EXHIBIT 4.1
EXACTIUM. LTD.
1999 STOCK OPTION PLAN
AMENDMENT
Pursuant to authority granted by Section 11 of the Exactium, Ltd. 1999 Stock
Option Plan, (the "Plan"), and in connection with the acquisition of all of the
issued and outstanding shares of Exactium, Ltd. by Pivotal Corporation
("Pivotal") on June 2, 2000 pursuant to the Stock Purchase Agreement dated April
11, 2000 by and among Pivotal, Industrial & Financial Systems AB, a Swedish
corporation, Eli Barak, Alon Hod and Tony Topaz (the "Purchase Agreement"), the
Plan is hereby amended as follows:
Effective June 2, 2000, Pivotal Corporation assumes the Plan in its entirety.
All options to purchase common shares of Exactium, Ltd. outstanding as of that
date are converted into options to purchase Pivotal common shares. The number of
Pivotal options granted to each Exactium, Ltd. optionee by Pivotal was the
number of Exactium, Ltd. options held by each Exactium, Ltd. optionee divided by
1.26343. The exercise price of each converted option is 1.26343 multiplied by
the exercise price of the original Exactium, Ltd. option. A total of 108,435
Pivotal common shares have been reserved for issuance under this plan. The
vesting terms of the Exactium, Ltd. options will continue to apply to the
converted options. No new additional options will be granted pursuant to the
plan. Except as otherwise described in this paragraph, the provisions of the
Plan continue in full force and effect.
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EXACTIUM, LTD.
1999 STOCK OPTION PLAN
1. Purpose. The purpose of this Exactium, Ltd. 1999 Stock Option Plan (the
"Plan") is to further the interests of Exactium, Ltd. (the "Company"), organized
under the laws of Israel, Exactium, Inc., a Delaware corporation and
wholly-owned subsidiary, and any entity that hereafter becomes a subsidiary of
the Company by providing incentives in the form of grants of stock options to
key employees and other persons who contribute materially to the success and
profitability of the Company. The grants will recognize and reward outstanding
individual performances and contributions and will give such persons a
proprietary interest in the Company, thus enhancing their personal interest in
the Company's continued success and progress. This program will also assist the
Company and its Subsidiary in attracting and retaining key persons.
2. Definitions. The following definitions shall apply to this Plan:
(a) "Board" means the board of directors of the Company.
(b) "Change of Control" occurs when (i) any person, including a
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the beneficial owner of more than 50 percent of the total
number of shares entitled to vote in the election of directors of the Board, or
(ii) a registration statement is declared effective by the Securities and
Exchange Commission with respect to an initial public offering of common stock
of the Company or Subsidiary.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Stock Option Committee consisting of two or
more directors appointed by the Board. In the event the Board does not appoint a
Stock Option Committee, "Committee" means the Board.
(e) "Company" means Exactium, Ltd.
(f) "Date of Grant" means the date on which the Option is granted.
(g) "Eligible Person" means any person who performs or has in the past
performed services for the Company or any direct or indirect partially or wholly
owned subsidiary thereof, whether as a director, officer, employee, consultant
or other independent contractor, and any person who performs services relating
to the Company in his or her capacity as an employee or independent contractor
of a corporation or other entity that provides services for the Company;
provided, that only an Employee can receive an incentive stock option grant.
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(h) "Employee" means any person employed on an hourly or salaried
basis by the Company or any subsidiary of the Company that now exists or
hereafter is organized or acquired by the Company.
(i) "Fair Market Value" means the fair market value of the Ordinary
Share. If the Ordinary Share is not publicly traded on the date as of which fair
market value is being determined, the Board shall determine the fair market
value of the Shares, using such factors as the Board considers relevant, such as
the price at which recent sales have been made(including shares of other classes
of Company stock), the book value of the Ordinary Share, and the Company's
current and projected earnings. If the Ordinary Share is publicly traded on the
date as of which fair market value is being determined, the fair market value is
the average of the high bid and ask price of the Common Stock as quoted on that
date. If a price quotation does not occur on the date as of which fair market
value is being determined, the next preceding date on which a price was quoted
will determine the fair market value.
(j) "Incentive Stock Option" means a stock option granted pursuant to
either this Plan or any other plan of the Company that satisfies the
requirements of Section 422 of the Code and that entitles the key employee to
purchase stock of the Company or in a corporation that at the time of grant of
the option was a parent or subsidiary of the Company or a predecessor
corporation of any such corporation.
(k) "Nonqualified Stock Option" means a stock option granted pursuant
to the Plan that is not an Incentive Stock Option and that entitles the
Recipient to purchase stock of the Company or in a corporation that at the time
of grant of the option was a parent or subsidiary of the Company or a
predecessor corporation of any such corporation.
(l) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted pursuant to the Plan.
(m) "Option Agreement" means a written agreement entered into between
the Company and a Recipient which sets out the terms and restrictions of an
Option granted to the Recipient.
(n) "Option Shareholder" shall mean an Employee who has exercised his
or her Option.
(o) "Option Shares" means Shares issued upon exercise of an Option.
(p) "Ordinary Share" or "Share" means the common stock, par value NIS
0.01 per share of the Company, as adjusted in accordance with Section 8 of the
Plan, or such other class of shares or securities as to which the Plan may be
applicable.
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(q) "Plan" means this Exactium, Ltd. 1999 Stock Option Plan.
(r) "Recipient" means an individual who receives an Option.
(s) "Subsidiary" means Exactium, Inc.
3. Administration. This Plan will be administered by the Committee. The
Committee has the exclusive power to select the Recipients of Options pursuant
to this Plan, to establish the terms of the Options granted to each Recipient,
and to make all other determinations necessary or advisable under the Plan. The
Committee has the sole and absolute discretion to determine whether the
performance of an Eligible Person warrants an Option under this Plan, and to
determine the size and type of the Option. The Committee shall have the
authority to grant in its discretion to the holder of an outstanding Option, in
exchange for the surrender and cancellation of such Option, a new Option having
an exercise price other than that provided in the Option so surrendered and
cancelled and containing such other terms and conditions as the Committee may
deem appropriate. The Committee has full and exclusive power to construe and
interpret this Plan, to prescribe, amend, and rescind rules and regulations
relating to this Plan, and to take all actions necessary or advisable for the
Plan's administration. The Committee, in the exercise of its powers, may correct
any defect or supply any omission, or reconcile any inconsistency in the Plan,
or in any Agreement, in the manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective. In exercising this power, the
Committee may retain counsel at the expense of the Company. The Committee shall
also have the power to determine the duration and purposes of leaves of absence
which may be granted to a Recipient without constituting a termination of the
Recipient's employment for purposes of the Plan. Any determinations made by the
Committee will be final and binding on all persons. Each member of the Committee
shall be indemnified and held harmless by the Company against any cost or
expense 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 Plan unless arising out of such
member's own fraud or bad faith, to the extent permitted by applicable law.
4. Shares Subject to Plan. Subject to the provisions of Section 10 of the
Plan, the maximum aggregate number of Shares that may be subject to Options
under the Plan shall be 170,000. If an Option should expire or become
unexercisable for any reason without having been exercised, the unpurchased
Shares that were subject to such Option shall, unless the Plan has then
terminated, be available for other Options under the Plan.
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5. Eligibility. Any Eligible Person that the Committee in its sole
discretion designates is eligible to receive an Option under this Plan. The
Committee's grant of an Option to a Recipient in any year does not require the
Committee to grant an Option such Recipient in any other year. Furthermore, the
Committee may grant different Options to different Recipients and has full
discretion to choose whether to grant Options to any Eligible Person. The
Committee may consider such factors as it deems pertinent in selecting
Recipients and in determining the types and sizes of their Options, including,
without limitation, (i) the financial condition of the Company or its
subsidiaries; (ii) expected profits for the current or future years; (iii) the
contributions of a prospective Recipient to the profitability and success of the
Company or its subsidiaries; and (iv) the adequacy of the prospective
Recipient's other compensation. Recipients may include persons to whom stock,
stock options, stock appreciation rights, or other benefits previously were
granted under this or another plan of the Company or any subsidiary, whether or
not the previously granted benefits have been fully exercised or vested. A
Recipient's right, if any, to continue to serve the Company and its subsidiaries
as an officer, Employee, or otherwise will not be enlarged or otherwise affected
by his designation as a Recipient under this Plan, and such designation will not
in any way restrict the right of the Company or any parent, as the case may be,
to terminate at any time the employment or affiliation of any participant.
6. Options. Each Option granted to a Recipient under the Plan shall contain
such provisions as the Committee at the Date of Grant shall deem appropriate.
Each Option granted to a Recipient will satisfy the following requirements:
(a) Written Agreement. Each Option granted to a Recipient will be
evidenced by an Option Agreement. The terms of the Option Agreement need not be
identical for different Recipients. The Option Agreement shall include a
description of the substance of each of the requirements in this Section 6 with
respect to that particular Option.
(b) Number of Shares. Each Option Agreement shall specify the number
of Shares that may be purchased by exercise of the Option.
(c) Exercise Price. The exercise price of each Share subject to an
Incentive Stock Option shall equal the exercise price designated by the
Committee on the Date of Grant, but shall not be less than the Fair Market Value
of the Share on the Incentive Stock Option's Date of Grant. The exercise price
of each Share subject to a Nonqualified Stock Option shall equal the exercise
price designated by the Committee on the Date of Grant.
(d) Duration of Option. Except as otherwise provided in this Section
6, an Incentive Stock Option granted to an Employee shall expire on the tenth
anniversary of its Date of Grant or, at such earlier date as is set by the
Committee in establishing the terms of the Incentive Stock Option at grant.
Except as otherwise provided in this Section 6, a Nonqualified Stock Option
granted to an Employee shall expire on the tenth anniversary of its Date of
Grant or, at such earlier or later date as is set by the Committee in
establishing the terms of the Nonqualified Stock Option at grant.
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(e) Vesting of Option. Each Option Agreement shall specify the vesting
schedule applicable to the Option. The Committee, in its sole and absolute
discretion, may accelerate the vesting of any Option at any time.
(f) Death. In the case of the death of a Recipient, an Option granted
the Recipient shall expire no later than the six month anniversary of the
Recipient's death, or if earlier, the date specified in subsection (d) above.
The Committee shall set the expiration date in establishing the terms of the
Option at grant or a later expiration date subsequent to the Date of Grant but
prior to the sixth month anniversary of the Recipient's death. During the period
beginning on the date of the Recipient's death and ending on the date the Option
expires, the Option may be exercised to the extent it could have been exercised
at the time the Recipient died, subject to any adjustment under Section 8
herein.
(g) Disability. In the case of the total and permanent disability of a
Recipient and a resulting termination of employment or affiliation with the
Company or subsidiary, an Option granted to the Recipient shall expire no later
than the six month anniversary of the Recipient's last day of employment, or, if
earlier, the date specified in subsection (d) above. The Committee shall set the
expiration date in establishing the terms of the Option at grant or a later
expiration date subsequent to the Date of Grant but prior to the six month
anniversary of the Recipient's last day of employment or affiliation with the
Company or subsidiary. During the period beginning on the date of the
Recipient's termination of employment or affiliation by reason of disability and
ending on the date the Option expires, the Option may be exercised as to the
number of Shares for which it could have been exercised at the time the
Recipient became disabled, subject to any adjustments under Section 8 herein.
(h) Retirement. If the Recipient's employment with the Company or
subsidiary terminates by reason of normal retirement under the Company's normal
retirement policies, an Option granted the Recipient shall expire no later than
90 days after the last day of employment, or, if earlier, on the date specified
in subsection (d) above. The Committee shall set the expiration date in
establishing the terms of the Option at grant or a later expiration date
subsequent to the Date of Grant but prior to the end of the 90-day period
following the Recipient's normal retirement. During the period beginning on the
date of the Recipient's normal retirement and ending on the date the Option
expires, the Option may be exercised as to the number of Shares for which it
could have been exercised on the retirement date, subject to any adjustment
under Section 8 herein.
(i) Termination of Service. If the Recipient ceases employment or
affiliation with the Company or subsidiary, for any reason other than death,
disability, or retirement (as described above), an Option granted to the
Recipient shall lapse immediately following the last day that the Recipient is
employed by or affiliated with the Company or subsidiary. However, the Committee
may, in its sole discretion, either at grant of the Option or at the time the
Recipient terminates employment, delay the expiration date of the Option to a
date after termination of employment; provided, however, that the expiration
date of an Incentive Stock Option may not be
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delayed more than 90 days following the termination of the Recipient's
employment or affiliation with the Company. During any such delay of the
expiration date, the Option may be exercised only for the number of Shares for
which it could have been exercised on such termination date, subject to any
adjustment under Section 8 herein. Notwithstanding any provisions set forth
herein or in the Plan, if the Recipient shall (i) commit any act of malfeasance
or wrongdoing affecting the Company or any subsidiary, (ii) breach any covenant
not to compete or employment agreement with the Company or any subsidiary, or
(iii) engage in conduct that would warrant the Recipient's discharge for cause,
any unexercised part of the Option shall lapse immediately upon the earlier of
the occurrence of such event or the last day the Recipient is employed by the
Company. For this purpose, "cause" shall mean (i) material violation of any
relevant letter or agreement of employment or engagement covering the Recipient,
(ii) commission of fraud, embezzlement or other felony or similar acts, or (iii)
insubordination or other material failure to discharge the duties of his or her
employment.
(j) Change of Control. If a Change of Control occurs, all Options,
limited to a fair market value of $100,000, shall become immediately vested and
exercisable by the Recipient.
(k) Conditions Required for Exercise. Options granted to Recipients
under the Plan shall be exercisable only to the extent they are vested according
to the terms of the Option Agreement. Furthermore, Options granted to Employees
under the Plan shall be exercisable only if the issuance of Shares pursuant to
the exercise would be in compliance with applicable securities laws, as
contemplated by Section 7 of the Plan. Each Agreement shall specify any
additional conditions required for the exercise of the Option.
(l) Ten Percent Shareholders. An Incentive Stock Option granted to an
Employee who, on the Date of Grant, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of either the Company
or any subsidiary, shall be granted at an exercise price of 110 percent of Fair
Market Value on the Date of Grant and shall be exercisable only during the
five-year period immediately following the Date of Grant. In calculating stock
ownership of any person, the attribution rules of Section 424(d) of the Code
will apply. Furthermore, in calculating stock ownership, any stock that the
Employee may purchase under outstanding options will not be considered.
(m) Maximum Option Grants. The aggregate Fair Market Value, determined
on the Date of Grant, of stock in the Company with respect to which any
Incentive Stock Options under the Plan and all other plans of the Company or its
subsidiary (within the meaning of Section 422(b) of the Code) may become
exercisable by any individual for the first time in any calendar year shall not
exceed $100,000.
(n) Method of Exercise. An Option granted under this Plan shall be
deemed exercised when the person entitled to exercise the Option (i) delivers
written notice to the President of the Company (or his delegate, in his absence)
of the decision to exercise accompanied by a
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voting proxy for the Shares to be received on exercise, (ii) concurrently
tenders to the Company full payment for the Shares to be purchased pursuant to
the exercise, and (iii) complies with such other reasonable requirements as the
Committee establishes pursuant to Section 7 of the Plan. Payment for Shares with
respect to which an Option is exercised may be made in cash, or by certified
check. A partial exercise of an Option will not affect the holder's right to
exercise the Option from time to time in accordance with this Plan as to the
remaining Shares subject to the Option.
(o) Designation of Beneficiary. Each Recipient shall designate, in the
Option Agreement he executes, a beneficiary to receive Options awarded hereunder
in the event of his death prior to full exercise of such Options; provided, that
if no such beneficiary is designated or if the beneficiary so designated does
not survive the Recipient, the estate of such Recipient shall be deemed to be
his beneficiary. Recipients may, by written notice to the Committee, change the
beneficiary designated in any outstanding Option Agreements.
(p) Transferability. An Option granted under this Plan is not
transferable except by will or the laws of descent and distribution. During the
lifetime of the Recipient, all rights of the Option are exercisable only by the
Recipient.
7. Taxes; Compliance with Law; Approval of Regulatory Bodies; Legends. The
Company shall have the right to withhold from payments (including shares
otherwise to be received on exercise) otherwise due and owing to the Recipient
(or his beneficiary) or to require the Recipient (or his beneficiary) to remit
to the Company in cash upon demand an amount sufficient to satisfy any federal
(including FICA and FUTA amounts), state, and/or local withholding tax
requirements.
Options can be granted, and Shares can be delivered under this Plan, only
in compliance with all applicable federal and state laws and regulations and the
rules of all stock exchanges on which the Company's stock is listed at any time.
An Option is exercisable only if either (a) a registration statement pertaining
to the Shares to be issued upon exercise of the Option has been filed with and
declared effective by the Securities and Exchange Commission and remains
effective on the date of exercise, or (b) an exemption from the registration
requirements of applicable securities laws is available. This Plan does not
require the Company, however, to file such a registration statement or to assure
the availability of such exemptions. Any certificate issued to evidence Shares
issued under the Plan may bear such legends and statements, and shall be subject
to such transfer restrictions, as the Committee deems advisable to assure
compliance with federal and state laws and regulations and with the requirements
of this Section. No Option may be exercised, and Shares may not be issued under
this Plan, until the Company has obtained the consent or approval of every
regulatory body, federal or state, having jurisdiction over such matters as the
Committee deems advisable.
Each person who acquires the right to exercise an Option may be
required by the Committee to furnish reasonable evidence of ownership of the
Option as a condition to his exercise
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of the Option. In addition, the Committee may require such consents and releases
of taxing authorities as the Committee deems advisable.
8. Adjustment Upon Change of Shares. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of
shares, stock split, stock dividend, rights offering, or other expansion or
contraction of the Common Stock of the Company occurs, the number and class of
Shares for which Options are authorized to be granted under this Plan, the
number and class of Shares then subject to Options previously granted to
Employees under this Plan, and the price per Share payable upon exercise of each
Option outstanding under this Plan shall be equitably adjusted by the Committee
to reflect such changes. To the extent deemed equitable and appropriate by the
Board, subject to any required action by shareholders, in any merger,
consolidation, reorganization, liquidation or dissolution, any Option granted
under the Plan shall pertain to the securities and other property to which a
holder of the number of Shares of stock covered by the Option would have been
entitled to receive in connection with such event.
9. Liability of the Company. The Company and its subsidiaries shall not be
liable to any person for any tax consequences incurred by a Recipient or other
person with respect to an Option.
10. Option Shareholder Action. If prior to completion of a public offering
of Shares of the Company, all or substantially all of the Shares of the Company
are to be sold, or upon a merger or reorganization or similar transaction, the
Shares of the Company or any class thereof, are to be exchanged for securities
of another company then in such event, each Recipient shall be obliged to sell
or exchange, as the case may be, the Shares such Optionee acquired under the
Plan in accordance with instructions provided by the Board.
11. Amendment and Termination of Plan. The Board may alter, amend, or
terminate this Plan from time to time without approval of the shareholders of
the Company, except that no amendment shall be made which, without the approval
of the shareholders of the Company would (i) increase the number of shares
reserved for purposes of the Plan, (ii) change the class of persons eligible to
participate in the Plan, or (iii) extend the option period as set forth in
Section 6. The Board may condition any amendment on the approval of the
shareholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws to which the Company, the
Plan, Recipients or Eligible Persons are subject. Any amendment, whether with or
without the approval of shareholders of the Company, that alters the terms or
provisions of an Option granted before the amendment (unless the alteration is
expressly permitted under this Plan) will be effective only with the consent of
the Recipient to whom the Option was granted or the holder currently entitled to
exercise it.
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12. Expenses of Plan. The Company shall bear the expenses of administering
the Plan.
13. Duration of Plan. Options may be granted under this Plan only during
the 10 years immediately following the effective date of this Plan.
14. Applicable Law. This Plan and options issued hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Israel applicable to contracts made and to be performed therein without
giving effect to the principles of conflict of laws.
15. Effective Date. The effective date of this Plan shall be the earlier of
(i) the date on which the Board adopts the Plan or (ii) the date on which the
Shareholders approve the Plan.
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