As filed with the Securities and Exchange
Commission on on September 19, 2000
Registration No. 333-48107
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
COM21, INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-3201698
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
750 TASMAN DRIVE
MILPITAS, CALIFORNIA 95035
(Address of principal executive offices) (Zip Code)
GAD-LINE LTD. 1999 KEY EMPLOYEE AND CONSULTANTS SHARE OPTION PLAN
(Full title of plans)
Peter D. Fenner
President and Chief Executive Officer
Com21, Inc.
750 Tasman Drive
Milpitas, California 95035
(Name and address of Agent for Service)
(408) 953-9100
(Telephone Number, including area code, of agent for service)
Copies to:
Michael Dorf
Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market Street, Spear Street Tower
San Francisco, CA 94105
<TABLE>
CALCULATION OF REGISTRATION FEE
_______________________________________________________________________________________
<S> <C> <C> <C> <C>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Securities to be Offering Price Aggregate Registration
to be Registered Registered (1) Per Share Offering Price Fee
_______________________________________________________________________________________
GAD-Line Ltd. 1999 Key
Employee and Consultants
Share Option Plan - Common
Stock, $0.001 par value 237,130 $11.99 (2) $3,202,889 $ 846
_______________________________________________________________________________________
</TABLE>
(1) Pursuant to Rule 416(a), this Registration Statement shall also cover
any additional shares of the Registrant's Common Stock that becomes
issuable under the Stock Option Plan and Stock Purchase Agreement by
reason of any stock splits, stock dividends or similar transactions
related to the registered securities.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of
calculating the registration fee based on the weighted average of the
exercise prices of the options to purchase the Common Stock to be
registered.
COM21, INC.
REGISTRATION STATEMENT ON FORM S-8
PART I: INFORMATION REQUIRED IN THE PROSPECTUS
Omitted pursuant to the instructions and provisions of Form S-8.
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement covers 267,130 shares of Common Stock,
par value $0.001 per share (the "Common Stock"), of Com21, Inc., a
Delaware corporation (the "Registrant"), being registered for use
under the GAD-Line Ltd. 1999 Key Employee and Consultants Share
Option Plan (the "Plan"), which has been assumed by the Registrant.
Item 3. Incorporation of Documents by Reference
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed
with the Securities and Exchange Commission (the "Commission") by
the Registrant:
1. The Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, filed with the
Commission on March 24, 2000;
2. The Registrant's Current Reports on Form 8-K (a) for
the date April 18, 2000, filed with the Commission on
April 24, 2000, and (b) for the date July 13, 2000,
originally filed with the Commission on July 18, 2000,
and as amended and filed with the Commission on
September 18, 2000;
3. The Registrant's Quarterly Reports on Form 10-Q (a)
for the fiscal quarter ended March 31, 2000, filed with
the Commission on May 15, 2000, and (b) for the fiscal
quarter ended June 30, 2000, filed with the Commission
on August 15, 2000; and
4. The Registrant's Registration Statement on Form 8-A
filed with the Commission on April 8, 1998, in which
there is described the terms, rights and provisions
applicable to the Common Stock.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c) and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all
securities that remain unsold, shall be deemed be incorporated by
reference and be part hereof from the date of such document.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superceded for purposes of this Registration Statement to the
extent that a statement contained herein or in any subsequently
filed document which also is or is deemed to be incorporated by
reference herein modifies or supercedes such statement. Any such
statement so modified or superceded shall not be deemed, except as
so modified or superceded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation limits the liability
of directors to the maximum extent permitted by Delaware law.
Delaware law provides that directors of a corporation will not be
personally liable for monetary damages for breach of their
fiduciary duties as directors, except for liability for (i) any
breach of their duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii)
unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law, or (iv) any transaction from which the director
derives an improper personal benefit.
The Registrant's Bylaws provide that the Registrant shall indemnify
its directors and may indemnify its officers, employees and other
agents to the fullest extent permitted by law. The Registrant
believes that indemnification under its Bylaws covers at least
negligence and gross negligence on the part of an indemnified party
in connection with the defense of any action or proceeding arising
out of such party's status or service as a director, officer,
employee or other agent of the Registrant upon an undertaking by
such party to repay such advances if it is ultimately determined
that such party is not entitled to indemnification. The Registrant
has entered into Indemnification Agreements with its officers and
directors. The Indemnification Agreements provide the Registrant's
officers and directors with further indemnification to the maximum
extent permitted by the Delaware General Corporation Law.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Index to Exhibits.
Exhibit
Number Description of Document
_________ __________________________________________________________________
4.1 Instruments Defining Rights of Stockholders. Reference is made
to the Registrant's Registration Statement on Form 8-A and the
exhibits thereto, which are incorporated herein by reference
pursuant to Item 3 of this Registration Statement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Independent Auditors' Consent
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in its opinion filed as Exhibit 5.1)
24.1 Power of Attorney. Reference is made to page II-4 of this
Registration Statement
99.1 GAD-Line Ltd. 1999 Key Employee and Consultants Share Option Plan
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) To file, at the start of any delayed offering or throughout a
continuos offering, a post-effective amendment to this registration
statement to include any financial statements required by Section
210.3-19 of Item 512 of the Securities Act of 1933.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the Registrant's
Certificate of Incorporation, as amended, Bylaws, indemnification
agreements or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
City of Milpitas, State of California, on the 19th day of
September, 2000.
COM21, INC.
By: /s/ Peter D. Fenner
_____________________________
Peter D. Fenner
President, Chief Executive
Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Peter D. Fenner
and David L. Robertson, jointly and severally, his or her
attorneys-in-fact, each with the power of substitution, for him in
any and all capacities, to sign any amendments to this Registration
Statement on Form S-8 and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities
and Exchange Commission, hereby ratifying and confirming all that
each of said attorney-in-fact, or his or her substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in
the capacities indicated on the 19th day of September, 2000.
Signatures Title
____________________________ _______________________________________________
/s/ Peter D. Fenner President, Chief Executive Officer, Director
_______________________ (Principal Executive Officer)
Peter D. Fenner
/s/ David L. Robertson Chief Financial Officer, Vice President Finance
_______________________ and Administration, Corporate Secretary
Davud L. Robertson (Principal Financial Officer)
/s/ Paul Baran Chairman of the Board of Directors, Director
_______________________
Paul Baran
/s/ Richard Kramlich Director
_______________________
Richard Kramlich
Director
_______________________
Robert C. Hawk
/s/ Jerald L. Kent Director
_______________________
Jerald L. Kent
/s/ Daniel J. Pike Director
_______________________
Daniel J. Pike
/s/ Robert W. Wilmot Director
_______________________
Robert W. Wilmot
/s/ James J. Spilker, Jr. Director
_______________________
James J. Spilker, Jr.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________
EXHIBITS
_____________________________________________________________________________
Registration Statement on Form S-8
COM21, INC.
INDEX TO EXHIBITS
Exhibit
Number Description of Document
_________ __________________________________________________________________
4.1 Instruments Defining Rights of Stockholders. Reference is made
to the Registrant's Registration Statement on Form 8-A and the
exhibits thereto, which are incorporated herein by reference
pursuant to Item 3 of this Registration Statement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
23.1 Independent Auditors' Consent
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in its opinion filed as Exhibit 5.1)
24.1 Power of Attorney. Reference is made to page II-4 of this
Registration Statement
99.1 GAD-Line Ltd. 1999 Key Employee and Consultants Share Option Plan
EXHIBIT 5.1
OPINION OF WILSON SONSINI GOODRICH & ROSATI PROFESSIONAL CORPORATION
September 18, 2000
Com21, Inc.
750 Tasman Drive
Milpitas, CA 95035
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed
by Com21, Inc.. (the "Company") with the Securities and Exchange
Commission on or about September 18, 2000 (the "Registration
Statement"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of (i) 267,130
shares of the Company's Common Stock reserved for issuance under
the GAD-Line Ltd. 1999 Key Employee and Consultants Share Option
Plan, as assumed by the Company on July 3, 2000 (the "Plan"). As
your legal counsel, we have examined the actions taken and proposed
to be taken by the Company in connection with the sale and issuance
of the shares of Common Stock under the Plan and Purchase Agreement
(the "Shares").
It is our opinion that, upon completion of the actions being taken,
or contemplated by us as your legal counsel to be taken by the
Company prior to the issuance of the Shares pursuant to the
Registration Statement and the Plan, and upon completion of the
actions being taken in order to permit such transactions to be
carried out in accordance with the securities laws of the various
states where required, the Shares will be legally and validly
issued, fully-paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name
wherever appearing in the Registration Statement and any amendments
thereto.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Com21, Inc. on Form S-8 of our report dated January
21, 2000, appearing in the Annual Report on Form 10-K of Com21,
Inc. for the year ended December 31, 1999.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
San Jose, California
September 13, 2000
EXHIBIT 99.1
GAD-LINE LTD. 1999 KEY EMPLOYEE AND CONSULTANTS SHARE OPTION PLAN
GAD-LINE Ltd., an Israeli company (the "Company"), has adopted a
share option plan (the "Plan") for key employees, officers, and
consultants of the Company and its subsidiaries in accordance with
the following terms and conditions.
1. DESIGNATION AND PURPOSE OF THE PLAN
1.1 Designation - The Plan is designated "the 1999 Key
Employee and Consultants Share Option Plan".
1.2 Purpose - The purpose of this Plan is to promote the
growth and development of the Company by affording an
opportunity to the Company's officers, consultants and key
employees (collectively "Participants") to purchase Shares of
the Company. The Company needs to attract and retain highly
competent personnel in order to attain the highest level of
performance possible necessary to maintain and improve its
competitive position and to continue to serve the best
interests of its Shareholders and customers. The acquisition
of Shares by Participants who are primarily responsible for
the Company's success, provides a continuing incentive for
them to promote the best interests of the Company, and, by
providing them with a proprietary interest in the Company,
induces them to continue in the employ and to work for the
long-term benefit of the Company. All Shares, Options and
other assets awarded under the Plan will be administered,
distributed, and otherwise governed by the Company's Articles
of Association, the provisions of the Plan and the Company's
agreement with each Participant. The Plan is made pursuant to
the provisions of Section 3(9) of the Israeli Income Tax
Ordinance [New Version], and the rules, regulations, orders or
proceedings promulgated thereunder from time to time.
2. DEFINITIONS
The following definitions shall be applicable to the terms used in
the Plan:
2.1 "Board" or "Board of Directors" means the board of
directors of the Company.
2.2 "Committee" means the Committee appointed by the Board of
Directors of the Company to administer the Plan pursuant to
Section 4 below.
2.3 "Eligible Participant" means any employee, officer, or
consultant of the Company or any of its subsidiaries.
2.4 "Shares" means Ordinary Shares of the Company (par value
NIS 0.5 per share).
2.5 "Option(s)" means one or more options to purchase Shares
which are granted to Participants under the Plan.
2.6 "Employee Option" means any Option which is granted to an
Employee Participants.
2.7 "Participant" means any Eligible Participant who is
granted an option to purchase Shares pursuant to the terms and
conditions of the Plan.
2.8 "Employee Participant" means any Participant who is an
employee of the Company (or its subsidiaries), including
directors who are employees.
2.9 "Participant Agreement" means the agreement entered into
between the individual Participant and the Company regarding
the grant of the Option and its terms pursuant to and in
accordance with the Plan.
2.10 "Shareholder(s)" means a holder of Ordinary Shares of the
Company (as defined in the Company's Articles of Association).
Wherever appropriate, words used in this Plan in the singular may
mean the plural, the plural may mean the singular and the masculine
may mean the feminine or neuter.
3. SHARES SUBJECT TO PLAN
3.1 Total Number of Shares - The Company shall at all times
reserve, or shall increase its authorized share capital as may
be required, and keep available for issuance and delivery,
such number of shares to be issued upon the exercise of the
Options granted under the Plan, as is necessary to reflect the
effect of any share split, reverse share split, or other
similar transaction or recapitalization of the Company.
3.2 Unexercised Options - The number of Shares available for
grant of Options under the Plan shall be decreased by the
number of Shares with respect to which Options have been
issued and are outstanding or which are subsequently issued
upon exercise of such Options. In the event that any
outstanding Option granted under the Plan expires, is
terminated, or is canceled prior to the end of the period
during which Options may be granted under the Plan, the
Ordinary Shares underlying such unexercised Option or any
portion thereof shall become available for new grants of
Options under the Plan.
4. ADMINISTRATION OF THE PLAN
4.1 Appointment of Committee - The Committee shall be
appointed by the Board of Directors. If not so appointed, the
entire Board of Directors shall act as the Committee.
4.2 Committee Meetings - The Committee shall hold its meetings
at such times and places as are determined by a majority of
the Committee's members. A majority of the Committee shall
constitute a quorum. All actions of the Committee shall be
taken by a majority of a quorum present at a meeting duly
called; provided, however, any action taken by a written
document signed by all Committee members shall be as effective
as any action taken by the Committee at a meeting duly called
and held.
4.3 COMMITTEE POWERS
4.3.1 Subject to the terms and provisions of this Plan and
any applicable law and to such guidelines, if any, as
shall be issued by the Board of Directors, the Committee,
in its sole discretion, shall have full power and
authority to: (i) designate the Participants to whom
Options shall be granted; (ii) determine and/or amend the
number of Shares to be covered by each such grant; (iii)
determine the vesting schedule of the Options granted;
(iv) determine the exercise price of the Options; (v)
determine the terms of payment for the Shares; and (vi)
determine such other provisions and requirements as are
appropriate, in the opinion of the Committee, to carry
out the purpose of the Plan.
4.3.2 The Committee shall have the rights, powers and
authority necessary or appropriate to administer this
Plan in accordance with its terms including, without
limitation, the power to make binding interpretations of
this Plan and to resolve conclusively all questions
(whether express or implied) arising thereunder. The
Committee may prescribe such rules and regulations for
administering this Plan as the Committee, in its sole
discretion, deems necessary or appropriate. No Committee
member shall be liable to the Company or to any
Participant for any action or determination taken or made
in good faith as a Committee member on behalf of the
Plan.
4.3.3 In the event of a tie vote with respect to any
matter brought before the Committee, such matter shall be
presented to the Board and the decision of the Board
shall be final with respect to such matter.
5. ELIGIBLE PARTICIPANTS
Any Eligible Participant may be eligible for consideration by the
Committee as a participant in the Plan. The grant of an Option
hereunder shall neither entitle the recipient thereof to
participate nor disqualify him for participating in, any other
grant of Options pursuant to the Plan or any other option or stock
plan or other form of compensation plan of the Company or any of
its affiliates.
All grants of Options to directors and office holders (as such term
is defined in the Companies Ordinance (New Version), 1983 - "the
Companies Ordinance") shall be authorized and implemented in
accordance with the provisions of the Companies Ordinance, as then
in effect.
6. GRANT AND EXERCISE OF OPTIONS
6.1 Option Period - Subject to the terms and conditions of the
Participant Agreement and the Plan, as shall be in effect from
time to time, and unless otherwise determined by the Committee
at the time of vesting of such Option, each Option granted
under the Plan shall be exercisable from the date of grant
through the fifth anniversary from the date of grant (the
"Option Period"). Options not so exercised shall terminate
upon the expiration of the Option Period.
6.2 Participant Agreement - Each Option granted to a
Participant under the Plan shall be evidenced by a Participant
Agreement, to be entered into by and between the Company and
such Participant, in the form and substance as may be from
time to time approved by the Committee, which shall
incorporate the provisions of this Plan. In the event of any
conflict between the terms and conditions of a Participant
Agreement and the terms hereof, the terms hereof shall
control.
6.3 Manner of Exercise - An Option shall be exercisable, in
whole or in part, during the Option Period, by delivery to the
Company of a duly executed copy of the relevant notice of
exercise in such form as may be prescribed by the Committee
from time to time, specifying the number of Shares as to which
such Option is being exercised, accompanied by full payment of
the option exercise price thereof (the "Option Exercise
Price") in such currency as may be authorized by the
Committee.
6.4 Termination of Employment
6.4.1 Subject to Section 6.4.3 below, and unless the
Committee determines otherwise, if an Employee
Participant should, for any reason, cease to be employed
by the Company, all Options theretofore granted to him
under the Plan which have not become exercisable prior to
the effective date of such cessation of employment shall
ipso facto terminate, and the Employee Participant may
exercise his options, only to the extent such Options
have become exercisable prior to the effective date of
such cessation of employment, at any time prior to the
termination of the Option Period; provided, however that
in the event of cessation of employment for reasons
involving (1) commission of a crime of moral turpitude,
(2) commission of an act which constitutes a breach of
the Employee Participant's duty of loyalty to the Company
or (3) circumstances under which according to any law
and/or employment agreement and/or judicial decision
(from a court of competent jurisdiction) the Employee
Participant is not entitled to the full amount of
severance pay that would otherwise be payable under the
Severance Pay Law, 1963, then all Options granted to such
Employee Participant, whether exercisable or not, shall
automatically terminate on the effective date of such
cessation of employment.
6.4.2 In the event of resignation or discharge of a
Participant from the employ of the Company or a
subsidiary thereof, his employment shall, for the
purposes of this Section 6.4, be deemed to have ceased
upon the delivery to the employer of notice of
resignation, or upon the delivery to the employee of
notice of discharge, as the case may be, irrespective of
the effective date of such resignation or discharge. The
Committee's determination as to whether an authorized
leave of absence on military, governmental or public
service or otherwise, or termination of employment under
certain conditions, shall constitute termination of
employment for the purposes hereof, shall be conclusive.
6.4.3 Death, Disability, Retirement: Anything herein to
the contrary notwithstanding:
6.4.3.1 If an Employee Participant dies while in
the employ of the Company, or a subsidiary
thereof, his estate, to the extent that it has
acquired by will and/or by operation of law the
rights of the deceased Participant in connection
with the purchase of any Shares under the Plan,
shall have the right, for a period of twelve (12)
months from the date of death of such Participant,
to exercise such rights of the deceased
Participant not theretofore exercised, only to the
same extent that the deceased Participant could
have done so during or at the end of such 12-month
period had he survived.
6.4.3.2 If an Employee Participant, while in the
employ of the Company or a subsidiary thereof,
should be incapacitated by reason of accident or
illness or other cause approved by the Committee,
and by virtue of such incapacity should, in the
judgment of the Committee, be rendered unable to
continue to be so employed, the Committee shall
have the right, in its sole discretion, to permit
such Participant (or his guardian) to continue to
enjoy the rights granted to him or her under the
Plan on such terms and conditions, with such
limitations and subject to such requirements, as
the Committee in its discretion may determine.
6.4.3.3 If an Employee Participant should retire,
he may, subject to the approval of the Committee,
continue to enjoy such rights, if any, under the
Plan and on such terms and conditions, with such
limitations and subject to such requirements as
the committee in its sole discretion may
determine.
6.4.4 Determination of Disability or Retirement: Whether
the cessation of employment of a particular Participant
is (i) by reason of "disability" for the purposes of
Section 6.4 hereof or by virtue of "retirement" for the
purposes of Section 6.4 hereof, on the one hand, or is a
termination of employment otherwise than by reason of
such disability or retirement, on the other hand, or (ii)
for reasons involving moral turpitude as referred to in
Section 6.4 hereof, shall be finally and conclusively
determined by the Committee in its sole and absolute
discretion.
7. OPTION EXERCISE PRICE
Unless the Committee, in its sole discretion, determines otherwise
in each Participant Agreement, the Option exercise price for each
Share issuable upon exercise of an Option shall be one hundred
percent (100%) of the price per Share paid by a third party
investor in the most recent arm's length equity financing
transaction with the Company, which was consummated prior to the
date of grant of such Option.
8. GRANT OF OPTIONS AND ISSUANCE OF SHARES; DIVIDEND AND VOTING RIGHTS
8.1 Grant of Options and Issuance of Shares
8.1.1 Anything herein to the contrary
notwithstanding and unless the Committee determines
otherwise, each Option shall be issued by the
Company directly to the Participant.
8.1.2 Subject to the terms of this Plan, including
but not limited to, the vesting schedule of the
Options, each Participant may require the Company to
issue such Options or Shares, provided that no
Options or Shares shall be issued by the Company to
the Participant unless and until (i) such
Participant shall have deposited with the Committee
an amount of money which, in the Committee's
opinion, is sufficient and necessary for the
discharge of such Participant's tax obligations with
respect to such Options or Shares; or (ii) such
Participant shall provide the Committee with such
confirmations, as deemed sufficient and necessary in
Committee's discretion, according to which all tax
consequences under any applicable law which may
arise from the grant of an Option, from the exercise
thereof, from the sale or disposition of Shares by
the Participant or from any other act of the
Participant in connection with any of the foregoing
shall be borne solely by the Participant.
8.2 Dividend Rights - All Shares issued upon the exercise
of Options granted under the Plan shall entitle the
Participant thereof to receive dividends with respect
thereto, provided, however, that Participant shall have no
right to dividends or distribution or other right with
respect to Shares for which the record date is prior to
the date on which the Participant shall have become the
holder of record.
8.3 Voting Rights - Each Participant shall irrevocably
appoint the person who holds the office of the Company's
Chairman of the Board, at any given time, as his or her
attorney, agent and proxy, with full power of
substitution, and such person may in their name, place and
stead vote all of the Shares held by them at any action by
written consent or meeting of the Shareholders of the
Company held after the date hereof, whether annual or
special, and whether or not adjourned meeting or
otherwise. The proxy holder shall vote such shares on any
issue brought before the shareholders of the Company in
the same proportion as the other shareholders of the
Company. The aforementioned proxies shall expire upon the
consummation of the Company's initial offering of its
ordinary shares to the public on a domestic or foreign
stock exchange.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION,
MERGER OR ASSET SALE
Upon the occurrence of any of the following described events, a
Participant's Options and Shares under the Plan shall be adjusted
as hereinafter provided:
9.1 Changes in Capitalization - Subject to any required
action by the Shareholders of the Company, the number of
Shares covered by each outstanding Option and the number
of Shares which have been authorized for issuance under
the Plan or have been issued or which have been returned
to the Plan upon cancellation or expiration of an Option,
as well as the exercise price per Share covered by each
such outstanding Option, shall be proportionately
adjusted, in an equitable manner determined by the
Committee, for any increase or decrease in the number of
issued Shares resulting from a share split, reverse share
split, combination or reclassification of the Company's
Ordinary Shares, or any other increase or decrease in the
number of issued Shares effected without receipt of
consideration by the Company; provided, however, that
the conversion of any convertible securities of the
Company shall not be deemed to have been "effected
without receipt of consideration".
9.2 Dissolution or Liquidation - In the event of the
proposed dissolution or liquidation of the Company, to
the extent that an Option has not been previously
exercised, the unexercised Option will terminate
immediately prior to the consummation of such proposed
action. The Committee may, in the exercise of its sole
discretion in such instances, declare that any Option
shall terminate as of a date fixed by the Committee and
give each Participant the right to exercise his Option as
to all or any part of the Shares, including Shares as to
which the Option would not otherwise be exercisable.
9.3 Merger or Asset Sale - In the event of a merger of
the Company with or into another corporation, or the sale
of all or substantially all of the assets or shares of
the Company (a "Change of Control"), each outstanding
Option shall be assumed or an equivalent option shall be
substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. Notwithstanding
the foregoing, the Committee may, in lieu of such
assumption or substitution, provide for the Participant
to have the right to exercise his or her Options, as to
all of the Shares or any part thereof, including Options
which would not otherwise be exercisable, under such
terms and conditions as the Committee shall determine, in
its sole discretion. If the Committee makes all or part
of an Option fully exercisable (an "Accelerated Option")
in lieu of such assumption or substitution, the Committee
shall notify the Participant that such Accelerated Option
shall be fully exercisable for a period of twenty-one
(21) days from the date of such notice, and the Option
will terminate upon the expiration of such period. In
the event of a partial acceleration, the remainder of the
Option, to the extent it has not been assumed or
substituted, shall vest in accordance with its terms.
For the purposes of this Section, following a Change of
Control transaction, an Option shall be considered
assumed if, for each Share covered by the Option prior to
the Change of Control, the Option confers the right to
purchase the same consideration (of any type or any
combination of types ) received in the Change of Control
by the shareholders of the Company for each Share held by
them on the effective date of such Change of Control. In
the event that the shareholders were offered a choice of
consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares shall be
the type of consideration deemed to be covered by the
Option. However, if the consideration received in the
Change of Control is other than shares of the successor
corporation or its parent, the Committee may, with the
consent of the successor corporation, provide that the
consideration to be received upon exercise of the Option
shall be securities of the successor corporation or its
parent only, equal in fair value, as conclusively
determined by the Committee, to the per share
consideration received by holders of Shares in the Change
of Control. Notwithstanding anything in this Section to
the contrary, the Committee may determine, in its sole
discretion, that upon the effective date of such Change
of Control, the Option shall confer the right to purchase
any other security or asset, or that the terms of the
Option shall be otherwise amended or modified.
9.4 Dividends (Bonus Shares) - In the event that the
Company shall issue any of its securities as share
dividends with respect to any Shares which at the time of
such issuance are covered by a vested Option, each
Participant upon exercising such vested Option shall be
entitled to receive upon payment of such Option Exercise
Price, the Shares covered by such Option (and at no
additional cost), such number of bonus Shares and/or such
amount of cash in lieu of fractional Shares,that he would
have received had he been the holder of the Shares as to
which he is exercising his said right at all times
between the date of the granting of such right and the
date of its exercise.
9.5 Upon the occurrence of any of the foregoing events,
the aggregate number of Shares issuable pursuant to the
Plan (as set forth in Section 3 hereof), in respect of
which Options have not yet been granted, shall also be
appropriately adjusted to reflect the foregoing events
specified in this Section 9.
9.6 Such adjustments as mentioned in this Section 9 shall
be made by the Committee, 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 Shares subject to an Option.
10. RESTRICTIONS ON TRANSFER
Apart from the inherent power of the Shareholders of the Company to
alter or modify the rights of the Company's shares, the Committee
may impose on any Participant such additional restrictions on the
transfer of Shares as the Committee may determine at the time that
Options are granted to the Participant or as may be agreed to by
the Committee and the Participant following purchase of said Shares
upon exercise of such Options under this Plan or upon termination
of the Participant's employment with the Company. Such additional
rights and restrictions shall be included in the Participation
Agreement entered into between the Company and the Participant, or,
upon agreement of the Participants, or in this Plan. In any event,
the Options are personal in nature and are not transferable.
11. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors of the Company may amend or terminate this
Plan at any time provided, however, that any such amendment or
termination shall not adversely affect the rights of a Participant
under the Plan prior thereto.
12. DEFAULT
A Participant shall be deemed to be in default under this Plan,
including the Participant Agreement, in the event that the
Participant fails to pay any sum or perform any obligation provided
for in the Plan, in a timely fashion or in a manner required. Any
default under this Plan not cured within ten (10) days after the
Company gives written notice of such default to Participant shall
entitle the Company to exercise any and all remedies and rights
against the defaulting Participant contained in any and all of the
documents comprising this Plan or provided under applicable law.
13. NOTICES
All notices and elections sent to the Company by a Participant
shall be in writing and delivered in person or by certified mail to
the Chairman of the Board or the C.E.O of the Company at the
principal office of the Company.
All notices given by the Company to a Participant under the Plan
shall be in writing and delivered in person or by certified mail to
the Participant's address as reflected in the Company's records.
All notices will be deemed delivered within 7 days of their
dispatch by certified mail, postage prepaid.
14. TAX MATTERS
All tax consequences under any applicable law which may arise from
the grant of an Option, from the exercise thereof, from the sale or
disposition of Shares by the Participant or from any other act of
the Participant in connection with any of the foregoing shall be
borne solely by the Participant, and the Participant 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.
15. EFFECTIVE DATE OF THE PLAN
The Plan effective date is as determined in the Board resolution
dated 26.8.99 (the "Effective Date"). The date on which the Plan
established therein was adopted by the Board of Directors. The
Plan shall be in effect for a period of 10 (Ten) years commencing
on the Effective Date, provided that any Options granted prior to
the termination of the Plan shall remain outstanding thereafter in
accordance with the terms of the Plan and the applicable
Participant Agreement.
