Exhibit 4.f.1
NOVANET SEMICONDUCTOR LTD.
THE COMPANY'S EMPLOYEE SHARES OPTION PLAN
1. DEFINITIONS
As used herein the following terms shall have the meanings hereinafter set
forth, unless the context clearly indicates to the contrary.
(A) "Company" - Novanet Semiconductor Ltd.
(B) "Board" - as defined in Section 3.1 hereinbelow.
(C) the "Documents" - as defined in Section 6.3 hereinbelow.
(D) the "Date of Grant" - as defined in Section 6.1 hereinbelow.
(E) the "Date of Release" - as defined in Section 9 hereinbelow
(F) "Share(s)" - Ordinary Shares having a par value NIS 0.01 of the
Company, to which are attached the rights specified in the Company's
Articles of Association.
(G) "Option(s)" - an Option or Options granted within the framework of this
Plan, each of which imparts the right to purchase one Share per Option.
(H) "Grantee" - an employee of the Company to whom Options are granted or
to whom the Company decides to grant Options.
(I) "Plan" - the Company's Employee Shares Option Plan as provided
hereunder, and as may be amended from time to time by the Board as set
forth hereinbelow.
(J) "Option Agreement" - the Agreement to be signed between the Company and
the Grantee under which Option(s) are to be granted.
(K) "Vested Option(s)" - that portion of the Options which the Grantee is
entitled to exercise in accordance with the provisions of Section 7.2
of the Plan or the provisions of the Option Agreement executed with
such Grantee.
(L) "Exercise Period" - the period during which the Vested Options may be
exercised, as provided in Sections 7.3 and 7.4 hereinbelow.
(M) "Exercise Price" - the price to be paid for the exercise of each
Option.
(N) "Exercised Shares" - the Shares that are issued upon the exercise of
the Options.
(O) "Exercise Notice" - as defined in Section 7.5 hereinbelow.
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(P) "Merger Transaction" - as defined in Section 7.4 hereinbelow.
(Q) "the "Ordinance" - as defined in Section 2.2 hereinbelow.
(R) "Restricted Period" - as defined in Section 6.5 hereinbelow.
(S) "Trustee" - the trustee designated by the Company for the purposes of
this Plan and approved of by the Israeli Income Tax Commissioner, or
any other trustee the Company may appoint, in its sole discretion, in
place of the approved trustee, provided that such trustee shall be
approved by the Israeli Income Tax Commissioner.
2. THE PLAN
2.1 Purpose - The purpose and intent of the Plan is to advance the
interests of the Company by affording to selected employees of the
Company an opportunity to acquire a proprietary interest in the Company
or to increase their proprietary interest therein, as applicable, by
the grant in favor of such employees of Options under the terms set
forth herein, and thus, to provide an additional incentive to such
employees to be employed by and remain in the employ of the Company, to
encourage the sense of proprietorship of such employees, and to
stimulate the active interest of such employees in the success of the
Company.
2.2 Framework - The Plan shall be implemented in accordance with Section
102 of the Israeli Income Tax Ordinance (New Version), 1961, and the
rules and regulations promulgated thereunder as are in effect from time
to time (hereinafter: the "Ordinance").
2.3 Effective Date - The Plan shall become effective upon its approval by
the Board.
3. ADMINISTRATION
3.1 The Plan shall be administered by the Board of Directors of the Company
or by a committee appointed by the Board. The term "Board" whenever
used herein, shall mean the Board or such appointed committee, as
applicable.
3.2 The Board shall have sole and full discretion and sole authority to
administer the Plan and all actions thereunder or related thereto,
including to perform any and all of the following, from time to time
and at any time:
3.2.1 To determine the Company's employees in favor of whom the
Options shall be granted, the number of Options to be
granted in favor of each employee, the Exercise Price
thereof, the time when an Option can be exercised, and the
conditions under which such Options may be exercised;
3.2.2 To interpret the Plan;
3.2.3 To determine the terms of the Option Agreements;
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3.2.4 To make all other determinations deemed necessary or
advisable for the administration of the Plan;
3.2.5 To prescribe, amend, modify (including by adding new terms
and rules), and to rescind and terminate the Plan or any of
its terms.
3.3 No amendment or modification of the Plan shall adversely affect the
right of a Grantee under any Option previously granted under the Plan
without the consent of the Grantee.
3.4 Unless otherwise determined by the Board, any amendment or modification
of the Plan shall be deemed to have been included, ab initio, in the
Plan and shall have full effect over the relationship between the
Company and the Grantee.
4. ELIGIBILITY
In determining the employee in favor of whom Options are to be granted, the
number of Options to be granted and the terms of the Options, the Board may take
into account the nature of the services rendered by the respective employee, his
present and future potential contribution to the Company's success, and such
other factors as the Board in its discretion shall deem relevant.
5. RESERVED SHARES
The total number of Options to be granted within the framework of the Plan shall
be as determined from time to time by the Board.
The Company shall at all times reserve such number of authorized but unissued
Shares which equals the number of shares to which all then outstanding Options
may be converted upon exercise.
6. GRANT OF OPTIONS AND ISSUANCE OF SHARES IN TRUST
6.1 The Options shall be granted in favor of the Grantee for no
consideration.
6.2 No Option shall be granted in favor of the Grantee unless an Option
Agreement between the Company and the Grantee shall have been executed,
which Option Agreement shall set forth the terms and conditions with
respect to the Options, including without limitation, the number of
Options granted thereunder, the terms of exercise thereof (including
the Exercise Price) and any other terms as the Board may deem
necessary.
6.3 In addition to the execution of the Option Agreement, no Option shall
be deemed granted in favor of a Grantee, unless all the documents
necessary in order to comply with the Ordinance, and all other document
required by the Company, are executed by
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the Grantee (the Option Agreement and said documents shall be called
hereinafter: the "Documents").
6.4 The Company shall provide the Grantee with the Documents for signature
after the Board adopts a resolution to grant Options in favor of such
Grantee, and the Company shall sign such Documents after their return
duly signed by such Grantee.
It is hereby clarified that the execution of the said Documents by the
Grantee does not exempt the Grantee from signing any other document as
may be required by the Company at a later stage.
6.5 In order to fulfill the provisions of Section 102 of the Ordinance, the
Options granted hereunder shall be granted to the Trustee and the
Exercised Shares shall be issued to the Trustee, and both shall be
registered in the name of the Trustee, who shall hold the Options and
the Exercised Shares in trust for the benefit of both the Grantee and
the Company for a period of at least two (2) years from the Date of
Grant (as hereinafter defined) (hereinafter: the "Restricted Period"),
and until such time when they are released, as hereinafter provided.
6.6 The granting of an Option pursuant to the Plan shall be deemed to occur
only when the Company shall give the Trustee a written notice of such
grant to be issued by the Company (with a simultaneous copy to the
Grantee), after the signing of the Documents as provided in this
Section 6 hereinabove, and on the date of grant stated in such notice
(hereinafter: the "Date of Grant"), which in no event shall be before
the lapse of thirty (30) days following the notice pertaining to the
Plan given by the Company to the Israeli Commissioner of Income Tax,
and before the approval by such tax authorities of the Trustee to this
Plan.
7. TERMS OF OPTIONS
7.1 The amount of Options and the Exercise Price for each Grantee shall be
determined by the Board and shall be specified in the Option Agreement;
provided however, that in no event shall the Exercise Price be less
than the par value of the Shares.
7.2 Unless otherwise determined by the Board with respect to any specific
Grantee, the right of a Grantee to exercise the Options, granted in
such Grantee's favor, during the Exercise Period, shall be vested with
such Grantee as follows:
(a) If the Grantee's employment with the Company was terminated
for any reason before the lapse of 1 (one) year from the Date
of the Grant - such Grantee shall not be entitled to exercise
any Options whatsoever.
(b) If the Grantee remained in the employ of the Company for a
period of not less than 1 (one) year from the Date of Grant -
the Grantee shall be entitled to exercise 33 1/3% of all the
Options granted in such Grantee's favor.
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(c) If the Grantee remained in the employ of the Company for a
period of not less than 2 (two) years from the Date of Grant -
the Grantee shall be entitled to exercise 66 2/3% of all the
Options granted in such Grantee's favor.
(d) If the Grantee remained in the employ of the Company for a
period of not less than 3 (three) years from the Date of Grant
- the Grantee shall be entitled to exercise 100% of all the
Options granted in such Grantee's favor.
7.3 Exercise Period
Each Vested Option shall be exercisable within a period of three (3)
years beginning on the earlier of: (i) the lapse of seven (7) years
after the Date of Grant of such Vested Option; or (ii) the closing of
an initial public offering of the Company, in the framework of which
shim of the Company are to be traded on a stock exchange (including OTC
trading such as NASDAQ). In the event of a Merger Transaction, Vested
Options may be exercisable as provided in Section 7.4 below.
7.4 Effect of A Merger
In the event of a merger of the Company into another corporation, or
the sale of all of the shares of the Company (such merger or sale: the
"Merger Transaction"), the surviving or the acquiring entity, as the
case may be, or their respective parent or subsidiary (the "Successor
Entity"), may either assume the Company's rights and obligations under
outstanding options or substitute for outstanding options substantially
equivalent options for the Successor Entity's shares.
For purposes of this Section 7.4, the outstanding options shall be
deemed assumed by the Successor Entity if, following the consummation
of the Merger Transaction, the Option confers the right to purchase in
accordance with its terms, for each share subject to the Option
immediately prior to the consummation of the Merger Transaction, the
consideration (whether shares, cash or other securities or property) to
which a holder of a share on the effective date of consummation of the
Merger Transaction was entitled; provided however, that if such
consideration is not solely securities of the Successor entity, the
Board may, with the consent of the Successor Entity, provide for the
consideration to be received upon the exercise of the Option, to be
solely securities of the Successor Entity equal in their market value
to the per share consideration received by the holders of shares in the
Merger Transaction.
In the event that the Successor Entity, does not assume or substitute
for all of, the outstanding options of a Grantee, then outstanding
options of the Grantee in a number equal to 16 4/6% of all of the
Options granted in the favor of such Grantee (i.e. a quantity which is
vested during a 6-month period) shall become fully vested and the
Grantee may exercise such options as well as all the other Vested
Options of the Grantee within a period of 15 days from the date
designated in a written notice to be given to the Grantee by the
Company.
All Options which are neither assumed or substituted for by the
Successor Entity nor exercised as of the date of the end of the said 15
day period shall expire and terminate
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effective as of the date of the consummation of the Merger Transaction,
shall become null and void and shall not entitle the Grantee to any
right in or toward the Company.
7.5 Vested Options may be exercised at one time or from time to time during
the Exercise Period, but only by the Trustee, after the Trustee shall
have received written instructions from the Grantee, accompanied by the
full payment of the Exercise Price for the Vested Options then being
exercised, by personal check or a cashier's check payable to the order
of the Company (the written instructions accompanied by the full
payment shall be called hereinafter: the "Exercise Notice"). The
Trustee shall exercise such Vested Options with respect to which the
Exercise Notice was given, by giving the Company, at its principal
office, a written notice of intent to exercise such Vested Options,
accompanied by the Exercise Notice; provided however, that in case of
payment by personal check (and not by cashier check), the Options shall
not be considered as exercised, and the Company shall not issue the
Exercised Shares in respect thereof, until the personal check shall
have been fully honored by the bank on which it was drawn.
7.6 The Exercised Shares shall be issued in the name of the Trustee who
shall hold the same until their release as hereinafter provided.
8. TRANSFERABILITY
8.1 The Options and rights in connection therewith shall not be assignable,
transferable, made subject to attachment lien or encumbrance of any
kind, and the Grantee shall not be entitled with regard to the same,
and shall not grant with regard thereto, any power of attorney or
transfer deed, whether valid immediately or in the future.
8.2 The Grantee may transfer or sell only the Exercised Shares, or any part
thereof, provided that all of the following conditions have been met
prior to such transfer or sale: (i) the transferee is not a competitor
of the Company; and (ii) the sale or transfer shall be subject to all
the provisions of the Articles of Association of the Company regarding
transfer of shares in the Company; and (iii) the transferee confirmed
in writing its acceptance of the terms and conditions of the Plan and
the Option Agreement with respect to the Shares being transferred,
instead of the, Grantee, to the satisfaction of the Board; and (iv) the
actual payment of all taxes required to be paid upon such sale and
transfer of the Exercised Shares have been made to the tax assessor,
and the Trustee shall have received confirmation from the tax assessor
that all taxes required to be paid upon such sale and transfer have
been paid.
8.3 Notwithstanding anything to the contrary herein, in any event where all
the shares in the Company (other than shares which were issued under an
employee stock option plan) (the "Non SOP Shares") are to be sold to a
third party or in the event of a transaction under which one
shareholder or an affiliate of one of the shareholders purchases from
all of the other shareholders of the Company their Non SOP Shares,
then, if so requested by the purchaser, the Grantee shall be obligated
to join such sale
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and sell all of his shares in the Company under the same terms under
which the Non SOP Shares are being sold.
9. RELEASE
Upon the lapse of the Restricted Period, the Trustee may, pursuant to the
written request of the Grantee, release and transfer the Exercised Shares to the
Grantee, or to any third party to whom the Grantee wishes to sell the Exercised
Shares, as indicated in the Grantee's written notice, provided however that all
the following conditions have been fulfilled prior to such transfer: (i) payment
to the tax assessor of all taxes required to be paid upon the release and
transfer of the Exercised Shares have been made and confirmation of same has
been received by the Trustee; and (ii) receipt by the Trustee of a written
confirmation issued by the Company to the Trustee stating that all requirements
for said release and transfer have been furnished according to the terms of the
Articles, the Ordinance, the Plan and the Option Agreement.
The date on which the Exercised Shares shall be released and transferred to the
Grantee shall hereinafter be referred to as the "Date of Release".
10. TERMINATION
10.1 Notwithstanding anything to the contrary, any Option issued in favor of
any Grantee but not exercised by such Grantee within the Exercise
Period and in strict accordance with the terms of the Plan and the
Option Agreement, shall, upon the lapse of the Exercise Period,
immediately expire and terminate, become null and void, and shall not
entitle the Grantee to any right in, or toward the Company in
connection with the same, and all interests and rights of the Grantee,
in and to the same, shall expire.
10.2 Notwithstanding anything to the contrary, upon the termination of a
Grantee' employment with the Company for any reason whatsoever, any
Options issued in favor of such Grantee which are not Vested Options,
shall immediately expire and terminate, become null and void, and shall
not entitle the Grantee to any right in, or toward the Company in
connection with the same, and all interests and rights of the Grantee,
in and to the same, shall expire.
10.3 Notwithstanding anything to the contrary herein, upon the issuance of a
court order declaring the bankruptcy of a Grantee, or the appointment
of a receiver or a provisional receiver for a Grantee, or over all of
his assets, or any material part thereof, or upon making a general
assignment for the benefit of his creditors, any Options issued in
favor of such Grantee which are not Vested Options shall immediately
expire and terminate, become null and void and shall not entitle the
Grantee, his receiver, successors, creditors or assignees, to any right
in, or toward the Company in connection with the same, and all
interests and rights of the Grantee, his receiver, successors,
creditors or assignees, in and to the same, shall expire.
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11. RIGHTS AS SHAREHOLDER
11.1 It is hereby clarified that a Grantee shall not, by virtue of the Plan,
the Option Agreement or any Option granted in favor of him thereunder,
have any of the rights of a shareholder with respect to any Shares
represented by the Options, until the Options have been exercised.
Furthermore, except for the right to receive dividends as provided in
Section 12.1 hereinafter, the Grantee shall not have any rights by
virtue of the Exercised Shares until same shall have been transferred
to the Grantee by registering same in the Grantee's name, and only
then, the Grantee shall have rights of a shareholder. with respect to
such shares so registered.
11.2 For so long as the Exercised shares are held by the Trustee, the
Company shall consider only the Trustee as the owner of such shares for
all purposes whatsoever (including without limitation, for the purpose
of delivering notices); the Trustee, however, shall not exercise the
voting rights conferred by such shares in any way whatsoever, and shall
not issue a proxy to any person or entity to vote such shares.
11.3 The Grantee shall not have, and hereby waives the right to have, by
virtue of the Exercised Shares, any pre-emptive rights to purchase,
along with the other shareholders in the Company, a pro rata portion of
any securities proposed to be offered by the Company prior to the
offering thereof to any third party and any rights of first refusal to
purchase any securities of the Company offered by the other
shareholders of the Company.
12. DIVIDENDS AND BONUS SHARES
12.1 Cash dividends paid or distributed, if any, with respect to the
Exercised Shares held by the Trustee, shall be remitted directly to the
Grantee who is entitled to the Exercised Shares for which the dividends
are being paid or distributed.
12.2 All bonus shares to be issued by the Company, if any, with regard to
the Exercised Shares, shall be registered in the name of the Trustee
and all provisions applying to the Exercised Shares, shall apply to the
bonus shares, mutatis mutandis.
12.3 The Trustee shall transfer the said bonus shares upon the transfer of
the Exercised Shares with respect to which they were issued.
13. ADJUSTMENTS
The number of Shares to which each outstanding Option is exercisable, shall be
proportionately adjusted for any increase or decrease in the number of Shares
resulting from a stock split, reverse stock split, combination or
reclassification of the Shares, as well as for any distribution of bonus shares.
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive.
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14. RIGHTS TO CHANGES, ETC.
The Plan or the Option Agreement shall not affect, in any way, the rights, power
or freedom of the Company or of its shareholders to make or authorize: any sale,
transfer or any change whatsoever in all or any part of the Company's assets,
obligations or business, or any other business, commercial or corporate act or
proceeding, whether of a similar character or otherwise; any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or business; any merger or consolidation of the Company; any issue of
bonds, debentures, shares (including preferred or prior preference shares ahead
of or affecting the existing shares of the Company including the shares into
which the Options granted hereunder are exercisable or the Exercised Shares or
the rights thereof, etc.); or the dissolution or liquidation of the Company; and
none of the above acts or authorizations shall entitle the Grantee to any right
or remedy, including, without limitation, a right of compensation for any
dilution resulting from any issuance of any shares or of any other securities in
the Company to any person or entity whatsoever.
15. NO EMPLOYMENT OBLIGATIONS
Nothing in the Plan, the Option Agreement or in any Option granted hereunder
shall guarantee the Grantee's employment in the Company, and no obligation of
the Company as to the length of employment of the Grantee or as to any other
term of employment shall be implied by the same; the Company reserves the right
to terminate the employment of any employee pursuant to such employee's terms of
employment and any law.
16. NO REPRESENTATION
The Company does not and shall not, through this Plan or through any Option
Agreement, make or be deemed to make any representation toward any Grantee with
regard to the Company, its business, its value or with regard to the Company's
shares in general, and the Exercised Shares in particular, their value or
rights.
The Grantee, in entering the Option Agreement, represents and warrants toward
the Company, that his consent to the grant of the Options issued in favor of him
and their exercise (if so exercised), is, in no respect, made on the basis of
any representation or warranty made by the Company or by any of its directors,
officers, shareholders or employees, and is made based only upon his examination
and expectations of the Company, on an "as is" basis. The Grantee waives any
claim whatsoever of "non conformity" of any kind or any other cause of action or
claim of any kind with respect to the Options and/or the Shares exercised
thereupon.
17. TAX CONSEQUENCES
All tax consequences arising from the grant or exercise of any Option, the
payment for or the transfer of the Exercised Shares to the Grantee, or from any
other event or act (of the Company or the Grantee) hereunder, shall be borne
solely by the Grantee, and the Grantee shall indemnify the Company and hold it
harmless from and against 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 Grantee.
The Company and the Trustee may withhold, from any payment which the Company
will make to the Grantee, the amount of the tax and/or other mandatory payment
the withholding of which is required with respect to the Options and/or the
Exercised Shares under any law.
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18. SUBORDINATION
It is clarified that the Grant of the Options hereunder is subject to the
approval by the Tax Authorities of the Plan and the Trustee, in accordance with
the Ordinance. It is also clarified that the Plan and the Option Agreement are
subject to the provisions of the Ordinance which shall be deemed an integral
part of each, accordingly, and which shall prevail over any term that is not
consistent with the Ordinance.
