Document:

Exhibit 10.3

 

IBM 2003 EMPLOYEES STOCK PURCHASE PLAN (the “Plan”)

(as amended through April 1, 2005)

 

[NOTE:  This exhibit reflects various
amendments to the Plan.  Section 3
of the Plan was amended to eliminate the requirement that Offering Periods be
semi-annual, and that each Offering Period be limited to six months in
duration.  Section 5 and Section 7
were amended to reflect administrative payroll deduction matters.  Section 9 was amended to reflect the
manner in which shares can be registered under the Plan.  No other changes have been made to the Plan,
and the maximum number of shares that may be issued under the Plan, as set
forth in the preamble to the Plan, remains unchanged.]

 

The purpose of this Plan is
to provide employees an opportunity to purchase IBM stock through  offerings to commence on a date no earlier
than July 1, 2003, as determined by the Committee.  50,000,000
shares of IBM stock in the aggregate ($0.20 par value) have been approved for
this purpose. 

 

1. Administration.  The Plan shall be administered by a
Committee appointed by the  Board
of Directors from members of senior management, consisting of at least three
members.  The Committee shall have authority to make rules and regulations for
the administration of the Plan,
including establishing the purchase price in accordance with Section 4 below.  The Committee’s interpretations and decisions
with regard thereto shall be final and
conclusive.  At any time and from time to
time, the Board may delegate to the Committee the Board’s power and authority under the Plan pursuant to
such conditions or limitations
as the Board may establish.

 

2. Eligibility.  Except
as provided below, all employees of the Corporation or its subsidiaries  shall be eligible to participate in the Plan
in accordance with such rules as may be prescribed by the Committee from time to time, which rules, however,
shall neither permit nor deny
participation in the Plan contrary to the requirements of the Internal Revenue Code (including, but not limited to, Section 423
(b)(3), (4), (5), and (8)  thereof) and the regulations promulgated
thereunder.  Sub-plans established under
the Plan outside of the United
States need not comply with the Internal Revenue Code and associated regulations.  No employee may be granted an option if such
employee, immediately after the
option is granted, owns 5% or more of the total combined voting power orvalue of the stock of the Corporation
or any subsidiary.  For purposes of the
preceding sentence, the rules of
Section 424(d) of the Internal Revenue Code shall apply in determiningthe stock ownership of an employee, and
stock that the employee may purchase under outstanding options shall be treated as stock owned by the employee.

 

3. Offering Periods.  The Corporation shall make
available Offering Periods to employees  to purchase IBM stock under this Plan (each, an “Offering Period”).
Each Offering Period shall be of
a length determined by the Committee, during which (or during such portion thereof as an employee may elect to
participate) the amounts received as compensation by an employee shall constitute the measure
of such of the employee’s participation in the Offering Period as is based on compensation.

 

4. Purchase
of Shares.  Shares shall be
purchased each pay period during an Offering  Period.  Prior to the commencement of each Offering
Period, the Committee shall establish the purchase price for each share purchased during such Offering
Period.  The purchase price shall be no lower than the lesser of
85% of the average market price on the first business day of each Offering Period or 85% of the average market
price on the last business day
of each pay period.  The purchase price
established by the Committee may include,
without limitation, a purchase price that is no lower than 85% of the average market
price on the last business day of each pay period or a purchase price that is
no lower than 85% of the average
market price on the first business day of each Offering

 

 

Period.  The purchase price established by the
Committee may be a fixed price or determined  by formula.  Each employee participating in the Plan during
any Offering Period shall be
granted an option, upon the effective date of such Offering Period, for as many
full and fractional shares of IBM stock as the participating employee may elect
to purchase with up to 10% of the compensation received during the specified
Offering Period, to be paid by payroll deductions during such Offering Period.  Notwithstanding the foregoing, in no event
shall the number of shares purchased by an employee in any Offering Period
exceed 1,000 shares.  As of the last day
of each pay period during any Offering Period, the account of each
participating employee shall be totaled, and the employee shall be deemed to have exercised an option
to purchase one or more full or fractional shares at the then-applicable price;
the employee’s account shall be charged for the amount of the purchase; and the
ownership of such share or shares shall be appropriately evidenced on the books
of the Corporation.  Additional shares
covered by the employee’s option shall be purchased in the same manner, as of
the last day of each subsequent pay period during the Offering Period.

 

5. Participation.  An employee eligible for
participation on the effective date of any  Offering Period may participate in such
Offering Period by completing and forwarding a payroll deduction authorization to the employee’s appropriate payroll
location in accordance with
payroll procedures established by IBM.  The
form will authorize a regular payroll deduction from the employee’s compensation, and must specify the date
on which such deduction is to
commence, which day may not be retroactive.  The form must be received by the Corporation’s payroll
department in accordance with payroll procedures established by IBM.

 

6. Deductions.  The
Corporation shall maintain payroll deduction accounts for all participating
employees.  With respect to any Offering Period under this
Plan, an employee may authorize
a payroll deduction of a whole percentage (up to a maximum of 10%) of the compensation the employee receives during
the Offering Period (or during such portion thereof in which the employee may elect to participate). No employee
may be granted an option that
permits his or her rights to purchase stock under this Plan, and any other stock purchase plan of the Corporation
and its subsidiaries, to accrue at a rate that exceeds $25,000 of the fair market value of such stock (determined at
the effective date of the
applicable Offering Period) for each calendar year in which the option is
outstanding at any time.

 

7. Deduction Changes.  All changes to payroll deductions
under the Plan shall be in  accordance
with payroll procedures established by IBM.  An employee may increase or decrease the employee’s payroll deduction by
filing a new payroll deduction authorization at any time during an Offering Period.  The change may not become effective sooner
than the next pay period after
receipt of the authorization.

 

8. Employee Accounts and Certificates.  Upon purchase of one or more full
or fractional  shares by a
Plan participant pursuant to Section 4 hereof, the Corporation shall
establish a book entry account
in the name of the employee to reflect the share(s) purchased at that time.  Certificates shall be issued only on request
for full shares and also when necessary to comply with transaction requirements outside the United States.  To request certificates, employees may call the Voice Response Service
on tieline 771-7000 or outside line
(781-575-2727) or send an E-mail to ibm@equiserve.com.  In the event a participant terminates his or her account, any fractional
share held in the account will be paid to the participant in cash.

 

9. Registration of Shares.  Shares may be registered only in
the name of the employee, or,  if the employee so indicates on the employee’s payroll deduction
authorization form, in the
employee’s name jointly with another joint tenant, with right of survivorship.  An employee who is a resident of a jurisdiction that does not recognize
such a joint tenancy may have
shares registered in the employee’s name as tenant in common or as community property
with another person, without right of survivorship.

 

 

10. Definitions.  The
term “Corporation” or “IBM” means International Business  Machines Corporation, a New York corporation.
 The term “IBM stock” means the commonstock of IBM.  The phrase “average market price” means the
average of the high and low
composite prices of IBM stock on the New York Stock Exchange on a given day or,
if no sales of IBM stock were
made on that day, the average of the high and low composite prices of IBM stock on the next preceding day
on which sales were made on said Exchange.
 The term “subsidiary” means a subsidiary
of the Corporation within the meaning of Section 424(f) of the Internal Revenue Code and the regulations
promulgated thereunder,
provided, however, that this Plan shall not be deemed to cover the employeesof any subsidiary that did not
participate in the IBM 2000 Employees Stock Purchase Plan, unless so authorized by the Committee.

 

11. Rights as a Stockholder.  None of the rights or privileges of
a stockholder of the  Corporation
shall exist with respect to shares purchased under this Plan unless and untilsuch shares shall have been
appropriately evidenced on the books of the Corporation.

 

12. Rights on Retirement, Death, or Termination of
Employment.  In the event of a
participating  employee’s
retirement, death, or termination of employment, the employee shall be ineligible to continue to participate in
the Plan, and no payroll deduction shall be taken from any pay due and owing to the employee after the pay period
during which the employee became
ineligible.

 

13. Rights Not Transferable.  Rights under this Plan are not
transferable by a participating  employee other than by will or the laws of descent and distribution,
and are exercisable during the
employee’s lifetime only by the employee.

 

14. Application of Funds and Administrative Fees.  All funds received or held by the
Corporation under this Plan may
be used for any corporate purpose.  The
Committee may impose reasonable
administrative fees on participating employees to defray the administrativecosts of the Plan, which shall in no
event exceed the actual administrative costs of the Plan.  Initially, the fee
shall be $6 per participating employee per Offering Period.

 

15. Adjustments in Case of Changes Affecting IBM Stock.  In the event of a subdivision of
outstanding shares, or the
payment of a stock dividend, the number of shares approved for this Plan shall be increased proportionately,
and such other adjustments shall be made as may be deemed equitable by the Board of Directors.  In the event of any other change affecting IBM stock, such adjustments shall
be made as may be deemed equitable by the Board of Directors to give proper effect to such event.

 

16. Disposition Restriction.  If a participating employee
disposes of any share purchased  under the Plan during an Offering Period before the expiration of that
Offering Period, the employee
shall not be eligible to continue to participate in the Plan for the remainder of
that Offering Period and the following Offering Period.  For purposes of this Section, the term “disposition” shall be defined in
accordance with Section 424(c) of the Internal Revenue Code, except that the issuance of a
certificate also shall be treated as a disposition, but a transfer by reason of legal process
shall not be treated as a disposition for purposes of this Section.

 

17. Amendment of the Plan.  Notwithstanding anything to the contrary
contained  herein, without
the approval of a majority of the shares of stock of the Corporation votedat a meeting duly called, no amendment
shall be made (i) increasing the number of shares approved for this Plan (other than as
provided in section 15 hereof) or (ii) decreasing the purchase price per share to less than the
lesser of (x) 85 percent of the average market price on the first business day of each Offering Period or (y) 85 percent
of the average market price on the last business day of each pay period.  Subject to the limitations set forth in the
immediately preceding

 

 

sentence, the Board of
Directors may at any time, or from time to time, amend this Plan in any
respect, including without limitation by (i) increasing or decreasing the purchase
price per share, (ii) excluding  highly compensated employees (within the meaning of section 414(q)
of the Internal Revenue Code) from participation, (iii) decreasing the maximum
amount of payroll deduction for purchases and the number of shares that
employees may purchase during any offering period, (iv) suspending the Plan and
purchases thereunder for a period of time, (v) modifying the offering period in
which employees may purchase stock under this Plan (except that an offering
period may not exceed twenty-four (24) months), and (vi) establishing sub-plans
under the Plan that permit offerings to employees of certain subsidiaries,which sub-plans are not intended to
satisfy the requirements of Section 423 of the Internal Revenue Code, in
each case in accordance with applicable laws, and in the case of clauses (i)
through (v), in accordance with the requirements of the Internal Revenue Code
(including, but not limited to, Section 423(b)) and the regulations
thereunder.

 

18. Termination of the Plan.  This Plan and all rights of
employees under any offering  hereunder shall terminate:

 

(a) on the day that
participating employees become entitled to purchase a number of shares equal to
or greater than the number of shares remaining available for purchase.  If the number of shares so purchasable is
greater than the shares remaining available, the available shares shall be
allocated by the Committee among such participating employees in such manner as
it deems fair, or

 

(b) at any earlier time,
including during any periods that the Plan is suspended as the  Board of Directors may determine from time to
time, at the discretion of the Board.

 

19. Governmental Regulations.  The Corporation’s obligation to
sell and deliver IBM  stock
under this Plan is subject to the approval of any governmental authority
required in connection with the
authorization, issuance, or sale of such stock.

 

20. Plan Shares.  Shares
for the Plan may be sourced from shares purchased in the open  market, treasury shares, or authorized and
unissued shares.Unassociated Document

EXHIBIT
10.1

	
       

      Contact:

      David
      Zigdon, CFO

      (972)
      3-6455004

      davidz@radcom.com

RADCOM
REPORTS FINANCIAL RESULTS FOR THE 

FIRST
QUARTER OF 2005

--
Profitable Quarter With 43% YOY Revenue Growth --

TEL-AVIV,
Israel—April 26, 2005-- RADCOM Ltd. (”the Company”) (NASDAQ: RDCM) today
announced unaudited financial results for the first quarter ended March 31,
2005. 

Financial
Results

Revenues
for the first quarter of 2005 were $5,017,000, an increase of 43% compared to
$3,504,000 in the first quarter of 2004. Gross margin for the quarter was 68%
compared 67% in the first quarter of 2004. Net income for the first quarter of
2005 was $134,000, or $0.01 per ordinary share, compared to a net loss of
($576,000), or ($0.05) per ordinary share, for the first quarter of 2004.

The
Company’s cash and cash equivalents rose by approximately $1.4 million during
the quarter, reflecting positive cash flow from operations, the exercise of
warrants by the Company’s PIPE (private placement) investors and the exercise of
options by its employees. 

Comments
of Management

Commenting
on the results, Arnon Toussia-Cohen, President and CEO of RADCOM, said, “We are
pleased to report a profitable quarter marked by strong year-over-year revenue
growth, high gross margins and positive cash flow. In contrast to our normal
seasonal trend, sales for the first quarter remained strong, declining by just
1% compared to the fourth quarter of 2004. This demonstrates the momentum that
continues to build for our flagship Cellular Performer and Omni-Q solutions in
all target markets and the success of our sales and marketing efforts in North
America.

“We
continue to build our capabilities in China, including the appointment during
the quarter of an extremely experienced local General Manager. We are also
investing in products to support the ‘triple play’ needs (converged video, voice
and data networks) of equipment vendors and service providers. Taken as a whole,
we are pleased with our progress and optimistic regarding our
prospects.”

Guidance

The
following statements are forward-looking in nature, and actual results may
differ materially. 

Revenues
for the second quarter of 2005 are expected to be between $4.8 million and $5.2
million with gross margins similar to the first quarter and both operating and
net profit for the period.

RADCOM’s
management invites you to take part in an interactive teleconference to discuss
the results today, April 26th, at 9:00
a.m. Eastern Standard Time. To participate, please call 1-866-322-0747 from the
U.S. or Canada, or +1-706-758-0715 from international locations, approximately
five minutes before the call is scheduled to begin. A replay of the call will be
available from 9:30 AM Eastern Time on April 26th until
midnight May 3rd. To
access the replay, please call 1-800-642-1687 from the U.S. or Canada, or
+1-706-645-9291 from international locations, and use the access code 5339948.
The conference call can also be accessed online at www.radcom.com.

RADCOM
designs, manufactures, markets and supports network test and quality management
solutions for service providers, developers and enterprises worldwide. The
company specializes in comprehensive performance measurement and voice quality
management systems for VoIP and cellular converged networks as well as in a line
of high quality, integrated, multitechnology WAN/LAN/ATM test solutions. For
more information, please visit www.RADCOM.com.

Risks
Regarding Forward Looking Statements

Certain
statements made herein that use the words ``estimate,'' ``project,'' ``intend,''
``expect”, ''believe`` and similar expressions are intended to identify
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks and uncertainties which could cause the actual results,
performance or achievements of the Company to be materially different from those
which may be expressed or implied by such statements, including, among others,
changes in general economic and business conditions and specifically, decline in
demand to the Company's products, inability to timely develop and introduce new
technologies, products and applications and loss of market share and pressure on
prices resulting from competition. For additional information regarding these
and other risks and uncertainties associated with the Company's business,
reference is made to the Company's reports filed from time to time with the
Securities and Exchange Commission. The Company does not undertake to update
forward-looking statements. 

(Financial
tables follow)

	
      RADCOM
      Ltd.

 

	
      Consolidated
      Statements of Operations

	
      (1000's
      of U.S. dollars, except per share data)

 

	 	 	
      Three
      months ended March 31,
	 
	 	 	
      2005
	 	
      2004
	 
	 	 	
      (unaudited)
	 	
      (unaudited)
	 
	
      Sales
      
	 	
      $
	
      5,017
	 	
      $
	
      3,504
	 
	
      Cost
      of sales
	 	 	
      1,621
      
	 	 	
      1,144
      
	 
	
      Gross
      profit 
	 	 	
      3,396
      
	 	 	
      2,360
      
	 
	 	 	 	 	 	 	 	 
	
      Research
      and development, gross
	 	 	
      1,415
      
	 	 	
      1,246
      
	 
	
      Less
      - royalty-bearing participation
	 	 	
      395
      
	 	 	
      500
      
	 
	
      Research
      and development, net
	 	 	
      1,020
      
	 	 	
      746
      
	 
	 	 	 	 	 	 	 	 
	
      Sales
      and marketing 
	 	 	
      1,866
      
	 	 	
      1,744
      
	 
	 	 	 	 	 	 	 	 
	
      General
      and administrative
	 	 	
      411
      
	 	 	
      452
      
	 
	 	 	 	 	 	 	 	 
	
      Total
      operating expenses
	 	 	
      3,297
      
	 	 	
      2,942
      
	 
	 	 	 	 	 	 	 	 
	
      Operating
      income (loss)
	 	 	
      99
      
	 	 	
      (582
	
      )

	 	 	 	 	 	 	 	 
	
      Financing
      income, net
	 	 	
      35
      
	 	 	
      6
      
	 
	 	 	 	 	 	 	 	 
	
      Net
      income (loss)
	 	 	
      134
      
	 	 	
      (576
	
      )

	 	 	 	 	 	 	 	 
	
      Basic
      net earning (loss) per ordinary share
	 	$
	
      0.01
	 	$
	
      (0.05
	
      )

	
      Diluted
      net earning (loss) per ordinary share
	 	$
	
      0.01
	 	$
	
      (0.05
	
      )

	
      Weighted
      average number of ordinary shares used in computing basic net earnings
      (loss) per ordinary share
	 	 	
      14,291,735
	 	 	
      10,610,274
	 
	
      Weighted
      average number of ordinary shares used in computing diluted net earnings
      (loss) per ordinary share 
	 	 	
      16,234,918
	 	 	
      10,610,274
	 

(Additional
table to follow)

	
      RADCOM
      Ltd.

      Consolidated
      Balance Sheets

      (1000's
      of U.S. dollars)

 

	 	 	
      As
      of
	 	
      As
      of
	 
	 	 	
      March
      31, 2005
	 	
      December
      31, 2004
	 
	 	 	
      (unaudited)
	 	
      (unaudited)
	 
	
      Current
      Assets 
	 	 	 	 	 	 	 
	
      Cash
      and cash equivalents 
	 	 	
      7,976
	 	 	
      6,558
	 
	
      Marketable
      securities
	 	 	
      1,989
	 	 	
      1,992
	 
	
      Trade
      receivables, net 
	 	 	
      4,072
	 	 	
      5,341
	 
	
      Inventories
      and inventory prepayments 
	 	 	
      2,451
	 	 	
      2,400
	 
	
      Other
      current assets 
	 	 	
      829
	 	 	
      880
	 
	
      Total
      Current Assets
	 	 	
      17,317
	 	 	
      17,171
	 
	 	 	 	 	 	 	 	 
	
      Assets
      held for severance benefits
	 	 	
      1,820
	 	 	
      1,784
	 
	
       
	 	 	 	 	 	 	 
	
      Property
      and equipment, net
	 	 	
      1,197
	 	 	
      1,174
	 
	
       
	 	 	 	 	 	 	 
	
      Total
      Assets
	 	 	
      20,334
	 	 	
      20,129
	 
	 	 	 	
      
	 	 	
      
	 
	
      Liabilities
      and Shareholders' Equity
	 	 	 	 	 	 	 
	
      Current
      Liabilities 
	 	 	 	 	 	 	 
	
      Trade
      payables 
	 	 	
      1,943
	 	 	
      2,027
	 
	
      Current
      deferred revenue 
	 	 	
      1,084
	 	 	
      889
	 
	
      Other
      payables and accrued expenses 
	 	 	
      3,140
	 	 	
      4,204
	 
	
      Total
      Current Liabilities
	 	 	
      6,167
	 	 	
      7,120
	 
	 	 	 	 	 	 	 	 
	
      Long-Term
      Liabilities 
	 	 	 	 	 	 	 
	
      Long-term
      deferred revenue 
	 	 	
      929
	 	 	
      583
	 
	
      Liability
      for employees’ severance pay benefits
	 	 	
      2,447
	 	 	
      2,402
	 
	
      Total
      Long-Term Liabilities
	 	 	
      3,376
	 	 	
      2,985
	 
	 	 	 	 	 	 	 	 
	
      Total
      Liabilities
	 	 	
      9,543
	 	 	
      10,105
	 
	 	 	 	 	 	 	 	 
	
      Shareholders'
      Equity 
	 	 	 	 	 	 	 
	
      Share
      capital 
	 	 	
      105
	 	 	
      101
	 
	
      Additional
      paid-in capital
	 	 	
      44,342
	 	 	
      43,698
	 
	
      Accumulated
      other comprehensive loss
	 	 	
      (28
	
      )
	 	
      (13
	
      )

	
      Accumulated
      deficit
	 	 	
      (33,628
	
      )
	 	
      (33,762
	
      )

	
      Total
      Shareholders' Equity
	 	 	
      10,791
      
	 	 	
      10,024
      
	 
	 	 	 	
      
	 	 	
      
	 
	
      Total
      Liabilities and Shareholders' Equity
	 	 	
      20,334
	 	 	
      20,129

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