Document:

exhibit_10-10.htm

Exhibit 10.10

 

Personal Employment Contract

Entered into in Rosh Pina on January 31, 2016

Between:               On Track Innovations Ltd.

A an Israeli public corporation located in the ZHR Industrial Zone, Rosh Pina

(hereafter, "Company")

on the one hand;

And:                      Yishay Curelaru, ID No. [·]

Address: [·]

(hereafter, "Employee")

on the other hand;

	
Wherefore:

	
The Employee has been employed by the Company as of August 1, 2013 as a controller in the Company's finance department pursuant to a Personal Employment contract dated July 2, 2013 (hereafter, "Previous Contract") and as of January 31, 2016 the Employee is employed by the Company as Chief Financial Officer (hereafter, "CFO") of the Company and its subsidiaries in accordance with a resolution of the Company's Board of Directors (hereafter, "Board of Directors") dated January 23, 2016; and

	
Wherefore:

	
The Company desires to continue to employ the Employee as CFO of the Company and its subsidiaries (hereafter, the "Position") and the employee desires to be employed in the Position, all subject to the terms and conditions set forth in this agreement, the principles of which were approved by the Board of Directors in its resolution dated January 23, 2016 and the rest of which will be approved as required by law; and

	
Wherefore:

	
It has been agreed that the employment of the Employee in the Position will be done so as to ensure full continuation of the Employee's rights, including the right to termination severance payment; and

	
Wherefore:

	
The Employee declares that nothing prohibits his entry into this agreement and that he has the skills, experience, and competence required for the purpose of performing the Position and that he has expressed his interest in being employed by the Company in the Position; and

	
Wherefore:

	
The parties desire to establish the terms and conditions for the Employee's employment, all as set forth in this Agreement and subject to the terms and conditions herein.

	
Therefore, the parties declare and agree as follows:

	
A.

	
General

	
1.

	
The preamble to this agreement constitutes and integral part thereof.

	
2.

	
The attachments to this agreement constitute integral parts thereof.

	
3.

	
Captions and headings are for convenience only and shall not serve as a basis for interpretation of this agreement.

 

  

  

  

 

	
B.

	
The Employment

	
4.

	
This agreement constitutes the entirety of the terms and conditions applicable to Employee's employment by the Company.  No collective bargaining agreements or arrangements or other special arrangements or agreements shall be applicable to the employment relationship between Employee and Company and the relationship between the parties will be governed by this agreement only.

	
C.

	
Obligations and Declarations of the Employee

	
5.

	
The Employee declares and commits hereby as follows:

	
  

	
5.1.

	
The Employee will perform the Position with dedication, loyalty and trustworthiness in any location, in Israel and abroad, in accordance with the instructions that he will receive from time to time from his supervisors, and to this effect will dedicate his time, efforts, skills and experience as necessary and needed.  The Employee will not take on any other employment or occupation without prior written approval of the Company.

	
  

	
5.2.

	
Employee is not prevented, whether by contract or otherwise, from entering into this Agreement and performing his obligations hereunder.

	
  

	
5.3.

	
All the details and information supplied by Employee to the Company in submission of his candidacy for the Position are truthful, correct and accurate, and Employee commits to notify the Company of any change in such details or information.

	
  

	
5.4.

	
The Employee commits to notify the Employer, immediately and without delay, of any subject or matter in which Employee has a personal interest which may cause a conflict of interest in the Employee's performance of the Position.

	
D.

	
Work Hours

	
6.

	
It is agreed by the parties that the Position is a management position which requires a special personal care and, accordingly, is not subject to the Work and Rest Hours Law of 1951 (hereafter, the "Work and Rest Hours Law") and the Employee will not be eligible to receive from the Company any special or extra pay for extra or additional hours.

	
E.

	
Compensation

	
7.

	
As compensation for the Company's employment of the Employee, the Company will pay the Employee a monthly salary as detailed in the notice of terms of employment attached hereto as Attachment A (hereafter, the "Determining Wage").

	
8.

	
The Determining Wage shall be updated in accordance with the cost of living adjustments as applied to the general economy, and subject to the decision of management from time to time.

	
9.

	
Adjustments of the components of salary will be done, in at all, at the discretion of the company once per year in January.

	
10.

	
The Determining Wage is the exclusive basis for contributions towards social benefits as provided in this agreement and for termination severance.

 

  

  

  

 

	
11.

	
It is clarified hereby that any grant and/or expense participation and/or expense reimbursement and/or other benefit that the Employee shall receive (if any), do not constitute part of the Determining Wage for purposes of social benefits including termination severance and/or distributions to the various pension plans.

	
F.

	
Annual Leave, Sick Pay and Recuperation

	
12.

	
The Employee will be entitled to annual leave as set forth in Attachment A.

	
13.

	
The Employee's taking of any annual leave will be done in coordination with the Company and subject to the Employee's direct supervisor's approval at least 14 days in advance.

	
14.

	
It is clarified hereby that the Employee will be required in each work year to utilize the annual leave to which he is entitled as set forth in Attachment A and will not be entitled to roll-over and aggregate annual leave days unless such aggregation is approved in writing in advance by the Company in certain circumstances as set by the Company from time to time in accordance with its policies.  Annual leave that is not utilized by the Employee within the work year in which such leave was earned will be void and will not be eligible for utilization or payout.

	
15.

	
The Employee will be entitled to paid sick days in accordance with the Sick Pay Law and against presentation of medical approvals.

	
16.

	
After the completion of one year of employment, Employee shall be paid Recuperation Pay (Dmei Havraa) at the rates determined from time to time in agreements between the Coordinating Bureau of Economic Organizations and the General Organization of Workers (Histadrut).

	
G.

	
Term of Agreement

	
17.

	
This agreement shall be valid from the date of its execution for an unlimited term.

	
18.

	
Notwithstanding the above, each side may terminate the agreement for any reason and without cause by delivery of prior notice in writing as set forth in Attachment A.

	
19.

	
In the prior notice period, the Employee will continue in the performance of his duties, and will transfer his duties in an efficient and organized manner to this replacement, in accordance with the Company's instruction.  Notwithstanding the foregoing, the Company is entitled to waive, in whole or in part, Employee's continued performance of his duties during the prior notice period.

	
20.

	
During the prior notice period, whether or not employee continued performance of his duties in whole or in part, the Employee will be entitled to full compensation and benefits.  Notwithstanding the foregoing, the Company shall be entitled to notify the Employee of immediate termination of Employment and pay him for the prior notice period (at the monthly rate of salary at which the Employee would have been paid had he continued performance of his duties during the prior notice period) and in such instance, the Employee will be entitled to the prior notice period compensation only.

	
21.

	
Notwithstanding anything else herein, the Company shall be entitled to terminate the Employee immediately and without prior notice in the events of breach of trust; intentional harm to the Company or its property; criminal conviction in connection with or due to performance of the Position; or criminal conviction for an offence of moral turpitude.

 

  

  

  

 

	
H.

	
Savings Plan (Kupat Gemel), Study Fund (Keren Hishtalmut) and Managers' Insurance (Bituach Menahalim)

	
22.

	
If and to the extent set forth in Attachment A, Company shall make distributions to a pension fund and/or managers' insurance or savings plan and/or study fund in the Employee's name.

	
23.

	
The Company will transfer the required payments monthly and in parallel will deduct Employee's contributions from Employee's salary as set forth in Attachment A.

	
24.

	
For avoidance of doubt, the payments to the pension fund and/or managers' insurance, if and to the extent the Employee is entitled to them per Attachment A, will be drawn from the Determining Wage as defined above.

	
25.

	
It is hereby clarified that the employer's payments to the pension fund and/or managers' insurance, will constitute Employee's entire entitlement to severance pay in respect of the paid salary, in place of any severance pay to which the Employee otherwise may have become entitled, as provide under 14 of the Severance Pay Law 1963.

	
I.

	
Termination of Employment

	
26.

	
Should the Employee's employment terminate for whatever reason, except under circumstances which preclude Employee's receipt of severance pay, the Employee shall be entitled to receive all amounts that have accrued to his benefit and all the amounts that were distributed to savings plan (to the extent distributed), whether from his distributions or the Company's contributions, including all interest and profits that have accrued on such amounts.

	
27.

	
The Company and the Employee adopt for purposes of this agreement, the General Order regarding employers' payments to pensions and insurance funds instead of severance pay pursuant to the Severance Pay Law of 1963 (Section 14 to the Law), as issued under the signature of the Minister of Labor on June 30, 1998 and published in Official Gazette 4659 (hereafter, "Labor Minister's Order").  The Labor Minister's Order is attached hereto as Attachment C.

	
28.

	
The Company's payments as described above will come in place of 100% of the severance pay that the Employee or his beneficiaries are entitled to in connection with the salary for which the payments were made and for the period they were made (hereafter, the "Exempt Wages").

	
29.

	
The Labor Minister's Order will be applicable to the Company's contributions, but does not diminish the Employee's rights by law, collective agreement, expansion order or contract, to severance pay for salary above the Exempt Wages.

	
30.

	
Should Employee's employment terminate due to Employee's resignation or events or circumstances preventing continued employment (including Employee's death), the Employee (or his beneficiaries, as applicable) shall be entitled:

	
30.1.

	
To receive from the Company the Employee's monthly salary for the portion of the year which the Employee actually worked;

	
30.2.

	
To receive from the pension fund all amounts that accrued to the benefit of the Employee said fund for distributions to the savings plan (Kupat Gemel), whether from Employee's distributions or Company's contributions, including all interest and profits that have accrued on said fund and also to receive the distributions that have accrued to the Employee's benefits in the study fund (Keren Hishtalmut), whether from Employee's distributions or Company's contributions.

 

  

  

  

 

	
31.

	
It is acknowledged and agreed that in the event that the Employee's termination is due to breach of trust or other material breach of his obligations to the Company under this agreement, including but not limited to any obligations regarding confidentiality and non-competition and including termination due to circumstances which preclude receipt of severance pay in accordance with the law, then despite anything else herein to the contrary, the Employee will not be entitled to receive prior notice of termination or payment for a prior notice period, and will also not be entitled to severance pay and the Company shall be entitled to demand return of all funds that were transferred to the severance fund on account of such severance pay, including all interest and profits earned on such amounts.

	
32.

	
Upon termination of the Employee's emplacement with the Company, the Employee shall deliver to Company all documents, information and other materials or property that has been provided to him or prepared by him in connection with his employment with the Company.

	
33.

	
For avoidance of doubt, the Employee shall not have any offset or lien rights against the property or funds of the Company that are in the Employee's possession or in connection with any debt of the Company to the Employee.

	
J.

	
Confidentiality and Non-Competition

 

	
34.

	
The Employee acknowledges hereby that in light of the business of the Company it is of utmost importance to preserve the confidentiality of any information and/or document which he receives during his employment and he commits to preserve confidentiality in accordance with the non-disclosure agreement attached hereto as Attachment C.

	
35.

	
The Employee commits as follows:

	
35.1.

	
Not to, directly or indirectly, engage with any customer of Company or its related companies, whether independently or as an employee, including by partnership or holding, by himself or through others, of shares or management rights in any companies, during the period of this agreement and for a period of 12 months thereafter, in any matter related to the business of the Company except as part of this performance of his duties to the Company.  It is clarified that the list of clients and/or vendors and/or marketing system and/or any other list that was utilized by employee in the regular course of his employment with the Company are trade secrets of the Company.  The Employee commits not to take advantage of and/or use such lists except with the specific written consent of the Company.

	
35.2.

	
Not to work, during the period of this agreement and for a period of 12 months thereafter, for any reason, in Israel or elsewhere, whether directly or indirectly, in any business, job, or other occupation which competes in any way with the Company's and/or its related companies' business in the field of Contact/contactless smart cards and IoT.

	
35.3.

	
Not to disparage the Company or its shareholders or its customer.

 

  

  

  

 

	
36.

	
The Employee and the Company hereby declare that the Determining Wage as defined in this Agreement was agreed upon in consideration of, among other things, the non-competition obligations applicable to employee pursuant to Section 34 above.

	
K.

	
Intellectual Property and Instruments of Service

	
37.

	
Any invention, patent, intellectual property right, trademark, trade secret, knowhow or information developed by the Employee due to and/or during his employment with the Company shall belong to the Company and the Employee agrees to execute any document that shall be required to substantiate Company's rights to the same.

	
L.

	
Miscellaneous

	
38.

	
The payments and benefits granted under this agreement are subject to tax withholdings and other obligatory withholdings that the Company must withhold by law and nothing in this agreement shall be deemed as obligating Company to pay any tax or payment which Employee is obligated to pay, except the benefit value of meals which shall be grossed up by company to which Employee and as may be otherwise agreed.

 

	
39.

	
The terms of employment with the Company are solely as set forth in this personal employment contract between Employee and Company and Employee will not be entitled to any payment or other benefits relating to his employment with the Company or termination thereof except as specifically provided in this agreement.

	
40.

	
This agreement will supersede all prior agreements between Employee and Company whether written or oral.

	
41.

	
Any change or cancellation of a term of this agreement shall be solely in writing and executed by both parties.

	
42.

	
The address of the parties for purposes of this agreement shall be as first written hereinabove and any notice, document or pleading that will be sent by one part to the other to the above addresses shall be deemed as delivered to the recipient if delivered by hand – at the time of delivery and if delivered by registered mail – 72 hours after mailing.

Acknowledged and Agreed:

 

	
/s/ On Track Innovations Ltd.

On Track Innovations, Ltd. 

	
/s/ Yishay Curelaru 

Employee

 

  

  

  

Attachment A

Employee's Details:

Name:          Yishay Curelaru    ID: [·] Address: [·]

Title:           Chief Financial Officer of the Company and its Subsidiaries

	
1.

	
Date of commencement of Employment:

	
January 31, 2016

	
2.

	
Direct Supervisor:

	
Company CEO

	
3.

	
Pay Basis:

	
Monthly Salary

	
4.

	
The Employee will be entitled to a personal vehicle for purposes of performing his duties in accordance with the type and/or class of vehicle customary in the Company for employee's position.  All regular expense relating to the use of the vehicle, except for fines of any type, will be borne and paid by Company.  Taxes for the benefit value of the vehicle will be borne by Company.

	
5.

	
The total regular payments to be paid to Employee as salary (gross) are: 38,000 NIS gross per month (hereafter, the "Determining Wage" or "Salary").

	
6.

	
Payments for Social Benefits:

 

Social benefits will be paid from the commencement of employment.

 

	
Date of commencement of Payment

	
Percentage of Employer Contribution

	
Percentage of Employee's Contribution

	
Receiving Entity and Name of Plan

	
Type of Payment

	
Month following Pay

	
8.33% instead of severance + 5% savings (gemel) + up to 2.5% disability

	
5%

	
Managers' insurance and/or pension fund

	
Insurances

	
Month following Pay

	
7.5%

	
2.5%

	
By Employee's Choice

	
Study Fund (Keren Hishtalmut)

	
7.

	
Number of annual leaves days to be granted to Employee is 18 days.

	
8.

	
Utilization of leave will be with prior approval from direct supervisor.

	
9.

	
Subject to applicable law and the Company's compensation plan and policies from time to time, the Employee will be entitled to participate in the annual bonus plan for officers of the Company, pursuant to which he will be entitled to a maximum bonus of up to 4 monthly salaries, according to the annual bonus plan to be approved by the Compensation Committee and the Board of Directors of the Company.

	
10.

	
Subject to approval of the Board of Directors and the conditions set forth in the law, the Company's management will recommend the grant of 40,000 share options from the Company's option plan to the Employee at an exercise price equal to the average share price of the Company's stock in the thirty days before the grant date, which options shall vest in three equal annual portions commencing at the conclusion of 12 months after the grant date and all in accordance with the Company's option plan.

 

  

  

  

 

	
11.

	
The prior notice period for termination of employment by the Company or by the Employee shall be 90 days.

We wish the Employee good luck.

Sincerely,

On Track Innovations, Ltd.

 

I hereby declare that I have read the above-written and understand and agree to the foregoing.

                    

	
 
/s/ Yishay Curelaru

Employee's signature   

	
January 31, 2016

Date

 

  

  

  

 

Attachment C

Non-Disclosure Agreement

I, the undersigned, Yishay Curelaru (ID No. [·]) in consideration for value received, hereby declare and undertake towards On Track Innovations Ltd. and any of its parent/controlling corporation, subsidiaries and/or affiliated entities (collectively, the “Company”) as follows:

	
1.

	
 In this Undertaking, the following terms shall have the following meaning:

 

	
  

	
1.1.

	
“Confidential Information” means any and all information relating to Company’s proprietary technology or business including, without limitation, information, data, know-how, formulas, concepts, tests, drawings, specifications, applications, designs and trade secrets, patents, know-how, technology data and all other information, design methodology, engineering and manufacturing processes and data and information related to Company’s products or their development, equipment, suppliers, sales, customers, potential customers, business operations and plans, financial situation, members, employees and investors.

 

	
  

	
1.2.

	
“Confidential Documents” means any documents containing Confidential Information, including without limitation: (i) any documents, notes, memoranda, summaries, analyses, paper works, sketches, designs, charts, specifications, prints, compilations, or any other writings relating to Confidential Information, and any other materials embodied in drawings, floppy discs, tapes, CD ROM, hard drives, software or in any other possible way containing or relating to Confidential Information or any part thereof, whether or not prepared by Company or on its behalf, (ii) all documents received, used, or that shall be received or used, by me in relation with my employment with Company, and/or (iii) the contents of such Confidential Documents as stored in my memory.

 

	
  

	
1.3

	
“Competing Goods” means any goods sold in competition with the Prescribed Goods;

 

	
  

	
1.4

	
“Competing Services” means any services rendered in competition with the Prescribed Services;

 

	
  

	
1.5

	
“Prescribed Areas” means Israel or in any other part of the world in which Company conducts its business;

 

	
  

	
1.6

	
“Prescribed Customers” means any person who is or was a customer of Company at the termination date; or  who is or was a customer of Company at the termination date or who was a potential customer with which I had been engaged in negotiations with a view to doing business on behalf of Company within the period of 6 (six) months preceding the termination date;

	 

 

	
  

	
1.7

	
“Prescribed Goods” means any products sold by Company in the ordinary course of business as at the termination date or which is then included in any strategic plan of Company;

 

  

  

  

 

	
  

	
1.8

	
“Prescribed Services” means any services rendered by Company in the ordinary course of business as at the termination date or which is then included in any strategic plan of Company;

 

	
  

	
1.9

	
“Prescribed Suppliers” means any person who is or was a supplier of Prescribed Goods and/or Prescribed Services to Company at the termination date; or is or was a supplier of Prescribed Goods and/or Prescribed Services to Company at the termination date with which I had been engaged in negotiations with a view to doing business on behalf of Company within the period of 6 (six) months preceding the termination date;

 

	
  

	
1.10

	
“Restraint Period” means a period of 12 (twelve) months calculated from the termination date;

 

	
  

	
1.11

	
“Termination Date” means the date upon which my employment with the Company ceases or is terminated for any reason whatsoever;

 

	
2.

	
I am fully aware that Confidential Information and Confidential Documents are the  exclusive property of Company, and that they were made or shall be made available to me and for my use solely for the purpose of my work as an employee of Company.

 

	
3.

	
I undertake towards Company as follows:

 

	
  

	
3.1.

	
To maintain as fully confidential all Confidential Information and Confidential Documents;

 

	
  

	
3.2.

	
Not to disclose or divulge to any third party, or allow any third party access to any of Confidential Information or Confidential Documents, or use any of thereof, whether directly or indirectly, save exclusively for the purposes of my work as an employee of Company.

 

	
  

	
3.3.

	
Not to misuse any of Confidential Information or Confidential Documents, or any part thereof, in a manner other than the usual use of Confidential Information and Confidential Documents and for a purpose other than the purpose for which Confidential Information and Confidential Documents were divulged to me.

 

	
  

	
3.4.

	
Not to make public or divulge in any way Confidential Information and Confidential Documents or any part thereof.

 

	
  

	
3.5.

	
Not to duplicate, copy, scan, or create in any other way copies of Confidential Documents or any part thereof, except for the purpose for which the Confidential Information and Confidential Documents were divulged to me.

 

	
  

	
3.6.

	
Upon demand of Company, at any time whatsoever, to return to Company the Confidential Information and Confidential Documents or any part thereof or copies thereof in any form whatsoever, and to, if so required, confirm in writing to Company that all Confidential Information and Confidential Documents or any copies thereof in any form whatsoever which had been in my possession have been returned to Company, and that I did not retain any copies of it, including copies made by electronic forms.

 

  

  

  

 

	
  

	
3.7.

	
Not to remove from Company’s premises or take for my use any of Confidential Information and Confidential Documents without Company’s prior written approval, unless if such removal is made strictly for the purposes of performing my undertakings towards Company.

 

	
4.

	
I agree and accept that:

 

	
  

	
4.1.

	

Company reserves all rights in any inventions, patents, copyrights, designs, and any other intellectual property invented or devised by it in relation to Confidential Information and Confidential Documents.

 

	
  

	
4.2.

	

Any invention including any patent or patent application and any copyrights or any other intellectual property invented or created by me during my employment with Company or as a result of my employment with Company (the “IP”), shall be the exclusive property of Company, and I do not have and shall not have any demand or claim against Company relating to the IP and no monetary rights therein. This Section will be considered for any purpose as "Contract" according to the meaning of this term in Section 134 of the Patents law. In other words, I hereby agree that I will not be entitled for any compensation for IP, and that I will not address in this matter to The Payment and Compensation Commission ("Hava'ada Leinianey pitzuim vetamlugim") by virtue of the Patents law. Despite of the above, it is hereby agreed that if Company will be forced, by any entity or authority, to pay me or whoever in my place, any compensation due to the rights stipulated above, this payment will be considered as my debt to Company, hence Company shall be entitled to offset and deduct this payment from any other sum that I am entitled to from Company according to this Undertaking (or according to other binding agreement between me and Company), including from the sum that I will be entitled to receive from Company as mentioned above.

 

	
  

	
4.3.

	

I undertake to sign any document and to do any other act required in order to assign and register the said rights in the name of Company, or to prove Company’s rights, if and to the extent that this is required in the opinion of Company and/or Company’s legal counsels.

 

	
  

	
4.4.

	
I shall not challenge Company's intellectual property rights in any way, including without limitation, by filing to any court, patent or other authority, a claim, opposition or request for cancellation against such rights.

 

	
5.

	
The restrictions of use and disclosure set forth in this undertaking shall not apply to any Confidential Information and Confidential Documents which after they were disclosed became, available to the general public, through no breach of a confidentiality undertaking towards Company.

 

  

  

  

 

	
6.

	
It is recorded that in the course of my duties I (i) have acquired and/or will acquire considerable know-how in and will learn of Company's techniques relating to the business; (ii) will have access to names of customers with whom Company does business, whether embodied in written form or otherwise; (iii) will have the opportunity of forging personal links with customers of Company; and (iv) generally will have the opportunity of learning and acquiring the trade secrets, business connections and other Confidential Information appertaining to Company's business.

 

I acknowledged that the only effective and reasonable manner in which Company's rights in respect of its business secrets and customer connections can be protected is the restraint I am imposing upon myself as set forth hereunder. Therefore, in consideration of the non-competition payment, as set in my employment agreement, I hereby undertake that during the term of my employment with Company and for the duration of the Restraint Period, whether as proprietor, partner, director, shareholder, member, employee, consultant, contractor, financier, agent, representative, assistant, trustee or beneficiary of a trust or otherwise and whether for reward or not, directly or indirectly, I shall not -

 

	
  

	
6.1

	
Carry on or be interested or engaged in or concerned with or employed by any company, close corporation, firm, undertaking or concern which carries on, in the Prescribed Areas any business which sells Prescribed Goods and/or Competing Goods or renders Prescribed Services or Competing Services or in the course of which Prescribed Goods or Competing Goods are sold and/ or Prescribed Services or Competing Services are rendered; provided that I shall not be deemed to have breached my undertaking by reason of my – (i) holding shares in Company; or (ii) holding shares in any company the shares of which do not in aggregate constitute more than 5% (five per cent) of any class of the issued share capital of such company and which are listed on a recognised stock exchange if the shares owned by me or by my relatives (as defined in the Israeli Companies Act 1999) which do not in the aggregate constitute more than 5% (five per cent) of any class of the issued share capital of such company.6.2

	
  

	
  6.2.1

	
Not to solicit, on my own account or for any other person, the services of, or endeavor to entice away from Company any director, employee, consultant or a subcontractor of, or any other person related to Company, who during the period of 12 months prior to such termination occupied a senior or managerial position in relation to Company, and/or who was likely (in the opinion of Company) to be: (i) in possession of Confidential Information; or (ii) able to influence the customers’ connections of Company (whether or not such person would commit any breach of his contract of employment or engagement with Company).

 

  

  

  

 

	
  

	
   6.2.2

	
Furnish any information or advice (whether oral or written) to any prescribed customer that I intend to or will, directly or indirectly, be interested or engaged in or concerned with or employed by any company, close corporation, firm, undertaking or concern carried on in any of the Prescribed Areas which sells Prescribed Goods and/or Competing Goods or renders Prescribed Services and/or Competing Services or in the course of which Prescribed Goods and/or Competing Goods are sold and/or Prescribed Services or Competing Services are rendered during the Restraint Period; or

 

	
  

	
   6.2.3

	
Furnish any information or advice (whether oral or written) to any Prescribed Customer or use any other means or take any other action which is directly or indirectly designed, or in the ordinary course of events calculated, to result in any such Prescribed Customer terminating his association with Company and/or transferring his business to or purchasing any Prescribed Goods or Competing Goods or accepting the rendering of any Prescribed Services or Competing Services from any person other than the Company, or attempt to do so.

 

	
  

	
6.3

	
Solicit orders from Prescribed Customers for the Prescribed Goods and/or any Competing Goods and/or the Prescribed Services and/or any Competing Services; or canvass business in respect of the Prescribed Goods and/or any Competing Goods and/or the Prescribed Services and/or Competing Services from Prescribed Customers; or sell or otherwise supply any Prescribed Goods and/or Competing Goods to any Prescribed Customer; or render any Prescribed Services and/or Competing Services to any Prescribed Customer; or purchase any Prescribed Goods and/or Competing Goods from any Prescribed Supplier or accept the rendering of any Prescribed Services and/or Competing Services from it; or solicit appointment as a distributor, licensee, agent or representative of any Prescribed Supplier in respect of Prescribed Goods and/or Prescribed Services, including on behalf of or for the benefit of a Prescribed Supplier.

 

	
  

	
6.4

	
Each of the undertakings set out in this Section 6 (including those appearing in a single sub-section) is severable inter alia as to (i)  the nature of interest, act or activity; (ii) the categories of persons falling within the definition of Prescribed Customers; (iii) the categories of goods falling within the definition of the Prescribed Goods and Competing Goods; (iv) the categories of services falling within the definition of the Prescribed Services and Competing Services; and (v) the categories of persons falling within the definition of Prescribed Supplier.

	 

 

  

  

  

 

	
7.

	
It is agreed and recorded that, without prejudice to any right or remedy which is available to Company under any law or agreement, the unauthorized disclosure or use of any Confidential Information and Confidential Documents or a breach of my undertakings pursuant to Section 6 above, will cause immediate or irreparable injury to the Company and that the Company cannot be adequately compensated for such injury in monetary damages, then, in order to safeguard the Company from any possible breach of confidentiality, I consent in advance that Company will be permitted to obtain, from any court or tribunal, any temporary or permanent injunctive relief necessary to prevent such unauthorized disclosure or use, or threat of unauthorized disclosure or use.

 

	
8.

	
This Undertaking shall form an integral part of my employment agreement with the Company and a breach of any of my obligations hereunder, shall also constitute a material breach of such employment agreement.

 

	
9.

	
This Undertaking shall be interpreted and construed in accordance with the laws of the State of Israel and the competent courts in Tel-Aviv-Jaffa shall have exclusive jurisdiction for all matters pertaining or relating thereto.

 

	
10.

	
If any condition, term or covenant of this Undertaking shall at any time be held to be void, invalid or unenforceable, such condition, covenant or term shall be construed as severable and such holding shall attach only to such condition, covenant or term and shall not in any way affect or render void, invalid or unenforceable any other condition, covenant or term of this Undertaking, and this Undertaking shall be carried out as if such void, invalid or unenforceable term were not embodied herein.

 

	
11.

	
Unless specifically limited herein, my undertakings hereunder shall be valid: (i) during the term of my employment with the Company, and unless the Company waived such right in writing, following termination of my employment with the Company (and will survive such termination or expiration) without time limitation; (ii) in Israel or outside Israel, and - (iii) whether such undertakings may or may not be registered under any register prescribed by law.

               

	
 
/s/ Yishay Curelaru

Employee's signature   

	
January 31, 2016

      Datefsnn_ex1011.htm

EXHIBIT 10.1.1

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

 

2009 STOCK OPTION PLAN

1.           Purpose.

The purpose of this plan (the “Plan”) is to secure for Fusion Telecommunications International, Inc. (the “Company”) and its stockholders the benefits arising from capital stock ownership by employees, officers and directors of, and consultants or advisors to, the Company who are expected to contribute to the Company’s future growth and success. Except where the context otherwise requires, the term “Company” shall include all present and future subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or replaced from time to time (the “Code”). Those provisions of the Plan, which make express reference to Section 422, shall apply only to Incentive Stock Options (as that term is defined in the Plan).

2.           Type of Options and Administration.

(a)           Types of Options. Options granted pursuant to the Plan shall be authorized by action of the Board of Directors of the Company (or a Committee designated by the Board of Directors) and may be either incentive stock options (“Incentive Stock Options”) meeting the requirements of Section 422 of the Code or non-statutory options which are not intended to meet the requirements of Section 422 of the Code.

(b)           Administration. The Board of Directors will administer the Plan or a committee appointed by the Board of Directors of the Company, whose construction and interpretation of the terms and provisions of the Plan shall be final and conclusive. Unless the context otherwise requires, references in this Plan to the term “Committee” refer to either the Company’s Board of Directors or such committee. The delegation of powers to the Committee shall be consistent with applicable laws or regulations (including, without limitation, applicable state law and Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), or any successor rule (“Rule I 6b-3”)). The Committee may in its sole discretion grant options to purchase shares of the Company’s Common Stock, $0.01 par value per share (“Common Stock”) and issue shares upon exercise of such options as provided in the Plan. The Committee shall have authority, subject to the express provisions of the Plan, to construe the respective option agreements and the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, to determine the terms and provisions of the respective option agreements, which need not be identical, and to make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any option agreement in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. No director or person acting pursuant to authority delegated by the Board of Directors shall be liable for any action or determination under the Plan made in good faith. Subject to adjustment as provided in Section 15 below, the aggregate number of shares of Common Stock that may be subject to Options granted to any person in a calendar year shall not exceed 35% of the maximum number of shares which may be issued and sold under the Plan, as set forth in Section 4 hereof, as such section may be amended from time to time.

(c)           Applicability of Rule 16b-3.  Those provisions of the Plan which make express reference to Rule I 6b-3 shall apply to the Company only at such time as the Company’s Common Stock is registered under the Exchange Act, subject to Section 3(b), and then only to such persons as are required to file reports under Section 16(a) of the Exchange Act (a “Reporting Person”).

 

  

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3.           Eligibility.

(a)           General.  Options may be granted to persons who are, at the time of grant, employees, officers or directors of, or consultants or advisors to, the Company or any subsidiaries of the Company as defined in Sections 424(e) and 424(1) of the Code (“Participants”) provided, that Incentive Stock Options may only be granted to individuals who are employees of the Company (within the meaning of Section 3401(c) of the Code). A person who has been granted an option may, if he or she is otherwise eligible, be granted additional options if the Committee shall so determine.

(b)           Grant of Options to Reporting Persons.  The selection of a director or an officer who is a Reporting Person (as the terms “director” and “officer” are defined for purposes of Rule 16b-3) as a recipient of an option, the timing of the option grant, the exercise price of the option and the number of shares subject to the option shall be determined either (i) by the Board of Directors or (ii) by a committee consisting of two or more directors having full authority to act in the matter, each of whom shall be an “Independent Director” as defined by Rule 1.62-27 of the Code.

4.            Stock Subject to Plan.

The stock subject to options granted under the Plan shall be shares of authorized but unissued or reacquired Common Stock. Subject to adjustment as provided in Section 15 below, the maximum number of shares of Common Stock of the Company which may be issued and sold under the Plan is 7,000,000 shares. If an option granted under the Plan shall expire, terminate or is cancelled for any reason without having been exercised in full, the unpurchased shares subject to such option shall again be available for subsequent option grants under the Plan.

5.           Forms of Option Agreements.

As a condition to the grant of an option under the Plan, each recipient of an option shall execute an option agreement in such form not inconsistent with the Plan as may be approved by the Board of Directors. Such option agreements may differ among recipients.

6.           Purchase Price.

(a)           General.  The purchase price per share of stock deliverable upon the exercise of an option shall be determined by the Board of Directors at the time of grant of such option; provided, however, that in the case of an Incentive Stock Option, the exercise price shall not be less than 100% of the Fair Market Value (as hereinafter defined) of such stock, at the time of grant of such option, or less than 110% of such Fair Market Value in the case of options described in Section 11(b). “Fair Market Value” of a share of Common Stock of the Company as of a specified date for the purposes of the Plan shall mean the closing price of a share of the Common Stock on the principal securities exchange (including the Nasdaq National Market) on which such shares are traded on the day immediately preceding the date as of which Fair Market Value is being determined, or on the next preceding date on which such shares are traded if no shares were traded on such immediately preceding day, or if the shares are not traded on a securities exchange, Fair Market Value shall be deemed to be the average of the high bid and low asked prices of the shares in the over-the-counter market on the day immediately preceding the date as of which Fair Market Value is being determined or on the next preceding date on which such high bid and low asked prices were recorded. If the shares are not publicly traded, Fair Market Value of a share of Common Stock (including, in the case of any repurchase of shares, any distributions with respect thereto which would be repurchased with the shares) shall be determined in good faith by the Board of Directors. In no case shall Fair Market Value be determined with regard to restrictions other than restrictions which, by their terms, will never lapse.

(b)           Payment of Purchase Price.  Options granted under the Plan may provide for the payment of the exercise price by delivery of cash or a check to the order of the Company in an amount equal to the exercise price of such options, or by any other means which the Board of Directors determines are consistent with the purpose of the Plan and with applicable laws and regulations (including, without limitation, the provisions of Rule 1 6b-3 and Regulation T promulgated by the Federal Reserve Board).

 

  

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7.           Option Period.

Subject to earlier termination as provided in the Plan, each option and all rights thereunder shall expire on such date as determined by the Board of Directors and set forth in the applicable option agreement, provided, that such date shall not be later than (10) ten years after the date on which the option is granted.

 

  

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8.           Exercise of Options.

Each option granted under the Plan shall be exercisable either in full or in installments at such time or times and during such period as shall be set forth in the option agreement evidencing such option, subject to the provisions of the Plan. Subject to the requirements in the immediately preceding sentence, if an option is not at the time of grant immediately exercisable, the Board of Directors may (i) in the agreement evidencing such option, provide for the acceleration of the exercise date or dates of the subject option upon the occurrence of specified events, and/or (ii) at any time prior to the complete termination of an option, accelerate the exercise date or dates of such option.

9.           Nontransferability of Options.

No option granted under this Plan shall be assignable or otherwise transferable by the optionee except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder. An option may be exercised during the lifetime of the optionee only by the optionee. In the event an optionee dies during his employment by the Company or any of its subsidiaries, or during the three-month period following the date of termination of such employment, his option shall thereafter be exercisable, during the period specified in the option agreement, by his executors or administrators to the full extent to which such option was exercisable by the optionee at the time of his death during the periods set forth in Section 10 or Section 11(d).

10.           Effect of Termination of Employment or Other Relationship.

Except as provided in Section 11(d) with respect to Incentive Stock Options and except as otherwise determined by the Committee at the date of grant of an Option, and subject to the provisions of the Plan, an optionee may exercise an option at any time within three months following the termination of the optionee’s employment or other relationship with the Company or within one (1) year if such termination was due to the death or disability of the optionee but, except in the case of the optionee’s death, in no event later than the expiration date of the Option. If the termination of the optionee’s employment is for cause or is otherwise attributable to a breach by the optionee of an employment or confidentiality or non-disclosure agreement, the option shall expire immediately upon such termination. The Board of Directors shall have the power to determine what constitutes a termination for cause or a breach of an employment or confidentiality or non-disclosure agreement, whether an optionee has been terminated for cause or has breached such an agreement, and the date upon which such termination for cause or breach occurs. Any such determinations shall be final and conclusive and binding upon the optionee.

11.           Incentive Stock Options.

Options granted under the Plan, which are intended to be Incentive Stock Options, shall be subject to the following additional terms and conditions:

(a)           Express Designation.  All Incentive Stock Options granted under the Plan shall, at the time of grant, be specifically designated as such in the option agreement covering such Incentive Stock Options.

(b)           10% Stockholder.  If any employee to whom an Incentive Stock Option is to be granted under the Plan is, at the time of the grant of such option, the owner of stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (after taking into account the attribution of stock ownership rules of Section 424(d) of the Code), then the following special provisions shall be applicable to the Incentive Stock Option granted to such individual:

(i)           The purchase price per share of the Common Stock subject to such Incentive Stock Option shall not be less than 110% of the Fair Market Value of one share of

Common Stock at the time of grant; and

(ii)           The option exercise period shall not exceed five years from the date of grant.

 

  

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(c)           Dollar Limitation.  For so long as the Code shall so provide, options granted to any employee under the Plan (and any other incentive stock option plans of the Company) which are intended to constitute Incentive Stock Options shall not constitute Incentive Stock Options to the extent that such options, in the aggregate, become exercisable for the first time in any one calendar year for shares of Common Stock with an aggregate Fair Market Value, as of the respective date or dates of grant, of more than $100,000.

(d)           Termination of Employment, Death or Disability.  No Incentive Stock Option may be exercised unless, at the time of such exercise, the optionee is, and has been continuously since the date of grant of his or her option, employed by the Company, except that:

(i)           an Incentive Stock Option may be exercised within the period of three months after the date the optionee ceases to be an employee of the Company (or within such lesser period as may be specified in the applicable option agreement), provided that the agreement with respect to such option may designate a longer exercise period and that the exercise after such three-month period shall be treated as the exercise of a non-statutory option under the Plan;

(ii)           if the optionee dies while in the employ of the Company, or within three months after the optionee ceases to be such an employee, the Incentive Stock Option may be exercised by the Code or any successor provisions thereto) while in the employ of the Company, the Incentive Stock Option may be exercised within the period of one year after the date the optionee ceases to be such an employee because of such disability (or within such lesser period as may be specified in the applicable option agreement).

(iii)           if the optionee becomes disabled (within the meaning of Section 22(e)(30 of the Code or any successor provisions thereto) while in the employ of the Company, the Incentive Stock Option may exercised within the period of one year after the date the optionee ceases to b e such an employee because of such disability (or within such lesser period as may be specified in the applicable option agreement).

For all purposes of the Plan and any option granted hereunder, “employment” shall be defined in accordance with the provisions of Section 1.421-7(h) of the Income Tax Regulations (or any successor regulations). Notwithstanding the foregoing provisions, no Incentive Stock Option may be exercised after its expiration date.

12.           Additional Provisions.

(a)           Additional Option Provisions. The Board of Directors may, in its sole discretion, include additional provisions in option agreements covering options granted under the Plan, including without limitation restrictions on transfer, repurchase rights, rights of first refusal, commitments to pay cash bonuses, to make, arrange for or guaranty loans or to transfer other property to optionees upon exercise of options, or such other provisions as shall be determined by the Board of Directors; provided, that such additional provisions shall not be inconsistent with any other term or condition of the Plan and such additional provisions shall not cause any Incentive Stock Option granted under the Plan to fail to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

(b)           Acceleration, Extension, Etc. The Board of Directors may, in its sole discretion, (i) accelerate the date or dates on which all or any particular option or options granted under the Plan may be exercised or (ii) extend the dates during which all, or any particular, option or options granted under the Plan may be exercised; provided, however that no such extension shall be permitted if it would cause the Plan to fail to comply with Section 422 of the Code or with Rule 16b-3 (if applicable).

 

  

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13.           General Restrictions.

(a)           Investment Representations.  The Company may require any person to whom an option is granted, as a condition of exercising such option, to give written assurances in substance and form satisfactory to the Company to the effect that such person is acquiring the Common Stock subject to the option or award, for his or her own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws, or with covenants or representations made by the Company in connection with any public offering of its Common Stock, including any “lock-up” or other restriction on transferability.

(b)           Compliance with Securities Law.  Each option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such option upon any securities exchange or automated quotation system or under any state or federal law, or the consent or approval of any governmental or regulatory body, or that the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with the issuance or purchase of shares thereunder, such option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board of Directors. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification, or to satisfy such condition.

14.           Rights as a Stockholder.

The holder of an option shall have no rights as a stockholder with respect to any shares covered by the option (including, without limitation, any rights to receive dividends or non-cash distributions with respect to such shares) until the date of issue of a stock certificate to him or her for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

15. Adjustment Provisions for Recapitalizations, Reorganization, and Related Transactions.

(a)           Recapitalizations and Related Transactions. If, through or as a result of any recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, (i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Company, or (ii) additional shares or new or different shares or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, an appropriate and proportionate adjustment shall be made in (x) the maximum number and kind of shares reserved for issuance under or otherwise referred to in the Plan, (y) the number and kind of shares or other securities subject to any then outstanding options under the Plan, and (z) the price for each share subject to any then outstanding options under the Plan, without changing the aggregate purchase price as to which such options remain exercisable. Notwithstanding the foregoing, no adjustment shall be made pursuant to this Section 15 if such adjustment (i) would cause the Plan to fail to comply with Section 422 of the Code or with Rule I 6b-3 or (ii) would be considered as the adoption of a new plan requiring stockholder approval.

(b)           Reorganization Merger and Related Transactions.  All outstanding options under the Plan shall become fully exercisable for a period of sixty (60) days following the occurrence of any Trigger Event, whether or not such Options are then exercisable under the provisions of the applicable agreements relating thereto. For purposes of the Plan, a “Trigger Event” is any one of the following events:

(i)           the date on which shares of Common Stock are first purchased pursuant to a tender offer or exchange offer (other than such an offer by the Company, any subsidiary, any employee benefit plan of the Company or of any subsidiary or any entity holding shares or other securities of the Company for or pursuant to the terms of such plan), whether or not such offer is approved or opposed by the Company and regardless of the number of shares purchased pursuant to such offer;

(ii)           the date the Company acquires knowledge that any person or group deemed a person under Section 13d-3 of the Exchange Act (other than the Company, any subsidiary, any employee benefit plan of the Company or of any subsidiary or any entity holding shares of Common Stock or other securities of the Company for or pursuant to the terms of any such plan or any individual or entity or group or affiliate thereof which acquired its beneficial ownership interest prior to the date the Plan was adopted by the Board), in a transaction or series of transactions, has become the beneficial owner, directly or indirectly (with beneficial ownership determined as provided in Rule I 3d-3, or any successor rule, under the Exchange Act), of securities of the Company entitling the person or group to 50% or more of all votes (without consideration of the rights of any class or stock to elect directors by a separate class vote) to which all stockholders of the Company would be entitled in the election of the Board of Directors were an election held on such date;

 

  

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(iii)                           the date of approval by the stockholders of the Company of an agreement (a “reorganization agreement”) providing for:

(A)           The merger or consolidation of the Company with another corporation where the stockholders of the Company, immediately prior to the merger or consolidation, do not beneficially own, immediately after the merger or consolidation, shares of the corporation issuing cash or securities in the merger or consolidation entitling such stockholders to 80% or more of all votes (without consideration of the rights of any class of stock to elect directors by a separate class vote) to which all stockholders of such corporation would be entitled in the election of directors or where the members of the Board of Directors of the Company, immediately prior to the merger or consolidation, do not, immediately after the merger or consolidation, constitute a majority of the Board of Directors of the corporation issuing cash or securities in the merger or consolidation; or

(B)           The sale or other disposition of all or substantially all the assets of the Company.

(c)           Board Authority to Make Adjustments.  Any adjustments under this Section 15 will be made by the Board of Directors, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. No fractional shares will be issued under the Plan on account of any such adjustments.

16.            Merger. Consolidation, Asset Sale. Liquidation. etc.

(a)      General. In the event of any sale, merger, transfer or acquisition of the Company or substantially all of the assets of the Company in which the Company is not the surviving corporation, and provided that after the Company shall have requested the acquiring or succeeding corporation (or an affiliate thereof), that equivalent options shall be substituted and such successor corporation shall have refused or failed to assume all options outstanding under the Plan or issue substantially equivalent options, then any or all outstanding options under the Plan shall accelerate and become exercisable in full immediately prior to such event. The Committee will notify holders of options under the Plan that any such options shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the options will terminate upon expiration of such notice.

(b)      Substitute Options. The Company may grant options under the Plan in substitution for options held by employees of another corporation who become employees of the Company, or a subsidiary of the Company, as the result of a merger or consolidation of the employing corporation with the Company or a subsidiary of the Company, or as a result of the acquisition by the Company, or one of its subsidiaries, of property or stock of the employing corporation. The Company may direct that substitute options be granted on such terms and conditions as the Board of Directors considers appropriate in the circumstances.

17.           No Special Employment Rights.

Nothing contained in the Plan or in any option shall confer upon any optionee any right with respect to the continuation of his or her employment by the Company or interfere in any way with the right of the Company at any time to terminate such employment or to increase or decrease the compensation of the optionee.  

 

  

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18.           Other Employee Benefits.

Except as to plans which by their terms include such amounts as compensation, the amount of any compensation deemed to be received by an employee as a result of the exercise of an option or the sale of shares received upon such exercise will not constitute compensation with respect to which any other employee benefits of such employee are determined, including, without limitation, benefits under any bonus, pension, profit-sharing, life insurance or salary continuation plan, except as otherwise specifically determined by the Board of Directors.

19.           Amendment of the Plan.

(a)           The Board of Directors may at any time, and from time to time, modify or amend the Plan in any respect; provided, however, that if at any time the approval of the stockholders of the Company is required under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board of Directors may not effect such modification or amendment without such approval.

(b)           The modification or amendment of the Plan shall not, without the consent of an optionee, affect his or her rights under an option previously granted to him or her. With the consent of the optionee affected, the Board of Directors may amend outstanding option agreements in a manner not inconsistent with the Plan. The Board of Directors shall have the right to amend or modify (i) the terms and provisions of the Plan and of any outstanding Incentive Stock Options granted under the Plan to the extent necessary to qualify any or all such options for such favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options under Section 422 of the Code and (ii) the terms and provisions of the Plan and of any outstanding option to the extent necessary to ensure the qualification of the Plan under Rule 1 6b-3.

20.           Withholding.

(a)           The Company shall have the right to deduct from payments of any kind otherwise due to the optionee any federal, state or local taxes of any kind required by law to be withheld with respect to any shares issued upon exercise of options under the Plan. Subject to the prior approval of the Company, which may be withheld by the Company in its sole discretion, the optionee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company to withhold shares of Common Stock otherwise issuable pursuant to the exercise of an option or (ii) by delivering to the Company shares of Common Stock already owned by the optionee. The shares so delivered or withheld shall have a Fair Market Value equal to such withholding obligation as of the date that the amount of tax to be withheld is to be determined. An optionee who has made an election pursuant to this Section 20(a) may only satisfy his or her withholding obligation with shares of Common Stock which are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

(b)           The acceptance of shares of Common Stock upon exercise of an Incentive Stock Option shall constitute an agreement by the optionee (i) to notify the Company if any or all of such shares are disposed of by the optionee within two years from the date the option was granted or within one year from the date the shares were issued to the optionee pursuant to the exercise of the option, and (ii) if required by law, to remit to the Company, at the time of and in the case of any such disposition, an amount sufficient to satisfy the Company’s federal, state and local withholding tax obligations with respect to such disposition, whether or not, as to both (i) and (ii), the optionee is in the employ of the Company at the time of such disposition.

(c)           Notwithstanding the foregoing, in the case of a Reporting Person whose options have been granted in accordance with the provisions of Section 3(b) herein, no election to use shares for the payment of withholding taxes shall be effective unless made in compliance with any applicable requirements of Rule I 6b-3.

 

  

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21.           Cancellation and New Grant of Options, Etc.

The Board of Directors shall have the authority to effect, at any time and from time to time, with the consent of the affected optionees, (i) the cancellation of any or all outstanding options under the Plan and the grant in substitution therefore of new options under the Plan covering the same or different numbers of shares of Common Stock and having an option exercise price per share which may be lower or higher than the exercise price per share of the cancelled options or (ii) the amendment of the terms of any and all outstanding options under the Plan to provide an option exercise price per share which is higher or lower than the then-current exercise price per share of such outstanding options.

22.           Effective Date and Duration of the Plan.

(a)           Effective Date. The Plan shall become effective when adopted by the Board of Directors, but no Incentive Stock Option granted under the Plan shall become exercisable unless and until the Plan shall have been approved by the Company’s stockholders. If such stockholder approval is not obtained within twelve months after the date of the Board’s adoption of the Plan, no options previously granted under the Plan shall be deemed to be Incentive Stock Options. Amendments to the Plan not requiring stockholder approval shall become effective when adopted by the Board of Directors; amendments requiring stockholder approval (as provided in Section 19(a)) shall become effective when adopted by the Board of Directors, but no Incentive Stock Option granted after the date of such amendment shall become exercisable (to the extent that such amendment to the Plan was required to enable the Company to grant such Incentive Stock Option to a particular optionee) unless and until such amendment shall have been approved by the Company’s stockholders. If such stockholder approval is not obtained within twelve months of the Board’s adoption of such amendment, any Incentive Stock Options granted on or after the date of such amendment shall terminate to the extent that such amendment to the Plan was required to enable the Company to grant such option to a particular optionee. Subject to this limitation, options may be granted under the Plan at any time after the effective date and before the date fixed for termination of the Plan.

(b)           Termination. Unless sooner terminated in accordance with Section 16, the Plan shall terminate upon the earlier of (i) the close of business on the day next preceding the tenth anniversary of the date of its adoption by the Board of Directors, or (ii) the date on which all shares available for issuance under the Plan shall have been issued pursuant to the exercise or cancellation of options granted under the Plan. If the date of termination is determined under (i) above, then options outstanding on such date shall continue to have force and effect in accordance with the provisions of the instruments evidencing such options.

23.           Provision for Foreign Participants.

The Board of Directors may, without amending the Plan, modify awards or options granted to participants who are foreign nationals or employed outside the United States to recognize differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.  

24. Governing Law.

The provisions of this Plan shall be governed and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws.

Adopted by the Board of Directors on, March 26, 2009.

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