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EXHIBIT 99.6
HYNEX LIMITED
(THE "COMPANY")
1998 KEY EMPLOYEE STOCK OPTION PLAN
1. ESTABLISHMENT AND PURPOSE
This document comprises the 1998 HyNEX Ltd. Key Employee Stock Option
Plan (the "Plan"). The Plan is intended to promote the interests of the
Company and its shareholders by providing officers and other employees
of the Company (including directors of the Company who are also
employees of the Company) with appropriate incentives and rewards to
encourage them to enter into and continue in the employ of the Company
and to acquire a proprietary interest in the long-term success of the
Company.
2. DEFINITIONS
As used in the Plan, the following definitions shall apply to the terms
indicated below:
a. "Cause," when used in connection with the termination of a Participant's
employment by the Company, shall mean (i) the failure by the Participant
to perform his duties in a satisfactory manner (including the duty of
care and the fiduciary duty as set forth in the Companies Ordinance) and
obligations to the Company (other than any such failure resulting from
Disability as hereinafter defined) or (ii) the engaging by the
Participant in misconduct which is injurious to the Company.
b. "Company" shall mean HyNEX Ltd., a company incorporated under the laws
of Israel, and any reference hereafter to the Company shall apply to its
appropriate authorized corporate organs.
c. "Company Stock" shall mean the ordinary shares of the Company, NIS0.1
par value each.
d. "Companies Ordinance" shall mean the Companies Ordinance [New Version],
1983, of the State of Israel.
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e. "Designated Beneficiary" of a Participant, shall mean the beneficiary
designated by such Participant or deemed as such Participant's
Designated Beneficiary pursuant to Section 20 hereof.
f. "Disability" shall mean any physical or mental condition that would
render the Participant unable to work according to the determination of
the Israel National Insurance Institute.
g. "Grant Date" shall mean January 1, 1998, subject to the provisions of
Section 5 below.
h. "Grant Instrument" shall have the meaning set forth in Section 5
hereinbelow.
i. "Option" shall mean an option to purchase shares of the Company Stock
granted pursuant to this Plan.
j. "Option Exercise Price" shall have the meaning set forth in Section 6.a.
hereof.
k. "Participant" shall mean an employee of the Company to whom an Option is
granted pursuant to the Plan, and, upon the Participant's death, the
Participant's successors, heirs, executors and administrators, as the
case may be.
l. "Plan" shall mean this HyNEX Ltd. Key Employee Stock Option Plan, as
amended from time to time.
m. "Trustee" shall have the meaning set forth in Section 7 hereof.
n. "Vesting Date" shall have the meaning set forth in Section 6.b.1.
hereof.
3. SHARES SUBJECT TO THE PLAN
a. Shares Available for Options
The maximum number of shares of Company Stock reserved for issuance
under the Plan shall be 222,000 ordinary shares (subject to adjustment
as provided herein).
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b. Adjustment for Change in Capitalization
Upon the occurrence of any Company Stock split, issue of bonus shares,
reverse Company Stock split, recapitalization or rights offering or
other substantially similar corporate transaction or event, the Company
shall make any and all equitable changes or adjustments necessary and
appropriate in order to prevent dilution or enlargement of the rights of
Participants under the Plan, to any or all of (i) the number and kind of
shares of Company Stock issued or issuable in respect of outstanding
Options, and (ii) the exercise price relating to any Option.
4. ADMINISTRATION OF THE PLAN; AMENDMENT OR TERMINATION OF THE PLAN
The Plan shall be administered by the Company. The Company shall have
the authority in its sole discretion, subject and not inconsistent with
the express provisions of the Plan, to administer the Plan and to
exercise all the powers and authorities either specifically granted to
it under the Plan as necessary and advisable in the administration of
the Plan, including, without limitation, the number of shares of Company
Stock to which an Option may relate and the terms, conditions and
restrictions thereof; to determine whether, to what extent, and under
what circumstances, an Option may be settled, cancelled, forfeited,
exchanged or surrendered; to construe and interpret the Plan and any
Option; to prescribe, amend and rescind rules and regulations relating
to the Plan; to determine the terms and provisions of any Grant
Instrument; and to make all other determination deemed necessary or
advisable for the administration of the Plan.
The Company may, in its sole and absolute discretion, without amendment
to the Plan, accelerate the date on which any Option granted under the
Plan becomes exercisable, waive or amend the operation of the Plan
provisions respecting exercise after termination of employment or
otherwise adjust any of the terms of such Option.
The Company may, at any time in its sole and absolute discretion,
suspend or terminate the Plan or revise or amend it in any respect
whatsoever; provided however, that no amendment, construction,
interpretation or other determination by the Company under the Plan, or
any other action or inaction by the Company of any kind whatsoever,
shall
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adversely affect a Participant's right under any outstanding Option
without the consent of such Participant.
Notwithstanding anything to the contrary in this Section, any amendment
of the Plan will be subject to the approvals of the Company's corporate
organs required under any applicable law.
5. OPTIONS UNDER THE PLAN; GRANT INSTRUMENT
The Options hereunder shall be granted to the Participants set forth on
Appendix A hereto (which shall be deemed an integral part hereof) and
each such Participant shall be entitled to receive Options to purchase
such number of shares of the Company Stock (subject to obligations as
provided herein) set forth next to such Participant's name on said
Appendix A. The names of additional Participants to whom Options are
granted subsequent to the date of this Plan will be added to Appendix A
and the date of such grants will be specified thereon and construed as
the Grant Date in respect of such additional Participants.
Each Option granted under the Plan shall be evidenced by a written
instrument signed by the Company and accepted by the Participant which
shall contain such provisions as the Company, in its sole discretion,
may deem necessary or desirable (the "Grant Instrument"). By accepting
an Option, a Participant shall thereby agree that the Option shall be
subject to all the terms and provisions of this Plan and the applicable
Grant Instrument.
6. OPTIONS
a. Exercise Price
Each Grant Instrument with respect to an Option shall set forth the
amount (the "Option Exercise Price") which will be paid by the
Participant to the Company upon exercise of the Option. The Option
Exercise Price will be denominated in NIS, in an amount equivalent to
US$2.50 (according to the representative rate of exchange for the US
dollar,
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published by the Bank of Israel, known at the time of payment) per each
share of Company Stock (subject to adjustment as provided in Section 3
hereof).
b. Term and Exercise of Option
1. An Option shall become cumulatively exercisable as to one-half of the
shares covered thereby on the second anniversary of the Grant Date, and
as to one-fourth of the shares covered thereby on the third and fourth
anniversaries of the Grant Date (such anniversaries being hereinafter
referred to as "Vesting Dates"). Each Option shall expire on the eighth
anniversary of the Grant Date. The Board of Directors of the Company
shall be entitled at its sole discretion to amend all or any of the
Vesting Dates with regard to all or any of the Participants.
2. An Option may be exercised for all or any portion of the shares of
Company Stock in relation to which it is exercisable at the time of such
exercise, provided that no partial exercise of an Option shall be for an
aggregate exercise price of less than $1,000. The partial exercise of an
Option shall not cause the expiration, termination or cancellation of
the remaining unexercised portion thereof.
3. An Option shall be exercised through the Trustee, as provided in Section
7 below, by delivering notice to the Company's principal office, to the
attention of its Company Secretary, no less than one business day in
advance of the date of the proposed exercise.
Such notice shall be accompanied by the applicable Grant Instrument,
shall specify the number of shares of Company Stock with respect to
which the Option is being exercised and the date of the proposed
exercise, and shall be signed by the Participant or other person then
having the right to exercise the Option. payment for shares of Company
Stock purchased upon the exercise of an Option shall be made on the date
of such exercise by either or both of the following means: (i) cash, by
certified cheque, bank cashier's cheque or wire transfer; or (ii)
subject to the approval of the Company, by such other provision as the
Company may from time to time authorize.
4. Subject to any other applicable provisions of this Plan, certificates
for shares of Company Stock purchased upon the exercise of an Option
shall be issued in the name of the
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Participant or other person entitled to receive such shares, and
delivered to the Participant or such other person as soon as practicable
following the date on which the Option is exercised.
c. Effect of Termination of Employment
1. In the event that the employment of a Participant with the Company shall
be terminated by such Participant voluntarily for any reason other than
Disability: (i) Options granted to such Participant, to the extent
exercisable at the time of such termination of employment, shall remain
exercisable for a period of 90 days following the date of such
termination of employment and shall expire at the close of business on
the 90th day after the date of such termination of employment, and (ii)
Options granted to such Participant, to the extent that they were not
exercisable at the time of such termination of employment, shall expire
at the close of business on the date of such termination of employment.
Notwithstanding the foregoing, no Option shall be exercisable after the
expiration of its term.
2. In the event that the employment of a Participant with the Company shall
terminate for any reason other than Cause, Disability or death or in the
circumstances provided in paragraph 1. above: (i) Options granted to
such Participant, to the extent exercisable at the time of such
termination of employment, shall remain exercisable for the remainder of
the original five-year term of the Option, and (ii) Options granted to
such Participant, to the extent that they were not exercisable at the
time of such termination of employment, shall expire at the close of
business on the date of such termination of employment. Notwithstanding
the foregoing, no Option shall be exercisable after the expiration of
its term.
3. In the event that the employment of a Participant with the Company shall
terminate by reason of the Disability or death of the Participant: (i)
Options granted to such Participant, to the extent exercisable at the
time of such termination, shall remain exercisable for the remainder of
the original eight-year term of the Option, and (ii) Options granted to
such Participant, to the extent that they were not exercisable at the
time of such termination of employment, shall expire at the close of
business on the date
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of such termination; provided, however, that a pro rata portion of the
Options that would have become exercisable on the next Vesting Date (but
for such termination of employment) shall vest and become exercisable on
the date of such termination of employment and shall be treated as all
other Options exercisable on such date (as set forth in clause (i)
above). Such pro rata portion shall be determined by multiplying the
number of Options scheduled to vest on the next Vesting Date by a
fraction, the numerator of which is the number of full and partial
months which the Participant has been employed with the Company since
the most recent Vesting Date (or, if less than two years has elapsed
since the Grant Date, since the Grant Date), and the denominator of
which is twelve (or, if less than two years has elapsed since the Grant
Date, twenty-four).
4. In the event that the employment of a Participant with the Company shall
be terminated for Cause: (i) all outstanding Options granted to such
Participant which are then shall expire at the close of business on the
third business day after the date on which the notice of termination of
employment was given to such Participant, and (ii) all outstanding
Options granted to such Participant, to the extent that they were not
exercisable at the time of the giving of such notice of termination of
employment, shall expire on the close of business on the date of such
termination of employment. The determination by the Company that a
termination of employment is for Cause shall be final and conclusive for
all purposes of this Plan.
7. TRUST ARRANGEMENTS; FINANCING
The Company shall appoint a trustee (the "Trustee"), who will hold the
outstanding Options in trust on behalf of each Participant, and will
exercise them (or a portion thereof) in accordance with written
instructions given to it by the Participant, subject to the provisions
of Section 102 of the Income Tax Ordinance.
The Trustee will also receive and hold shares issued to him on trust for
a Participant, in accordance with the Option. He will transfer the
Options or any shares received and held by him to the Participant as
aforesaid upon receipt of a written request to do so by the Participant,
subject to the provisions of Section 102 of the Income Tax Ordinance.
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The Trustee will act in every way necessary to comply with the
provisions of Section 102 of the Income Tax Ordinance and any
regulations promulgated in accordance with it.
8. RIGHTS AS A SHAREHOLDER
No person shall have any rights as a shareholder with respect to any
shares of Company Stock covered by or relating to any Option until the
date of issuance of a stock certificate with respect to such shares.
9. NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO OPTION
Nothing contained in the Plan or any Grant Instrument shall confer upon
any Participant any right with respect to the continuation of employment
by the Company or interfere in any way with the right of the Company,
subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or
decrease the compensation of the Participant. No person shall have any
claim or right to receive an Option hereunder except in accordance with
the express terms of a Grant Instrument issued to such person.
10. TAX MATTERS
a. The Plan shall be governed by Section 102 of the Income Tax Ordinance,
1961, and shall conform with and be interpreted so as to comply with the
requirements of such Section.
b. All tax consequences under any applicable law which may arise from the
grant of an Option, from the exercise thereof, from the sale of the
Company Stock by the Participant or form any other act of the Company or
such Participant in connection with any of the foregoing shall be borne
solely by such Participant, and such V shall indemnify the Company, and
hold it harmless, against and from any liability for any such tax or any
penalty, interest or indexation thereon or thereof.
11. WITHHOLDING TAXES
Whenever cash is to be paid pursuant to an Option, the Company shall
have the right to deduct therefrom an amount sufficient to satisfy any
applicable withholding tax
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requirements related thereto. Whenever shares of Company Stock are to be
delivered pursuant to an Option, the Company shall have the right to
require the Participant to remit to the Company in cash an amount
sufficient to satisfy any applicable withholding tax requirements
related thereto.
12. TRANSFERS UPON DEATH; NON-ASSIGNABILITY
Neither any Option granted pursuant to this Plan, nor any interest
therein, may be transferred in any manner or assigned by the Participant
other than upon the Participant's death or legal incapacity to a
Designated Beneficiary.
Upon the death of a Participant, outstanding Options granted to such
Participant may be exercised only by (i) the Designated Beneficiary
designated by such Participant pursuant to Section 19 hereof, or (ii) if
such Participant did not designate a beneficiary, to the person deemed
as such Participant's Designated Beneficiary pursuant to Section 19
hereof or to a person who shall have acquired the right t such exercise
by will or by the laws of descent and distribution. No transfer of an
Option by will or by the laws of descent and distribution shall be
effective to bind the Company unless the Company shall have been
furnished with (a) written notice thereof and with a copy, certified by
a notary, of the relevant provision of the will relating to the bequest
of the Option and/or such other evidence as the Company may deem
necessary to establish the validity of the transfer, and (b) an
agreement by the transferee to pay the Option Exercise Price upon
exercise of the Option, if any, and otherwise follow the exercise
procedures set forth herein and in the relevant Grant Instrument.
13. EXPENSES AND RECEIPTS
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with the exercise of any Option
will be used for general corporate purposes.
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14. FAILURE TO COMPLY
In addition to the remedies of the Company elsewhere provided for
herein, failure by a Participant (or a Designated Beneficiary) to comply
with any of the terms and conditions of the Plan or the applicable Grant
Instrument, unless such failure is remedied by such a Participant (or
Designated Beneficiary) within ten days after notice of such failure by
the Company shall be grounds for the cancellation and forfeiture of such
Option, in whole or in part, as the Company, in its absolute discretion,
may determine.
15. GRANT DATE, REQUIRED APPROVALS AND TERM OF PLAN
The Plan became effective on the Grant date.
Notwithstanding the above, the Plan is subject to any approvals required
under any applicable law.
16. APPLICABLE LAW
The Plan will be governed by, and construed and administered in
accordance with the laws of the State of Israel.
17. TREATMENT OF PARTICIPANTS
There is no obligation for uniformity of treatment of Participants.
18. NO FRACTIONAL SHARES
No fractional shares of the Company Stock shall be issued or delivered
pursuant to the Plan. The Company shall determine whether cash, other
Option or other property shall be paid, issued or transferred in lieu of
such fractional shares, or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.
19. DESIGNATION OF A BENEFICIARY
A Participant may file with the Company a written designation of a
beneficiary on such form as may be prescribed by the Company and may,
from time to time, amend or revoke
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such designation. If no Designated Beneficiary survives the Participant,
the executor or administrator of the Participant's estate shall be
deemed to be the Participant's Designated Beneficiary.
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