Document:

Exhibit
10.2

 

Termination Agreement

Made on April 20, 2005

Between

Ness Technologies Inc. (“the
Company”)

And

Yaron Garmazi (“the Executive”)

 

WHEREAS – the Executive informed the Company that he desires to
voluntarily leave his position; and

 

WHEREAS; the parties wish to define the various terms relating to the
termination of the Executive’s employment;

 

It is therefore agreed as follows:

 

1.               The Executive will
resign as Chief Financial Officer on May 20, 2005.

 

2.               The Executive will
continue to provide consulting services to the Company from time to time as
requested by the Company until September 20, 2005 (the “Termination Date”).
The scope of the services will be agreed between the parties.

 

3.               The Executive will
be entitled to his salary and benefits to which he is currently entitled
(unless such benefits are terminated for all Company executives) until
Termination Date. On the Termination Date, the Company will release to the
Executive his mangers insurance policy (including any severance payment components)
and the advanced studies fund and will redeem all unused vacation days.

 

4.               The Executive may
continue to use the Company’s car, phone and laptop currently in his possession
until the earlier of the Termination Date or upon his employment by another entity.

 

5.               The Executive will
be entitled to a bonus of the NIS equivalent of 31,000 USD for 2004 and a bonus
of the NIS equivalent 44,000 USD for 2005.

 

6.               Through and
including 31/1/07, the Executive will be entitled to exercise any options
granted to him that shall be vested by the Termination Date.  All unvested options shall terminate on the
Termination Date.

 

7.               The Company
will  obtain a directors and executive
insurance policy substantially in the same terms as the current policy that
shall cover the Executive during the period commencing on the Termination Date
and expiring on the seventh anniversary of the Termination Date.

 

8.               Any employment or
other agreements except the indemnification agreement dated 29/9/04 with the
Company will terminate and be of no force and effect as of May 20, 2005.

 

9.               The Executive, in
consideration of the benefits provided hereby irrevocably waives any and all
claims against the Company, its officers or directors other than for claims if
any that may arise if the Company does not fulfill its obligations under the
Agreement.

 

IN WITNESS WHEREOF,
the parties have executed this Agreement on the date first above written.

 

 

	
  /s/ YARON
  GARMAZI

  	
   

  	
  /s/ RAVIV
  ZOLLER

  	
   

  
	
  Yaron Garmazi

  	
   

  	
  Ness Technologies Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ AHARON
  FOGEL

  	
   

  
	
   

  	
   

  	
  Ness Technologies Inc.Exhibit
10.3

 

EMPLOYMENT
AGREEMENT

 

THIS AGREEMENT
is made on the 21 of April 2005.

 

BETWEEN:

 

Ness Technologies, Inc.

A Delaware Corporation

With offices at Kiryat Atidim,

Tel Aviv, Israel (the “Company”)

 

Mr. Ytzhak Edelman

 

Israel (the “Executive”)

 

WHEREAS, the Company desires to employ the
Executive as the CFO of the Company and the Executive is willing to commit
himself to be employed by the Company; and

 

WHEREAS, the parties desire to enter
into this Agreement setting forth the terms and conditions of the employment
relationship of the Executive with the Company;

 

NOW, THEREFORE,
in consideration of the premises and the mutual agreements set forth below, and
intending to be legally bound, the parties hereto hereby agree as follows:

 

1.                                       Personal Employment Agreement.  This Employment Agreement is the only
agreement, which shall govern the relations between the Company and the
Executive, and shall exclusively determine the Executive’s terms of employment
by the Company.  This Agreement shall be
binding upon the parties, and shall not be subject to any other agreements or
arrangements of any kind.

 

2.                                       Term. 
The period of employment of the Executive by the Company hereunder (the “Employment
Period”) shall commence on June 1, 2005 (the “Effective Date”) and shall
end on February 1st, 2007 (the “Initial Period”), provided,
however, that the Employment Period shall automatically be extended for
successive one year periods (each a “Renewal Period”) unless either of the
parties shall give to the other party written notice of its desire not to so
extend the Employment Period no later than six (6) months prior to the
expiration of Initial Period or the Renewal Period, as the case may be.

 

3.                                       Position and Duties.

 

(a)                                  During
the Employment Period, the Executive shall serve as the Chief Financial Officer
of the Company and a member of the executive management, and in addition will
be responsible for M&A and capital market matters and shall provide to the
company such other services reasonably related to his position, as he shall be
requested from time to time by the

 

 

Company.
The parties will review the executive’s title and position shall be upgraded
not later then 1.1.2006.

 

(b)                                 The
Executive agrees to devote all of his working time and efforts to the
performance of his duties for the Company.

 

(c)                                  The
Executive’s services are included among the positions of management and the
positions requiring a special degree of personal trust and the Company is not
able to supervise the number of working hours of the Executive.  Accordingly, the provisions of the Hours of
Work and Rest Law 1951 will not apply to the Executive and he will not be
entitled to any additional remuneration whatsoever for his work with the
exception of that specifically set out in this Agreement.

 

4.                                       Compensation and Related Matters.

 

(a)                                  Monthly Salary.  As compensation for the performance by the
Executive of his obligations hereunder, during the Employment Period, the
Company shall pay the Executive a monthly salary of 75,000 NIS which sum shall
be adjusted at the time of each payment of the salary in accordance with the
changes in the Israeli Consumer Price Index (basic index published on May 15th
2005) (the “Monthly Salary”). It is hereby stated that such adjustment to the
CPI shall be deemed to include any incremental cost of living addition to which
the executive may become entitled and that the Executive shall not be entitled
to such additions. Once a year the parties will review the Executive salary.

 

In any event the executive salary shall not be less then 75,000 NIS.

 

(b)                                 Gross Salary.  The Monthly Salary represents the Executive’s
gross salary, and includes all of the salary components and various supplements
and benefits and/or all supplements under any law and/or expansion order and/or
any special or general collective bargaining agreement that may apply to the
relations between the Company and the Executive.  It is hereby acknowledged and agreed that all
payments to the Executive by the Company, including, without limitation, the
Monthly Salary and other benefits and payments of any kind, as provided in this
Agreement are, unless otherwise required by law, stated in gross figures, and
there shall be deducted therefrom all relevant taxes and/or charges that shall
apply to them, at the time of their payment, pursuant to any applicable law.

 

(c)                                  Options.  The Executive shall be entitled to 125,000
options to purchase shares of Common Stock of the Company as shall be set forth
in Exhibit A, in accordance with the terms of the option agreement, in the
form attached hereto as Exhibit A. 
It is hereby clarified that such options shall be at all times subject
to the Company’s Employee Share Option Plan and the applicable provisions of
the Israeli Tax Code and any rules and regulations promulgated thereunder Upon
a Change of Control (as this term is defined in the option plan) all the
unvested options shall be vested and exercisable.

 

 

(d)                                 Bonus. 
The Executive shall be entitled to a Bonus equal to 90% - 95% (per the
discretion of the Compensation Committee of the Company’s Board of Directors)
of the CEO’S bonus for the relevant year. In the event that the Company shall
employ the Executive only during part of a fiscal year, the bonus shall be paid
in part, in proportion to that part of the fiscal year during which the
Executive was employed hereunder. All bonuses are gross and subject to tax,
payable in NIS and are not part of the Executive regular salary.

 

(e)                                  Expenses. The Company shall promptly
reimburse the Executive for all reasonable business expenses incurred during
the Employment Period by the Executive in performing services hereunder,
including all expenses of travel and living expenses while traveling on
business or at the request of and in the service of the Company, provided that
such expenses are incurred and accounted for in accordance with the policies
and procedures established by the Company, including the submission to the
Company of appropriate vouchers or receipts for such expenses.

 

(f)                                    Company Car. The Executive shall be
entitled to the use of a Company car, in accordance with the Company’s policy
and as customary for executives of the Company. 
The Company shall pay all expenses in connection with the car, and shall
reimburse the Executive for all income taxes imposed in connection with his use
of the car by way of grossing up (“GILUM”)

 

(g)                                 Managers Insurance Policy.  During the Employment Period, the Company
shall contribute to an insurance company as part of a Managers Insurance
Policy, which shall be the property of the Company an amount equal to 131/3% of
the Monthly Salary (out of which 5% shall be for provident funds and 8 1/3%
shall serve to cover severance compensation). The executive shall have the
right to allocate the contribution of the above-mentioned 131/3% between Managers
Insurance Policy program and a Pension fund. In the event due to applicable tax
law or regulation, the executive shall not be entitled to deduct any part of
the above mentioned 131/3% contribution, the executive shall have the right to
receive this part of the contribution as part of his salary (similar to the
equivalent treatment of advanced study fund (“Keren
Hishtalmut”). Any tax payable in respect of such contributions to
the insurance company shall be paid by the Executive.  The aforementioned allocations shall be in
lieu of severance pay according to the Severance Pay Law, 1963. The policy will
include irrevocable instructions of the Company for an automatic transfer of
title upon termination of employment for any reason other than termination by the
Company pursuant to Art. 5 (c) (III) below.

 

(h)                                 Disability Insurance.  In addition to the foregoing, during the
Employment Period the Company will bear the cost of disability insurance with
an insurance company, which secures a monthly payment to the Executive.  In any event the amount paid by the Company
for such insurance shall not exceed 2.5% of the Executive’s gross salary.

 

(i)                                     Advanced Study Fund.  The Company shall, during the Employment
Period, make monthly contributions on behalf of the Executive to a recognized
Advanced Study Fund in an amount equal to 7.5% of the Executive’s salary. Any
tax payable in respect of such contributions to such fund shall be paid by the
Company. In addition

 

 

the Company shall
deduct 2.5% from the Executive’s salary which deduction shall also be paid to
such Fund.

 

(j)                                     Vacation.  The Executive shall be entitled to vacation
days and to compensation in respect of earned but unused vacation days,
determined in accordance with the Company’s vacation plan (currently 24 working
days per year that can be aggregated for up to two years (up to 48 days)[“The
Aggregating Period”].  Official state
holidays in Israel shall not be considered as vacation days. Within the
Aggregating Period the company shall not obligate the Executive to leave for
vacation including during the Notice Period.

 

(k)                                  Medical Examination.  The Company shall pay for one annual medical
examination of the Executive, to be performed at a medical center of the
Executive’s choice, provided that the cost of such examination shall not exceed
the cost of a similar examination at the Tel-HaShomer hospital.

 

(l)                                     Alternative Allocation of Payments.  At the Executive’s request, the Company shall
modify the payments and benefits set forth in this Section 4 by increasing
certain payments and benefits and decreasing others, in accordance with the
Executive’s request, provided, however, that all such modifications shall not
result in any increase to the overall cost to the Company of the Executive’s
employment (including costs in connection with future entitlements of the
Executive or his heirs).

 

(m)                               Daily Newspaper. The Executive shall be
entitled to the “Globes” newspaper and or a daily newspaper on the Company’s
account.

 

(n)                                 Insurance and Indemnification. The
company undertakes to take all necessary steps and actions in order to (1)
include the executive under the directors’ and officers’ insurance policy
providing sufficient insurance coverage and (2) Providing him with full
indemnification. Both insurance and indemnification shall be in full force and
effect for the Term of his employment by the company plus additional seven
years.

 

5.                                       Termination.  The Executive’s employment hereunder may be
terminated, in which case the Employment Period shall end, under the circumstances
set forth below:

 

(a)                                   Death.  The Executive’s employment hereunder shall
terminate upon his death.

 

(b)                                  Disability.  If, as a result of the Executive’s incapacity
due to physical or mental illness or injury, the Executive shall have been
absent from the performance of his duties hereunder for a period of six
consecutive months or 180 days within a one year period, the Company may
terminate the Executive’s employment hereunder for “Disability.”

 

(c)                                   Cause.  The Company may terminate the Executive’s employment
hereunder for Cause.  For purposes of
this Agreement, the Company shall have “Cause” to

 

 

terminate the
Executive’s employment hereunder upon the occurrence of any of the following
events:

 

(i)                                     The
conviction of the Executive for the commission of a felony; or

 

(ii)                                  An
event constituting a material breach of this Agreement by the Executive,
including, but not limited to, breach by the Executive of the provisions of Section 3
hereof, that has not been fully cured within seven (7) days after written
notice thereof has been given by the Company to the Executive; or

 

(iii)                               Serious
misconduct by the Executive (including, but not limited to, breach by the
Executive of the provisions of Section 7 hereof) that is injurious to the
Company or its subsidiaries or any other member of the Group, whether
monetarily or otherwise.

 

(d)                                 Termination by the Company.
Notwithstanding the foregoing, the Company may terminate the Executive’s
employment during the Employment Period at any time for any reason whatsoever,
subject to a prior written notice delivered by the Company to the Executive,
which shall take effect as set forth in Section 6(b) (b1) (iv) below.

 

(e)                                  Termination by the Executive .  The Executive may terminate his employment
during the Employment Period hereunder, subject to a prior written notice
delivered by the Executive to the Company, which shall take effect as set forth
in Sections 6(b) (b1) (iv) and 6(b) (b2) below.

 

6.                                      Termination Procedure.

 

(a)                                  Notice of Termination.  Any termination of the Executive’s employment
by the Company or by the Executive (other than termination pursuant to Section 5(a)
hereof) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 9. 
For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable details the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.

 

(b)                                 Date of Termination. (b1) “Date of
Termination” shall mean (i) if the Executive’s employment is terminated by his
death, the date of his death, (ii) if the Executive’s employment is terminated
for Disability pursuant to Section 5(b) above, thirty (30) days after
Notice of Termination, (iii) if the Executive’s employment is terminated
pursuant to Section 5(c), six months after the date of Notice of
Termination, except for in the event of Termination pursuant to Article 5
(c) (iii) above (in which case the termination will be effective upon delivery
of the notice) and (iv) if the Executive’s employment is terminated pursuant to
Section 5(d) eighteen (18) months after the date of Notice of Termination
(v) ) if the Executive’s employment is terminated pursuant to Section 5  (e) above,six (6) months after the delivery
of Notice of Termination. (b2) Upon a Change of Control or in case of
termination by either party after January 31st, 2007 the notice
period under section (v) will be extended to 18 months. (b3) It is hereby
agreed, that until the Date of Termination employer’s – employee’s relationship
shall

 

 

be in full force and effect and to avoid doubt it is hereby
specifically provided that the Executive shall be entitled until the date of
termination to the relevant part of his bonus regarding the above mentioned
notice period and the use of the company’s car.

 

For the purpose of this Section, “Change of Control” shall have – the
following – meanings: (i) as this term is defined in the company’s option plan
and (ii) the replacement of the person currently serving as the Chairman of the
Board of Directors and the replacement of the person currently serving as the
President and CEO.

 

(c)                                  Termination by Company for Cause.  If the Executive’s employment shall be
terminated by the Company for Cause, then the Company shall pay the Executive
his Monthly Salary (at the rate in effect at the time Notice of Termination is
given) and all other unpaid amounts and benefits through the Date of
Termination.  The Executive shall be
entitled to amounts deposited in pension programs for severance pay, except for
in the event of Termination pursuant to Article 5 (c) (iii) above. The
Company shall have no additional obligations to the Executive under this
Agreement except as set forth in this Section 6(c).

 

(d)                                 Deposits to Pension Programs.  Upon
the termination of the Executive’s employment, provided that such termination
was not pursuant to Article 5 (c) (iii) above, the Executive shall be
entitled to all amounts deposited in his favor in pension programs, including
payments made for severance pay.

 

7.                                       Confidential Information; Noncompetition.

 

(a)                                  Confidential Information.  In consideration of the Company’s agreements
hereunder, and in further consideration of the benefits accruing to the
Executive hereunder, the Executive hereby agrees that he shall not, directly or
indirectly, disclose or use at any time, either during or subsequent to the
Employment Period, any trade secrets or other confidential information, whether
patentable or not, of the Company, its subsidiaries or its affiliates now or
hereafter existing, including but not limited to, any (i) processes, formulas,
trade secrets, innovations, inventions, discoveries, improvements, research or
development and test results, specifications, data and know-how; (ii) marketing
plans, business plans, strategies, forecasts, unpublished financial
information, budgets, projections, product plans and pricing; (iii) personnel
information, including organizational structure, salary, and qualifications of
employees; (iv) customer and supplier information, including identities,
product sales and purchase history or forecasts and agreements; and (v) any
other information (collectively, “Confidential Information”), of which the
Executive is or becomes informed or aware during the Employment Period, whether
or not developed by the Executive, except (A) as may be reasonably required for
the Executive to perform the Executive’s employment duties with the Company,
(B) to the extent such information becomes generally available to the public
through no wrongful act of the Executive, (C) information which has been
disclosed without restriction as a result of a subpoena or other legal process,
after the Company has had the opportunity to request a suitable protective
order for such information, or (D) with the Company’s prior written
authorization.  This covenant shall
survive the termination of the Executive’s employment hereunder for a period of
three year after termination.  The
Executive agrees to execute such further agreements and/or confirmations of the
Executive’s obligations to the Company

 

 

concerning
non-disclosure of Confidential Information as the Company may reasonably
require from time to time.  Upon
termination of the Employment Period, the Executive shall promptly deliver to
the Company all physical and electronic copies and other embodiments of
Confidential Information.

 

(b)                                 Noncompetition Covenant.  The Executive agrees that at all times during
the Employment Period and thereafter until the first anniversary of the
termination or expiration of the Employment Period (the “Noncompetition Period”),
the Executive shall not, except on behalf of the Company, directly or
indirectly, allow his name to be used by or Participate in any Competitive
Business (as each of such terms is defined below).  For purposes of this Agreement, (A) the term “Participate”
means to have any direct or indirect interest, participation or involvement,
whether as an officer, director, employee, partner, sole proprietor, agent,
representative, independent contractor, consultant, franchiser, franchisee,
creditor, owner, stockholder or otherwise; provided, however,
that the foregoing shall not prevent the Executive from investing in publicly
traded securities issued by any corporation, provided the holdings thereof by
the Executive do not constitute more then five percent (5%) of outstanding
shares so long as the Executive does not have any participation in the business
management of such entity; and (B) the term “Competitive Business” means any
enterprise, venture or proprietorship engaged in or which proposes to engage in
the development, manufacture, sale, licensing and/or distribution of any
information, products and/or services that are the same as or substantially
similar to information, products and/or services provided (or in development
and proposed to be provided) by any business unit or division within the
Company or the Group;

 

(c)                                  Non Solicitation of Employees.  The Executive recognizes that he will possess
confidential information about other executives and employees of the Company,
its subsidiaries and affiliates relating to their education, experience,
skills, abilities, compensation and benefits, and inter-personal relationships
with customers of the Company, its subsidiaries and affiliates.  The Executive recognizes that the information
he will possess about these other employees is not generally known, is of
substantial value to the Company, its subsidiaries and affiliates in developing
their businesses and in securing and retaining customers, and has been and will
be acquired by him because of his business position with the Company, its
subsidiaries and affiliates.  The
Executive agrees that, during the Employment Period and the Noncompetition
Period, he will not, directly or indirectly, solicit or recruit any employee of
the Company or its subsidiaries (hereinafter- the Group) for the purpose of
being employed by him or by any competitor of the Company or of the Group on
whose behalf he is acting as an agent, representative or employee and that he
will not convey any such confidential information or trade secrets about other
employees of the Company or the Group to any other person.

 

(d)                                 Ownership of Developments.  Any invention, improvement, design,
development or discovery conceived, developed, created or made by Executive
alone or with others, during the period of his employment hereunder and
applicable to the business of the Company, whether or not patentable or
registrable, shall become the sole and exclusive property of the Company.  Executive shall disclose the same promptly
and completely to the Company and shall, during the period of his employment
hereunder and at any time and from time to time hereafter (i) execute all
documents requested by the Company for vesting in the Company the entire right,
title and interest in and to the same, (ii) execute all documents requested by
the Company for filing and prosecuting such applications for patents, trademarks
and/or copyrights

 

 

as the Company, in its sole discretion, may desire to prosecute, and
(iii) give the Company all assistance it reasonably requires, including the
giving of testimony in any suit, action or proceeding, in order to obtain,
maintain and protect the Company’s right therein thereto.

 

In
the event that the Company is unable to secure the signature of Executive on
any document necessary to apply for, prosecute, obtain, or enforce any patent,
copyright, trademark or other similar right, whether due to mental or physical
incapacity or any other cause, Executive hereby irrevocably designates and
appoints the Company and each of its duly authorized officers, as his agent and
attorney in fact, to act for and in his behalf and stead, to execute and file
any such document and to do all other lawfully permitted acts to further the
prosecution, issuance, and enforcement of patents, copyrights, trademarks, or
other rights of protection with the same force and effect as if executed and
delivered by Executive.

 

8.                                       Assignment; Successors.

 

As used in this Agreement, “Company” and “Group”
shall mean as defined above and any successor (whether direct or indirect, by
purchase, merger, consolation or otherwise) to all or substantially all of the
business and/or assets of the Company or the Group or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.

 

This Agreement is a personal contract and,
except as specifically set forth herein, or by law, Executive’s rights and
obligations hereunder may not be sold, transferred, assigned, pledged or
hypothecated by Executive.  This
Agreement shall be binding upon Executive, and shall inure to the benefit of
his heirs, executors and administrators, and upon the Company, its successors
and assigns.

 

The rights and obligations of the Company
hereunder may, in whole or in part, be sold, transferred or assigned by the
Company to any affiliated or successor corporation; provided, however,
that any such transfer will not relieve the Company of its obligations
hereunder.

 

9.                                       Notice. 
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
ten (10) days after having been mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:

 

	
  If to the Executive:

  
	
   

  
	
   

  
	
  If to the Company:

  
	
  Kiryat
  Atidim,Tel Aviv, Israel Att. Raviv Zoller, CEO&President

  

 

or
to such other address as any party may have furnished to the other in writing
in accordance therewith, except that notices of change of address shall be
effective only upon receipt.

 

 

10.                                 Choice of Law.  This Agreement and the legal relations
between the parties hereto shall be governed by and in accordance with the laws
of the State of Israel.

 

11.                                 Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

12.                                 Waiver. 
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times.

 

13.                                 Miscellaneous.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company.

 

14.                                 Validity.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.  Upon
determination that any term or other provision is invalid, illegal or incapable
of being enforced, this Agreement shall be modified so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by applicable law.

 

15.                                 Entire Agreement.  This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of the Company or any party hereto;  Any modifications
to this Agreement can only be made in writing signed by the Executive and an
appropriate Company Officer.

 

IN WITNESS WHEREOF,
the parties have executed this Agreement on the date first above written.

 

 

	
   

  	
  Ness Technologies, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE: April 21, 2005

  	
  BY: 

  	
  /s/ RAVIV
  ZOLLER

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Raviv Zoller

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ AHARON
  FOGEL

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Aharon Fogel

  
	
   

  	
   

  	
  Title: 

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATE: April 21, 2005

  	
   

  	
  /s/ YTZHAK
  EDELMAN

  	
   

  
	
   

  	
   

  	
  Ytzhak Edelman

  	
   

  
					

 

 

EXHIBIT
A

 

 

Executive
Option Agreement

 

 

NESS TECHNOLOGIES INC.

 

OPTION AGREEMENT

 

Made as of the    
day of June, 2005

 

	
  BETWEEN:

  	
  Ness Technologies Inc.

  
	
   

  	
   

  
	
  A Delaware Corporation
  having offices at Kiryat Atidim, Tel Aviv,
  Israel

  
	
   

  
	
  (hereinafter the “Company”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  on the one part

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AND:

  	
  Name Ytzhak Edelman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  I.D. No.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (hereinafter the “Optionee”)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  on the other part

  

 

WHEREAS                                  On
August 2003, the Company duly adopted and the Board approved the 2003
Israeli Share Option Plan, a copy of which is attached as Exhibit A hereto, forming an integral part
hereof (the “ISOP”); and -

 

WHEREAS                                  Pursuant to the ISOP,
the Company has decided to grant Options to purchase Shares of the Company to
the Optionee, and the Optionee has agreed to such grant, subject to all the
terms and conditions as set forth in the ISOP and as provided herein;

 

NOW, THEREFORE, it is agreed as follows:

 

1.                                      Preamble and
Definitions

 

1.1                                 The preamble to this
agreement constitutes an integral part hereof.

 

 

1.2                                 Unless otherwise
defined herein, capitalized terms used herein shall have the meaning ascribed
to them in the ISOP.

 

2.                                      Grant of
Options

 

2.1                                 The Company hereby
grants the Optionee Options in a number set forth in Section 1 of Exhibit B hereto (the “Options”), each Option
exercisable for one ordinary (common) share of par value of 0.01$ per share,
taken from the total number of shares reserved for purposes of the Option Plan
in the Company’s authorized capital (the “Share”), to purchase Shares
at a price per Share set forth in Section 2 of such Exhibit B (the “Purchase Price”), on the terms and
subject to the conditions hereinafter provided.

 

The Option Price will be paid in NIS in accordance with the
representative rate of exchange of the U.S. dollar, published by the Bank of
Israel and known on the date of giving the notice of exercise (as set forth in Section 6.1
hereinafter).

 

2.2                                 The Optionee is aware that
the Company intends to issue additional shares in the future to various
entities and individuals, as the Company in its sole discretion shall
determine.

 

3.                                      Period of
Option and Conditions of Exercise

 

3.1                                 The terms of this
Option Agreement shall commence on the date hereof (the “Date of Grant”) and terminate at
the Expiration Date (as defined in Section 2.12 in the ISOP), or at the
time at which the Option expires pursuant to the terms of the ISOP or pursuant
to this Option Agreement.

 

3.2                                 Options may be
exercised by the Optionee in whole or at any time or in part from time to time,
as determined by the Board, and to the extent that the Options become vested
and exercisable, prior to the Expiration Date, and provided that, subject to
the provisions of Section 10.5 of the ISOP and to Exhibit B, the Optionee is an
employee or providing services to the Company or any of its Affiliates, at all
times during the period beginning with the granting of the Option and ending
upon the date of exercise. It is agreed that the provisions of Section 10.5  of the ISOP regarding immediate expiry of
unexercised options upon termination for cause will only be applicable in case
of termination pursuant to section 5 (c) (iii) of the Employment
Agreement.

 

3.3                                 The Options may be
exercised only to purchase whole Shares, and in no case may a fraction of a
Share be purchased. If any fractional Shares would be deliverable upon
exercise, such fraction shall be rounded up one-half or more, or otherwise
rounded down, to the nearest whole number.

 

 

4.                                      Adjustments

 

Notwithstanding anything to the contrary in Section 9.5
of the ISOP and in addition thereto, if in any such Change in Control as
described in Section 9.5 of the ISOP, the Successor Company (or parent or
subsidiary of the Successor Company) does not agree to assume or substitute for
the Options, the Vesting Dates shall be accelerated so that any unvested Option
shall be immediately vested in full as of the date which is ten (10) days prior
to the effective date of the Change in Control, and the Committee shall notify
the Optionee that the unexercised Options are fully exercisable for a period of
ten (10) days from the date of such notice, and that any unexercised Options
shall terminate upon the expiration of such period.

 

If the successor Company (or parent or
subsidiary of the Successor Company) agrees to assume or substitute for the
Options and Optionee’s employment with the Successor Company is terminated by
the Successor Company without “Cause” within one year of the closing of such
Change in Control, the Vesting Dates shall be accelerated so that any unvested
portion of the substituted Option shall be immediately vested in full as of the
date of such termination without Cause.

 

5.                                      Vesting; Period
of Exercise

 

Subject to the provisions of the ISOP, Options shall vest
and become exercisable according to the Vesting Dates set forth in Exhibit B hereto, provided that
the Optionee is an Employee of or providing services to the Company and/or its
Affiliates on the applicable Vesting Date.

 

All unexercised Options granted to the
Optionee shall terminate and shall no longer be exercisable on the Expiration
Date, as described in Section 2.12 of the ISOP.

 

6.                                      Exercise of Options

 

6.1                                 Options may be
exercised in accordance with the provisions of Section 10.1 of the ISOP.

 

6.2                                 In
order for the Company to issue Shares upon the exercise of any of the Options,
the Optionee hereby agrees to sign any and all documents required by any
applicable law and/or by the Company’s incorporation documents. The Optionee
further agrees that in the event that the Company and its counsel deem it
necessary or advisable, in their sole discretion, the issuance of Shares may be
conditioned upon certain representations, warranties, and acknowledgments by
the Optionee.

 

6.3                                 Deleted.

 

6.4                                 The
Company shall not be obligated to issue any Shares upon the exercise of an
Option if such issuance, in the opinion of the Company, might constitute a
violation by the Company of any provision of law.

 

 

6.5                                 Each
Option shall be subject to the further requirement that, if at any time the
Board (or, following its appointment, the Committee) shall determine in its
discretion that the listing or qualification of the shares of common stock
subject to such Option under any securities exchange requirement or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary as a condition of, or in connection with, the granting of such
Option or the issue of Shares thereunder, such Option may not be exercised in
whole or in part, unless such listing, qualification, consent or approval shall
have been affected or obtained free of any conditions not acceptable to the
Board.

 

7.                                      Restrictions on Transfer of Options and
Shares

 

7.1                                 The
transfer of Options and the transfer of Shares to be issued upon exercise of
the Options shall be subject to the limitations set forth in the ISOP and in
the Company’s incorporation documents, in any shareholders’ agreement to which
the holders of ordinary shares of the Company are bound or in or in any
applicable law including securities law of any jurisdiction.

 

7.2                                 With respect to any
Approved 102 Option, subject to the provisions of Section 102 and any
rules or regulation or orders or procedures promulgated thereunder, an Optionee
shall not sell or release from trust any Share received upon the exercise of an
Approved 102 Option and/or any share received subsequently following any
realization of rights, including without limitation, bonus shares, until the
lapse of the Holding Period required under Section 102 of the Ordinance.
Notwithstanding the above, if any such sale or release occurs during the Holding
Period, the sanctions under Section 102 of the Ordinance and under any
rules or regulation or orders or procedures promulgated thereunder shall apply
to and shall be borne by such Optionee.

 

7.3                                 With
respect to Unapproved 102 Option, if the Optionee ceases to be employed by the
Company or any Affiliate, the Optionee shall extend to the Company and/or its
Affiliate a security or guarantee for the payment of tax due at the time of
sale of Shares, all in accordance with the provisions of Section 102 and the
rules, regulation or orders promulgated thereunder.

 

7.4                                 The
Optionee acknowledges that in the event Company’s shares shall be registered
for trading in any public market, the Optionee’s right to sell Shares may be
subject to limitations (including a lock-up period), as will be requested by
the Company or its underwriters, and the Optionee unconditionally agrees and
accepts any such limitations.

 

The Optionee acknowledges that in order to
enforce the above restriction, the Company may impose stop-transfer
instructions with respect to the exercised Shares.

 

 

7.5                                 The
Optionee shall not dispose of any Shares in transactions which violate, in the
opinion of the Company, any applicable laws, rules and regulations.

 

7.6                                 The
Optionee agrees that the Company shall have the authority to endorse upon the
certificate or certificates representing the Shares such legends referring to
the foregoing restrictions, and any other applicable restrictions as it may
deem appropriate (which do not violate the Optionee’s rights according to this
Option Agreement).

 

7.7                                 No
person who acquires Shares under the ISOP may, during any period of time that
such person is an affiliate of the Company within the meaning of the rules and
regulations of the Securities and Exchange Commission under the U.S. Securities
Act of 1933 as amended (the “Act”), sell such Shares, unless such offer and
sale is made (i) pursuant to an effective registration statement under the Act,
which is current and includes the shares to be sold, or (ii) pursuant to an
appropriate exemption from the registration requirements of the Act, such as
that set forth in Rule 144 promulgated under the Act.

 

7.8                                 With
respect to any person subject to the reporting requirements of Section 16(a)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Reporting
Person”), transactions under the ISOP are intended to comply with all
applicable conditions of Rule 16b-3 under the Exchange Act.  To the extent any provision of the ISOP or
any action by an authority under the ISOP fails to so comply, such provision or
action shall, without further action by any person, be deemed to be
automatically amended to the extent necessary to effect compliance with Rule
16b-3, provided that if such provision or action cannot be amended to effect
such compliance, such provision or action shall be deemed null and void, to the
extent permitted by law and deemed advisable by the appropriate authority.  Each Option to a Reporting Person under the ISOP
shall be deemed issued subject to the foregoing qualification.

 

7.9                                 Notwithstanding
Section 12.2 of the ISOP, the Optionee shall not be subject to the
limitation of the six (6) months and one day of the date of exercise of such
Option or issuance of such Shares, with respect to Options granted under this
Option Agreement.

 

8.                                      Taxes; Indemnification

 

8.1                                 Any
tax consequences arising from the grant or exercise of any Option, from the
payment for Shares covered thereby or from any other event or act (of the
Company and/or its Affiliates, the Trustee or the Optionee), hereunder, shall
be borne solely by the Optionee. The Company and/or its Affiliates and/or the
Trustee shall withhold taxes according to the requirements under the applicable
laws, rules, and regulations, including withholding taxes at source.
Furthermore, the Optionee hereby agrees to indemnify the Company and/or its
Affiliates and/or 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.

 

8.2                                 The
Optionee will not be entitled to receive from the Company and/or the Trustee
any Shares allocated or issued upon the exercise of Options prior to the full
payments of the Optionee’s tax liabilities arising from Options which were
granted to him and/or Shares issued upon the exercise of Options. For the
avoidance of doubt, neither the Company nor the Trustee shall be required to
release any share certificate to the Optionee until all payments required to be
made by the Optionee have been fully satisfied.

 

8.3                                 The
receipt of the Options and the acquisition of the Shares to be issued upon the
exercise of the Options may result in tax consequences. THE OPTIONEE IS ADVISED
TO CONSULT A TAX ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

8.4                                 With
respect to Approved 102 Options, the Optionee hereby acknowledges that he is
familiar with the provisions of Section 102 and the regulations and rules
promulgated thereunder, including without limitations the type of Option
granted hereunder and the tax implications applicable to such grant. The
Optionee accepts the provisions of the trust agreement signed between the
Company and the Trustee, attached as Exhibit
C hereto, and agrees to be bound by its terms.

 

9.                                      Miscellaneous

 

9.1                                 No Obligation to Exercise Options. The grant and acceptance of these Options
imposes no obligation on the Optionee to exercise it.

 

9.2                                 Confidentiality.  The
Optionee shall regard the information in this Option Agreement and its exhibits
attached hereto as confidential information and the Optionee shall not reveal
its contents to anyone except when required by law or for the purpose of
gaining legal or tax advice.

 

9.3                                 Continuation of Employment or Service. 
Neither the ISOP nor this Option Agreement shall impose any obligation
on the Company or an Affiliate to continue the Optionee’s employment or service
and nothing in the ISOP or in this Option Agreement shall confer upon the
Optionee any right to continue in the employ or service of the Company and/or
an Affiliate or restrict the right of the Company or an Affiliate to terminate
such employment or service at any time.

 

9.4                                 Entire Agreement. Subject to the provisions of the ISOP, to
which this Option Agreement is subject, this Option Agreement, together with
the exhibits

 

 

hereto,
constitute the entire agreement between the Optionee and the Company with
respect to Options granted hereunder, and supersedes all prior agreements,
understandings and arrangements, oral or written, between the Optionee and the
Company with respect to the subject matter hereof.

 

9.5                                 Failure to Enforce - Not a Waiver. The failure of any party to enforce at any
time any provisions of this Option Agreement or the ISOP shall in no way be
construed to be a waiver of such provision or of any other provision hereof.

 

9.6                                 Provisions
of the ISOP. The Options provided for herein are granted pursuant to the
ISOP and said Options and this Option Agreement are in all respects governed by
the ISOP and subject to all of the terms and provisions of the ISOP.

 

Any interpretation of this Option Agreement
will be made in accordance with the ISOP but in the event there is any
contradiction between the provisions of this Option Agreement and the ISOP, the
provisions of the Option Agreement will prevail.

 

9.7                                 Binding
Effect. The ISOP and this Option Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereof.

 

9.8                                 Notices.
All notices or other communications given or made hereunder shall be in writing
and shall be delivered or mailed by registered mail or delivered by email or
facsimile with written confirmation of receipt to the Optionee and/or to the
Company at the addresses shown on the letterhead above, or at such other place
as the Company may designate by written notice to the Optionee. The Optionee is
responsible for notifying the Company in writing of any change in the Optionee’s
address, and the Company shall be deemed to have complied with any obligation
to provide the Optionee with notice by sending such notice to the address
indicated below.

 

 

Company’s Signature:

 

Ness Technologies Inc.

 

	
  By :

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Hadas Halbreich

  	
  Ilan Rotem

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
   

  	
   

  
					

 

 

 

I, the undersigned, hereby acknowledge receipt of a copy of the ISOP
and accept the Options subject to all of the terms and provisions thereof. I
have reviewed the ISOP and this Option Agreement in its entirety, have had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement, and fully understand all provisions of this Option Agreement. I
agree to notify the Company upon any change in the residence address indicated
above.

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  Optionee’s
  Signature

  

 

 

	
  Attachments:

  	
   

  	
  Exhibit A:

  	
   

  	
  Ness Technologies Inc. 2003 Israeli Share
  Option Plan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exhibit B:

  	
   

  	
  Terms of the Option

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exhibit C:

  	
   

  	
  Trust Agreement

  

 

 

EXHIBIT
B

 

TERMS
OF THE OPTION

 

	
  Name of the Optionee:

  	
  Ytzhak Edelman

  
	
   

  	
   

  
	
  Date of Grant:

  	
  June, 2005

  
	
   

  	
   

  
	
  Designation:

  	
  •

  	
  x Approved 102 Option: 

  
	
   

  	
  •

  	
  Capital Gain Option (CGO)

  
	
   

  
	
  1.

  	
  Number of Options granted:

  	
  125,000

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Purchase Price:

  	
  The lower of 11.82$ per share or the share
  market price at the Date of Grant (start date of employment)

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Vesting Dates:

  	
  As follows:

  

 

	
  Number of Options

  	
   

  	
  Vesting
  Date

  
	
  41,667

  	
   

  	
  One year as of the Date of Grant

  
	
   

  	
   

  	
   

  
	
  41,667

  	
   

  	
  Two years as of the Date of Grant

  
	
   

  	
   

  	
   

  
	
  41,666

  	
   

  	
  Three years as of the Date of Grant

  

 

	
  4.

  	
  Expiration Date:

  	
  31.12.2010

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Optionee

  	
  Printed Name

  	
  Ness Technologies Inc.

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