guernsey, Channel Islands.
2. When issued and sold upon the exercise of options granted or
pursuant to awards made in accordance with the terms of the Plan
as contemplated by the Registration Statement, each of the Shares
will be validly issued, fully paid and non-assessable.
We express no opinion on any law other than the law of Guernsey as of the
date hereof.
We hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
Yours faithfully,
/s/ Carey Olsen
Carey Olsen
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-____________) pertaining to the 2003 Israeli Stock Option Plan of
SigValue, of our reports dated November 30, 2006, with respect to the
consolidated financial statements and schedule of Amdocs Limited, Amdocs Limited
management's assessment of the effectiveness of internal control over financial
reporting, and the effectiveness of internal control over financial reporting of
Amdocs Limited, included in its Amendment No. 1 to Form 20-F (Annual Report) for
the year ended September 30, 2006, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
New York, NY
February 14, 2007
Exhibit 99.1
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
Appendix A
SIGVALUE TECHNOLOGIES INC.
THE 2003
ISRAELI STOCK OPTION PLAN
(*In compliance with Amendment No. 132 of the Israeli Tax Ordinance, 2002)
Table of Contents
Page
1. NAME.....................................................................................................1
2. PURPOSE OF THE ISOP......................................................................................1
3. DEFINITIONS..............................................................................................1
4. ADMINISTRATION OF THE ISOP...............................................................................4
5. DESIGNATION OF PARTICIPANTS..............................................................................5
6. DESIGNATION OF OPTIONS PURSUANT TO SECTION 102...........................................................6
7. TRUSTEE..................................................................................................7
8. SHARES RESERVED FOR THE ISOP; RESTRICTION THEREON........................................................7
9. PURCHASE PRICE...........................................................................................8
10. ADJUSTMENTS..............................................................................................8
11. TERM AND EXERCISE OP OPTIONS............................................................................10
12. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL................................................................11
13. VESTING OF OPTIONS......................................................................................12
14. DIVIDENDS...............................................................................................12
15. ASSIGNABILITY AND SALE OF OPTIONS.......................................................................12
16. TERM OF THE ISOP........................................................................................13
17. AMENDMENTS OR TERMINATION...............................................................................13
18. GOVERNMENT REGULATIONS & JURISDICTION...................................................................13
19. CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES.............................................................13
20. TAX CONSEQUENCES........................................................................................13
21. NON-EXCLUSIVITY OF THE ISOP.............................................................................14
22. MULTIPLE AGREEMENTS.....................................................................................14
i
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
1. NAME
This plan, as amended from time to time, shall be known as the SigValue
Technologies Inc. 2003 Israeli Stock Option Plan (the "ISOP").
2. PURPOSE OF THE ISOP
The ISOP is intended as an incentive to retain, in the employ of
SigValue Technologies Inc. (the "Company") and its Affiliates (as
defined below), persons of training, experience, and ability, to
attract new employees directors, consultants and service providers,
whose services are considered valuable, to encourage the sense of
proprietorship of such persons, and to stimulate the active interest of
such persons in the development and financial success of the Company by
providing them with opportunities to purchase shares in the Company,
pursuant to the ISOP.
3. DEFINITIONS
As used herein, the following definitions shall apply:
3.1 "AFFILIATE" means any "employing company" within the meaning of Section
102(a) of the Ordinance.
3.2 "APPROVED 102 OPTION" means an Option granted pursuant to Section
102(b) of the Ordinance and held in trust by a Trustee for the benefit
of the Optionee.
3.3 "BOARD" means the Board of Directors of the Company.
3.4 "CAPITAL GAIN OPTION" or "CGO" as defined in Section 6.4 below.
3.5 "CAUSE" shall mean (i) conviction of any felony involving moral
turpitude or affecting the Company; (ii) any refusal to carry out a
reasonable directive of the CEO which involves the business of the
Company or its affiliates and was capable of being lawfully performed;
(iii) embezzlement of funds of the Company or its affiliates; (iv) any
breach of the Optionee's fiduciary duties or duties of care of the
Company; including without limitation disclosure of confidential
information of the Company; and (v) any conduct (other than conduct in
good faith) reasonably determined by the Board of Directors to be
materially detrimental to the Company.
3.6 "CHAIRMAN" means the chairman of the Committee.
3.7 "COMMITTEE" means a share option compensation committee appointed by
the Board, which shall consist of no fewer than two members of the
Board.
3.8 "COMPANY" means SigValue Technologies Inc.
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
3.9 "COMPANIES LAW" means the Israeli Companies Law 5759-1999.
3.10 "CONTROLLING SHAREHOLDER" shall have the meaning ascribed to it in
Section 32(9) of the Ordinance.
3.11 "DATE OF GRANT" means, the date of grant of an Option, as determined by
the Board and set forth in the Optionee's Option Agreement.
3.12 "EMPLOYEE" means a person who is employed by the Company or its
Affiliates, including an individual who is serving as a director or an
office holder, but excluding Controlling Shareholder.
3.13 "EXPIRATION DATE" means the date upon which an Option shall expire, as
set forth in Section 11.2 of the ISOP.
3.14 "FAIR MARKET VALUE" means, as of any date, the value of a Share
determined as follows:
(i) If the Shares are listed on any established stock exchange or
a national market system, including without limitation the
NASDAQ National Market system, or The NASDAQ SmallCap Market
of the NASDAQ Stock Market , the Fair Market Value shall be
the closing sales price for such Shares (or the closing bid,
if no sales were reported), as quoted on such exchange or
system for the last market trading day prior to time of
determination, as reported in the Wall Street Journal, or such
other source as the Committee deems reliable. Without
derogating from the above, solely for the purpose of
determining the tax liability pursuant to Section 102(b)(3) of
the Ordinance, if at the Date of Grant the Company's shares
are listed on any established stock exchange or a national
market system or if the Company's shares will be registered
for trading within ninety (90) days following the Date of
Grant, the Fair Market Value of a Share at the Date of Grant
shall be determined in accordance with the average value of
the Company's shares on the thirty (30) trading days preceding
the Date of Grant or on the thirty (30) trading days following
the date of registration for trading, as the case may be;
(ii) If the Shares are regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market
Value shall be the mean between the high bid and low asked
prices for the Shares on the last market trading day prior to
the day of determination, or;
(iii) In the absence of an established market for the Shares, the
Fair Market Value thereof shall be determined in good faith by
the Committee.
3.15 "IPO" means the initial public offering of the Company's shares.
3.16 "ISOP" means this 2003 Israeli Share Option Plan.
3.17 "ITA" means the Israeli Tax Authorities.
- 2 -
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
3.18 "NON-EMPLOYEE" means a consultant, adviser, service provider,
Controlling Shareholder or any other person who is not an Employee.
3.19 "ORDINARY INCOME OPTION" or "OIO" as defined in Section 6.5 below.
3.20 "OPTION" means an option to purchase one or more Shares of the Company
pursuant to the ISOP.
3.21 "102 OPTION" means any Option granted to Employees pursuant to Section
102 of the Ordinance.
3.22 "3(i) OPTION" means an Option granted pursuant to Section 3(i) of the
Ordinance to any person who is Non- Employee.
3.23 "OPTIONEE" means a person who receives or holds an Option under the
ISOP.
3.24 "OPTION AGREEMENT" means the share option agreement between the Company
and an Optionee that sets out the terms and conditions of an Option.
3.25 "ORDINANCE" means the Israeli Income Tax Ordinance [New Version] 1961
as now in effect or as hereafter amended.
3.26 "PURCHASE PRICE" means the price for each Share subject to an Option.
3.27 "SECTION 102" means section 102 of the Ordinance as now in effect or as
hereafter amended.
3.28 "SHARE" means the ordinary shares, U.S. $0.01 par value each, of the
Company.
3.29 "SUCCESSOR COMPANY" means any entity the Company is merged to or is
acquired by, in which the Company is not the surviving entity.
3.30 "TRANSACTION" means (i) merger, acquisition or reorganization of the
Company with one or more other entities in which the Company is not the
surviving entity, (ii) a sale of all or substantially all of the assets
of the Company.
3.31 "TRUSTEE" means any individual appointed by the Company to serve as a
trustee and approved by the ITA, all in accordance with the provisions
of Section 102(a) of the Ordinance.
3.32 "UNAPPROVED 102 OPTION" means an Option granted pursuant to Section
102(c) of the Ordinance and not held in trust by a Trustee.
3.33 "VESTED OPTION" means any Option, which has already been vested
according to the Vesting Dates.
- 3 -
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
3.34 "VESTING DATES" means, as determined by the Board or by the Committee,
the date as of which the Optionee shall be entitled to exercise the
Options or part of the Options, as set forth in section 13 of the ISOP.
4. ADMINISTRATION OF THE ISOP
The Board shall have the power to administer the ISOP either directly
or upon the recommendation of the Committee, all as provided by
applicable law and in the Company's incorporation documents.
Notwithstanding the above, the Board shall automatically have a
residual authority if no Committee shall be constituted or if such
Committee shall cease to operate for any reason whatsoever.
The Committee shall select one of its members as its Chairman and shall
hold its meetings at such times and places as the Chairman shall
determine all in accordance with the Company's By-Laws or Certificate
of Incorporation. The Committee shall keep records of its meetings and
shall make such rules and regulations for the conduct of its business
as it shall deem advisable.
Any member of such Committee shall be eligible to receive Options under
the ISOP while serving on the Committee, unless otherwise specified
herein and subject to any applicable law.
The Committee shall have full power and authority to:
4.1 Designate participants;
4.2 Determine the terms and provisions of respective Option Agreements
(which need not be identical) including, but not limited to, the number
of Shares in the Company to be covered by each Option, provisions
concerning the time or times when and the extent to which the Options
may be exercised and the nature and duration of restrictions as to
transferability or restrictions constituting substantial risk of
forfeiture;
4.3 Accelerate of the right of an Optionee to exercise, in whole or in
part, any previously granted Option;
4.4 Make an election as to the type of Approved 102 Option;
4.5 Designate the type of Options;
4.6 Interpret the provisions and supervise the administration of the ISOP;
4.7 Determine the Fair Market Value of the Shares;
4.8 Determine any other matter which is necessary or desirable for, or
incidental to administration of the ISOP.
The Committee shall have the authority to grant, subject to the
Company's By-Laws or Certificate of Incorporation, in its discretion,
to the holder of an outstanding Option, in
- 4 -
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
exchange for the surrender and cancellation of such Option, a new
Option having a purchase price equal to, lower than or higher than the
Purchase Price provided in the Option so surrendered and canceled, and
containing such other terms and conditions as the Committee may
prescribe in accordance with the provisions of the ISOP and in
accordance with the Company's By-Laws or Certificate of Incorporation.
All decisions and selections made by the Board or the Committee
pursuant to the provisions of the ISOP and subject to the Company's
By-Laws or Certificate of Incorporation shall be made by a majority of
its members except that no member of the Board or the Committee shall
vote on, or be counted for quorum purposes, with respect to any
proposed action of the Board or the Committee relating to any Option to
be granted to that member. Any decision reduced to writing and signed
by all of the members who are authorized to make such decision shall be
fully effective as if it had been made by a majority at a meeting duly
held.
The interpretation and construction by the Committee of any provision
of the ISOP or of any Option thereunder shall be final and conclusive
unless otherwise determined by the Board. Subject to the company's
decision and to all approvals legally required, each member of the
Board or the Committee shall be indemnified and held harmless by the
Company against any cost or expense (including counsel fees) reasonably
incurred by him, or any liability (including any sum paid in settlement
of a claim with the approval of the Company) arising out of any act or
omission to act in connection with the ISOP unless arising out of such
member's own fraud or bad faith, to the extent permitted by applicable
law. Such indemnification shall be in addition to any rights of
indemnification the member may have as a director or otherwise under
the Company's By-Laws or Certificate of Incorporation, any agreement,
any vote of shareholders or disinterested directors, insurance policy
or otherwise.
5. DESIGNATION OF PARTICIPANTS
The persons eligible for participation in the ISOP as Optionees shall
include any Employees and/or Non-Employees of the Company or of any
Affiliate; provided, however, that (i) Employees may only be granted
102 Options; (ii) Non-Employees may only be granted 3(i) Options; and
(iii) Controlling Shareholders may only be granted 3(i) Options.
The grant of an Option hereunder shall neither entitle the Optionee
thereof to participate nor disqualify him from participating in, any
other grant of Options pursuant to the ISOP or any other option or
stock plan of the Company or any of its affiliates.To the extent
applicable and anything in the ISOP to the contrary notwithstanding,
all grants of Options to directors and office holders shall be
authorized and implemented in accordance with the provisions of the
applicable corporate law, as in effect from time to time.
- 5 -
ISRAELI SHARE OPTION PLAN
- -------------------------------------------------------------------------------
6. DESIGNATION OF OPTIONS PURSUANT TO SECTION 102
6.1 The Company may designate Options granted to Employees pursuant to
Section 102 as Unapproved 102 Options or Approved 102 Options.
6.2 The grant of Approved 102 Options shall be made under this ISOP adopted
by the Board as described in Section 16 below, and shall be conditioned
upon the approval of this ISOP by the ITA.
6.3 Approved 102 Option may either be classified as Capital Gain Option
("CGO") or Ordinary Income Option ("OIO").
6.4 Approved 102 Option elected and designated by the Company to qualify
under the capital gain tax treatment in accordance with the provisions
of Section 102(b)(2) shall be referred to herein as CGO.
6.5 Approved 102 Option elected and designated by the Company to qualify
under the ordinary income tax treatment in accordance with the
provisions of Section 102(b)(1) shall be referred to herein as OIO.
6.6 The Company's election of the type of Approved 102 Options as CGO or
OIO granted to Employees (the "ELECTION"), shall be appropriately filed
with the ITA before the Date of Grant of an Approved 102 Option. Such
Election shall become effective beginning the first Date of Grant of an
Approved 102 Option under this ISOP and shall remain in effect until
the end of the year following the year during which the Company first
granted Approved 102 Options. The Election shall obligate the Company
to grant only the type of Approved 102 Option it has elected, and shall
apply to all Optionees who were granted Approved 102 Options during the
period indicated herein, all in accordance with the provisions of
Section 102(g) of the Ordinance. For the avoidance of doubt, such
Election shall not prevent the Company from granting Unapproved 102
Options simultaneously.
6.7 All Approved 102 Options must be held in trust by a Trustee, as
described in Section 7 below.
6.8 For the avoidance of doubt, the designation of Unapproved 102 Options
and Approved 102 Options shall be subject to the terms and conditions
set forth in Section 102 of the Ordinance and the regulations
promulgated thereunder.
6.9 With regards to Approved 102 Options, the provisions of the ISOP and/or
the Option Agreement shall be subject to the provisions of Section 102
and the Tax Assessing Officer's permit, and the said provisions and
permit shall be deemed an integral part of the ISOP and of the Option
Agreement. Any provision of Section 102 and/or the said permit which is
necessary in order to receive and/or to keep any tax benefit pursuant
to Section 102, which is not expressly specified in the ISOP or the
Option Agreement, shall be considered binding upon the Company and the
Optionees.
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ISRAELI SHARE OPTION PLAN
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7. TRUSTEE
7.1 Approved 102 Options which shall be granted under the ISOP and/or any
Shares allocated or issued upon exercise of such Approved 102 Options
and/or other shares received subsequently following any realization of
rights, including without limitation bonus shares, shall be allocated
or issued to the Trustee and held for the benefit of the Optionees for
such period of time as required by Section 102 or any regulations,
rules or orders or procedures promulgated thereunder (the "HOLDING
PERIOD"). In the case the requirements for Approved 102 Options are not
met, then the Approved 102 Options may be treated as Unapproved 102
Options, all in accordance with the provisions of Section 102 and
regulations promulgated thereunder.
7.2 Notwithstanding anything to the contrary, the Trustee shall not release
any Shares allocated or issued upon exercise of Approved 102 Options
prior to the full payment of the Optionee's tax liabilities arising
from Approved 102 Options which were granted to him and/or any Shares
allocated or issued upon exercise of such Options.
7.3 With respect to any Approved 102 Option, subject to the provisions of
Section 102 and any rules or regulation or orders or procedures
promulgated thereunder, an Optionee shall not sell or release from
trust any Share received upon the exercise of an Approved 102 Option
and/or any share received subsequently following any realization of
rights, including without limitation, bonus shares, until the lapse of
the Holding Period required under Section 102 of the Ordinance.
Notwithstanding the above, if any such sale or release occurs during
the Holding Period, the sanctions under Section 102 of the Ordinance
and under any rules or regulation or orders or procedures promulgated
thereunder shall apply to and shall be borne by such Optionee.
7.4 Upon receipt of Approved 102 Option, the Optionee will sign an
undertaking to release the Trustee from any liability in respect of any
action or decision duly taken and bona fide executed in relation with
the ISOP, or any Approved 102 Option or Share granted to him
thereunder.
8. SHARES RESERVED FOR THE ISOP; RESTRICTION THEREON
8.1 The Company has reserved 15,005 authorized but unissued Shares for the
purposes of the ISOP and for the purpose of any other stock option
plans which may be adopted by the Company in the future, subject to
adjustment as set forth in paragraph 9 below. Any of such Shares
covered by the ISOP, which remain unissued and are not subject to
outstanding Options at the termination of the ISOP, shall cease to be
reserved for the purpose of the ISOP. Should any Option for any reason
expire or be canceled prior to its exercise or relinquishment in full,
the Shares therefore subject to such Option may again be subjected to
an Option under the ISOP.
8.2 Until an IPO, the Shares issued upon the exercise of Options shall be
voted by an irrevocable Proxy (attached hereto as EXHIBIT "C" to the
Option Agreement)(the "PROXY") pursuant to the directions of the Board,
such Proxy to be assigned to the person or persons designated by the
Board. Such person or persons designated by the Board
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ISRAELI SHARE OPTION PLAN
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shall be indemnified and held harmless by the Company against any cost
or expense (including counsel fees) reasonably incurred by him/her, or
any liability (including any sum paid in settlement of a claim with the
approval of the Company) arising out of any act or omission to act in
connection with the voting of such Proxy unless arising out of such
member's own fraud or bad faith, to the extent permitted by applicable
law. Such indemnification shall be in addition to any rights of
indemnification the person(s) may have as a director or otherwise under
the Company's By-Laws or Certificate of Incorporation, any agreement,
any vote of shareholders or disinterested directors, insurance policy
or otherwise. Without derogating from the above, with respect to
Approved 102 Options, such shares shall be voted in accordance with the
provisions of Section 102 and any rules, regulations or orders
promulgated thereunder.
8.3 Each Option granted pursuant to the Plan, shall be evidenced by a
written Option Agreement between the Company and the Optionee, in such
form as the Board or the Committee shall from time to time approve.
Each Option Agreement shall state a number of the Shares to which the
Option relates and the type of Option granted thereunder (whether a
CGO, OIO, Unapproved 102 Option or a 3(i) Option).
9. PURCHASE PRICE
9.1 The Purchase Price of each Share subject to an Option granted or any
portion thereof shall be determined by the Committee in its sole and
absolute discretion in accordance with applicable law, subject to any
guidelines as may be determined by the Board from time to time. Each
Option Agreement will contain the Purchase Price determined for each
Optionee, and in any event not less than the nominal value of the
shares subject to the Option
9.2 The Purchase Price shall be payable upon the exercise of the Option in
a form satisfactory to the Committee, including without limitation, by
cash or check. The Committee shall have the authority to postpone the
date of payment on such terms as it may determine.
10. ADJUSTMENTS
Upon the occurrence of any of the following described events,
Optionee's rights to purchase Shares under the ISOP shall be adjusted
as hereafter provided:
10.1 In the event of a Transaction while unexercised Options remain
outstanding under the ISOP, then each unexercised Option shall be
assumed, or substituted for by an appropriate number of shares, of each
class of shares or other securities of the Successor Company (or a
parent or subsidiary of the Successor Company) which were distributed
to the shareholders of the Company in respect of such shares. In the
case of such assumption and/or substitution of shares, appropriate
adjustments shall be made in the Purchase Price to reflect such action,
and all other terms and conditions of the Option Agreements, such as
the Vesting Dates, shall remain in force, all as will be determined by
the Committee whose determination shall be final.
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ISRAELI SHARE OPTION PLAN
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10.2 Notwithstanding the above and subject to any applicable law, unless the
Board or the Committee determines otherwise with respect to certain
Option Agreements, there shall be a clause in each Option Agreement
instructing that if in any such Transaction as described in section
10.1 above, the Successor Company (or parent or subsidiary of the
Successor Company) does not agree to assume or substitute for the
Options, all unexercised Options shall be expired as of the date of the
Transaction.
10.3 For the purposes of section 10.1 above, the Option shall be considered
assumed or substituted if, following the Transaction, the Option
confers the right to purchase or receive, for each Share underlying an
Option immediately prior to the Transaction, the consideration (whether
shares, options, cash, or other securities or property) received in the
Transaction by holders of Shares for each Share held on the effective
date of the Transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the Transaction is not solely ordinary shares
(or their equivalent) of the Successor Company or its parent or
subsidiary, the Committee may, with the consent of the Successor
Company, provide for the consideration to be received upon the exercise
of the Option to be solely ordinary shares (or their equivalent) of the
Successor Company or its parent or subsidiary equal in Fair Market
Value to the per Share consideration received by holders of a majority
of the outstanding Shares in the Transaction; and provided further that
the Committee may determine, in its discretion and subject to the
board's approval, that in lieu of such assumption or substitution of
Options for options of the Successor Company or its parent or
subsidiary, such Options will be substituted for any other type of
asset or property including cash which is fair under the circumstances.
10.4 If the Company is liquidated or dissolved while unexercised Options
remain outstanding under the ISOP, then the Company shall immediately
notify all unexercised Option holders of such liquidation, and the
Option holders shall then have ten (10) days to exercise any
unexercised Vested Option held by them at that time, in accordance with
the exercise procedure set forth herein. Upon the expiration of such
ten-days period, all remaining outstanding Options will terminate
immediately.
10.5 If the outstanding shares of the Company shall at any time be changed
or exchanged by declaration of a stock dividend (bonus shares), stock
split, combination or exchange of shares, recapitalization, or any
other like event by or of the Company, and as often as the same shall
occur, then the number, class and kind of Shares subject to the ISOP or
subject to any Options therefore granted, and the purchase prices,
shall be appropriately and equitably adjusted so as to maintain the
proportionate number of Shares without changing the aggregate purchase
price, provided, however, that no adjustment shall be made by reason of
the distribution of subscription rights (rights offering) on
outstanding shares. Upon happening of any of the foregoing, the class
and aggregate number of Shares issuable pursuant to the ISOP (as set
forth in paragraph 6 hereof), in respect of which Options have not yet
been exercised, shall be appropriately adjusted, all as will be
determined by the Board whose determination shall be final.
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ISRAELI SHARE OPTION PLAN
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10.6 Anything herein to the contrary notwithstanding, if prior to the
completion of an IPO all or substantially all of the shares of the
Company are to be sold, or upon a Transaction, reorganization or the
like, all or substantially all of the shares of the Company are to be
exchanged for securities of another Company, then each Optionee shall
be obliged to sell or exchange, as the case may be, any Shares such
Optionee purchased under the ISOP, in accordance with the instructions
issued by the Board in connection with the Transaction, whose
determination shall be final.
11. TERM AND EXERCISE OF OPTIONS
11.1 Options shall be exercised by the Optionee by giving written notice to
the Company, in such form and method as may be determined by the
Company and the Trustee when applicable, in accordance with the
requirements of Section 102, which exercise shall be effective upon
receipt of such notice by the Company and the payment of the Purchase
Price at its principal office (the "DATE OF EXERCISE"). The notice
shall specify the number of Shares with respect to which the Option is
being exercised.
11.2 Options, to the extent not previously exercised, shall terminate
forthwith upon the earlier of: (i) the date set forth in the Option
Agreement; and - (ii) the expiration of any extended period in any of
the events set forth in Section 11.5 below.
11.3 The Options may be exercised by the Optionee in whole at any time or in
part from time to time, to the extent that the Options become vested
and exercisable, prior to the Expiration Date, and provided that,
subject to the provisions of Section 11.5 below and unless the Board or
Committee resolves otherwise, the Optionee is employed by or providing
services to the Company or its Affiliates, at all times during the
period beginning with the granting of the Option and ending upon the
date of exercise.
11.4 Subject to the provisions of Section 11.5 below, in the event of
termination of Optionee's employment or service with the Company or any
of its Affiliates all Options granted to him will immediately expire. A
notice of termination of employment or services shall be deemed to
constitute termination of employment or services.
11.5 Notwithstanding anything to the contrary hereinabove and unless
otherwise determined in the Optionee's Option Agreement, an Option may
be exercised after the date of termination of Optionee's service or
employment with the Company or any Affiliate of the Company only with
respect to the number of Options already vested and unexpired at the
time of such termination according to the Vesting Dates and Expiration
Date of the Options set forth in exhibit B of such Optionee's Option
Agreement, and only provided that either:
11.5.1 prior to the date of such termination, the Board or Committee
shall authorize an extension of the terms of all or part of
the Options beyond the date of such termination for a period
not to exceed the period during which the Options by their
terms would otherwise have been exercisable; or -
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ISRAELI SHARE OPTION PLAN
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11.5.2 such termination is without Cause, in which event the Options
may be exercised within a period of 90 days from the date of
such termination; or -
11.5.3 termination is the result of death or disability of the
Optionee, in which event the Options may be exercised within a
period of 12 (twelve) months from such date of termination.
For avoidance of any doubt, if termination of employment or service is
for Cause, any outstanding unexercised Option (whether vested or
non-vested), will immediately expire and terminate, and the Optionee
shall not have any right in connection to such outstanding Options.
11.6 Subject to the provisions of Section 12 below, the holders of Options
shall not have any of the rights or privileges of shareholders of the
Company in respect of any Shares purchasable upon the exercise of any
part of an Option, until registration of the Optionee as holder of such
Shares in the Company's register of shareholders upon exercise of the
Option in accordance with the provisions of the ISOP, but in case of
Options and Shares held by the Trustee, subject to the provisions of
Section 7 of the ISOP.
11.7 Any form of Option Agreement authorized by the ISOP may contain such
other provisions as the Committee may, from time to time, deem
advisable.
11.8 With respect to Unapproved 102 Option, if the Optionee ceases to be
employed by the Company or any Affiliate, the Optionee shall extend to
the Company and/or its Affiliate a security or guarantee for the
payment of tax due at the time of sale of Shares, all in accordance
with the provisions of Section 102 and the rules, regulation or orders
promulgated thereunder.
12. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL
12.1 Notwithstanding anything to the contrary in the By-Laws or Certificate
of Incorporation of the Company, none of the Optionees shall have a
right of first refusal in relation with any sale of shares in the
Company.
12.2 The sale of Shares by the Optionee shall be subject to the right of
first refusal of other shareholders as set forth in the By-Laws or
Certificate of Incorporation of the Company. In the event that the
By-Laws or Certificate of Incorporation of the Company shall not
contain any provision regarding rights of first refusal, then, unless
otherwise provided by the Board, until such time as the Company shall
effectuate an IPO, the sale of Shares issuable upon exercise of an
Option, shall be subject to a right of first refusal on the part of the
Repurchaser(s).
Repurchaser(s) means (i) the Company, if permitted by applicable laws;
(ii) if the Company is not permitted by applicable laws, then any
affiliate of the Company designated by a unanimous decision reached by
the Board; or (iii) if no unanimous decision is reached by the Board,
then the company's existing shareholders (save, for
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ISRAELI SHARE OPTION PLAN
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avoidance of doubt , for other Optionees who already exercised their
Options), pro rata in accordance with their shareholding.
The right of first refusal shall not be exercised before the lapse of 6
months and one day following the later of the exercise of an option or
the issuance of shares. The Optionee shall not sell shares during such
six-month period. The Optionee shall give a notice of sale (the
"NOTICE") to the Company in order to offer the Shares to the
Repurchaser(s), and the Company will forward the Notice to the existing
shareholders.
The Notice shall specify the Number of Shares offered for sale, the
price per Share, the payment terms the name of each proposed purchaser
or other Transferee (the "PROPOSED TRANSFEREE"). The Repurchaser(s)
will be entitled for 30 days from the day of receipt of the Notice (the
"30 DAYS PERIOD"), to purchase all or part of the offered Shares. If by
the end of the 30 Days Period not all of the offered Shares have been
purchased by the Repurchaser(s), the Optionee will be entitled to sell
such Shares at any time during the 90 days following the end of the 30
Days Period on terms not more favorable than those set out in the
Notice, provided that the Proposed Transferee agrees in writing that
the provisions of this section shall continue to apply to the Shares in
the hands of such Proposed Transferee.
13. VESTING OF OPTIONS
Subject to the provisions of the ISOP, each Option shall vest following
the Vesting Dates and for the number of Shares as shall be provided in
the Option Agreement. However, no Option shall be exercisable after the
Expiration Date.
An Option may be subject to such other terms and conditions on the time
or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. The vesting
provisions of individual Optionees may vary.
14. DIVIDENDS
With respect to all Shares (in contrast to unexercised Options) issued
upon the exercise of Options purchased by the Optionee and held by the
Optionee or the Trustee, as the case may be, the Optionee shall be
entitled to receive dividends in accordance with the quantity of such
Shares, subject to the provisions of the Company's incorporation
documents (and all amendments thereto) and subject to any applicable
taxation on distribution of dividends and when applicable subject to
the provisions of Section 102 and the rules, regulations or orders
promulgated thereunder.
15. ASSIGNABILITY AND SALE OF OPTIONS
No Option, purchasable hereunder, whether fully paid or not, shall be
assignable, transferable or given as collateral or any right with
respect to them given to any third party whatsoever, and during the
lifetime of the Optionee each and all of such Optionee's rights to
purchase Shares hereunder shall be exercisable only by the Optionee.
Any such
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ISRAELI SHARE OPTION PLAN
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action made directly or indirectly, for an immediate validation or for
a future one, shall be void.
As long as the Shares are held by the Trustee in favor of the Optionee,
than 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.
16. TERM OF THE ISOP
The ISOP shall be effective as of the date that it is adopted by the
Board and shall terminate at the end of ten (10) years from such day of
adoption.
17. AMENDMENTS OR TERMINATION
The Board may, at any time and from time to time, but after
consultation with the Trustee, amend, alter or discontinue the ISOP,
except that no amendment or alteration shall be made which would impair
the rights of the holder of any Option therefore granted, without his
written consent. Termination of the ISOP shall not affect the
Committee's and/or the Board's ability to exercise the powers granted
to it hereunder with respect to the Options granted under the ISOP
prior to the date of such termination.
18. GOVERNMENT REGULATIONS & JURISDICTION
The ISOP, the granting and exercise of Options hereunder, and the
obligation of the Company to sell and deliver Shares under such
Options, shall be subject to all applicable laws, rules, and
regulations, whether of the State of Israel or of the United States or
any other State having jurisdiction over the Company and the Optionee,
including the registration of the Shares under the United States
Securities Act of 1933, and to such approvals by any governmental
agencies or national securities exchanges as may be required. The
competent courts of Tel-Aviv, Israel shall have sole jurisdiction in
any matters pertaining to the ISOP.
19. CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES
Neither the ISOP nor the Option Agreement with the Optionee shall
impose any obligation on the Company or an Affiliate thereof, to
continue any Optionee in its employ, or the hiring by the Company of
the Optionee's services and nothing in the ISOP or in any Option
granted pursuant thereto shall confer upon any Optionee any right to
continue in the employ or service of the Company or an Affiliate
thereof or restrict the right of the Company or an Affiliate thereof to
terminate such employment or service at any time.
20. TAX CONSEQUENCES
Any tax consequences arising from the grant or exercise of any Option,
from the payment for Shares covered thereby or from any other event or
act (of the Company and/or its Affiliates, the Trustee or the
Optionee), hereunder, shall be borne solely by the Optionee. The
Company and/or its Affiliates and/or the Trustee shall withhold taxes
according to
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ISRAELI SHARE OPTION PLAN
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the requirements under the applicable laws, rules, and regulations,
including withholding taxes at source. Furthermore, the Optionee shall
agree to indemnify the Company and/or its Affiliates and/or the Trustee
and hold them harmless against and from any and all liability for any
such tax or interest or penalty thereon, including without limitation,
liabilities relating to the necessity to withhold, or to have withheld,
any such tax from any payment made to the Optionee.
The Committee and/or the Trustee shall not be required to release any
Share certificate to an Optionee until all required payments have been
fully made.
21. NON-EXCLUSIVITY OF THE ISOP
The adoption of the ISOP by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive
arrangements or as creating any limitations on the power of the Board
to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock Options otherwise
then under the ISOP, and such arrangements may be either applicable
generally or only in specific cases. For the avoidance of doubt, prior
grant of options to Optionees of the Company under their employment
agreements, and not in the framework of any previous option plan, shall
not be deemed an approved incentive arrangement for the purpose of this
Section.
22. MULTIPLE AGREEMENTS
The terms of each Option may differ from other Options granted under
the ISOP at the same time, or at any other time. The Committee may also
grant more than one Option to a given Optionee during the term of the
ISOP, either in addition to, or in substitution for, one or more
Options previously granted to that Optionee.
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