Document:

exhibit_10-5.htm

Exhibit 10.5

 

OPTION NUMBER:

NAME OF OPTIONEE:

DATE OF GRANT:

EXERCISE PRICE:

COVERED SHARES:

 

MAGICJACK VOCALTEC LTD.

2013 LONG-TERM INCENTIVE PLAN

STOCK OPTION AGREEMENT

 

1.      Definitions.  In this Agreement, capitalized terms used herein and not defined in the Plan or elsewhere herein shall have the following meanings:

 

1.1      “Agreement” means this Stock Option Agreement.

 

1.2       “Cause” means if, in the reasonable judgment of the Board: (i) Optionee commits fraud, theft or embezzlement against the Company or any Affiliate; (ii) Optionee commits a felony or a crime involving moral turpitude; (iii) Optionee refuses to execute or materially breaches the terms of the Company’s Insider Trading Policy or FD/Media Policy as in effect from time-to-time, (iv) Optionee breaches any of the terms of the Employment Agreement and fails to cure such breach within thirty (30) days after the receipt of written notice of such breach from the Company; or (v) Optionee engages in gross negligence or willful misconduct that causes harm to the business and operations of the Company or an Affiliate.

 

1.3      “Change of Control” means and shall be deemed to occur if (i) a Person acquires ownership of stock that, together with stock held by such Person, constituting more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; (ii) a majority of the members of the Board are replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of such Board before the date of such appointment or election; or (iii) a Person (other than a Person controlled, directly or indirectly, by shareholders of the Company) acquires fifty percent (50%) or more of the gross fair market value of the assets of the Company over a twelve (12) week period.

 

1.4      “Covered Shares” means the Ordinary Shares subject to the Option.

 

1.5      “Date of Exercise” means the date on which the Company receives notice pursuant to Section 5.1 of the exercise, in whole or in part, of the Option.

 

  

  

  

 

1.6      “Date of Expiration” means the date on which the Option shall expire, which shall be the earliest of the following times:

 

(a)      the date of the first notification to the Optionee that the Optionee’s Service is terminated by the Company or an Affiliate for Cause;

 

(b)      six (6) months after termination of the Optionee’s Service for any reason other than by the Company or an Affiliate for Cause; or

 

(c)      five years after the Date of Grant.

 

1.7      “Date of Grant” means the date set forth at the beginning of this Agreement.

 

1.8      “Disability” means total and permanent disability under Section 22(e)(3) of the Code or the Optionee’s becoming entitled to long-term disability benefits under the long-term disability plan or policy of the Company and/or its Affiliates that covers the Optionee, if any.

 

1.9      “Employment Agreement” means the Employment Agreement by and between Executive and the Company of near or even date herewith.

 

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

 

1.11    “Exercise Price” means the dollar amount per Ordinary Share set forth on page 1 of this Agreement as the Exercise Price, as it may be adjusted from time to time pursuant to Section 4 hereof or the Plan.

 

1.12    “Good Reason” means termination by Optionee of his employment upon the occurrence of one of the following events or conditions without the consent of the Optionee:

 

	
  

	
(i)

	
A material reduction in the authority, duties or responsibilities of the Optionee;

 

	
  

	
(ii)

	
Any material reduction in the Optionees’s Annual Base Salary or Target Annual Bonus as set forth in the Employment Agreement; or

 

	
  

	
(iii)

	
Any material breach of the Employment Agreement by the Company.

 

Notwithstanding the foregoing,  Optionee shall not be deemed to have terminated his employment for Good Reason unless: (i) Optionee terminates his employment no later than ninety (90) days following his initial discovery of the above referenced event or condition which is the basis for such termination; and (ii) Optionee provides to the Company a written notice of the existence of the above referenced event or condition which is the basis for the termination within forty-five (45) days following his initial discovery of such event or condition, and the Company fails to remedy such event or condition within thirty (30) days following the receipt of such notice.

 

1.13          “Option” means the stock option granted to the Optionee in Section 2 of this Agreement.

 

1.14          “Optionee” means the person identified on page 1 of this Agreement.

 

  

2

  

 

1.15          “Person” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

 

1.16          “Plan” means the magicJack Vocaltec Ltd. 2013 Long-Term Incentive Plan.

 

1.17          “Service” means, if the Optionee is (a) an employee of the Company and/or any of its Affiliates (as determined by the Committee in its reasonable discretion), the Optionee’s service as an employee of the Company and/or any of its Affiliates, (b) a member of the Board or the board of directors of an Affiliate but not an employee of the Company or any of its Affiliates (as determined by the Committee in its reasonable discretion), the Optionee’s service as a member of such Board or board of directors, or (c) a consultant or independent contractor to the Company or any of its Affiliates (as determined by the Committee in its reasonable discretion) and is not described in the preceding clause (b), the Optionee’s service as a consultant or independent contractor to the Company and/or any of its Affiliates.

 

Capitalized terms used herein but not defined herein shall have the meanings assigned in the Plan.

 

2.      Grant of Option.  Pursuant to the Plan and subject to the terms of this Agreement, the Company hereby grants to the Optionee, as of the Date of Grant, the Option to purchase from the Company that number of shares identified as the “Covered Shares” on page 1 of this Agreement, exercisable at the Exercise Price.

 

3.      Terms of the Option.

 

3.1      Type of Option.  The Option is intended to be a Nonqualified Stock Option.

 

3.2      Option Period; Exercisability.  The Option may be exercised in whole shares during the period commencing on the Date of Grant and terminating on the Date of Expiration, as follows:

 

(a)      no part of the Option may be exercised until December 31, 2013;

 

(b)      beginning December 31, 2013, the Option may be exercised as to thirty three and one-third percent (33-1/3%) of the Covered Shares;

 

(c)      beginning on December 31, 2014,  the Option may be exercised as to an additional thirty three and one-third percent (33-1/3%) of the Covered Shares; and

 

(d)      beginning on December 31, 2015, the Option may be exercised as to all of the Covered Shares.

 

Notwithstanding the foregoing, if the Optionee’s Service is terminated by the Company without Cause or by the Optionee for Good Reason, the Option may be exercised, to the extent not previously exercised, as to a number of Covered Shares equal to (a) total number of Covered Shares multiplied by (b) (i) the number of days elapsed between January 1, 2013 and the termination date, plus (ii) ninety (90) days, divided by (c) one thousand ninety-six (1,096) days.  By way of example, if Optionee’s Service is terminated by the Company without Cause or by the Optionee for Good reason on the date that is five hundred (500) days after January 1, 2013, the Option will be exercisable as to 53.88% (590/1096) of the Covered Shares minus any shares as to which the Option previously has been exercised.   In the event of a Change of Control or termination of the Optionee’s Service by reason of Disability or death, the Option shall thereupon become exercisable at any time prior to the Date of Expiration, as to the full number of Covered Shares.

 

  

3

  

 

3.3      Nontransferability. The Option is not transferable by the Optionee other than by will or by the laws of descent and distribution, and is exercisable, during the Optionee’s lifetime, only by the Optionee, or, in the event of the Optionee’s death or disability, by the Optionee’s legal representative.  Optionee acknowledges and agrees that any Shares acquired by the Optionee hereunder may not be transferred by Optionee during the term of the Employment Agreement, whether through sale or otherwise, without the prior written approval of the Committee.

 

3.4      Payment of the Exercise Price.  The Optionee, upon exercise, in whole or in part, of the Option, may pay the Exercise Price by any or all of the following means, either alone or in combination:

 

(a)      cash or check payable to the order of the Company;

 

(b)      if at the time of exercise, the Ordinary Shares are listed for trading on a national securities exchange, delivery (either actual or constructive) of shares of unencumbered Ordinary Shares (provided that such shares, if acquired under the Option or under any other option or award granted under the Plan or any other plan sponsored or mentioned by the Company, have been held by the Optionee for such period, if any, as the Committee may specify) that have an aggregate Fair Market Value on the Date of Exercise equal to that portion of the Exercise Price being paid by delivery of such shares;

 

(c)      if at the time of exercise, the Ordinary Shares are listed for trading on a national securities exchange and in accordance with such rules as may be specified by the Committee, delivery to the Company of a properly executed exercise notice and irrevocable instructions to a registered securities broker promptly to deliver to the Company cash equal to the Exercise Price for that portion of the Option being exercised; or

 

(d)      if at the time of exercise the Ordinary Shares are listed for trading on a national securities exchange, by directing the Company to withhold from the Ordinary Shares to be issued upon exercise of the Option (or portion thereof) a number of Ordinary Shares having a Fair Market Value not in excess of the aggregate Exercise Price of the Option (or portion thereof) being exercised, with payment of the balance of the Exercise Price being made pursuant to Section 3.4(a), 3.4(b) and/or Section 3.4(c).

 

  

4

  

 

4.      Exercise.

 

4.1      Notice.  The Option shall be exercised, in whole or in part by the delivery to the Company of written notice in the form of Exhibit A hereto.

 

4.2      Withholding.  The Company’s obligation to issue or deliver Ordinary Shares upon the exercise of the Option  shall be subject to the satisfaction of any applicable federal, state and local tax withholding requirements.  The Optionee may satisfy any such withholding obligation by any of the following means or by a combination of such means: (a) tendering a cash payment or (b) if at the time the withholding obligation arises, the Ordinary Shares are  listed for trading on a national securities exchange, authorizing the Company to withhold Ordinary Shares from the shares otherwise issuable to the Optionee upon exercise of the Option.  For purposes of this Section 4.2, Ordinary Shares that are withheld or delivered to satisfy applicable withholding taxes shall be valued at their Fair Market Value on the date the withholding tax obligation arises, and in no event shall the aggregate Fair Market Value of the Ordinary Shares withheld pursuant to this Section 4.2 exceed the minimum amount of taxes required to be withheld in connection with exercise of the Option.

 

4.3      Effect.  The exercise, in whole or in part, of the Option shall cause a reduction in the number of Covered Shares as to which the Option may be exercised in an amount equal to the number of Ordinary Shares as to which the Option is exercised.

 

4.4      Legends.  The Optionee agrees that the certificates evidencing the Ordinary Shares issued upon exercise of the Option may include any legend which the Committee deems appropriate to reflect the transfer and other restrictions contained in the Plan, this Agreement, or to comply with applicable laws.

 

4.5      Rights as Stockholder.  The Optionee shall have no rights as a stockholder with respect to any Ordinary Shares subject to the Option until and unless such shares are issued to the Optionee pursuant to this Agreement.

 

4.6      Service.  Neither the grant of the Option evidenced by this Agreement nor any term or provision of this Agreement shall constitute or be evidence of any understanding, express or implied, on the part of the Company to employ or retain the Optionee for any period.

 

4.7      Subject to the Plan.  The Option evidenced by this Agreement and the exercise thereof are subject to the terms and conditions of the Plan, which is incorporated by reference and made a part hereof, but the terms of the Plan shall not be considered an enlargement of any rights or benefits under this Agreement.  In addition, the Option (including its exercise) is subject to any rules and regulations promulgated by the Committee.

 

4.8      Governing Law.  The validity, construction, interpretation and enforceability of this agreement shall be determined and governed by the laws of the State of Florida without giving effect to the principles of conflicts of laws.

 

5.      Stockholder Approval.  Optionee acknowledges that the Plan and this Agreement require stockholder approval at the next annual or special meeting of stockholders following adoption and approval by the Board.  If the adoption of the Plan and approval of this Agreement is not so approved by the Company’s stockholders, this Agreement shall be cancelled and void ab initio immediately following such next annual or special meeting of stockholders.

 

  

5

  

 

6.      Severability.  If any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any material respect, such provision shall be replaced with a provision that is as close as possible in effect to such invalid, illegal or unenforceable provision, and still be valid, legal and enforceable, and the validity, legality and enforceability of the remainder of this Agreement shall not in any way be affected or impaired thereby.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed on its behalf by the undersigned, thereunto duly authorized, effective as of the Date of Grant.

 

	 	
MAGICJACK VOCALTEC LTD.

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	 	 
	
Accepted and agreed to as of the Date of Grant:

	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

                                        

  

6

  

“EXHIBIT A”

EXERCISE OF OPTION

Board of Directors

magicJack VocalTec Ltd.

Ladies and Gentlemen:

The undersigned, the Optionee under the Stock Option Agreement (“Agreement”) identified as Option No. ____—___ granted pursuant to the magicJack VocalTec Ltd. 2013 Stock Incentive Plan, hereby irrevocably elects to exercise the Option granted in the Agreement to purchase ___ shares of Ordinary Shares (the “Option Shares”), and herewith makes payment of $   in the form of (check all that apply and if more than one is checked, indicate the amount to be paid by each payment method):

	
o Cash or Check:

	

	
o Ordinary Shares:

	

	
o Brokerage Transaction:

	

	
o Withholding of Ordinary Shares:

	

The undersigned hereby elects to satisfy applicable withholding requirements by (check all that apply and, if more than one is checked, indicate the amount to be withheld by each withholding method):

	
o  Cash or Check:

	

	
o  Withholding of Ordinary Shares:

	

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Agreement:

 

	Date:   	 	 	 	 	 
	 	 	 	
(Signature of Optionee)

	 	 

 

Date received by magicJack VocalTec Ltd: ______________________________

                                                                             

  

7

  

Received by: ______________________________

 

Note: Ordinary Shares being delivered in payment of all or any part of the Exercise Price must be represented by certificates registered in the name of the Optionee and duly endorsed by the Optionee and by each and every other co-owner in whose name the shares may also be registered.

 

8EX-4.1

 Exhibit 4.1 
 FIFTH AMENDMENT TO 
 POOLING AND SERVICING AGREEMENT 

This FIFTH AMENDMENT TO POOLING AND SERVICING AGREEMENT, dated as of May 10, 2013 (this “Amendment”), is among
American Express Receivables Financing Corporation II (“RFC II”), American Express Receivables Financing Corporation III LLC (“RFC III”), American Express Receivables Financing Corporation IV LLC (“RFC
IV”), American Express Travel Related Services Company, Inc. (the “Servicer”) and The Bank of New York Mellon (formerly The Bank of New York), as trustee (the “Trustee”). This Amendment amends the Pooling
and Servicing Agreement, dated as of May 16, 1996, as amended and restated as of January 1, 2006 and as amended as of December 17, 2007, as of October 24, 2008, as of February 24, 2009 and as of October 7, 2010 (as so
amended and restated, the “Pooling and Servicing Agreement” and, together with this Amendment, the “Amended Pooling and Servicing Agreement”). 
 RECITALS 
 1. Pursuant to Section 13.01(a) of the Pooling and Servicing
Agreement, each of RFC II, RFC III and RFC IV has delivered to the Trustee an Officer’s Certificate, dated the date of this Amendment, stating that RFC II, RFC III and RFC IV, respectively, reasonably believes that this Amendment will not have
an Adverse Effect. 
 2. RFC II, RFC III, RFC IV and the Servicer have satisfied all conditions precedent contained in the
Pooling and Servicing Agreement to entering into this Amendment and this Amendment is authorized and permitted under the Pooling and Servicing Agreement. All capitalized terms not otherwise defined herein shall have the meanings assigned to such
terms in the Pooling and Servicing Agreement. 
 3. Now, therefore, in consideration of the mutual agreements herein contained,
and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, each party hereto agrees as follows: 
 AMENDMENTS 
 SECTION 1. Amendment to Section 1.01. The definition of
“Fifth Amendment Effective Date” shall be added to Section 1.01 of the Pooling and Servicing Agreement and it shall read as follows: 
 “Fifth Amendment Effective Date” shall mean May 10, 2013. 

SECTION 2. Amendment to Section 2.01. The following sentence shall be added at the end of the first paragraph of
Section 2.01 of the Pooling and Servicing Agreement: 
 Each Account will continue to be owned by the related Account Owner
and will not be a Trust Asset. 

 SECTION 3. Amendment to Section 3.01. Section 3.01(b) of the Pooling and
Servicing Agreement shall be amended to read as follows: 
 (b) As agent for each Transferor and the Trust, the
Servicer shall service and administer the Receivables and any Participation Interests, shall collect and deposit into the Collection Account payments due under the Receivables and any Participation Interests and shall charge-off as uncollectible
Receivables, all in accordance with its customary and usual servicing procedures for servicing credit or charge receivables comparable to the Receivables and in accordance with the applicable Credit Guidelines. As agent for each Transferor and the
Trust, the Servicer shall have full power and authority, acting alone or through any party properly designated by it hereunder, to do any and all things in connection with such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing and subject to Section 10.01, the Servicer or its designee is hereby authorized and empowered, unless such power is revoked by the Trustee on account of the occurrence of a Servicer Default
pursuant to Section 10.01, (i) to instruct the Trustee to make withdrawals and payments from the Collection Account, the Special Funding Account and any Series Account, as set forth in this Agreement or any Supplement, (ii) to take
any action required or permitted under any Series Enhancement, as set forth in this Agreement or any Supplement, (iii) to execute and deliver, on behalf of the Trust for the benefit of the Certificateholders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and, after the delinquency of any Receivable and to the extent permitted under and in compliance with
applicable Requirements of Law, to commence collection or enforcement proceedings with respect to such Receivables and (iv) at the expense of the Transferors, to make any filings, reports, notices, applications and registrations with, and to
seek any consents or authorizations from, the Securities and Exchange Commission (the “Commission”) and any state securities authority on behalf of the Trust as may be necessary or advisable to comply with any Federal or state
securities or reporting requirements or other laws or regulations. In any action or proceeding that is described in clause (iii) of the preceding sentence, (A) the Servicer, whether acting in its own name or on behalf of another and
whether acting alone or through another, represents each of the Transferors’, the Trust’s and the Trustee’s interests, (B) each of the Transferors, the Trust and the Trustee will be bound by that action or by any judgment or
other ruling in that action or proceeding, and (C) complete and final relief can be accorded among the parties to that action or proceeding without joining any Transferor, the Trust or the Trustee. Nothing in the immediately preceding sentence
applies to interests of or claims against the Trustee in its individual capacity or will relieve the Servicer of its obligation to service and administer the Receivables in accordance with the Servicer’s customary and usual servicing procedures
for servicing credit card receivables comparable to the Receivables and in accordance with the Credit Guidelines. The Trustee shall furnish the Servicer with any documents necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties hereunder. 

 SECTION 4. Miscellaneous. The amendments provided for by this Amendment shall become
effective as of the Fifth Amendment Effective Date upon receipt by the Trustee of the following: 
 (a) Notification in writing
from each Rating Agency to the effect that this Amendment will not result in a reduction or withdrawal of the rating of any outstanding Series or Class to which it is a Rating Agency. 

(b) An Officer’s Certificate of each Transferor to the effect that such Transferor reasonably believes that this Amendment will not
have an Adverse Effect. 
 (c) An Opinion of Counsel delivered pursuant to subsection 13.02(d)(i) of the Pooling and Servicing
Agreement. 
 (d) Counterparts of this Amendment, duly executed by the parties hereto. 

SECTION 5. Pooling and Servicing Agreement in Full Force and Effect as Amended. The Pooling and Servicing Agreement is hereby
amended by providing that all references therein to the “Pooling and Servicing Agreement,” “this Agreement,” “hereby,” “hereof” and “herein” shall be deemed from and after the effective date of this
Amendment to be a reference to the Amended Pooling and Servicing Agreement. Except as expressly amended hereby, all of the representations, warranties, terms, covenants and conditions of the Pooling and Servicing Agreement shall remain unamended and
shall continue to be, and shall remain, in full force and effect in accordance with their terms and except as expressly provided herein, this Amendment shall not constitute or be deemed to constitute a waiver of compliance with or consent to
non-compliance with any term or provision of the Pooling and Servicing Agreement. 
 SECTION 6. Counterparts. This
Amendment may be executed in two or more counterparts (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument. 

SECTION 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 SECTION 8. Limitation of Trustee. The Trustee makes no representations as to the validity or sufficiency of this Amendment. The recitals and statements herein are deemed to be those of RFC II, RFC
III, RFC IV and the Servicer, and not of the Trustee. 

 IN WITNESS WHEREOF, RFC II, RFC III, RFC IV, the Servicer and the Trustee have caused this
Amendment to be duly executed and delivered by their respective duly authorized officers as of the day and year first written above. 
  

					
	 AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION II,
as a Transferor

		
	By:	 	 /s/ Anderson Y. Lee

		 	Name:	 	Anderson Y. Lee
		 	Title:	 	President
	
	 AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION III LLC,
as a Transferor

		
	By:	 	 /s/ Kevin L. Thompson

		 	Name:	 	Kevin L. Thompson
		 	Title:	 	President
	
	 AMERICAN EXPRESS RECEIVABLES
FINANCING CORPORATION IV LLC,
as a Transferor

		
	By:	 	 /s/ Denise D. Roberts

		 	Name:	 	Denise D. Roberts
		 	Title:	 	President
	
	 AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.,
as Servicer

		
	By:	 	 /s/ David L. Yowan

		 	Name:	 	David L. Yowan
		 	Title:	 	Treasurer
	
	 THE BANK OF NEW YORK MELLON,
as Trustee

		
	By:	 	 /s/ Michael Commisso

		 	Name:	 	Michael Commisso
		 	Title:	 	Vice President

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