Document:

2000 U.S. Share Incentive Plan

 EXHIBIT 10.25 
  
 VERISITY LTD. 
 2000 U.S. SHARE INCENTIVE PLAN, AMENDED AND RESTATED MAY 27, 2004 
  
 1. Adoption and Purpose of the Plan. This plan, to be known as the
“Verisity Ltd. 2000 U.S. Share Incentive Plan, Amended and Restated May 27, 2004” (the “Plan”), has been adopted by the board of directors (the “Board”) of Verisity Ltd., an Israeli corporation (the
“Company”), and the shareholders of the Company. The purpose of this Plan is to advance the interests of the Company and its shareholders by enabling the Company to attract and retain qualified Directors, Officers, Employees and
Consultants by providing them with an opportunity for investment in the Company. The options that may be granted hereunder (“Options”) represent the right by the grantee thereof (“Optionee”) to acquire Ordinary
Shares of the Company (“Shares” which if acquired pursuant to the exercise of an Option will be referred to as “Option Shares”) subject to the terms and conditions of this Plan. Options granted hereunder may be
either ISOs or Nonstatutory Stock Options. In addition, Shares may be issued to Directors, Officers, Employees and Consultants pursuant to Restricted Share Rights provided for hereunder at the discretion of the Administrator. The terms of any
Options and Restricted Share Rights granted hereunder will be reflected in a written Option Agreement or a Restricted Share Agreement, as applicable. 
  
 2. Certain Definitions. The defined terms set forth in Exhibit A attached hereto and incorporated herein (together with other capitalized terms defined
elsewhere in this Plan) will govern the interpretation of this Plan. 
  
 3.
Eligibility. The Company may grant Options and Restricted Share Rights under this Plan only to persons who, at the time of such grant, are Directors, Officers, Employees and/or Consultants of the Company and/or any of its Subsidiaries
(“Eligible Participants”). Subject to the provisions of section 4 of this Plan, there is no limitation on the number of Options or Restricted Share Rights that may be granted to an Eligible Participant. 
  
 4. Shares Subject to the Plan. Subject to section 13 of this Plan, in no event
will the Company issue, in the aggregate, more than the sum of (i) Three Million, Six Hundred and Five Thousand (3,605,000) Shares and (ii) Five Hundred Thousand (500,000) Shares1 (collectively, the “OptionPool”) pursuant to the exercise of all Options and Restricted Share Rights granted under this Plan, less that
number of Shares and Restricted 
  

 1Such 500,000 Share pool was added to the Plan by resolution of the Board effective
April 15, 2003, subject to the limitation that such pool be reserved solely for the issuance of Shares upon exercise of Nonstatutory Options, and not ISOs. The aggregate number of Shares issued or reserved for issuance pursuant to Options granted to
persons other than Officers and Directors under this pool must exceed fifty percent (50%) of the total number of shares issued or reserved for issuance pursuant to Options granted under such pool as determined on April 15, 2006 and on each yearly
anniversary thereafter. 
  

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 Share Rights that have been issued, or have been reserved for issuance, either directly or pursuant to options granted,
to Directors, Officers, Employees, or Consultants of the Company and any of its Subsidiaries on or after August 30, 2000 under any other share option plan, share incentive plan, restricted share or similar arrangement (except for the Employee Share
Purchase Plan, the 2000 Israeli Share Option Plan and any equity plan, agreement or arrangement assumed in connection with a merger or acquisition transaction), provided that the Option Pool shall be deemed to include, and shall not be
reduced by (and shall be deemed to be increased by the Shares described in clause (ii) below): (i) any Shares that may have been reserved for issuance and purchase pursuant to any Option or Restricted Share Right granted under this Plan, but which
Shares remain unissued (and no longer reserved for issuance) upon the expiration or cancellation for any reason of such Option or Right, or any portion thereof, (ii) any Shares that may have been reserved for issuance and purchase pursuant to any
Option or Restricted Share Right granted under any such other plan or similar arrangement (except for the Employee Share Purchase Plan, the 2000 Israeli Share Option Plan and any equity plan, agreement or arrangement assumed in connection with a
merger or acquisition transaction), but which Shares remain unissued (and no longer reserved for issuance) upon the expiration or cancellation for any reason, on or after August 30, 2000, of such Option or Right, or any portion thereof, and (iii)
any Shares that are retained by or delivered to the Company upon exercise of an Option or Restricted Share Right as consideration for the payment of all or a portion of the Option Price and/or Tax Withholding Liability as contemplated by section
5(c) of this Plan. Notwithstanding the foregoing, subject to section 13 of this Plan, in no event will the Company issue, in the aggregate, more than Three Million, Six Hundred and Five Thousand (3,605,000) Shares pursuant to the exercise of all
ISOs that are granted under this Plan. No Participant shall be issued, within any one-year period, a number of Shares and/or Option Shares under the Plan that exceeds 500,000 shares (subject to section 13). At all times while Options granted under
this Plan are outstanding, the Company will reserve for issuance for the purposes hereof a sufficient number of authorized and unissued Shares to fully satisfy the Company’s obligations under all such outstanding Options. 
  
 5. Administration. 
  
 (a) This Plan will be administered and interpreted by the Board, or if the
Board so decides, then to the extent permissible under Israeli law including but not limited to the Israeli Companies Law and Section 112 thereof, by a Committee appointed by the Board for such purpose (the Board, or such Committee, referred to
herein as the “Administrator”). Any Committee shall consist solely of two or more such Non-Employee Directors in accordance with Rule 16b-3, one of whom will be an External Director if and to the extent required under the Israeli
Companies Law. Notwithstanding the foregoing, the Committee may consist of one or more members of the Board but only with respect to the grant of Options and Restricted Share Rights to eligible persons who (i) are not then subject to Section 16 of
the Exchange Act and/or (ii) are either (A) not 
  

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 then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from
such Option or Restricted Share Rights or (B) not persons with respect to whom the Company wished to comply with Section 162(m) of the Code. If administration of this plan is delegated to a Committee, the Committee shall have the powers theretofore
possessed by the Board to the extent permissible under the Israeli Companies Law. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. A majority of the members of the Board, or a Committee if so
appointed, shall constitute a quorum and all actions of the Board or Committee shall be taken by a majority of the members present at any meeting. Any action of the Board, or a Committee, may be taken by an instrument or instruments in writing
signed by all the members of the Board, or such Committee, and any actions so taken shall be as effective as if it had been passed by a majority of the votes cast by the members of the Board, or a Committee, present at a meeting of such members duly
called and held. 
  
 (b) Subject to the express terms and
conditions hereof and to the extent permissible under the Israeli Companies Law and Section 112 thereof, the Administrator is authorized to prescribe, amend and rescind rules and regulations relating to this Plan, and to make all other
determinations necessary or advisable for its administration and interpretation. Specifically, the Administrator will have full and final authority in its discretion, subject to the specific limitations on that discretion as are set forth herein and
in the Articles, at any time: 
  
         (i) to select and approve the Eligible Participants to whom Options and Restricted Share Rights will be granted; provided that no Option or Restricted Share Right may be granted to any person
after he or she ceases, or to any entity after it ceases, for any reason, to be an Eligible Participant (a “Loss of Eligibility Status”); 
  
         (ii) to determine the Eligible Participants to whom and the time or times at which Shares may be issued
under Restricted Share Rights; to grant Restricted Share Rights to such Eligible Participants; to determine the number of Shares to be sold or transferred and the price per share (which shall not be less than par value) and the method of payment for
any Shares to be sold or transferred pursuant to a Restricted Share Right; to subject any Shares purchased pursuant to a Restricted Share Right to the Company’s right to repurchase such Shares upon any Loss of Eligibility Status (a
“Repurchase Option”); to determine limitations on the Repurchase Option and the rate at which any such Repurchase Option shall lapse; and to determine all additional terms of the Restricted Share Agreement that are not otherwise
inconsistent with the Plan; 
  
         (iii) to determine the Fair Market Value of the Shares as of the Grant Date for any Option or Restricted Share Right; and 
  
         (iv) with respect to each Option, to determine the terms and conditions of
the Option, to be set forth in the Option Agreement evidencing the Option (the form of 
  

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 which also being subject to approval by the Administrator), which may vary from the “default” terms and
conditions set forth in section 7 below, except to the extent otherwise provided, as follows: 
  
                 (a) the total number of Option Shares that may be acquired by the Optionee pursuant to the Option; 
  
                 (b) if the Option would otherwise satisfy the conditions under Section 422(b) of the Code, whether the Option will be treated as an ISO;

  
                 (c) the per share purchase price to be paid to the Company by the Optionee to acquire the Option Shares issuable upon exercise of the Option
(the “Option Price”); 
  
                 (d) the maximum period or term during which the Option will be exercisable (the “Option Term”), provided that in no event may
the Option Term be longer than 10 years from the Grant Date; 
  
                 (e) whether to accept a promissory note, delivery of Shares and/or Options, etc. as forms of legal consideration in addition to cash as payment
of all or a portion of the Option Price and/or Tax Withholding Liability to be paid by the Optionee upon the exercise of an Option granted hereunder; 
  
                 (f) the maximum period following any Loss of Eligibility
Status with respect to the Optionee, whether resulting from his or her death, disability or any other reason, during which period (the “Grace Period”) the Option will be exercisable, subject to vesting as provided for in section
7(d) below and to the expiration of the Option Term; and 
  
                 (g) the conditions (e.g., the passage of time or the occurrence of events), if any, that must be satisfied prior to the vesting of the right to
exercise all or specified portions of an Option (such portions being described as a percentage of the total number of Option Shares that may be acquired by the Optionee pursuant to the Option; the vested portion being referred to as a
“Vested Option” and the unvested portion being referred to as an “Unvested Option”). 
  
 6. Restricted Shares. 
  
 (a) Restricted Shares may be issued either alone or in tandem with the grant of Options under the Plan. After the Administrator determines that it will
offer Restricted Shares under the Plan, it shall advise the selected Eligible Participant in writing, by means of a Notice of Grant, of the terms, conditions and restrictions related to the offer, including the number of Shares that the Participant
shall be entitled to receive and the price to be paid (which may be as low per share as par value). The offer shall be 
  

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 accepted by a purchaser (the “Purchaser”) by the execution of a Restricted Share Agreement in the form
determined by the Administrator. 
  
 (b) Unless the Administrator
determines otherwise and to the extent permissible under the Israeli Companies Law, the Restricted Share Agreement shall grant the Company a Repurchase Option. The purchase price for Shares repurchased pursuant to the Restricted Share 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. 
  
 7. Terms and Conditions of Option Agreements if not otherwise Specified. Unless otherwise expressly provided in an Option Agreement based on
the Administrator’s determination pursuant to section 5(b) above, the following terms and conditions will be the default provisions that apply to each Option as if expressly set forth in the Option Agreement, provided that, if the Administrator
grants an ISO to an Eligible Participant, then in no event shall that Participant’s Option Agreement modify the provisions of section 7(a): 
  
 (a) ISO. If granted to an Eligible Participant who, as of the Grant Date, is an Employee of the Company or any Subsidiary (as determined under
Section 3401(c) of the Code), the Option will be subject to the following additional terms and conditions in order to qualify as an ISO: 
  
         (i) To the extent that the Fair Market Value of Option Shares (determined as of the Grant Date) with
respect to which all ISOs are exercisable for the first time by any individual during any calendar year exceeds $100,000, the Option will not be treated as an ISO. 
  
         (ii) The Option Price will not be less than 100% of the Fair Market Value of
the Shares as of the Grant Date, except that if the Optionee is a 10% shareholder the Option Price will not be less than 110% of the Fair Market Value of the Shares as of the Grant Date, and the Option Term may not be more than five (5) years.

  
         (iii)
Notwithstanding any Grace Period selected by the Administrator pursuant to section 5(b) above, or the provisions set out in this section 7, the tax treatment available pursuant to Section 422 of the Code upon the exercise of the ISO will not be
available to an Optionee who exercises the Option more than (i) three months following the Optionee’s Loss of Eligibility Status other than by reason of his or her death or permanent and total disability (within the meaning of Section
22(e)(3) of the Code), or (ii) 12 months following such Optionee’s Loss of Eligibility Status by reason or his or her permanent and total disability, whichever case may be applicable. 
  
 (b) Option Term. The Option Term will be for a period of 10 years
beginning on the Grant Date (subject to section 7(a) above in the case of an ISO granted to a 10% shareholder). 
  

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 (c) Grace Periods. Following a Loss of Eligibility Status: 
  
         (i) the Grace Period will be
30 days, unless the Loss of Eligibility Status is a result of a Just Cause Termination or the death or disability of the Optionee; 
  
         (ii) the Grace Period will be six months if the Loss of Eligibility Status is a result of the death or
disability of the Optionee; and 
  
         (iii) the Option will terminate, and there will be no Grace Period, effective immediately as of the date and time of a Loss of Eligibility Status which results from a Just Cause Termination of
the Optionee, regardless of whether the Option is Vested or Unvested. 
  
 (d) Vesting. The Option initially will be deemed an entirely Unvested Option, but portions of the Option will become a Vested Option on the following schedule: 
  
         (i) twenty-five percent (25%) will become a Vested Option as of the first
anniversary of the “Vesting Start Date” specified in the Option Agreement (which may be earlier than the Grant Date specified therein); and 
  
         (ii) two and one-twelfth percent (2-1/12%) of the Option will become a Vested Option as of the end of each
month thereafter, provided that the Optionee does not suffer a Loss of Eligibility Status prior to each such vesting date and provided further that additional vesting will be suspended during any period while the Optionee is on a leave
of absence from the Company, as determined by the Administrator. 
  
 (e) Exercise of the Option; Issuance of Share Certificate. 
  
         (i) The portion of the Option that is a Vested Option may be exercised by giving written notice thereof to the Company, on such form as may be specified by the
Administrator, but in any event stating the Optionee’s intention to exercise the Option; the date of exercise; the number of full Option Shares to be purchased (which number will be no less than 100 Shares, without regard to adjustments to the
number of Shares subject to the Option pursuant to section 13 below, or, if less, all of the remaining Shares subject to the Option); the amount and form of payment of the Option Price. The notice of exercise will be signed by the person or persons
exercising the Option. In the event that the Option is being exercised by the representative of the Optionee, the notice will be accompanied by proof satisfactory to the Company of the representative’s right to exercise the Option. The notice
of exercise will be accompanied by full payment of the Option Price for the number of Option Shares to be purchased. The Administrator will determine the form of the consideration that the Company will accept in payment of the Option Price. Such
consideration, in the Administrator’s sole discretion, may include (a) cash, certified check, bank draft, money order or the equivalent in U.S. dollars payable to the order of the Company; (b) delivery of other Shares which (i) in the case of

  

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 Shares acquired upon exercise of an Option, have been owned by the Optionee for more than six months on the date of
surrender and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Option Price of the Shares as to which said Option shall be exercised; (c) consideration received by the Company under a cashless exercise program
implemented by the Administrator, if it wishes in its sole discretion, in connection with the Plan; or (d) such other consideration (such as a promissory note) as approved by the Administrator. 
  
         (ii) To the extent required
by applicable federal, state, local or foreign law, and as a condition to the Company’s obligation to issue any Shares upon the exercise of the Option in full or in part, the Optionee will make arrangements satisfactory to the Company for the
payment of any applicable Tax Withholding Liability that may arise by reason of or in connection with such exercise. Such arrangements may include, in the Company’s sole discretion, that the Optionee tender to the Company the amount of such Tax
Withholding Liability, in cash, by check made payable to the Company, or in the form of such other payment as may be approved by the Administrator, in its discretion pursuant to section 5(b) above. Similar arrangements shall be made by a Purchaser
of Shares pursuant to a Restricted Share Agreement at the time (or times) that the Repurchase Option lapses, if so required by the Administrator. 
  
         (iii) After receiving a proper notice of exercise, payment of the applicable Option Price and Tax
Withholding Liability and satisfaction of any requirements under section 9, below, the Company will cause to be issued a certificate or certificates for the Option Shares as to which the Option has been exercised, registered in the name of the
person rightfully exercising the Option and the Company will cause such certificate or certificates to be delivered to such person (also referred to as the Purchaser) or to the escrow holder described in section 8, below 
  
 8. Escrow. For purposes of facilitating the enforcement of the Repurchase
Option set forth in this Plan or in any Restricted Share Agreement, the Administrator may, at its discretion, require the Purchaser of Shares to deliver the certificate(s) for such Shares with a stock power executed by him or her and by his or her
spouse, in blank, to the Secretary of the Company (or his or her designee) to hold said certificate(s) and stock power(s) in escrow and to take all such actions and to effectuate all such releases as are in accordance with the terms of this Plan.
The certificates may be held in escrow so long as the Shares whose ownership they evidence are subject to any Repurchase Option under this Plan or under a Restricted Share Agreement, and shall be released by the escrow holder to a Purchaser when
they are no longer subject to a Repurchase Option under this Plan or under a Restricted Share Agreement. Each Purchaser thereby acknowledges that the Secretary of the Company (or his or her designee) is so appointed as the escrow holder with the
foregoing authorities as a material inducement to the grant of a Restricted Share Right under this Plan, that the appointment is coupled with an interest, and that it accordingly will be irrevocable. The escrow holder will not be liable to any party
to a 
  

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 Restricted Share Agreement (or to any other party) for any actions or omissions unless the escrow holder is grossly
negligent relative thereto. The escrow holder may rely upon any letter, notice or other document executed by any signature purported to be genuine. 
  
 9. Compliance with Law. Notwithstanding any other provision of this Plan, Options and Restricted Share Rights may be granted pursuant to this Plan, and
Option Shares and Shares may be issued pursuant to the exercise thereof by a Participant, only after and on the condition that there has been compliance with all applicable United States federal and state securities laws, applicable Israeli laws
and, to the extent applicable, all applicable rules and regulations of all share exchanges or quotation systems on which the Shares are listed or posted for trading (together “Applicable Laws”). Except in any period (a
“Listing Period”) during which the Company’s Shares are listed or approved for listing upon notice of issuance on a national securities exchange, or are designated or approved for designation upon notice of issuance as a
national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc., in which the exchange or system has been certified by rule or order of the California Commissioner of Corporations pursuant
to section 25100(o) of the Corporate Securities Law of 1968, as amended (the “1968 Law”), each Option and Restricted Share Right granted under this Plan shall comply with the provisions of section 25102(o) of the 1968 Law and the
regulations cited therein (specifically Regulations 260.140.41, 260.140.42, 260.140.45 and 260.140.46 of Title 10 of the California Code of Regulations), and the Administrator shall take no action nor exercise its authority or discretion hereunder
except in strict compliance with such provisions, which shall be deemed incorporated into this Plan by this reference, provided that during any Listing Period such provisions shall not be deemed incorporated into this Plan, in which case the
Administrator shall be free to take action and to exercise its authority and discretion hereunder without compliance with such provisions. In addition to any other requirements hereunder, the Company’s obligation to issue and deliver Shares
under any Option or Restricted Share Right is subject to the satisfaction of all requirements under Applicable Laws in respect thereof and obtaining all regulatory approvals as the Company shall determine to be necessary or advisable in connection
with the authorization, issuance and sale thereof. In this connection, the Company shall take all reasonable steps to obtain such approvals and registrations as may be necessary for the issuance of such Shares in compliance with Applicable Laws and
for the registration of such Shares. As a condition to the exercise of an Option or the issuance of any Shares, the Company may impose various conditions, including a requirement that the person exercising such Option or acquiring such Shares
represents and warrants, at the time of any such exercise or acquisition, that the Shares are being acquired only for investment and without any present intention to sell or distribute such Shares and other restrictions on such Shares relating to
employment or other matters as may be determined by the Board. The Company may, upon advice of counsel to the Company, place legends on share certificates issued under the Plan as counsel to the Company deems necessary or advisable in order to
comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Shares. 
  

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 10. Restrictions on Transfer. No Option or Share (that is still subject to restrictions under a Restricted
Share Agreement) will be transferable by an Optionee otherwise than by will or the laws of descent and distribution. During the lifetime of a natural person who is granted an Option under this Plan, the Option will be exercisable only by him or her.
Notwithstanding anything else in the Plan to the contrary, no Option Agreement will contain any provision which is contrary to, or which modifies, the provisions of this Section 10. 
  
 11. Notices. Any notice to be given to the Company under the terms of an Option Agreement or Restricted Share Right will be
addressed to the Company (or the Subsidiary for which the Participant renders services) at its principal corporate office, Attention: Chief Financial Officer, or at such other address as the Company (or such Subsidiary) may designate in writing. Any
notice to be given to a Participant will be addressed to him or her at the address provided to the Company by such Participant. Any such notice will be deemed to have been duly given if and when enclosed in a properly sealed envelope, addressed as
aforesaid, deposited, either postage prepaid in a post office or branch post office regularly maintained by the local postal authority or prepaid with a globally-recognized air courier. 
  
 12. Term of the Plan. The Plan will become effective on the date of its adoption by the shareholders of the Company. The Plan
will expire on the tenth (10th) anniversary of the date of its adoption by the shareholders of the Company unless it is terminated earlier pursuant to Section 18 of the Plan, after which no more Options or Restricted Share Rights may be granted
under the Plan, although all outstanding Options and Restricted Share Rights granted prior to such expiration or termination will remain subject to the provisions of the Plan, and no such expiration or termination of the Plan will result in the
expiration or termination of any such Option or Restricted Share Right prior to the expiration or early termination of the applicable Option Term or the term set forth in the Restricted Share Right, as applicable. 
  
 13. Adjustments Upon Changes in Share Capital; Rights Offering. 
  
 (a) The number of Shares subject to the Plan, the number of Shares available
under Options and the Restricted Share Rights granted and the Option Price and the price payable for Shares under the Restricted Share Right shall be adjusted as determined by the Board in its discretion from time to time to reflect adjustments in
the number of Shares arising as a result of subdivisions, share dividends, bonus shares, consolidations or reclassifications of the Shares or other relevant changes in the authorized or issued capital of the Company. No such adjustments will be
required by reason of the issuance or sale by the Company for cash or other consideration of additional Shares or securities convertible into or exchangeable for Shares. No fractional Shares may be purchased or issued hereunder. If a Participant is
entitled to purchase a fraction of a Share pursuant to 
  

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 an Option or Restricted Share Right such entitlement shall be rounded down to the nearest whole number. 
  
 (b) If the Company proposes to issue or sell any securities to all of its
then current shareholders, each Optionee shall be deemed for purposes of such issuance or offer to sell to be a shareholder of that number of Option Shares that may be acquired by the Optionee pursuant to Vested Options held by such Optionee (in
addition to any Option Shares or other Shares actually held of record by such Optionee). 
  
 14. Market Standoff. If in connection with any public offering of securities of the Company, the Company, the Board and/or the underwriter or underwriters managing such offering so request, then each
Participant and each holder of Option Shares and/or Shares will agree to not sell or otherwise transfer any such Shares (other than Shares included in such underwriting) without the prior written consent of such underwriter, for such period of time
as may be requested by the underwriter commencing on the effective date of the registration statement filed with the Securities and Exchange Commission in connection with such offering. 
  
 15. Change of Control Transactions. Except as otherwise provided in the Option Agreement, Restricted Share Agreement or any
contract of employment or engagement between a Participant and the Company, in the event of a Change of Control Transaction, the Company shall endeavor to cause the Successor Entity in such transaction either to assume all of the Options which have
been granted hereunder and which are outstanding as of the consummation of such transaction (the “Closing”), or to issue (or cause to be issued) in substitution thereof comparable options of such Successor Entity (or of its parent
or its subsidiary). If the Successor Entity is unwilling to either assume such Options or grant comparable options in substitution for such Options on terms that are acceptable to the Company as determined by the Board in the exercise of its
discretion, then with respect to each outstanding Option, that portion of the Option which remains Unvested that either (x) would have become Vested over the 12-month period immediately following the Closing, or (y) represents 50% of the Unvested
portion of the Option as of the Closing, whichever portion is smaller, will become Vested immediately prior to such closing; and the Board may cancel all outstanding Options, and terminate this Plan, effective as of the closing, provided that it
will notify all Optionees of the proposed Change of Control Transaction a reasonable amount of time prior to the closing thereof so that each Optionee will be given the opportunity to exercise the Vested portion of his or her Option (after giving
effect to the acceleration of such vesting discussed above) prior to such closing. In the event of a Change of Control Transaction, the Board will also have the discretion to cancel all or any part of a Repurchase Option in effect with respect to
any Purchaser’s Shares. For purposes of this section 15, the term “Change of Control Transaction” means (a) the sale of all or substantially all of the assets of the Company to any person or entity that, prior to such sale, did
not control, was not under common control with, or was not controlled by, the Company, or (b) a merger 
  

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 or consolidation or other reorganization in which the Company is not the surviving entity or becomes owned entirely by
another entity, unless at least fifty percent (50%) of the outstanding voting securities of the surviving or parent corporation, as the case may be, immediately following such transaction are beneficially held by such persons and entities in the
same proportions as such persons and entities beneficially held the outstanding voting securities of the Company immediately prior to such transaction, or (c) the sale or other change of beneficial ownership of the outstanding voting securities of
the Company such that any person or “group” as that term is defined under the Exchange Act becomes the beneficial owner of more than 50% of the outstanding voting securities of the Company. 
  
 16. Modification, Extension and Renewal of Options and Restricted Share Rights.
Subject to the terms and conditions and within the limitations of this Plan, the Administrator may modify, extend or renew outstanding Options and Restricted Share Rights granted under this Plan, or accept the surrender of outstanding Options or
Restricted Share Rights (to the extent not theretofore exercised) and authorize the granting of new Options or Restricted Share Rights in substitution therefor (to the extent not theretofore exercised). Notwithstanding the foregoing, however, no
modification of any Option or Restricted Share Right will without the consent of the Participant, materially and adversely impair any rights or obligations under any outstanding Option or Restricted Share Right. 
  
 17. Governing Law. The internal laws of the State of California (irrespective
of its choice of law principles) shall govern this Agreement. HOWEVER, THE RELATIONSHIP OF THE PARTICIPANTS AS SHAREHOLDERS OF THE COMPANY, INCLUDING WITHOUT LIMITATION ALL OF THEIR RIGHTS AND DUTIES ARISING UNDER THE COMPANY’S ARTICLES, SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF ISRAEL, AND THE COMPANY AND EACH PARTICIPANT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF ISRAEL LOCATED IN TEL AVIV, IN RESPECT OF ANY DISPUTE OR MATTER ARISING OUT OF OR
CONNECTED WITH SUCH RELATIONSHIP AND THE ARTICLES. 
  
 18. Amendment and
Discontinuance. The Board may amend, suspend or discontinue this Plan at any time or from time to time; provided that no action of the Board will cause ISOs granted under this Plan not to comply with Section 422 of the Code unless the
Board specifically declares such action to be made for that purpose and provided further that no such action may, without the approval of the shareholders of the Company, materially increase (other than by reason of an adjustment pursuant to
section 13) the benefits accruing to Eligible Participants, or materially modify the category of, or eligibility requirements for persons who are Eligible Participants. However, no such action may materially and adversely impair any Option or
Restricted Share Right previously granted under this Plan without the consent of the Participant, nor may the number of Shares subject to the Plan be reduced to a number that is less than the 
  

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 aggregate number of Option Shares and Shares (i) that may be issued pursuant to the exercise of all outstanding and
unexpired Options or Restricted Share Rights granted hereunder, and (ii) that have been issued and are outstanding pursuant to the exercise of Options granted hereunder. The Board may create subplans under this Plan or make changes to this Plan
which are appropriate or necessary by law to permit Directors, Officers, Employees or Consultants of the Company or its Subsidiaries outside of the United States to participate in this Plan. The Board in its sole discretion may also submit any other
amendment to the Plan for shareholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers. Nothing contained in the Plan or in the Option Agreement or Restricted Share Agreement shall be construed so as to prevent
the Company or any Subsidiary from taking corporate action which is deemed by the Company or the Subsidiary to be appropriate or in the Company’s best interest, whether or not such action would have an adverse effect on the Plan. 
  
 19. No Shareholder or Employment Rights. No rights or privileges of a
shareholder in the Company are conferred by reason of the granting of an Option or Share Purchase Right. No Optionee will become a shareholder in the Company with respect to any Option Shares unless and until the Option has been properly exercised
and the Option Price has been fully paid as to the portion of the Option exercised, and the name of the person rightfully exercising the Option has been entered in the register of shareholders of the Company. The granting of an Option or the grant
of rights to a Participant pursuant to a Restricted Share Right do not confer upon the Participant any right to continue in the employment of the Company or any Subsidiary of the Company or on the Board, as the case may be, nor does it interfere in
any way with the right of the Participant or the Company to terminate the Participant’s employment at any time or shareholders’ right to elect Directors. 
  
 20. Copies of Plan; Electronic Delivery. A copy of the Plan will be delivered to each Participant at or before the time he,
she or it executes an Option Agreement or Restricted Share Agreement, as applicable. Notwithstanding any other provision of the Plan, to the extent permitted by Applicable Law, the Company may provide copies of the Plan and any other documentation
or writing to be delivered to any Participant or Eligible Participant (including Option Agreements and Restricted Share Agreements) electronically, and, as determined by the Administrator and permitted by Applicable Law, all notices and other
documentation or writing required to be provided by a Participant or Eligible Participant to the Company may be transmitted electronically. 
  

 -12- 

 VERISITY LTD. 
 2000 U.S. SHARE INCENTIVE PLAN, AMENDED AND RESTATED MAY 27, 2004 
  
 EXHIBIT A 
  
 DEFINITIONS 
  
 1. “10% shareholder” means a person who owns, either directly or indirectly
by virtue of the ownership attribution provisions set forth in Section 424(d) of the Code at the time he or she is granted an Option, shares possessing more than 10% of the total combined voting power or value of all classes of equity of the Company
and/or of its Subsidiaries. 
  
 2. “1968 Law” has the meaning set
forth in section 9 of the Plan. 
  
 3. “1933 Act” means the
United States Securities Act of 1933, as amended. 
  
 4.
“Administrator” has the meaning set forth in section 5(a) of the Plan. 
  
 5. “Applicable Laws” has the meaning set forth in section 9 of the Plan. 
  
 6. “Articles” means the Company’s Articles of Association, as amended. 
  
 7. “Board” has the meaning set forth in section 1 of the Plan. 
  

8. “Change of Control Transaction” has the meaning set forth in section 15 of the Plan. 
  
 9. “Code” means the United States Internal Revenue Code of 1986, as amended (references herein to Sections of the Code are
intended to refer to Sections of the Code as enacted at the time of the Plan’s adoption by the Board and as subsequently amended, or to any substantially similar successor provisions of the Code resulting from recodification, renumbering or
otherwise). 
  
 10. “Company” has the meaning set forth in
section 1 of the Plan. 
  
 11. “Committee” means a committee
appointed by the Board in accordance with section 5(a) of the Plan. 
  
 12.
“Consultant” is as an individual who provides bona fide services (other than relating to capital raising activities) to the Company or a Subsidiary but who is not an Employee, Officer or Director. 
  
 13. “Covered Employee” means the chief executive officer and the four other
highest compensated officers of the Company for whom total compensation is required to be reported to shareholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code. 
  

 -13- 

 14. “Disability” means any physical or mental disability which results in a Loss of Eligibility Status
under applicable law, except that for purposes of section 9.3(c) of the Plan, the term “disability” means permanent and total disability within the meaning of Section 22(e)(3) of the Code. 
  
 15. “Director” means a member of the Board. 
  
 16. “Eligible Participants” has the meaning set forth in section 3 of the
Plan. 
  
 17. “Employee” means any person, including Officers and
Directors, employed by the Company or any Affiliate. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  
 18. “Exchange Act” means the United States Securities Exchange Act of 1934,
as amended. 
  
 19. “Fair Market Value” means, with respect to
the Shares and as of the date that is relevant to such a determination (e.g., on the Grant Date), the market price per share of such Shares determined by the Administrator, consistent with the requirements of Section 422 of the Code and to the
extent consistent therewith, as follows: (a) if the Shares are traded on a share exchange on the date in question, then the Fair Market Value will be equal to the closing price reported by the applicable composite-transactions report for such date;
(b) if the Shares are traded over-the-counter on the date in question and are classified as a national market issue, then the Fair Market Value will be equal to the last-transaction price on the Nasdaq National Market; (c) if the Shares are traded
over-the-counter on the date in question but are not classified as a national market issue, then the Fair Market Value will be equal to the mean between the last reported representative bid and asked prices quoted by Nasdaq for such date; and (e) if
none of the foregoing provisions is applicable, then the Fair Market Value will be determined by the Administrator in good faith on such basis as it deems appropriate. 
  
 20. “Grace Period” has the meaning set forth in section 5(b)(iv) of the Plan. 
  
 21. “Grant Date” means, with respect to an Option, the date set forth in
that Option Agreement as the “Grant Date” and, with respect to a Share, the date set forth in that Restricted Share Agreement as the “Grant Date.” 
  
 22. “ISO” means an “incentive share option” as defined in Section 422 of the Code. 
  
 23. “Just Cause Termination” means a termination by the Company and/or any
of its Subsidiaries of the Optionee’s employment or services (or if the Optionee is a Director, removal of him or her from the Board by action of the shareholders or, if permitted by applicable law and the bylaws of the Company, the other
Directors), in connection with the good faith determination of the Board (or of the Company’s shareholders if the Optionee is a Director and the removal of him or her from the Board is by action of the 
  

 -14- 

 shareholders, but in either case excluding the vote of the subject individual if he or she is a Director or a
shareholder) that the Optionee has engaged in any acts involving dishonesty or moral turpitude or in any acts that materially and adversely affect the business, affairs or reputation of the Company or any of its Subsidiaries. 
  
 24. “Listing Period” has the meaning set forth in section 9 of the Plan.

  
 25. “Loss of Eligibility Status” has the meaning set forth in
section 5(b)(i) of the Plan. 
  
 26. “Non-Employee Director”
means a Director who either (i) is not a current Employee or Officer of the Company or its parent or Subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or Subsidiary for services rendered as a
Consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the 1933 Act), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K or (ii) is otherwise considered a
“non-employee director” for purposed of Rule 16b-3. 
  
 27.
“Nonstatutory Stock Option” means an Option not intended to qualify as an ISO. 
  
 28. “Notice of Grant” means a written notice evidencing certain terms and conditions of an individual Share Purchase Right grant. 
  
 29. “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. 
  
 30. “Option
Agreement” means an agreement pursuant to which an Optionee is granted Options to purchase Option Shares pursuant to the Plan. 
  
 31. “Option Price” has the meaning set forth in section 5(b)(iv) of the Plan. 
  
 32. “Option Shares” has the meaning set forth in section 1 of the Plan. 
  
 33. “Option Term” has the meaning set forth in section 5(b)(iv) of the Plan.

  
 34. “Optionee” has the meaning set forth in section 1 of the
Plan. 
  
 35. “Options” has the meaning set forth in section 1 of
the Plan. 
  
 36. “Participant” means Eligible Participants to
whom Options are granted pursuant to the Plan or to whom a Share Purchase Right has been granted. 
  
 37. “Plan” has the meaning set forth in section 1 of the Plan. 
  
 38. “Purchaser” has the meaning set forth in section 6(a) of the Plan. 
  

 -15- 

 39. “Repurchase Option” has the meaning set forth in section 5(b)(ii) of the Plan. 
  
 40. “Restricted Share Agreement” means a written agreement between the
Company and the grantee of a Share Purchase Right evidencing the terms and restrictions applying to Shares to be purchased under a Share Purchase Right. The Restricted Share Agreement is subject to the terms and conditions of the Plan and the Notice
of Grant. 
  
 41. “Rule 16b-3” means Rule 16b-3 of the
Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
  
 42. “Shares” means the Ordinary Shares of the Company or, in the event of an adjustment contemplated in section 13 hereof, such other securities to which
an Eligible Participant may be entitled upon the exercise of an Option or a Share Purchase Right as a result of such adjustment. 
  
 43. “Share Purchase Right” means the right to purchase Shares pursuant to section 6 of the Plan, as evidenced in the Notice of Grant. 
  
 44. “Subsidiary” has the same meaning as “subsidiary corporation”
as defined in Section 424(f) of the Code. 
  
 45. “Successor
Entity” means a corporation or other entity that acquires all or substantially all of the assets of the Company, or which is the surviving or parent entity resulting from Change of Control Transaction, as that term is defined in section 15
of the Plan. 
  
 46. “Tax Withholding Liability” in connection
with the exercise, sale or repurchase of any Option or Option Shares means United States federal or state income taxes, social security taxes, employment taxes and any other taxes (together with any interest or penalties applicable thereon) related
to any compensation income arising from the transaction required by applicable law to be withheld by the Company. 
  
 47. “Unvested Option” has the meaning set forth in section 5(b)(iv) of the Plan. 
  
 48. “Vested Option” has the meaning set forth in section 5(b)(iv) of the Plan. 
  
 Date Plan Adopted by Board of Directors: 11 October , 2000 

 
 Date Plan Approved by the Shareholders: 18 October , 2000

  
 Date Plan Amended by Board of Directors: 17 April ,
2002 
  
 Date Amended Plan Approved by the Shareholders: 04
June , 2002 
  
 Date Amended Plan Amended by Board of
Directors: 30 March , 2004 
  
 Date Amended Plan Approved
by the Shareholders: 27 May , 2004 
  

 -16-Verisity Ltd. 2000 Employee Share Purchase Plan

 EXHIBIT 10.45 
  
 VERISITY LTD. 
 2000 EMPLOYEE SHARE PURCHASE PLAN 
 AMENDED AND RESTATED MAY 27, 2004 
  
 1. Purpose. The purpose of the Plan is to provide employees of the Company with an opportunity to purchase Ordinary Shares of the Company through
accumulated payroll deductions. In light of the substantial anticipated participation of United States employees, it is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the
United States Internal Revenue Code of 1986, as amended. The provisions of the Plan, accordingly, shall be construed in a manner consistent with the requirements of that section of the Code. 
  
 2. Definitions. 
  
 (a) “Board” shall mean the board of directors of the Company
or any committee appointed pursuant to Section 14. 
  
 (b)
“Code” shall mean the United States Internal Revenue Code of 1986, as amended. 
  
 (c) “Company” shall mean Verisity Ltd., an Israeli corporation, and any Designated Subsidiary of the Company. 
  
 (d) “Compensation” shall mean all gross earnings including
commissions, bonuses, payments for overtime, shift premium, incentive compensation, incentive payments, and other compensation. 
  
 (e) “Designated Subsidiary” shall mean Verisity Design, Inc., a California corporation, and any other Subsidiary that has been designated
by the Board from time to time in its sole discretion as eligible to participate in the Plan. 
  
 (f) “Employee” shall mean any individual who is an employee of the Company for tax purposes whose customary employment with the Company is at least twenty (20) hours per week and more than five (5)
months in any calendar year. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds 90
days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship, for purposes of this Plan, shall be deemed to have terminated on the 91st day of such leave. 
  
 (g) “Enrollment Date” shall mean the first day of each
Offering Period. 
  
 (h) “Exercise Date” shall
consist of four days in each Offering Period. For Offering Periods beginning on the first Trading Day on or after November 1, the four 
  

 -1- 

 Exercise Dates are the last Trading Day in the period ending on (i) April 30 approximately six months later, (ii) October
31 approximately one year later; (iii) April 30 approximately 18 months later; and (iv) October 31 approximately 24 months later. For Offering Periods beginning on the first Trading Day on or after May 1, the four Exercise Dates are the last Trading
Day in the period ending on (i) October 31 approximately six months later; (ii) April 30 approximately one year later; (iii) October 31 approximately 18 months later; and (iv) April 30 approximately 24 months later year. For the purpose of
determining the Exercise Dates for the initial Offering Period under this Plan, the first Exercise Date shall be June 29, 2001, the second Exercise Date shall be November 28, 2001, and thereafter the Exercise Dates shall be determined as if such
initial Offering Period commences on November 1, 2000 thus the last Exercise Date of that Offering Period will be the last Trading Day in the period ending on October 31, 2002. For the purpose of determining the Exercise Dates for the Offering
Period beginning July 2, 2001, the first Exercise Date shall be November 28, 2001, and thereafter the Exercise Dates shall be determined as if such Offering Period commences on May 1, 2001, thus the last Exercise Date of that Offering Period will be
the last Trading Day in the period ending on April 30, 2003. For the purpose of determining the Exercise Dates for the Offering Period beginning on November 29, 2001, the Exercise Dates shall be determined as if such Offering Period commences on the
first Trading Day on or after November 1, 2001, thus the last Exercise Date of that Offering Period will be the last Trading Day in the period ending on October 31, 2003. 
  
 (i) “Fair Market Value” shall mean, as of any date, the value of Ordinary Shares determined as
follows: 
  
         (i)
If the Ordinary Shares are listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or the Nasdaq SmallCap Market, their Fair Market Value shall be the closing sales price for such
shares (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of such determination (or, if such date is not a Trading Day, then on the first Trading Day immediately prior to such date), as reported in The
Wall Street Journal or such other source as the Board deems reliable; or 
  
         (ii) If the Ordinary Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, their Fair Market Value shall be the mean of the
closing bid and asked prices for the Ordinary Shares on the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or 
  
         (iii) In the absence of an established market for the Ordinary Shares, the
Fair Market Value thereof shall be determined in good faith by the Board. 
  
         (iv) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value shall be the initial price to the public as set forth in the

  

 -2- 

 final prospectus included within the registration statement on Form S-1 filed with the Securities and Exchange Commission
for the initial public offering of the Company’s Ordinary Shares (the “Registration Statement”). 
  
 (j) “New Exercise Date” shall have the meaning set out in Section 19(b). 
  
 (k) “Ordinary Shares” shall mean the ordinary shares of Verisity Ltd. 
  
 (l) “Offering Period” shall mean overlapping periods of
approximately twenty four (24) months commencing (i) on the first Trading Day on or after each November 1 during the term of this Plan and terminating on the last Trading Day in the period ending October 31 the second following year, and (ii) on the
first Trading Day on or after each May 1 during the term of this Plan and terminating on the last Trading Day in the period ending April 30 the second following year; provided, however, that (i) the initial Offering Period under the Plan shall
commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration Statement effective and shall terminate on the last Trading Day on or before October 31, 2002; (ii) the
second Offering Period shall begin on July 2, 2001 and shall terminate on the last Trading Day in the period ending on April 30, 2003; and (iii) the third Offering Period shall begin on November 29, 2001 and shall terminate on the last Trading Day
in the period ending on October 31, 2003. The duration of Offering Periods may be changed pursuant to Section 4 of this Plan. Notwithstanding anything in this Plan to the contrary, if on any Exercise Date in an Offering Period, the Fair Market Value
of the Ordinary Shares is less than the Fair Market Value of the Ordinary Shares on the Enrollment Date of such Offering Period, the Offering Period shall terminate on the day after such Exercise Date. All Participants in such terminated Offering
Period shall be automatically enrolled in the Offering Period that is then immediately commencing. 
  
 (m) “Participant” shall mean an eligible Employee who has completed and filed an enrollment form at the time and in the manner required
by the Company for participation in the Plan. 
  
 (n)
“Plan” shall mean the Verisity Ltd. 2000 Employee Share Purchase Plan. 
  
 (o) “Purchase Price” shall mean an amount equal to 85 percent of the Fair Market Value of an Ordinary Share on the Enrollment Date or on each Exercise Date during an Offering Period, whichever is
lower; provided, however, that the Purchase Price may be adjusted by the Board pursuant to Section 20. 
  
 (p) “Reserves” shall mean the number of Ordinary Shares covered by each option under the Plan which have not yet been exercised and the
number of Ordinary Shares which have been authorized for issuance under the Plan but not yet placed under option. 
  

 -3- 

 (q) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than
50 percent of the voting shares are held by the Company or a Subsidiary of the Company, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary of the Company. 
  
 (r) “Trading Day” shall mean a day on which national stock
exchanges and the Nasdaq National Market are open for trading. 
  

	3.	Eligibility. 

  
 (a) Any Employee who shall be employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan. 
  
 (b) Any provisions of the Plan to the contrary notwithstanding, no Employee
shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose shares would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital shares of
the Company and/or hold outstanding options to purchase such shares possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital shares of the Company or of any Subsidiary, or (ii) to the extent that
his or her rights to purchase shares under the Plan (and all other employee share purchase plans of the Company and its Subsidiaries) accrues at a rate which exceeds Twenty-Five Thousand United States Dollars (US$25,000) worth of shares (determined
at the Fair Market Value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. 
  
 4. Offering Periods. The Plan shall be implemented through Offering Periods. The Board shall have the power to change the duration of future Offering
Periods (including the commencement dates thereof) without shareholder approval if such change is announced at least five (5) days prior to the beginning (or previously scheduled beginning, if earlier) of the first Offering Period to be affected.

  
 5. Participation. 
  
 (a) All eligible Employees are automatically enrolled in the Plan at the time
of its adoption. To confirm his or her level of participation, each automatic enrollee shall file an enrollment form substantially in the form of Exhibit A to this Plan by whichever is the latest of: (i) January 1, 2001; (ii) 30 days after the first
day of the initial Offering Period under this Plan; or (iii) 15 days after the securities authority in such automatic enrollee’s jurisdiction of residence has granted the Company approval under or an exemption from the provisions of the local
securities law in connection with the Plan (to the extent such exemption is legally required and provided that the Company has applied to receive such exemption on or before April 5, 2001), but in no event after April 30, 2001, and provided
however that payroll deductions for an automatic enrollee who has confirmed his or her 
  

 -4- 

 level of participation as per the above on or after April 25, 2001, shall commence on the second payroll following the
Enrollment Date. In addition to the automatic enrollees, all other eligible Employees may become Participants in the Plan by completing these enrollment forms and filing such forms with the Company’s payroll office at least ten days prior to
the applicable Enrollment Date, or at such other time (prior to the applicable Enrollment Date) as designated by the Administrator. A Participant’s enrollment form shall remain in effect automatically for each successive Offering Period
commencing at the end of the Participant’s prior Offering Period unless such enrollment is terminated as provided in Section 10. 
  
 (b) Payroll deductions for a Participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10 or otherwise as set forth in Section 6. 
  
 6. Payroll Deductions. 
  
 (a) Employees who have been automatically enrolled at the time of the Plan’s initial adoption will not be subject to payroll deductions (until the
filing of the enrollment form described above). At the time a Participant files his or her enrollment form (including an Employee who was automatically enrolled), he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation which he or she receives on each pay day during the Offering Period. Payroll deductions shall be made after taxes, even though the amount of each Participant’s
deduction shall be based on pretax income. 
  
 (b) All payroll
deductions made for a Participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A Participant may not elect to have payroll deductions in a percentage amount other than a whole number and may
not elect to make any additional payments into such account. 
  
 (c) A Participant (including an automatic enrollee under Section 5(a)) may discontinue his or her participation in the Plan as provided in Section 10, or may increase or decrease the rate of his or her payroll deductions during the Offering
Period, by completing and filing with the Company a revised enrollment form. The Board may, in its discretion, limit the number of Participant rate changes during any Offering Period. The change in rate shall be effective with the first full payroll
period following five (5) business days after the Company’s receipt of the new enrollment form unless the Board elects to process a given change in participation more quickly. 
  
 (d) Under Section 8 (Exercise of Options), any Excess Withholdings shall be returned in whole to the Participant in a single
lump sum in cash as soon as reasonably practicable after the Exercise Date. 
  

 -5- 

 (e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code
and Section 3(b), a Participant’s payroll deductions may be decreased to a smaller integer percentage including to zero percent (0%) at any time during an Offering Period. Payroll deductions shall recommence at the rate provided in such
Participant’s enrollment form on the date following an Exercise Date provided that the subsequent Exercise Date is scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 10. 
  
 (f) At the time the option is exercised, in whole or in part, or at the time
some or all of the Company’s Ordinary Shares issued under the Plan are disposed of, the Participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise
of the option or the disposition of the Ordinary Shares. At any time, the Company may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Ordinary Shares by the Participant. Notwithstanding the foregoing, the Company’s duty to perform its
obligations under this Plan are conditional upon the Participant making provision to satisfy his or her applicable tax obligations and/or liability in a manner that is acceptable to the Company. 
  
 7. Grant of Option. On the Enrollment Date of each Offering Period, each
Participant shall be granted an option to purchase on each of the Exercise Dates of such Offering Period at the applicable Purchase Price up to a number of the Company’s Ordinary Shares determined by dividing such Participant’s payroll
deductions which have been accumulated prior to such Exercise Date and retained in the Participant’s account as of the Exercise Date by the applicable Purchase Price (or as described in Section 8 below with respect to automatic enrollees).
Exercise of the option shall occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10. The option shall expire immediately after the final Exercise Date in the Offering Period. 
  
 8. Exercise of Option. Unless a Participant withdraws from the Plan as provided
in Section 10, his or her option for the purchase of shares shall be exercised automatically on each of the successive Exercise Dates in the Offering Period. On such Exercise Date, the maximum number of full shares subject to the option shall be
purchased for such Participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. Notwithstanding the preceding sentence, no shares will be purchased for an employee in an amount that would violate any
provision of the Plan or Section 423 of the Code with respect to that individual, including without limitation the provisions of Section 3(b) of the Plan. The maximum number of shares that may be purchased by any participant on any purchase date is
10,000 shares. No fractional shares shall be purchased; any payroll deductions accumulated in a Participant’s account which are not sufficient to purchase a full share shall be retained in the Participant’s account for the 
  

 -6- 

 subsequent Exercise Date or Offering Period. Any other cash left over in a Participant’s account after an Exercise
Date (including after the last Exercise Date of an Offering Period) (“Excess Withholdings”) shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after such Exercise Date, without any interest thereon.
During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by him or her. Notwithstanding the above, as no payroll deductions will be made for automatic enrollees (until they have duly filed
enrollment forms) each automatic enrollee who has not filed an enrollment form shall purchase with a lump-sum cash payment that number of whole Ordinary Shares at the Purchase Price that can be acquired with 15% of such enrollee’s Compensation
calculated from the beginning of the initial Offering Period through the initial Exercise Date. 
  
 9. Delivery. As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to each Participant, as appropriate, of a notification of the
amount of shares purchased upon exercise of his or her option. The Company may elect to deliver share certificates to the Participant representing such purchase of shares or may record such purchase and ownership of shares by any other method that
comports with applicable law. 
  
 10. Withdrawal. 

 
 (a) A Participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company substantially in the form of Exhibit B to this Plan. All of the Participant’s payroll
deductions credited to his or her account shall be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If a Participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of any succeeding Offering Period unless the Participant delivers
to the Company a new enrollment form within the time periods and in the form specified by the Company. 
  
 (b) A Participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company, or in succeeding Offering Periods which commence after the termination of the Offering Period from which the Participant withdraws provided such Participant delivers a new enrollment form. 
  
 (c ) Notwithstanding anything in the Plan to the contrary, during the time
period from June 4, 2001 until no later than 5 pm June 27, 2001, local time (where participant is located), a Participant may make a single withdrawal from Participant’s account under the Plan in an amount that leaves in Participant’s
account an amount equal to at least 1% of 
  

 -7- 

 his or her total compensation for the pay periods during which Participant has been enrolled. This is a special one-time
withdrawal, and is allowed now to enable Participants to study the implications of the plan and to modify their levels of participation accordingly. This withdrawal can be effected by filing with the local Plan administrator or payroll a physical,
signed document with the Participant’s name and the amount (stated as a whole percentage of compensation) to be retained in the account under the Plan, and indicating the percentage of compensation (in whole percentages of up to 15%) at which
payroll deductions are to be made with respect to pay periods ending after the date of the election. The Participant’s payroll deduction percentage will remain at that level until Participant files a revised enrollment form (substantially in
the form of Exhibit A to the Plan). 
  
 11. Termination of
Employment. Upon a Participant’s ceasing to be an Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such Participant’s account during the Offering
Period but not yet used to exercise the option shall be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such Participant’s option shall be automatically
terminated. The preceding sentence notwithstanding, a Participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the Participant’s customary number of hours per week of
employment during the period in which the Participant is subject to such payment in lieu of notice. 
  
 12. Interest. No interest shall accrue on the payroll deductions of a Participant in the Plan. 
  
 13. Shares. 
  
 (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section 19, the maximum number of the Company’s Ordinary
Shares which shall be made available for sale under the Plan shall be one million three hundred thousand (1,300,000) shares. If, on a given Exercise Date, the number of shares with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Board shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable. 
  
 (b) The Participant shall have no interest or voting right in shares covered
by his option until such option has been exercised. 
  
 (c) Shares
to be delivered to a Participant under the Plan shall be registered only in either the name of the Participant or in the name of the Participant and his or her spouse (or in a revocable trust established for estate planning purposes for such
Participant or for such Participant and his or her spouse). 
  

 -8- 

 14. Administration. The Plan shall be administered by the Board or, to the extent permissible by law, a
committee of Board members appointed by the Board. The Board shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the
Plan, including the power to delegate this authority to any subcommittee of the board established to administer the Plan. Every finding, decision and determination made by the Board shall, to the full extent permitted by law, be final and binding
upon all parties. 
  
 15. Designation of Beneficiary.

  
 (a) A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death. In addition, a Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option. If a Participant is married and the designated beneficiary is not the spouse, an executed spousal consent form
shall be required for such designation to be effective. 
  
 (b)
Such designation of beneficiary may be changed by the Participant at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such
Participant’s death, the Company shall deliver such shares and cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in
its discretion, may deliver such shares and cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

  
 16. Transferability. Neither payroll deductions credited to a
Participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw in accordance with
Section 10. 
  
 17. Use of Funds. All payroll deductions received or
held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. 
  
 18. Reports. Individual accounts shall be maintained for each Participant in the Plan. Statements of account shall be given to
participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any. 
  

 -9- 

 19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.

  
 (a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the Reserves, the maximum number of shares each Participant may purchase per Exercise Date (pursuant to Section 7) and the price per share and number of Ordinary Shares covered by each option under the Plan
which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Ordinary Shares resulting from a share split, reverse share split, share dividend, bonus shares, recapitalization,
combination or reclassification of the Ordinary Shares, or any other increase or decrease in the number of Ordinary Shares effected without receipt of consideration by the Company; provided, however, that 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 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 Ordinary Shares subject to an
option. 
  
 (b) Dissolution or Liquidation. In the event of
the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of
such proposed dissolution or liquidation, unless provided otherwise by the Board. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation. The Board shall notify each Participant in writing, at least
ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option shall be exercised automatically on the New Exercise
Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10. 
  
 (c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the option, the Offering Period then in progress shall be shortened by setting a New Exercise Date and following the procedures set out in Section 19(b), above. 
  
 20. Amendment or Termination. 
  
 (a) The Board may at any time and for any reason terminate or amend the Plan.
Except as provided in Section 19, however, no such termination shall affect options 
  

 -10- 

 previously granted, except that the Board may terminate an Offering Period on any date if it determines that such
termination is in the best interests of the Company and its shareholders. Except as provided in Section 19 and Section 20, no amendment may make any change in any option theretofore granted which adversely affects the rights of any Participant.

  
 (b) Without shareholder consent and without regard to whether
any Participant rights may be considered to have been adversely affected, the Board shall be entitled to change the Offering Periods, revise the Exercise Dates, limit the permitted frequency and number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the
Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and accounting and crediting procedures to ensure that amounts applied toward the purchase of Ordinary Shares for each
Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Board determines in its sole discretion advisable and which are consistent with the Plan.

  
 (c) In the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion, modify or amend the Plan to reduce or eliminate such accounting consequences, including, but not limited to: 
  
         (i) altering the Purchase
Price applicable during any Offering Period including an Offering Period underway at the time of the change in Purchase Price; and 
  
         (ii) shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an
Offering Period underway at the time of the Board action. 
  
 Any such
modifications or amendments under this Section 20 shall not require shareholder approval or the consent of any Plan Participants unless otherwise required under Section 423 of the Code or any other applicable law, regulation or stock exchange rule.

  
 The Board may from time to time designate a Subsidiary as a Designated
Subsidiary wherein Employees of the Designated Subsidiary will participate in this Plan. However, if application of the Plan to any Designated Subsidiary operates to compromise or violate the equal rights and privileges requirement under Section
423, due to operation or requirements of governing law in the jurisdiction of such Subsidiary or any other reason, then that Designated Subsidiary will automatically be removed from the Plan and any Employees of such Subsidiary will be terminated
from the Plan. 
  

 -11- 

 21. Notices. All notices or other communications by a Participant to the Company under or in connection
with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
  
 22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the Israeli Securities Law, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or national market system upon which the shares may then be listed.

  
 As a condition to the exercise of an option, the Company may require the
person exercising such option to make such representations and warranties at the time of any such exercise that the Company determines are required under any applicable law including, but not limited to, that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares. 
  
 23. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 20. 
  
 24. General
Provisions. 
  
 (a) Nothing in the Plan shall
confer upon any Participant any right to continue in the employ of the Company or any affiliate of the Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any affiliate of the
Company employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause. 
  
 (b) With respect to any Participant who is an employee of Verisity Design,
Inc., the provisions of the Plan shall be governed by the laws of the State of California without resort to that state’s conflict-of-laws rules. With respect to all other Participants, the provisions of the Plan shall be governed by the laws of
the State of Israel without resort to that state’s conflict-of-law’s rules. NOTWITHSTANDING ANYTHING ABOVE TO THE CONTRARY, THE
PARTIES ACKNOWLEDGE AND AGREE THAT THE RELATIONSHIP OF ALL PARTICIPANTS AS
SHAREHOLDERS OF THE COMPANY, INCLUDING WITHOUT LIMITATION ALL OF THEIR RIGHTS
AND DUTIES ARISING UNDER THE COMPANY’S ARTICLES OF ASSOCIATION, SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF ISRAEL, AND EACH
SUCH PARTICIPANT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF ISRAEL LOCATED IN TEL AVIV, IN RESPECT OF ANY DISPUTE
OR MATTER ARISING OUT OF OR CONNECTED WITH SUCH RELATIONSHIP AND THE
ARTICLES. 
  

 -12- 

 EXHIBIT A 
  
 VERISITY LTD. 
 2000 EMPLOYEE SHARE PURCHASE PLAN 
  
 ENROLLMENT FORM 
  

	              Original Application 
	 Enrollment Date:
                         

  

	              Change in Payroll Deduction Rate

	 Dated:
                         

  
              Change of Beneficiary(ies)

  
 1. I,
                                        
                , hereby elect to participate in the Verisity Ltd. 2000 Employee Share Purchase Plan (the “Employee Share Purchase Plan”) and subscribe to
purchase shares of the Company’s Ordinary Shares in accordance with this Enrollment Form and the Employee Share Purchase Plan. 
  
 2. I hereby authorize payroll deductions from each paycheck in the amount of             % of
my Compensation on each payday (from 1 to 15%) during the Offering Period in accordance with the Employee Share Purchase Plan. (Please note that no fractional percentages are permitted.) 
  
 3. I understand that said payroll deductions shall be accumulated for the purchase of Ordinary Shares at the applicable
Purchase Price determined in accordance with the Employee Share Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option on each Exercise Date
during the Offering Period. 
  
 4. I have received a copy of the
complete Employee Share Purchase Plan. I understand that my participation in the Employee Share Purchase Plan is in all respects subject to the terms of the Plan. I understand that my ability to exercise the option under this Subscription Agreement
is subject to shareholder approval of the Employee Share Purchase Plan. 
  
 5. Shares purchased for me under the Employee Share Purchase Plan should be issued in the name(s) of (Employee or Employee and Spouse
only):                                       
                                        
                                        
 . 
  
 6. I understand that if I dispose of any shares
received by me pursuant to the Plan within two years after the Enrollment Date or within one year of the 
  

 -13- 

 Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such
disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares. I hereby agree to notify the Company in writing within 30 days after the
date of any disposition of shares and I will make adequate provision for Federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Ordinary Shares. The Company may, but will not be obligated to, withhold
from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Ordinary Shares
by me. If I dispose of such shares at any time after the expiration of the holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will
be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair
market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 
  
 7. I hereby agree to be bound by the terms of the Employee Share Purchase Plan. The effectiveness of this Enrollment Form is
dependent upon my eligibility to participate in the Employee Share Purchase Plan. 
  
 8. In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Employee Share Purchase Plan. 
  

	
	 Name (Please print):
  
  

	
 (First)        
(Middle)             (Last) 

	  
  
  

	 Relationship
  
  

	 
	
 (Address)

	 

  

 -14- 

 I UNDERSTAND THAT THIS ENROLLMENT FORM SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY
ME. 
  
  

			
	
 Signature of Employee
  

 
	  	
 Spouse’s Signature (If beneficiary other than spouse)

	 Employee’s Social Security or Tax ID
Number:                            
  
	  	 
	 Employee’s Address:
  
  

  
  

	  	 

  

 -15- 

 EXHIBIT B 
  
 VERISITY LTD. 
 2000 EMPLOYEE SHARE PURCHASE PLAN 
  
 NOTICE OF WITHDRAWAL 
  
 The undersigned Participant in the Offering Period of the Verisity Ltd. 2000 Employee Share Purchase Plan which began on
            ,              (the “Enrollment Date”) hereby notifies the Company that he or she hereby withdraws from the
Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that
his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be
eligible to participate in succeeding Offering Periods only by delivering to the Company a new Enrollment Form. 
  

	
	 Name (Please print):
  
  

	 (First)        
(Middle)             (Last) 
  
  

	
 (Address)
  
  
  

	 
	 Signature:
  
  

  

	 Date:                                     
                                        
                                        
                                        
                                        
                                        
         

	 

  

 -16-

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