Document:

EXHIBIT 10.6

 

QUAINT OAK MORTGAGE, LLC

QUAINT OAK REAL ESTATE, LLC

QUAINT OAK ABSTRACT, LLC

EMPLOYMENT AGREEMENT

FOR

WILLIAM R. GONZALEZ

THIS EMPLOYMENT AGREEMENT (the "Agreement") between Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC and Quaint Oak Abstract, LLC, each a Pennsylvania limited liability company with principal business offices at 1710 Union Boulevard, Allentown, Pennsylvania 18109 (collectively, the "Employers"), and William R. Gonzalez (the "Executive"), is hereby adopted effective as of the 1st day of July 2009 (the "Effective Date").

WHEREAS, the Executive is the sole member and is presently employed as the Chief Executive Officer of Affiligration, LLC ("Affiligration");

WHEREAS, Affiligration is a party to an Asset Purchase and Sale Agreement by and among Affiligration, Union Property Holdings, LLC General Mortgage Company, LLC, Bellman & Radcliff Real Estate, LLC, First Continental Settlement Services, L.P., Rebecca Gonzalez and the Executive, and Quaint Oak Bancorp, Inc. and Quaint Oak Bank, pursuant to which Affiligration sold all of its assets and thereafter will cease business operations;

WHEREAS, the Employers wish to assure themselves of the services of the Executive as an officer of the Employers for the period provided in this Agreement; and

WHEREAS, the Executive is willing to serve the Employers on the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties hereby agree as follows:

1.            Definitions.  The following words and terms shall have the meanings set forth below for the purposes of this Agreement:

(a)            Cause. Termination of the Executive's employment for "Cause" shall mean termination because of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, conviction of a felony, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order which in the reasonable judgment of the Boards of Directors of the Employers will probably cause substantial economic damages to the Employers, willful or intentional breach or neglect by the Executive of his duties, or a material breach of any provision of this Agreement.  For purposes of this Agreement, no act or failure to act on the Executive's part shall be considered "willful" unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Employers; provided that any act or omission to act on the Executive's behalf in reliance upon an opinion of counsel to the Employers or counsel to the Executive shall not be deemed to be willful.

(b)            Code.  "Code" shall mean the Internal Revenue Code of 1986, as amended.

(c)            Date of Termination.  "Date of Termination" shall mean the date specified in the Notice of Termination.

(d)            Notice of Termination.  Any purported termination of the Executive's employment by the Employers for any reason, including without limitation for Cause, or by the Executive for any reason, shall be communicated by a written "Notice of Termination" to the other party(ies) hereto.  For purposes of this Agreement, a "Notice of Termination" shall mean a dated notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, (iii) specifies a Date of Termination, and (iv) is given in the manner specified in Section 9 hereof.

2.            Term of Employment.  During the term of his employment hereunder, the Executive will serve as President and Chief Executive Officer of Quaint Oak Real Estate, LLC and Quaint Oak Abstract, LLC and Executive Vice President and Chief Operating Officer of Quaint Oak Mortgage, LLC and the Executive hereby accepts said employment and agrees to render such services on the terms and conditions set forth in this Agreement.  Subject to the terms hereof, the initial term of this Agreement shall be for the period commencing on the Effective Date hereof and ending on December 31, 2009; provided, however, that beginning on December 31, 2009, and on each December 31st thereafter, the term of this Agreement shall be extended for one additional year, provided that neither party to the Agreement has given notice to the other party in writing at least 30 days, and not more than 90 days, prior to any such December 31st that the term of this Agreement shall not be extended further.  If any party gives timely notice that the term will not be extended as of any such December 31st, then this Agreement shall terminate at the conclusion of its remaining term.  References herein to the term of this Agreement shall refer both to the initial term and successive terms.

3.            Compensation and Benefits.

(a)            Base Salary and Commissions.  The Employers shall pay the Executive for his services during the term of this Agreement a minimum base salary of Sixty Thousand and 00/100 Dollars ($60,000.00) per year ("Base Salary") payable in bi-weekly installments or with such other frequency as officers of the Employers are normally paid pursuant to their customary payroll practices.  The Executive's Base Salary may be increased from time to time in such amounts as may be determined by the Boards of Directors of the Employers in their sole discretion and may not be decreased without the Executive's prior express written consent.  Any increase in Base Salary shall become the "Base Salary" for purposes of this Agreement.  In addition to his Base Salary, the Executive may be entitled to earn annual commissions in an amount not to exceed an additional Sixty Thousand and 00/100 Dollars ($60,000.00) per year pursuant to Schedule A attached hereto.

 

 

  

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(b)            Bonus Compensation.  Executive may be entitled to participate in any bonus plans or arrangements of the Employers as may be determined by the Compensation Committee of the Boards of Directors of the Employers in their sole discretion.  Nothing paid to Executive under any such plan or arrangement will be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.

(c)            Employee Benefits.  During the term of this Agreement, the Executive shall be entitled to participate in such benefit plans as the Employers may adopt for the benefit of their employees, but shall not be entitled to participate in any benefit plans maintained by Quaint Oak Bank.  The Employers shall not make any changes in such benefit plans that would adversely affect the Executive's rights or benefits thereunder without the Executive's express written consent.  Nothing paid to the Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary payable to the Executive pursuant to Section 3(a) hereof.

(d)            Paid Time Off.  During the term of this Agreement, the Executive shall be entitled to paid annual vacation and sick leave in accordance with the policies as established from time to time by the Boards of Directors of the Employers.  The Executive shall not be entitled to receive any additional compensation from the Employers for failure to take a vacation, nor shall the Executive be able to accumulate unused vacation time from one year to the next, except to the extent authorized by the Boards of Directors of the Employers.

4.            Expenses.  The Employers shall reimburse the Executive or otherwise provide for or pay for all reasonable expenses incurred by the Executive in furtherance of or in connection with the business of the Employers including, but not by way of limitation, traveling expenses, subject to such reasonable documentation and other limitations as may be established by the Boards of Directors of the Employers.  If such expenses are paid in the first instance by the Executive, the Employers shall reimburse the Executive therefor.  Such reimbursement shall be made promptly by the Employers and, in any event, no later than the calendar quarter of the year immediately following the quarter in which such expenses were incurred.

5.            Termination.  The Employers shall have the right, at any time upon prior Notice of Termination, to terminate the Executive's employment hereunder for any reason, including without limitation termination for Cause, and the Executive shall have the right, upon prior Notice of Termination, to terminate his employment hereunder for any reason.  The Executive shall have no right pursuant to this Agreement to compensation or other benefits for any period after the applicable Date of Termination, other than his accrued but unpaid Base Salary or other vested benefits which may be available to the Executive upon a termination of employment with the Employers pursuant to employee benefit plans of the Employers or otherwise.

6.            Withholding.  All payments required to be made by the Employers hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Employers may reasonably determine should be withheld pursuant to any applicable law or regulation.

 

  

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7.            Licenses.  During the Executive's term of employment hereunder, the Executive shall have and maintain all licenses as are necessary to render all such services to the Employers contemplated by this Agreement, including real estate brokerage and title insurance agent licenses.

8.            Noncompetition Agreement.

(a)            During the Executive's term of employment hereunder and for a period of three (3) years after any termination of the Executive's employment by the Employers for Cause or upon the Executive's voluntary termination of employment for any reason, or for a period of one (1) year in the event of the Executive's termination of employment by the Employers without Cause, in any of the following counties within the Commonwealth of Pennsylvania: Philadelphia, Montgomery, Bucks, Lehigh, Berks, Lebanon, Dauphin, Lancaster, Chester, Delaware, Lackawanna, Schuylkill, Carbon, Luzerne, Monroe or Northampton, the Executive will not compete in any way with the Employers or any affiliate or entity related to the Employers or any affiliate, directly or indirectly, and will not consult with or have any interest in any business, firm, person, partnership, corporation or other entity, whether as employee, officer, director, agent, security holder, creditor, consultant or otherwise, which competes with the Employers or any affiliate or related entity, directly or indirectly, in any aspect of the business of the Employers; provided, however, that this Section 7(a) shall not be deemed to prevent the Executive's ownership of not more than 1% of the capital stock of any publicly held entity.

(b)            The Executive expressly agrees that (i) in the event of a violation of these noncompetition provisions by the Executive, monetary damages alone will be inadequate to compensate the Employers, (ii) the Employers will be entitled to injunctive relief against the Executive in addition to any other remedies provided by law or in equity and (iii) the noncompetition obligations contained herein shall be extended by the length of time during which the Executive shall have been in breach thereof.

9.            Assignability.  The Employers may assign this Agreement and their rights and obligations hereunder in whole, but not in part, to any corporation or other entity with or into which the Employers may hereafter merge or consolidate or to which the Employers may transfer all or substantially all of their assets, if in any such case said corporation or other entity shall by operation of law or expressly in writing assume all obligations of the Employers hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or their rights and obligations hereunder.  The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

10.            Key Man Insurance.  The Employers will have the right throughout the term of the Executive's employment, to obtain or increase insurance on Executive's life in such amount as the Boards of the Employers determine, in the name of the Employers and for their sole benefit, or otherwise, in the discretion of the Board.  Upon reasonable advance notice, Executive will cooperate in any and all necessary physical examinations without expense to Executive, supply information, and sign documents, and otherwise cooperate fully with the Employers as the Employers may request in connection with such insurance.  Executive warrants and represents that, to the Executive's best knowledge, Executive is in good health and does not suffer from any medical condition which might interfere with the timely performance of Executive's obligations under this Agreement.

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11.            Notice.  For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

		To the Employers:	Boards of Directors

Quaint Oak Mortgage, LLC

Quaint Oak Real Estate, LLC

Quaint Oak Abstract, LLC

1710 Union Boulevard

Allentown, Pennsylvania 18109

To the Executive:          William R. Gonzalez

At the address last appearing on the

personnel records of the Employers

12.            Amendment; Waiver.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer or officers as may be specifically designated by the Boards of Directors of the Employers to sign on its behalf.  No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

13.            Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the substantive laws of the Commonwealth of Pennsylvania.

14.            Nature of Obligations.  Nothing contained herein shall create or require the Employers to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that the Executive acquires a right to receive benefits from the Employers hereunder, such right shall be no greater than the right of any unsecured general creditor of the Employers.

15.            Headings.  The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

16.            Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which shall remain in full force and effect.

17.            Changes in Statutes or Regulations. If any statutory or regulatory provision referenced herein is subsequently changed or re-numbered, or is replaced by a separate provision, then the references in this Agreement to such statutory or regulatory provision shall be deemed to be a reference to such section as amended, re-numbered or replaced.

  

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

19.            Entire Agreement.  This Agreement embodies the entire agreement between the Employers and the Executive with respect to the matters agreed to herein.  All prior agreements between the Employers and the Executive with respect to the matters agreed to herein are hereby superseded and shall have no force or effect.

[Signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of this 15th day of June, 2009.

 

		
ATTEST:

	
QUAINT OAK MORTGAGE, LLC

		 	 	 	 
		 	 	 	 
		
By:

	/s/Diane J. Colyer	
By:

	/s/Robert T. Strong
		 	
Diane J. Colyer

	 	
Robert T. Strong

		 	
Corporate Secretary

	 	
Chairman of the Board

		 	 	 	 
		 	 	 	 
		
ATTEST:

	
QUAINT OAK REAL ESTATE, LLC

		 	 	 	 
		 	 	 	 
		
By:

	/s/Diane J. Colyer	
By:

	/s/Robert T. Strong
		 	
Diane J. Colyer

	 	
Robert T. Strong

		 	
Corporate Secretary

	 	
Chairman of the Board

		 	 	 	 
		 	 	 	 
		
ATTEST:

	
QUAINT OAK ABSTRACT, LLC

		 	 	 	 
		 	 	 	 
		
By:

	
/s/Diane J. Colyer

	
By:

	/s/Robert T. Strong
		 	
Diane J. Colyer

	 	
Robert T. Strong

		 	Corporate Secretary	 	
Chairman of the Board

		 	 	 	 
		 	 	 	 
		 	 	
 EXECUTIVE

	 				
		 	 	 	 
		 	 	
By:

	/s/William R. Gonzalez
		 	 	 	
William R. Gonzalez

 

7

Schedule A

 

 

Annual commissions not to exceed Sixty Thousand and 00/100 Dollars ($60,000.00) shall be calculated as follows:

	
(a)

	
The Executive shall receive a commission of 70% of Quaint Oak Real Estate, LLC's gross real estate commissions received on sales executed  by 

	
 

	
the Executive.

	
 

	
 

	            (b)	The  Executive  shall  receive  a  commission  of  55%  of  Quaint  Oak  Mortgage,  LLC's gross  mortgage  commissions  received  on  loans  by 
	 	the Executive.

 

 

QUAINT OAK MORTGAGE, LLC

QUAINT OAK REAL ESTATE, LLC

QUAINT OAK ABSTRACT, LLC

AMENDMENT NUMBER ONE

TO THE

EMPLOYMENT AGREEMENT

FOR

WILLIAM R. GONZALEZ

THIS AMENDMENT NUMBER ONE (the "Amendment") to the employment agreement between Quaint Oak Mortgage, LLC, Quaint Oak Real Estate, LLC and Quaint Oak Abstract, LLC, each a Pennsylvania limited liability company with principal business offices at 1710 Union Boulevard, Allentown, Pennsylvania 18109 (collectively, the "Employers"), and William R. Gonzalez (the "Executive"), is hereby adopted effective as of the 11th day of May 2011.

WHEREAS, the Executive and the Employers entered into an employment agreement effective as of July 1, 2009 (the "Employment Agreement"), pursuant to which the Executive currently serves as President and Chief Executive Officer of Quaint Oak Real Estate, LLC and Quaint Oak Abstract, LLC and Executive Vice President and Chief Operating Officer of Quaint Oak Mortgage, LLC;

WHEREAS, each of the Employers is a wholly-owned subsidiary of Quaint Oak Bank (the "Bank"); and

WHEREAS, the Executive and the Employers desire to amend the Employment Agreement in the manner specified herein.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties hereby agree as follows:

1.            Section 2 of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

"2.            Term of Employment.  During the term of his employment hereunder, the Executive will serve as President and Chief Executive Officer of Quaint Oak Real Estate, LLC and Quaint Oak Abstract, LLC and Executive Vice President and Chief Operating Officer of Quaint Oak Mortgage, LLC and the Executive hereby accepts said employment and agrees to render such services on the terms and conditions set forth in this Agreement.  In addition to the foregoing, the Executive shall be eligible to serve and, if so appointed, also agrees to serve as an officer of the Bank.  Subject to the terms hereof, the initial term of this Agreement shall be for the period commencing on the Effective Date hereof and ending on December 31, 2011; provided, however, that beginning on December 31, 2011, and on each December 31st thereafter, the term of this Agreement shall be extended for one additional year, provided that neither party to the Agreement has given notice to the other party in writing at least 30 days, and not more than 90 days, prior to any such December 31st that the term of this Agreement shall not be extended further.  If any party gives timely notice that the term will not be extended as of any such December 31st, then this Agreement shall terminate at the conclusion of its remaining term.  References herein to the term of this Agreement shall refer both to the initial term and successive terms."

2.            Section 3(a) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

"(a)            Base Salary and Commissions.  During the term of this Agreement, the Executive shall receive a minimum base salary of Eighty-Five Thousand and 00/100 Dollars ($85,000.00) per year ("Base Salary") payable in bi-weekly installments or with such other frequency as officers of the Employers are normally paid pursuant to their customary payroll practices.  The Executive's Base Salary may be increased from time to time in such amounts as may be determined by the Boards of Directors of the Employers in their sole discretion and may not be decreased without the Executive's prior express written consent.  Any increase in Base Salary shall become the "Base Salary" for purposes of this Agreement.  In addition to his Base Salary, the Executive may be entitled to earn annual commissions as provided pursuant to Schedule A attached hereto, provided, however, that in no event shall the Executive's aggregate annual compensation from all sources hereunder exceed a total of One Hundred Twenty Thousand and 00/100 Dollars ($120,000.00) per year."

3.            Section 3(c) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

"(c)            Employee Benefits.  During the term of this Agreement, the Executive shall be entitled to participate in such benefit plans as the Employers may adopt for the benefit of their employees.  In the event that the Executive is appointed as an officer of the Bank pursuant to Section 2 hereof, the Executive shall be entitled to participate in any employee benefit plans or arrangements maintained by the Bank.  The Employers shall not make any changes in such benefit plans that would adversely affect the Executive's rights or benefits thereunder without the Executive's express written consent.  Nothing paid to the Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the Base Salary payable to the Executive pursuant to Section 3(a) hereof."

4.            A new Section 3(e) is hereby added to the Employment Agreement to read as follows:

"(e)            Source of Payments.  All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Employers or the Bank, provided, however, to the extent that such payments and benefits are paid to or received by the Executive from the Bank, any such compensation and benefits paid by the Bank will be subtracted from any amounts simultaneously due to the Executive by the Employers."

 

  

5.            Section 6 of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

"6.            Withholding.  All payments required to be made hereunder to the Executive shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as may reasonably be required pursuant to any applicable law or regulation."

6.            All other terms and conditions of the Employment Agreement not otherwise modified by this Amendment shall remain in full force and effect.

[Signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the 11th day of May 2011.

		
ATTEST:

	
 QUAINT OAK MORTGAGE, LLC

		 	 	 	 
		 	 	 	 
		
By:

	/s/Diane J. Colyer	
By:

	/s/Robert T. Strong
		 	
Diane J. Colyer

	 	
Robert T. Strong

		 	
Corporate Secretary

	 	
Chairman of the Board

		 	 	 	 
		 	 	 	 
		
ATTEST:

	
 QUAINT OAK REAL ESTATE, LLC

		 	 	 	 
		 	 	 	 
		
By:

	/s/Diane J. Colyer	
By:

	/s/Robert T. Strong
		 	
Diane J. Colyer

	 	
Robert T. Strong

		 	
Corporate Secretary

	 	
Chairman of the Board

		 	 	 	 
		 	 	 	 
		
ATTEST:

	
 QUAINT OAK ABSTRACT, LLC

		 	 	 	 
		 	 	 	 
		
By:

	
/s/Diane J. Colyer

	
By:

	/s/Robert T. Strong
		 	
Diane J. Colyer

	 	
Robert T. Strong

		 	Corporate Secretary	 	
Chairman of the Board

		 	 	 	 
		 	 	 	 
		 	 	
 EXECUTIVE

	 				
		 	 	 	 
		 	 	
By:

	/s/William R. Gonzalez
		 	 	 	
William R. Gonzalezexhibit_4-3.htm

Exhibit 4.3

 

Radcom Ltd.

 

2013 SHARE OPTION PLAN

 

A.  NAME AND PURPOSE

 

1.           Name:  This plan, as amended from time to time, shall be known as the Radcom Ltd. 2013 Share Option Plan” (the “Plan”).

 

2.           Purpose: The purpose and intent of the Plan is to provide incentives to employees, directors, consultants and contractors of Radcom Ltd., a company organized under the laws of the State of Israel, or any subsidiary thereof (the “Company”), by providing them with opportunities to purchase Ordinary Shares, nominal value of 0.20 New Israeli Shekel each (the “Shares”) of the Company, pursuant to a plan approved by the Board of Directors of the Company (the “Board”) which is designed to benefit from, and is made pursuant to, the provisions of either Section 102 or Section3(9) of the Israeli Income Tax Ordinance [New Version] 1961 (the “Ordinance”), as applicable,  and the rules and regulations promulgated thereunder.

 

B.  GENERAL TERMS AND CONDITIONS OF THE PLAN

 

3.             Administration:

 

3.1           The Board may appoint a Share Incentive Committee, which will consist of such number of Directors of the Company, as may be fixed from time to time by the Board. The Board shall appoint the members of the committee, may from time to time remove members from, or add members to, the Committee and shall fill vacancies in the Committee however caused. The Plan will be administered by the Board and/or the Share Incentive Committee, or where not permitted according to Section 112 of the Companies Law, 1999 (the “Companies Law”), by the Board only (collectively - the “Committee”).

 

3.2           The Committee shall select one of its members as its Chairman and shall hold its meetings at such times and places, as it shall determine. Actions taken by a majority of the members of the Committee, at a meeting at which a majority of its members is present, or acts reduced to, or approved in, writing by all members of the Committee, shall be the valid acts of the Committee. The Committee may appoint a Secretary, who shall keep records of its meetings and shall make such rules and regulations for the conduct of its business, as it shall deem advisable.

 

  

  

  

3.3           Subject to the general terms and conditions of this Plan and applicable law, the Committee shall have the full authority in its discretion, from time to time and at any time, to determine (i) the persons ("Grantees") to whom options to purchase Shares (the "Options") shall be granted, (ii) the number of Shares subject to each Option, (iii) the time or times at which the same shall be granted, (iv) the schedule and conditions on which such Options may be exercised and on which such Shares shall be paid for, and/or (v) any other matter which is necessary or desirable for, or incidental to, the administration of the Plan. In determining the number of Shares subject to the Options to be granted to each Grantee, the Committee may consider, among other things, the Grantee's salary and the duration of the Grantee's employment by the Company.

 

3.4           Subject to the general terms and conditions of the Plan and the Ordinance, the Committee shall have the full authority in its discretion, from time to time and at any time, to determine:

 

(a)           with respect to the grant of 102 Options (as defined in Section 5.1(a)(i) below) - whether the Company shall elect the “Ordinary Income Route” under Section 102(b)(1) of the Ordinance (the “Ordinary Income Route”) or the “Capital Gains Route” under Section 102(b)(2) of the Ordinance (the “Capital Gains Route”) (each of the Ordinary Income Route or the Capital Gains Route - a “Taxation Route”) for the grant of 102 Options, and the identity of the trustee who shall be granted such 102 Options in accordance with the provisions of this Plan and the then prevailing Taxation Route;

 

  In the event the Committee determines that the Company shall elect one of the Taxation Routes for the grant of 102 Options, the Company shall be entitled to change such election only following the lapse of one year from the end of the tax year in which 102 Options are first granted under the then prevailing Taxation Route; and

 

(b)           with respect to the grant of 3(9) Options (as defined in Section 5.1(a)(ii) below) - whether or not 3(9) Options shall be granted to a trustee in accordance with the terms and conditions of this Plan, and the identity of the trustee who shall be granted such 3(9) Options in accordance with the provisions of this Plan.

 

3.5           Notwithstanding the aforesaid, the Committee may, from time to time and at any time, grant 102 Options that will not subject to a Taxation Route, as detailed in Section 102(c) of the Ordinance (“102(c) Options”).

 

3.6           The Committee may, from time to time, adopt such rules and regulations for carrying out the Plan as it may deem necessary.  No member of the Board or of the Committee shall be liable for any act or determination made in good faith with respect to the Plan or any Option granted thereunder.

 

  

  

  

3.7           The interpretation and construction by the Committee of any provision of the Plan or of any Option thereunder shall be final and conclusive and binding on all parties who have an interest in the Plan or any Option or Share issuance thereunder unless otherwise determined by the Board.

 

4.             Eligible Grantees:

 

4.1           The Committee, at its discretion, may grant Options to any employee, director, consultant or contractor of the Company. Anything in this Plan to the contrary notwithstanding, all grants of Options to office holders (i.e., "Nosei Misra", as such term is defined in the Companies Law) shall be authorized and implemented only in accordance with the provisions of the Companies Law.

 

4.2           The grant of an Option to a Grantee hereunder, shall neither entitle such Grantee to participate, nor disqualify him from participating, in any other grant of options pursuant to this Plan or any other share option plan of the Company.

 

5.             Grant of Options, Issuance of Shares, Dividends and Shareholder Rights:

 

5.1           Grant of Options and Issuance of Shares.

 

(a)           Subject to the provisions of the Ordinance and applicable law,

 

(i)           all grants of Options to employees, directors and office holders of the Company, other than to a Controlling Shareholder of the Company (i.e., "Baal Shlita", as such term is defined in the Ordinance), shall be made only pursuant to the provisions of Section 102 of the Ordinance and the rules and regulations promulgated thereunder ("Section 102"  and “102 Options”, respectively), or any other section of the Income Tax Ordinance that will be relevant for such issuance in the future; and

 

(ii)          all grants of Options to consultants, contractors or Controlling Shareholders of the Company shall be made only pursuant to the provisions of Section 3(9) of the Ordinance and the rules and regulations promulgated thereunder (“3(9) Options”), or any other section of the Ordinance that will be relevant for such issuance in the future.

 

(b)          Subject to Sections 7.1 and 7.2 hereof, the effective date of the grant of an Option (the "Date of Grant") shall be the date specified by the Committee in its determination relating to the award of such Option.  The Committee shall promptly give the Grantee written notice (the "Notice of Grant") of the grant of an Option.

 

(c)           Trust.  In the event Options are granted under the Plan to a trustee designated by the Committee in accordance with the provisions of Section 3.4 hereof and, with respect to 102 Options, approved by the Israeli Commissioner of Income Tax (the "Trustee"), the Trustee shall hold each such Option and the Shares issued upon exercise thereof in trust (the "Trust") for the benefit of the Grantee in respect of whom such Option was granted (the "Beneficial Grantee").

 

  

  

  

In accordance with Section 102, the tax treatment of 102 Options (and any Shares received upon exercise of such Options) in accordance with the Ordinary Income Route or Capital Gains Route, as applicable, shall be contingent upon the Trustee holding such 102 Options for the requisite period provided by such Section 102 (the "Trust Period") (in 2013 (i) one year from the Date of Grant for 102 Options   granted under the Ordinary Income Route, or (ii) two years from the  Date of Grant for 102 Options granted under the Capital Gains Route, or (iii) such other period as shall be approved by the Israeli Tax Authority).

 

All 102 Options granted hereunder to the Trustee, as aforementioned, shall be governed by the provisions of Section 102 of the Ordinance, the Income Tax Rules (Tax Relief in Issuance of Shares to Employees), 2003 (the "102 Rules") and any other regulations, rulings, procedures or clarifications promulgated thereunder.

 

With respect to 102 Options granted to the Trustee under a Taxation Route, the following shall apply:

 

(i)           A Grantee granted 102 Options shall not be entitled to sell the Shares received upon exercise thereof (the “Exercised Shares”) or to transfer such Exercised Shares (or such 102 Options) from the Trustee prior to the lapse of the Trust Period;

 

(ii)          Any and all rights issued in respect of the Exercised Shares, including bonus shares but excluding cash dividends (“Rights”), shall be issued to the Trustee and held thereby until the lapse of the Trust Period, and such Rights shall be subject to the Taxation Route which is applicable to such Exercised Shares.

 

Notwithstanding the aforesaid, Exercised Shares or Rights may be sold or transferred, and the Trustee may release such Exercised Shares (or 102 Options) or Rights from Trust, prior to the lapse of the Trust Period, provided however, that tax is paid or withheld in accordance with Section 102(b)(4) of the Ordinance and Section 7 of the 102 Rules.

 

All certificates representing Shares issued to the Trustee under the Plan shall be deposited with the Trustee, and shall be held by the Trustee until such time that such Shares are released from the Trust as herein provided.

 

  

  

  

(d)           Subject to the terms hereof, at any time after the options have vested, with respect to any Options or Shares the following shall apply:

 

 (i)           Upon the written request of any Beneficial Grantee, the Trustee shall release from the Trust the Options granted, and/or the Shares issued, on behalf of such Beneficial Grantee, by executing and delivering to the Company such instrument(s) as the Company may require, giving due notice of such release to such Beneficial Grantee, provided, however, that the Trustee shall not so release any such Options and/or Shares to such Beneficial Grantee unless the latter, prior to, or concurrently with, such release, provides the Trustee with evidence, satisfactory in form and substance to the Trustee, that all taxes, if any, required to be paid upon such release have, in fact, been paid.

 

 (ii)          Alternatively, provided the Shares are listed on a stock exchange or admitted to trading on an electronic securities trading system (such as the Nasdaq Stock Market), upon the written instructions of the Beneficial Grantee to sell any Shares issued upon exercise of Options, the Trustee shall use its reasonable efforts to effect such sale and shall transfer such Shares to the purchaser thereof concurrently with the receipt, or after having made suitable arrangements to secure the payment of the proceeds of the purchase price in such transaction.  The Trustee shall withhold from such proceeds any and all taxes required to be paid in respect of such sale, shall remit the amount so withheld to the appropriate tax authorities and shall pay the balance thereof directly to the Beneficial Grantee, reporting to such Beneficial Grantee and to the Company the amount so withheld and paid to said tax authorities.

 

5.2           Guarantee. In the event a 102(c) Option is granted to a Grantee who is an employee at the time of such grant, if the Grantee’s employment is terminated, for any reason, such Grantee shall provide the Company with a guarantee or collateral, to the full satisfaction of the Committee, securing the payment of all taxes required to be paid in connection with any action involving such 102(c) Option or the Shares received upon exercise of thereof. Alternatively, the Committee shall have the authority to instruct such Grantee to transfer his/her 102(c) Option to a trustee (or escrow agent) who shall hold such 102(c) Option, and the Shares received upon exercise thereof, in trust (or escrow) to guarantee the full payment of all taxes required to be paid in connection with any action involving such 102(c) Option or Shares.

 

5.3           Dividend.  All Shares issued upon the exercise of Options granted under the Plan shall entitle the Beneficial Grantee thereof to receive dividends with respect thereto. For so long as Shares issued to the Trustee on behalf of a Beneficial Grantee are held in the Trust, the dividends paid or distributed with respect thereto shall be remitted to the Trustee for the benefit of such Beneficial Grantee or distributed directly to such Beneficial Grantee, as shall be solely determined by the Committee prior to each such distribution or payment.

 

  

  

  

5.4           Shareholder Rights.  The holder of an Option shall have no shareholder rights with respect to the Shares subject to the Option until such person shall have exercised the Option, paid the exercise price and become the recordholder of the purchased Shares.

 

6.             Reserved Shares: The Committee shall reserve from time to time, authorized but unissued Shares to be issued under the Plan and any other option or incentive plan that the Company may adopt, subject to adjustments as provided in Section 11 hereof. Notwithstanding the aforesaid, the Committee shall have full authority in its discretion to determine that the Company may issue, for the purposes of this Plan, previously issued Shares which are held by the Company, from time to time, as Dormant Shares (as such term is defined in the Companies Law). All Shares under the Plan, in respect of which the right hereunder of a Grantee to purchase the same shall, for any reason, terminate, expire or otherwise cease to exist, shall again be available for grant through Options under the Plan.

 

7.             Grant of Options:

 

7.1          The implementation of the Plan and the granting of any Option under the Plan shall be subject to the Company’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the Options granted under it and the Shares issued pursuant to it.

 

7.2          Without derogating from the foregoing, the Committee in its discretion may, subject to the provisions of the Ordinance, award to Grantees Options available under the Plan, provided however, that 102 Options granted under one of the Taxation Routes may be granted to the Trustee only following the fulfillment of the following procedure:

 

 (i)            The Company shall inform the Israeli tax authorities of its election of a Taxation Route and shall submit the Plan to the Israeli tax authorities at least 30 days prior to the grant of any 102 Options under the elected Taxation Route;

 

 (ii)           The Plan and the appointment of the Trustee shall be subject to approval of the Israeli tax authorities, provided, however, that if the Israeli Tax authorities shall not respond within 90 days of submission of the Plan and election of a Taxation Route by the Company, the Plan and/or the Trustee shall be deemed approved by the Israeli tax authorities.

 

7.3           The Notice of Grant shall state, inter alia, the number of Shares subject to each Option, the vesting schedule, the dates when the Options may be exercised, the exercise price, whether the Options granted thereby are 102 Options or 3(9) Options, and such other terms and conditions as the Committee at its discretion may prescribe, provided that they are consistent with this Plan. Each Notice of Grant evidencing a 102 Option shall, in addition, be subject to the provisions of the provisions of the Ordinance applicable to such options.

 

  

  

  

7.4           Vesting.  Without derogating from the rights and powers of the Committee under Section 7.3 hereof, unless otherwise specified by the Committee, the Options shall be for a term of ten (10) years, and unless determined otherwise by the Committee and/or the Board, the schedule pursuant to which such Options shall vest, and the Beneficial Grantee thereof shall be entitled to pay for and acquire the Shares, such that all the Options shall be fully vested, as further determined by the Committee and/or Board: either on the first business day following the passing of four (4) years from the Date of Grant, or on the first business day following the passing of one (1) year from the Date of Grant, (the “Vesting Period”) as follows: (i) in case Vesting Period has been determined as four (4) years, 25% of such Options shall vest on each of the four (4) annual anniversaries of the Adoption Date (the “Adoption Date” for the purpose of this Plan means the Date of Grant or any other date determined by the Committee for a given grant of Options), or (ii) in case Vesting Period has been determined as one (1) year, 25% of such Options shall each vest on the passing of every three (3) months’ term of the Adoption Date.

 

Unless determined otherwise by the Board, any period in which the Grantee shall not be employed by the Company, or in which the Grantee shall have taken an unpaid leave of absence (excluding a leave for military reserves duty or the mandatory maternity leave determined by law), or in which the Grantee shall cease to serve as service provider of the Company, shall not be included in the Vesting Period, or shall cause the number of vested Options to be adjusted accordingly, as shall be determined by the Committee.

 

“Vesting Period” of an Option means, for the purpose of the Plan and its related instruments, the period between the Adoption Date and the date on which the holder of an Option may exercise the rights awarded pursuant to terms of the Option.

 

7.5           Acceleration of Vesting.  Anything herein to the contrary in this Plan notwithstanding, the Committee shall have full authority to determine any provisions regarding the acceleration of the Vesting Period of any Option or the cancellation of all or any portion of any outstanding restrictions with respect to any Option or Share upon certain events or occurrences, and to include such provisions in the Notice of Grant on such terms and conditions as the Committee shall deem appropriate.

 

7.6           Repricing. Subject to applicable law, the Committee shall have full authority to, at any time and from time to time, without the approval of the Shareholders of the Company, (i) grant in its discretion to the holder of an outstanding Option, in exchange for the surrender and cancellation of such Option, a new Option having an exercise price lower than provided in the Option so surrendered and canceled and containing such other terms and conditions as the Committee may prescribe in accordance with the provisions of the Plan, or (ii) effectuate a decrease in the Exercise Price (see Section 8 below) of outstanding Options.

 

  

  

  

8.             Exercise Price: The exercise price per Share subject to each Option shall be determined by the Committee in its sole and absolute discretion; provided, however, that such exercise price shall not be less than the par value of the Shares into which such Option is exercisable.

 

9.             Exercise of Options:

 

9.1           Options shall be exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions of the Plan.

 

9.2           The exercise of an Option shall be made by a written notice of exercise (the "Notice of Exercise") delivered by the Beneficial Grantee (or, with respect to Options held in the Trust, by the Trustee upon receipt of written instructions from the Beneficial Grantee) to the Company at its principal executive office, specifying the number of Shares to be purchased and accompanied by the payment therefor, and containing such other terms and conditions as the Committee shall prescribe from time to time.

 

9.3           Anything herein to the contrary notwithstanding, but without derogating from the provisions of Section 10 hereof, if any Option has not been exercised and the Shares subject thereto not paid for within ten (10) years  after the Date of Grant (or any shorter period set forth in the Notice of Grant), such Option and the right to acquire such Shares shall terminate, all interests and rights of the Grantee in and to the same shall ipso facto expire, and, in the event that in connection therewith any Options are still held in the Trust as aforesaid, the Trust with respect thereto shall ipso facto expire, and the Shares subject to such Options shall again be available for grant through Options under the Plan, as provided for in Section 6 herein.

 

9.4           Each payment for Shares shall be in respect of a whole number of Shares, and shall be effected in cash or by a bank’s check payable to the order of the Company, or such other method of payment acceptable to the Company.

 

9A.         Restricted Share Units:

 

9A.1        Subject to the sole and absolute discretion and determination of the Committee, the Committee may decide to grant under the Plan, Restricted Share Unit(s) (“RSU(s)”). A RSU is a right to receive a Share of the Company, under certain terms and conditions, for no consideration. Upon the lapse of the exercise conditions of a RSU (i.e. Vesting Period and/or performance conditions, "Exercise Conditions"), such RSU shall automatically vest into an Exercised Share of the Company (subject to adjustments under Section 11 herein). Unless determined otherwise by the Board, the nominal value shall be paid by the Grantee, and the Board shall determine procedures for payment of such nominal value by the Grantees or for collection of such amount from the Grantees by the Company. However, the Board shall have the full authority in its discretion to determine at any time that said nominal value shall not be paid by the Grantee, and the Company shall then capitalize applicable profits or take any other action to ensure that it meets any requirement of applicable laws regarding issuance of Shares for consideration that is lower than the nominal value of such Shares. .

 

  

  

  

9A.2        Unless determined otherwise by the Administrator, in the event of a Cessation of Employment (or service, as the case may be), all RSUs theretofore granted to such Grantee when such Grantee was an Employee or a service provider of the Company, as the case may be, that are not vested on the Date of Cessation, shall terminate immediately and have no legal effect.

 

9A.3        All other terms and conditions of the Plan applicable to Options, shall apply to RSUs, mutatis mutandis. It is clarified, that without deviating from the foregoing in Sub-Section 9.2, the provisions of Section 8.6 herein, shall, mutatis mutandis, apply to RSUs in the event of Cessation of Employment or service, as the case may be.

 

9B.         Restricted Shares.

 

9B.1         Restricted Shares under this section ("Restricted Shares") may be granted upon such terms and conditions, as the Committee shall determine.

  

                9B.2           Purchase Price. No monetary payment (other than payments made for applicable taxes) shall be required as a condition of receiving Shares pursuant to a grant of Restricted Shares, and unless determined otherwise by the Board, the aggregate nominal value of such Shares shall be paid by the Grantee, and the Board shall determine procedures for payment of such nominal value by the Grantees or for collection of such amount from the Grantees by the Company. However, the Board shall have the full authority in its discretion to determine at any time that said nominal value shall not be paid by the Grantee, and the Company shall then capitalize applicable profits or take any other action to ensure that it meets any requirement of applicable laws regarding issuance of Shares for consideration that is lower than the nominal value of such Shares.

 

                9B.3           Vesting and Restrictions on Transfer. Shares issued pursuant to any Restricted Shares may (but need not) be made subject to Exercise Conditions, as shall be established by the Committee and set forth in the applicable notice of grant evidencing such award. During any restriction period in which Shares acquired pursuant to an award of Restricted Shares remain subject to Exercise Conditions, such Shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of unless otherwise provided in the Plan. Upon request by the Company, each Grantee shall execute any agreement evidencing such transfer restrictions prior to the receipt of Shares hereunder and the Company may place appropriate legends evidencing any such transfer restrictions on the relevant share certificates.

 

  

  

  

                9B.4         Voting Rights; Dividends and Distributions. Except as provided in this section and in any notice of grant, during any restriction period applicable to Shares subject to an award of Restricted Shares, the Grantee shall have all of the rights of a shareholder of the Company holding Shares, including the right to receive all dividends and other distributions paid with respect to such Shares. However, in the event of a dividend or distribution paid in Shares or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 11, any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Grantee is entitled by reason of the Grantee’s award of Restricted Shares shall be immediately subject to the same Exercise Conditions as the Shares subject to the award of Restricted Shares with respect to which such dividends or distributions were paid or adjustments were made.

 

                9B.5         Cessation of Employment or service. Unless otherwise provided by the Committee, in the event of Cessation of Employment or service of a Grantee, for any reason, whether voluntary or involuntary (including the Grantee’s death or disability), then the Grantee shall forfeit to the Company any Shares acquired by the Grantee pursuant to an award of Restricted Shares which remain subject to Exercise Conditions as of the Date of Cessation.

 

9B.6       All other terms and conditions of the Plan applicable to Options, shall apply to Restricted Shares, mutatis mutandis. It is clarified, that without deviating from the foregoing in Sub-Section 9B.5., the provisions of Section 10.6 herein, shall, mutatis mutandis, apply to Restricted Shares in the event of Cessation of Employment or service.

 

10.           Termination of Employment:

 

10.1         Employees.  In the event that a Grantee who was an employee of the Company on the Date of Grant of any Options to him or her ceases, for any reason, to be employed by the Company (the “Cessation of Employment”), all Options theretofore granted to such Grantee when such Grantee was an employee of the Company shall terminate as follows:

 

(a)           The date of the Grantee’s Cessation of Employment shall be the date on which the employee-employer relationship between the Grantee and the Company ceases to exist (the “Date of the Cessation”).

 

(b)           All such Options which are not vested at the Date of Cessation shall terminate immediately.

 

(c)            If the Grantee’s Cessation of Employment is by reason of such Grantee's death or "Disability" (as hereinafter defined), such Options (to the extent vested at the Date of Cessation) shall be exercisable by the Grantee or the Grantee's guardian, legal representative, estate or other person to whom the Grantee's rights are transferred by will or by laws of descent or distribution, at any time until 180 days from the Date of Cessation, and shall thereafter terminate.

 

  

  

  

For purposes hereof, "Disability" shall mean the inability to engage in any substantial gainful occupation for which the Grantee is suited by education, training or experience, by reason of any medically determinable physical or mental impairment which is expected to result in such person’s death or to continue for a period of six (6) consecutive months or more.

 

(d)           If the Grantee’s Cessation of Employment is due to any reason other than those stated in Sections 10.1(c), 10.1(e) and 10.1(f) herein, such Options (to the extent vested at the Date of Cessation) shall be exercisable at any time until 180 days after the Date of Cessation, and shall thereafter terminate; provided, however, that if the Grantee dies within such period, such Options (to the extent vested at the Date of Cessation) shall be exercisable by the Grantee's legal representative, estate or other person to whom the Grantee's rights are transferred by will or by laws of descent or distribution at any time until 180 days from the Date of Cessation, and shall thereafter terminate.

 

(e)           Notwithstanding the aforesaid, if the Grantee’s Cessation of Employment is due to (i) breach of the Grantee’s duty of loyalty towards the Company, or (ii) breach of the Grantee’s duty of care towards the Company, or (iii) the commission any flagrant criminal offense by the Grantee, or (iv) the commission of any act of fraud, embezzlement or dishonesty towards the Company by the Grantee, or (v) any unauthorized use or disclosure by the Grantee of confidential information or trade secrets of the Company, or (vi) any other intentional misconduct by the Grantee (by act or omission) adversely affecting the business or affairs of the Company in a material manner, or (vii) any act or omission by the Grantee which would allow for the termination of the Grantee’s employment without severance pay, according to the Severance Pay Law, 1963, all the Options whether vested or not shall ipso facto expire immediately and be of no legal effect.

 

(f)            If a Grantee retires, he shall, subject to the approval of the Committee, continue to enjoy such rights, if any, under the Plan and on such terms and conditions, with such limitations and subject to such requirements as the Committee in its discretion may determine.

 

(g)           Whether the Cessation of Employment of a particular Grantee is by reason of “Disability” for the purposes of paragraph 10.1(c) hereof or by virtue of “retirement” for purposes of paragraph 10.1(f) hereof, or is a termination of employment other than by reason of such Disability or retirement, or is for reasons as set forth in paragraph 10.1(e) hereof, shall be finally and conclusively determined by the Committee in its absolute discretion.

 

  

  

  

(h)           Notwithstanding the aforesaid, under no circumstances shall any Option be exercisable after the specified expiration of the term of such Option.

 

10.2         Directors, Consultants and Contractors.  In the event that a Grantee, who is a director, consultant or contractor of the Company, ceases, for any reason, to serve as such, the provisions of Sections 10.1(b), 10.1(c), 10.1(d), 10.1(e), 10.1(g) and 10.2(h) above shall apply, mutatis mutandis. For the purposes of this Section 10.2, “Date of Cessation” shall mean:

 

(a)           with respect to directors - the date on which a director submits notice of resignation from the Board or the date on which the shareholders of the Company remove such director from the Board; and

 

(b)           with respect to consultants and contractors - the date on which the consulting or contractor agreement between such consultant or contractor, as applicable, and the Company expires or the date on which either of the parties to such agreement sends the other notice of its intention to terminate said agreement.

 

10.3        Notwithstanding the foregoing provisions of this Section 10, the Committee shall have the discretion, exercisable either at the time an Option is granted or thereafter, to:

 

(a)           extend the period of time for which the Option is to remain exercisable following the Date of Cessation to such greater period of time as the Committee shall deem appropriate, but in no event beyond the specified expiration of the term of the Option;

 

(b)           permit the Option to be exercised, during the applicable exercise period following the Date of Cessation, not only with respect to the number of Shares for which such Option is exercisable at the Date of Cessation but also with respect to one or more additional installments in which the Grantee would have vested under the Option had the Grantee continued in the employ or service of the Company.

 

10.4        Notwithstanding the foregoing provisions of this Section 10, unless determined otherwise by the Board, and for the avoidance of doubt, the transfer of a Grantee from the employ or service of the Company to the employ or service of an Affiliate, or from the employ or service of an Affiliate to the employ or service of the Company or another Affiliate, shall not be deemed a Cessation of Employment for purposes hereof. Furthermore, and notwithstanding the foregoing provisions of this Section 10, the Board may determine that the transfer of a Grantee from the a status of an Employee status to a status of a consultant or from a status of a consultant to a status of an Employee, shall not be deemed a Cessation of Employment for purposes hereof.

 

For purposes hereof “Affiliate” shall mean any company (i) that holds at least 10% of the issued share capital of Radcom Ltd. or of its voting power, or (ii) in which Radcom Ltd. holds at least 10% of the issued share capital or voting power, or (iii) in which a company under clause (i) above also holds at least 10% of its issued share capital or voting power.

 

  

  

  

11.           Adjustments, Liquidation and Corporate Transaction:

 

11.1         Definitions:

 

“Merger” means a merger or consolidation or a similar business combination, in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction.

 

“Sale of All of the Company’s Assets” means the sale, transfer or other disposition of all or substantially all of the Company’s assets.

 

                                “Corporate Transaction” means a Merger or a Sale of All of the Company’s Assets.

 

“Change of Control” means an event following which the persons and/or entities that control the Company, directly or indirectly, at the time of adoption of this Plan, shall cease to have the right to appoint, directly or indirectly, independently, or together with another person or entity (as a result of an agreement with such person or entity, or otherwise), 50% or more of the members of the Board.

 

“Corporate Transaction” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)             a sale or other disposition of all or substantially all, as determined by the Board in its discretion, of the consolidated assets of the Company and its subsidiaries;

 

(ii)            a sale or other disposition of all or substantially all, as determined by the Board in its discretion, of the outstanding securities of the Company resulting in a Change of Control;

 

(iii)           a merger, consolidation or similar transaction resulting in a Change of Control;

 

(iv)           a merger, consolidation or reorganization following which the Company is the surviving corporation but the Ordinary Shares of the Company outstanding immediately preceding the merger, consolidation or reorganization are converted or exchanged by virtue of the merger, consolidation or reorganization into other property, whether in the form of securities, cash or otherwise (the "Reorganization").

 

  

  

  

Whether a transaction is a “Corporate Transaction” as defined above, shall be finally and conclusively determined by the Committee in its absolute discretion.

 

“Successor Entity Option” means options of any successor entity, as provided in Section 11.4 below.

 

11.2         Adjustments.  Subject to any required action by the shareholders of the Company, the number of Shares subject to each outstanding Option, and the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Shares subject to each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares or the payment of a stock dividend (bonus shares) with respect to the Shares or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration."  Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Option.

 

11.3         Liquidation.  Unless otherwise provided by the Board, in the event of the proposed dissolution or liquidation of the Company, all outstanding Options will terminate immediately prior to the consummation of such proposed action. In such case, the Committee may declare that any Option shall terminate as of a date fixed by the Committee and give each Grantee the right to exercise his Option, including any Option which would not otherwise be exercisable.

 

11.4         Corporate Transaction.

 

(a)           In the event of a Corporate Transaction, immediately prior to the effective date of such Corporate Transaction, each Option may, among other things, at the sole and absolute discretion of the Board, either:

 

 (i)           Be substituted for a Successor Entity Option such that the Grantee may exercise the Successor Entity Option for such number and class of securities of the successor entity which would have been issuable to the Grantee in consummation of such Corporate Transaction, had the Option been exercised, immediately prior to the effective date of such Corporate Transaction, given the exchange ratio or consideration paid in the Corporate Transaction, the Vesting Period of the Options and such other terms and factors that the Board determines to be relevant for purposes of calculating the number of Successor Entity Options granted to each Grantee; or

 

  

  

  

(ii)          Be assumed by any successor entity such that the Grantee may exercise the Option  which would have been issuable to the Grantee in consummation of such Corporate Transaction, had the Option been exercised immediately prior to the effective date of such Corporate Transaction, given the exchange ratio or consideration paid in the Corporate Transaction, the Vesting Period of the Options and such other terms and factors that the Board determines to be relevant for this purpose.

 

(iii)         Determine that the Options shall be cashed out for a consideration equal to the difference between the price received by the shareholders of the Company in the Corporate Transaction and the Exercise Price of such Option.

 

 In the event of a clause (i) or clause (ii) action, appropriate adjustments shall be made to the Exercise Price per Share to reflect such action. In taking any of the actions permitted under this Section 11.4(a), the Board shall not be obligated to treat all Options, all Options held by a Grantee, or all Options of the same type, similarly.

 

(b)           Immediately following the consummation of the Corporate Transaction, all outstanding Options shall terminate and cease to be outstanding, except to the extent assumed by a successor entity.

 

(c)           Notwithstanding the foregoing, and without derogating from the power of the Board pursuant to the provisions of the Plan, the Board shall have full authority and sole discretion to determine that any of the provisions of Sections 11.4(a)(i), or 11.4(a)(ii) above shall apply in the event of a Corporate Transaction in which the consideration received by the shareholders of the Company is not solely comprised of securities of a successor entity, or in which such consideration is solely cash or assets other than securities of a successor entity.

 

11.5         Sale.  In the event that all or substantially all of the issued and outstanding share capital of the Company is to be sold (the “Sale”), each Grantee shall be obligated to participate in the Sale and sell his or her Shares and/or Options in the Company, provided, however, that each such Share or Option shall be sold at a price equal to that of any other Share sold under the Sale (minus the applicable exercise price), while accounting for changes in such price due to the respective terms of any such Option, and subject to the absolute discretion of the Board.

 

11.6        The grant of Options under the Plan shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

  

  

  

12.           Limitations on Transfer:

 

Unless determined otherwise by the Board, no Option shall be assignable or transferable by the Grantee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of the Grantee only by such Grantee or by such Grantee's guardian or legal representative. The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs and successors of such Grantee.  Any Shares acquired upon exercise of Options shall be transferable only in accordance with applicable securities and other local laws, and may be subject to substantial statutory or regulatory restrictions on transfer, except to the extent exemptions (whether by registration or otherwise) are available.

 

13.           Term and Amendment of the Plan:

 

13.1         The Plan was adopted by the Board on April 3rd, 2013. The Plan shall terminate upon the earliest of (i) the expiration of the ten (10)-year period measured from the date the Plan was adopted by the Board, or (ii) the termination of all outstanding Options in connection with a Corporate Transaction.  All Options outstanding at the time of a clause (i) termination event shall continue to have full force and effect in accordance with the provisions of the Plan and the documents evidencing such Options.

 

13.2         Subject to applicable laws, the Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects.

 

13.3         Without derogating from the foregoing, the Board in its discretion may, at any time and from time to time, without the approval of the Shareholders of the Company, (i) increase the number of Shares to be issued under the Plan; or (ii) expand of the class of participants eligible to participate in the Plan; or (iii) expand the types of options or awards provided under the Plan.

 

14.           Withholding and Tax Consequences: The Company’s obligation to deliver Shares upon the exercise of any Options granted under the Plan shall be subject to the satisfaction of all applicable income tax and other compulsory payments withholding requirements.

 

14.1        All tax consequences and obligations regarding any other compulsory payments arising from the grant, vesting, or exercise of any Option, from the payment for, or the subsequent disposition of, Shares subject thereto or from any other event or act (of the Company or of the Grantee) hereunder, shall be borne solely by the Grantee, and the Grantee shall indemnify the Company and/or the Trustee, as applicable, and hold them harmless against and from any and all liability for any such tax or other compulsory payment, or interest or penalty thereon, including without limitation, monetary liabilities relating to the necessity to withhold, or to have withheld, any such tax or other compulsory payment from any payment made to the Grantee. Notwithstanding the above, the Company’s obligation to deliver Shares upon the exercise or vesting of any Options granted under the Plan shall be subject to the satisfaction of all applicable tax withholding requirements as governed by Applicable Laws or practice.

 

  

  

  

14.3        The Company shall not be required to release any Shares (or Share certificate) to a Grantee until all required payments have been fully made or secured.

 

14.4        The Grantee shall, if requested at any time by the Company, provide to the Company within 10 calendar days of such request, any information regarding the transfer or other disposition of Shares reasonably required by the Company in order for the Company to comply with applicable local laws and regulations or to obtain any benefits thereunder.

 

15.           Miscellaneous:

 

15.1         Continuance of Employment.  Neither the Plan nor the grant of an Option thereunder shall impose any obligation on the Company to continue the employment or service of any Grantee. Nothing in the Plan or in any Option granted thereunder shall confer upon any Grantee any right to continue in the employ or service of the Company for any period of specific duration, or interfere with or otherwise restrict in any way the right of the Company to terminate such employment or service at any time, for any reason, with or without cause.

 

15.2         Governing Law.  The Plan and all instruments issued thereunder or in connection therewith, shall be governed by, and interpreted in accordance with, the laws of the State of Israel.

 

15.3         Use of Funds.  Any proceeds received by the Company from the sale of Shares pursuant to the exercise of Options granted under the Plan shall be used for general corporate purposes of the Company.

 

15.4         Multiple Agreements.  The terms of each Option may differ from other Options granted under the Plan at the same time, or at any other time.  The Committee may also grant more than one Option to a given Grantee during the term of the Plan, either in addition to, or in substitution for, one or more Options previously granted to that Grantee.  The grant of multiple Options may be evidenced by a single Notice of Grant or multiple Notices of Grant, as determined by the Committee.

 

15.5         Non-Exclusivity of the Plan.  The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

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