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EXHIBIT 10.26
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VERISITY LTD.
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THE 1999 ISRAELI SHARE OPTION PLAN
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I. NAME
This Plan, as amended from time to time, shall be known as the VERISITY Ltd.
1999 Israeli Share Option Plan ("the Option Plan").
II. PURPOSE OF THE OPTION PLAN
The Option Plan is intended as an incentive to retain, in the employment of
VERISITY Ltd. ("the Company") or a Subsidiary of the Company which now
exists or hereafter is organized or acquired by the Company, persons of
training, experience, and ability, to attract employees, directors or
consultants, 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 Option Plan approved by the board of directors of the
Company ("the Board") (each such employee, director or consultant shall be
referred to herein as "Optionee"). Options granted under the Option Plan may
or may not contain such terms as will qualify such Options for the special
tax treatment under section 102 of the Israeli Income Tax Ordinance
("Section 102").
Options containing such terms as will qualify them for the special tax
treatment under section 102 of the Israeli Income Tax Ordinance, shall be
referred to herein as "102 Options". Options that do not contain such terms
as will qualify them for the special tax treatment under section 102 of the
Israeli Income Tax Ordinance, shall be referred to herein as "3(i) Options".
All Options granted hereunder, whether together or separately, shall be
hereinafter referred to as "the Options".
The term "Subsidiary" shall mean for the purposes of the Plan any company
(other than the Company) in an unbroken chain of companies beginning with
the Company if, at the time of granting an option, each of the companies
other than the last company in the unbroken chain owns stock possessing
fifty percent (50%) or more of
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the total combined voting power of all classes of stock in one of the other
companies in such chains.
III. ADMINISTRATION OF THE OPTION PLAN
The Board or a committee appointed and maintained by the Board for such
purpose ("the Committee") shall have the power to administer the Option
Plan. 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 consist of such number of members (not less than two (2)
in number) as may be fixed by the Board. The Committee shall select one of
its members as its chairman ("the Chairman") and shall hold its meetings at
such times and places as the Chairman shall determine. 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.
No member of such Committee shall be prevented from receiving Options under
the Option Plan while serving on the Committee by virtue of his or her being
a member as per the above, unless otherwise specified herein.
The Committee shall have full power and authority to:
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IV. Designate participants as per Section 4 below;
V. Designate Options as 102 Options or 3(i) Options;
VI. Determine the terms and provisions of respective Option agreements (which
need not be identical) including, but not limited to, the number of
Ordinary Shares in the Company to be covered by each Option, the vesting
periods in respect thereof including but without limitation 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;
VII. Accelerate the right of an Optionee (as defined in Section 1 above) to
exercise, in whole or in part, any previously granted Option;
VIII. Interpret the provisions and supervise the administration of the Option
Plan;
IX. Determine the Fair Market Value (as defined below) of the Shares (as
defined below);
X. Determine any other matter which is necessary or desirable for, or
incidental to administration of the Option Plan;
XI. Appoint in its absolute discretion the Trustee and replace it at any time
in the future; and
XII. Suspend, terminate or cancel the Option Plan or any part thereof, replace
and/or determine further provisions and sub-plans in addition to the
Option Plan, determine any other plan in lieu of the Option Plan and
determine any provision and do anything in connection with this Option
Plan.
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 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 Option
Plan.
All decisions made or resolutions passed by the Board or the Committee
pursuant to the provisions of the Option Plan 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
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Committee relating to any Option to be granted to that member.
Notwithstanding the above, any decision, signed or agreed to in writing or
by telex or facsimile by all of the members of the Board or by all of the
members of the Committee, as the case may be, shall be valid for every
purpose as a resolution adopted at a Board or Committee meeting, as the
case may be, that was duly convened and held.
The interpretation and construction by the Committee of any provision of
the Option Plan or of any Option thereunder shall be final and conclusive
unless otherwise determined by the Board.
Subject to any applicable law, 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 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 Option Plan unless arising out of such member's own
fraud or bad faith, all subject and to the extent permitted by any
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 Articles of Association, any agreement, any vote of shareholders
or disinterested directors, insurance policy or otherwise. The term "Fair
Market Value" shall mean, with respect to the Shares and as of the date
that is relevant to such a determination, the market price per share of
such Shares determined by the Committee, as follows: (a) if the Shares are
traded on a stock exchange on the date in question, then the Fair Market
Value will be equal to the closing price reported by the applicable
composite-transactions report for such date; (b) if the Shares are traded
over-the-counter on the date in question and are classified as a national
market issue, then the Fair Market Value will be equal to the last-
transaction price quoted by the NASDAQ system for such date; (c) if the
Shares are traded over-the-counter on the date in question but are not
classified as a national market issue, then the Fair Market Value will be
equal to the mean between the last reported representative bid and asked
prices quoted by the NASDAQ system for such date; and (d) if none of the
foregoing provisions is applicable, then the Fair Market Value will be
determined by the Committee in its sole and absolute discretion in good
faith on such basis as it deems appropriate.
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XIII. DESIGNATION OF PARTICIPANTS
The persons eligible for participation in the Option Plan as recipients of
Options shall include any employees, directors or consultants of the
Company or of any Subsidiary of the Company that now exists or hereafter is
organized or acquired by the Company. The grant of an Option hereunder
shall neither entitle the recipient thereof to participate, nor disqualify
him or her from participating in, any other grant of Options pursuant to
this Option Plan or any other option or stock plan of the Company or any of
its affiliates.
Anything in the Option Plan to the contrary notwithstanding, all grants of
Options to directors and office holders ("Nosei Misra" - as such term is
defined in the Companies Ordinance (New Version), 1983 - "the Companies
Ordinance") shall be authorized and implemented only in accordance with the
provisions of the Companies Ordinance, as in effect from time to time.
XIV. TRUSTEE
The 102 Options which shall be granted to employees of the Company or of
any Subsidiary of the Company that now exists or hereafter is organized or
acquired by the Company and/or any Shares (as defined below) issued upon
exercise of such Options and/or other shares received subsequently
following any realization of rights, if such shall be granted to an
employee, shall be issued to a Trustee nominated by the Committee, and
approved in accordance with the provisions of Section 102 ("the Trustee")
and held for the benefit of the Optionees for a period of not less than two
years (24 months) from the Date of Grant, as defined in Optionee's Option
Agreement. Anything to the contrary notwithstanding, the Trustee shall not
release any Options, prior to their exercise, or release any Shares issued
upon exercise of Options prior to the full payment of the Optionee's tax
liabilities arising from Options which were granted to him or her and/or
any Shares issued upon exercise of such Options. The Optionee hereby
authorizes the Trustee to sign an agreement with the Company whereby Shares
will not be transferred without deduction of taxes at source.
Upon receipt of the Option, the Optionee will sign an undertaking to exempt
the Trustee from any liability in respect of any action or decision
executed bona fide in relation with the Option Plan, or any Option or Share
granted to him or her thereunder.
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XV. SHARES RESERVED FOR THE OPTION PLAN; RESTRICTION THEREON
XVI. The Company has reserved Six Hundred Sixty Four Thousand (664,000)
authorized but unissued Ordinary Shares of NIS 0.01 par value each of the
Company (each such Ordinary Share - a "Share" and collectively - "the
Shares"), for purposes of the Plan, subject to adjustment as set forth in
Section 8 below. Any of such Shares which may remain unissued and which
are not subject to outstanding Options at the termination of the Option
Plan shall cease to be reserved for the purpose of the Option Plan, but
until termination of the Option Plan the Company shall at all times
reserve sufficient number of Shares to meet the requirements of the
Option Plan. Should any Option for any reason expire or be canceled prior
to its exercise or expiration in full, the Shares therefore subject to
such Option may again be subjected to an Option under the Option Plan.
XVII. Until the consummation of an initial public offering of the Company's
shares ("the IPO") an Optionee who purchased Shares hereunder upon
exercise of Options:
XVIII. Shall not exercise his or her voting rights as a shareholder (in any and
all matters whatsoever), and such Shares shall be voted by a proxy,
substantially in the form attached to the Option Agreement as Exhibit C
pursuant to the directions of the Board, such proxy to be to the person
or persons designated by the Board. The Optionee shall further execute
irrevocable and unconditional undertaking toward the person or persons so
designated by the Board to vote under the Proxy, substantially in the
form attached to the Option Agreement as Exhibit D. In addition to the
above, any such Optionee shall not be entitled to receive any notice to
which a shareholder of the Company is entitled.
XIX. Notwithstanding anything to the contrary in the Articles of Association
of the Company and/or in any applicable law or agreement, none of the
Optionees nor the Trustee shall have right of first refusal and/or
preemptive rights in relation with any issuance and/or sale of shares in
the Company.
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XX. If in connection with an IPO, the stock exchange regulations and/or any
applicable law so provide and/or the Board or the Committee so resolve
and/or the underwriter or underwriters managing such offering so
requests, then each Optionee who purchased Shares hereunder upon exercise
of Options will agree to not sell or otherwise transfer any such Shares
(other than Shares included in such underwriting) without the prior
written consent of such underwriter, for such period of time as may be
requested by the underwriter commencing on the effective date of the
registration statement filed in connection with such offering, but in no
event longer than the period of time that the officers and directors of
the Company are generally prohibited from transferring their Shares in
connection with such public offering.
XXI. OPTION PRICE
XXII. The purchase price of each Share subject to an Option 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.
XXIII. The Option price shall be payable upon the exercise of the Option in a
form satisfactory to the Committee and in the event of 102 Options
conforming to the requirements of Section 102, including without
limitation, by cash or check as set forth in Section 9.1 below. The
Committee shall have the authority to postpone the date of payment on
such terms as it may determine.
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XXIV. CHANGE OF CONTROL TRANSACTIONS; ADJUSTMENTS
XXV. In the event of a Change of Control Transaction, as defined below, the
Company shall endeavor to cause the successor entity in such transaction
either to assume all of the Options which have been granted hereunder and
which are outstanding as of the consummation of such transaction
("Closing"), or to issue (or cause to be issued) in substitution thereof
comparable options of such successor entity (or of its Parent or its
Subsidiary). If the successor entity is unwilling to either assume such
Options or grant comparable options in substitution for such Options, on
terms that are acceptable to the Company as determined by the Board in the
exercise of its discretion, then:
(i) with respect to each outstanding Option, that portion of the
Option which remains unvested that either (x) would have become
vested over the 12-month period immediately following the Closing,
or (y) represents 50% of the unvested portion of the Option as of
the Closing, whichever portion is smaller, will become Vested
immediately prior to such Closing; and
(ii) the Board may cancel all outstanding Options, and terminate this
Plan, effective as of the Closing, provided that it shall notify
all Optionees of the proposed Change of Control Transaction a
reasonable amount of time prior to the Closing so that the
Optionee will be given the opportunity to exercise the vested
portion of his or her Option (after giving effect to the
acceleration of such vesting under clause (i) above) prior to the
Closing.
For purposes of this Section 8.1, the term "Change of Control
Transaction" means a Business Combination in which less than 50% of the
outstanding voting securities of the successor entity immediately
following the Closing of the Business Combination transaction are
beneficially held by those persons and entities in the same proportion
as such persons and entities beneficially held the voting securities of
the Company immediately prior to such transaction; the term "Business
Combination" means a transaction or series of transactions consummated
within any period of 90 days resulting in (A) the sale of all or
substantially all of the assets of the Company, or (B) a merger or
consolidation or other reorganization of which the Company is a merging
party.
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XXVI. In the event of any change in the capital structure of the Company,
including but without limitation as a result of a recapitalization,
combination, reclassification, distribution of bonus shares, distribution
of dividend otherwise than in cash, shares split, reverse shares split,
dividend on winding up, consolidating shares, swapping shares, changing
the Company's structure or otherwise, but excluding a Change of Control
Transactions in respect of which the provisions of Section 8.1 above shall
apply, appropriate proportionate adjustments will be made in (i) the
aggregate number of Shares that are reserved for issuance pursuant to
Section 6 above, under outstanding Options or future Options granted
hereunder; and/or (ii) the Option price and the number of Shares that may
be acquired under each outstanding Option granted hereunder; and/or (iii)
other rights and matters determined on a per share basis under this Plan
or any Option agreement evidencing an outstanding Option granted
hereunder. Any such adjustments will be made only by the Board, and when
so made will be effective, conclusive and binding for all purposes with
respect to this Plan and all Options then outstanding. No such adjustments
will be required by reason of the issuance or sale by the Company for cash
or other consideration of additional shares or securities convertible into
or exchangeable for Shares.
For the removal of doubt all the terms and conditions contained herein
in respect of the Options and/or the Shares shall apply to the options
and/or shares resulting from the adjustments as per the above.
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XXVII. Anything herein to the contrary notwithstanding, if prior to the
completion of an IPO of the Company's securities, all or substantially
all of the shares of the Company are to be sold, or upon a merger or
reorganization or the like, the shares of the Company, or any class
thereof, are to be exchanged for securities of another Company, then in
such event, each Optionee shall be obliged to sell or exchange, as the
case may be, the Shares such Optionee purchased under the Option Plan,
in accordance with the instructions then issued by the Board whose
determination shall be final.
XXVIII. TERM AND EXERCISE OF OPTIONS
XXIX. Vested Options shall be exercised by the Optionee by giving written
notice to the Company, in the form attached to the Option Agreement as
Exhibit E, and the method as may be determined by the Company and the
Trustee and if the Options so exercised are 102 Options than in
accordance with the requirements of Section 102, which exercise shall be
effective upon receipt of such notice by the Company at its principal
office. The notice shall specify the number of Shares with respect to
which the Option is being exercised and it shall be accompanied by any
further assurances and/or undertaking as the Committee and/or Trustee
may require to ensure that the transaction complies in all respects with
the requirements of any applicable law. The notice as per the above will
be signed by the person exercising the Option and it will be accompanied
by full payment of the corresponding Option price, by cash or check made
payable to the Company.
XXX. Each Option granted under this Option Plan shall be exercisable
following the Vesting Schedule Dates in respect thereof ("the Vesting
Dates") and for the number of Shares as shall be provided in Exhibit B
to the Option agreement. However no Option shall be exercisable after
the expiration date, as defined for each Optionee in the Optionee's
Option agreement ("the Expiration Date"), but subject always to Section
9.6 below.
XXXI. Options granted under the Option Plan shall not be transferable by
Optionees other than by will or laws of descent and distribution, and
during an Optionee's lifetime shall be exercisable only by that
Optionee.
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XXXII. 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
prior to the Expiration Date, provided that the number of Shares
purchased under the exercised Option as per the above will be no less
than 100 Shares, without regard to adjustments to the number of Shares
subject to the Option pursuant to Section 8 above, or, if less, all of
the remaining Shares subject to the Option, and provided further that,
subject to the provisions of Section 9.6 below, the Optionee is an
employee, director or consultant of the Company or a Subsidiary of the
Company or a company or a Parent or a subsidiary company of such company
issuing or assuming the Options in a transaction described in Section
8.1 above, at all times during the period beginning with the granting of
the Option and ending upon the date of exercise.
XXXIII. Subject to the provisions of Section 9.6 below, in the event of
termination of Optionee's employment with or performance of services for
or on behalf of the Company or a Subsidiary of the Company or a company
or a Parent or a subsidiary company of such company issuing or assuming
the Options in a transaction described in Section 8.1 above, all Options
granted to him or her will immediately expire. A notice of termination
of employment or services by either party shall be deemed to constitute
termination of employment or services.
XXXIV. Notwithstanding anything to the contrary hereinabove, an Option may be
exercised after the date of termination of Optionee's employment with or
performance of services for or on behalf of the Company or any
Subsidiary of the Company thereof or a company or a Parent or a
subsidiary company of such company issuing or assuming the Options in a
transaction described in Section 8.1 above during an additional period
of time beyond the date of such termination, but only with respect to
the number of Options already vested at the time of such termination
according to the Vesting Dates if:
XXXV. Termination is without Cause (as defined below), in which event any
Options still in force and unexpired may be exercised within a period of
30 (thirty) days from the date of such termination.
XXXVI. Termination is the result of death or disability of the Optionee, in
which event any Options still in force and unexpired may be exercised
within a period of six (6) months from the date of termination.
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XXXVII. The Committee may authorize an extension of the terms of all or part of
the Options beyond the date of such termination, even if such terms has
been expired, for a period not to exceed the period during which the
Options by their terms would otherwise have been exercisable.
The term "Cause" shall mean for the purposes of the Plan a termination
by the Company and/or any of its Subsidiaries of the Optionee's
employment or services (or if the Optionee is a director, removal of
him or her from the Board by action of the shareholders or, if
permitted by applicable law and the Articles of the Company, the other
directors), in connection with the good faith determination of the CEO
(or of the Company's shareholders if the Optionee is a director and
the removal of him or her from the Board is by action of the
shareholders, but in either case excluding the vote of the subject
individual if he or she is a director or a shareholder) that the
Optionee has engaged in any acts involving dishonesty or moral
turpitude or in any acts that materially and adversely affect the
business, affairs or reputation of the Company or any of its
Subsidiaries.
The term "Parent" shall mean for the purposes of the Plan any company
(other than the Company) in an unbroken chain of companies ending with
the Company if, at the time of granting an Option, each of the
companies (other than the Company), owns stock possessing fifty
percent (50%) or more of total combined voting power of all classes of
stock in one of the other companies in such chain.
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XXXVIII. To avoid doubt and subject to Sections 6.2 above and 11.1 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, nor shall they be deemed to be a class of
shareholders or creditors of the Company for purpose of the operation of
Section 233 of the Companies Ordinance or any successor to such Section,
until registration of the Optionee as holder of such Shares in the Company's
register of members upon exercise of the Option in accordance with the
provisions of this Plan.
XXXIX. Any form of Option agreement subject to the Option Plan may contain such
other provisions as the Committee may, from time to time, deem advisable.
Without limiting the foregoing, the Committee may, with the consent of the
Optionee, from time to time cancel all or any portion of any Option then
subject to exercise, and the Company's obligation in respect of such Option
may be discharged by either (i) payment to the Optionee of an amount in cash
equal to the excess, if any, of the Fair Market Value of the Shares at the
date of such cancellation subject to the portion of the Option so canceled
over the aggregate purchase price of such Shares, or (ii) the issuance or
transfer to the Optionee of Shares of the Company with a Fair Market Value
at the date of such transfer equal to any such excess, or (iii) a
combination of cash and Shares with a combined value equal to any such
excess, all as determined by the Committee in its sole discretion.
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XL. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL
Until the consummation of an IPO, transfer of exercised Shares by the
Optionee, whether for consideration or for no consideration (for the purpose
of this Section 10 - "Sale") shall be made only once every year, within a
period of time as shall be determined by the Committee and as the Company
shall notify those Optionees who have notified the Company of their
intention to sell the Shares held by them or any part thereof, and shall be
subject to the right of first refusal of the Investor Shareholders, as
defined in the Company's Articles of Association, and all other Shareholders
of the Company holding 3% or more of the outstanding and issued share
capital of the Company (save, for avoidance of doubt, for other Optionees
who already exercised their options) ("Repurchasers"), pro rata in
accordance with their shareholding. The Optionee shall give a notice of sale
(the "Notice") to the Company in order to offer the Shares to the
Repurchasers.
The Notice shall specify the name of each proposed purchaser or other
transferee ("Proposed Transferee"), the number of Shares offered for sale,
the price per Share and the payment terms, as well as such other terms and
conditions, if any, as were included in the offer. The Repurchasers will be
entitled for 21 days from the day of receipt of the Notice, to purchase all
of the offered Shares.
If by the end of the above 21 days period not all of the offered Shares have
been purchased by the Repurchasers, then the Repurchasers who have notified
the Company of their desire to purchase the Shares which are subject to the
Sale, if any, shall have additional 20 days period to purchase the balance
of the Shares which are subject to the Sale. If by the end of the additional
20 days period as per the above not all of the Shares which are subject to
the Sale have been purchased by the Repurchasers then the Optionee will be
entitled to sell such Shares at any time during the 60 days following the
end of the 20 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 Sections 6.2, 6.3, 8.3 above and of this Section shall
continue to apply to the Shares in the hands of such Proposed Transferee.
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XLI. DIVIDENDS; NO SOCIAL BENEFITS
XLII. With respect to all Shares (in contrary to unexercised Options) issued
upon the exercise of Options purchased by the Optionee and held by the
Trustee, the Optionee shall be entitled to receive dividends in
accordance with the quantity of such Shares, and subject to any
applicable taxation on distribution of dividends. During the period in
which Shares issued to the Trustee on behalf of an Optionee are held by
the Trustee, the cash dividends paid with respect thereto shall be paid
directly to the Optionee.
XLIII. The income attributed to the Optionee as a result of the grant of the
Options hereunder and/or the exercise of the Shares, their transfer in
his or her name or their sale and in all respects relating thereto,
shall not be taken into account when computing the basis of the
Optionee's entitlement to any social benefits. Without derogating from
the generality of the above, that income shall not be taken into account
in computing mangers insurance, vocational studies fund, provident
funds, severance pay, holiday pay and the like. If the Company is
legally obliged to take any of the above into account, as income which
is to be attributed to the Optionee, the Optionee will indemnify the
Company in respect of any expense sustained by it in such respect.
XLIV. ASSIGNABILITY AND SALE OF OPTIONS
No Option hereunder 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.
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, cannot
be transferred, assigned, pledged or mortgaged, other than by will or
laws of descent and distribution.
XLV. TERM OF THE OPTION PLAN
The Option Plan shall be effective as of the day it was adopted by the
Board and shall terminate at the end of ten years from such day of
adoption, if not terminated under Section 14 below prior to such date.
For the removal of doubt, upon termination of the Option Plan as per the
above, all unexercised Options shall immediately terminate.
XLVI. AMENDMENTS OR TERMINATION
The Board may at any time, but after consultation with the Trustee,
amend, alter, suspend or terminate the Plan. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Company, which agreement must be in writing and signed by the Optionee
and the Company.
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Termination of the Plan shall not affect the Committee's ability to
exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
XLVII. GOVERNMENT REGULATIONS
The Option Plan, and 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/or 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.
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XLVIII. CONTINUANCE OF EMPLOYMENT
Neither the Option Plan nor the Option agreement with the Optionee
shall impose any obligation on the Company or a Subsidiary thereof, to
continue the employment or services of any Optionee with it, and
nothing in the Option Plan or in any Option granted pursuant thereto
shall confer upon any Optionee any right to continue in the employment
of the Company or a Subsidiary thereof, nor the right to be retained
as a consultant thereof or restrict the right of the Company or a
Subsidiary thereof to terminate such employment or consulting services
at any time.
XLIX. GOVERNING LAW & JURISDICTION
This Option Plan shall be exclusively 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. The competent courts of Tel-
Aviv, Israel, shall have and exclusive jurisdiction in any matters
pertaining to this Option Plan.
L. 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, the Trustee or the Optionee) hereunder, shall be
borne solely by the Optionee. The Company and/or the Trustee shall
withhold taxes according to the requirements under the applicable
laws, rules, and regulations, including withholding taxes at source.
Furthermore, the Optionee shall agree to indemnify the Company and 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 transfer any
Shares or to release any Share certificate to an Optionee until all
required payments have been fully made.
LI. NON-EXCLUSIVITY OF THE OPTION PLAN
The adoption of the Option Plan 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
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otherwise then under the Option Plan, and such arrangements may be
either applicable generally or only in specific cases. For the
avoidance of doubt, prior grant of options to employees, directors or
consultants of the Company under their employment or services
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.
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<PAGE>
LII. MULTIPLE AGREEMENTS
The terms of each Option may differ from other Options granted under
the Option Plan 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 Option Plan, either in addition to, or in substitution
for, one or more Options previously granted to that Optionee.
-19-
<PAGE>
EXHIBIT B
---------
Terms of the Options
--------------------
Name of the Optionee: _______________
Date of Grant: _______________
Designation: 3(i) Options [_]
1. Number of Options granted: _______________
2. Price per Share: _______________
3. Vesting Schedule: _______________
% of Options Vesting Date
------------ ------------
25 % 1 year from the Date of Grant
2.0833 % End of each month, starting from the
13/th/ month from the Date of Grant
all subject to the employment or services of the Optionee with the Company
through the entire respective Vesting Date, as per the above.
4. Expiration Date: _______________
-20-
<PAGE>
EXHIBIT C
---------
PROXY
LETTER OF APPOINTMENT OF PROXY
------------------------------
I, ________________________, hereby appoint the attorney of Verisity Ltd. (the
"Company") to vote in my name and in my place at any general meeting of the
Company and at any separate class meetings.
In witness whereof, I have hereby affixed my signature the _________ day of
___________.
_____________________
Appointor's Signature
I hereby confirm that the foregoing
instrument was signed before me by the Appointor.
______________________________
name
______________________________
profession
______________________________
address
-21-
<PAGE>
EXHIBIT D
---------
To
The Attorney of the Company
---------------------------
The undersigned, having executed a proxy in the form attached hereto as Appendix
"A" (the "Proxy"), pursuant to which you shall be representing the undersigned
at the general meetings of Verisity Ltd., and in connection therewith, hereby
irrevocably and unconditionally undertake and agree as follows:
1. You will be entitled to vote instead of the undersigned at any and all
general meetings of VERISITY LTD. (the "Company") (including but without
limitation general meetings convened for the purpose of adopting
extraordinary resolutions and separate class meetings) and to vote thereat on
any and all matters in respect of the Shares of the Company as the
undersigned would be entitled to vote if then personally present.
2. The undersigned acknowledge and agree that you will refrain from voting under
this Proxy except than in the case of resolution in writing of the
Shareholders of the Company, in which event you will sign such resolution
only after the other Shareholders of the Company have signed same. The
undersigned further acknowledge and agree that such vote and/or refrain from
voting by you may not be in the interest of the undersigned and/or may be
contrary thereto and/or may adversely effect the rights and/or situation of
the undersigned. The undersigned hereby waive any claims, causes of action or
demands against you in connection with your voting and/or refraining from
voting as per the above.
3. The undersigned will immediately indemnify and hold you harmless from and
against any damages, costs and expenses, including legal fees and expenses
you may incur as a result of, or in connection with, your actions or non-
actions under the Proxy, promptly upon your first written demand.
-22-
<PAGE>
4. The undersigned acknowledge and agree that his or her undertakings as per the
above are and will remain irrevocable, as one or more third parties will be
relying upon them in taking action that they may otherwise not take, and by
which they may be adversely changing their financial and/or legal situation.
_____________________
Name: ______________
I.D.: ______________
Address: ___________
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<PAGE>
EXHIBIT E
---------
NOTICE OF EXERCISE OF OPTION
Verisity Ltd.
To the General Manager of Verisity Ltd.
The undersigned, the holder of an Option to purchase ordinary shares of Verisity
Ltd. (the "Company"), hereby irrevocably elects to exercise the purchase rights
represented by such Option, and to purchase thereunder ______________ ordinary
shares of the Company, herewith makes payment of NIS _______________ therefor in
the form of a check made payable to the Company, and requests that the
certificates for such shares be issued in the name of and delivered to the
undersigned at the address set forth below.
The undersigned acknowledges that the issuance and delivery of the certificates
for the shares as per the above is subject to, inter alia, the payment by the
undersigned of all taxes due in connection with the purchase of said shares.
The undersigned further acknowledges that the shares being purchased by him or
her are subject to substantial restrictions on sale or transfer set forth in the
Company's Articles of Association and in the Company's 1999 Israeli Share Option
Plan (the "Plan") and agrees to be bound by the terms and conditions of said
Plan and the Option Agreement entered into by and between the Company and the
undersigned on ___________.
Dated: ____________
____________________________________
(signature)
__________________________________________________
Print name exactly as to be shown on certificate
Address :
__________________________________________________
-24-
<PAGE>
OPTION AGREEMENT
Made as of the _________ day of ______, 1999
By and between VERISITY LTD.
an Israeli company with offices at
8-10 Ha' Melacha St.
Rosh Ha'-Ayin,
Israel
("the Company")
of the first part
-----------------
and
-------------
ID _________
("the Optionee")
of the second part
------------------
PREAMBLE
Whereas In December 1, 1999, the Company adopted the 1999 Israeli Share Option
Plan, a copy of which is attached as Exhibit A hereto (the "Option
---------
Plan"), forming an integral part hereof, incorporated herein by
reference and -
Whereas The Company has determined that the Optionee shall be granted an Option
under the Option Plan to buy Shares of the Company, and the Optionee has
agreed to such grant, all on the terms and subject to the conditions
hereinafter provided.
-1-
<PAGE>
NOW, THEREFORE, it is agreed as follows:
I. PREAMBLE AND DEFINITIONS
II. The Preamble to this Agreement constitutes an integral part hereof.
III. Unless otherwise defined herein, capitalized terms used herein shall have
the meaning ascribed to them in the Option Plan.
-2-
<PAGE>
IV. GRANT OF OPTION
V. The Company hereby grants to the Optionee the number of Options set forth
in Section 1 of Exhibit B hereto, to purchase Shares at the price per
---------
Share set forth in Section 2 of such Exhibit B ("the Option Price"), on
the terms and subject to the conditions hereinafter provided.
The Option Price will be paid in NIS in accordance with the
representative rate of exchange of the U.S. dollar, published by the
Bank of Israel and known on the date of payment.
-3-
<PAGE>
VI. The Optionee is aware and agree that the Company intends to issue
additional shares and options in the future to various entities and
individuals, as the Company in its sole discretion shall determine.
VII. PERIOD OF OPTION AND CONDITIONS OF EXERCISE
VIII. The terms of this Option Agreement shall commence on the date hereof
("the Date of Grant") and terminate at the Expiration Date (as defined in
Section 6 below), or at the time at which the Option is completely
terminated pursuant to the terms of the Option Plan or pursuant to this
Agreement.
IX. The Options may be exercised by the Optionee in whole at any time or in
part from time to time, as determined by the Board, and to the extent
that the Options become vested in accordance with Section 3 of Exhibit B,
prior to the Expiration Date, provided that the number of Shares
purchased under the exercised Option as per the above will be no less
than 100 Shares, without regard to adjustments to the number of Shares
subject to the Option pursuant to Section 7 below, or, if less, all of
the remaining Shares subject to the Option, and provided further that,
subject to the provisions of Section 3.4 below, the Optionee is an
employee, director or consultant of the Company or a Subsidiary of the
Company or a company or a Parent or a Subsidiary company of such company
issuing or assuming the Options in a transaction described in Section 7.1
of the Agreement, at all times during the period beginning with the
granting of the Option and ending upon the date of exercise.
X. Subject to the provisions of Section 3.4 below, in the event of
termination of the Optionee's employment with, or the retention as a
consultant of the Company or a Subsidiary of the Company or a company or
a Parent or a subsidiary company of such company issuing or assuming the
Options in a transaction described in Section 7.1 of the Agreement, all
Options granted to him or her will immediately expire. A notice of
termination of employment or consulting services as the case may be, by
either the Company or the Optionee shall be deemed to constitute
termination of employment or consulting services.
-4-
<PAGE>
XI. Notwithstanding anything to the contrary hereinabove, an Option may be
exercised after the date of termination of Optionee's employment or
services with the Company or any Subsidiary of the Company or a company
or a Parent or a subsidiary company of such company issuing or assuming
the Options in a transaction described in Section 7.1 of the Agreement
during an additional period of time beyond the date of such termination,
but only with respect to the number of Options already vested at the time
of such termination according to the vesting dates if:
XII. termination is without Cause, in which event any Options still in force
and unexpired may be exercised within a period of 30 (thirty) days from
the date of such termination.
XIII. termination is the result of death or disability of the Optionee, in
which event any Options still in force and unexpired may be exercised
within a period of 6 (six) months from the date of termination.
XIV. the Committee may authorize an extension of the terms of all or part of
the Options beyond the date of such termination, even if such terms has
been expired, for a period not to exceed the period during which the
Options by their terms would otherwise have been exercisable.
XV. The Options may be exercised only to purchase whole Shares, and in no
case may a fraction of a Share be purchased. If any fractional Shares
would be deliverable upon exercise, such fraction shall be rounded up
one-half or more, or otherwise rounded down, to the nearest whole number.
XVI. VESTING
Options shall vest on the dates set forth in Section 3 of exhibit B
hereto (the "Vesting Dates").
-5-
<PAGE>
XVII. METHOD OF EXERCISE
XVIII. Vested Options shall be exercised by the Optionee by giving written
notice to the Company, in the form attached hereto as Exhibit E and the
method as may be determined by the Company and the Trustee ("the Exercise
Notice"), which exercise shall be effective upon receipt of such notice
by the Company at its principal office. The notice shall specify the
number of Shares with respect to which the Option is being exercised and
it shall be accompanied by any further assurances and/or undertaking as
the Committee and/or Trustee may require to ensure that the transaction
complies in all respects with the requirements of any applicable law. The
Exercise Notice as per the above will be signed by the person exercising
the Option and it will be accompanied by full payment of the
corresponding Option price, by cash or check made payable to the Company.
XIX. Shares which have resulted from the exercise of 102 Options shall be
issued in the name of the Trustee and be held by the Trustee in
accordance with the provisions of Section 5 of the Option Plan. The
Trustee shall not transfer any Options to the Optionee prior to exercise
of the Options into Shares. The Trustee will transfer the Shares to the
Optionee upon demand but in case of Shares which have resulted from the
exercise of 102 Options, not earlier than two years (24 months) from Date
of Grant. If any law or regulation requires the Company to take any
action with respect to the Shares so demanded before the issuance
thereof, then the date of their issuance shall be extended for the period
necessary to take such action. The Optionee hereby authorizes the Trustee
to sign an agreement with the Company whereby Shares will not be
transferred without deduction of taxes at source. The Optionee hereby
undertakes to exempt the Trustee from any liability in respect of any
action or decision executed bona fide in relation with the Option Plan,
or any Option or Share granted to him or her thereunder.
XX. TERMINATION OF OPTION
XXI. Except as otherwise stated in this Agreement, the Options, to the extent
not previously exercised, shall terminate forthwith upon the earlier of
(i) the date set forth in Section 4 of Exhibit B hereto; or (ii) the
termination of the Option Plan as per Section 13 of the Option Plan; or
(iii) the expiration of any extended period in any of the events set
forth in Section 3.4 above (and such earlier date shall be hereinafter
referred to as "the Expiration Date").
-6-
<PAGE>
XXII. Without derogating from the above, the Committee may, with the prior
written consent of the Optionee, from time to time cancel all or any
portion of the Options then subject to exercise, and the Company's
obligation in respect of such Options may be discharged by either (i)
payment to the Optionee of an amount in cash equal to the excess, if any,
of the Fair Market Value of the Shares pertaining to such canceled
Options, at the date of such cancellation, over the aggregate purchase
price of such Shares, or (ii) the issuance or transfer to the Optionee of
Shares of the Company with a Fair Market Value at the date of such
transfer equal to any such excess, or (iii) a combination of cash and
Shares with a combined value equal to any such excess, all as determined
by the Committee in its sole discretion.
XXIII. CHANGE OF CONTROL TRANSACTIONS; ADJUSTMENTS
XXIV. In the event of a Change of Control Transaction, as defined below, the
Company shall endeavor to cause the successor entity in such transaction
either to assume all of the Options which have been granted hereunder and
which are outstanding as of the consummation of such transaction
("Closing"), or to issue (or cause to be issued) in substitution thereof
comparable options of such successor entity (or of its Parent or its
Subsidiary). If the successor entity is unwilling to either assume such
Options or grant comparable options in substitution for such Options, on
terms that are acceptable to the Company as determined by the Board in
the exercise of its discretion, then:
(i) with respect to each outstanding Option, that portion of the
Option which remains unvested that either (x) would have become
vested over the 12-month period immediately following the
Closing, or (y) represents 50% of the unvested portion of the
Option as of the Closing, whichever portion is smaller, will
become Vested immediately prior to such Closing; and
(ii) the Board may cancel all outstanding Options, and terminate this
Plan, effective as of the Closing, provided that it shall notify
all Optionees of the proposed Change of Control Transaction a
reasonable amount of time prior to the Closing so that the
Optionee will be given the opportunity to exercise the vested
portion of his or her Option (after giving effect to the
acceleration of such vesting under clause (i) above) prior to the
Closing.
-7-
<PAGE>
For purposes of this Section 7.1, the term "Change of Control
Transaction" means a Business Combination in which less than 50%
of the outstanding voting securities of the successor entity
immediately following the Closing of the Business Combination
transaction are beneficially held by those persons and entities
in the same proportion as such persons and entities beneficially
held the voting securities of the Company immediately prior to
such transaction; the term "Business Combination" means a
transaction or series of transactions consummated within any
period of 90 days resulting in (A) the sale of all or
substantially all of the assets of the Company, or (B) a merger
or consolidation or other reorganization of which the Company is
a merging party.
XXV. In the event of any change in the capital structure of the Company,
including but without limitation as a result of a recapitalization,
combination, reclassification, distribution of bonus shares, distribution
of dividend otherwise than in cash, shares split, reverse shares split,
dividend on winding up, consolidating shares, swapping shares, changing
the Company's structure or otherwise, but excluding a Change of Control
Transactions in respect of which the provisions of Section 7.1 above
shall apply, appropriate proportionate adjustments will be made in (i)
the aggregate number of Shares that are reserved for issuance pursuant to
Section 6 of the option plan, under outstanding Options or future Options
granted hereunder; and/or (ii) the Option price and the number of Shares
that may be acquired under each outstanding Option granted hereunder;
and/or (iii) other rights and matters determined on a per share basis
under the Option Plan or any Option agreement evidencing an outstanding
Option granted thereunder. Any such adjustments will be made only by the
Board, and when so made will be effective, conclusive and binding for all
purposes with respect to the Option Plan and all Options then
outstanding. No such adjustments will be required by reason of the
issuance or sale by the Company for cash or other consideration of
additional Shares or securities convertible into or exchangeable for
Shares.
For the removal of doubt all the terms and conditions contained
herein in respect of the Options and/or the Shares shall apply to
the options and/or shares resulting from the adjustments as per
the above.
-8-
<PAGE>
XXVI. Anything herein to the contrary notwithstanding, if prior to the
completion of an IPO of the Company's securities, all or substantially
all of the shares of the Company are to be sold, or upon a merger or
reorganization or the like, the shares of the Company, or any class
thereof, are to be exchanged for securities of another Company, then in
such event, each Optionee shall be obliged to sell or exchange, as the
case may be, the Shares such Optionee purchased under the Option Plan,
in accordance with the instructions then issued by the Board whose
determination shall be final.
XXVII. RIGHTS PRIOR TO EXERCISE OF OPTION; LIMITATIONS AFTER PURCHASE OF SHARES
XXVIII. Subject to the provisions of Sections 8.2 and 8.4 below, the Optionee
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 unless and until, following exercise but in case of
Options and Shares held by the Trustee, subject always to the provisions
of Section 5 of the Option Plan, registration of the Optionee as holder
of such Shares in the Company's register of members.
XXIX. With respect to all Shares (in contrary to unexercised Options) issued
upon the exercise of Options purchased by the Optionee and held by the
Trustee, the Optionee shall be entitled to receive dividends in
accordance with the quantity of such Shares, and subject to any
applicable taxation on distribution of dividends. During the period in
which Shares issued to the Trustee on behalf of the Optionee, the cash
dividends paid with respect thereto shall be paid directly to the
Optionee.
XXX. No Option granted hereunder 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 the
Optionee's rights to purchase Shares hereunder shall be exercisable only
by the Optionee.
As long as the Shares are held by the Trustee in favor of the
Optionee, then all rights the last possesses over the Shares are
personal, cannot be transferred, assigned, pledged or mortgaged,
other than by will or laws of descent and distribution.
Any such action made directly or indirectly, for an immediate
validation or for a future one, shall be void.
-9-
<PAGE>
XXXI. Until the consummation of an initial public offering of the Company's
shares ("the IPO") an Optionee who purchased Shares hereunder upon
exercise of Options:
XXXII. Shall not exercise his or her voting rights as a shareholder (in any and
all matters whatsoever), and such Shares shall be voted by a proxy
pursuant to the directions of the Board, such proxy to be to the person
or persons designated by the Board. In addition to the above, any such
Optionee shall not be entitled to receive any notice to which a
shareholder of the Company is entitled.
Upon the execution of this Agreement Optionee shall execute (i) a
proxy in the form attached hereto as Exhibit "C", pursuant to
which the attorney of the Company shall represent the Optionee at
the general meetings of the Company, all as specified within said
proxy; and (ii) a letter to the attorney of the Company in
respect of the above proxy in the form attached hereto as Exhibit
"D".
XXXIII. Notwithstanding anything to the contrary in the Articles of Association
of the Company and/or in any applicable law or agreement, none of the
Optionees nor the Trustee shall have right of first refusal and/or
preemptive rights in relation with any issuance and/or sale of shares in
the Company.
XXXIV. If in connection with an IPO, the stock exchange regulations and/or any
applicable law so provide and/or the Board or the Committee so resolve
and/or the underwriter or underwriters managing such offering so
requests, then each Optionee who purchased Shares hereunder upon
exercise of Options will agree to not sell or otherwise transfer any
such Shares (other than Shares included in such underwriting) without
the prior written consent of such underwriter, for such period of time
as may be requested by the underwriter commencing on the effective date
of the registration statement filed in connection with such offering,
but in no event longer than the period of time that the officers and
directors of the Company are generally prohibited from transferring
their Shares in connection with such public offering.
XXXV. The Optionee shall not dispose of any Shares in transactions which
violate, in the opinion of the Company, any applicable laws, rules and
regulations.
XXXVI. The Optionee agrees that the Company shall have the authority to endorse
upon the certificate or certificates representing the Shares such
legends referring to the foregoing restrictions, and any other
applicable restrictions, as it may deem appropriate (which do not
violate the Optionee's rights according to this Agreement).
-10-
<PAGE>
XXXVII. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL
Until the consummation of an IPO, transfer of exercised Shares by the
Optionee, whether for consideration or for no consideration (for the
purpose of this Section 9 - "Sale") shall be made only once every year,
within a period of time as shall be determined by the Committee and as
the Company shall notify those Optionees who have notified the Company
of their intention to sell the Shares held by them or any part thereof,
and shall be subject to the right of first refusal of the Investor
Shareholders, as defined in the Company's Articles of Association, and
all other Shareholders of the Company holding 3% or more of the
outstanding and issued share capital of the Company (save, for avoidance
of doubt, for other Optionees who already exercised their options)
("Repurchasers"), pro rata in accordance with their shareholding. The
Optionee shall give a notice of sale (the "Notice") to the Company in
order to offer the Shares to the Repurchasers.
The Notice shall specify the name of each proposed purchaser or other
transferee ("Proposed Transferee"), the number of Shares offered for
sale, the price per Share and the payment terms, as well as such other
terms and conditions, if any, as were included in the offer. The
Repurchasers will be entitled for 21 days from the day of receipt of the
Notice, to purchase all of the offered Shares.
If by the end of the above 21 days period not all of the offered Shares
have been purchased by the Repurchasers, then the Repurchasers who have
notified the Company of their desire to purchase the Shares which are
subject to the Sale, if any, shall have additional 20 days period to
purchase the balance of the Shares which are subject to the Sale. If by
the end of the additional 20 days period as per the above not all of the
Shares which are subject to the Sale have been purchased by the
Repurchasers then the Optionee will be entitled to sell such Shares at
any time during the 60 days following the end of the 20 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
Sections 7.3, 8.4, 8.5 and of this Section shall continue to apply to
the Shares in the hands of such Proposed Transferee.
XXXVIII. GOVERNMENT REGULATIONS
The Option Plan, and the granting and exercise of the Option thereunder,
and the Company's obligation to sell and deliver Shares or cash under
the Option, are 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/or 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 required.
-11-
<PAGE>
XXXIX. CONTINUANCE OF EMPLOYMENT
Nothing in this Option Agreement shall be construed to impose any
obligation on the Company or a Subsidiary thereof to continue the
Optionee's employment or services with it, to confer upon the Optionee
any right to continue in the employment of the Company or a Subsidiary
thereof, nor the right to be retained as a consultant thereof, or to
restrict the right of the Company or a Subsidiary thereof to terminate
such employment or consulting services at any time.
XL. GOVERNING LAW & JURISDICTION
This Agreement shall be exclusively 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. The competent courts of Tel-Aviv,
Israel shall have sole and exclusive jurisdiction in any matters
pertaining to this Agreement.
XLI. 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, the Trustee or the Optionee) hereunder, shall be
borne solely by the Optionee. The Company and/or the Trustee shall
withhold taxes according to the requirements under the applicable laws,
rules, and regulations, including the withholding of taxes at source.
Furthermore, the Optionee shall indemnify the Company and 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 transfer any
Shares or to release any Share certificate to an Optionee until all
required payments have been fully made.
The Optionee hereby declares that he/she will not transfer Shares issued
upon the exercise of 102 Options, nor any other shares received
subsequently following any realization of rights which are subject to
Section 102, by a way of tax - exempt transfer or a transfer under
Sections 104 (a), 104 (b) or 97 (a) of the Income Tax Ordinance.
XLII. FAILURE TO ENFORCE NOT A WAIVER
The failure of any party to enforce at any time any provisions of this
Option Agreement shall in no way be construed to be a waiver of such
provision or of any other provision hereof.
-12-
<PAGE>
XLIII. PROVISIONS OF THE OPTION PLAN
The Options provided for herein are granted pursuant to the Option Plan,
and said Options and this Option Agreement are in all respects governed
by the Option Plan and subject to all of the terms and provisions
whether such terms and provisions are incorporated in this Option
Agreement solely by reference or are expressly cited herein. Any
interpretation of this agreement will be made in accordance with the
Option Plan but in the event there is any contradiction between the
provisions of this agreement and the Option Plan, the provisions of this
agreement will prevail.
XLIV. BINDING EFFECT
This Agreement shall be binding upon the heirs, executors,
administrators, and successors of the parties hereof.
XLV. NOTICES
Any notice required or permitted under this Option Agreement shall be
deemed to have been duly given within one week if delivered, faxed or
mailed, if delivered by certified or registered mail or return receipt
requested, either to the Optionee at his or her address set forth above
or such other address as he or she may designate in writing to the
Company, or to the Company at the address set forth above or such other
address as the Company may designate in writing to the Optionee.
XLVI. ENTIRE AGREEMENT
This Agreement exclusively concludes all the terms of the Optionee's
Option Plan, and, subject to the provisions of Section 19 of the Option
Plan, annuls and supersedes any other agreement, arrangement or
understanding, whether oral or in writing, relating to the grant of
options to the Optionee. Any change of any kind to this agreement will
be valid only if made in writing and signed by both the Optionee and the
Company's authorized member and has received the approval of the Board.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Option Agreement in duplicate on the day and year first above written.
VERISITY LTD.
-13-
<PAGE>
By:___________
Optionee acknowledges receipt of a copy of the Plan and represents that he or
she is familiar with and agrees to the terms and provisions thereof, and hereby
accepts these Options subject to all of the terms and provisions thereof.
Optionee has reviewed the Plan and this Option Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option Agreement and fully understands all provisions of these Options. Optionee
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any question arising under the Plan or
this Option Agreement or connected therewith. Optionee further agrees to notify
the Company upon any change in the residence address indicated above.
_________
The Optionee
Name: ___________
I.D.: ___________
Address: ___________
-14-
