Exhibit 10.9


 


NESS
TECHNOLOGIES, INC.


 


2001
STOCK OPTION PLAN


 


 


1.             Purpose
of the Plan.


 


This 2001 Stock Option Plan (the “Plan”) is intended as an incentive,
to retain in the employ of and as directors, consultants and advisors to NESS
TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and any Subsidiary
of the Company, within the meaning of Section 424(f) of the United States
Internal Revenue Code of 1986, as amended (the “Code”), persons of training,
experience and ability, to attract new employees, directors, consultants and
advisors whose services are considered valuable, to encourage the sense of
proprietorship and to stimulate the active interest of such persons in the
development and financial success of the Company and its Subsidiaries.


 


It is further intended that certain options granted pursuant to the
Plan shall constitute incentive stock options within the meaning of
Section 422 of the Code (the “Incentive Options”) while certain other
options granted pursuant to the Plan shall be nonqualified stock options (the
“Nonqualified Options”).  Incentive
Options and Nonqualified Options are hereinafter referred to collectively as
“Options.”


 


The Company intends that the Plan meet the requirements of Rule 16b-3
(“Rule 16b-3”) promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and that transactions of the type specified in
subparagraphs (c) to (f) inclusive of Rule 16b-3 by officers and directors of
the Company pursuant to the Plan will be exempt from the operation of
Section 16(b) of the Exchange Act. 
Further, the Plan is intended to satisfy the performance-based
compensation exception to the limitation on the Company’s tax deductions
imposed by Section 162(m) of the Code. In all cases, the terms,
provisions, conditions and limitations of the Plan shall be construed and
interpreted consistent with the Company’s intent as stated in this
Section 1.


 


2.             Administration of the Plan.


 


The Board of Directors of the Company (the “Board”) shall appoint and
maintain as administrator of the Plan a Committee (the “Committee”) consisting
of two or more directors who are “Non-Employee Directors” (as such term is
defined in Rule 16b-3) and “Outside Directors” (as such term is defined in
Section 162(m) of the Code), which shall serve at the pleasure of the
Board.  The Committee, subject to
Sections 3 and 5 hereof, shall have full power and authority to designate
recipients of Options, to determine the terms and conditions of respective Option
agreements (which need not be identical) and to interpret the provisions and
supervise the administration of the Plan. 
The Committee shall have the authority, without limitation, to designate
which Options granted under the Plan shall be Incentive Options


 

















 


and which shall be Nonqualified Options.  To the extent any Option does not qualify as an Incentive Option,
it shall constitute a separate Nonqualified Option.


 


Subject to the provisions of the Plan, the Committee shall interpret
the Plan and all Options granted under the Plan, shall make such rules as it
deems necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defects or supply any omission or reconcile any inconsistency
in the Plan or in any Options granted under the Plan in the manner and to the
extent that the Committee deems desirable to carry into effect the Plan or any
Options.  The act or determination of a
majority of the Committee shall be the act or determination of the Committee
and any decision reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a majority at a
meeting duly held.  Subject to the
provisions of the Plan, any action taken or determination made by the Committee
pursuant to this and the other Sections of the Plan shall be conclusive on all
parties.


 


In the event that for any reason the Committee is unable to act or if
the Committee at the time of any grant, award or other acquisition under the
Plan of Options or Stock as hereinafter defined does not consist of two or more
Non-Employee Directors, or if there shall be no such Committee, then the Plan
shall be administered by the Board, and references herein to the Committee
(except in the proviso to this sentence) shall be deemed to be references to
the Board, and any such grant, award or other acquisition may be approved or
ratified in any other manner contemplated by subparagraph (d) of Rule 16b-3; provided,
however, that options granted to the Company’s Chief Executive Officer
or to any of the Company’s other four most highly compensated officers that are
intended to qualify as performance-based compensation under Section 162(m)
of the Code may only be granted by the Committee.


 


3.             Designation
of Optionees.


 


The persons eligible for participation in the Plan as recipients of
Options (the “Optionees”) shall include employees, officers and directors of,
and consultants and advisors to, the Company or any Subsidiary; provided that
Incentive Options may only be granted to employees of the Company and the
Subsidiaries.  In selecting Optionees,
and in determining the number of shares to be covered by each Option granted to
Optionees, the Committee may consider the office or position held by the
Optionee or the Optionee’s relationship to the Company, the Optionee’s degree
of responsibility for and contribution to the growth and success of the Company
or any Subsidiary, the Optionee’s length of service, age, promotions, potential
and any other factors that the Committee may consider relevant.  An Optionee who has been granted an Option
hereunder may be granted an additional Option or Options, if the Committee
shall so determine.


 


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4.             Stock Reserved for the Plan.


 


Subject to adjustment as provided in Section 7 hereof, a total of
1,000,000 shares of the Company’s Common Stock, $0.01 par value per share (the
“Stock”), shall be subject to the Plan. 
The maximum number of shares of Stock that may be subject to options
granted under the Plan to any individual in any calendar year shall not exceed
250,000 shares (subject to adjustment pursuant to Section 7 hereof), and
the method of counting such shares shall conform to any requirements applicable
to performance-based compensation under Section 162(m) of the Code. The
shares of Stock subject to the Plan shall consist of unissued shares or
previously issued shares held by any Subsidiary of the Company, and such amount
of shares of Stock shall be and is hereby reserved for such purpose.  Any of such shares of Stock that may remain
unsold and that are not subject to outstanding Options at the termination of
the Plan shall cease to be reserved for the purposes of the Plan, but until
termination of the Plan the Company shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan.  Should any Option expire or be canceled
prior to its exercise in full or should the number of shares of Stock to be
delivered upon the exercise in full of an Option be reduced for any reason, the
shares of Stock theretofore subject to such Option may be subject to future
Options under the Plan, except where such reissuance is inconsistent with the
provisions of Section 162(m) of the Code.


 


5.             Terms and Conditions of Options.


 


Options granted under the Plan shall be subject to the following
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:


 


(a)           Option
Price.  The purchase price of each
share of Stock purchasable under an Incentive Option shall be determined by the
Committee at the time of grant, but shall not be less than 100% of the Fair
Market Value (as defined below) of such share of Stock on the date the Option
is granted; provided, however, that with respect to an Optionee
who, at the time such Incentive Option is granted, owns (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting
power of all classes of stock of the Company or of any Subsidiary, the purchase
price per share of Stock shall be at least 110% of the Fair Market Value per
share of Stock on the date of grant. 
The purchase price of each share of Stock purchasable under a
Nonqualified Option shall not be less than 80% of the Fair Market Value of such
share of Stock on the date the Option is granted; provided, however,
that if an option granted to the Company’s Chief Executive Officer or to any of
the Company’s other four most highly compensated officers is intended to
qualify as performance-based compensation under Section 162(m) of the
Code, the exercise price of such Option shall not be less than 100% of the Fair
Market Value (as such term is defined below) of such share of Stock on the date
the Option is granted.  The exercise
price for each Option shall be subject to adjustment as provided in
Section 7 below.  “Fair Market
Value” means the closing price of publicly traded shares of Stock on the
principal securities exchange on which shares of Stock are listed (if the
shares of Stock are so listed), or on the NASDAQ Stock Market (if the shares of
Stock are regularly quoted on the NASDAQ Stock Market), or, if not so listed or
regularly quoted, the


 


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mean between the closing bid and asked prices of publicly traded shares
of Stock in the over-the-counter market, or, if such bid and asked prices shall
not be available, as reported by any nationally recognized quotation service
selected by the Company, or as determined by the Committee in a manner
consistent with the provisions of the Code. 
Anything in this Section 5(a) to the contrary notwithstanding, in
no event shall the purchase price of a share of Stock be less than the minimum
price permitted under the rules and policies of any national securities
exchange on which the shares of Stock are listed.


 


(b)           Option
Term.  The term of each Option shall
be fixed by the Committee, but no Option shall be exercisable more than ten
years after the date such Option is granted and in the case of an Incentive
Option granted to an Optionee who, at the time such Incentive Option is
granted, owns (within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company
or of any Subsidiary, no such Incentive Option shall be exercisable more than
five years after the date such Incentive Option is granted.


 


(c)           Exercisability.  Subject to Section 5(j) hereof, Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at the time of grant.


 


Upon the occurrence of a “Change in Control” (as hereinafter defined),
the Committee may accelerate the vesting and exercisability of outstanding Options,
in whole or in part, as determined by the Committee in its sole
discretion.  In its sole discretion, the
Committee may also determine that, upon the occurrence of a Change in Control,
each outstanding Option shall terminate within a specified number of days after
notice to the Optionee thereunder, and each such Optionee shall receive, with
respect to each share of Company Stock subject to such Option, an amount equal
to the excess of the Fair Market Value of such shares immediately prior to such
Change in Control over the exercise price per share of such Option; such amount
shall be payable in cash, in one or more kinds of property (including the
property, if any, payable in the transaction) or a combination thereof, as the
Committee shall determine in its sole discretion.


 


For purposes of the Plan, a Change in Control shall be deemed to have
occurred if:


 


(i)  a
tender offer (or series of related offers) shall be made and consummated for
the ownership of 50% or more of the outstanding voting securities of the
Company, unless as a result of such tender offer more than 50% of the
outstanding voting securities of the surviving or resulting corporation shall
be owned in the aggregate by the shareholders of the Company (as of the time
immediately prior to the commencement of such offer), any employee benefit plan
of the Company or its Subsidiaries, and their affiliates;


 


(ii)  the Company shall be merged or consolidated with
another corporation, unless as a result of such merger or consolidation more
than 50% of the outstanding voting


 


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securities of the surviving or resulting corporation shall be owned in
the aggregate by the shareholders of the Company (as of the time immediately
prior to such transaction), any employee benefit plan of the Company or its
Subsidiaries, and their affiliates;


 


(iii) 
the Company shall sell substantially all of its assets to another
corporation that is not wholly owned by the Company, unless as a result of such
sale more than 50% of such assets shall be owned in the aggregate by the
shareholders of the Company (as of the time immediately prior to such
transaction), any employee benefit plan of the Company or its Subsidiaries and
their affiliates; or


 


(iv) 
a Person (as defined below) shall acquire 50% or more of the outstanding
voting securities of the Company (whether directly, indirectly, beneficially or
of record), unless as a result of such acquisition more than 50% of the
outstanding voting securities of the surviving or resulting corporation shall
be owned in the aggregate by the shareholders of the Company (as of the time
immediately prior to the first acquisition of such securities by such Person),
any employee benefit plan of the Company or its Subsidiaries, and their affiliates.


 


For purposes of this Section 5(c), ownership of voting securities
shall take into account and shall include ownership as determined by applying
the provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under
the Exchange Act.  In addition, for such
purposes, “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include (A) the Company or any of its Subsidiaries;
(B) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Subsidiaries; (C) an underwriter temporarily
holding securities pursuant to an offering of such securities; or (D) a
corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportion as their ownership of stock of the
Company.


 


(d)           Method
of Exercise.  Options to the extent
then exercisable may be exercised in whole or in part at any time during the
option period, by giving written notice to the Company specifying the number of
shares of Stock to be purchased, accompanied by payment in full of the purchase
price, in cash, or by check or such other instrument as may be acceptable to
the Committee.  As determined by the
Committee, in its sole discretion, at or after grant, payment in full or in
part may be made at the election of the Optionee (i) in the form of Stock owned
by the Optionee (based on the Fair Market Value of the Stock on the trading day
before the Option is exercised) which is not the subject of any pledge or
security interest, (ii) in the form of shares of Stock withheld by the Company
from the shares of Stock otherwise to be received with such withheld shares of
Stock having a Fair Market Value on the date of exercise equal to the exercise
price of the Option, or (iii) by a combination of the foregoing, provided that
the combined value of all cash and cash equivalents and the Fair Market Value
of any shares surrendered to the Company is at least equal to such exercise
price and except with respect to (ii) above, such method of payment will not
cause a disqualifying disposition of all or a portion of the Stock received
upon exercise of an Incentive Option. 
An Optionee shall have the right to dividends and other rights of a
stockholder with respect to


 


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shares of Stock purchased upon exercise of an Option at such time as
the Optionee has given written notice of exercise and has paid in full for such
shares and (ii) has satisfied such conditions that may be imposed by the
Company with respect to the withholding of taxes.


 


(e)           Non-transferability
of Options.  Options are not
transferable and may be exercised solely by the Optionee during his lifetime or
after his death by the person or persons entitled thereto under his will or the
laws of descent and distribution.  The
Committee, in its sole discretion, may permit a transfer of a Nonqualified
Option to (i) a trust for the benefit of the Optionee or (ii) a member of the
Optionee’s immediate family (or a trust for his or her benefit).  Any attempt to transfer, assign, pledge or
otherwise dispose of, or to subject to execution, attachment or similar
process, any Option contrary to the provisions hereof shall be void and
ineffective and shall give no right to the purported transferee.


 


(f)            Termination
by Death.  Unless otherwise
determined by the Committee at grant, if any Optionee’s employment with or
service to the Company or any Subsidiary terminates by reason of death, the
Option may thereafter be exercised, to the extent then exercisable (or on such
accelerated basis as the Committee shall determine at or after grant), by the
legal representative of the estate or by the legatee of the Optionee under the
will of the Optionee, for a period of one year after the date of such death or
until the expiration of the stated term of such Option as provided under the
Plan, whichever period is shorter.


 


(g)           Termination
by Reason of Disability.  Unless
otherwise determined by the Committee at grant, if any Optionee’s employment
with or service to the Company or any Subsidiary terminates by reason of total
and permanent disability, any Option held by such Optionee may thereafter be
exercised, to the extent it was exercisable at the time of termination due to
Disability (or on such accelerated basis as the Committee shall determine at or
after grant), but may not be exercised after 30 days after the date of such
termination of employment or service or the expiration of the stated term of
such Option, whichever period is shorter; provided, however, that, if the
Optionee dies within such 30-day period, any unexercised Option held by such
Optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of one year after the date of
such death or for the stated term of such Option, whichever period is shorter.


 


(h)           Termination
by Reason of Retirement.  Unless
otherwise determined by the Committee at grant, if any Optionee’s employment
with or service to the Company or any Subsidiary terminates by reason of Normal
or Early Retirement (as such terms are defined below), any Option held by such
Optionee may thereafter be exercised to the extent it was exercisable at the
time of such Retirement (or on such accelerated basis as the Committee shall
determine at or after grant), but may not be exercised after 30 days after the
date of such termination of employment or service or the expiration of the
stated term of such Option, whichever period is shorter; provided, however,
that, if the Optionee dies within such 30-day period, any unexercised Option
held by such Optionee shall thereafter be exercisable, to the extent to which
it was exercisable at the time of death, for a period of one year after the
date of such death or for the stated term of such Option, whichever period is
shorter.


 


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For purposes of this paragraph (h) “Normal Retirement” shall mean
retirement from active employment with the Company or any Subsidiary on or
after the normal retirement date specified in the applicable Company or
Subsidiary pension plan or if no such pension plan, age 65, and “Early
Retirement” shall mean retirement from active employment with the Company or any
Subsidiary pursuant to the early retirement provisions of the applicable
Company or Subsidiary pension plan or if no such pension plan, age 55.


 


(i)            Other
Termination.  Unless otherwise
determined by the Committee at grant, if any Optionee’s employment with or
service to the Company or any Subsidiary terminates for any reason other than
death, Disability or Normal or Early Retirement, the Option shall thereupon
terminate, except that the portion of any Option that was exercisable on the
date of such termination of employment or service may be exercised for the
lesser of 30 days after the date of termination or the balance of such Option’s
term if the Optionee’s employment or service with the Company or any Subsidiary
is terminated by the Company or such Subsidiary without cause (the
determination as to whether termination was for cause to be made by the
Committee).  The transfer of an Optionee
from the employ of or service to the Company to the employ of or service to a
Subsidiary, or vice versa, or from one Subsidiary to another, shall not be
deemed to constitute a termination of employment or service for purposes of the
Plan.


 


(j)            Limit
on Value of Incentive Option.  The
aggregate Fair Market Value, determined as of the date the Incentive Option is
granted, of Stock for which Incentive Options are exercisable for the first
time by any Optionee during any calendar year under the Plan (and/or any other
stock option plans of the Company or any Subsidiary) shall not exceed $100,000.


 


(k)           Transfer
of Incentive Option Shares.  The
stock option agreement evidencing any Incentive Options granted under this Plan
shall provide that if the Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any
share or shares of Stock issued to him upon exercise of an Incentive Option
granted under the Plan within the two-year period commencing on the day after
the date of the grant of such Incentive Option or within a one-year period
commencing on the day after the date of transfer of the share or shares to him
pursuant to the exercise of such Incentive Option, he shall, within 10 days
after such disposition, notify the Company thereof and immediately deliver to
the Company any amount of United States federal, state and local income tax
withholding required by law.


 


6.             Term of Plan.


 


No Option shall be granted pursuant to the Plan on or after
March 21, 2011, but Options theretofore granted may extend beyond that
date.


 


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7.             Capital Change of the Company.


 


In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares reserved for issuance under the
Plan and in the number and option price of shares subject to outstanding
Options granted under the Plan, to the end that after such event each
Optionee’s proportionate interest shall be maintained as immediately before the
occurrence of such event.


 


8.             Purchase for Investment.


 


Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended (the “Securities Act”), or the
Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.


 


9.             Taxes.


 


The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any Options granted under
the Plan with respect to the withholding of any taxes or any other tax matters.


 


10.           Effective Date of Plan.


 


The Plan shall be effective on March 22, 2001, provided however
that the Plan shall subsequently be approved by majority vote of the Company’s
stockholders not later than March 21, 2002.


 


11.           Amendment and Termination.


 


The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made that would impair the rights of any Optionee under any
Option theretofore granted without the Optionee’s consent, and except that no
amendment shall be made which, without the approval of the stockholders of the
Company would:


 


(a)           materially
increase the number of shares that may be issued under the Plan, except as is
provided in Section 7;


 


(b)           materially
increase the benefits accruing to the Optionees under the Plan;


 


(c)           materially
modify the requirements as to eligibility for participation in the Plan;


 


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(d)           decrease
the exercise price of an Incentive Option to less than 100% of the Fair Market
Value per share of Stock on the date of grant thereof or the exercise price of
a Nonqualified Option to less than 80% of the Fair Market Value per share of
Stock on the date of grant thereof; or


 


(e)           extend
the term of any Option beyond that provided for in Section 5(b).


 


The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights
of any Optionee without the Optionee’s consent.  The Committee may also substitute new Options for previously
granted Options, including options granted under other plans applicable to the
participant and previously granted Options having higher option prices, upon
such terms as the Committee may deem appropriate.


 


12.           Government Regulations.


 


The Plan, and the grant 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, and to such approvals
by any governmental agencies, national securities exchanges and interdealer
quotation systems as may be required.


 


13.           General Provisions.


 


(a)           Certificates.  All certificates for shares of Stock
delivered under the Plan shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, or other
securities commission having jurisdiction, any applicable Federal or state
securities law, any stock exchange or interdealer quotation system upon which
the Stock is then listed or traded and the Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.


 


(b)           Employment
Matters.  The adoption of the Plan
shall not confer upon any Optionee of the Company or any Subsidiary any right
to continued employment or, in the case of an Optionee who is a director,
continued service as a director, with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of any of its employees, the service of
any of its directors or the retention of any of its consultants or advisors at
any time.


 


(c)           Limitation
of Liability.  No member of the
Board or the Committee, or any officer or employee of the Company acting on
behalf of the Board or the Committee, shall be personally liable for any
action, determination or interpretation taken or made in good faith with
respect to the Plan, and all members of the Board or the Committee and each and
any officer or employee of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by the Company in
respect of any such action, determination or interpretation.


 


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(d)           Registration
of Stock.  Notwithstanding any other
provision in the Plan, no Option may be exercised unless and until the Stock to
be issued upon the exercise thereof has been registered under the Securities
Act and applicable state securities laws, or are, in the opinion of counsel to
the Company, exempt from such registration in the United States.  The Company shall not be under any
obligation to register under applicable federal or state securities laws any
Stock to be issued upon the exercise of an Option granted hereunder in order to
permit the exercise of an Option and the issuance and sale of the Stock subject
to such Option, although the Company may in its sole discretion register such
Stock at such time as the Company shall determine.  If the Company chooses to comply with such an exemption from
registration, the Stock issued under the Plan may, at the direction of the
Committee, bear an appropriate restrictive legend restricting the transfer or
pledge of the Stock represented thereby, and the Committee may also give
appropriate stop transfer instructions with respect to such Stock to the
Company’s transfer agent.


 


 


	
   

  	
  NESS TECHNOLOGIES, INC.

  
	
   

  	
  March 22, 2001

  



 


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