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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.
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<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: _______________
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<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
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<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.
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<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: ___________
-23-
<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 :
__________________________________________________
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