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Exhibit 10.31
Verisity Limited
2000 Employee Share Purchase Plan
1. Purpose. The purpose of the Plan is to provide employees of the Company
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with an opportunity to purchase Ordinary Shares of the Company through
accumulated payroll deductions. In light of the substantial anticipated
participation of United States employees, it is the intention of the Company to
have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of
the United States Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed in a manner consistent with the
requirements of that section of the Code.
2. Definitions.
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(a) "Board" shall mean the board of directors of the Company or any
committee appointed pursuant to Section 14.
(b) "Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
(c) "Company" shall mean Verisity Ltd., an Israeli corporation, and any
Designated Subsidiary of the Company.
(d) "Compensation" shall mean all base gross earnings, exclusive of
payments for overtime, shift premium, incentive compensation, incentive
payments, bonuses and other compensation.
(e) "Designated Subsidiary" shall mean Verisity Design, Inc., a Delaware
corporation, and any other Subsidiary that has been designated by the Board from
time to time in its sole discretion as eligible to participate in the Plan.
(f) "Employee" shall mean any individual who is an employee of the Company
for tax purposes whose customary employment with the Company is at least twenty
(20) hours per week and more than five (5) months in any calendar year. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Company. Where the period of leave exceeds 90 days and the individual's
right to reemployment is not guaranteed either by statute or by contract, the
employment relationship, for purposes of this Plan, shall be deemed to have
terminated on the 91st day of such leave.
(g) "Enrollment Date" shall mean the first day of each Offering Period.
(h) "Exercise Date" shall consist of four days in each Offering Period. For
Offering Periods beginning on the first Trading Day on or after January 1, the
four Exercise Dates are the last Trading Day in the period ending on (i) the
first following
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June 30; (ii) the first following December 31; (iii) the second following
June 30; and (iv) the second following December 31. For Offering Periods
beginning on the first Trading Day on or after July 1, the four Exercise
Dates are last Trading Day in the period ending on (i) first following
December 31; (ii) the first following June 30; (iii) the second following
December 31; and (iv) the second following June 30. For purpose of
determining the Exercise Dates for the initial Offering Period under this
Plan, the Exercise Dates shall be determined as if such initial Offering
Period commences on January 1, 2001.
(i) "Fair Market Value" shall mean, as of any date, the value of
Ordinary Shares determined as follows:
(i) If the Ordinary Shares are listed on any established stock
exchange or a national market system, including without limitation the
Nasdaq National Market or the Nasdaq SmallCap Market, their Fair Market
Value shall be the closing sales price for such shares (or the closing bid,
if no sales were reported) as quoted on such exchange or system on the date
of such determination (or, if such date is not a Trading Day, then on the
first Trading Day immediately prior to such date), as reported in The Wall
Street Journal or such other source as the Board deems reliable; or
(ii) If the Ordinary Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, their Fair Market
Value shall be the mean of the closing bid and asked prices for the
Ordinary Shares on the date of such determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable; or
(iii) In the absence of an established market for the Ordinary
Shares, the Fair Market Value thereof shall be determined in good faith by
the Board.
(iv) For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to
the public as set forth in the final prospectus included within the
registration statement on Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Company's Ordinary Shares
(the "Registration Statement").
(j) "New Exercise Date" shall have the meaning set out in Section
19(b).
(k) "Ordinary Shares" shall mean the ordinary shares of Verisity Ltd.
(l) "Offering Period" shall mean overlapping periods of approximately
twenty four (24) months commencing (i) on the first Trading Day on or after
each January 1 during the term of this Plan and terminating on the last
Trading Day in the period ending the second following December 31, and (ii)
on the first Trading Day on or after each July 1 during the term of this
Plan and terminating on the last Trading Day in the period ending the
second following June 30; provided, however, that the initial Offering
Period
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under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and shall terminate on the last Trading
Day on or before December 31, 2002. The duration of Offering Periods may
be changed pursuant to Section 4 of this Plan. Notwithstanding anything in
this Plan to the contrary, if on any Exercise Date in an Offering Period,
the Fair Market Value of the Ordinary Shares is less than the Fair Market
Value of the Ordinary Shares on the Enrollment Date of such Offering
Period, the Offering Period shall terminate on the day after such Exercise
Date. All Participants in such terminated Offering Period shall be
automatically enrolled in the Offering Period that is then immediately
commencing.
(m) "Participant" shall mean an eligible Employee who has completed
and filed an enrollment form at the time and in the manner required by the
Company for participation in the Plan.
(n) "Plan" shall mean the Verisity Ltd. 2000 Employee Share Purchase
Plan.
(o) "Purchase Price" shall mean an amount equal to 85 percent of the
Fair Market Value of an Ordinary Share on the Enrollment Date or on each
Exercise Date during an Offering Period, whichever is lower; provided,
however, that the Purchase Price may be adjusted by the Board pursuant to
Section 20.
(p) "Reserves" shall mean the number of Ordinary Shares covered by
each option under the Plan which have not yet been exercised and the number
of Ordinary Shares which have been authorized for issuance under the Plan
but not yet placed under option.
(q) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50 percent of the voting shares are held by the Company
or a Subsidiary of the Company, whether or not such corporation now exists
or is hereafter organized or acquired by the Company or a Subsidiary of the
Company.
(r) "Trading Day" shall mean a day on which national stock exchanges
and the Nasdaq National Market are open for trading.
3. Eligibility.
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(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose
shares would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital shares of the Company and/or hold outstanding
options to purchase such shares possessing five percent (5%) or more of
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the total combined voting power or value of all classes of the capital
shares of the Company or of any Subsidiary, or (ii) to the extent that his
or her rights to purchase shares under the Plan (and all other employee
share purchase plans of the Company and its Subsidiaries) accrues at a rate
which exceeds Twenty-Five Thousand United States Dollars (US$25,000) worth
of shares (determined at the Fair Market Value of the shares at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented through Offering
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Periods. The Board shall have the power to change the duration of future
Offering Periods (including the commencement dates thereof) without
shareholder approval if such change is announced at least five (5) days
prior to the beginning (or previously scheduled beginning, if earlier) of
the first Offering Period to be affected.
5. Participation.
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(a) All eligible Employees are automatically enrolled in the Plan at
the time of its adoption. To confirm his or her level of participation,
each automatic enrollee shall file an enrollment form in the form of
Exhibit A to this Plan by January 1, 2001 or 30 days after the first day of
the initial Offering Period under this Plan, whichever is later. In
addition to the automatic enrollees, all other eligible Employees may
become Participants in the Plan by completing these enrollment forms and
filing such forms with the Company's payroll office prior to the applicable
Enrollment Date. A Participant's enrollment form shall remain in effect
automatically for each successive Offering Period commencing at the end of
the Participant's prior Offering Period unless such enrollment is
terminated as provided in Section 10.
(b) Payroll deductions for a Participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless
sooner terminated by the Participant as provided in Section 10.
6. Payroll Deductions.
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(a) Employees who have been automatically enrolled at the time of the
Plan's initial adoption will not be subject to payroll deductions (until
the filing of the enrollment form described above). At the time a
Participant files his or her enrollment form (including an Employee who was
automatically enrolled), he or she shall elect to have payroll deductions
made on each pay day during the Offering Period in an amount not exceeding
fifteen percent (15%) of the Compensation which he or she receives on each
pay day during the Offering Period. Payroll deductions shall be made after
taxes, even though the amount of each Participant's deduction shall be
based on pretax income.
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(b) All payroll deductions made for a Participant shall be credited
to his or her account under the Plan and shall be withheld in whole
percentages only. A Participant may not elect to have payroll deductions in
a percentage amount other than a whole number and may not elect to make any
additional payments into such account.
(c) A Participant (including an automatic enrollee under Section
5(a)) may discontinue his or her participation in the Plan as provided in
Section 10, or may increase or decrease the rate of his or her payroll
deductions during the Offering Period, by completing and filing with the
Company a revised enrollment form. The Board may, in its discretion, limit
the number of Participant rate changes during any Offering Period. The
change in rate shall be effective with the first full payroll period
following five (5) business days after the Company's receipt of the new
enrollment form unless the Board elects to process a given change in
participation more quickly.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b), a Participant's
payroll deductions may be decreased to zero percent (0%) at any time during
an Offering Period. Payroll deductions shall recommence at the rate
provided in such Participant's enrollment form on the date following an
Exercise Date provided that the subsequent Exercise Date is scheduled to
end in the following calendar year, unless terminated by the Participant as
provided in Section 10.
(e) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Ordinary Shares issued under the Plan
are disposed of, the Participant must make adequate provision for the
Company's federal, state, or other tax withholding obligations, if any,
which arise upon the exercise of the option or the disposition of the
Ordinary Shares. At any time, the Company may, but shall not be obligated
to, withhold from the Participant's compensation the amount necessary for
the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Ordinary Shares by
the Participant. Notwithstanding the foregoing, the Company's duty to
perform its obligations under this Plan are conditional upon the
Participant making provision to satisfy his or her applicable tax
obligations and/or liability in a manner that is acceptable to the Company.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
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Participant shall be granted an option to purchase on each of the Exercise
Dates of such Offering Period at the applicable Purchase Price up to a
number of the Company's Ordinary Shares determined by dividing such
Participant's payroll deductions which have been accumulated prior to such
Exercise Date and retained in the Participant's account as of the Exercise
Date by the applicable Purchase Price (or as described in Section 8 below
with respect to automatic enrollees). Exercise of the option shall occur as
provided in
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Section 8, unless the Participant has withdrawn pursuant to Section 10. The
option shall expire immediately after the final Exercise Date in the
Offering Period.
8. Exercise of Option. Unless a Participant withdraws from the Plan as
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provided in Section 10, his or her option for the purchase of shares shall
be exercised automatically on each of the successive Exercise Dates in the
Offering Period. On such Exercise Date, the maximum number of full shares
subject to the option shall be purchased for such Participant at the
applicable Purchase Price with the accumulated payroll deductions in his or
her account. No fractional shares shall be purchased; any payroll
deductions accumulated in a Participant's account which are not sufficient
to purchase a full share shall be retained in the Participant's account for
the subsequent Exercise Date or Offering Period. Any other cash left over
in a Participant's account after the Offering Period shall be returned to
the Participant. During a Participant's lifetime, a Participant's option to
purchase shares hereunder is exercisable only by him or her.
Notwithstanding the above, as no payroll deductions will be made for
automatic enrollees (until they have duly filed enrollment forms) each
automatic enrollee who has not filed an enrollment form shall purchase with
a lump-sum cash payment that number of whole Ordinary Shares at the
Purchase Price that can be acquired with 15% of such enrollee's
Compensation calculated from the beginning of the initial Offering Period
through the initial Exercise Date.
9. Delivery. As promptly as practicable after each Exercise Date on which
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a purchase of shares occurs, the Company shall arrange the delivery to each
Participant, as appropriate, of a notification of the amount of shares
purchased upon exercise of his or her option. The Company may elect to
deliver share certificates to the Participant representing such purchase of
shares or may record such purchase and ownership of shares by any other
method that comports with applicable law.
10. Withdrawal.
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(a) A Participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his
or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the Participant's
payroll deductions credited to his or her account shall be paid to such
Participant promptly after receipt of notice of withdrawal and such
Participant's option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of shares
shall be made for such Offering Period. If a Participant withdraws from an
Offering Period, payroll deductions shall not resume at the beginning of
any succeeding Offering Period unless the Participant delivers to the
Company a new enrollment form within the time periods and in the form
specified by the Company.
(b) A Participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan
which may hereafter be
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adopted by the Company, or in succeeding Offering Periods which commence
after the termination of the Offering Period from which the Participant
withdraws provided such Participant delivers a new enrollment form.
11. Termination of Employment. Upon a Participant's ceasing to be an
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Employee for any reason, he or she shall be deemed to have elected to
withdraw from the Plan and the payroll deductions credited to such
Participant's account during the Offering Period but not yet used to
exercise the option shall be returned to such Participant or, in the case
of his or her death, to the person or persons entitled thereto under
Section 15, and such Participant's option shall be automatically
terminated. The preceding sentence notwithstanding, a Participant who
receives payment in lieu of notice of termination of employment shall be
treated as continuing to be an Employee for the Participant's customary
number of hours per week of employment during the period in which the
Participant is subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
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Participant in the Plan.
13. Shares.
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(a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19, the maximum number of the Company's
Ordinary Shares which shall be made available for sale under the Plan shall
be one million (1,000,000) shares. If, on a given Exercise Date, the number
of shares with respect to which options are to be exercised exceeds the
number of shares then available under the Plan, the Board shall make a pro
rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable.
(b) The Participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a Participant under the Plan shall be
registered only in either the name of the Participant or in the name of the
Participant and his or her spouse (or in a revocable trust established for
estate planning purposes for such Participant or for such Participant and
his or her spouse).
14. Administration. The Plan shall be administered by the Board or, to
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the extent permissible by law, a committee of Board members appointed by
the Board. The Board shall have full and exclusive discretionary authority
to construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan,
including the power to delegate this authority to any subcommittee of the
board established to administer the Plan. Every finding, decision and
determination made by the Board shall, to the full extent permitted by law,
be final and binding upon all parties.
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15. Designation of Beneficiary.
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(a) A Participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the Participant's account
under the Plan in the event of such Participant's death. In addition, a
Participant may file a written designation of a beneficiary who is to
receive any cash from the Participant's account under the Plan in the event
of such Participant's death prior to exercise of the option. If a
Participant is married and the designated beneficiary is not the spouse, an
executed spousal consent form shall be required for such designation to be
effective.
(b) Such designation of beneficiary may be changed by the Participant
at any time by written notice. In the event of the death of a Participant
and in the absence of a beneficiary validly designated under the Plan who
is living at the time of such Participant's death, the Company shall
deliver such shares and cash to the executor or administrator of the estate
of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and cash to the spouse or to any one or
more dependents or relatives of the Participant, or if no spouse, dependent
or relative is known to the Company, then to such other person as the
Company may designate.
16. Transferability. Neither payroll deductions credited to a
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Participant's account nor any rights with regard to the exercise of an
option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws
of descent and distribution or as provided in Section 15) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such
act as an election to withdraw in accordance with Section 10.
17. Use of Funds. All payroll deductions received or held by the Company
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under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each Participant
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in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts
of payroll deductions, the Purchase Price, the number of shares purchased
and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
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Merger or Asset Sale.
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(a) Changes in Capitalization. Subject to any required action by the
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shareholders of the Company, the Reserves, the maximum number of shares
each Participant may purchase per Exercise Date (pursuant to Section 7) and
the price per share and number of Ordinary Shares covered by each option
under the Plan which has not yet been exercised
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shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Ordinary Shares resulting from a share split,
reverse share split, share dividend, bonus shares, recapitalization,
combination or reclassification of the Ordinary Shares, or any other
increase or decrease in the number of Ordinary Shares effected without
receipt of consideration by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed to have
been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of any class, or securities convertible into shares
of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Ordinary Shares subject to an
option.
(b) Dissolution or Liquidation. In the event of the proposed
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dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date"), and shall terminate immediately prior to the consummation
of such proposed dissolution or liquidation, unless provided otherwise by
the Board. The New Exercise Date shall be before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each
Participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the Participant's option has been
changed to the New Exercise Date and that the Participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date
the Participant has withdrawn from the Offering Period as provided in
Section 10.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
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substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, the
Offering Period then in progress shall be shortened by setting a New
Exercise Date and following the procedures set out in Section 19(b), above.
20. Amendment or Termination.
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(a) The Board may at any time and for any reason terminate or amend
the Plan. Except as provided in Section 19, however, no such termination
shall affect options previously granted, except that the Board may
terminate an Offering Period on any date if it determines that such
termination is in the best interests of the Company and its shareholders.
Except as provided in Section 19 and Section 20, no amendment may make any
change in any option theretofore granted which adversely affects the rights
of any Participant.
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(b) Without shareholder consent and without regard to whether any
Participant rights may be considered to have been adversely affected, the
Board shall be entitled to change the Offering Periods, revise the Exercise
Dates, limit the permitted frequency and number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable
to amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a Participant in order to
adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and
adjustment periods and accounting and crediting procedures to ensure that
amounts applied toward the purchase of Ordinary Shares for each Participant
properly correspond with amounts withheld from the Participant's
Compensation, and establish such other limitations or procedures as the
Board determines in its sole discretion advisable and which are consistent
with the Plan.
(c) In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion, modify or amend the Plan to reduce or
eliminate such accounting consequences, including, but not limited to:
(i) altering the Purchase Price applicable during any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price; and
(ii) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time
of the Board action.
Any such modifications or amendments under this Section 20 shall not
require shareholder approval or the consent of any Plan Participants unless
otherwise required under Section 423 of the Code or any other applicable
law, regulation or stock exchange rule.
The Board may from time to time designate a Subsidiary as a Designated
Subsidiary wherein Employees of the Designated Subsidiary will participate
in this Plan. However, if application of the Plan to any Designated
Subsidiary operates to compromise or violate the equal rights and
privileges requirement under Section 423, due to operation or requirements
of governing law in the jurisdiction of such Subsidiary or any other
reason, then that Designated Subsidiary will automatically be removed from
the Plan and any Employees of such Subsidiary will be terminated from the
Plan.
21. Notices. All notices or other communications by a Participant to
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the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt
thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
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respect to an option unless the exercise of such option and the issuance
and delivery of such shares
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pursuant thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the Israeli Securities Law, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange or national market system upon which the shares may then be listed.
As a condition to the exercise of an option, the Company may require the person
exercising such option to make such representations and warranties at the time
of any such exercise that the Company determines are required under any
applicable law including, but not limited to, that the shares are being
purchased only for investment and without any present intention to sell or
distribute such shares.
23. Term of Plan. The Plan shall become effective upon the earlier to occur
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of its adoption by the Board or its approval by the shareholders of the Company.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 20.
24. General Provisions.
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(a) Nothing in the Plan shall confer upon any Participant any right to
continue in the employ of the Company or any affiliate of the Company for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company (or any affiliate of the Company employing such
person) or of the Participant, which rights are hereby expressly reserved by
each, to terminate such person's employment at any time for any reason, with or
without cause.
(b) With respect to any Participant who is an employee of Verisity Design,
Inc., the provisions of the Plan shall be governed by the laws of the State of
California without resort to that state's conflict-of-laws rules. With respect
to all other Participants, the provisions of the Plan shall be governed by the
laws of the State of Israel without resort to that state's conflict-of-law's
rules. NOTWITHSTANDING ANYTHING ABOVE TO THE CONTRARY, THE PARTIES ACKNOWLEDGE
AND AGREE THAT THE RELATIONSHIP OF ALL PARTICIPANTS AS SHAREHOLDERS OF THE
COMPANY, INCLUDING WITHOUT LIMITATION ALL OF THEIR RIGHTS AND DUTIES ARISING
UNDER THE COMPANY'S ARTICLES OF ASSOCIATION, SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF ISRAEL, AND EACH SUCH PARTICIPANT HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF ISRAEL LOCATED IN TEL AVIV, IN RESPECT
OF ANY DISPUTE OR MATTER ARISING OUT OF OR CONNECTED WITH SUCH RELATIONSHIP AND
THE ARTICLES.
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Exhibit A
Verisity Ltd.
2000 Employee Share Purchase Plan
Enrollment Form
_____ Original Application Enrollment Date: _______
_____ Change in Payroll Deduction Rate Dated: ___________
_____ Change of Beneficiary(ies)
1. I, _____________________________________, hereby elect to participate
in the Verisity Ltd. 2000 Employee Share Purchase Plan (the "Employee Share
Purchase Plan") and subscribe to purchase shares of the Company's Ordinary
Shares in accordance with this Enrollment Form and the Employee Share Purchase
Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 1 to 15%) during the Offering
Period in accordance with the Employee Share Purchase Plan. (Please note that no
fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of Ordinary Shares at the applicable Purchase Price determined in
accordance with the Employee Share Purchase Plan. I understand that if I do not
withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option on each Exercise Date during the
Offering Period.
4. I have received a copy of the complete Employee Share Purchase Plan. I
understand that my participation in the Employee Share Purchase Plan is in all
respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to shareholder
approval of the Employee Share Purchase Plan.
5. Shares purchased for me under the Employee Share Purchase Plan should
be issued in the name(s) of (Employee or Employee and Spouse
only):_____________________________________________________________.
6. I understand that if I dispose of any shares received by me pursuant
to the Plan within two years after the Enrollment Date or within one year of the
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Exercise Date, I will be treated for federal income tax purposes as having
received ordinary income at the time of such disposition in an amount equal to
the excess of the fair market value of the shares at the time such shares were
purchased by me over the price which I paid for the shares. I hereby agree to
notify the Company in writing within 30 days after the date of any disposition
of shares and I will make adequate provision for Federal, state or other tax
withholding obligations, if any, which arise upon the disposition of the
Ordinary Shares. The Company may, but will not be obligated to, withhold from my
compensation the amount necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Ordinary
Shares by me. If I dispose of such shares at any time after the expiration of
the holding periods, I understand that I will be treated for federal income tax
purposes as having received income only at the time of such disposition, and
that such income will be taxed as ordinary income only to the extent of an
amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares, or (2) 15% of the fair market value of the shares on the first day
of the Offering Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Share Purchase
Plan. The effectiveness of this Enrollment Form is dependent upon my eligibility
to participate in the Employee Share Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Share Purchase Plan.
Name (Please print):
______________________________________
(First) (Middle) (Last)
______________________________________
Relationship
______________________________________
(Address)
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<PAGE>
I UNDERSTAND THAT THIS ENROLLMENT FORM SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
____________________________________ ________________________________________
Signature of Employee Spouse's Signature (If beneficiary other
than spouse)
Employee's Social Security
Number:_____________________________
Employee's Address:
____________________________________
____________________________________
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<PAGE>
Exhibit B
Verisity Ltd.
2000 Employee Share Purchase Plan
Notice Of Withdrawal
The undersigned Participant in the Offering Period of the Verisity Ltd. 2000
Employee Share Purchase Plan which began on ___________, ______ (the "Enrollment
Date") hereby notifies the Company that he or she hereby withdraws from the
Offering Period. He or she hereby directs the Company to pay to the undersigned
as promptly as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Enrollment Form.
Name (Please print):
___________________________________
(First) (Middle) (Last)
___________________________________
(Address)
Signature:
___________________________________
Date: _____________________________
-15-
