Unassociated Document


GURUNET
CORPORATION




1999
STOCK OPTION PLAN

As
Amended, as of February 25, 2000




1. Purposes
of the Plan. The
purposes of this Stock Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company's business. Options granted under the Plan may be Incentive Stock
Options or Nonstatutory Stock Options, as determined by the Administrator at the
time of grant, Stock Purchase Rights may also be granted under the
Plan.




2. Definitions. As used
herein, the following definitions shall apply:




(a) "Administrator" means
the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof.




(b)
 "Applicable
Laws" means
the requirements relating to the administration of stock option plans under U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted
and the applicable laws of any other country or jurisdiction where Options or
Stock Purchase Rights are granted under the Plan.




(c) "Board" means
the Board of Directors of the Company.




(d) "Code" means
the Internal Revenue Code of 1986, as amended.




(e) "Committee" means a
committee of Directors appointed by the Board in accordance with Section 4
hereof.




(f)
"Common
Stock” means
the Common Stock of the Company.




(g) "Company" means
Guru International, Inc., a Delaware corporation together with any Subsidiary
that may be formed by the Company from time to time.




(h) "Consultant" means
any person who is engaged by the Company or any Parent or Subsidiary to render
consulting or advisory services to such entity.




(i) "Director" means a
member of the Board of Directors of the Company, or any Subsidiary.




(j) "Disability" means
total and permanent disability as defined in Section 22(e)(3) of the
Code.


























 

(k) "Employee" means
any person, including Officers and Directors, employed by the Company or any
Parent or Subsidiary of the Company. A Service Provider shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, on the 181st day
of such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.




(l) "Exchange
Act" means
the Securities Exchange Act of 1934, as amended.




(m)
 "Fair-Market
Value" means,
as of any date, the value of Common Stock determined as follows:




  
 
 (i)
 If the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The
Wall Street Journal or such
other source as the Administrator deems reliable;




             
   (ii)
 If the
Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the
high bid and low asked prices for the Common Stock on the last market trading
day prior to the day of determination; or




             
   (iii)
 In the
absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Administrator.




(n) "Incentive
Stock Option" means
an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code.




(o) "Nonstatutory
Stock Option" means
an Option not intended to qualify as an Incentive Stock Option.




(p)
 "Officer" means a
person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated
thereunder.
 

              
(q) "Option" means a
stock option granted pursuant to the Plan.









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(r)
 "Option
Agreement" means a
written or electronic agreement between the Company and an Optionee evidencing
the terms and conditions of an individual Option grant. The Option Agreement is
subject to the terms and conditions of the Plan.




(s) "Option
Exchange Program" means a
program whereby outstanding Options are exchanged for Options with a lower
exercise price.




(t) "Optioned
Stock" means
the Common Stock subject to an Option or a Stock Purchase Right.




(u) "Optionee" means
the holder of an outstanding Option or Stock Purchase Right granted under the
Plan.




(v)
"Parent" means a
"parent corporation," whether now or hereafter existing, as defined in Section
424(f) of the Code.




(w) "Plan" means
this 1999 Stock Plan.




(x) "Restricted
Stock" means
shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right
under Section 11 below.




(y) "Section
16(b)" means
Section 16(b) of the Securities Exchange Act of 1934 as amended.




(z) "Service
Provider" means
an Employee, Director or Consultant.




(aa) 
"Share" means a
share of the Common Stock, as adjusted in accordance with Section 12
below.




(bb)
 "Stock
Purchase Right" means a
right to purchase Common Stock pursuant to Section 11 below.




(cc)
 "Subsidiary" means a
"subsidiary corporation," whether now or hereafter existing, as defined in
Section 424(t) of the Code.




3.
 Stock
Subiect to the Plan. Subject
to the provisions of Section 12 of the Plan, the maximum aggregate number of
Shares which may be subject to option and sold under the Plan is ten million
four hundred fifty five thousand one hundred eleven (10,455,111) Shares. The
Shares may be authorized but unissued, or reacquired Common Stock.




If an
Option or Stock Purchase Right expires or becomes unexercisable without having
been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.








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4. Administration
of the Plan.




(a) Administrator. The
Plan shall be administered by the Board or a Committee appointed by the Board,
which Committee shall be constituted to comply with Applicable
Laws.




(b)
 Powers
of the Administrator. Subject
to the provisions of the Plan and, in the case of a Committee, the specific
duties delegated by the Board to such Committee, and subject to the approval of
any relevant authorities, the Administrator shall have the authority in its
discretion:

 

                    (i) to determine the
Fair Market Value;   

 

(ii) to select
the Service Providers to whom Options and Stock Purchase Rights may from time to
time be granted hereunder;  

 

(iii)
 to
determine the number of Shares to be covered by each such award granted
hereunder;

 

(iv)
 to
approve forms of agreement for use under the Plan;

 

(v)
 to
determine the terms and conditions, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

 

 (vi)
 to
determine whether and under what circumstances an Option may be settled in cash
under subsection 9(e) instead of Common Stock;

 

(vii)
 to reduce
the exercise price of any Option to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Option has declined since
the date the Option was granted; 

 

 (viii)
 to
initiate an Option Exchange Program;

 

(ix)
 to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax
laws;

 

(x)
 to allow
Optionees to satisfy withholding tax obligations by electing to have the Company
withhold from the Shares to be issued upon exercise of an Option or Stock
Purchase Right that number of Shares having a Fair Market Value equal to the
amount required to be withheld, The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by Optionees to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable: and










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                    (xi) to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan.

 

                    (xii) to alter,
revise or otherwise adjust the terms of the Plan and the Option Agreement, as
may be required pursuant to any applicable laws of local or foreign
jurisdictions.




      
(c) Effect
of Administrator's Decision. All
decisions, determinations, and interpretations of the Administrator shall be
final and binding on all Optionees.




5. Eligibility.




      
(a) Nonstatutory
Stock Options and Stock Purchase Rights may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.




       (b)
 Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by the Optionee during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted. The
Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.




       (c)
Neither the Plan nor any Option or Stock Purchase Right shall confer upon any
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall it interfere in any way with his or
her right or the Company's right to terminate such relationship at any time,
with or without cause.




6.
 Term
of Plan. The
Plan shall become effective upon its adoption by the Board. It shall continue in
effect for a term of ten (10) years unless sooner terminated under Section 14 of
the Plan.




7.
 Term
of Option. The
term of each Option shall be stated in the Option Agreement; provided, however,
that the term shall be no more than ten (10) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to an Optionee who, at
the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option
Agreement.








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8. Option
Exercise Price and Consideration.




       (a)
 The per
share exercise price for the Shares to be issued upon exercise of an Option
shall be such price as is determined by the Administrator, but shall be subject
to the following:




(i) In the
case of an Incentive Stock Option 




(1)
granted to an Employee who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of
grant.




(2) granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.




             (ii)
 In the
case of a Nonstatutory Stock Option




                   (1)
 granted
to a Service Provider who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of the
grant.




                  
(2) granted
to any other Service Provider, the per Share exercise price shall be no less
than 85% of the Fair Market Value per Share on the date of grant.




             (iii)
 Notwithstanding
the foregoing, Options may be granted with a per Share exercise price other than
as required above pursuant to a merger or other corporate
transaction.




       (b)
 The
consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock Option, shall be determined at the time of
grant). Such consideration may consist of (1) cash, (2) check, (3) promissory
note, (4) other Shares which (x) in the case of Shares acquired upon exercise of
an Option, have been owned by the Optionee for more than six months on the date
of surrender, and (y) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which such Option shall be
exercised, (5) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan, or (6) any
combination of the foregoing methods of payment. In making is determination as
to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.




9. Exercise
of Option.




       (a)
 Procedure
or Exercise: Rights as a Stockholder. Any
Option granted hereunder shall be exercisable according to the terms hereof at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Except in the case of Options granted to
Officers, Directors and Consultants, Options shall become exercisable at a rate
of no less than 20% per year over five (5) years from the date the Options are
granted. Unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be tolled during any unpaid leave of absence. An Option may not
be exercised for a fraction of a Share.










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An Option
shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 12 of
the Plan.




Exercise
of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is
exercised.




       (b)
 Termination
of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, such Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement (of at
least thirty, (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the plan.




       (c)
 Disability
of Optionee. If an
Optionee ceases to be a Service Provider as a result of the Optionee's
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement (of at least six (6) months) to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.











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     (d)
 Death
of Optionee. If an
Optionee dies while a Service Provider, the Option may be exercised within such
period of time as is specified in the Option Agreement (of at least six (6)
months) to the extent that the Option is vested on the date of death (but in no
event later than the expiration of the term of such Option as set forth in the
Option Agreement) by the Optionee's estate or by a person who acquires the right
to exercise the Option by bequest or inheritance. In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination. If, at the time of death, the
Optionee is not vested as to the entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the
Plan.




       (e)
 Buyout
Provisions. The
Administrator may at any time offer to buy out for a payment in cash or Shares,
an Option previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that
such offer is made. No such offer shall obligate Optionee to relinquish his or
her Option.




10.
 Non-Transferability
of Options and Stock Purchase Rights. Options
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.




11. Stock
Purchase Rights.




(a)
 Rights
to Purchase. Stock
Purchase Rights may be issued either alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the Plan.
After the Administrator determines that it will offer Stock Purchase Rights
under the Plan, it shall advise the offeree in writing or electronically of the
terms, conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid, and
the time within which such person must accept such offer. The terms of the offer
shall comply in all respects with Section 260.140.42 of Title 10 of the
California Code of Regulations. The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the
Administrator.




       (b)
 Repurchase
Option. Unless
the Administrator determines otherwise, the Restricted Stock purchase agreement
shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser's service with the Company for any
reason (including death or disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock purchase agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse
at such rate as the Administrator may determine. Except with respect to Shares
purchased by Officers, Directors and Consultants, the repurchase option shall in
no case lapse at a rate of less than 20% per year over five years from the date
of purchase.








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       (c)
 Other
Provisions. The
Restricted Stock purchase agreement shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.




     (d)
 Rights
as a Stockholder. Once
the Stock Purchase Right is exercised, the purchaser shall have rights
equivalent to those of a stockholder and shall be a stockholder when his or her
purchase is entered upon the records of the duly authorized transfer agent of
the Company. No adjustment shall be made for a dividend or other right for which
the record date is prior to the date the Stock Purchase Right is exercised,
except as provided in Section 12 of the Plan.




12. Adjustments
Upon Changes in Capitalization. Merger or Asset Sale.




       (a)
 Changes
in Capitalization. Subject
to any required action by the stockholders of the Company, the number of shares
of Common Stock covered, by each outstanding Option or Stock Purchase Right; and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option or Stock Purchase Right, as well as the price per share of Common
Stock covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company. The conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.




        (b)
 Merger,
Acquisition, or Asset Sale. (i) In
the event of a merger of the Company with or into another corporation, an
acquisition of all or substantially all of the shares of the Company, or the
sale of substantially all of the assets of the Company (each such event, a
"Transaction"), each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. If an
Optionee's employment is terminated by the Company without Cause (as defined
below) within one (1) year following the date of the Transaction, the option
shall become immediately vested as to the number of Shares that would otherwise
have vested within one year following the date of termination in addition to the
number of Shares otherwise exercisable on the date of such termination (but, in
no event, shall the option become bested and exercisable for more than one
hundred percent (100%) of the shares subject to such option). In the event that
the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a Transaction, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall• be fully exercisable for a period of fifteen (15) days
from the date of such notice, and the Option or Stock Purchase Right, shall
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following a Transaction the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right immediately prior to the Transaction, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the Transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Transaction is not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.










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(c) Cause. Cause
shall mean any of the following: (i) the Optionee's theft dishonesty, or
falsification of any Company documents or records; (ii) the Optionee's improper
use or disclosure of the Company's confidential or proprietary information;
(iii) any action by the Optionee which has a detrimental effect on the Company's
reputation or business; (iv) the Optionee's failure or inability to perform any
reasonable assigned duties after written notice from the Company of and a
reasonable opportunity to cure, such failure or inability; (v) any material
breach of the Optionee of any employment agreement between the Option and the
Company, which breach is not cured pursuant to the terms of such agreement; or
(vi) the Optionee's conviction (including any plea of guilty or nolo contendere)
of any criminal act which impairs the Optionee's ability to perform his or her
duties with the Company.




13.
 Time
of Granting Options and Stock Purchase Rights. The
date of grant of an Option or Stock Purchase Right shall, for all purposes, be
the date on which the Administrator makes the determination granting such Option
or Stock Purchase Right, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Employee or
Consultant to whom an Option or Stock Purchase Right is so granted within a
reasonable time after the date of such grant.




14. Amendment
and Termination of the Plan.




      
(a) Amendment
and Termination. The
Board may at any time amend, alter, suspend or terminate the Plan.




      
(b) Stockholder
Approval. The
Board shall obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with the Applicable Laws.








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       (c)
 Effect
of Amendment or Termination. 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 Administrator, which agreement must be in writing and signed by the
Optionee and the Company. Termination of the Plan shall not affect the
Administrator'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.




15.
 Conditions
Upon Issuance of Shares.




       (a)
Legal
Compliance. Shares
shall not be issued pursuant to the exercise of an Option unless the exercise of
such Option and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.




       (b)
 Investment
Representations. As a
condition to the exercise of an Option, the Administrator may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.




        16.
Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.




17.
 Reservation
of Shares. The
Company, during the term of this Plan, shall at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.




18.
 Stockholder
Approval. The
Plan shall be subject to approval by the stockholders of the Company within
twelve (12) months after the date the Plan is adopted. Such stockholder approval
shall be obtained in the degree and manner required under Applicable
Laws.




19.
 Information
to Optionees and Purchasers. The
Company shall provide to each Optionee and to each individual who acquires
Shares pursuant to the Plan, not less frequently than annually during the period
such Optionee or purchaser has one or more Options or Stock Purchase Rights
outstanding, and, in the case of an individual who acquires Shares pursuant to
the Plan, during the period such individual owns such Shares, copies of annual
financial statements. The Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure
their access to equivalent information.










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20. Special
Provisions for Plan Participants who are Israeli Residents.




      
(a) This
Section 20 shall apply only to Optionees who are residents of the State of
Israel.




      
(b) Notwithstanding
anything to the contrary herein, the Plan may also be administered pursuant to
the provisions of Section 102 ("Section 102") or Section 3(i) ("Section 3 Tet")
of the Israeli Income Tax Ordinance (New Version), 1961, the rules promulgated
thereunder and the Israeli Companies Ordinance (New Version), 1983, with respect
to employees who are Israeli residents. Details regarding the terms and
conditions of Options and Stock Purchase Rights granted pursuant to the
provisions of Section 102 in addition to those set forth herein will be
delivered to the participants who are Israeli residents along with the remaining
terms and conditions.




      
(c) Notwithstanding
anything herein to the contrary, in the event that the Plan is administered
pursuant to the provisions of Section 102, each Option and Stock Purchase Right.
and each Share with respect to which an Option or Stock Purchase Right has been
exercised by an Optionee who is an Israeli resident, may be issued by the
Company to, and held in trust (the "Trust") for the benefit of such Optionee by
a trustee (the "Trustee") designated by the Board of Directors of the Company or
its Subsidiaries, as appropriate, pursuant to Section 102. All certificates
representing Shares issued to the trustee under the Plan shall be deposited with
the Trustee, and shall be held by the Trustee until such time that such Shares
are released from the Trust as herein provided. The Trustee shall hold the same
pursuant to the instructions of the Directors, from time to time. The Trustee
shall not use the voting rights vested in such Shares and shall not exercise
such rights in any way whatsoever, except in cases when at its discretion and
after consulting with the Board of Directors of the Company or its Subsidiaries,
as appropriate, the Trustee believes that the said rights should be exercised
for the protection of the Optionees as a minority among the Company's
shareholders.




      
(d) Notwithstanding
anything herein to the contrary, no Options or Stock Purchase Rights granted, or
Shares purchased pursuant to Section 102 shall be released from the Trust prior
to two years after the grant of the Options or Stock Purchase Rights to the
Trustee on behalf of the Optionee (the "Release Date"), or two years from the
date of approval of the Plan by the Israeli Income Tax authorities, whichever is
later. Subject to the terms hereof, at any time after the Release Date with
respect to any Options, Stock Purchase Rights or shares, each Optionee may
require (but shall not be obligated to require) the Trustee to release such
Options, Stock Purchase Rights or Shares, provided that no securities shall be
released from the Trust to the Optionee unless and until such Optionee shall
have deposited with the Trustee an amount of money which, in the Trustee's
opinion, is sufficient and necessary for the discharge of such Optionee's tax
obligations with respect to such Shares.




      
(e) Upon sale
by an Optionee of any securities held in Trust, the Company shall (or shall
cause the Trustee to) withhold from the proceeds of such sale all applicable
taxes, shall remit the amount withheld to the appropriate Israeli tax
authorities, shall pay the balance thereof directly to such Optionee, and shall
report to such Optionee the amount so withheld and paid to said tax
authorities.










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(f) All
Shares issued upon the exercise of Options or Stock Purchase Rights granted
under the Plan shall entitle the Optionee to receive dividends with respect
thereto, and to vote the same at any meeting of the shareholders of the Company.
For as long as shares issued to the Trustee on behalf of the Optionee are held
in the Trust, the cash dividends paid with respect thereto shall be remitted to
the Trustee for the benefit of such Optionee and the Trustee shall vote all such
Shares in accordance with the instructions of such Optionee.

    


      
(g) At the
Administrator's discretion, for purposes of simplicity and in order to ensure
compliance with Israel's tax regulations, the exercise of the Options and the
purchases and sales of Shares issued upon the exercise of Stock Purchase Rights
made under the Plan shall be executed by the Company or its Subsidiaries, as
appropriate.




      
(h) With
respect to the Plan participants who are Israeli residents, the Plan and all
instruments issued thereunder or in connection therewith shall be governed by,
and interpreted in accordance with, the laws of the State of
Israel.




      
(i) Any tax
consequences arising from the grant or exercise of any Options or Stock Purchase
Rights, from the payment for Shares covered thereby or from any other event or
act (whether of the Optionee or of the Company or its Subsidiaries) hereunder,
shall be borne solely by the Optionee. Furthermore, such Optionee shall agree to
indemnify the Company or Subsidiary that employs the Optionee 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.

 







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