Document:

Exhibit

STOCK OPTION AGREEMENT

This Stock Option Agreement (this “Agreement”) is entered into by and between XXX (“Optionee”) and Universal Electronics Inc., a Delaware corporation (the “Corporation”), effective as of the Grant Date specified in the Stock Option Grant Statement attached hereto (the “Grant Statement”), which shall constitute an integral part of this Agreement.
1.Option Grant.  Upon the execution and delivery of this Agreement and the Grant Statement, the Corporation hereby grants to the Optionee a nonqualified stock option (“Option”) to purchase shares of the Corporation’s Common Stock (each, a “Share”), upon the terms and conditions set out in this Agreement and the Grant Statement.  This Option is issued pursuant to the Universal Electronics, Inc. 2018 Equity and Incentive Compensation Plan (the “Plan”), and the terms and conditions specified in the Plan shall apply in addition to the terms set out in this Agreement and the Grant Statement.  In case on any conflict between the terms of the Plan and this Agreement or the Grant Statement, the terms of the Plan shall apply.
2.    Defined Terms and Rules of Construction.  Except as otherwise defined herein, capitalized terms in this Agreement and the Grant Statement shall have the meanings specified by the Plan.  In addition, the following terms, when capitalized herein, shall have the meanings set out below:
(a)    “Constructive Termination” means the Optionee’s voluntary termination of employment, if such Termination occurs within eighteen (18) months after the occurrence of (i) the Employer’s failure to elect, re-elected, appoint, or re-appoint the Optionee to an office of the Employer that the Optionee holds (other than as a result of a termination for “Cause”), if such office is one to which the Optionee is elected or appointed according to the Employer’s By-laws; provided, however, such failure shall not be deemed a Constructive Termination, if the Optionee is elected or appointed to a higher office in connection with such failure; (ii) a change in the Optionee’s functions, duties, or responsibilities such that Optionee’s position with the Employer becomes substantially less in responsibility, importance, or scope; or (iii) a Change in Control.
(b)    “Exercise Notice” means a written notice described in Section 4 of this Agreement.
(c)    “Exercise Price” means the price set out in the Grant Statement.
(d)    “Expiration Date” means the expiration date specified in the Grant Statement.
(e)     “Option Period” means the period during which an Option is exercisable, as provided in the Grant Statement.
(f)    “Termination Date” means the date of the Optionee’s cessation of employment as determined by the Corporation.
3.    Term and Exercise of Option.  Subject to earlier termination, acceleration or cancellation of the Option as provided herein or the Plan, the term of the Option shall be for the period specified in the Grant Statement and, subject to the provisions of this Agreement and the Plan, the Option shall be exercisable at such times and as to such number of Shares as determined pursuant to the schedule specified in the Grant Statement.
4.    Method of Exercise.  The Option may be exercised by written notice to the Corporation at its offices at 201 E. Sandpointe Avenue, 8th Floor, Santa Ana, California 92707 to the attention of the Secretary of the Corporation, or as otherwise directed by the Corporation in writing to the Optionee.  The Exercise Notice shall (i) state (A) the election to exercise the Option and (B) the number of full Shares with respect to which the Option is being exercised and (ii) be signed by the person or persons exercising the Option.  Unless another method is permitted by the Committee at the time of exercise, the Exercise Notice shall be accompanied by a certified or cashier’s check for the full amount of the purchase price of such Shares, plus any amount necessary to satisfy Optionee’s obligations pursuant to Section 7.  Subject to Committee approval the Exercise Price may be paid by delivery of certificates for Mature Shares that have a Fair Market Value on the date of exercise equal to the Exercise Price, through a brokered cashless exercise approved by the Corporation (subject to the Federal Reserve Board’s Regulation T and applicable securities laws), or by a combination of the foregoing methods of payment.  Upon receipt of the foregoing, the Corporation shall issue the Shares as to which the Option has been duly exercised and shall return the Exercise Notice, duly endorsed to reflect such exercise, to the Optionee.  In a cashless exercise, the Optionee must notify the Corporation as to the manner of the transaction.
5.    Optionee’s Covenants and Representations.
(a)    The Optionee represents and warrants that any and all Shares acquired through the exercise of rights under the Option granted pursuant to this Agreement will be acquired for Optionee’s own account and not with a view to, or present intention of, distribution thereof in violation of the Securities Act, and will not be disposed of in contravention of the Securities Act.
(b)    The Optionee acknowledges that he/she is able to bear the economic risk of the investment in any and all Shares acquired through the exercise of rights under the Option for an indefinite period of time, because the Shares have not been registered under the Securities Act and, therefore, cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.
(c)    The Optionee has reviewed this Agreement and has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of Shares and has had full access to such other information concerning the Corporation as he/she has requested.
6.    Restrictions on Exercise.  This Option may not be exercised if the issuance of Shares upon exercise or the method of payment of consideration for such Shares would constitute a violation of any applicable federal or state securities or other law or regulation.  As a condition to the exercise of this Option, the Corporation may require the Optionee to make any representation and warranty to the Corporation as may be required to comply with any applicable law or regulation.  All exercises of the Option must be for full Shares only.
7.    Withholding of Taxes.  Whenever the Corporation is required to issue Shares upon exercise hereunder, the Corporation may require that the recipient remit in cash to the Corporation an amount sufficient to satisfy any federal, state and/or local tax withholding requirements before transfer of the Shares.  To the extent permitted by the Committee, the recipient may satisfy such tax withholding obligations by authorizing the Corporation to withhold from Shares to be issued upon the exercise of the Option a number of Shares with an aggregate Fair Market Value that would satisfy the withholding amount due, or (ii) transferring to the Corporation Shares owned by the Participant with an aggregate Fair Market Value that would satisfy the withholding amount due.  Notwithstanding the provisions of clause (i) of the preceding sentence, the Fair Market Value of Shares withheld shall not exceed the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Option as a liability for financial accounting purposes).
8.    Effect of Termination of Employment.
(a)    Except as provided in Subsection (b) or (c) below, if the Optionee’s employment terminates for any reason, the Optionee (or his/her estate or representative, in the event of the Optionee’s death during the Option Period) may, during the period following the Optionee’s Termination Date and ending on the earlier of (i) ninety (90) days after such Termination Date or (ii) the Expiration Date, exercise the Option to the extent such Option was exercisable on the Termination Date and, on the Termination Date, that portion of the Option that was not exercisable shall automatically terminate without further action by the parties hereto and, in all events, to the extent not exercised, the Option shall terminate in its entirety at the end of business on the last day of the exercise period specified in this Subsection; provided, however, the Committee may, in its sole discretion, accelerate full vesting to the Optionee’s Termination Date and/or extend the exercise period to any date on or before the Expiration Date.
(b)    If (i) the Optionee’s employment is terminated without Cause, or (ii) in the event of a Constructive Termination, the Optionee shall immediately become fully vested in the Option without further action by the parties hereto, and to the extent not previously exercised, shall be exercisable in whole or in part with respect to all remaining Shares covered by the Option and may be exercised by the Optionee (or the Optionee’s estate or representative, in the event of the Optionee’s death) at any time before expiration of the original Option Period, determined as if no Termination of Employment had occurred.
(c)    If the Optionee’s employment terminates due to his/her death or Disability, the Optionee (or his/her estate or representative, in the event of the Optionee’s death during the Option Period) may, during the period following his/her Termination Date and ending on the earlier of (i) one year after such Termination Date or (b) the Expiration Date, exercise the Option to the extent such Option was exercisable on the Termination Date and, on the Termination Date, that portion of the Option that was not exercisable shall automatically terminate without further action by the parties hereto and, in all events, to the extent not exercised, the Option shall terminate in its entirety at the end of business on the last day of the exercise period specified in this Subsection; provided, however, the Committee may, in its sole discretion, accelerate full vesting to the Optionee’s Termination Date and/or extend the exercise period to any date on or before the Expiration Date.
(d)    If (i) the Optionee’s employment is terminated for Cause, the Option, whether or not vested, shall immediately terminate and be of no further force or effect.
9.    Compliance with Certain Laws and Regulations.  If the Committee shall determine, in its sole discretion, that the listing, registration, or qualification of the Shares subject to the Option upon any securities exchange or under any law or regulation, or that the consent or approval of any governmental regulatory body is necessary or desirable in connection with the granting of the Option or the acquisition of Shares thereunder, the Optionee shall supply the Committee or the Corporation, as the case may be, with such certificates, representations, and information as the Committee or the Corporation, as the case may be, may request and shall otherwise cooperate with the Corporation in obtaining any such listing, registration, qualification, consent, or approval.
10.    Transferability of Option.  The Option is not transferable by the Optionee other than by will or the laws of descent and distribution.  During the Optionee’s lifetime, the Option is exercisable only by the Optionee, or in the event of his/her legal incompetency, his/her guardian or legal representative.
11.    Additional Restrictions on Transfer.  Certificates representing the Shares purchased upon the exercise of the Option will bear the following legend until such Shares have been registered under an effective registration statement under the Securities Act:
The securities represented by this certificate were originally issued on _____________________, _____, have not been registered under the Securities Act of 1933, as amended, or under the securities laws of any state or other jurisdiction (together, the “Securities Laws”) and may not be offered for sale, sold or otherwise transferred or encumbered in the absence of compliance with such Securities Laws and until the issuer hereof shall have received from counsel acceptable to issuer a written opinion reasonably satisfactory to issuer that the proposed transaction will not violate any applicable Securities Laws.
12.    Notices.  Any notice or demand provided for in this Agreement must be in writing and must be either personally delivered, delivered by overnight courier, or mailed by first class mail, to the Optionee at Optionee’s most recent address on file in the records of the Employer, and to the Corporation at the address set forth or established pursuant to Section 4 or to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.  Any notice or demand under this Agreement shall be deemed to have been given when received.
13.    Severability.  This Agreement and each provision hereof shall be valid and enforced to the fullest extent permitted by law.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision.  Without limiting the generality of the foregoing, if the scope of any provision contained in this Agreement is too broad to permit enforcement to its fullest extent, such provision shall be enforced to the maximum extent permitted by law, and the parties hereby agree that such scope may be judicially modified accordingly.
14.    Complete Agreement.  This Agreement and those documents expressly referred to herein embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.
15.    Tax Consequences.  None of the Corporation, any Subsidiary, or any officer of director of either, shall be responsible to the Participant or any other person for the tax consequences of the Option or the exercise thereof.
16.    Code Section 409A. This Agreement is intended to be interpreted and applied so that the Award set forth herein shall be exempt from the requirements of Section 409A of the Code and the final Treasury Regulations promulgated thereunder (collectively, “Section 409A”), and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from Section 409A.  To the extent that the Corporation determines that any provision of this Agreement would cause the Optionee to incur any additional tax or interest under Section 409A, the Corporation shall be entitled to reform such provision to attempt to comply with or be exempt from Section 409A through good faith modifications.  To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Employee and the Corporation without violating the provisions of Section 409A.  Neither the Corporation nor any employee, director or officer thereof guarantees that this Agreement complies with Section 409A and no such party shall have any liability with respect to any failure of this Agreement to so comply.
17.    Counterparts.  This Agreement may be executed by way of facsimile or electronic signature in separate counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement.
18.    Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by the Optionee, the Corporation, and their respective permitted successors and assigns (including personal representatives, heirs, and legatees), and is intended to bind all successors and assigns of the respective parties, except that the Optionee may not assign any of his/her rights or obligations under this Agreement except to the extent and in the manner expressly permitted hereby.
19.    Remedies.  Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in its favor.  The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may, in its sole discretion, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement, without the necessity of posting bond or any other security.
20.    Waiver or Modification.  Any waiver or modification of any of the provisions of this Agreement shall not be valid unless made in writing and signed by the parties hereto.  A waiver by either party of any breach of this Agreement shall not operate as a waiver of any subsequent breach. 
In Witness Whereof, the parties have executed this Agreement effective on the XXX day of XXX, 20XX.

		
	OPTIONEE
	    UNIVERSAL ELECTRONICS INC.

		
	________________________________
	By: _________________________________    

		
	Signature
	Its: Chief Executive Officer

Grant Statement Number:  00XXX
UNIVERSAL ELECTRONICS INC.
2018 EQUITY AND INCENTIVE COMPENSATION PLAN
STOCK OPTION GRANT STATEMENT

THIS GRANT STATEMENT CERTIFIES THAT, effective as of the Grant Date set out below, XXX, has been awarded a non-qualified stock option to purchase XXX (XXX) shares of Common Stock, par value $0.01 per share (“Shares”), of UNIVERSAL ELECTRONICS INC.  This Grant Statement is issued in accordance with and is subject to the terms and conditions of the related Stock Option Agreement of even date herewith (the “Agreement”).  The Option terms include the following:
(a)    Grant Date:  XXX
(b)    Number of Shares Subject to Option:  XXX
(c)    Exercise Price per Share:  $XXX
(d)    Expiration Date: XXX
THIS OPTION is not transferable except in accordance with the terms and conditions of the Agreement.
THIS OPTION shall become vested and exercisable with respect to the percentage of the total number of Shares set forth above as follows:
	
		
	

On and After the Following
Dates, But Prior to Expiration
	

Vested Percentage

	

XXX/2019
	

25%

	

XXX/2020
	

50%

	

XXX/2021
	

75%

	

XXX/2022
	

100%

IN WITNESS WHEREOF, UNIVERSAL ELECTRONICS INC. has caused this Stock Option Grant Statement to be signed by its duly authorized officer the XXX day of XXX, 20XX.

UNIVERSAL ELECTRONICS INC.

By: ______________________________
Its: Chief Executive Officerex_120432.htm

Exhibit 10.5

 

 

FORM OF RESTRICTED STOCK UNIT AGREEMENT

FOR TIME-BASED RSUs

 

Date:

 

Company: Ormat Technologies, Inc.

Date of Grant:

Total No. of Restricted Stock Units:

 

 

Vesting Schedule

50% will vest on second anniversary of grant date

25% will vest on third anniversary of grant date

25% will vest on fourth anniversary of grant date

Type:  Capital Gain Award

 

 

Dear              :

 

We are pleased to inform you that, as an eligible employee of Ormat Technologies, Inc. (herein called the “Company”) or one of its subsidiaries, you have been granted one or more restricted stock units (herein called “RSUs”) under the Company’s 2018 Incentive Compensation Plan (as amended and restated) and the Restricted Stock Unit Terms and Conditions (herein called the “Plan” and the “Terms and Conditions”).

 

By your signature, you agree that the RSUs are granted under and governed by the Plan and the Terms and Conditions, and acknowledge receipt of these documents, as well as the Prospectus for the Plan. As set forth in Section 1 of the Terms and Conditions, a signed copy of this agreement must be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel before 5:00 P.M. Eastern time on the 3rd business day after the date of grant noted above. If the 3rd business day is a holiday in the United States or in Israel, such signed copy of this agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. Failure to return a signed copy of this agreement will deem the grant of the RSUs null and void.

 

This agreement and the documents that accompany to it constitute the entire agreement between you and the Company with respect to the RSUs granted hereunder and supersede in their entirety all prior undertakings and agreements of the Company and yourself, both written and oral, with respect to the RSUs granted hereunder (including the shares underlying it).

 

1

 

 

Furthermore, by your signature you hereby approve and agree to all the aforesaid in this agreement and the trust agreement signed with the Trustee (as defined in Annex A) and you declare that you are familiar with the provisions of Section 102 and the Capital Gains route. You hereby undertake not to sell or transfer the Shares underlying the RSUs prior to the lapse of the restrictions period, unless you pay all taxes, which may arise in connection with such sale and/or transfer.

 

 

 

 

Very truly yours,

 

 

 

ORMAT TECHNOLOGIES, INC.

 

 

 

	 	 	 	 
	Date:	 	Signature of Awardee	 

 

 

 

 

(Second page)

 

2

 

 

RESTRICTED STOCK UNITS

TERMS AND CONDITIONS

 

As a participant in the Ormat Technologies, Inc. 2018 Incentive Compensation Plan (as amended and restated, the “Plan”), you have been granted one or more Restricted Stock Units (herein called “RSUs”) under the Plan. RSUs give you the opportunity to receive at a specified future date, payment of an amount equal to all or a portion of the Fair Market Value of a specified number of shares of Common Stock after the Vesting Date(s) specified in Section 2 below (herein called the letter agreement) multiplied by the applicable percentage of RSUs specified in Section 2 below, subject to your acceptance of the RSUs as provided in Section 1 below and the other terms and conditions described below.

 

The date of the grant of the RSUs (herein called the date of grant) is set forth in the letter agreement.

 

Note that all capitalized terms in the letter agreement and these Terms and Conditions are defined in the Plan, except as indicated in such agreement and herein. All terms of the Plan are hereby incorporated into these Terms and Conditions.

 

	
			1.

				
			Acceptance of RSUs: The RSUs will not be deemed granted unless you sign your name in the space provided on the enclosed copies of the letter agreement and cause one signed copy to be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel (or to such other person and place as the Company may specify in writing), before 5:00 P.M. Eastern Time on the 3rd day after the date of grant. If the 3rd day is a holiday in the United States or in Israel, such signed copy of the letter agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. If the Corporate Secretary does not receive your properly executed copy of the letter agreement before such time, then, anything in the letter agreement and these Terms and Conditions to the contrary notwithstanding, the grant of the RSUs will be deemed null and void ab initio (as of the date of the grant). (Your signing and delivering a copy of the letter agreement will evidence your acceptance of the RSUs upon these Terms and Conditions.)

			

 

	
			2.

				
			Vesting:

			

 

	 	
			(a)

				
			Subject to the provisions of this Section 2 and of Section 5, 6 and 7, the RSUs shall become vested in accordance with the following vesting schedule:

			

 

(ii) 50% Shall vest on the second anniversary of Grant Date     

 

(iii) 25% Shall vest on the third anniversary of Grant Date     

 

(iv) 25% Shall vest on the fourth anniversary of Grant Date      

 

No fractional shares shall be delivered and fractional shares shall be disregarded. All vesting increments shall be rounded to the nearest whole number of RSUs.

 

	 	
			(b)

				
			The RSUs shall not become vested unless you shall have remained continuously in the employ or service of the Company or of one or more of its Subsidiaries on the applicable Vesting Date, except as provided in Section 5, 6 and 7. Any RSUs that are not vested will terminate on the date of your Separation from Service.

			

 

3

 

 

	
			3.

				
			Issuance of Shares: RSUs will be credited to an account to be maintained on your behalf. The Fair Market Value of any vested RSUs measured as of the Vesting Date will be paid within thirty (30) days of the date such Vesting Date. Payment of any RSUs shall be made by the issuance of shares of Common Stock.

			

 

	
			4.

				
			Transferability of RSUs: The RSUs shall not be transferable by you otherwise than (i) by will or (ii) by the laws of descent and distribution. Any transferred RSU shall continue to be subject to these Terms and Conditions.

			

 

	
			5.

				
			Death: Section 2 to the contrary notwithstanding, if you incur a Separation from Service because you die, you will become fully vested in any unvested RSUs awarded under the letter of grant to which these Terms and Conditions are attached.

			

 

	
			6.

				
			Other Separation from Service:

			

 

(a)     Except as otherwise clearly specified in a duly executed, written, valid and binding agreement between you and the Company, if you incur a Separation from Service before the end of the applicable Vesting Date for any reason other than death, you will immediately forfeit any unvested RSUs.

 

	 	
			(b)

				
			For the purposes of the letter agreement, your employment by a Subsidiary of the Company shall be considered terminated on the date that the company by which you are employed is no longer a Subsidiary of the Company.

			

 

	
			7.

				
			Change of Control: Section 2 to the contrary notwithstanding, upon a Change of Control (as defined in your Employment Agreement, as amended), you will become fully vested in any unvested RSUs awarded under the letter of grant to which these Terms and Conditions are attached.

			

 

	
			8.

				
			Dividend Equivalents: Except as otherwise provided in Section 11, no dividend equivalents shall be payable or accumulated in respect of RSUs.

			

 

	
			9.

				
			Clawbacks: The RSUs are subject to recoupment in accordance with Section 15(i) of the Plan and any other recoupment or clawback policy adopted by the Company, or as agreed with you.

			

 

	
			10.

				
			Listing Requirements: The Company shall not be obligated to deliver any certificates representing any shares until all applicable requirements imposed by federal and state securities laws and by any stock exchanges upon which the shares may be listed have been fully met.

			

 

	
			11.

				
			Transfer of Employment: Leave of Absence: A transfer of your employment from the Company to a Subsidiary or vice versa, or from one Subsidiary to another, without an intervening period, shall not be deemed a Separation from Service. If you are granted an authorized leave of absence, you shall be deemed to have remained in the employ of the Company or a Subsidiary during such leave of absence.

			

 

4

 

 

	
			12.

				
			Adjustments in RSUs:

			

 

(a)     The existence of the letter agreement and the RSUs shall not affect or restrict in any way the right or power of the Board of Directors or the stockholders of the Company to make or authorize any reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the shares or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business.

 

	 	
			(b)

				
			In the event of any change in or affecting the outstanding shares by reason of a stock dividend or split, merger or consolidation (whether or not the Company is the surviving corporation), recapitalization, spin-off, reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend in cash, securities or other property, the Board of Directors shall make such amendments to the Plan, the letter agreement, these Terms and Conditions and the RSUs and make such adjustments and take actions thereunder as it deems appropriate, in its sole discretion, under the circumstances. Such amendments, adjustments and actions may include, but are not limited to, (i) changes in the number and kind of shares underlying the RSUs set forth in the letter agreement, and (ii) accelerating the vesting of the RSUs. The determination by the Board as to the terms of any of the foregoing adjustments shall be conclusive and binding.

			

 

	
			13.

				
			Stockholder Rights: Neither you nor any other person shall have any rights of a stockholder as to shares underlying any RSUs unless and until (a) the Company pays or settles any vested RSUs in shares of Common Stock, and (b) such Common Stock shall have been recorded by the Company’s registrar, American Stock Transfer and Trust Company (herein called “AST”), as having been issued or transferred, as the case may be.

			

 

	
			14.

				
			Delivery of Shares: To the extent that any vested RSUs are paid or settled in shares of Common Stock:

			

 

(a)     Certificates for any shares issuable upon exercise will be issued and delivered as soon as practicable, subject to Section 7.

 

	 	
			(b)

				
			If a Registration Statement on Form S-8 is in effect with respect to the RSUs, you can arrange with your stockbroker to have the broker exercise your right on your behalf and have the shares withdrawn from AST electronically by DWAC for deposit in your brokerage account.

			

 

	
			15.

				
			Tax Matters:

			

 

(a)     You should consult your tax advisor about tax consequences of the RSUs.

 

5

 

 

	 	
			(b)

				
			Tax Withholding for U.S. Employees: If and to the extent Federal income tax withholding (and state and local income tax withholding, if applicable) may be required by the Company in respect of taxes on income you realize upon or after payment or settlement of any portion of the RSUs, or upon disposition of any shares of Common Stock acquired through the payment or settlement of any RSUs, the Company may withhold such required amounts from your future paychecks or may require that you deliver to the Company the amounts to be withheld. You may also pay the minimum required Federal income tax withholding (and state and local income tax withholding, if applicable) by electing either to have the Company withhold a portion of the shares of Common Stock otherwise issuable upon payment or settlement of the RSUs, or to deliver other shares of Common Stock you own, in either case having a fair market value (on the date that the withholding amount is to be determined) of the minimum amount required to be withheld, provided that the election will be irrevocable and will be subject to such rules as the Committee may adopt. You may also arrange to have any tax (or taxes) paid directly to the Company on your behalf from the proceeds of the sale of Common Stock to the extent provided in the notice of exercise referred to in Section 10.

			

 

	 	
			(c)

				
			Tax Withholding For Israeli Employees - The provisions specified in Annex A attached hereto shall apply only to Eligible Individuals who are residents of the state of Israel or those who are deemed to be residents of the state of Israel for the payment of tax, from the date of the grant and until the last Exercise date.

			

 

	 	
			(d)

				
			Section 409A. The grant, vesting, payment and settlement of the RSUs are intended to be exempt from the requirements of Code Section 409A. Notwithstanding any other provision of the letter agreement, these Terms and Conditions or the Plan to the contrary, the Company makes no representation regarding the status of any RSUs under Code Section 409A.

			

 

	
			16.

				
			Employment or Other Service: Nothing contained herein shall confer any right to continue in the employ or other service of the Company or a Subsidiary or limit in any way the right of the Company or a Subsidiary to change your compensation or other benefits or to terminate your employment or other service with or without cause.

			

 

	
			17.

				
			Short-Swing Trading: If you are a director or executive officer of the Company or one of its subsidiaries who is granted RSUs, you must report such grant, the vesting or settlement of such RSUs and any sale of Common Stock received upon settlement of any RSUs, on a Form 4 (Statement of Changes of Beneficial Ownership of Securities) within two business days of such reportable event pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended. The Corporate Secretary of the Company will provide you with a form of the Form 4 upon request, but such filing is the personal responsibility of the holder of RSUs. All holders of RSUs should consult the Company’s Insider Trading Policy before arranging any trade in any of the Company’s securities, including Common Stock.

			

 

	
			18.

				
			Time of Essence: Time is of the essence with respect to delivering notices and stock certificates hereunder. There is no grace period.

			

 

	
			19.

				
			Successors: These Terms and Conditions are binding on your heirs and personal representatives and on the successors of the Company.

			

 

	
			20.

				
			Counterparts: The letter agreement may be executed in duplicate counterparts, each of which shall be deemed to be an original.

			

 

6

 

 

ORMAT TECHNOLGIES INC. 

 

(the "Company")

 

2018- INCENTIVE COMPENSATION PLAN

 

ANNEX A - TAX WITHOLDING FOR ISRAELI EMPLOYEES

 

Tax Withholding For Israeli Employees - The provisions specified hereunder shall apply only to Eligible Individuals who are residents of the state of Israel or those who are deemed to be residents of the state of Israel for the payment of tax (such persons, “Israeli Participants”), from the date of the grant and until the last Exercise date. All defined terms terms shall have the meaning ascribed to them in the Plan, unless the context requires otherwise.

 

(i)     For the purposes of this Annex A, the following terms shall have the following meanings:

 

	 	
			●

				
			“Affiliate” means any “employing company” within the meaning of Section 102(a) of the Ordinance.

			

 

	 	
			●

				
			“Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and/or additional rights issued with respect thereto, including, but not limited to, bonus shares, and held in trust by a Trustee for the benefit of the Employee.

			

 

	 	
			●

				
			"Award" shall have the meaning ascribed to it in the Plan; provided, however, that for the purposes of Sections 102 or 3(i) of the Ordinance, Awards shall not be settled in cash.

			

 

	 	
			●

				
			"Award Agreement" shall have the meaning ascribed to it in the Plan; provided, however, that for the purposes of Section 102 of the Ordinance, an electronic acceptance may be used only pursuant to a tax ruling to be obtained, if so required by applicable law.

			

 

	 	
			●

				
			“Capital Gain Award" (or "CGA)” means an Approved 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(3) of the Ordinance.

			

 

	 	
			●

				
			“Controlling Shareholder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.

			

 

	 	
			●

				
			“Employee” means a person who is employed by the Company or an Affiliate, including an individual who is serving as a director or an office holder, but excluding any Controlling Shareholder, all as determined in Section 102 of the Ordinance.

			

 

	 	
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			“ITA” means the Israeli Tax Authority.

			

 

 

	ORMAT TECHNOLOGIES, INC.	 
	6225 Neil Road, Reno, NV  89511-1136, USA  •  +1-775-356-9029  •  ormat@ormat.com	ormat.com

 

 

 

 

 

	 	
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			“Ordinary Income Award"("OIA") means an Approved 102 Award elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.

			

 

	 	
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			“Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended.

			

 

	 	
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			“Rules” means the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003.

			

 

	 	
			●

				
			“Section 102” means Section 102 of the Ordinance and any regulations, Rules, orders or procedures promulgated thereunder as now in effect or as hereafter amended.

			

 

	 	
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			“Trustee” means any individual or trust company appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance.

			

 

	 	
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			“Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.

			

 

(ii)     Any tax liability, of any kind due to the Plan, or resulting from it (including, without derogating from the aforementioned, income tax, capital gains tax, social security, surtax and health tax), and any other obligatory payment applicable as a result of the grant of the right, its exercise and Employee's receipt of Common Stock as a result of such exercise or the sale of underlying Common Stock (the "Common Stocks”), will be fully borne by the Employee.

 

(iii)     The Company recommends that Employee consults with professional advisors and consider the tax implications, including the result of the application of Section 102, of the grant of the right, of its exercise and of the receipt of any Shares.

 

(iv)     Despite of anything to the contrary in the Plan, with respect to any Approved 102 Award, subject to the provisions of Section 102, an Employee shall not sell, release, assign, transfer or give as collateral or any right with respect to them given to any third party whatsoever (collectively “Transfer”) from trust any Share received upon the exercise of an Approved 102 and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Minimal Restriction Period (as defined below) required under Section 102. Notwithstanding the above, if any such sale or other Transfer occurs during the Minimal Restriction Period, the sanctions under Section 102 shall apply to and shall be borne solely by such Employee.

 

 

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(v)     In accordance with the provisions of Section 102, the Trustee will hold the right in trust for the benefit of the Employee until the right is exercised, if at all (or until the termination of the exercise period, to the extent the right remains unexercised, as applicable). Consequently, the Trustee will hold the right and/or the shares of Common Stock (including any stock dividend or shares of Common Stock derived from issuance of rights exercised during the right’s exercise period) in trust for the benefit of the Employee for the period set forth in Section 102 and the Rules. Such period is on the date of adoption of this Plan at least (i) in the case of a CGA, 24 months from the date on which the right is granted and deposited with the Trustee; or (ii) in the case of an OIA-, 12 months from the date on which the Right is granted and deposited with the Trustee (the “Minimal Restriction Period”), and will not transfer the right and the shares of Common Stock to the Employee prior to the full payment of the applicable taxes. Transfer of the shares of Common Stock from the Trustee to the Employee or their sale by the Trustee prior to the lapse of the Minimal Restriction Period, might involve tax implications (which the Employee should consider prior to taking any such action).

 

(vi)     The Company was engaged with the Trustee with respect to the Awards, rights and Common Stocks (the “Trust Agreement”) and the provisions of the Trust Agreement will apply and obligate any Employee who receives rights under the Plan. The main provisions of the Trust Agreement are: (i) the Company will not grant Awards and rights to its Employees but will grant them to the Trustee who will hold them for at least the Minimal Restriction Period; (ii) during the Minimal Restriction Period, the Awards, rights and Common Stocks will not be transferable; and (iii) after termination of the Minimal Restriction Period, the Employee will be entitled to demand that the Trustee transfer the Common Stocks to the Employee’s name, provided either: (A) the tax applicable to the Employee under Section 102 has been paid and the Trustee holds a confirmation for the payment issued by the ITA; or (B) the Trustee has transferred to the ITA the appropriate percentage amount (determined in accordance with the applicable tax rate) of the consideration received by it for the sale of the Common Stocks, on account of the applicable tax. The Plan and the Trust Agreement will apply to any stock dividends and/or rights granted to the Employee, mutatis mutandis.

 

(vii)     The Company has undertaken not to grant and Awards and rights to Employees under Section 102, unless it received a confirmation from the Employee that the Employee undertakes vis-a-vis the ITA not to exercise the Awards and rights prior to the termination of the Minimal Restriction Period (unless he or she pays all applicable tax).

 

(viii)   The transfer of the Common Stocks from the Trustee to the Employee or their sale by the Trustee for the benefit of the Employee, all in accordance with the Employee’s order, is possible and may be done in accordance and under the rules, conditions and arrangements to be agreed between the Company and the Trustee and in accordance and subject to applicable law and arrangements (if existing) with the tax authorities.

 

(ix)     The provisions of Section 102 will apply to the Awards and rights to be granted to the Employees, (i.e., grant to and deposit with the Trustee for the benefit of the Employee), in the capital gain tax route. Any tax liability to the Employee will occur upon the earlier of the time the Common Stocks will be transferred from the Trustee to the Employee or sold by the Trustee, without any tax event occurring on the date of grant of the Award.

 

 

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(x)     In accordance with Section 12(c)(ix) above, and since the Company has chosen the capital gains tax route, as specified in Section 102, any income resulting from the realization of the benefit by the Employee will be deemed as a capital gain and will be taxed on the date of the tax event at the applicable tax rate of 25%, excluding the portion of the income equaling the difference between the exercise price of the Award, if applicable, and the average price of the Common Stock during the 30 trading days prior to the date of grant, which will be deemed as working income and will be subject to income tax, according to the rate applicable to the Employee, and social security tax and health tax – all provided that all of the provisions of the capitl gains tax route are met.

 

(xi)     With regards to Approved 102 Awards , the provisions of the Plan shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s permit and/or any pre-rulings obtained by the ITA, and the said provisions, permit and/or pre-rulings shall be deemed an integral part of the Plan. Any provision of Section 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the Plan, shall be considered binding upon the Company and the Employees.

 

(xii)      Any tax consequences arising from the grant or exercise of any Award, from the grant of right and/or the underlying Common Stocks, from the payment for stocks covered thereby or from any other event or act (of the Company, and the Trustee or the Employee), hereunder, shall be borne solely by the Employee. The Company and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Employee shall agree to indemnify the Company and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Employee.

 

(xiii)     The Company and/or, when applicable, the Trustee shall not be required to release any stock certificate to an Employee until all required payments (including any tax liability) have been fully made.

 

(xiv)     With respect to an Unapproved 102 Award, if the Employee ceases to be employed by the Company, the Employee shall extend to the Company a security or guarantee for the payment of tax due at the time of sale of Common Stocks, all in accordance with the provisions of Section 102.

 

 

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