Document:

Exhibit
		10.5

	  

	 

	  

	 L.I.M.S.
		LABORATORY INFORMATION AND MANAGEMENT SYSTEMS LTD.

	  

	  

	  

	  

	 2005
		OPTION PLAN

	  

	  

	  

	  

	  

	  

	  

	  

	  

	  

	  

	 L.I.M.S.
		2005 OPTION PLAN - PAGE 1 OF 7 PRINTED 8/29/06 

	 

	 
	 

	 
	 L.I.M.S.
		Laboratory Information and Management Systems Ltd., a corporation formed under
		the laws of the state of Israel (the “Company”), hereby establishes
		and adopts the following Stock Option Plan (the “Plan”), effective
		March 24,
		2005 (the
		“Effective Date”). 

	  

	 1. Purpose. The purpose of
		the Plan is to attract and retain outstanding employees of the Company or
		Starlims Corporation, a subsidiary of
		the Company formed under the laws of the State of Florida
		(“Starlims”) who will contribute to the Company’s
		success and achieve long-term objectives which will inure to the benefit
		of all stockholders of the Company and Starlims through the additional
		incentive inherent in the ownership of ordinary shares of the Company (1 NIS
		par value) (“Shares”). 

	  

	 2. Shares
		Subject to Awards.

	  

	 (a) Awards under
		the Plan (“Award”) shall be in the form of non-qualified stock
		options (“Options”). 

	  

	 (b) Subject to the
		adjustment provisions of Section 11 hereof, the aggregate number of Shares that
		are the subject of Awards under the Plan shall not exceed 200,000. The Shares
		that are forfeited under the terms of the Plan and Shares that are the subject
		of Options that expire unexercised or which are otherwise surrendered by the
		holder of such Option (the “Optionee”) without receiving any payment
		or other benefit with respect thereto may again be subject to new
		Awards under the Plan. 

	  

	 3. Administration
		of the Plan.

	  

	 (a) The Plan shall
		be administered by the Board of Directors of the Company (the
		“Board”) or a compensation committee of the Board, consisting of not
		fewer than two directors of the Company, as designated by the Board (the
		“Committee”). The Board may remove from, add members to, or fill
		vacancies in the Committee. Each member of the Committee shall be a
		“nonemployee director” within the meaning of Rule 16(b)-3 of the
		Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
		an “outside director” within the meaning of Section 162(m)(4)(C)(i)
		of the Internal Revenue Code of 1986, as amended (the “Code”);
		provided, however, that if the Board determines that (i) the Plan cannot or
		shall not satisfy the requirements of Rule 16b-3 of the Exchange Act, then the
		members of the Committee need not be “nonemployee directors,” or (ii)
		they no longer want the Plan to comply with the requirements of Code
		Section 162(m), then the members of the Committee need not be “outside
		directors.” 

	  

	 (b) The Board and
		the Committee are authorized, subject to the provisions of the Plan,
		to establish such rules and regulations as they may deem appropriate for
		the conduct of meetings and proper administration of the Plan. All actions of
		the Board or the Committee shall be taken by majority vote of their members,
		except that the members thereof may authorize any one or more of their number
		or any officer of the Company to execute and deliver documents on behalf
		of the Board or the Committee. Subject to the provisions of the Plan, the Board
		and the Committee shall have authority, in their sole discretion, to grant
		Awards under the Plan, to interpret the provisions of the Plan and, subject
		to the requirements of applicable law, to prescribe, amend, and rescind
		rules and regulations relating to the Plan or any Award thereunder as they may
		deem necessary or advisable. All decisions made by the Board or the Committee
		pursuant to the provisions of the Plan shall be final, conclusive and
		binding on all persons. No member of the Board or the Committee shall be liable
		for anything done or omitted to be done by him or by any other member of
		the Board or the Committee in 

	  

	 L.I.M.S.
		2005 OPTION PLAN - PAGE 2 OF 7 PRINTED 8/29/06

	  

	 

	 
	 

	 
	 connection
		with the Plan, except
		for his own willful misconduct or as expressly provided by statute.
		

	  

	 4. Eligibility. Awards shall be
		made to such employees of the Company or Starlims as the Board or the
		Committee shall select from time to time. The Board’s and the
		Committee’s designation of an Optionee in any year shall not require The
		Board or the Committee to designate such person to receive Awards or
		grants in any other year. 

	  

	 5. Stock
		Option Agreements. All Options
		granted pursuant to the Plan shall be evidenced in writing by stock option
		agreements (“Stock Option Agreements”) in such form and containing
		such terms and conditions as the Board or the Committee shall determine,
		including the following: 

	  

	 (a) Number of
		Shares. Each Option
		shall state the total number of Shares to which it pertains. 

	  

	 (b) Option
		Price. Except as
		otherwise provided by the Board or the Committee in the Stock Option Agreement,
		the Option price per each Share shall be: (a) with respect to Options that the
		Board has decided to Award on March 24, 2005 - US$ 6.87 (b) with respect
		to Options that the Board or the Committee will decide to Award after
		March 24, 2005 the closing price of a Share on the Tel Aviv Stock Exchange on
		the date the Board or the Committee have decided to make the Award
		(“Date of Award”), converted into U.S. dollars based on the
		exchange rate of NIS and U.S. dollars as determined by the “representative
		rate” for such currencies published by the Bank of Israel for such date.
		

	  

	 (c) Option
		Period. Each Option
		shall expire on the fifth anniversary of its Award and no Option may be
		exercised after the expiration of its term. 

	  

	 (d) Exercise
		Period. Except as
		otherwise provided by the Board or the Committee in a Stock Option Agreement,
		Options shall vest and become exercisable upon the Optionee’s completion
		of a number of years of continuous employment service for the Company or
		Starlims following the date of the grant of an Option as follows (the
		“Vesting Periods”): 

	  

	 
			
				less than two
				  years of service
 	
				0% of the total
				  Award;
 
	
				two years of
				  service
 	
				50% of the total
				  Award;
 
	
				three years of
				  service
 	
				75% of the total
				  Award less

				amount previously
				  exercised;
 
	
				four or more years
				  of service
 	
				100% of the total
				  Award less

				amount previously
				  exercised; 
 

 

	  

	 provided, however,
		that, unless determined otherwise by the Board, Options shall cease to vest and
		all unvested Options shall be null and void immediately upon a reduction in the
		scope of duties that the Optionee performs for the Company or Starlims, whether
		or not the Optionee’s job title changes. For purposes of this paragraph
		(d) medical, military, disability (including pregnancy), and other leaves of
		absence approved by the Company or Starlims shall be deemed to be
		continuous employment to the extent required by law or by the Board or the
		Committee in their sole discretion. Notwithstanding any provision of the Plan
		to the contrary, no Option shall be exercisable under this paragraph
		(d) unless counsel for the Company shall be satisfied that the transfer of
		Shares upon exercise will be in compliance with all applicable laws, including
		the U.S. Securities Exchange Act of 1934.

	  

	 L.I.M.S.
		2001 OPTION PLAN - PAGE 3 OF 7 PRINTED 8/29/06

	  

	 

	 
	 

	 
	 (e) Time and Manner
		of Payment. Each Stock
		Option Agreement shall provide that Options granted under the Plan shall be
		exercised by the Optionee (or by his executors, administrators, guardian or
		legal representative) as to all or part of the Shares covered thereby, by the
		giving of written notice of exercise to the Company, specifying the number
		of Shares to be purchased. Full payment of such purchase price plus all
		applicable taxes required to be withheld shall be made within five
		business days following the receipt of such notice by the Company and shall be
		made in cash or by certified check, bank check, or promissory note as permitted
		by the Board or the Committee in their sole discretion. Such notice of exercise
		and full payment, shall be delivered to the Company at its principal
		business office or such other office as the Board or the Committee may from
		time to time direct, and shall be in such form, containing such further
		provisions consistent with the provisions of the Plan, as the Board or the
		Committee may from time to time prescribe. In no event may any Option
		granted hereunder be exercised for a fraction of a Share. The Company shall
		effect the transfer of Shares purchased pursuant to an Option as soon as
		practicable, and, within a reasonable time thereafter, such transfer shall be
		evidenced on the books of the Company. No person exercising an Option
		shall have any of the rights of a holder of Shares subject to an Option
		until such Shares shall have been transferred and registered in the
		Company’s books in the name of the transferee following the exercise of
		such Option. No adjustment shall be made for cash dividends or other rights for
		which the record date is prior to the date of such transfer. 

	  

	 (f) Other
		Provisions. A Stock Option
		Agreement may contain any other terms and conditions that the Board or the
		Committee, in their sole discretion, deem appropriate. 

	  

	 6. Non-Transferability
		of Options. No Option
		shall be assignable or transferable by the Optionee, and may be exercised
		during the lifetime of the Optionee only by the Optionee; provided, however,
		that during the Optionee’s lifetime, the Optionee may, with the consent of
		the Board or the Committee, transfer without consideration all or any portion
		of his Options to (i) one or more
		members of the Optionee’s immediate family, (ii) a trust established for
		the exclusive benefit of one or more members of the Optionee’s immediate
		family, or (iii) a limited liability company in which all members are members
		of the Optionee’s immediate family; provided, further, that any such
		immediate family, and any such trust, and limited liability company, shall
		agree to be and shall be bound by the terms and provisions of the Plan and
		any applicable Stock Option Agreement or other agreements covering the Options
		of the Shares. For purposes of this Section 6, “immediate family”
		means the Optionee’s spouse, children, stepchildren, grandchildren,
		parents, stepparents, grandparents, siblings (including half-brothers and
		half-sisters), in-laws, and all such relationships arising because of legal
		adoption. 

	  

	 7. Termination
		of Employment.

	  

	 (a) In the event
		of the termination of employment of an Optionee with the Company and/or
		Starlims for any reason (other than termination for cause, death or disability
		as provided below), Options granted to him that have not previously expired or
		been exercised shall be, to the extent exercisable on the date of such
		termination, exercisable by the Optionee within 60 days after the date of such
		termination, unless such Option is earlier terminated pursuant to its terms.
		All Options that are not exercisable as of the date of such termination or
		which are not exercised within 60 days thereafter, shall be deemed canceled and
		terminated as of such date, unless the Board or the Committee shall have, in
		their discretion, extended the exercise period to accommodate any legal or
		regulatory requirements that pertain to the exercise of Options or the
		delivery of Shares.

	  

	 L.I.M.S.
		2001 OPTION PLAN - PAGE 4 OF 7 PRINTED 8/29/06

	  

	 

	 
	 

	 
	 (b) In the event
		that an Optionee’s employment is terminated by the Company and/or Starlims
		for “cause”, all Options exercisable as of the date of such
		termination shall be canceled and terminated as of such date. For these
		purposes, termination for “cause” shall mean the following: the
		Optionee’s violation of copyright/trademark protection maintained by the
		Company or Starlims; the Optionee’s engaging or assisting in any business
		in competition with the Company or Starlims as employee, owner, partner,
		director, officer, stockholder, consultant or agent (ownership of minority
		interests in publicly-traded corporations, partnerships or companies or of 5%
		or less of the equity of privately-held corporations, partnerships or companies
		shall not be considered competition for purposes of this Plan); or conviction
		of the Optionee by a court of law of competent jurisdiction for fraud,
		misappropriation, embezzlement, or any felony. 

	  

	 8. Death. In the event an
		Optionee dies while employed by the Company and/or Starlims, any Option granted
		to him that has not previously expired or been exercised shall,
		to the extent exercisable on the date of death, be exercisable by the
		estate of such Optionee or by any person who acquired such Option by
		bequest or inheritance, at any time prior to the expiration of the Option.
		

	  

	 9. Disability. In the event of
		the termination of employment of an Optionee due to disability, the
		Optionee or his guardian or legal representative, shall have the right
		to exercise any Option which has not been previously exercised or expired
		and which the Optionee was eligible to exercise as of the first date of
		his or her disability, at any time within 180 days of after such termination or
		separation, unless such Option is earlier terminated pursuant to its terms. All
		Options that are not exercisable as of the date of the Optionee’s
		termination or which are not exercised within the period set forth in the
		preceding sentence shall be deemed canceled and terminated. Whether or not the
		Optionee is “disabled”, for purposes of this Section 9, shall be
		determined by the Board or the Committee in their sole discretion.
		

	  

	 10. Change
		of Control. In the event of a
		Change of Control, the expiration and the Vesting Periods of all Options may be
		accelerated or the terms of such Option may be changed by the Board, in its
		sole discretion. For these purposes, a Change of Control shall be deemed
		to have occurred when: 

	  

	 (a) any person (as
		such term is used in Section 13 of the U.S. Securities Exchange Act of 1934 and
		the rules and regulations thereunder and any person acting in concert with such
		person) directly or indirectly acquires or otherwise becomes entitled
		to vote more than 50% of the voting power entitled to be cast at
		elections for directors of the Company; or 

	  

	 (b) there occurs
		any merger or consolidation of the Company or Starlims, or any sale, lease or
		exchange of all or any substantial part of the consolidated assets of Starlims
		or the Company and its subsidiaries (as defined in Section 424(f) of the Code),
		to any other person, and (i) in the case of a merger or consolidation, the
		holders of outstanding stock of the Company (or Starlims, as the case may be)
		entitled to vote in elections of directors of the Company (or Starlims)
		immediately before such merger or consolidation (excluding for this purpose any
		person that directly or indirectly owns or is entitled to vote 20% or more
		of the voting power of the Company (or Starlims)) hold less than 50% of the
		voting power of the survivor of such merger or consolidation or its parent, or
		(ii) in the case of any such sale, lease or exchange, the Company (or Starlims)
		does not own at least 50% of the voting power of the other person, or
		

	  

	 L.I.M.S.
		2001 OPTION PLAN - PAGE 5 OF 7 PRINTED 8/29/06

	  

	 

	 
	 

	 
	 (c) one or more
		new directors of the Company are elected and at such time five or more
		directors (or, if less, a majority of the directors) then holding office were
		not nominated as candidates by a majority of the directors in office
		immediately before such election. 

	  

	 11. Adjustments. In the event that
		the Board or the Committee shall determine that any recapitalization, stock
		split, reverse stock split, reorganization, merger, consolidation, split-up,
		spin-off, combination, repurchase, or exchange of Shares or other securities,
		the issuance of warrants or other rights to purchase Shares or other
		securities, or other similar corporate transaction or event affects the Shares
		with respect to which Options have been or may be issued under the Plan,
		such that an adjustment is determined by the Board or by the Committee to be
		appropriate in order to prevent enlargement of the benefits or potential
		benefits intended to be made available under the Plan, then the Board or
		the Committee shall, in such manner as they may deem equitable, adjust any or
		all of (i) the number and type of Shares that thereafter may be made the
		subject of Options, (ii) the number and type of Shares subject
		to outstanding Options, and (iii) the grant or exercise price with respect
		to any Option, or, if deemed appropriate, make provision for a cash
		payment to the holder of any outstanding Option; provided, however, that
		the number of Shares subject to any Option denominated in Shares shall always
		be a whole number. 

	  

	 12. Tax
		Withholding. The Company or
		Starlims shall notify an Optionee of any income tax withholding requirements
		arising as a result of the grant of any Award or exercise of an Option. The
		Company or Starlims shall have the right to withhold from such Optionee such
		withholding taxes as may be required by law, or to otherwise require the
		Optionee to pay such withholding taxes. If the Optionee shall fail to make
		such tax payments as are required under Section 5(e), the Company or Starlims
		shall, to the extent permitted by law, have the right to deduct any
		such taxes from any payment of any kind, including a payment of Shares,
		otherwise due to such Optionee or to take such other action as may be
		necessary to satisfy such withholding obligations. 

	  

	 13. Right
		of Discharge Reserved. Nothing in the
		Plan nor the grant of an Award hereunder shall confer upon any employee the
		right to continue in the employment of the Company, Starlims or any
		company affiliated with the Company or Starlims or affect any right that the
		Company or Starlims may have to terminate the employment or service of (or
		to demote or to exclude from future Options under the Plan) any such
		employee at any time for any reason. Except as specifically provided by the
		Board or the Committee, the Company shall not be liable for the loss of
		existing or potential profit from an Award granted in the event of termination
		of an employment or other relationship even if the termination is in violation
		of an obligation of the Company or Starlims to the employee. 

	  

	 14. Severability. If any provision
		of the Plan shall be held unlawful or otherwise invalid or unenforceable in
		whole or in part, such unlawfulness, invalidity or unenforceability shall not
		affect any other provision of the Plan or part thereof, each of which remain in
		full force and effect. If the making of any payment or the provision of any
		other benefit required under the Plan shall be held unlawful or otherwise
		invalid or unenforceable, such unlawfulness, invalidity or unenforceability
		shall not prevent any other payment or benefit from being made or provided
		under the Plan, to the extent that it would not be unlawful, invalid or
		unenforceable, and the maximum payment or benefit that would not be unlawful,
		invalid or unenforceable shall be made or provided under the Plan.
		

	  

	 15. Amendment
		and Termination of the Plan.

	  

	 L.I.M.S.
		2001 OPTION PLAN - PAGE 6 OF 7 PRINTED 8/29/06

	 

	 

	 
	 

	 
	 (a) The Board may,
		from time to time, alter, amend, suspend or terminate the Plan with
		respect to Options that have not been granted, subject to any
		requirement for stockholder approval imposed by applicable law or any rule of
		any stock exchange or quotation system on which Shares are listed or quoted;
		provided, however, that the Board may not amend the Plan in any manner that
		would result in noncompliance with any applicable law. Subject to the
		provisions of Section 10 hereinabove, neither the Board nor the Committee may,
		without the consent of the Optionee, alter or in any way impair the rights of
		such Optionee under any Award previously granted. The termination of the Plan
		shall not affect any Option previously granted. 

	  

	 (b) The Plan shall
		terminate and no further Options shall be granted hereunder after the
		fifth anniversary of the Effective Date unless terminated earlier by the Board
		pursuant to paragraph (a) hereof as of an earlier date. 

	  

	 (c) Without
		amending the Plan, the Board or the Committee may grant Options
		to eligible individuals who are not U.S. nationals on such terms and
		conditions different from those specified in this Plan as may in the judgment
		of the Board or the Committee be necessary or desirable to foster and
		promote achievement of the purposes of the Plan, and, in furtherance of such
		purposes, the Board and the Committee may make such modifications, amendment,
		procedures and the like to the Plan as may be necessary or advisable
		to comply with the provisions of laws in other countries in which the
		Company operates or has employees. 

	  

	 16. Gender
		and Number. Any masculine
		terminology used in this Plan document shall also include the feminine,
		and the definition of any term herein in the singular shall also include the
		plural except when otherwise indicated by the context. 

	  

	 17. Governing
		Law. The Plan and all
		determinations made and actions taken thereunder, shall be governed by the laws
		of the State of Florida to the extent not otherwise governed by the Code or the
		federal laws of the United States if the Optionee is a resident of the United
		States and shall be governed and construed according to the laws of Israel
		if the Optionee is not a resident of the United States. 

	  

	 L.I.M.S.
		2001 OPTION PLAN - PAGE 7 OF 7 PRINTED 8/29/06Exhibit
		10.6

	 

	 

	 TRANSLATION
		FROM HEBREW

	 

	 LIMS
		LABORATORY INFORMATION MANAGEMENT SYSTEMS LTD.

	 

	 Employee
		Option Plan

	 

	 
			1.	
				General

				

 

	 

	 
			(a)	
				This
				  employees’ option plan is a plan for granting options for shares in LIMS
				  Laboratory Information Management Systems Ltd. (hereinafter: “the
				  Company”) to employees of the Company and its subsidiaries
				  (hereinafter: “the Group” and “the
				  Plan”).
 

 

	 

	 
			(b)	
				The plan
				  will be administered by the Board of Directors of the Company or a Committee of
				  the Board of Directors that will be duly empowered to administer the plan by
				  the Board of Directors of the Company, as directed by the Board of Directors
				  (the Board of Directors and any such duly empowered Committee shall hereinafter
				  be referred to as: “the
				  Board”).

				

 

	 

	 
			(c)	
				Subject
				  to the provisions of the plan, the Board will be empowered to make any decision
				  that is necessary or desirable for administering the plan. The Board will be
				  entitled at its discretion, to rectify any defect, make up any deficiency and
				  clarify any lack of coherence in the plan, and all its decisions in relation to
				  the management of the plan shall be final and conclusive.
 

 

	 

	 
			2.	
				The
				  number of options that are to be allocated in the plan and the dates of their
				  allocation.
 

 

	 

	 
			(a)	
				In the
				  context of the plan, allocation letters addressed to the grantees will be
				  deposited with Lahav, Litvak-Abadi and Co. Law Office 2002 Ltd. (hereinafter:
				  “the
				  Trustee”),
				  which relate to up to 40,500 options, subject to adjustments, exercisable into
				  up to 40,500 of the Company’s Ordinary Shares each of NIS 1 nominal value,
				  for such period, at such price and on such conditions as specified hereunder
				  and as shall be prescribed by the Board. 
 

 

	 

	 
			(b)	
				The
				  options shall be deposited with the Trustee on a date not earlier than thirty
				  days from the date of submission to the Assessing Officer of a request for
				  approval of the plan. The Trustee shall hold the options for a period of 24
				  months from the date of their allocation. 
 

 

	 

	 
			3.	
				The
				  Grantees
 

 

	 

	 The
		options shall be allocated and deposited with the Trustee on behalf of the
		employees of the Company and the subsidiaries, as determined from time to time
		by the Board, at its discretion and subject to receipt of all such approvals as
		are required by law (heretofore and hereinafter: “the
		Grantees”).

	  

	 1

	  

	 

	 
	 

	 
	 
			4.	
				Terms
				  and Conditions of the Options
 

 

	 

	 
			(a)	
				Each
				  option shall be exercisable into one of the Company’s Ordinary NIS 1
				  shares in consideration of payment of the exercise price in cash, as specified
				  hereunder (hereinafter: “exercise
				  share”).
				  
 

 

	 

	 
			(b)	
				The
				  exercise shares shall be equivalent in respect of their rights to the existing
				  ordinary shares in the Company’s issued capital, and their holders shall
				  be entitled to the full dividend in cash as well as in any other distribution,
				  including a distribution of bonus shares respecting which the determining date
				  for entitlement is the date of their allocation or subsequent
				  thereto.
 

 

	 

	 
			(c)	
				The
				  Board shall determine, in relation to any allocation of options, the following
				  details, at its discretion:
 

 

	 

	 
			 	(1)	
				The
				  price that is to be offered to the grantee for exercise of the options
				  (hereinafter: “the
				  exercise price”);
				  
 

 

	  

	 
			 	(2)	
				The
				  quantity of options that is to be offered to the grantee;
 

 

	  

	 
			 	(3)	
				The
				  dates of creation of the entitlement to exercise the options that are to be
				  offered to the grantee (hereinafter: “the
				  creation of entitlement dates”);

				

 

	  

	 
			 	(4)	
				The
				  number of options to which entitlement is created on each creation of
				  entitlement date (all the options respecting which creation of entitlement date
				  is identical shall hereinafter be called: “a
				  portion”);

				

 

	  

	 
			 	(5)	
				The last
				  date or dates on which a grantee will be entitled to exercise the options or
				  any portion of options (hereinafter: “end
				  of the exercise period”)

				

 

	 

	 
			5.	
				Delivery
				  of allocation letters, their division and transfer.
 

 

	 

	 
			(a)	
				The
				  Company shall give notice to the grantees as to deposit of the option
				  allocation letters with the Trustee (hereinafter: “the
				  allocation letters). An
				  allocation letter may refer to one option or to a number of
				  options.
 

 

	 

	 
			(b)	
				Deposit
				  of an allocation letter shall be made subject to the grantee’s signature
				  of a letter of undertaking, incorporating the following provisions:
				  
 

 

	 

	 
			 	(1)	
				Agreement
				  to accept the options that are allocated to the Trustee on his behalf, in
				  accordance with the conditions specified in the plan and in the Board
				  resolution as to the allocation, including an undertaking to bear any tax
				  liabilities and other obligatory payments that are imposed on him as a result
				  of allocation of the options, the exercise thereof or sale of the exercise
				  shares.
 

 

	 

	 
			 	(2)	
				A
				  declaration that he is aware of the provisions of Section 102 of the Ordinance
				  and the taxation route that applies to him.
 

 

	 

	 
			 	(3)	
				Agreement
				  to what is stated in the trust deed which is attached as an appendix to the
				  plan. 
 

 

	  

	 

	 
	 

	 
	 
			 	(4)	
				An
				  undertaking to proceed in accordance with the provisions of Section 102 of the
				  Ordinance and the regulations issued pursuant thereto, including an undertaking
				  not to exercise the options, as such term is defined in Section 102 of the
				  Ordinance, prior to the end of the period, as such is defined in Section 102 of
				  the Ordinance. 
 

 

	 

	 
			(c)	
				Every
				  allocation letter is divisible into a number of allocation letters, such that
				  the total of all the options contained in them shall be equivalent to the
				  options that were contained in the original allocation letter. Under no
				  circumstances will an allocation letter be issued that relates to less than one
				  option.
 

 

	 

	 
			(d)	
				The
				  allocation letters are not transferable or assignable and may not be waived in
				  favor of others, including in favor of other employees, except for a transfer
				  of allocation letters to heirs of a deceased or to a guardian in a case of lack
				  of legal capacity, as specified hereunder in Section 6(f).
 

 

	 

	 
			6.	
				Entitlement
				  to exercise the options and expiration thereof
 

 

	 

	 
			(a)	
				Without
				  derogating from the lock-up provisions that apply to the options pursuant to
				  Section 102 of the Ordinance, and subject to satisfaction of the conditions for
				  exercise of the options in accordance with this document and signature of a
				  letter of undertaking as specified above, a grantee will be entitled to
				  exercise any portion of options commencing from the creation of entitlement
				  date and until the end of the exercise period of such portion. 

				

 

	 

	 
			(b)	
				If the
				  last date for exercise of the options falls on a day that is not a business
				  day, the last exercise date will be deferred to the next business
				  day.
 

			 	 

			 	Options that are not exercised by the
				end of the exercise period shall expire and will not confer any right
				whatsoever.

			 	 

			 	In this regard “business
				day” means a day on which most of the banks in Israel are open for the
				provision of services to their customers.

 

	  

	 
			(c)	
				Subject
				  to the contents of subsection (f) hereunder, the right of a grantee to exercise
				  options that are the subject of any portion, is conditional on him being an
				  employee of the Group on the creation of entitlement date of such
				  portion.
 

 

	 

	 
			(d)	
				If a
				  grantee resigns or is dismissed from his employment in the Group, for any
				  reason, except in circumstances that are specified in subsection (e) hereunder,
				  the grantee will be entitled to exercise the options whose creation of
				  entitlement date has occurred by the date of termination of employer-employee
				  relationship between him and the Group, no later that 60 days from the date of
				  termination of such employer-employee relationship, but in no event later than
				  the end of the exercise period.
 

 

	  

	 

	 
	 

	 
	 
			(e)	
				If a
				  grantee is dismissed from his employment in the Group for one of the reasons
				  specified hereunder, all the options allocated to him and which have not yet
				  been exercised by the date of his dismissal, shall expire.
 

 

	  

	 “Circumstances”
		in this regard, mean each of the following - (1) an infringement by the grantee
		of copyright or a trademark of the Group; (2) competition with or assisting in
		competition with the business of the Group, as an employee, owner, partner,
		director, officeholder, shareholder, adviser or agent (a holding of less than
		5% of the issued capital of a public company shall not for such purpose be
		deemed to be competition with the Group’s business); (3) if a grantee is
		dismissed in circumstances that do not entitle him to lawful severance pay
		and/or in circumstances that constitute a grave breach of discipline under the
		provisions of his contract of employment. 

	 

	 
			(f)	
				If a
				  grantee ceases to be an employee of the Group as a result of his death his
				  legal heirs will have a right to exercise the options whose creation of
				  entitlement date preceded the date of his death, no later than the end of the
				  exercise period.
 

 

	  

	 If a
		grantee ceases to be an employee of the Group in consequence of dismissal or
		resignation due to a poor health condition, such grantee shall be entitled to
		exercise the options whose creation of entitlement date preceded the date of
		termination of his employment, not later than 180 days from the date of
		termination of his employment, but in no event later than the end of the
		exercise period.

	 

	 
			(g)	
				Notwithstanding
				  the provisions of Section 6 above, a grantee will not be entitled to exercise
				  the options, as such term is defined in Section 102 of the Ordinance, prior to
				  the end of the period, as such is defined in Section 102 of the Ordinance, and
				  the lock-up provisions prescribed in Section 102 of the Ordinance shall apply
				  to the options in relation to such options as were allocated in the context of
				  the capital gains route. 
 

 

	 

	 
			7.	
				Exercise
				  of the options
 

 

	 

	 
			(a)	
				Exercise
				  of the options or any part thereof by a grantee shall be effected by means of
				  submission of a written application to the Company at its registered office, or
				  at such other place as the Company shall notify, on a form as prescribed by the
				  Company and the Trustee, attaching the allocation letters of the options that
				  relate to the application, and the amount in cash that is equivalent to the
				  total exercise price in respect of all options to which the application relates
				  (hereinafter: “the
				  exercise notice”).
				  
 

 

	  

	 No right
		will be granted for partial exercise of an option but an allocation letter is
		divisible as aforementioned.

	 

	 
			(b)	
				The date
				  of receipt of the exercise notice by the Company which satisfies all the
				  conditions mentioned above in sub-section (a) shall be deemed to be the
				  exercise date (hereinafter: “the
				  exercise date”).

				

 

	  

	 

	 
	 

	 
	 
			(c)	
				A
				  grantee shall sign any document that is required under any law and in
				  accordance with the Company’s Articles for allocation of the exercise
				  shares. Without derogating from the foregoing, the Board of Directors of the
				  Company shall have authority to duly empower any person that it sees fit to
				  sign for and on behalf of a grantee, any application, agreement and/or document
				  that is necessary for completion of allocation of the exercise
				  shares.
 

 

	 

	 
			(d)	
				Shortly
				  after receipt of the exercise notice the Company will transfer exercise shares
				  to the grantee in accordance with the quantity of the options that is the
				  subject of the exercise notice. Options that are exercised will be null and
				  void commencing from the date of allocation of the exercise
				  shares.
 

 

	 

	 
			8.	
				Taxation

				

 

	 

	 
			(a)	
				Any
				  liability to tax, including income tax, national insurance, health tax and any
				  other obligatory payment that applies to an employee in connection with receipt
				  of the options, their exercise or sale of the exercise shares, shall apply
				  fully to the grantees. The Company will not bear the tax burden that is imposed
				  on the grantees, if any, in respect of the options, their exercise or sale of
				  the exercise shares, either by way of grossing up or in any other
				  way.
 

 

	 

	 
			(b)	
				The
				  Company shall make application to the tax authorities to apply to the options
				  the provisions of Section 102 of the Ordinance that relate to the capital gain
				  route. For such purpose the Company shall deposit the options with the Trustee
				  and the lock-up provisions prescribed in Section 102 of the Ordinance shall
				  apply to them.
 

 

	 

	 
			9.	
				Adjustments

				

 

	 

	 
			(a)	
				In the
				  event of a distribution of bonus shares in respect of which the date
				  determining the entitlement to receive them falls during the period from the
				  date of allocation of the options until the end of the exercise period, the
				  number and class of exercise shares of the options in respect of which no
				  exercise notice was given up to the date determining the entitlement to such
				  bonus shares, shall be adjusted, to the effect that any such option shall be
				  exercisable, in addition to the exercise shares, to shares of the same class
				  which had been distributed as bonus shares to the ordinary shareholders of the
				  class of exercise shares as fully paid up bonus shares, in a ratio of one bonus
				  share to each exercise share which will be equivalent to the ratio of one bonus
				  share to every share that was in existence in the issued and paid up capital of
				  the Company on the date of distribution of the bonus shares.
 

 

	 

	 
			(b)	
				In any
				  case of division, consolidation, reacquisition, swap or issue of shares or
				  convertible securities of the Company, as well as in a case of reorganization,
				  merger, split up or division of the Company, the Board may adjust the number of
				  exercise shares, the classes thereof or the exercise price, or prescribe
				  financial compensation, all if and in so far as it deems this to be
				  appropriate. Without derogating from the generality of the foregoing, in a case
				  of a change in the identity  
 

 

	   

	 

	 
	 

	 
	 
			 	
				of the controlling shareholders
				  in the Company, the Company’s Board may expedite the creation of
				  entitlement dates and the end of the exercise period and change the option
				  periods, as it shall deem appropriate at its sole discretion.

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