<PAGE>
As filed with the Securities and Exchange Commission on September 10, 1998
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GALILEO TECHNOLOGY LTD.
(Exact Name of Registrant as Specified in Its Charter)
Israel Not Applicable
------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Moshav Manof, D.N. Misgav, Israel 20184
--------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
GALILEO TECHNOLOGY LTD. 1998 NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
--------------------------------------------------------------------
(Full Title of Plan)
Manuel Alba
President
Galileo Technology Inc.
142 Charcot Avenue
San Jose, California 95131
--------------------------------
(Name and Address of Agent For Service)
(408) 367-1400
--------------
(Telephone Number, Including Area Code, of Agent For Service)
Copy to: Lior O. Nuchi
McCutchen, Doyle, Brown & Enersen, LLP
3150 Porter Drive
Palo Alto, California 94304-1212
(650) 849-4400
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares, NIS
0.01 Nominal Value 100,000 $9.57 $957,000 $283.00
===========================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the average of the high and low prices as reported on the
Nasdaq National Market System on September 4, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Commission by
the Registrant are incorporated by reference in this Registration Statement:
(a) Registrant's latest Annual Report on Form 20-F for the fiscal year
ended December 31, 1997 filed pursuant to Section 13(a) or 15(d) of the
Securities Act of 1934, as amended (the "EXCHANGE ACT").
(b) Registrant's Quarterly Report on Form 6-K for the quarter ended
June 30, 1998, filed on August 18, 1998 with the Commission.
(c) The description of the Ordinary Shares of the Registrant contained
in the Registrant's Registration Statement on Form 8-A filed on July 25, 1997.
In addition, 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 thereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Yesha Primes, a member of Primes, Shiloh, Givon & Co., holds 360,000
shares of the Registrant in trust for certain key employees.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Association provide that the Registrant will indemnify
any Office Holder of the Registrant, as defined in the Companies Ordinance, out
of the assets of the Registrant against all liabilities incurred in good faith
by such Office Holder in the line of his duties for the Registrant or related
thereto. Such indemnification is subject to limitation by Israeli law and the
Articles of Association.
The Registrant has entered into separate indemnification agreements
with all its directors and officers. These agreements would require the
Registrant, among other things, to indemnify such directors and officers against
certain liabilities that may arise by reason of their status or service as
directors and officers (other than liabilities arising from willful misconduct
of culpable nature) and to advance expenses, in certain circumstances, incurred
as a result of any proceeding against them as to
<PAGE>
which they could be indemnified and to obtain directors' and officers' insurance
if available on reasonable terms.
Christopher J. Schaepe, a director of the Registrant and General
Partner of WPG Venture Partners III, L.P., which is the General Partner of
Weiss, Peck & Greer Venture Associates III, L.P. and WPG Enterprise Fund II,
L.P. (both of which are or were shareholders of the Registrant), is indemnified
in his role as a director of the Registrant pursuant to the terms of his
respective partnership agreements with the above entities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits.
ITEM 9. UNDERTAKINGS.
(a) 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. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(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 (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports
2
<PAGE>
filed by the Registrant pursuant to Section 13 or 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.
(b) 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 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to 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.
(c) 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 provisions described in Item 6, 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.
3
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 San Jose, state of California, on this 10th day
of September, 1998.
GALILEO TECHNOLOGY, LTD.
By: /s/ George A. Hervey
--------------------
George A. Hervey
Chief Financial Officer
4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
- ------ ------- -------------
<S> <C> <C>
5.1 Opinion regarding legality of securities to be offered
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Primes, Shiloh, Givon & Co.
(See Exhibit 5.1)
99.1 Galileo Technology Ltd. 1998 Nonemployee Directors Plan
</TABLE>
<PAGE>
EXHIBIT 5.1
[LETTER HEAD OF PRIMES, SHILOH, GIVON & CO., LAW OFFICE]
REF: G/115/2
August 27, 1998
Galileo Technology Ltd.
c/o Galileo Technology Inc.
1735 North First Street, #308
San Jose, CA 95112
U.S.A.
- ------
REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
With reference to the Registration Statement on Form S-8 to be filed by Galileo
Technology Ltd., an Israeli corporation (the "Company"), with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, related to
100,000 Ordinary Shares of the Company issuable pursuant to the Company's 1998
Non-Employee Directors' Stock Option Plan (the "Directors Plan"), it is our
opinion that such Ordinary Shares of the Company, when issued, sold and fully
paid for in accordance with the Directors Plan, will be legally issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion with the Securities and Exchange
Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ Y. Primes
Y. Primes, Advocate
Primes, Shiloh, Givon & Co.
Law Office
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Galileo Technology Ltd. 1998 Nonemployee Directors Stock
Option Plan of our report dated January 20, 1998, with respect to the
consolidated financial statements and schedule of Galileo Technology Ltd.
included in its Annual Report (Form 20-F) for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.
Palo Alto, California
September 9, 1998
<PAGE>
Exhibit 99.1
GALILEO TECHNOLOGY LTD.
1998 NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSE.
The purpose of this Plan is to offer Nonemployee Directors of Galileo
Technology Ltd. an opportunity to acquire a proprietary interest in the success
of the Company, or to increase such interest, by purchasing Ordinary Shares of
the Company. This Plan provides for the grant of Options to purchase Shares.
Options granted hereunder shall be "Nonstatutory Options," and shall not include
"incentive stock options" intended to qualify for treatment under Sections 421
and 422 of the Internal Revenue Code of 1986, as amended.
2. DEFINITIONS.
As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" shall mean the entity, either the Board or the
committee of the Board, responsible for administering this Plan, as provided in
Section 3.
(b) "AFFILIATE" means a parent or subsidiary corporation as defined
in the applicable provisions (currently, Sections 424(e) and (f), respectively)
of the Code.
(c) "BOARD" shall mean the Board of Directors of the Company, as
constituted from time to time.
(d) "CHANGE IN CONTROL" shall mean the occurrence of any one of the
following:
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (other than the Company, an Affiliate, or a Company employee
benefit plan, including any trustee of such plan acting as trustee) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities;
(ii) the election of any director of the Company who was not a
candidate proposed by a majority of the Board in office prior to the time of
such election; or
(iii) the dissolution or liquidation (partial or total) of the
Company or a sale of assets involving 30% or more of the assets of the Company,
or any merger or reorganization of the Company, whether or not another entity is
the survivor, or other transaction pursuant to which the holders, as a group, of
all of the shares of the Company outstanding prior to the transaction hold, as a
group, less than 70% of the shares of the Company outstanding after the
transaction.
<PAGE>
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
(f) "COMPANY" shall mean Galileo Technology Ltd., an Israeli
corporation.
(g) "DISABILITY" means permanent and total disability as determined by
the Administrator in accordance with the standards set forth in Section 22(e)(3)
of the Code.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
(i) "EXPIRATION DATE" shall mean the last day of the term of an Option
established under Section 6(e).
(j) "FAIR MARKET VALUE" means as of any given date (a) the closing
price of the Ordinary Shares on the Nasdaq National Market as reported in The
---
Wall Street Journal; or (b) if the Ordinary Shares are no longer quoted on the
- ---- ------ -------
Nasdaq National Market but are listed on an established stock exchange or quoted
on any other established interdealer quotation system, the closing price for the
Ordinary Shares on such exchange or system, as reported in The Wall Street
--- ---- ------
Journal.
- -------
(k) "NONEMPLOYEE DIRECTOR" shall mean any person who is a member of the
Board but is not an employee of the Company or any Affiliate of the Company and
has not been an employee of the Company or any Affiliate of the Company at any
time during the preceding twelve months. Service as a director does not in
itself constitute employment for purposes of this definition.
(l) "OPTION" shall mean a stock option granted pursuant to this Plan.
Each Option shall be a nonstatutory option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(m) "OPTION AGREEMENT" shall mean the written agreement described in
Section 6 evidencing the grant of an Option to a Nonemployee Director and
containing the terms, conditions and restrictions pertaining to such Option.
(n) "OPTIONEE" shall mean a Nonemployee Director who holds an Option.
(o) "ORDINARY SHARES" shall mean the Ordinary Shares of the Company.
(p) "PLAN" shall mean this Galileo Technology Ltd. 1998 Nonemployee
Directors Stock Option Plan, as it may be amended from time to time.
(q) "SECTION" unless the context clearly indicates otherwise, shall
refer to a Section of this Plan.
2
<PAGE>
(r) "SHARES" shall mean the Ordinary Shares subject to an Option
granted under this Plan.
(s) "TAX DATE" means the date defined in Section 7(c).
(t) "TERMINATION" means, for purposes of the Plan, with respect to an
Optionee, that the Optionee has ceased to be, for any reason, a director of the
Company.
(u) "WINDOW PERIOD" means any 10-day period beginning on the third
business day following the date of release for publication of the Company's
quarterly or annual summary statements of earnings or such other period as is
specified in Rule 16b-3(e) under the Exchange Act, as such rule may be amended
from time to time, or any successor to such rule.
3. ADMINISTRATION.
(a) ADMINISTRATOR. The Plan shall be administered by the Board or,
upon delegation by the Board, by a committee consisting of not fewer than two
non-employee directors (as such term is defined in Rule 16b-3(b)(3)(i) of the
Exchange Act) (in either case, the "Administrator"). The Administrator shall
have no authority, discretion or power to select the Nonemployee Directors who
will receive Options hereunder or to set the number of shares to be covered by
each Option granted hereunder, the exercise price of such Option, the timing of
the grant of such Option or the period within which such Option may be
exercised; provided, however, that the Administrator shall have the discretion
to change the exercise price of an outstanding option granted under the Plan or
to issue new options under the Plan with a lower exercise price in exchange for
outstanding options granted under the Plan in connection with a general
repricing by the Company of outstanding options. In connection with the
administration of the Plan, the Administrator shall have the powers possessed by
the Board. The Administrator may act only by a majority of its members. The
Administrator may delegate administrative duties to such employees of the
Company as it deems proper, so long as such delegation is not otherwise
prohibited by Rule 16b-3 under the Exchange Act. The Board at any time may
terminate the authority delegated to any committee of the Board pursuant to this
Section 3(a) and revest in the Board the administration of the Plan.
(b) ADMINISTRATOR DETERMINATIONS BINDING. Subject to the limitations
set forth in Section 3(a), the Administrator may adopt, alter and repeal
administrative rules, guidelines and practices governing the Plan as it from
time to time shall deem advisable, may interpret the terms and provisions of the
Plan, any Option and any Option Agreement and may otherwise supervise the
administration of the Plan. All decisions made by the Administrator under the
Plan shall be binding on all persons, including the Company and Optionees. No
member of the Administrator shall be liable for any action that he or she has in
good faith taken or failed to take with respect to this Plan or any Option.
4. ELIGIBILITY.
3
<PAGE>
Only Nonemployee Directors may receive Options under this Plan.
5. SHARES SUBJECT TO PLAN.
(a) AGGREGATE NUMBER. Subject to Section 9, the total number of
Ordinary Shares reserved and available for issuance pursuant to Options under
this Plan shall be 100,000 shares. Such shares may consist, in whole or in part,
of authorized and unissued shares or shares reacquired in private transactions
or open market purchases, but all shares issued under the Plan regardless of
source shall be counted against the 100,000 share limitation. If any Option
terminates or expires without being exercised in full, the shares issuable under
such Option shall again be available for issuance in connection with other
Options. If Ordinary Shares issued pursuant to an Option are repurchased by the
Company, such Ordinary Shares shall not again be available for issuance in
connection with Options. To the extent the number of Ordinary Shares issued
pursuant to an Option is reduced to satisfy withholding tax obligations, the
number of shares withheld to satisfy the withholding tax obligations shall not
be available for later grant under the Plan.
(b) NO RIGHTS AS A SHAREHOLDER. An Optionee shall have no rights as a
shareholder with respect to any Shares covered by his or her Option until the
issuance (as evidenced by the appropriate entry on the books of the Company or
its duly authorized transfer agent) of a stock certificate evidencing such
Shares. Subject to Section 9, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions, or other rights for which the record date is prior to the date
the certificate is issued.
6. GRANT OF OPTIONS.
(a) MANDATORY INITIAL OPTION GRANTS. Subject to the terms and
conditions of this Plan, if any person who is not, and has not been in the
preceding 12 months, an officer or employee of the Company is elected or
appointed a member of the Board at the 1998 Annual Meeting of Shareholders of
the Company, then on the effective date of such appointment or election the
Company shall grant to such Nonemployee Director an Option to purchase 25,000
shares at an exercise price equal to the Fair Market Value of such Shares on the
date of such option grant. Thereafter, if any person who is not, and has not
been in the preceding 12 months, an officer or employee of the Company and who
has not previously been a member of the Board is elected or appointed a member
of the Board, then on the effective date of such appointment or election the
Company shall grant to such new Nonemployee Director an Option to purchase
25,000 shares at an exercise price equal to the Fair Market Value of such Shares
on the date of such option grant. Any Option granted pursuant to this Section
6(a) shall be referred to as an "Initial Option." The Chairman of the Board may,
at his discretion, increase the number of Shares subject to the Initial Option.
(b) MANDATORY ANNUAL OPTION GRANTS. Subject to the terms and
conditions of this Plan, on the date of the first meeting of the Board
immediately following the annual meeting of shareholders of the Company (even if
held on the same day as the meeting of shareholders) commencing with the annual
meeting of shareholders held in 1999, the Company
4
<PAGE>
shall grant to each Nonemployee Director then in office (other than a
Nonemployee Director who received a grant under Section 6(a) on or after the
record date for such annual meeting) an Option to purchase 6,250 shares at an
exercise price equal to the Fair Market Value of such shares on the date of such
option grant. Any Option granted pursuant to this Section 6(b) shall be referred
to as an "Annual Option."
(c) VESTING OF INITIAL GRANT. Each Initial Option granted under
Section 6(a) shall become exercisable with respect to one forty-eighth of the
number of Shares covered by such Initial Option for each month that elapses
after the date of grant, so that such Initial Option shall be fully exercisable
on the fourth anniversary of the date such Initial Option was granted.
(d) VESTING OF ANNUAL GRANT. Each Annual Option granted under Section
6(b) shall become exercisable with respect to one-twelfth of the number of
Shares covered by such Annual Option one month after the third anniversary of
the date such Annual Option was granted, and with respect to an additional one-
twelfth of the number of Shares covered by such Annual Option for each month
thereafter, so that such Annual Option shall be fully exercisable on the fourth
anniversary of the date such Annual Option was granted.
(e) TERM. Subject to the other provisions of this Plan, each Option
granted pursuant to this Plan shall be for a term of ten years.
(f) LIMITATION ON OTHER GRANTS. The Administrator shall have no
discretion to grant Options under this Plan other than as set forth in Sections
6(a) and 6(b).
(g) OPTION AGREEMENT. As soon as practicable after the grant of an
Option, the Optionee and the Company shall enter into a written Option Agreement
which specifies the date of grant, the number of Shares, the option price, and
the other terms and conditions applicable to the Option.
(h) TRANSFERABILITY. No Option shall be transferable otherwise than by
will or the laws of descent and distribution, and an Option shall be exercisable
during the Optionee's lifetime only by the Optionee.
(i) LIMITS ON EXERCISE. Subject to the other provisions of this Plan,
an Option shall be exercisable in such amounts as are specified in the Option
Agreement.
(j) EXERCISE PROCEDURES. To the extent the right to purchase Shares
has accrued, Options may be exercised, in whole or in part, from time to time,
by written notice from the Optionee to the Company stating the number of Shares
being purchased, accompanied by payment of the exercise price for the Shares,
and other applicable amounts, as provided in Section 7.
(k) TERMINATION. In the event of Termination, Options held at the date
of Termination (and only to the extent then exercisable) may be exercised in
whole or in part at any time within three months after the date of Termination
(but in no event after the Expiration Date),
5
<PAGE>
but not thereafter. Notwithstanding the foregoing, if Termination is due to
retirement, death or Disability, Options held at the date of Termination (and
only to the extent then exercisable) may be exercised in whole or in part at any
time within two years from the date of Termination (but in no event after the
Expiration Date) by the Optionee or by the Optionee's guardian or legal
representative in the case of retirement or Disability or in the case of death,
by the person to whom the Option is transferred by will or the laws of descent
and distribution.
7. PAYMENT AND TAXES UPON EXERCISE OF OPTIONS.
(a) PURCHASE PRICE. The purchase price of Shares issued under this Plan
shall be paid in full at the time an Option is exercised.
(b) DELIVERY OF PURCHASE PRICE. Optionees may make all or any portion
of any payment due to the Company
(i) upon exercise of an Option, or
(ii) with respect to federal, state, local or foreign tax payable
in connection with the exercise of an Option, by delivery of (x) cash, (y)
check, or (z) a promissory note of the Optionee. No promissory note under the
Plan shall have a term (including extensions) of more than five years or shall
be of a principal amount exceeding 90 percent of the purchase price paid by the
borrower. Exercise of an Option may be made pursuant to a "cashless
exercise/sale" procedure pursuant to which funds to pay for exercise of the
Option are delivered to the Company by a broker upon receipt of stock
certificates from the Company, or pursuant to which Optionees obtain margin
loans from brokers to fund the exercise of the Option.
(c) TAX WITHHOLDING. The Optionee shall pay to the Company in cash,
promptly upon exercise of an Option or, if later, the date that the amount of
such obligations becomes determinable (in either case, the "Tax Date"), all
applicable federal, state, local and foreign withholding taxes that the
Administrator, in its discretion, determines to result upon exercise of an
Option or from a transfer or other disposition of the Ordinary Shares acquired
upon exercise of an Option or otherwise related to an Option or the Ordinary
Shares acquired in connection with an Option.
A person who has exercised an Option may make an election (i) to
deliver to the Company a promissory note of the Optionee on the terms set forth
in Section 7(b) or (ii) to have the Ordinary Shares to be obtained upon exercise
of the Option withheld by the Company on behalf of the Optionee, to pay the
amount of tax that the Administrator, in its discretion, determines to be
required to be withheld by the Company.
Any shares tendered to or withheld by the Company will be valued at Fair
Market Value on such date. The value of the Ordinary Shares tendered or
withheld may not exceed the required federal, state, local and foreign
withholding tax obligations as computed by the Company.
8. USE OF PROCEEDS.
6
<PAGE>
Proceeds from the sale of Shares pursuant to this Plan shall be used
for general corporate purposes.
9. ADJUSTMENT OF SHARES.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split or other change in corporate
structure affecting the Ordinary Shares, appropriate adjustments shall be made
by the Administrator in the aggregate number and kind of shares of stock
reserved for issuance under the Plan and in the number, kind and exercise price
of shares subject to outstanding Options; provided, however, that the number of
shares subject to any Option shall always be a whole number.
10. EFFECT OF CHANGE IN CONTROL.
In the event of a "Change in Control," any Options outstanding as of
the date such Change in Control is determined to have occurred and not then
exercisable and vested shall become fully exercisable and vested.
11. NO RIGHT TO DIRECTORSHIP.
Neither this Plan nor any Option granted hereunder shall confer upon
any Optionee any right with respect to continuation of the Optionee's membership
on the Board or shall interfere in any way with provisions in the Company's
Memorandum of Association and Articles of Association relating to the election,
appointment, terms of office, and removal of members of the Board.
12. LEGAL REQUIREMENTS.
The Company shall not be obligated to offer or sell any Shares upon
exercise of any Option unless the Shares are at that time effectively registered
or exempt from registration under the federal securities laws and the offer and
sale of the Shares are otherwise in compliance with all applicable securities
laws and the regulations of any stock exchange on which the Company's securities
may then be listed. The Company shall have no obligation to register the
securities covered by this Plan under the federal securities laws or take any
other steps as may be necessary to enable the securities covered by this Plan to
be offered and sold under federal or other securities laws. Upon exercising all
or any portion of an Option, an Optionee may be required to furnish
representations or undertakings deemed appropriate by the Company to enable the
offer and sale of the Shares or subsequent transfers of any interest in the
Shares to comply with applicable securities laws. Certificates evidencing Shares
acquired upon exercise of Options shall bear any legend required by, or useful
for purposes of compliance with, applicable securities laws, this Plan or the
Option Agreements.
13. DURATION AND AMENDMENTS.
7
<PAGE>
(a) DURATION. This Plan shall become effective upon adoption by the
Board provided, however, that no Option shall be exercisable unless and until
written consent of the shareholders of the Company, or approval of shareholders
of the Company voting at a validly called shareholders' meeting, is obtained
within 12 months after adoption by the Board. If such shareholder approval is
not obtained within such time, Options granted hereunder shall terminate and be
of no force and effect from and after expiration of such 12-month period. The
Plan shall terminate automatically on the tenth anniversary of its adoption by
the Board.
(b) AMENDMENT AND TERMINATION. The Board may amend, alter or
discontinue the Plan or any Option, but no amendment, alteration or
discontinuance shall be made which would impair the rights of an Optionee under
an outstanding Option without the Optionee's consent. No amendment shall require
shareholder approval except (i) an increase in the total number of shares
reserved for issuance under the Plan, (ii) to the extent required by applicable
laws, rules or regulations or (iii) to the extent that the Board otherwise
concludes that shareholder approval is advisable.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or
sold under this Plan after the termination hereof, except upon exercise of an
Option granted before termination. Termination or amendment of this Plan shall
not affect any Shares previously issued and sold or any Option previously
granted under this Plan.
14. RULE 16B-3.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with the applicable
conditions of Rule 16b-3 under the Exchange Act. To the extent any provision of
this Plan or action by the Administrator fails to so comply, it shall be
adjusted to comply with Rule 16b-3, to the extent permitted by law and deemed
advisable by the Administrator. It shall be the responsibility of persons
subject to Section 16 of the Exchange Act, not of the Company or the
Administrator, to comply with the requirements of Section 16 of the Exchange
Act; and neither the Company nor the Administrator shall be liable if this Plan
or any transaction under this Plan fails to comply with the applicable
conditions of Rule 16b-3, or if any such person incurs any liability under
Section 16 of the Exchange Act.
Approved by the Board of Directors on June 29, 1998.
Approved by the Shareholders of the Company on August 4, 1998.
8
