Document:

zixi-ex1030_258.htm

Exhibit 10.30

ZIX CORPORATION

EMPLOYEE STOCK OPTION AGREEMENT

This Employee Stock Option Agreement (“Option”) is effective as of the Grant Date set forth in the Grant Detail section of this Option (“Grant Details”) with respect to the stock option described in the Grant Details that is granted by Zix Corporation, a Texas corporation (“Company”), to the person (“Optionee”) named in the Grant Details.

The Company wishes to recognize Optionee’s contributions to the Company and to encourage Optionee's sense of proprietorship in the Company by providing Optionee with the opportunity to purchase shares of the Company’s common stock, par value $.01 per share (“Common Stock”).

The Company and Optionee agree as follows:

	
1
	
Non-Qualified Stock Option Grant

The Company hereby grants to Optionee the option to purchase up to the number of shares of Common Stock shown as the Quantity in the Grant Details. The Option exercise price is the amount per share shown as the Exercise Price in the Grant Details. This Option is subject to the terms set forth in this Option. This Option being granted pursuant to this Agreement is being granted as an ”inducement” grant pursuant to and in accordance with Nasdaq Listing Rule 5635(c). Consequently, the Option being granted hereunder is not being granted under the Zix Corporation 2018 Omnibus Incentive Plan (the “Plan”). However, the Plan shall nonetheless govern the Option as if such Option was granted pursuant to and subject to the Plan.  This Option is intended to be a nonqualified stock option, and it is not to be characterized or treated as an incentive stock option, under applicable tax laws.

	
2
	
Grant Details

	
Optionee:
	
Ryan Allphin

	
Grant Date:
	
November 11, 2020

	
Expiration Date:
	
November 11, 2024

	
Quantity:
	
100,000

	
Exercise Price:
	
$6.70

	
Vesting Schedule:
	
Quarterly in equal installments over 4 years

	
3
	
Term of Option

This Option automatically expires at 12:00 midnight on Expiration Date described in the Grant Details. This Option may be terminated earlier by other provisions of the Plan or this Option.

 

 

3.1Termination of Continuous Service Other Than For “Cause”

	
 
	
a)
	
This Option terminates 60 days after Optionee’s Continuous Service terminates due to “Resignation.”

	
 
	
b)
	
This Option terminates one year after Optionee’s Continuous Service terminates due to death, “Disability,” “Retirement” or termination by the Company other than for “Cause.”

3.2Termination of Continuous Service For “Cause”

This Option (whether vested or unvested) terminates immediately and automatically upon the Company or any Subsidiary terminating the Continuous Service of Optionee for “Cause.”

	
4
	
Vesting of Option Shares

This Option will vest and become exercisable with respect to a number of shares of Common Stock according to the Vesting Schedule described in the Grant Details, if and only if Optionee is on each applicable Vesting Date either a full time employee or full time individual contractor of the Company or a Subsidiary; provided, however, that no shares of Common Stock will vest and become exercisable during the periods described in section 2. Notwithstanding the Vesting Schedule described in the Grant Details, and except as otherwise provided in Optionee’s Employment Termination Benefits Agreement or any other employment, severance or similar agreement between the Company and Optionee, if any, this Option will become fully vested and exercisable (i) upon termination of Optionee’s Continuous Service by reason of death or Disability, or (ii) as provided in Section 22 of the Plan in connection with a Change in Control. Once this Option has become exercisable with respect to a number of shares of Common Stock (“Vested Shares”), it will remain exercisable as that number of shares, or any lesser number of shares, until the expiration or termination of this Option.

	
5
	
Adjustment of Option

This Option is subject to the adjustment provisions provided in Section 15 of the Plan.

	
6
	
Modification of Option

At any time and from time-to-time, the Committee may execute an instrument providing for modification, extension or termination of this Option, provided that no such modification, extension or termination may, without the written consent of the holder. reduce or diminish the value of the Option determined as if it had been exercised on the date of such modification, extension or termination.

Employee SOA – Non-Plan Award

Revised 11-2-20

 

	
7
	
Who May Exercise Option

This Option is exercisable during Optionee’s lifetime only by Optionee. To the extent exercisable after Optionee's death, this Option may be exercised only by a person who has obtained Optionee's rights under this Option by will or under the laws of descent and distribution or pursuant to a “qualified domestic relations order” as defined in the Code. If the person exercising this Option is a transferee of Optionee by will or under the laws of descent and distribution or pursuant to a “qualified domestic relations order,” the Exercise Notice must be accompanied by appropriate proof of the right of such transferee to exercise this Option.

	
8
	
Method of Exercise

8.1All Optionees

As a condition of exercising this Option with respect to any Vested Shares, Optionee must have an established brokerage account with the Company’s authorized stock option administrative brokerage, which is currently Merrill Lynch (“Broker”). At the time of exercise, the Broker will pay to the Company on behalf of Optionee the Option Price times the number of Vested Shares as to which this Option is being exercised. Such payment may consist of (a) cash, (b) a certified cashier's check or (c) at the Committee's election, any other consideration that the Committee determines is consistent with the Plan and applicable law. Optionee must bear any transaction costs imposed by the Broker.

8.2Non-Designated Optionees

An Optionee who has not been advised by the Company that Optionee is subject to the exercise procedures described in section 8.3 may exercise an Option either by contacting the Broker or by an electronic transaction initiated by the Optionee using the Optionee’s account with the Broker described in section 8.1 via the Broker’s online system on the website, and for either method under the procedures designated by the Broker.

8.3Certain Designated Optionees

An Optionee who has been advised by the Company that Optionee is subject to the exercise procedures described in this section 8.3, including Optionees who are subject to Section 16 of the Exchange Act, may exercise an Option only through the procedures specified by the Company, which depend on the Optionee’s particular designated status.

As a condition of exercising this Option with respect to any Vested Shares, each designated Optionee must provide to the Company (or its designee) at its principal executive office a written notice satisfying the requirements of this section 8 (“Exercise Notice”). The Exercise Notice must contain sufficient information to identify this Option being exercised, including Optionee’s name, Exercise Price, Grant Date and Stock Option Plan. The Exercise Notice must state the number of Vested Shares for which this Option 

Employee SOA – Non-Plan Award

Revised 11-2-20

 

is being exercised. If the shares of Common Stock that are being purchased are to be evidenced by more than one stock certificate, the Exercise Notice must state the number of shares of Common Stock to be indicated on each stock certificate. The Exercise Notice is deemed to be provided when it is delivered to the Company’s Corporate Secretary. After receiving the Exercise Notice from Optionee, the Company will determine whether this Option is subject to any restrictions and is otherwise eligible for exercise. 

If the Company determines that the designated Option is eligible for exercise, the Company will, depending on the Optionee’s particular designated status, either:

	
 
	
a)
	
Authorize the Broker to allow the Optionee to exercise the Option, and authorize the Optionee to exercise the Option by contacting the Broker. The Broker will not allow Optionee to exercise the Option unless Optionee has provided the Exercise Notice to the Company and the Company has authorized the exercise.

	
 
	
b)
	
Authorize the Optionee to exercise the Option either by contacting the Broker or by an electronic transaction initiated by the Optionee using the Optionee’s account with the Broker described in section 8.1 via the Broker’s online system on the website, and for either method under the procedures designated by the Broker.

	
9
	
Restrictions on Exercise

Notwithstanding anything to the contrary in this Option:

	
 
	
c)
	
Company will not issue fractional Shares.

	
 
	
d)
	
Optionee cannot exercise this Option in order to purchase less than 100 Option Shares unless the number of then Vested Shares is less than 100.

	
 
	
e)
	
Optionee cannot exercise this Option if exercise or the delivery of Shares would violate any applicable law or any rule of any securities exchange on which the Shares are then listed.

	
 
	
f)
	
Optionee cannot exercise this Option if exercise or the delivery of shares would in the Company’s sole discretion constitute a violation of any Company rule or policy, including but not limited to block trades, windows and black-out periods.

	
10
	
Noncompetition Agreement

The grant of this Option and the exercise of Optionee’s rights under this Option are subject to and conditioned upon Optionee’s full compliance with Optionee’s Confidentiality and Invention Agreement with the Company or any Subsidiary. If in any dispute between Optionee and the Company or any Subsidiary a court or arbitrator determines that Optionee did not comply in any respect with the that agreement, the Company will be entitled to receive from 

Employee SOA – Non-Plan Award

Revised 11-2-20

 

Optionee all Option Shares, or if Optionee has sold, transferred or otherwise disposed of this Option Shares the excess of the fair market value of this Option Shares on the date of sale, transfer or other disposition and the Exercise Price. This provision will survive any termination or expiration of this Option.

	
11
	
Payment and Tax Withholding

As a condition of exercising this Option with respect to any Vested Shares, Optionee must make prior arrangements for the payment of the Exercise Price and arrangements for any withholding tax obligations. The Company may take such steps to withhold any taxes that it is required to withhold in connection with the exercise of this Option.

	
12
	
Shares Issued on Option Exercise

The shares of Common Stock purchased upon the exercise of this Option will be registered in the name of Optionee at the address specified in the Exercise Notice. Any stock certificates issued will contain an appropriate legend referencing any applicable transfer restrictions.

	
13
	
No Rights as Shareholder

Neither Optionee nor any person claiming under or through Optionee has any rights or privileges of a shareholder of the Company in respect of any of the shares issuable upon the exercise of this Option, unless and until Option Shares are registered in such person’s name, as evidenced by the appropriate entry on the books of the Company or its duly authorized stock registrar and transfer agent.

	
14
	
State and Federal Securities Regulation

No Option Shares will be issued by the Company upon the exercise of this Option unless and until all legal requirements have been complied with to the satisfaction of the Company and its counsel. The Company may restrict the periods during which this Option may be exercised if, in the opinion of the Company and its counsel, such a restriction is desirable to comply with legal requirements. This Option is subject to the requirement that, if the Company determines in its discretion that the listing, registration or qualification of this Option Shares upon any securities exchange or under any state or federal law, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in connection with, the granting or exercise of this Option or the issuance or purchase of Option Shares, this Option may not be exercised in whole or in part until such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Company. The Company has no obligation to effect or obtain any such listing, registration, qualification, consent or approval if the Company determines, in its discretion, that such action would not be in the best interest of the Company. The Company will not be liable to Optionee or anyone claiming under or through Optionee for damages due to a delay in the delivery or issuance of any Option Shares for any reason whatsoever, including, but not limited to, a delay caused by listing, registration or qualification of this Option Shares upon any securities exchange or under any 

Employee SOA – Non-Plan Award

Revised 11-2-20

 

federal or state law or the effecting or obtaining of any consent or approval of any governmental body with respect to the granting or exercise of this Option or the issue or purchase of Option Shares.

	
15
	
Continued Employment or Service Not Guaranteed

Nothing in this Option, the Plan or any document describing it nor the grant of any option gives Optionee the right to continue employment or service with the Company or any Subsidiary or affect the right of the Company or a Subsidiary to terminate the employment or service of Optionee with or without Cause.

	
16
	
No Liability of Option

This Option is not liable for or subject to, in whole or in part, the debts, contracts, liabilities or torts of Optionee nor is it subject to garnishment, attachment, execution, levy or other legal or equitable process without the prior written consent of the Company (which consent the Company may withhold or condition for any reason or for no reason).

	
17
	
No Assignment

This Option is not Transferable without the prior written consent of the Company (which consent the Company may withhold or condition for any reason or for no reason) except that this Option is Transferrable by will or the laws of descent and distribution or pursuant to a “qualified domestic relations order” as defined in the Code. Any other attempted Transfer is void and ineffective for all purposes. Subject to the Transferability limitations in this Option, this Option is binding upon and inure to the benefit of the representatives, executors, successors or beneficiaries of the parties hereto.

	
18
	
Notice

Other than any Exercise Notice, any notice required or permitted to be given under the Plan or this Option must be in writing and delivered in person or sent by registered or certified mail, return receipt requested, first-class postage prepaid (i) if to Optionee, at the address shown on the books and records of the Company or at Optionee's place of employment, or (ii) if to the Company, at 2711 N. Haskell Avenue, Suite 2200, Dallas, Texas 75204-2960, Attention: Corporate Secretary, or any other address that is specified in a notice provided by one party to the other party. Any notice, if sent by registered or certified mail, is deemed to effective upon actual receipt.

	
19
	
Defined Terms

All capitalized terms not defined in this Option have the meanings ascribed to them in the Plan. Section references are to the sections of this Option unless otherwise specified. All section titles and captions in this Option are for convenience only, will not be deemed part of this Option, and in no way define, limit, extend or describe the scope or intent of any provisions of this Option.

Employee SOA – Non-Plan Award

Revised 11-2-20

 

“Disability” means any medically determinable physical or mental impairment that, in the opinion of the Committee, based upon medical reports and other evidence satisfactory to the Committee, can reasonably be expected to prevent Optionee from performing substantially all of his or her customary duties of employment or service (with or without reasonable accommodation) for a continuous period of not less than 12 months.

“Option Shares” means shares of Common Stock received upon exercise of this Option.

“Resignation” means the voluntary termination by Optionee of his employment or service by or to the employing Subsidiary and, if applicable, the Company under circumstances other than Retirement.

“Retirement” means the termination of Optionee's employment or service  in accordance with the requirements of a written retirement plan, policy or rule of the Company or employing Subsidiary, as applicable.

“Transfer” (or any variation thereof) means a direct or indirect assignment, sale, transfer, license, lease, pledge, encumbrance, hypothecation or execution, attachment or similar process.

	
20
	
Miscellaneous

20.1Governing Law

This Option has been executed by the Company in, and is deemed to be performable in, the City of Dallas, Dallas County, Texas. This Option is governed by and will be construed, interpreted and enforced in accordance with the laws of the State of Texas (excluding its conflict of laws rules).

20.2Injunctive Relief

In addition to all other rights or remedies available at law or in equity, the Company is entitled to injunctive and other equitable relief to prevent or enjoin any violation of the provisions of this Option, without the necessity of posting a bond or other security.

20.3Consent to Jurisdiction and Venue

With respect to all matters relating to this Option or Option Shares, the parties consent to the personal jurisdiction of the courts of the State of Texas, and any courts whose jurisdiction is derivative of the jurisdiction of the courts of the State of Texas, and to venue in the courts in Dallas County, Texas.

20.4Entire Agreement

This Option and the Plan together constitute the entire agreement between the parties pertaining to the subject matter hereof and supersede all prior and 

Employee SOA – Non-Plan Award

Revised 11-2-20

 

contemporaneous agreements, representations and understandings of the parties Notwithstanding anything to the contrary in the previous sentence, if Optionee is a party to any agreement with the Company or a Subsidiary which contains any provision that conflicts with this Option, such as a provision with respect to vesting or exercise rights in connection with an involuntary separation or a change in control of the Company, then the terms of that agreement will control and govern this Option. If any provision of this Option conflicts with the Plan, the terms of the Plan will control and govern this Option.

20.5Modifications in Writing

Except as provided in sections 5 and 6, no supplement, modification or amendment of this Option or waiver of any provision of this Option is binding unless it is in a writing signed by all parties to this Option. 

20.6No Deemed Waivers

No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Option or to exercise any right or remedy consequent upon a breach thereof will constitute a waiver of any such breach or any other covenant, duty, agreement or condition. No waiver of any of provision of this Option will be deemed to occur, or to constitute a waiver of any other provision of this Option, or to constitute a continuing waiver, unless that waiver is in a writing signed by the party against whom the waiver is asserted.

20.7Blue-penciling

If any provision of this Option is declared or found to be illegal, unenforceable or void, in whole or in part, then the parties will be relieved of all obligations arising under such provision, but only to the extent that it is illegal, unenforceable or void, it being the intent and agreement of the parties that this Option will be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefor another provision that is legal and enforceable and achieves the same objectives.

20.8Further Acts

The parties will execute all documents, provide all information and take or refrain from taking all actions as may be necessary or appropriate to achieve the purposes of this Option.

	
21
	
Option Not Issued Pursuant to Plan

Optionee accepts this Option subject to the provisions of this Option and, as noted above, the Plan, which are incorporated herein, including the provisions that authorize the Committee to administer and interpret the Plan and provide that the Committee's determinations and interpretations with respect to the Plan are final and conclusive and binding on all persons 

Employee SOA – Non-Plan Award

Revised 11-2-20

 

affected thereby.  This Option is subject to the terms and conditions of any compensation recoupment policy adopted from time to time by the Board or any committee of the Board.

	
22
	
Electronic Signatures

This Option may be digitally signed by Optionee. By accepting this Option on the Broker’s online system, Optionee agrees to the terms of this Stock Option Agreement together with the pertinent Plan documents found in the Communications Center on the Broker’s website. By failing to accept this Option on the Broker’s online system, Optionee forfeits all rights to this Option and under this Option. Evidence of Optionee’s acceptance of this Option will be captured and stored in electronic format in the Broker’s database, and that electronic acceptance will create and evidence a binding contract between Optionee and the Company. 

 

ZIX CORPORATION

 

By: 

 

Its: 

 

Employee SOA – Non-Plan Award

Revised 11-2-20zixi-ex1031_254.htm

Exhibit 10.31

 

ISRAEL AWARD PLAN

OF ZIX CORPORATION

Effective November 5, 2020 (the " Israel Plan")

1.General 

	
 
	
1.1
	
This Israel Award Plan of Zix Corporation (this “Israel Plan”) is to be construed in accordance with the terms of the Zix Corporation 2018 Omnibus Award Plan (Amended and Restated Effective June 6, 2018) (the “Plan”)Israel Plan.

The provisions of the Plan are hereby incorporated by reference into this Israel Plan and shall apply to Awards (as defined below) granted under this Israel Plan, subject to the modifications set forth below. In the event of any conflict between the Plan and this Israel Plan, the terms of this Israel Plan shall govern with respect to Awards granted to Israeli Participants (as defined below).

This Israel Plan shall only apply to Israeli Participants so that Awards to Israeli Participants as defined below will be governed by the terms of this Israel Plan and comply with the requirements of the Israeli law, and specifically with the provisions of Section 3(i) and Section 102 of the Ordinance (as defined below).

2.Definitions 

Unless otherwise defined in this Israel Plan, all capitalized terms used herein shall have the same meanings given to such terms in the Plan which are hereby incorporated by reference to this Israel Plan. Capitalized terms used herein that are the plural forms or singular forms of defined terms shall have the corresponding plural or singular meanings of the corresponding defined terms. The following terms shall have the meanings set forth below, unless the context clearly requires a different meaning:

"Affiliate" - shall mean, with respect to any person or entity, any other person or entity that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such person or entity, including, without limitation, any parent or subsidiary, however with respect to "102 Award", "Affiliate" shall mean Israeli resident Affiliate of the Company which is an “Employing Company” or "Employer" within the meaning of Section 102(a) of the Ordinance.

“3(i) Award” means an Award granted pursuant to Section 3(i) of the Ordinance to any person who is an Israeli Non-Employee.

“102 Award” means an Award granted pursuant to Section 102 of the Ordinance to any person who is an Israeli Employee Participant.

“102 Capital Gains Award” means a Trustee 102 Award elected and designated by the Employing Company to qualify for Capital Gains tax treatment in accordance with the provisions of Section 102(b)(2) or Section 102(b)(3) of the Ordinance.

- 2 -

“102 Ordinary Income Award” means a Trustee 102 Award elected and designated by the Employing Company to qualify for ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.

“Award” means any Options, Stock Appreciation Right, Stock Award, Performance Award, all to be denominated in shares of Common Stock or any other stock right or interest relating to shares of Common Stock whether granted singly, in combination or in tandem, to an Israeli Participant pursuant to such applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of this Israel Plan based Award.

"Award Agreement" means a document to be signed between the Company and an Israeli Participant, to set out and inform the Israeli Participant with respect to the terms and conditions of the grant of an Award under this Israel Plan and including any document attached to such agreement. Without derogating from the above, with respect to Trustee 102 Award, such Award Agreement to be deposited with the Trustee in accordance with the provisions of Section 102 and the Rules

"Capital Gains" means a Trustee 102 Award granted under the capital gains tax treatment in accordance with the provisions of Section 102(b)(2) or Section 102(b)(3) of the Ordinance.

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

"Date of Grant" means the date the applicable Award was approved by the Board or the Committee, unless otherwise determined by the Board or the Committee and set forth in the Israeli Participant Award Agreement.

“Employing Company” shall have the meaning ascribed to it in Section 102(a) of the Ordinance.

“Israeli Employee Participant” means an individual employed by an Israeli resident Affiliate or an individual who is serving as a Nose Misra - Office Holder (as such term is defined in the Israeli Companies' Law, 5759-1999, including directors) of an Israeli resident Affiliate, who is not a Controlling Shareholder prior to the issuance of the relevant Award or as a result thereof.

“Israeli Non-Employee Participant” means a person who is not an Israeli Employee Participant, and inter alia, shall include a consultant, adviser or service provider of an Israeli resident Affiliates and a Controlling Shareholder (whether or not an employee of the Company or its Affiliates) of an Israeli resident Affiliate.

“Israeli Participant” means Israeli Employee Participants and Israeli Non-Employee Participants.

“ITA” means the Israeli Income Tax Authority, or any successor agency.

“Lockup Period” means the requisite period prescribed by the Ordinance and the Rules, or such other period as may be required by the ITA, with respect to Trustee 102 Awards, granted and/or issued thereunder, and all rights resulting from them, are 

- 3 -

to be held in trust by the Trustee for the benefit of the Israeli Employee Participant for at least during and until the end of such period.

“Non-Trustee 102 Award” means an Award granted to an Israeli Employee Participant pursuant to Section 102(c) of the Ordinance, which is not required to be held in trust by a Trustee.

“Option” means a right to purchase a specified number of shares of Common Stock at a specified price.

“Ordinance” means the Israeli Income Tax Ordinance [New Version], 1961 or any successor statute, as amended from time to time.

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

“Section 102” means Section 102 of the Ordinance and the Rules and any regulations, rules, orders, promulgated thereunder as now in effect or as amended or replaced from time to time.

“Tax” means any tax (including, without limitation, any income tax, capital gains tax, value added tax, sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff, duty (including any customs duty), deficiency, or other fee, and any related charge or amount (including any fine, penalty, interest, linkage differentials or addition to tax), imposed, assessed, or collected by or under the authority of any governmental body.

“Trustee” means any person or entity appointed by the Company or its Subsidiaries or Affiliates, as applicable, and approved by the ITA, to serve as a trustee, all in accordance with the provisions of Section 102(a) of the Ordinance, as may be replaced from time to time subject to the provisions of Section 102

“Trustee 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of the Israeli Employee Participant.

3.Issuance of Awards

	
 
	
3.1
	
Under the terms of this Israel Plan: (i) Israeli Employee Participants may be granted only with 102 Awards; and (ii) Israeli Non-Employee Participants may be granted only with 3(i) Awards. In each case, such Awards shall be subject to the terms and conditions of the Ordinance, Section 102 and the Rules as applicable.

	
 
	
3.2
	
The Employing Company may, pursuant to Section 102, designate 102 Awards granted to Israeli Employee Participants as Non-Trustee 102 Awards or as Trustee 102 Awards.

4.Trustee 102 Awards

	
 
	
4.1
	
Trustee 102 Awards may be granted only to Israeli Employee Participants under this Israel Plan duly approved and adopted by the Board and as approved by the respective tax assessing officer within ninety (90) days from its Submission (as defined below) or by the passage of such ninety (90) days.

- 4 -

	
 
	
4.2
	
Trustee 102 Awards shall be classified as either 102 Capital Gains Awards or 102 Ordinary Income Awards, subject to the terms and conditions of Section 102, the Rules and the provisions of this Israel Plan.

	
 
	
4.3
	
The Board shall have the right to determine the Employing Company’s election of the type of Trustee 102 Awards to be granted to Israeli Employee Participants, being either 102 Capital Gains Awards or 102 Ordinary Income Awards (the “Election”). Such Election is to be appropriately filed with the ITA together with this Israel Plan in accordance with the provisions of the Ordinance, Section 102 and the Rules (the: "Submission"). After making an Election, the Company may grant only the type of Trustee 102 Awards it has elected (i.e., 102 Capital Gains Awards or 102 Ordinary Income Awards), and the Election shall become effective beginning the first Date of Grant of a Trustee 102 Award under this Israel Plan and shall apply to all grants to Israeli Employee Participants of Trustee 102 Awards until such Election is changed pursuant to the provisions of Section 102(g) of the Ordinance. The Employing Company may change such Election only after the passage of at least one year after the end of the year during which the applicable Employing Company first granted Trustee 102 Awards in accordance with the previous Election. For the avoidance of doubt, such Election shall not prevent the Company from granting Non-Trustee 102 Awards or 3(i) Awards. For the avoidance of any doubt, no Trustee 102 Awards may be granted under this Israel Plan to any eligible Israeli Employee Participants, unless and until the Election made by the Employing Company is appropriately filed with the ITA together with this Israel Plan in accordance with the provisions of the Ordinance, Section 102 and the Rules. Notwithstanding the above and for the avoidance of doubt, the Election shall not prevent the Employing Company from granting Non-Trustee 102 Awards under this Israel Plan either before the Election is filled or simultaneously thereafter.

	
 
	
4.4
	
Trustee 102 Awards may be granted under this Israel Plan duly adopted and approved by the Board and only after the passage of thirty (30) days following the Submission Notwithstanding the above, if within ninety (90) days from Submission, the respective tax assessing officer notifies the Employing Company and/or the Trustee of his or her decision not to approve this Israel Plan or the Trustee, the Awards that were intended to be classified as a Trustee 102 Awards shall be deemed to be Non-Trustee 102 Awards, unless otherwise determined by the tax assessing officer.

	
 
	
4.5
	
In the event that any amendment are made with respect to this Israel Plan provisions, then to the extent so required under applicable law, any grants of Trustee 102 Awards made following such amendment shall be made and shall become effective only at the expiration of thirty (30) days after the filing of any amendment thereof with the ITA in accordance with the Ordinance, Section 102 and the Rules and shall be conditional upon the expiration of such 30-day period.

	
 
	
4.6
	
Anything herein to the contrary notwithstanding, all Trustee 102 Awards granted and/or issued under this Israel Plan and/or any/all 102 Shares (as defined below), and/or any/all other rights resulting from such Trustee 102 Award, including bonus shares, shall be deposited with the Trustee and held in trust by the Trustee for the benefit of the Israeli Employee Participant to which such Award was granted all in accordance with the provisions of Section 102 and the Rules. All certificates representing 102 Shares, including bonus shares, shall be issued in the Trustee’s name for the benefit of the Israeli Employee Participant, and be deposited with the Trustee, 

- 5 -

	
 
		
and be held by the Trustee until such time that such 102 Shares are released from the trust. In the event the requirements for Trustee 102 Awards and/or 102 Shares are not met, the Trustee 102 Awards and/or 102 Shares may be regarded as Non-Trustee 102 Award, or as Awards and/or shares of Common Stock which are not subject to Section 102, all in accordance with the provisions of Section 102 and the Rules.

	
 
	
4.7
	
With respect to 102 Capital Gains Awards and 102 Ordinary Income Awards, such Awards or any shares of Common Stock granted and/or issued upon the vesting and/or exercise thereof (the: "102 Shares") and all rights resulting from such Awards or Shares, including bonus shares, will be held by the Trustee, from the Date of Grant and for at least the end of the applicable Lockup Period or such shorter period as approved by the ITA, under the terms set forth in Section 102 and the Rules.

	
 
	
4.8
	
In accordance with Section 102, the Israeli Employee Participant shall not sell, cause the release from trust, or otherwise dispose of, any Trustee 102 Award and/or any 102 Share, or any rights resulting from such Award or Share until, at least, the end of the applicable Lockup Period. Notwithstanding the foregoing but without derogating from the provisions of the Plan and the terms and conditions set forth in the Award Agreement, if any such sale, release, or disposition occurs during the Lockup Period, then the provisions of Section 102 relating to non-compliance with the Lockup Period will apply and all sanctions and liability under Section 102 shall be borne by the Israeli Employee Participant.

	
 
	
4.9
	
Anything herein to the contrary notwithstanding, the Trustee shall not release any unexercised Trustee 102 Awards, 102 Shares, or any rights thereunder, including bonus shares, resulting from such Trustee 102 Awards or 102 Shares, prior to the full payment of the exercise price set to such Award (if applicable) and the Israeli Employee Participant’s tax liability arising from the Trustee 102 Awards granted to him or her.

	
 
	
4.10
	
Upon receipt of a Trustee 102 Award, the Israeli Employee Participant will sign the Award Agreement under which such Participant will sign an undertaking of his/her consent and agreement to the grant of the Award under Section 102, and to undertake to comply with the terms of Section 102 and the Rules and to be subject to the trust agreement between the Company or its Subsidiaries and the Trustee, stating, inter alia, that the Trustee will be released from any liability in respect of any action or decision taken or executed in good faith with respect to this Israel Plan, or any Trustee 102 Award or 102 Share issued to him or her thereunder, or right resulting therefrom, including bonus shares.

	
 
	
4.11
	
Without derogating from the above and/or from the provisions of Section 102, the Company and/or its Affiliate (as applicable) shall have the authority to determine specific procedures and conditions of the trusteeship with the Trustee in a separate agreement between the Company and/or the Affiliate (as applicable) and the Trustee.

5.Non-Trustee 102 Awards. 

	
 
	
5.1
	
Non-Trustee 102 Awards may be granted only to Israeli Employee Participants. 

- 6 -

	
 
		

	
 
	
5.2
	
Non-Trustee 102 Awards that shall be granted pursuant to this Israel Plan may be issued directly to the Israeli Employee Participant or to a trustee appointed by the Board in its sole discretion.

	
 
	
5.3
	
In the event that an Israeli Employee Participant was granted with a Non-Trustee 102 Award and thereafter such Israeli Employee Participant’s employment by the Company or its Subsidiaries or Affiliates terminates for any reason, such Israeli Employee Participant will be obligated to provide her or his employer, upon the termination of her or his employment, with a security or guarantee to cover any future tax obligation resulting from the grant, exercise or disposition of the Award, the Shares granted and/or issuable upon the vesting or exercise thereof, or any rights resulting therefrom, in a form satisfactory to such employer in such employer’s sole discretion.

6.3(i) Awards.

	
 
	
6.1
	
Awards granted pursuant to this Section 6 are intended to constitute 3(i) Awards and are subject to the provisions of Section 3(i) of the Ordinance and the general terms and conditions specified in this Israel Plan.

	
 
	
6.2
	
3(i) Awards may be granted to Israeli Non-Employee Participants.

	
 
	
6.3
	
3(i) Awards granted pursuant to this Israel Plan may be issued directly to the Israeli Non-Employee Participant or to a trustee appointed by the Board in its sole discretion.

7.The Award Agreement. 

The terms and conditions upon which the Awards shall be issued and exercised shall be as specified in an Award Agreement to be executed pursuant to this Israel Plan. Each Award Agreement shall state, inter alia, the number of shares of Common Stock granted under the Award, the type of Award granted thereunder (whether such Award is a Trustee 102 Award, and if so, whether it is a 102 Capital Gains Award or 102 Ordinary Income Award, or a Non-Trustee 102 Award, or a 3(i) Award), the vesting provisions, the term of the Award, and the exercise price, if applicable. Awards may differ in number of shares covered thereby, the terms and conditions applying to them or on the Israeli Participant or in any other respect (including, that there should not be any expectation (and it is hereby disclaimed)) that a certain treatment, interpretation or position granted to one shall be applied to the other, regardless of whether or not the facts or circumstances are the same or similar).

8.Fair Market Value For Israeli Tax Purposes. 

Without derogating from Section 2 of the Plan and solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the Date of Grant of a 102 Capital Gains Award the Company’s Shares are listed on any established stock exchange or a national market system, or if the Company’s shares are registered for trading within ninety (90) days following the Date of Grant of the 102 Capital Gains Award, the fair market value of the shares of Common Stock at the Date of Grant shall be determined in accordance with the average value of the Company’s shares of Common Stock on the thirty (30) trading days preceding the Date of Grant or on the thirty (30) trading days following the date of registration for trading, as applicable.

- 7 -

9.Exercise of Awards. 

Awards shall be exercised in accordance with the provisions of this Israel Plan and the Award Agreement, and in accordance with the requirements of Section 102.

10.Assignability and Sale of Awards. 

	
 
	
10.1
	
Notwithstanding any other provision of this Israel Plan to the contrary, no Awards, or any right with respect thereto or purchasable thereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect thereto granted to any third party whatsoever, other than by will or by laws of decent and distribution, or as specifically otherwise allowed under this Israel Plan, without the prior written consent of the Board, and subject to the Ordinance. Any purported assignment, transfer, grant of collateral, or pledge of Awards, or any right with respect thereto or purchasable thereunder, contrary to the provisions of this Section, directly or indirectly, whether contemplated to be effective immediate effect or in the future, shall be null and void and cause the applicable Award to immediately expire. During the lifetime of the Israeli Participant all of such Israeli Participant’s rights to purchase Shares or to otherwise exercise an Award hereunder shall be exercisable only by the Israeli Participant.

	
 
	
10.2
	
Without derogating from the above, for as long as Trustee 102 Awards and/or 102 Shares are held by the Trustee on behalf of the Israeli Employee Participant, all rights of the Israeli Employee Participant with respect to such Awards and Shares shall be personal, and may not be transferred, assigned, pledged or mortgaged, all in accordance with the provisions of Section 102 and the Rules, or any regulations or orders promulgated thereunder unless other than by a last will or the laws of descent and distribution and after the required taxes and payments have been fully made or secured. In the event that such Awards and/or Shares have been transferred by will or laws of descent and distribution, the provisions of Section 102 shall continue to apply on the heirs and transferees respectively.

11.Integration of Section 102 And Tax Assessing Officer’s Permit. 

	
 
	
11.1
	
With respect to Trustee 102 Awards, the provisions of this Israel Plan and the Award Agreement shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s permit (to the extent that such permit is issued) (the “Permit”), and the provisions of the Permit shall be deemed integrated with, and a part of, this Israel Plan and the Award Agreement.

	
 
	
11.2
	
Any provision of Section 102 and/or the Permit and/or tax ruling(s) and/or guidance issued by the ITA which is necessary in order to receive and/or to obtain and/or preserve any tax benefit pursuant to Section 102, which is not expressly specified in this Israel Plan or the Award Agreement, shall be deemed to have been automatically incorporated into this Israel Plan and binding upon the Company and the Participants who are Israeli Participants.

12.Dividends.

Without derogating from the provisions of this Israel Plan, an Israeli Participant shall be entitled to receive dividends with respect to shares of Common Stock granted 

- 8 -

and/or issued upon the vesting, exercise of his or her Awards (whether such shares are held by the Participant or by the Trustee for his or her benefit), in accordance with the provisions of the Company’s Certificate of Incorporation (including all amendments thereto), subject to any applicable taxation on distribution of dividends and, when applicable, subject to the provisions of Section 102 and the Rules.

13.Tax Consequences. 

	
 
	
13.1
	
Any liability for any Tax arising with respect to the Awards and the shares of Common Stock, including, but not limited to, as a result of the grant of Awards, the vesting or exercise of an Award for shares, the receipt of cash, the transfer, waiver, or expiration of Awards or shares or the disposal of shares, shall be borne solely by the Israeli Participants, and in the event of their death, by their estates or heirs. Neither the Company nor any of its Subsidiaries or Affiliates nor the Trustee shall be required to pay such Taxes, directly or indirectly, nor shall they be required to gross up such Taxes in the Israeli Participants’ salaries or remuneration. The applicable Tax may be deducted from any cash to be provided to the Israeli Participant or from the proceeds of the disposal of the shares or shall be paid to the Trustee or to the Company or its Subsidiaries or Affiliates by the Israeli Participants at their request, or may be provided via any combination of the above.

	
 
	
13.2
	
The Company, its Subsidiaries or Affiliates and the Trustee shall be entitled to withhold Taxes according to the requirements of any applicable laws, rules, and regulations, including by withholding Taxes at source.

	
 
	
13.3
	
The Israeli Participants undertake to indemnify the Company, its Subsidiaries or Affiliates and the Trustee, immediately upon their request, for any Tax for which the Israeli Participant is liable under any applicable law, under the Plan or this Israel Plan, and which was paid by the Company or the Trustee, or which the Company or the Trustee are required to pay. The Company may exercise its right to such indemnification by deducting the Tax subject to indemnification from Participant’s salary or remuneration.

	
 
	
13.4
	
The Board or, when applicable, the Trustee shall not be required to release any Awards, Shares, rights resulting therefrom, including bonus shares, or stock certificates, to an Israeli Participant until all required Tax payments and other payments to be borne by such Israeli Participant have been fully made. In the event that the Company, or its Affiliates, or the Trustee, as applicable, is uncertain as to the sum of the full tax payment due or which is subject to withholding, the Company or the Trustee, as applicable, may refuse to release the Shares until such time as the ITA verifies the sum of the full tax payment which is due, and the Grantee shall not have any claims in connection with such refusal.

	
 
	
13.5
	
The Company and its Subsidiaries and its Affiliates do not undertake or assume any liability or responsibility to the effect that any Award shall qualify with any particular tax regime or rules applying to particular tax treatment, or benefit from any particular tax treatment or tax advantage of any type and subject to the requirements of applicable law. No assurance is made by the Company or any of its Subsidiaries and its Affiliates that any particular tax treatment on the Date of Grant will continue to exist or that the Award would qualify at the time of vesting or exercise or disposition thereof with any particular tax treatment.. The Company does not undertake or 

- 9 -

	
 
		
assume any liability to contest a determination or interpretation (whether written or unwritten) of any tax authorities, including in respect of the qualification under any particular tax regime or rules applying to particular tax treatment. If the Awards do not qualify under any particular tax treatment it could result in adverse tax consequences to the Israeli Participant.

	
 
	
13.6
	
Notwithstanding any other provision, no Israeli Participant shall have any of the rights of a shareholder with respect to any Shares until Participant pays all payments required to be paid with respect to such Shares.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00323-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00323-of-00352.parquet"}]]