Document:

exhibit_4-9.htm

Exhibit 4.9

 

AMENDED & RESTATED REGISTRATION RIGHTS AGREEMENT

AMENDED & RESTATED REGISTRATION RIGHTS AGREEMENT made as of February 29, 2012 by and among Given Imaging Ltd., an Israeli corporation (the "Company"), and the holders of Ordinary Shares in the Company whose signature is affixed hereto (the “Shareholders”).

 

WHEREAS on July 18, 2007, the Company and the Shareholders previously entered into a Registration Rights Agreement whereby the Shareholders were provided, inter alia, with certain registration rights which are due to expire on July 18, 2012 ("Original Agreement");

WHEREAS, the Shareholders wish to renew the Original Agreement for an additional  period of five (5) years until July 18, 2017, and to effect certain changes to the Original Agreement as more fully described herein, all by amending and restating the Original Agreement; and

WHEREAS, the Audit Committee and the Board of Directors of the Company have each determined that it is in the best interests of the Company that the Company enter into this Amended and Restated Registration Rights Agreement subject to and conditional upon the approval of the shareholders of the Company.

NOW, THEREFORE, subject to Section 5 below, in consideration of the covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties hereto covenant and agree as follows:

 

1.           GENERAL PROVISIONS

 

1.1          Shares Subject to this Agreement. The Parties hereto expressly agree that the terms and restrictions of this Agreement shall apply to all shares of the Company's share capital which any of them now owns or hereafter acquires by any means, including without limitation by purchase, assignment or operation of law, or as a result of any share dividend, share split, reorganization, reclassification, whether voluntary or involuntary, or other similar transaction, whether by sale, merger, consolidation or other similar transaction, or by purchase, assignment or operation of law (the "Shares").

1.2          Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

"Affiliate" has the meaning ascribed to that term in Rule 12b-2 under the Exchange Act, or any successor rule.

"Articles" shall mean the Articles of Association of the Company as may hereafter be amended in accordance with their terms from time to time.

 

  

  

  

 

"Commission" shall mean the Securities and Exchange Commission and any successor agency of the Federal government administering the Securities Act and the Exchange Act.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and any successor Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

 

"Lending Institution" means any financial institution to whom any Registrable Shares have been pledged as security for loans or a credit line provided by such Lending Institution to any Shareholder.

"Ordinary Shares" shall mean (i) the ordinary shares, NIS 0.05 par value per share, of the Company, (ii) any other capital shares of the Company, however designated, authorized on or after the date hereof, which shall neither be limited to a fixed sum or percentage of par value in respect of the rights of the holders thereof to participate in dividends nor entitled to a preference prior or equal to any class of preferred shares of the Company in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company; and (iii) any other securities of the Company into which or for which any of the securities described in (i) or (ii) may be converted or exchanged pursuant to any recapitalization, reorganization, merger, consolidation, sale of assets or other similar event.

"Permitted Transferee" shall mean with respect to any Shareholder, any Person that controls, is controlled by or is under common control with such Shareholder.

"Person" means an individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

The terms "register", "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement, or, as the context may require, under the Exchange Act or applicable state securities laws.

"Registrable Securities" shall mean (i) Ordinary Shares held by the Shareholders from time to time and (ii) other Ordinary Shares or other securities of the Company, in each case, issued or issuable to the Shareholders or their Permitted Transferees with respect to such Ordinary Shares in connection with any share split, share dividend, recapitalization, reorganization, merger, consolidation, sale of assets or similar event, excluding in any event securities which have been (a) registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with the registration statement covering them, (b) publicly sold pursuant to Rule 144 under the Securities Act, or (c) sold by a person in a transaction in which the holder’s registration rights have not been assigned in accordance with Section 3.14 hereof.

 

  

2

  

"Registration Expenses" shall mean the expenses so described in Section 3.8.

"Securities Act" shall mean the Securities Act of 1933, as amended, and any successor Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

"Selling Expenses" shall mean the expenses so described in Section 3.8.

"Subsidiary" or "Subsidiaries" shall mean any corporation, partnership, trust or other entity of which the Company and/or any of its other Subsidiaries directly or indirectly owns at the time a majority of the outstanding shares of any class of equity security of such corporation, partnership, trust or other entity.

2.           Reserved

 

3.           TRANSFER OF REGISTRABLE SECURITIES; REGISTRATION

3.1          Restrictive Legend. Each certificate representing Registrable Securities (“Restricted Securities”) shall, except as otherwise provided in this Section 3.1 or in Section 3.2, be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required under applicable state securities laws):

"The securities represented by this certificate have not been registered under the Securities Act of 1933 or any other securities laws.  These securities have been acquired for investment and not with a view to distribution or resale.  Such securities may not be offered for sale, sold, delivered after sale or transferred in the absence of an effective registration statement covering such securities under the Securities Act of 1933 and any other applicable securities laws, unless the holder shall have obtained an opinion of counsel reasonably satisfactory to the corporation that such registration is not required."

Upon request of a holder of such a certificate, the Company shall remove the foregoing legend from the certificate if (i) there is an effective registration statement covering the securities represented by such certificate, or (ii) with such request, the Company shall have received either the opinion referred to in Section 3.2(a)(i) or the "no-action" letter referred to in Section 3.2(a)(ii), or (iii) pursuant to any other express provision hereof such legend is no longer required.

 

  

3

  

3.2          Notice of Proposed Transfer.

(a)           Prior to any proposed sale or other transfer of any Restricted Securities (other than under the circumstances described in Section 3.4 or 3.5), the holder thereof shall give written notice to the Company of its intention to effect such sale or other transfer.  Each such notice shall describe the manner of the proposed sale, or other transfer and, if requested by the Company shall be accompanied by either (i) an opinion of counsel reasonably satisfactory to the Company to the effect that the proposed sale or other transfer may be effected without registration under the Securities Act, except if the proposed sale or other transfer is effected pursuant to any exercise of a Lending Institution’s rights or remedies, including, without limitation, a foreclosure proceeding, in which event no such opinion nor an "no action letter" as provided in the following clause (ii) shall be required under this Agreement or (ii) a "no action" letter from the Commission to the effect that the distribution of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such share shall be entitled to transfer such share in accordance with the terms of its notice.  Each certificate for Restricted Securities transferred as above provided shall bear the appropriate restrictive legend set forth in Section 3.1, except that such certificate shall not bear such legend if (i) such transfer is in accordance with the provisions of Rule 144 (or any other rule permitting public sale without registration under the Securities Act), or (ii) the opinion of counsel or "no-action" letter referred to above is to the further effect that the transferee and any subsequent transferee (other than an Affiliate of the Company) would be entitled to transfer such securities in a public sale without registration under the Securities Act or that such legend is not required to establish compliance with any provisions of the Securities Act.  Notwithstanding any other provision hereof, the restrictions provided for in this Section 3.2 shall not apply to securities which are not required to bear the legend prescribed by Section 3.1 in accordance with the provisions of that Section. The Company will not unreasonably refuse to accept an opinion of counsel required hereby signed by counsel for a Shareholder.

(b)           No such opinion of counsel or "no action" letter from the Commission, as set forth in Section 3.2(a) above, shall be required in the event of a sale or other transfer of any Registrable Securities to (i) any Affiliate of a Shareholder, including, without limitation, any venture capital limited partnership now existing or hereafter formed which controls, is controlled by or is under common control with such Shareholder; (ii) one or more partners or members of the transferor (in the case of a transferor that is a partnership, limited liability company or fund), to a shareholder (in the case of a transferor that is a corporation) or to a trust grantor (in the case of a transferor that is a trust) in each case in respect of the beneficial interest of such partner, shareholder or trust; or (iii) any successors or assigns of any of the foregoing persons, provided that the transferee agrees in writing to be subject to this Agreement to the same extent as if such transferee were originally a signatory.

3.3          Reserved

3.4          Required Registration

(a)           One or more of the Shareholders holding Registrable Securities constituting at least 5% of the total number of Ordinary Shares then outstanding may request the Company to register for sale under the Securities Act all or any portion of the Ordinary Shares held by such requesting holder or holders for sale in the manner specified in such notice; provided, however, that the proposed aggregate offering price of the Ordinary Shares held by such holder or holders must be at least US$15,000,000, except if the request is being made pursuant to any exercise of a Lending Institution’s rights or remedies, including, without limitation, a foreclosure proceeding, in which event the thresholds set forth in this Section shall be 1% and US$5,000,000, respectively.

 

  

4

  

(b)           Following receipt of any notice under this Section 3.4, the Company shall promptly notify all holders of Registrable Securities from whom notice has not been received and such holders shall then be entitled within thirty (30) days after receipt of such notice from the Company to request the Company to include in the requested registration all or any portion of their Ordinary Shares.  The Company shall use its commercially reasonable efforts to register under the Securities Act, for public sale in accordance with the method of disposition specified in the notice from requesting holders described in paragraph (a) above, within 180 days of its receipt of such notice, the number of shares of Registrable Securities specified in such notice (and in all notices received by the Company from other holders within thirty (30) days after the receipt of such notice by such holders).  The Company shall be obligated to register the Ordinary Shares pursuant to this Section 3.4 on two (2) occasions only, provided, however, that such obligation shall be deemed satisfied only when a registration statement covering all of the Ordinary Shares specified in notices received as aforesaid (except to the extent reduced by the managing underwriter pursuant to Section 3.4(d)) shall have become effective and, if such method of disposition is a firm commitment underwritten public offering, all such shares shall have been sold pursuant thereto; provided, further, that, upon effectiveness of the registration statement satisfying the second registration obligation set forth in this Section 3.4, the Company shall have no further obligation to register any Ordinary Shares not otherwise included in the notices described above.  Notwithstanding anything to the contrary contained herein, (i) no request may be made under this Section 3.4 during the period commencing 60 days prior to the Company’s good faith estimate of the effectiveness of a registration statement filed by the Company covering a firm commitment underwritten public offering (other than pursuant to this Section 3.4) and prior to the later to occur of the completion of the period of distribution for such offering or 120 days after the effective date of such registration statement, or (ii) if the Company shall furnish to the holders requesting such registration a certificate signed by the President and/or Chief Executive Officer of the Company stating that in the good faith judgment of the Board it would be detrimental to the Company or its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to delay the 180-day period to register the Registrable Securities referenced in this Section 3.4(b) by not more than ninety (90) days, provided, however, that the Company shall not utilize this right more than once in any twelve (12) month period.

(c)           If the holders requesting such registration intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 3.4 and the Company shall include such information in the written notice referred to in paragraph (b) above.  The right of any holder to registration pursuant to this Section 3.4 shall be conditioned upon such holder's agreeing to participate in such underwriting and to permit inclusion of such holder's Ordinary Shares in the underwriting.  If such method of disposition is an underwritten public offering, the Company may designate the managing underwriter(s) of such offering, which managing underwriter(s) shall be reasonably acceptable to the holders of at least a majority in interest of the shares of Registrable Securities to be sold in such offering.  A holder may elect to include in such underwriting all or a part of the Registrable Securities it holds.

 

  

5

  

(d)           A registration statement filed pursuant to this Section 3.4 may, subject to the following provisions, include (i) Ordinary Shares for sale by the Company for its own account, (ii) Ordinary Shares held by officers or directors of the Company and (iii) Ordinary Shares held by other holders of Registrable Securities to be included in the securities to be covered by such registration statement in accordance with Section 3.5 and Ordinary Shares held by other holders of Ordinary Shares who may from time to time have the right to seek to include such Ordinary Shares in such registration statement (the holders referred to in this clause (iii), collectively, "Other Shareholders"), in each case for sale in accordance with the method of disposition specified by the requesting holders.  If such registration shall be underwritten, the Company, such officers and directors and Other Shareholders proposing to distribute their shares through such underwriting shall enter into an underwriting agreement in customary form (including representations, warranties and indemnification provisions customary for a transaction of this kind) with the representative of the underwriter or underwriters selected for such underwriting on terms no less favorable to such officers, directors or Other Shareholders than the terms afforded the holders of Registrable Securities.  If and to the extent that the managing underwriter determines that marketing factors require a limitation on the number of shares to be included in such registration, then the Ordinary Shares held by officers or directors (other than Registrable Securities) of the Company or by Other Shareholders (other than Registrable Securities) and Ordinary Shares to be sold by the Company for its own account shall be excluded from such registration to the extent so required by such managing underwriter, and unless the holders of such shares and the Company have otherwise agreed in writing, such exclusion shall be applied first to the Ordinary Shares of the Company to be included for its own account to the extent required by the managing underwriter, and then to the shares held by the directors and officers and the Other Shareholders to the extent required by the managing underwriter, ratable among them on the basis of the respective number of shares held by each of them.  If the managing underwriter determines that marketing factors require a limitation of the number of Registrable Securities to be registered under this Section 3.4, then Registrable Securities shall be excluded in such manner that the securities to be sold shall be allocated among the selling holders pro rata based on their ownership of Registrable Securities.  In any event all securities to be sold other than Registrable Securities will be excluded prior to any exclusion of  Registrable Securities.  No Registrable Securities or any other security excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration.  If any holder of Registrable Securities, officer, director or Other Shareholder who has requested inclusion in such registration as provided above, disapproves of the terms of the underwriting, such holder of securities may elect to withdraw therefrom by written notice to the Company and the managing underwriter.  The securities so withdrawn shall also be withdrawn from registration.  Except for registration statements on Form S-4, S-8 or any comparable form or successor thereto, the Company will not file with the Commission any other registration statement with respect to its Ordinary Shares, whether for its own account or that of other shareholders, from the date of receipt of a notice from requesting holders pursuant to this Section 3.3 until the completion of the period of distribution of the registration contemplated thereby or 120 days after the effective date of such registration, whichever is earlier, if in the good faith judgment of the managing underwriter marketing factors would materially adversely affect the price of the Registrable Securities subject to such underwritten registration.

 

  

6

  

 

3.5          Incidental Registration. If the Company at any time proposes to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Forms S-4, S-8 or any successor to such forms or another form not available for registering the Registrable Securities for sale to the public), each such time it will promptly give written notice to all holders of the Registrable Securities of its intention so to do.  Upon the written request of any such holder, received by the Company within thirty (30) days after the giving of any such notice by the Company, to register any or all of its Registrable Securities, the Company will use its commercially reasonable  efforts to cause the Registrable Securities as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by the holder (in accordance with its written request) of such Registrable Securities so registered.  If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the holders of Registrable Securities as a part of the written notice given pursuant to this Section 3.5.  In such event the right of any holder of Registrable Securities to registration pursuant to this Section 3.5 shall be conditioned upon such holder's participation in such underwriting to the extent provided herein.  All holders of Registrable Securities proposing to distribute their securities through such underwriting shall (together with the Company and the other shareholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for underwriting by the Company.  Notwithstanding any other provision of this Section 3.5, if the underwriter determines that marketing factors require a limitation on the number of shares to be underwritten, the Company shall so advise all holders of securities requesting registration of any limitations on the number of shares to be underwritten, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated (i) first to the party initiating such registration procedure (whether the Company for selling Ordinary Shares for its own account or any holder of Registrable Securities initiating such registration); and (ii) then, to Other Shareholders requesting registration pursuant to this Section 3.5 or other similar piggy-back registration rights and to the Company with respect to Ordinary Shares being sold for its own account (unless allocated first under clause (i) above), in proportion, as nearly as practicable, to the respective amounts of securities requested by them to be included in such registration.  Notwithstanding the foregoing provisions, the Company may withdraw any registration statement referred to in this Section 3.5 without thereby incurring any liability to the holders of Registrable Securities.  If any holder of Registrable Securities disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Company and the underwriter.  Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

3.6           Registration on Form F-3.

 

(a)           In addition to the rights provided in Section 3.4, provided that at least nine (9) months have elapsed since the most recent registration in which the shareholder seeking to make a request under this Section 3.6 was entitled to request that any of its Registrable Securities be included therein, if at any time (i) any holder or holders of the Registrable Securities request that the Company file a registration statement on Form F-3 or any comparable or successor form thereto for a public offering of all or any portion of the shares of Registrable Securities held by such requesting holder or holders, the reasonably anticipated aggregate price to the public of which would exceed US$15,000,000 (in case of an underwritten offering) or $5,000,000 (in case of a non-underwritten offering) (except if the request is being made pursuant to any exercise of a Lending Institution’s rights or remedies, including, without limitation, a foreclosure proceeding, in which event the thresholds set forth in this Section shall be $3,000,000 and $1,000,000, respectively), and (ii) the Company is a registrant entitled to use Form F-3 or any comparable or successor form thereto to register such shares, then the Company shall use its commercially reasonable efforts to register under the Securities Act on Form F-3 or any comparable or successor form thereto, for public sale in accordance with the method of disposition specified in such notice, the number of Registrable Securities specified in such notice.  At the request of the holder or holders requesting such registration on Form F-3 (or comparable or successor form), such registration statement shall be a “shelf” registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 or any successor rule under the Securities Act (the “Shelf Registration Statement").

 

  

7

  

 

(b)           Notwithstanding the foregoing, the Company shall not be obligated to effect any registration pursuant to this Section 3.6, (i) if Form F-3 or any comparable or successor form is not available for such offering by the holders requesting such registration; (ii)  if the Company shall furnish to the holders requesting such registration a certificate signed by the President and/or Chief Executive Officer of the Company stating that in the good faith judgment of the Board it would be detrimental to the Company or its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to delay the 180-day period to register the Registrable Securities referenced in Section 3.4(b) by not more than ninety (90) days; provided, however, that the Company shall not utilize this right more than once in any twelve (12) month period; (iii) during the period starting sixty (60) days prior to the Company's estimated date of filing of, and ending on the date six (6) months immediately following the effective date of, any registration statement pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the Company is actively employing in good faith reasonable efforts to cause such registration statement to become effective and that the Company's estimate of the date of filing such registration statement is made in good faith; or (iv) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

 

(c)           Whenever the Company is required by this Section 3.6 to use its commercially reasonable efforts to effect the registration of Registrable Securities, each of the procedures and requirements of Section  3.4 (with all holders of Registrable Securities being treated equally), including but not limited to the requirement that the Company notify all holders of Registrable Securities from whom notice has not been received and provide them with the opportunity to participate in the offering, shall apply to such registration, provided, however, that except as provided above, there shall be no limitation on the number of registrations on Form F-3 which may be requested and obtained under this Section 3.6.

(d)           The Company shall use its commercially reasonable efforts to qualify for registration on Form F-3 or any comparable or successor form or forms; and to that end the Company shall register (whether or not required by law to do so) the Ordinary Shares under the Exchange Act in accordance with the provisions of that Act following the effective date of the first registration of any securities of the Company on Form F-1 or any comparable or successor form.

 

  

8

  

3.7          Registration Procedures. (a) If and whenever the Company is required by the provisions of Sections 3.4, 3.5 or 3.6 to use its commercially reasonable efforts to effect the registration of any Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:

(i)            prepare and file with the Commission a registration statement (which, in the case of an underwritten public offering pursuant to Section 3.4, shall be on Form F-1 or other form of general applicability satisfactory to the managing underwriter selected as therein provided) with respect to such securities including executing an undertaking to file post-effective amendments and use its commercially reasonable efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as provided below);

(ii)           prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period specified herein and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement in accordance with the sellers' intended method of disposition set forth in such registration statement for such period;

(iii)           furnish to each seller of Registrable Securities and to each underwriter such number of copies of the registration statement and each such amendment and supplement thereto (in each case including all exhibits) and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such registration statement;

(iv)           use its commercially reasonable efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or "blue sky" laws of such jurisdictions as the sellers of Registrable Securities or, in the case of an underwritten public offering, the managing underwriter reasonably shall request, provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction, unless the Company is already subject to service in such jurisdiction;

(v)           use its commercially reasonable efforts to list the Registrable Securities covered by such registration statement with any securities exchange on which the Ordinary Shares of the Company are then listed;

(vi)          comply with all applicable rules and regulations under the Securities Act and Exchange Act relating to such registration;

 

  

9

  

(vii)         immediately notify each seller of Registrable Securities and each underwriter under such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare and furnish to such seller a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(viii)        if the offering is underwritten and at the request of any seller of Registrable Securities, use its commercially reasonable efforts to furnish on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters to such effects as reasonably may be requested by counsel for the underwriters, and (ii) a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five (5) business days prior to the date of such letter) with respect to such registration as such underwriters reasonably may request;

(ix)           make available for inspection by each seller of Registrable Securities, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such seller or underwriter, all at the cost and expense of such sellers or underwriters, as the case may be, reasonable access to all financial and other records, pertinent corporate documents and properties of the Company, as such parties may reasonably request, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement, all subject to the recipients' signing non-disclosure undertakings in form designated by the Company;

 

  

10

  

 

(x)            cooperate with the selling holders of Registrable Securities and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, such certificates to be in such denominations and registered in such names as such holders or the managing underwriter may request at least two business days prior to any sale of Registrable Securities;

(xi)           permit any holder of Registrable Securities which holder, in the sole and exclusive judgment, exercised in good faith, of such holder, would be deemed to be a controlling

 

person of the Company, to participate in good faith in the preparation of such registration statement and to require the insertion therein of material, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel, reasonably concurred in by the Company’s counsel, should be included; and

(xii)          in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement reasonably acceptable to the Company, in usual and customary form, with the managing underwriter of such offering.

(b)           For purposes of this Agreement, the period of distribution of Registrable Securities in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Registrable Securities in any other registration shall be deemed to extend until the earlier of the sale of all Registrable Securities covered thereby or 180 days after the effective date thereof, provided, however, in the case of any registration of Registrable Securities on Form F-3 or a comparable or successor form which are intended to be offered on a continuous or delayed basis, such 180 day-period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold (but in no event longer than nine months after the effective date of such registration statement) and (ii) in the event of a Shelf Registration the Company shall use its commercially reasonable efforts to keep such Shelf Registration Statement continuously effective for a period ending on the earlier to occur of (a) the latest date on which the Company may keep such Shelf Registration Statement continuously effective under Rule 415, or (b) when all Ordinary Shares covered by the Shelf Registration Statement are sold, and provided, further, that applicable rules under the Securities Act governing the obligation to file a post effective amendment, permit, in lieu of filing a post-effective amendment which (y) includes any prospectus required by Section 10(a)(3) of the Securities Act or (z) reflects facts or events representing a material or fundamental change in or omission from the information set forth in the registration statement, the incorporation by reference of information required to be included in (y) and (z) above contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement.

(c)           In connection with each registration hereunder, the sellers of Registrable Securities will furnish to the Company in writing such information requested by the Company with respect to themselves and the proposed distribution by them as shall be reasonably necessary in order to assure compliance with Federal and applicable state securities laws.

3.8           Expenses.

(a)           All expenses incurred by the Company in complying with Sections 3.4, 3.5 and 3.6, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including counsel fees) incurred in connection with complying with state securities or "blue sky" laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of any insurance which might be obtained by the Company with respect to the offering by the Company, and fees and disbursements of one counsel selected by the holders of at least two-thirds (2/3) of the Registrable Securities being sold, but excluding any Selling Expenses, are called "Registration Expenses".  All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called "Selling Expenses".

 

  

11

  

(b)           The Company will pay all Registration Expenses in connection with each registration statement under Sections 3.4, 3.5 or 3.6; provided, that, in the event of a registration pursuant to Section  3.4 hereof which is withdrawn at the request of the Shareholders other than (i) as a result of the Company's failure to perform its obligations hereunder, (ii) as a result of a cutback by the underwriter of such registration in the amount of Registrable Securities which may be included in such registration by more than 25% or (iii) as a result of information concerning a materially adverse change in the Company's business or financial condition that is made known to the Shareholders after the date on which such registration was requested, the Shareholders shall pay the Registration Expenses with respect to such registration.  In the event that a registration pursuant to Section 3.4 hereof is withdrawn pursuant to clauses (i), (ii) or (iii) of this Section 3.8(b), the Shareholders shall, immediately following such withdrawal, be entitled to that number of registration requests pursuant to Section  3.4 hereof to which they would have been entitled not taking into account the withdrawn request.  All Selling Expenses in connection with each registration statement under Sections 3.4, 3.5 or 3.6 shall be borne by the participating sellers in proportion to the number of shares registered by each, or by such participating sellers other than the Company (except to the extent the Company shall be a seller) as they may agree.

3.9           Indemnification and Contribution.

(a)           In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to any of Sections 3.4, 3.5 or 3.6, the Company will indemnify and hold harmless each holder of Registrable Securities, its officers, directors and partners, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls such holder or underwriter within the meaning of the Securities Act (each, an "Indemnitee"), against any losses, claims, damages or liabilities, joint or several, to which such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any prospectus, offering circular or other document incident to such registration (including any related notification, registration statement under which such Registrable Securities were registered under the Securities Act pursuant to any of Sections 3.4, 3.5, or 3.6 any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof), (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a "Blue Sky Application"), (iii) any omission or alleged omission to state in any such registration statement, prospectus, amendment or supplement or in any Blue Sky Applications executed or filed by the Company, a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iv) any violation by the Company of the Securities Act or any rule or regulation promulgated under the Securities Act or any state law applicable to the Company and relating to action or inaction required of the Company in connection with such registration, and will reimburse each Indemnitee for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, promptly after being so incurred, provided, however, that the Company will not be liable to an Indemnitee if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with written information furnished by such Indemnitee, in writing specifically for use in such registration statement or prospectus; provided further, however, that, other than in a firm commitment underwriting, the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Indemnitee from whom the person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Indemnitee to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

 

  

12

  

(b)           In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to any of Sections 3.4, 3.5 or 3.6, each seller of such Registrable Securities thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each other seller of Registrable Securities, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, other seller, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any prospectus, offering circular or other document incident to such registration (including any related notification, registration statement under which such Registrable Securities were registered under the Securities Act pursuant to any of Sections 3.4, 3.5 or 3.6, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof), or any Blue Sky Application or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, other seller, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, promptly after being so incurred, provided, however, that such seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such registration statement or prospectus; and provided, further, however, that the liability of each seller hereunder shall be limited to the proceeds received by such seller from the sale of Registrable Securities covered by such registration statement.  Not in limitation of the foregoing, it is understood and agreed that the indemnification obligations of any seller hereunder pursuant to any underwriting agreement entered into in connection herewith shall be limited to (or be reasonably comparable to, in the event an underwriter reasonably requires the use of its form of underwriting agreement) the obligations contained in this subparagraph (b).

 

  

13

  

(c)           Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 3.9 and shall only relieve it from any liability which it may have to such indemnified party under this Section 3.9 if and to the extent the indemnifying party is prejudiced by such omission.  In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel selected by such indemnifying party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 3.9 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the counsel selected by the indemnifying party shall have reasonably concluded that there may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party.  No indemnifying party, in the defense of any such claim or action, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or action, and no indemnified party shall consent to entry of any judgment or settle such claim or litigation without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld.  Each indemnified party shall furnish such information regarding itself or the claim in question as an indemnifying party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

(d)           In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any indemnified party makes a claim for indemnification pursuant to this Section 3.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 3.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such indemnified party in circumstances for which indemnification is provided under this Section 3.9; then, and in each such case, the indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities to which such party may be subject in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.

 

  

14

  

The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of material fact related to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  Notwithstanding the foregoing (A) no such holder of Registrable Securities will be required to contribute any amount in excess of the proceeds received from the sale of all such Registrable Securities offered by it pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

(e)           The indemnities and obligations provided in this Section 3.9 shall survive the transfer of any Registrable Securities by such holder.

3.10         Changes in Ordinary Shares. If, and as often as, there is any change in the Ordinary Shares by way of a share split, share dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Ordinary Shares as so changed.

3.11         Rule 144 and 144A Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, except as provided in paragraph (c) below, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, the Company agrees to:

(a)           use its commercially reasonable efforts to comply with all of the applicable reporting requirements of the Exchange Act and shall comply with all other public information reporting requirements of the Commission as a condition to the availability of an exemption from the Securities Act for the sale of any of the Registrable Securities by any holder of Registrable Securities pursuant to Rule 144 or Rule 144A thereof, as amended from time to time, or any successor rule thereto or otherwise;

(b)           cooperate with each holder of Registrable Securities in supplying such information as may be necessary for such holder of Registrable Securities to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an exemption from the Securities Act under Rule 144 or Rule 144A thereunder for the sale of any of the Registrable Securities by any holder of Registrable Securities; and

(c)           furnish to each holder of Registrable Securities forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of such Rule 144 or Rule 144A (or any successor rule) and, at any time after it has become subject to such reporting requirements, of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such holder to sell any Registrable Securities without registration.

 

  

15

  

(d)           furnish or cause its counsel to furnish to each holder of Registrable Securities, within three (3) business days of request therefor, which includes all relevant facts, circumstances and certifications reasonably required,  legal opinions reasonably required in connection with any sales under Rule 144.

3.12        "Market Stand-Off' Agreement. Each of the Shareholders agrees, severally and not jointly, if requested by the Company and an underwriter of Ordinary Shares (or other securities) of the Company, not to sell or otherwise transfer or dispose of any Ordinary Shares (or other securities) of the Company held by such Shareholder during a period not to exceed ninety (90) days following the effective date of any registration statement filed by the Company under the Securities Act, and to enter into an agreement to such effect; provided, that,  all of the Company's officers, directors and holders of at least 5% of the outstanding Ordinary Shares (or securities convertible into at least 5% of the Ordinary Shares) also enter into agreements to such effect. The provisions of this Section 3.12 shall not apply to Registrable Shares in the event that the Registrable Shares are acquired pursuant  to any exercise of a Lending Institution’s rights or remedies, including, without limitation, a foreclosure proceeding.

The Company may impose stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of said period.

3.13        Reserved

3.14        Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Article 3 may be assigned (but only with all related obligations) by a holder of Registrable Securities to a transferee or assignee of such securities who is not engaged in a business activity competitive with the Company (as reasonably determined by the Company's Board of Directors) and who, after such assignment or transfer, holds at least 500,000 shares of Registrable Securities (subject to appropriate adjustment for share splits, share dividends, combinations and similar recapitalization events) ("Minimum Transfer"), provided, that, the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if (i) immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and (ii) the transferee or assignee shall acknowledge in writing that the transferred or assigned Registrable Securities shall remain subject to this Agreement. Notwithstanding the foregoing, in connection with a pledge of any Shareholder's Registrable Securities in favor of a Lending Institution, any Shareholder shall be entitled to conditionally assign to a third party acquiring such Registrable Securities pursuant to any exercise of a Lending Institution’s rights or remedies, including, without limitation, a foreclosure proceeding, prior to effecting the Minimum Transfer, such Shareholder's rights to cause the Company to register such Registrable Securities under this Article 3 provided that the Company is provided with written notice thereof. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of a partnership who are partners or retired partners of such partnership (including spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the partnership; provided, that, all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under this Article 3.

 

  

16

  

 

3.15        Blockage Periods.   Notwithstanding any other provision of this Agreement, the Company shall be permitted to defer the filing of any registration statement under Sections 3.4 or 3.6 if the Company’s Board of Directors determines in good faith, as certified in writing by the Company’s President or Chief Executive Officer to the holder of Registrable Securities requesting registration pursuant to any of the said Sections, that the filing of such a registration statement at such time would be seriously detrimental to the business of the Company.  The Company may decline to file any registration statement for this reason only once in any 12-month period and only for a maximum period of 90 days at any one time.

3.16        Termination of Registration Rights.  The rights under this Section 3 will expire with respect to each of the Shareholders and their respective successors, assigns and transferees, upon the earlier of (i) July 18, 2017, or (ii) with respect to a particular holder or any of it successors, assigns or transferees, the earlier of such person's ceasing to hold any Registrable Securities or at such time as such person is entitled to sell all of its Registrable Securities within a consecutive 90-day period pursuant to Rule 144.

 

4.           MISCELLANEOUS

4.1           Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party's address set forth below or to such other address as a party may designate by notice hereunder, and shall be either (i) delivered by hand, (ii) made by telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv) sent by registered or certified mail, return receipt requested, postage prepaid.

If to the Company:               Given Imaging Ltd.

2 Ha’Carmel Street

New Industrial Park

P.O. Box 258

Yoqneam 20692

Israel

Attn: the CEO

972-4-959-2466 (Fax)

 

If to the Shareholders: To the addresses set forth on Exhibit A

 

  

17

  

 

All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if made by telecopy or facsimile transmission,  on the next business day following the day such notice is transmitted, or (iii) if sent by registered or certified mail, on the fifth business day following the day such mailing is made.

4.2           Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

4.3           Modifications and Amendments. This Agreement may be amended or modified, and any provision hereof may be waived, only with the written consent of (i) the Company and (ii) the holders of at least two-thirds (2/3) of the Registrable Securities whose rights under Section 3 have not terminated according to the provisions of this Agreement.  Any waiver or consent hereunder shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

4.4           Assignment. The rights and obligations under this Agreement may not be assigned by the Company without the prior written consent of at least a majority of the holders of Registrable Securities, unless specifically permitted by the terms hereof.

4.5           Benefit. All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.  Nothing in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.

4.6           Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of New York, without giving effect to the conflict of law principles thereof (other than Section 5-1401 of the General Obligations Law of the State of New York).

4.7           Jurisdiction and Service of Process. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of the State of New York or of the United States of America for the District of New York.  By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.  Each of the parties hereto irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by certified mail, postage prepaid, to the party at its address set forth in Section 4.1 hereof.

4.8           Severability. In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement shall be unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it enforceable, and as so limited shall remain in full force and effect.  In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect.

 

  

18

  

4.9           Interpretation. The parties hereto acknowledge and agree that: (i) each party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (ii) the rule of construction to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement; and (iii) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto and not in favor of or against any party, regardless of which party was generally responsible for the preparation of this Agreement.

4.10        Headings and Captions. The headings and captions of the

various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

4.11        Enforcement. Each of the parties hereto acknowledges and agrees that the rights acquired by each party hereunder are unique and that irreparable damage would occur in the event that any of the provisions of this Agreement to be performed by the other parties were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, in addition to any other remedy to which the parties hereto are entitled at law or in equity, each party hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by any other party and to enforce specifically the terms and provisions hereof in any federal or state court to which the parties have agreed hereunder to submit to jurisdiction.

4.12        No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing among the parties hereto, shall operate as a waiver of any such right, power or remedy of the party, other than as provided by Section 4.3 above.  No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.  The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies.  No notice to or demand on a party not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.

4.13        Counterparts. This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

  

19

  

5. Condition Precedent The execution, delivery and performance of this Agreement is conditional upon obtaining the approval of the shareholders of the Company in accordance with applicable law.   If such approval is not obtained, this Agreement shall be deemed null and void ab initio.

 

  

20

  

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Registration Rights Agreement or caused this Agreement to be executed by their duly authorized representatives; as of the date first written above.

	 	
GIVEN IMAGING LTD.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Nachum Shamir	 
	 	 	
Mr. Nachum (Homi) Shamir

	 
	 	 	
President and Chief

	 
	 	 	
Executive Officer

	 

 

	
 

	
By: 

	/s/ Yuval Yanai	 
	 	 	Mr. Yuval Yanai	 
	 	 	
Chief Financial Officer

	 

 

  

21

  

 

SHAREHOLDERS:

 

DISCOUNT INVESTMENT CORPORATION LTD.

	 	 	 	 
	
 

	
By: 

	/s/ Michel Dahan	 
	 	 	
Michel Dahan

	 

 

	
 

	
By: 

	/s/ Raanan Cohen	 
	 	 	
Raanan Cohen

	 

 

ELRON ELECTRONIC INDUSTRIES LTD.

	 	 	 	 
	
 

	
By: 

	/s/ Ari Bronshtein	 
	 	 	

Ari Bronshtein

	 
	 	 	
Chief Executive Officer

	 

 

	
 

	
By: 

	/s/ Yaron Elad	 
	 	 	
Yaron Elad

	 
	 	 	Chief Financial Officer	 

 

RDC RAFAEL DEVELOPMENT CORPORATION LTD.

 

	
 

	
By: 

	/s/ Giora Shaked	 
	 	 	
Giora Shaked

	 
	 	 	
Chief Executive Officer

	 

 

	
 

	
By: 

	/s/ Lior Levinsky	 
	 	 	

Lior Levinsky

	 
	 	 	

Director of Finance

	 

 

  

22

  

 

EXHIBIT A

 

RDC Rafael Development Corporation Ltd.

Address:

Triangular Tower

42nd Floor

3 Azrieli Center

Tel Aviv 67023

Israel

 

Discount Investment Corporation Ltd.

 

Address:

Triangular Tower

44th Floor

3 Azrieli Center

Tel Aviv 67023

Israel

 

Elron Electronic Industries Ltd.

 

Address:

Triangular Tower

42nd Floor

3 Azrieli Center

Tel Aviv 67023

Israel

 

23exhibit_4-11.htm

Exhibit 4.11

 

GIVEN IMAGING LTD.

 

AMENDED AND RESTATED 2003 EQUITY INCENTIVE  PLAN

 

(Amended and Restated as of February 14, 2012)

 

This Given Imaging Amended and Restated 2003 Equity Incentive Plan (hereinafter called the “Plan”) was originally adopted by the Board of Directors of Given Imaging Ltd., an Israeli corporation (hereinafter called the “Company”) on February 12, 2003, under the name “2003 Stock Options Plan.”  The Plan was approved by the Company’s Shareholders on June 18, 2003, and the Plan became effective on such date, and was subsequently amended by the Company on May 3, 2004.  The Plan was amended and restated as the 2003 Equity Incentive Plan on February 14, 2012.

 

ARTICLE 1

 

PURPOSE

 

The purpose of the Plan is to attract and retain the services of able persons as Employees, Consultants, and Non-Employee Directors of the Company and its Subsidiaries, and to provide such persons with a proprietary interest in the Company through the granting of Options, SARs, Restricted Stock, and RSUs, whether granted singly, or in combination, or in tandem, that will (a) increase the interest of such persons in the Company’s success, and (b) furnish an incentive to such persons to continue their services for the Company and/or Subsidiary.

 

ARTICLE 2

 

DEFINITIONS

 

For purposes of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:

 

2.1           “3(i) Option” means an Option granted to an Israeli Participant under the terms of Section 3(i) of the Ordinance that does not qualify as a 102 Award.

 

2.2           “102 Award” means an Option or other award granted to an Israeli Participant that is intended to qualify for special tax treatment under Section 102(b)(2) (the “Capital Track”) or Section 102(b)(1) (the “Income Track”) of the Ordinance.

 

2.3           “102 Track Election” means the right of the Company to elect either the “Capital Track” under Section 102(b)(2) or the “Income Track” under Section 102(1) of the “Capital Track”.

 

2.4           “Award” means the grant hereunder of any 102 Award, 3(i) Option, Incentive Stock Option, Non-qualified Stock Option, SAR, Restricted Stock, Restricted Stock Unit, or Other Award, whether granted singly, in combination or in tandem (each individually referred to herein as an “Award”).

 

  

  

  

 

2.5           “Award Agreement” means a written agreement between a Participant and the Company or any other written notice of an Award, which sets out the terms of the grant of an Award.

 

2.6           “Award Period” means the period during which one or more Awards granted under an Award Agreement may be exercised or earned.

 

2.7           “Board” means the Board of Directors of the Company.

 

2.8           “Cause” shall mean (i) a material breach of a Participant’s agreement or duty towards the Company or any Subsidiary, including the Participant not acting in good faith towards the Company or any Subsidiary, (ii) embezzlement of funds of the Company or its Subsidiaries or any act of fraud against the Company or its Subsidiaries, and (iii) any conduct (other than conduct in good faith) reasonably determined by the Committee to be materially detrimental to the Company or any Subsidiary.  The Committee, in its sole discretion, shall determine if a Participant’s termination or employment of cessation of services is for “Cause.”

 

2.9           “Change of Control” shall mean, unless otherwise defined in an Award Agreement, the occurrence of an event described in paragraph (a), (b), or (c) below:

 

(a)          The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the then outstanding Shares; provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a change of control:

 

(i)           Any acquisition directly from the Company;

 

(ii)          Any acquisition by the Company or by any affiliate (as defined in Rule 405 under the Securities Act) of the Company as of February 12, 2003;

 

(iii)         Any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

 

(iv)         Any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (b) below.

 

(b)          Consummation of a reorganization, merger or consolidation involving the Company or its Subsidiaries or a sale or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (a “Business Combination”) unless, following such Business Combination:

 

(i)           All or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Shares immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then outstanding voting securities entitled to vote generally in the election of directors of the Company or its successor (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the assets of the Company either directly or through one or more Subsidiaries); and

 

  

2

  

 

(ii)           No Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or its successor resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50% of the then outstanding voting securities of the Company or corporation (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the assets of the Company either directly or through one or more Subsidiaries) except to the extent that such ownership existed prior to the Business Combination.

 

(c)          Notwithstanding paragraphs (a) or (b) above, with respect to Restricted Stock Units granted to Participants who are subject to U.S. income taxes, a change of control shall mean a “change of control” as defined in Section 409A of the Code.

 

2.10            “Code” means the U.S. Internal Revenue Code of 1986, as amended, together with the published rulings, regulations, and interpretations duly promulgated thereunder.

 

2.11           “Committee” means the Compensation and Nominating Committee of the Board or such other Committee appointed or designated by the Board to administer the Plan in accordance with Article 3 of this Plan.

 

2.12           “Company” means Given Imaging Ltd., an Israeli corporation, and any successor entity.

 

2.13           “Constructive Termination” means the occurrence, without a Participant’s prior consent, of any of the following during the one-year period commencing at a Change of Control:  (a) a material reduction in such Participant’s base compensation; (b) a material adverse change in such Participant’s duties or responsibilities or the assignment of duties materially inconsistent with such Participant’s position; or (c) relocation of such Participant’s primary work location which would result in an increase of more than 50 miles to such Participant’s one-way commute.  The Company shall have 30 days following delivery by such Participant of notice of Constructive Termination to cure the event or circumstance constituting Constructive Termination.

 

2.14            “Consultant” means each individual who performs services for the Company and/or any Subsidiary, and who is not an Employee or a Non-Employee Director.

 

2.15           “Covered Participant” means a Participant who is a “covered employee” as defined in Section 162(m)(3) of the Code, and the regulations promulgated thereunder, and any individual the Committee determines should be treated as such a covered employee.

 

2.16           “Date of Grant” means “date of grant” as determined under Financial Accounting Standards 123R, as amended and interpreted from time to time.

 

2.17           “Disability” means, unless otherwise defined in an Award Agreement or other agreement between a Participant and the Company, the inability, by reason of illness or physical or mental incapacity (from any cause or causes whatsoever) evidenced by medical records, to perform essential job functions, whether with or without reasonable accommodation by Company, in substantially the manner and to a similar extent such job functions were performed immediately prior to the occurrence of such disabling circumstances, for a period of ninety (90) consecutive days or a total of one hundred and twenty (120) days in any one (1) year period, and disability shall be deemed to have occurred on the first day immediately after such period.  For purposes of determining whether a disability continued for ninety (90) consecutive days, if a Participant shall have suffered a Disability and shall have returned to work after the end of such disability, any inability, by reason of illness or physical or mental incapacity or disability (from any cause or causes whatsoever), to perform essential job functions commencing within sixty (60) days after the termination of the prior Disability shall be deemed to be a continuation of the prior Disability, and the periods of all such Disabilities shall be added as if they fell on consecutive days.

 

  

3

  

 

2.18         “Employee” means each individual who performs services for the Company and/or any Subsidiary, and who is determined to be an employee of the Company and/or such Subsidiary by the Committee, provided however that for the purposes of any grants pursuant to Section 102 of the Ordinance, “Employee” shall mean an employee or an officer of the Company and/or any Subsidiary, but excluding any Controlling Person, as such term is defined under Section 102 of the Ordinance (as such definition may change from time to time) or any Consultant.

 

2.19         “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

2.20         “Exercise Date” means the date specified in the Participant’s Exercise Notice, on which the Participant seeks to exercise an Option or SAR.

 

2.21         “Exercise Notice” means the written notice from the Participant to the Company notifying the Company that the Participant seeks to exercise an Option or SAR.  The Exercise Notice shall set forth the number of Shares with respect to which the Stock Option or SAR is to be exercised, the Exercise Date, and such other terms as determined by the Committee in its sole discretion.

 

2.22         “Fair Market Value” of a Share means the closing price of a Share on an applicable date as quoted on any over-the-counter market or national securities exchange on which the Shares are then listed, or in the absence of a reported closing price for such date, the closing price on the next following day for which a closing sale is reported.  In the event Shares are not quoted on a recognized over-the-counter market or stock exchange, Fair Market Value of a Share shall be the price per Share at which the Company last issued any of its Shares to a non-affiliated investor.  Notwithstanding the preceding provision to the contrary, solely with respect to Shares granted pursuant to an ISO under this Plan, Fair Market Value shall be determined in accordance with Section 422(c)(7) of the Code.

 

2.23         “Incentive Stock Option” or “ISO” means an incentive stock option within the meaning of Section 422 of the Code, granted pursuant to this Plan.

 

2.24         “Non-Employee Director” means a member of the Board who is not an Employee.

 

2.25         “Non-qualified Stock Option” or “NQSO” means a stock option, granted pursuant to this Plan that is not intended to comply with the requirements set forth in Section 422 of the Code.

 

  

4

  

 

2.26         “Option” means either an 3(i) Option, 102 Option, ISO or NQSO.

 

2.27         “Option Price” means the price which must be paid by a Participant upon exercise of an Option to purchase a Share.

 

2.28         “Ordinance” means the Israeli Tax Ordinance (New Version) 5721-1961 and applicable Income Tax Rules (Tax Benefits in Shares Issuances to Employees) 5763, 2003.

 

2.29         “Other Award” means a right or other interest granted to a Participant that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, including unrestricted Shares or dividend equivalent rights; provided, that the grant of an Other Award may in the Committee’s discretion be conditioned upon prior receipt of appropriate governmental approvals.

 

2.30         “Participant” means an Employee, Consultant, or Non-Employee Director to whom an Award is granted under this Plan.

 

2.31         “Performance Goal” means the performance goals or objectives established by the Committee as a condition precedent to the vesting of an Award.  The Performance Goals related to a Covered Participant are listed in Article 10 of this Plan.  The Performance Goals related to a Participant who is not a Covered Participant shall be determined by the Committee in its sole discretion.

 

2.32         “Performance Period” means the time period designated by the Committee during which Performance Goals must be met.

 

2.33         “Person” means an individual, entity or group (within the meaning of Section I3(d)(3) or 14(d)(2) of the Exchange Act).

 

2.34         “Plan” means this Given Imaging Ltd. Amended and Restated 2003 Equity Incentive Plan, as amended from time to time.

 

2.35         “Restricted Stock” means Shares issued or transferred to a Participant pursuant to Section 6.5 of this Plan which are subject to restrictions or limitations set forth in this Plan and in the related Award Agreement.

 

2.36         “Restricted Stock Unit” means a unit denominating a Share that gives the right to receive a payment in cash and/or Shares, and which is subject to restrictions, as described under Section 6.5 of the Plan.

 

2.37         “SAR” or “Stock Appreciation Right” means the right to receive a payment, in cash and/or Share, equal to the excess of the Fair Market Value of a specified number of Shares on the date the SAR is exercised over the SAR Price for such Shares.

 

2.38         “SAR Price” means the Fair Market Value of each Share covered by a SAR, determined by the Committee on the Date of Grant of the SAR.

 

2.39         “SEC” means the U.S. Securities and Exchange Commission.

 

  

5

  

 

2.40         “Securities Act” means the Securities Act of 1933, as amended.

 

2.41         “Shares” means the Company’s Ordinary Shares (nominal value NIS 0.05 per Share) or any shares substituted for such Ordinary Shares, which the Company is currently authorized to issue or may in the future be authorized to issue.

 

2.42         “Subsidiary” means (i) any corporation in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain, (ii) any limited partnership, if the Company or any corporation described in item (i) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement of the general partner, and (iii) any partnership or limited liability company, if the partners or members thereof are composed only of the Company, any corporation listed in item (i) above or any limited partnership listed in item (ii) above. “Subsidiaries” means more than one of any such corporations, limited partnerships, partnerships or limited liability companies.  Notwithstanding the above, with respect to a 102 Award, the term “Subsidiary” means any corporation (other than the Company) that is considered to be an  “employer company” under Section 102 of the Ordinance.

 

ARTICLE 3

 

ADMINISTRATION

 

3.1           The Committee shall administer the Plan unless otherwise determined by the Board.  The Committee shall consist of at least two persons. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board. Any vacancy occurring in the membership of the Committee may be filled by appointment by the Board.

 

3.2           A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee.

 

3.3           Subject to the provisions of applicable law, the Committee shall determine and designate from time to time the eligible persons to whom Awards will be granted and shall set forth in each related Award Agreement the Award Period, the Date of Grant, and such other terms, provisions, limitations, and Performance Goals, as are approved by the Committee, including, but not limited to, any rights of the Committee to cancel or rescind any such Award.

 

3.4           The Committee, in its discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and rescind any rules and regulations necessary or appropriate for the administration of the Plan, and (iii) make such other determinations and take such other action as it deems necessary or advisable in the administration of the Plan, including but not limited to, creating sub-plans, and (iv) make a 102 Track Election from time to time.  Any interpretation, determination, or other action made or taken by the Committee shall be final, binding, and conclusive on all interested parties.

 

  

6

  

 

3.5           With respect to restrictions in the Plan that are based on the requirements of Section 422 of the Code, Section 162(m) of the Code, the rules of any exchange or inter-dealer quotation system upon which the Company’s securities are listed or quoted, the provisions of the Ordinance, including regarding 102 Awards or any other applicable law, rule or restriction (collectively, “applicable law”), to the extent that any such restrictions are no longer required by applicable law, the Committee shall have the sole discretion and authority to grant Awards that are not subject to such mandated restrictions and/or to waive any such mandated restrictions with respect to outstanding Awards.

 

3.6           The Board shall have residual authority to administer any issue or matter related to this Plan, and may also affect any authority granted to the Committee hereunder.

 

ARTICLE 4

 

ELIGIBILITY

 

The Committee, upon its own action, may grant, but shall not be required to grant, an Award to any Employee, Consultant, or Non-Employee Director.  Awards may be granted by the Committee at any time and from time to time to new Participants, or to then Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Committee shall determine.  Except as required by this Plan, different Awards need not contain similar provisions.  The Committee’s determinations under the Plan (including without limitation the determination of the individual who is to receive an Award, the form, amount and timing of such Award, and the terms and provisions of such Award and the agreements evidencing the same) need not be uniform and may be made by it selectively among Employees, Consultants, or Non-Employee Directors who receive, or are eligible to receive, Awards under the Plan.

 

ARTICLE 5

 

SHARES SUBJECT TO PLAN

 

5.1           Total Shares Available.  Subject to adjustment as provided in Articles 13 and 14, the maximum number of Shares that may be delivered pursuant to Awards granted under the Plan is 2,500,000.

 

5.2           Source of Shares.  Shares to be issued may be made available from authorized but unissued Shares, Shares held by the Company in its treasury, or Shares purchased by the Company on the open market or otherwise.  During the term of this Plan, the Company will at all times reserve and keep available a number of Shares that shall be sufficient to satisfy the requirements of this Plan.

 

5.3           Restoration and Retention of Shares.  If any Shares subject to an Award shall not be issued or transferred to a Participant and shall cease to be issuable or transferable to a Participant because of the forfeiture, termination, expiration or cancellation, in whole or in part, of such Award or for any other reason, or if any such Shares shall, after issuance or transfer, be reacquired by the Company because of the Participant’s failure to comply with the terms and conditions of an Award or for any other reason, the Shares not so issued or transferred, or the Shares so reacquired by the Company, as the case may be, shall no longer be charged against the limitation provided for in Section 5.1 and may be used thereafter for additional Awards under the Plan.  To the extent an Award under the Plan is settled or paid in cash, Shares subject to such Award will not be considered to have been issued and will not be applied against the maximum number of Shares provided for in Section 5.1.  If an Award may be settled in Shares or cash, such Shares shall be deemed issued only when and to the extent that settlement or payment is actually made in Shares.  To the extent an Award is settled or paid in cash, and not Shares, any Shares previously reserved for issuance or transfer pursuant to such Award will again be deemed available for issuance or transfer under the Plan, and the maximum number of Shares that may be issued or transferred under the Plan shall be reduced only by the number of Shares actually issued and transferred to the Participant.  The Committee may from time to time adopt and observe such procedures concerning the counting of Shares against the Plan maximum as it may deem appropriate.

 

  

7

  

 

ARTICLE 6

 

GRANT OF AWARDS

 

6.1           Award Agreement. The grant of an Award shall be authorized by the Committee and may be evidenced by an Award Agreement setting forth the term of the Award, including the total number of Shares subject to the Award, the Option Price (if applicable), the Award Period, the Date of Grant, and such other terms, provisions, limitations, and Performance Goals, as are approved by the Committee, but not inconsistent with the Plan.  The Company may execute an Award Agreement with a Participant after the Committee approves the issuance of an Award. Any Award granted pursuant to this Plan must be granted within 10 years of the date of adoption of this Plan.  The grant of an Award to a Participant shall not be deemed either to entitle the Participant to, or to disqualify the Participant from, receipt of any other Award under the Plan.

 

6.2           Limitations on Awards. The Plan is subject to the following limitations:

 

(a)           Options. The Option Price of Options cannot be less than 100% of the Fair Market Value of a Share on the Date of Grant of the Option. Subject to adjustment as provided in Articles 13 and 14, the maximum number of Shares that may be made subject to ISOs is 1,000,000.

 

(b)           SARs. The SAR Price of a SAR cannot be less than 100% of the Fair Market Value of a Share on the Date of Grant of the SAR.

 

(c)           Calendar Year Share Limit. In the event the Company is subject to Section 162(m) of the Code, no Participant may receive during any calendar year Awards that are to be settled in Shares covering an aggregate of more than 1,000,000 Shares.

 

(d)           Calendar Year Cash Limit. In the event the Company is subject to Section 162(m) of the Code, no Participant may receive during any calendar year Awards that are to be settled in cash covering an aggregate of more than $4,000,000.

 

(e)           Term. The term of Awards may not exceed 10 years.

 

  

8

  

 

6.3           Rights as Shareholder.  Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or any authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder of the Company shall exist with respect to Shares, notwithstanding the exercise of any Award. Notwithstanding the above, a Participant awarded Restricted Stock shall have the right to vote and receive dividends with respect to such Shares.

 

6.4           Options.

 

(a)           In General. The Committee may grant Options under the Plan.  ISOs may be granted only to Employees.  NQSOs may be granted to Employees, Consultants, and Non-Employee Directors.  Section 102 Options may be granted only to Israeli Participants who are Employees. Any Option granted to a Nosei Misra shall be authorized and implemented only in accordance with the provisions of the Israeli Companies Law.  Section 3(i) Options may be granted to Non-Israeli Employees, Non-Employee Directors, and Consultants.  With respect to each Option, the Committee shall determine the number of Shares subject to the Option, the exercise price, the term of the Option, the time or times at which the Option may be exercised and whether the Option is an 3(i) Option, 102 Options, ISO, or a NQSO.

 

(b)           Vesting. Subject to Article 14 of the Plan, Options shall vest upon satisfaction of the conditions set forth in the Award Agreement. Such conditions may provide for vesting based on (i) length of continuous service, (ii) achievement of specific business objectives, (iii) increases in specified indices, (iv) attainment of specified growth rates, or (v) other Performance Goals, as may be determined by the Committee in its sole discretion.

 

(c)           Special Rule for ISOs. If the aggregate Fair Market Value of Shares (determined as of the Date of Grant) underlying ISOs that first become exercisable during any calendar year exceeds $100,000, the portion of the Option or Options not exceeding $100,000, to the extent of whole Shares, will be treated as an ISO and the remaining portion of the Option or Options will be treated as a NQSO’s.  The preceding sentence will be applied by taking Options into account in the order in which they were granted.

 

6.5           Restricted Stock/Restricted Stock Units.  If Restricted Stock and/or Restricted Stock Units are granted to a Participant under an Award, the Committee shall establish: (i) the number of Shares of Restricted Stock and/or the number of Restricted Stock Units awarded, (ii) the price, if any, to be paid by the Participant for such Restricted Stock and/or Restricted Stock Units, (iii) the time or times within which such Award may be subject to forfeiture, (iv) Performance Goals of the Company, a Subsidiary, any division thereof or any group of Employees of the Company, or other criteria, if any, which the Committee determines must be met in order to remove any restrictions (including vesting) on such Award, and (v) all other terms, limitations, restrictions, and conditions of the Restricted Stock and/or Restricted Stock Units, which shall be consistent with this Plan. The provisions of Restricted Stock and/or Restricted Stock Units need not be the same with respect to each Participant.

 

(a)           Legend on Shares.  Each Participant who is awarded Restricted Stock shall be issued the number of Shares specified in the Award Agreement for such Restricted Stock, and such Shares shall be recorded in the Share transfer records of the Company and ownership of such Shares shall be evidenced by a certificate or book entry notation in the Share transfer records of the Company.  Such Shares shall be registered in the name of the Participant, and shall bear or be subject to an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. The Committee may require that the Share certificates or other evidence of ownership of the Shares of Restricted Stock be held in custody by the Company until the restrictions thereon shall have lapsed, and that the Participant deliver to the Committee a share power or share powers, endorsed in blank, relating to the Shares of Restricted Stock.

 

  

9

  

 

(b)           Restrictions and Conditions.  Shares of Restricted Stock and Restricted Stock Units shall be subject to the following restrictions and conditions:

 

(i)           Subject to the other provisions of this Plan and the terms of the particular Award Agreements, during such period as may be determined by the Committee commencing on the Date of Grant (the “Restriction Period”), the Participant shall not be permitted to sell, transfer, pledge or assign Shares of Restricted Stock and/or Restricted Stock Units.

 

(ii)           Except as provided in subparagraph (i) above and subject to the terms of a Participant’s Award Agreement, the Participant shall have, with respect to his or her Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the Shares, and the right to receive any dividends thereon.  Subject to the terms of a Participant’s Award Agreement, certificates or evidence of ownership of Shares free of restriction under this Plan shall be delivered to the Participant promptly after, and only after, the Restriction Period shall expire without forfeiture in respect of such Shares.  Certificates for the Shares forfeited under the provisions of the Plan shall be promptly returned to the Company by the forfeiting Participant.  Each Participant, by his or her acceptance of Restricted Stock, shall irrevocably grant to the Company a power of attorney to transfer any Shares so forfeited to the Company and agrees to execute any documents requested by the Company in connection with such forfeiture and transfer.

 

(iii)           The Restriction Period of Restricted Stock and/or Restricted Stock Units shall commence on the Date of Grant and, subject to Article 14 of the Plan, shall expire upon satisfaction of the conditions set forth in the Award Agreement; such conditions may provide for vesting based on (i) length of continuous service, (ii) achievement of specific business objectives, (iii) increases in specified indices, (iv) attainment of specified growth rates, or (v) other Performance Goals, as may be determined by the Committee in its sole discretion.

 

6.6           SARs.

 

(a)           In General. A SAR shall entitle the Participant to surrender to the Company the SAR, or portion thereof, as the Participant shall choose, and to receive from the Company in exchange therefore cash or Shares, as determined by the Committee in its discretion, in an amount equal to the excess (if any) of the Fair Market Value (as of the date of the exercise of the SAR) per Share over the SAR Price per Share specified in such SAR, multiplied by the total number of Shares of the SAR being surrendered.  In the discretion of the Committee, the Company may satisfy its obligation upon exercise of an SAR by the distribution of that number of Shares having an aggregate Fair Market Value (as of the date of the exercise of the SAR) equal to the amount of cash otherwise payable to the Participant, with a cash settlement to be made for any fractional Shares, or the Company may settle such obligation in part with Shares and in part with cash.

 

  

10

  

 

(b)           Vesting. Subject to Article 14 of the Plan, SARs shall vest upon satisfaction of the conditions set forth in the Award Agreement; such conditions may provide for vesting based on (i) length of continuous service, (ii) achievement of specific business objectives, (iii) increases in specified indices, (iv) attainment of specified growth rates, or (v) other Performance Goals, as may be determined by the Committee in its sole discretion.

 

6.7           Special Rules for 102 Awards.  102 Awards granted to Participants and/or any Shares issued upon the exercise of such 102 Awards shall be issued to a trustee nominated by the Committee, and approved in accordance with the provisions of Section 102 of the Ordinance (the ''Trustee'') and held together with any Shares issued upon exercise of such 102 Awards for the benefit of the Participants for the minimum period required by applicable law without disqualifying such 102 Awards from treatment under Section 102 of the Ordinance. The Trustee will hold such 102 Awards or Shares resulting from the exercise thereof in accordance with the provisions of the Ordinance and the rules promulgated thereunder, the trust agreement and any other instructions the Committee may issue to him or her from time to time (so long as they do not contradict the Ordinance and the rules promulgated thereunder). The Trustee will transfer the 102 Awards or the Shares issued upon exercise of such 102 Awards, as the case may be, to the Participant upon his or her demand, provided, that the Trustee shall not release any 102 Awards which were not already exercised into Shares by the Participant or release any Shares issued upon exercise of such Options prior to the full payment of the withholding tax arising from such Options which were granted to him and/or any Shares issued upon exercise of such Options. The Participant may be required to execute a form of undertakings or waivers in favor of such Trustee in a customary form, as a condition for the grant of any Award.  Subject to the provisions of Section 102 of the Ordinance (including the regulations promulgated thereunder), the Committee shall determine and approve the terms of engagement of the Trustee, and shall be authorized, subject to the provisions of applicable law, to designate from time to time a new Trustee and replace either of them at its sole discretion, and in the event of replacement of any existing Trustee, to instruct the transfer of all Options and Shares held by such Trustee at such time to its successor.

 

If a Participant exercises any Award or sells or releases any underlying Shares during the holding period mandated by Section 102 of the Ordinance, 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 Participant.

 

  

11

  

 

ARTICLE 7

 

AWARD PERIOD; VESTING

 

7.1           In General. Unless otherwise provided for in the Award Agreement, or otherwise determined by the Committee in its sole discretion, Awards shall vest as follows:

 

(a)           Initial Grant. With respect to the first Award granted to a Participant under the Plan, in the event that the Participant has not previously been granted options to purchase Shares of the Company under any other plan or sub-plan of the Company, 50% of the Award shall vest on the second anniversary of the Date of Grant, 25% of the Award shall vest on the third anniversary of the Date of Grant, and 25% of the Award shall vest on the fourth anniversary of the Date of Grant; provided, however, that the Participant is providing services to the Company and/or Subsidiary on each such anniversary date; and provided further, that, the vesting shall not commence prior to the date the Participant provides services to the Company and/or Subsidiary.

 

(b)           Subsequent Grant. With respect to subsequent Awards granted to a Participant under the Plan or with respect to Awards made to a Participant that has previously been granted options to purchase Shares of the Company under any other plan or sub-plan of the Company, 25% of the Award shall vest on each anniversary of the Date of Grant; provided, however, that the Participant is providing services to the Company and/or Subsidiary on each such anniversary date.

 

7.2            Specific Powers of Committee. The Committee, in its sole discretion, may determine that an Award will be immediately exercisable, in whole or in part, or that all or any portion may not be exercised until a date, or dates, subsequent to its Date of Grant, or until the occurrence of one or more specified events, subject in any case to the terms of the Plan.  If the Committee imposes conditions upon exercise, then subsequent to the Date of Grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Award may be exercised.

 

ARTICLE 8

 

TERMINATION OF SERVICE

 

8.1           In General. Unless otherwise provided in an Award Agreement, if a Participant’s employment or service as a Consultant or Non-Employee Director with the Company is terminated (other than for Cause, or by reason of death or disability or retirement, as determined by the Committee in its sole discretion), then the portion of the Award that is not vested as of the date of such termination shall automatically lapse and be forfeited. The portion, if any, of the Award (other than Awards of Restricted Stock or Restricted Stock Units) that is vested as of the date of such termination shall automatically lapse and be forfeited at the close of business on the 180th day following the effective date of such Participant’s termination.

 

8.2           Special Provision Regarding Non-Employee Directors.  In the event that the service of any Non-Employee Director who has served for five years or more on the Board of Directors is terminated or discontinued for any reason other than cause, all unvested Awards held by such director shall automatically vest and become exercisable immediately prior to such termination or discontinuance.  If such termination of service is due to applicable statutory requirements, death, disability or other forced cessation of service, such vested Awards may be exercised until the expiration date of the Award.  In all other circumstances, all vested Awards must be exercised within the 180-day period following termination or discontinuance of service as set forth in Section 8.1 above.

 

  

12

  

 

8.3           Death; Disability; Retirement.

 

(a)      Death and Disability.  Unless otherwise provided in an Award Agreement, if a Participant’s employment or service as a Consultant or Non-Employee Director with the Company is terminated by reason of death or Disability, then the unvested portion of any Awards then held by such Participant (or the Trustee, where applicable) shall thereupon automatically be accelerated and exercisable in full and all Restriction Periods applicable to Awards of Restricted Stock and/or Restricted Stock Units shall automatically expire.  All vested Awards (other than Awards of Restricted Stock or Restricted Stock Units) shall automatically lapse and be forfeited at the close of business on the first anniversary of the date of the Participant’s death.

 

(b)      Retirement.  Unless otherwise provided in an Award Agreement, if a Participant’s employment or service as a Consultant or Non-Employee Director with the Company is terminated by reason of retirement (as determined by the Committee in its sole discretion), then the portion of the Award that is not vested as of the date of such termination shall automatically lapse and be forfeited.  The portion, if any, of the Award (other than Awards of Restricted Stock or Restricted Stock Units) that is vested as of the date of such termination shall automatically lapse and be forfeited at the close of business on the first anniversary of the date of such Participant’s termination.

 

8.4           Termination for Cause.  If a Participant’s employment or service as a Consultant or Non-Employee Director is terminated by the Company for Cause, the Participant’s entire Award, whether vested or unvested, shall automatically lapse and be forfeited on the date of such termination, or the date of termination notice to Participant, whichever is earlier.

 

ARTICLE 9

 

EXERCISE OF AWARD

 

9.1           In General.

 

(a)           A vested Award may be exercised at such times and in such amounts as provided in this Plan and the applicable Award Agreement, subject to the terms, conditions, and restrictions of the Plan.

 

(b)           In no event may an Award be exercised or Shares to be issued pursuant to an Award if a necessary listing or quotation of the Shares on a stock exchange or inter-dealer quotation system or any registration under any laws required under the circumstances has not been accomplished.  No Award may be exercised for a fractional Share.

 

9.2           Stock Options.

 

(a)           Subject to such administrative regulations as the Committee may from time to time adopt, an Option may be exercised by the delivery of the Exercise Notice to the Company, in such form and method as may be determined by the Company and, when applicable, the Trustee, which exercise shall be effective upon receipt of such notice by the Company at its principal office and the applicable payment of the exercise price of the exercised options, as described herein. The notice shall specify the number of Shares with respect to which the Option is being exercised. On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the Shares to be purchased. The acceptable form(s) of consideration for the total Option Price shall be specified in the Award Agreement. Such consideration may include the following: (a) cash, check, bank draft, or money order payable to the order of the Company, (b) Shares owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, (c) by delivery (including by fax) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the Shares purchased upon exercise of the Option and promptly deliver to the Company the amount of sale proceeds necessary to pay such purchase price, (d) by delivery (including by fax) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell all of the Shares purchased upon exercise of the Option and promptly deliver to the Company the amount of sale proceeds necessary to pay such purchase price, (e) a cashless exercise mechanism approved by the Company in compliance with Section 402 of the Sarbanes Oxley Act, and/or (e) in any other form of valid consideration that is acceptable to the Company in its sole discretion.

 

  

13

  

 

(b)           Upon payment of all amounts due from the Participant, the Company shall cause Shares then being purchased to be delivered as directed by the Participant (or the person exercising the Participant’s Option in the event of his death) at its principal business office promptly after the Exercise Date; provided that if the Participant has exercised an ISO, the Company may at its option retain possession of the Shares acquired upon exercise until the expiration of the holding periods described in Section 422(a)(1)of the Code.  The obligation of the Company to deliver Shares shall, however, be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration, or qualification of the Option or the Shares upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the Option or the issuance or purchase of Shares thereunder, the Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.

 

(c)           If the Participant fails to pay for any of the Shares specified in such notice or fails to accept delivery thereof, the Participant’s right to purchase such Shares may be terminated by the Company.

 

(d)           Options granted under the Option Plan shall not be transferable by Participant other than by will or laws of descent and distribution and during a Participants' lifetime shall be exercisable only by that Participant.

 

9.3           SARs.  Subject to the conditions of this Section and such administrative regulations as the Committee may from time to time adopt, an SAR may be exercised by the delivery (including by fax) of the Exercise Notice to the Company . On the Exercise Date, the Participant shall receive from the Company in exchange therefore cash in an amount equal to the excess (if any) of the Fair Market Value (as of the date of the exercise of the SAR) per Share over the SAR Price per Share specified in such SAR, multiplied by the total number of Shares of the SAR being surrendered.  In the discretion of the Committee, the Company may satisfy its obligation upon exercise of a SAR by the distribution of that number of Shares having an aggregate Fair Market Value (as of the date of the exercise of the SAR) equal to the amount of cash otherwise payable to the Participant, with a cash settlement to be made for any fractional Shares, or the Company may settle such obligation in part with Shares and in part with cash.

 

  

14

  

 

9.4           Tax Payment Election.  Subject to the approval of the Committee, and to any rules and limitations as the Committee may adopt, a person exercising an Award may make the payment of the amount of any taxes required to be collected or withheld by the Company in connection with such exercise in whole or in part by electing, at or before the time of exercise, either (i) to have the Company withhold from the number of Shares otherwise deliverable a number of Shares whose value equals the amount of the applicable supplemental wage withholding required plus any required state, local or employment tax withholdings, (ii) to deliver certificates for other Shares owned by the person exercising the Award, endorsed in blank with appropriate signature guarantee, having a value equal to the amount otherwise to be collected or withheld, or (iii) in the event of an exercise immediately followed by a sale of the underlying Shares, to have the broker executing such transaction deduct the required tax from the sale proceeds and transfer it to the Company.

 

ARTICLE 10

 

SPECIAL PROVISIONS

APPLICABLE TO COVERED PARTICIPANTS

 

Awards subject to Performance Goals paid to Covered Participants under this Plan shall be governed by the conditions of this Article 10 in addition to the requirements of Article 6, above.  Should conditions set forth under this Article 10 conflict with the requirements of Article 6, the conditions of this Article 10 shall prevail.

 

10.1           Establishment of Performance Goals.  All Performance Goals, relating to Covered Participants for a relevant Performance Period shall be established by the Committee in writing prior to the beginning of the Performance Period, or by such other later date for the Performance Period as may be permitted under Section 162(m) of the Code.  The Performance Goals may be identical for all Participants or, at the discretion of the Committee, may be different to reflect more appropriate measures of individual performance.

 

10.2           Performance Goals.  The Committee shall establish the Performance Goals relating to Covered Participants for a Performance Period in writing.  Performance Goals may include alternative and multiple Performance Goals and may be based on one or more business and/or financial criteria.  In establishing the Performance Goals for the Performance Period, the Committee in its discretion may include one or any combination of the following criteria in either absolute or relative terms, for the Company or any Subsidiary:

 

(a)           Increased revenue;

 

(b)           Net income measures (including but not limited to income after capital costs and income before or after taxes);

 

  

15

  

 

(c)           Stock price measures (including but not limited to growth measures and total stockholder return);

 

(d)           Market Share;

 

(e)           Earnings per Share (actual or targeted growth);

 

(f)           Cash flow measures (including but not limited to net cash flow and net cash flow before financing activities);

 

(g)           Return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity);

 

(h)           Operating measures (including but not limited to operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes, and production efficiency); and

 

(i)           Expense measures (including but not limited to cost-per-barrel, overhead cost and general and administrative expense).

 

10.3         Compliance  with Section 162(m).  The Performance Goals must be objective and must satisfy third party “objectivity” standards under Section 162(m) of the Code, and the regulations promulgated thereunder.  In interpreting Plan provisions relating to Awards subject to Performance Goals paid to Covered Participants, it is the intent of the Plan to conform with the standards of Section 162(m) of the Code and Treasury Regulation §1.162-27(e)(2)(i), and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions.

 

10.4         Adjustments.  The Committee is authorized to make adjustments in the method of calculating attainment of Performance Goals in recognition of: (i) extraordinary or non-recurring items, (ii) changes in tax laws, (iii) changes in generally accepted accounting principles or changes in accounting principles, (iv) charges related to restructured or discontinued operations, (v) restatement of prior period financial results, and (vi) any other unusual, non-recurring gain or loss that is separately identified and quantified in the Company’s financial statements.  Notwithstanding the foregoing, the Committee may, at its sole discretion, reduce the performance results upon which Awards are based under the Plan, to offset any unintended result(s) arising from events not anticipated when the Performance Goals were established, or for any other purpose, provided that such adjustment is permitted by Section 162(m) of the Code.

 

10.5         Discretionary Adjustments.  The Performance Goals shall not allow for any discretion by the Committee as to an increase in any Award, but discretion to lower an Award is permissible.

 

10.6         Certification.  The Award and payment of any Award under this Plan to a Covered Participant with respect to a relevant Performance Period shall be contingent upon the attainment of the Performance Goals that are applicable to such Covered Participant.  The Committee shall certify in writing prior to payment of any such Award that such applicable Performance Goals relating to the Award are satisfied.  Approved minutes of the Committee may be used for this purpose.

 

  

16

  

 

10.7         Other Considerations.  All Awards to Covered Participants under this Plan shall be further subject to such other conditions, restrictions, and requirements as the Committee may determine to be necessary to carry out the purpose of this Article 10.

 

ARTICLE 11

 

AMENDMENT OR DISCONTINUANCE

 

11.1         In General.  Subject to the limitations set forth in this Article 11, the Committee may at any time and from time to time, without the consent of the Participants, alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided, however, that no amendment which requires shareholder approval under the rules of any over-the-counter market or national securities exchange on which Shares are listed (or in order for the Plan and Awards awarded under the Plan to comply with Section 422 or Section 162(m) of the Code, including any successors to such Sections), shall be effective unless such amendment shall be approved by the requisite vote of the shareholders  of the Company entitled to vote thereon. Any such amendment shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding Award theretofore granted under the Plan, notwithstanding any contrary provisions contained in any Award Agreement.  In the event of any such amendment to the Plan, the holder of any Award outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Committee to any Award Agreement relating thereto.  Notwithstanding the foregoing, no such alteration, amendment, revision, suspension or discontinuance implemented after a Change in Control may adversely affect any Award outstanding prior to the Change in Control without the consent of the holder of such Award.

 

11.2         Amendments to Awards.  The Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted; provided that, unless required by law, no action contemplated or permitted by this Article 11 shall adversely effect (as reasonably determined by the Committee) any rights of Participants or obligations of the Company to Participants with respect to any Award theretofore granted under the Plan without the consent of the affected Participant.

 

ARTICLE 12

 

EFFECTIVE DATE AND TERM

 

The Plan shall be effective as of June 18, 2003.  Subject to earlier termination pursuant to Article 11, the Plan shall have a term of 10 years from its effective date and will terminate on  June 18, 2013. After termination of the Plan, no future Awards may be made.  However, any Awards granted before that date will continue to be effective in accordance with their terms and conditions.

 

 

  

17

  

 

ARTICLE 13

 

CAPITAL ADJUSTMENTS

 

13.1         In General.  If at any time while the Plan is in effect, or Awards are outstanding, there shall be any increase or decrease in the number of issued and outstanding Shares resulting from (1) the declaration or payment of a stock dividend, (2) any recapitalization resulting in a stock split-up, combination, or exchange of Shares, or (3) other increase or decrease in such Shares effected without receipt of consideration by the Company, then, to the extent the Committee determines that an adjustment is desirable to prevent the dilution or enlargement of the rights of Participants under the Plan:

 

(a)           An appropriate adjustment shall be made in the maximum number of Shares then subject to being awarded under the Plan and in the maximum number of Shares that may be awarded to a Participant to the end that the same proportion of the Company’s issued and outstanding Shares shall continue to be subject to being so awarded.

 

(b)           Appropriate adjustments shall be made in the number of Shares and the Option Price thereof then subject to purchase pursuant to each such Option previously granted and unexercised, to the extent that the same proportion of the Company’s issued and outstanding Shares in each such instance shall remain subject to purchase at the same aggregate Option Price.

 

(c)           Appropriate adjustments shall be made in the number of SARs and the SAR Price thereof then subject to exercise pursuant to each such SAR previously granted and unexercised, to the extent that the same proportion of the Company’s issued and outstanding Shares  in each instance shall remain subject to exercise at the same aggregate SAR Price.

 

(d)           Appropriate adjustments shall be made in the number of outstanding Shares of Restricted Stock and the number of Restricted Stock Units with respect to which restrictions have not yet lapsed prior to any such change.

 

13.1A      Cash Dividends.  In the event the Company distributes a dividend in cash and the record date for such distribution is subsequent to the Date of Grant of an Option but prior to the exercise or other termination of such Option, the Committee may in its discretion determine that the exercise price of all or any portion of such outstanding Option shall be reduced by the dividend amount, net of applicable tax in a manner that complies with Section 409A of the Code (to the extent applicable).

 

13.2         Issuance of Shares or Other Convertible Securities.  Except as otherwise expressly provided herein, the issuance by the Company of Shares of any class, or securities convertible into Shares of any class, either in connection with direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of Shares or obligations of the Company convertible into such Shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to (i) the number of or Option Price of Shares then subject to outstanding Options granted under the Plan, (ii) the number of or SAR Price or SARs then subject to outstanding SARs granted under the Plan, (iii) the number of outstanding Shares of Restricted Stock, or (iv) the number of outstanding Restricted Stock Units.

 

  

18

  

 

13.3         Notification.  Upon the occurrence of each event requiring an adjustment with respect to any Award, the Company shall notify each affected Participant its computation of such adjustment, which shall be conclusive and shall be binding upon each such Participant.

 

ARTICLE 14

 

RECAPITALIZATION, MERGER AND CONSOLIDATION; CHANGE OF CONTROL

 

14.1         Adjustments, Recapitalizations, Reorganizations, or Other Adjustments.  The existence of this Plan and Awards granted hereunder shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure and its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the Shares or the rights thereof (or any rights, options, or warrants to purchase same), or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

14.2         Acquiring Entity.  Subject to any required action by the stockholders and subject to Article 16, if the Company shall be the surviving or resulting corporation in any merger, consolidation or Share exchange, any Award granted hereunder shall pertain to and apply to the securities or rights (including cash, property, or assets) to which a Participant would have been entitled.

 

14.3         Acquired Entity.  In the event of any merger, consolidation or Share exchange involving the Company pursuant to which the Company is not the surviving or resulting corporation, the Committee, as constituted before such transaction, without the consent of any Participant, shall have the sole discretion to determine the treatment of any outstanding Awards under this Plan.  For purposes of clarity, the Committee’s determination under this Section 14.3 shall not be an amendment to an Award subject to Section 11.2.  Notwithstanding the above, in the event the successor corporation does not agree to assume an Award, any unvested portion of such Award shall become fully vested and exercisable as of the date 10 days prior to the effective date of the transaction, provided, however, that a Participant has been employed or providing services to the Company at least one year prior to such date.

 

14.4         Change of Control. Unless otherwise provided in an Award Agreement and subject to Article 16, notwithstanding any other provision in this Plan to the contrary, if, as of or within twelve months following a Change of Control, a Participant’s employment or service with the Company  is terminated (i) by the Company without Cause (for purposes of clarity, such a termination of employment or service shall not include a termination which occurs because of the Participant’s death or disability) or (ii) by the Participant in circumstances of Constructive Termination, the unvested portion of any Awards then held by such Participant (or the Trustee, where applicable) shall thereupon automatically be accelerated and exercisable in full and all Restriction Periods applicable to Awards of Restricted Stock and/or Restricted Stock Units shall automatically expire.  The determination of the Committee that any of the foregoing conditions has been met shall be binding and conclusive on all parties.

 

  

19

  

 

ARTICLE 15

 

LIQUIDATION OR DISSOLUTION

 

In case the Company sells all or substantially all of its property, or dissolves, liquidates,  or winds up its affairs (each, a “Dissolution Event”), the Participant shall receive, to the extent the Participant is vested in an Award, the same kind and amount of any securities or assets as may be issuable, distributable, or payable upon any such sale, dissolution, liquidation, or winding up with respect to each Share of the Company.

 

ARTICLE 16

 

ADDITIONAL AUTHORITY OF COMMITTEE

 

In addition to the Committee’s authority set forth elsewhere, in order to maintain a Participant’s rights in the event of any Change of Control or Dissolution Event described under Articles 14 and 15, the Committee, as constituted before the Change of Control or Dissolution Event, is hereby authorized, and has sole discretion, as to any Award, either at the time the Award is made hereunder or any time thereafter, to take any one or more of the following actions:

 

(a)           provide for the acceleration of any time periods relating to the vesting, exercise or realization of the Award so that the Award may be exercised or realized in full on or before a date fixed by the Committee;

 

(b)           provide for the purchase or cancellation of any Award in exchange for an amount of cash equal to the amount that could have been attained upon the exercise of the Award or realization of the Participant’s rights in the Award had the Award been currently exercisable or payable;

 

(c)           adjust any outstanding Award as the Committee deems appropriate to reflect the Change of Control or Dissolution Event; or

 

(d)           cause any outstanding Award to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation after a Change of Control or successor following a Dissolution Event.

 

(e)           The Committee may in its discretion include other provisions and limitations in any Award Agreement as it may deem equitable and in the best interests of the Company.

 

ARTICLE 17

 

MISCELLANEOUS PROVISIONS

 

17.1         Code Section 409A.  It is intended that the payments and benefits under the Plan comply with, or as applicable, constitute a short-term deferral or otherwise be exempt from, the provisions of Section 409A of the Code and related regulations (“Section 409A”).  Notwithstanding anything in this Plan to the contrary, if any Plan provision or Award under the Plan would result in the imposition of an applicable tax under Section 409A, that Plan provision or Award may be reformed to avoid imposition of the applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect the Participant’s rights to an Award.

 

  

20

  

 

17.2         Investment Intent.  The Company may require that there be presented to and filed with it by any Participant under the Plan, such evidence as it may deem necessary to establish that the Awards granted or the Shares to be purchased or transferred are being acquired for investment and not with a view to their distribution.

 

17.3         No Right to Continued Employment.  Neither the Plan nor any Award granted under the Plan shall confer upon any Participant any right with respect to continuance of employment by the Company or any Subsidiary.

 

17.4         Delegation.  Subject to the terms of the Plan and applicable law, the Committee may delegate to one or more officers or managers of the Company or any Affiliate, or to a committee of such officers or managers, the authority, subject to the terms and limitations the Committee shall determine, to grant Awards or to cancel, modify or waive rights with respect to, or to amend, suspend, or terminate Awards.

 

17.5         Indemnification of Board and Committee.  No member of the Board or the Committee, nor any officer or employee of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company acting on their behalf shall, to the fullest extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation.

 

17.6         Effect of the Plan.  Neither the adoption of this Plan nor any action of the Board or the Committee shall be deemed to give any person any right to be granted an Award or any other rights except as may be evidenced by an Award Agreement, or any amendment thereto, duly authorized by the Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein.

 

17.7         Compliance with Laws and Regulations.  Notwithstanding anything contained herein to the contrary, the Company shall not be required to sell or issue Shares under any Award if the issuance thereof would constitute a violation by the Participant or the Company of any provisions of any law or regulation of any governmental authority or any national securities exchange or inter-dealer quotation system or other forum in which Shares are quoted or traded (including without limitation Section 162(m) of the Code), and, as a condition of any sale or issuance of Shares under an Award, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary or advisable to assure compliance with any such law or regulation.  The Plan, the grant and exercise of Awards hereunder, and the obligation of the Company to sell and deliver Shares, shall be subject to all applicable laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.

 

  

21

  

 

17.8         Severability.  If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

 

17.9         Tax Requirements, Withholding.

 

(a)           In General. The Company or any Affiliate is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding taxes with respect to an Award, its exercise, the lapse of restrictions thereon, payment or transfer under an Award or under the Plan, and to take any other action necessary in the opinion of the Company to satisfy all obligations for the payment of the taxes.  Such payments shall be required to be made prior to the delivery of any Shares.  Such payment may be made in cash, by check, or through the delivery of Shares owned by the Participant (which may be effected by the actual delivery of Shares by the Participant or by the Company’s withholding a number of Shares to be issued upon the exercise of a Share, if applicable), or any combination thereof.

 

(b)           102 Awards.    With respect to 102 Awards, the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including the withholding of taxes at source.  The Board, the Committee and/or the Trustee shall not be required to release any Share certificate, issued upon exercise of the 102 Awards to a Participant until all required payments have been fully made.

 

17.10       Assignability.  Awards may not be transferred or assigned other than by will or the laws of descent and distribution and may be exercised during the lifetime of the Participant only by the Participant or the Participant’s legally authorized representative, and each Award Agreement in respect of an Award shall so provide.

 

17.11       No Trust or Fund Created.  Except for 102 Awards or as otherwise required under applicable law, neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or any fiduciary relationship between the Company or any Affiliate and a Participant or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

 

17.12       Use of Proceeds.  Proceeds from the sale of Shares pursuant to Awards granted under this Plan shall constitute general funds of the Company.

 

17.13       Governing Law.  The validity, construction and effect of the Plan and any actions taken or relating to the Plan shall be determined in accordance with the laws of Israel without giving effect to its choice of law provisions.

 

  

22

  

 

17.14       No Fractional Shares.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or whether fractional Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

 

17.15       Headings.  Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference.  The headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

17.16       Construction.  Use of the term “including” in this Plan shall be construed to mean “including but not limited to.”

 

23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00200-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00200-of-00352.parquet"}]]