-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QSCjxue0P94FS1elGWvioZY4k6ERGDDQT5DgXgJKj6hDX/LEY5th01eOpD2bEMhK 6k01eDJf+I4hKmggORcvUA== /in/edgar/work/0000909518-00-000661/0000909518-00-000661.txt : 20001027 0000909518-00-000661.hdr.sgml : 20001027 ACCESSION NUMBER: 0000909518-00-000661 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20001026 EFFECTIVENESS DATE: 20001026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMVERSE TECHNOLOGY INC/NY/ CENTRAL INDEX KEY: 0000803014 STANDARD INDUSTRIAL CLASSIFICATION: [3661 ] IRS NUMBER: 133238402 STATE OF INCORPORATION: NY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-48640 FILM NUMBER: 746125 BUSINESS ADDRESS: STREET 1: 170 CROSSWAYS PARK DR CITY: WOODBURY STATE: NY ZIP: 11797 BUSINESS PHONE: 5166777200 MAIL ADDRESS: STREET 1: 170 CROSSWAYS PARK DRIVE STREET 2: 170 CROSSWAYS PARK DRIVE CITY: WOODBURY STATE: NY ZIP: 11797 S-8 1 0001.txt As filed with the Securities and Exchange Commission on October 26, 2000 Registration No. 333_____ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 COMVERSE TECHNOLOGY, INC. (Exact Name of Registrant as Specified in its Charter) NEW YORK 13-3238402 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) or Incorporation Organization) 170 CROSSWAYS PARK DRIVE WOODBURY, NEW YORK 11797 (516) 677-7200 (Address, Including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Offices) ISRAELI EMPLOYEE STOCK OPTION PLAN OF EXALINK LTD. 2000 U.S. STOCK OPTION PLAN OF EXALINK LTD. (Full Title of Plan) KOBI ALEXANDER PRESIDENT AND CHIEF EXECUTIVE OFFICER 170 CROSSWAYS PARK DRIVE WOODBURY, NEW YORK 11797 (516) 677-7200 (Name and Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) Copies to: STEPHEN M. BESEN, ESQ. WILLIAM F. SORIN WEIL, GOTSHAL & MANGES LLP SECRETARY 767 FIFTH AVENUE COMVERSE TECHNOLOGY, INC. NEW YORK, NEW YORK 10153 170 CROSSWAYS PARK DRIVE (212) 310-8000 WOODBURY, NEW YORK 11797 (516) 677-7200 CALCULATION OF REGISTRATION FEE =================================================================================================================================== Title of Each Class of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of Registered Registered(1) Offering Price Per Aggregate Offering Registration Fee Share(2) Price(2) - ----------------------------------------------------------------------------------------------------------------------------------- Common Stock, par value $.10 per share 715,617(3) $0.74 $529,556.58 $139.80 - ----------------------------------------------------------------------------------------------------------------------------------- Common Stock, par value $.10 per share 94,760(4) $14.81 $1,403,395.60 $370.50 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL 810,377 $1,932,952.18 $510.30 - ----------------------------------------------------------------------------------------------------------------------------------- (1) Plus such indeterminate number of shares of Common Stock of the Registrant as may be issued to prevent dilution resulting from stock dividends, stock splits or similar transactions in accordance with Rule 416 under the Securities Act of 1933. (2) Pursuant to Rule 457(h)(1) under the Securities Act of 1933, the proposed maximum aggregate offering price of the Common Stock was calculated on the basis of the price at which each outstanding option to purchase shares of the Registrant's Common Stock may be exercised under each Plan. (3) Issuable pursuant to the Israeli Employee Stock Option Plan of Exalink Ltd. (4) Issuable pursuant to the 2000 U.S. Stock Option Plan of Exalink Ltd. ===================================================================================================================================
NY2:\971848\01\KTVS01!.DOC\37994.0020 PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS ITEM 1. PLAN INFORMATION The documents containing the information specified in Part I of this Registration Statement on Form S-8 will be sent or given to the plan participants as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act"). Such documents are not required to be and are not filed with Securities and Exchange Commission (the "Commission") either as a part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424. These documents and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act. ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION Upon written or oral request, any of the documents incorporated by reference in Item 3 of Part II of this Registration Statement (which documents are incorporated by reference in this Section 10(a) Prospectus), other documents required to be delivered to eligible employees pursuant to Rule 428(b) of the Securities Act or additional information about the Israeli Employee Stock Option Plan and the 2000 U.S. Stock Option Plan and the administrators of such option plans are available without charge by contacting: Comverse Technology, Inc. 170 Crossways Park Drive Woodbury, New York 11797 (516) 677-7200 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Commission by Comverse Technology, Inc. (the "Company") (File No. 0-15502) are incorporated herein by reference and made a part hereof: o Annual Report on Form 10-K for the year ended January 31, 2000 (except Items 7 and 14); o Amended Annual Report on Form 10-K/A for the year ended January 31, 2000; o Quarterly Report on Form 10-Q for the quarter ended April 30, 2000; o Current Report on Form 8-K filed with Commission on July 5, 2000; o Current Report on Form 8-K filed with the Commission on July 28, 2000; o Quarterly Report on Form 10-Q for the quarter ended July 31, 2000; o Current Report on Form 8-K filed with the Commission on September 29, 2000; and o Description of our common stock contained in our registration statement on Form 8-A filed with the Commission on March 17, 1987, as amended. All documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities covered by this Registration Statement have been sold or which deregisters all of the securities then remaining unsold, will be deemed to be incorporated by reference in this Registration Statement and to be a part of this document from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this document will be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in this document or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this document modifies or supersedes such statement. Any such statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Business Corporation Law of the State of New York ("BCL") provides that if a derivative action is brought against a director or officer, the Registrant may indemnify him or her against amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by him or her in connection with the defense or settlement of such action, if such director or officer acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the Registrant, except that no indemnification shall 3 be made without court approval in respect of a threatened action, or a pending action settled or otherwise disposed of, or in respect of any matter as to which such director or officer has been found liable to the Registrant. In a nonderivative action or threatened action, the BCL provides that the Registrant may indemnify a director or officer against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees incurred by him or her in defending such action if such director or officer acted in good faith for a purpose which he or she reasonably believed to be in the best interests of the Registrant. Under the BCL, a director or officer who is successful, either in a derivative or nonderivative action, is entitled to indemnification as outlined above. Under any other circumstances, such director or officer may be indemnified only if certain conditions specified in the BCL are met. The indemnification provisions of the BCL are not exclusive of any other rights to which a director or officer seeking indemnification may be entitled pursuant to the provisions of the certificate of incorporation or the by-laws of a corporation or, when authorized by such certificate of incorporation or by- laws, pursuant to a shareholders' resolution, a directors' resolution or an agreement providing for such indemnification. The above is a general summary of certain indemnity provisions of the BCL and is subject, in all cases, to the specific and detailed provisions of Sections 721-725 of the BCL. The Registrant has included in its Certificate of Incorporation, a provision that no director of the Registrant shall be personally liable to the Registrant or its shareholders in damages for any breach of duty as a director, provided that such provision shall not be construed to eliminate or limit the liability of any director if a judgment or other final adjudication adverse to him establishes that his acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law, that he personally gained in fact a financial profit or other advantage to which he was not legally entitled or that his acts violated Section 719 of the BCL. The By-Laws of the Registrant further provide that the Registrant shall indemnify its directors and officers, and shall advance their expenses in the defense of any action for which indemnification is sought, to the full extent permitted by the BCL and when authorized by resolution of the shareholders or directors of the Registrant or any agreement providing for such indemnification or advancement of expenses, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to him established that his acts were committed in bad faith or were the result of active and deliberate dishonesty material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. The Registrant has entered into indemnity agreements with each of its directors and officers pursuant to the foregoing provisions of its By-Laws. The Registrant maintains insurance policies insuring each of its directors and officers against certain civil liabilities, including liabilities under the Securities Act. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1 Excerpts from certificate of incorporation, as amended. (Incorporated by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the year ended December 31, 1994). 4.2 Excerpts from by-laws, as amended. (Incorporated by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the year ended December 31, 1992). 4 4.3 Specimen stock certificate. (Incorporated by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the year ended December 31, 1992). *4.4 Israeli Employee Stock Option Plan of Exalink Ltd. *4.5 2000 U.S. Stock Option Plan of Exalink Ltd. *5.1 Opinion of William F. Sorin, Esq. *23.1 Consent of William F. Sorin, Esq. (included in Exhibit 5.1 hereto). *23.2 Consent of Deloitte & Touche LLP *24.1 Powers of Attorney (included in the signature pages of this Registration Statement). - -------------------------------- * Filed herewith. 5 ITEM 9. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement; (2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate 6 jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 7 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, as of October 25, 2000. COMVERSE TECHNOLOGY, INC. By: /s/ DAVID KREINBERG ---------------------------------- David Kreinberg Chief Financial Officer 8 POWER OF ATTORNEY We, the undersigned directors and officers of Comverse Technology, Inc. (the "Company") and each of us, do hereby constitute and appoint William F. Sorin and David Kreinberg, or either of them, our true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, to do any and all acts and things in our names and on our behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities indicated above, which said attorneys or agents, or either of them, may deem necessary or advisable to enable the Company to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, and any and all amendments (including post-effective amendments) to this Registration Statement, in connection with the public offering of the common stock of the Company, including specifically but without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below, any and all amendments (including post-effective amendments) to such Registration Statement; and we do hereby ratify and confirm all that the said attorneys and agents, or their substitute or substitutes, or either of them, shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
SIGNATURE CAPACITY DATE --------- -------- ---- /S/ KOBI ALEXANDER Chairman, President and Chief Executive October 25, 2000 - ---------------------- Officer and Director (Principal Executive Kobi Alexander Officer) /S/ DAVID KREINBERG Chief Financial Officer October 25, 2000 - ---------------------- (Principal Financial and Accounting Officer) David Kreinberg /S/ ZVI ALEXANDER Director October 25, 2000 - ---------------------- Zvi Alexander /S/ ITSIK DANZIGER Director October 25, 2000 - ---------------------- Itsik Danziger /S/ FRANCIS E. GIRARD Director October 25, 2000 - ---------------------- Francis E. Girard /S/ SAM OOLIE Director October 25, 2000 - ---------------------- Sam Oolie /S/ WILLIAM F. SORIN Secretary and Director October 25, 2000 - ---------------------- William F. Sorin /S/ SHAULA A. YEMINI Director October 25, 2000 - ---------------------- Shaula A. Yemini /S/ JOHN H. FRIEDMAN Director October 25, 2000 - ---------------------- John H. Friedman
9 Exhibits - -------- Exhibit No. Description of Exhibit - ----------- ---------------------- 4.1 Excerpts from certificate of incorporation, as amended. (Incorporated by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the year ended December 31, 1994). 4.2 Excerpts from by-laws, as amended. (Incorporated by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the year ended December 31, 1992). 4.3 Specimen stock certificate. (Incorporated by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K under the Securities Exchange Act of 1934 for the year ended December 31, 1992). *4.4 Israeli Employee Stock Option Plan of Exalink Ltd. *4.5 2000 U.S. Stock Option Plan of Exalink Ltd. *5.1 Opinion of William F. Sorin, Esq. *23.1 Consent of William F. Sorin, Esq. (included in Exhibit 5.1 hereto). *23.2 Consent of Deloitte & Touche LLP *24.1 Powers of Attorney (included in the signature pages of this Registration Statement). - -------------------------------- * Filed herewith. 10 EX-4.4 2 0002.txt EXHIBIT 4.4 EXALINK LTD. THE ISRAELI EMPLOYEE STOCK OPTION PLAN 1. NAME This Plan, as amended from time to time, shall be known as the EXALINK LTD. Israeli Employee Stock Option Plan (the "ISOP"). 2. PURPOSE OF THE ISOP The ISOP is intended as an incentive to retain, in the employ of EXALINK LTD. (the "COMPANY") and its Subsidiaries, persons of training, experience, and ability, to attract new employees directors, consultants and service providers, whose services are considered valuable, to encourage the sense of proprietorship of such persons, and to stimulate the active interest of such persons in the development and financial success of the Company by providing them with opportunities to purchase Shares in the Company, pursuant to the ISOP approved by the board of directors of the company (the "BOARD"). Options granted under the ISOP may or may not contain such terms as will qualify such Options for the special tax treatment under section 102 of the Israeli Tax Ordinance ("SECTION 102"). Options containing such terms as will qualify them for the special tax treatment under section 102 of the Israeli Tax Ordinance, shall be referred to herein as "102 OPTIONS". Options that do not contain such terms as will qualify them for the special tax treatment under section 102 of the Israeli Tax Ordinance, shall be referred to herein as "3(I) OPTIONS". All Options granted hereunder, whether together or separately, shall be hereinafter referred to as "OPTIONS". The term "SUBSIDIARY" shall mean for the purposes of the ISOP: any company (other than the Company) in an unbroken chain of companies beginning with the Company if, at the time of granting an option, each of the companies other than the last company in the unbroken chain owns shares possessing fifty percent (50%) or more of the total combined voting power of all classes of shares in one of the other companies in such chains. 3. ADMINISTRATION OF THE ISOP The Board or a committee appointed and maintained by the Board for such purpose (the "COMMITTEE") shall have the power to administer the ISOP. Notwithstanding the above, the Board shall automatically have a residual authority if no Committee shall be constituted or if such Committee shall cease to operate for any reason whatsoever. The Committee shall consist of such number of members (not less than two (2) in number) as may be fixed by the Board. The Committee shall select one of its members as its chairman (the "CHAIRMAN") and shall hold its meetings at such times and places as the Chairman shall determine. The Committee shall keep records of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable. Any member of such Committee shall be eligible to receive Options under the ISOP while serving on the Committee, unless otherwise specified herein. The Committee shall recommend the Board and the board shall have full power and authority regarding: 3.1 The participants. 3.1.1 The terms and provisions of respective Option agreements (which need not be identical) including, but not limited to, the number of shares in the Company to be covered by each Option, provisions concerning the time or times when and the extent to which the Options may be exercised and the nature and duration of restrictions as to transferability or restrictions constituting substantial risk of forfeiture. 3.1.2 Acceleration of the right of an Optionee to exercise, in whole or in part, any previously granted Option. The Committee shall have full power and authority to: 3.1.3 To designate Options as 102 Options or 3(i) options. 3.1.4 Interpret the provisions and supervise the administration of the ISOP; 3.1.5 Determine the Fair Market Value (as defined below) of the Shares (as defined below). 3.1.6 Determine any other matter that is necessary or desirable for, or incidental to administration of the ISOP. Notwithstanding the above, the identity of each of the Optionees and the number of Shares covered by each Option must be ratified by the Board. 14 The Board shall have the authority to grant, in its discretion, to the holder of an outstanding Option, in exchange for the surrender and cancellation of such Option, a new Option having a purchase price equal to, lower than or higher than the Purchase Price provided in the Option so surrendered and canceled, and containing such other terms and conditions as the Committee may prescribe in accordance with the provisions of the ISOP. All decisions and selections made by the Board or the Committee pursuant to the provisions of the ISOP shall be made by a majority of its members except that no member of the Board or the Committee shall vote on, or be counted for quorum purposes, with respect to any proposed action of the Board or the Committee relating to any Option to be granted to that member. Any decision reduced to writing and signed by a majority of the members who are authorized to make such decision shall be fully effective as if it had been made by a majority at a meeting duly held. The interpretation and construction by the Committee of any provision of the ISOP or of any Option thereunder shall be final and conclusive unless otherwise determined by the Board. Subject to the company's decision and to all approvals legally required, including, but not limited to the provisions of the Israeli Companies Law each member of the Board or the Committee shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the ISOP unless arising out of such member's own fraud or bad faith, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the member may have as a director or otherwise under the Company's Articles of Association, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise. 3.2. "FAIR MARKET VALUE" means, as of any date, the value of a Share determined as follows: (i) If the Shares are listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market system, or The Nasdaq SmallCap Market of the Nasdaq Stock Market , the Fair Market Value shall be the closing sales price for such Shares (or the closing bid, if no sales were reported), as quoted on such exchange or system for the last market trading day prior to time of determination, as reported in the Wall Street Journal, or such other source as the Administrator deems reliable. 15 (ii) If the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the Shares on the last market trading day prior to the day of determination, or; (iii) In the absence of an established market for the Shares, the Fair Market Value thereof shall be determined in good faith by the Committee. 4. DESIGNATION OF PARTICIPANTS The persons eligible for participation in the ISOP as recipients of Options shall include any employees, directors, consultants and service providers of the Company or of any Subsidiary of the Company. The grant of an Option hereunder shall neither entitle the recipient thereof to participate nor disqualify him from participating in, any other grant of Options pursuant to the ISOP or any other option or stock plan of the Company or any of its affiliates. To the extent applicable and anything in the ISOP to the contrary notwithstanding, all grants of Options to directors and office holders ("Nosei Misra" - as such term is defined in the Israeli Companies Law -(the "COMPANIES LAW")) shall be authorized and implemented in accordance with the provisions of the Companies Law, as in effect from time to time. 5. TRUSTEE 102 Options which shall be granted under the ISOP and/or any Shares issued upon exercise of such 102 Options and/or other shares received subsequently following any realization of rights, shall be issued to a Trustee nominated by the Committee, and approved in accordance with the provisions of Section 102 (the "TRUSTEE") and held for the benefit of the Optionees. 102 Options and any Shares received subsequently following exercise of 102 Options, shall be held by the Trustee for a period of not less than two years (24 months) from the Date Of Grant. 3(i) Options granted under the ISOP, may be issued to a Trustee nominated by the Committee, and held for the benefit of the Optionees. 16 Anything to the contrary notwithstanding, the Trustee shall not release any Options which were not already exercised into Shares by the Optionee or release any Shares issued upon exercise of Options prior to the full payment of the Optionee's tax liabilities arising from Options which were granted to him and/or any Shares issued upon exercise of such Options. Upon receipt of the Option, the Optionee will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with the ISOP, or any Option or Share granted to him thereunder. 6. SHARES RESERVED FOR THE ISOP; RESTRICTION THEREON 6.1 The Company has reserved 1,500,000 after split and bonus shares (1:100) authorized but unissued Ordinary Shares par value NIS 0.01 each in the Share capital of the Company (the "SHARES"), for the purposes of the ISOP and for the purpose of the Exalink Ltd U.S Stock Option Plan (the "USSOP"), subject to adjustment as set forth in paragraph 8 below. Any of such Shares covered by the ISOP, which remain unissued and are not subject to outstanding Options at the termination of the ISOP, shall cease to be reserved for the purpose of the ISOP. Should any Option for any reason expire or be canceled prior to its exercise or relinquishment in full, the Shares therefore subject to such Option may again be subjected to an Option under the ISOP. 6.2 An Optionee who purchased Shares hereunder upon exercise of Options shall have no voting rights as a shareholder (in any and all matters whatsoever) until the consummation of a public offering of the Company's shares ("THE IPO"). Until an IPO, such Shares shall be voted by an irrevocable Proxy (attached hereto as EXHIBIT "C" to the Option Agreement)(the "PROXY") pursuant to the directions of the Board, such Proxy to be assigned to the person or persons designated by the Board. Such person or persons designated by the Board shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him/her, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the voting of such Proxy unless arising out of such member's own fraud or bad faith, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the person(s) may have as a director or otherwise under the Company's Articles of Association, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise. 17 6.3 Each Option granted pursuant to the Plan, shall be evidenced by a written agreement between the Company and the Optionee ("THE OPTION AGREEMENT"), in such form as the Board or the Committee shall from time to time approve. Each Option Agreement shall state a number of the Shares to which the Option relates and the type of Option granted thereunder (whether a 102 Option or a 3(i) Option). 6.4 All Shares allocated or issued upon exercise of the Options shall entitle the holder thereof to receive dividends and other distributions thereon. 7. PURCHASE PRICE 7.1 The purchase price of each Share subject to an Option granted or any portion thereof shall be determined by the Committee in its sole and absolute discretion in accordance with applicable law, subject to any guidelines as may be determined by the Board from time to time. Each Option Agreement will contain the Purchase Price determined for each Optionee, and in any event not less than the nominal value of the shares subject to the Option. ("THE PURCHASE PRICE"). 7.2 The Purchase Price shall be payable upon the exercise of the Option in a form satisfactory to the Committee, including without limitation, by cash or check. The Committee shall have the authority to postpone the date of payment on such terms as it may determine. 8. ADJUSTMENTS Upon the occurrence of any of the following described events, Optionee's rights to purchase Shares under the ISOP shall be adjusted as hereafter provided: 8.1 In the event of a merger of the Company with or into another company (the "SUCCESSOR COMPANY"), or the sale of all or substantially all of the assets or shares of the Company (the "TRANSACTION") while unexercised Options remain outstanding under the ISOP, then each Unexercised Option shall be assumed, or substituted for by an appropriate number of shares, of each class of shares or other securities of the Successor Company (or a parent or subsidiary of the Successor Company) which were distributed to the shareholders of the Company in respect of such shares. In the case of such assumption and/or substitution of shares, appropriate adjustments shall be made in the Purchase Price to reflect such action, and all other terms and conditions of the Option Agreements, such as the Vesting Dates, shall remain in force, all as will be determined by the Committee whose determination shall be final. 18 8.2 Notwithstanding the above and subject to any applicable law, unless the Board or the Committee determines otherwise with respect to certain Option Agreements, there shall be a clause in each Option Agreement instructing that if in any such Transaction as described in section 8.1 above, the Successor Company (or parent or subsidiary of the Successor Company) does not agree to assume or substitute for the Options, all Unexercised Options shall be expired as of the date of the Transaction. 8.3 For the purposes of section 8.1 above, the Option shall be considered assumed or substituted if, following the merger or acquisition, the Option confers the right to purchase or receive, for each Share of Optioned Shares immediately prior to the Transaction, the consideration (whether shares, options, cash, or other securities or property) received in the Transaction by holders of Shares for each Share held on the effective date of the Transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Transaction is not solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Option to be solely ordinary shares (or their equivalent) of the Successor Company or its parent or subsidiary equal in Fair Market Value to the per Share consideration received by holders of a majority of the outstanding Shares in the Transaction; and provided further that the Committee may determine, in its discretion and subject to the boards approval, that in lieu of such assumption or substitution of Options for options of the Successor Company or its parent or subsidiary, such Options will be substituted for any other type of asset or property including cash which is fair under the circumstances. 8.3 If the Company is liquidated or dissolved while unexercised Options remain outstanding under the ISOP, then the Board in its own discretion may determine that all such outstanding Options may be exercised in full by the Optionees as of the effective date of any such liquidation or dissolution of the Company without regard to the vesting provisions hereof. If the Board determines that the outstanding Options may be exercised, the Optionees, giving notice in writing to the Company of their intention to so, may exercise all such outstanding Options in full. 19 8.5 If the outstanding shares of the Company shall at any time be changed or exchanged by declaration of a stock dividend (bonus shares), stock split, combination or exchange of shares, recapitalization, or any other like event by or of the Company, and as often as the same shall occur, then the number, class and kind of Shares subject to the ISOP or subject to any Options therefore granted, and the purchase prices, shall be appropriately and equitably adjusted so as to maintain the proportionate number of Shares without changing the aggregate purchase price, provided, however, that no adjustment shall be made by reason of the distribution of subscription rights (rights offering) on outstanding shares. Upon happening of any of the foregoing, the class and aggregate number of Shares issuable pursuant to the ISOP (as set forth in paragraph 6 hereof), in respect of which Options have not yet been exercised, shall be appropriately adjusted, all as will be determined by the Board whose determination shall be final. 8.6 Anything herein to the contrary notwithstanding, if prior to the completion of an IPO all or substantially all of the shares of the Company are to be sold, or upon a Transaction reorganization or the like, all or substantially all of the shares of the Company are to be exchanged for securities of another Company, then each Optionee shall be obliged to sell or exchange, as the case may be, any Shares such Optionee purchased under the ISOP, in accordance with the instructions issued by the Board in connection with the Transaction, whose determination shall be final. 20 9. PURCHASE FOR INVESTMENT The Company's obligation to issue Shares upon exercise of an Option granted under the Plan is expressly conditioned upon (a) the Company's completion of any registration or other qualifications of such Shares under any state and/or federal law, rulings or regulations or (b) representations and undertakings by the Optionee (or his legal representative, heir or legatee, in the event of the Optionee's death) to assure that the sale of the Shares complies with any registration exemption requirements which the Company in its sole discretion shall deem necessary or advisable. Such required representations and undertakings may include representations and agreements that such Optionee (or his legal representative, heir, or legatee): (a) is purchasing such Shares for investment and not with any present intention of selling or otherwise disposing thereof; and (b) agrees to have placed upon the face and reverse of any certificates evidencing such Shares a legend setting forth (i) any representations and undertakings which such Optionee has given to the Company or a reference thereto and (ii) that, prior to effecting any sale or other disposition of any such Shares, the Optionee must furnish to the Company an opinion of counsel, satisfactory to the Company, that such sale or disposition will not violate the applicable laws, rules and regulations whether of the state of Israel or of the United States or any other State having jurisdiction over the Company and/or the Optionee requirements of State and federal laws and regulatory agencies. 10. TERM AND EXERCISE OF OPTIONS 10.1 Options shall be exercised by the Optionee by giving written notice to the Company, in such form and method as may be determined by the Company and the Trustee and when applicable, in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice by the Company at its principal office. The notice shall specify the number of Shares with respect to which the Option is being exercised. 10.2 Options, to the extent not previously exercised, shall terminate forthwith upon the earlier of: (i) the date set forth in Section 4 of exhibit B to the Option Agreement; and - (ii) the expiration of any extended period in any of the events set forth in Section 9.7 below (and such earlier date shall be hereinafter referred to as the "EXPIRATION DATE"). 10.3 Each Option shall be exercisable following the Vesting Periods and subject to the provisions of the ISOP for the number of Shares as shall be provided in Exhibit B to the Option Agreement. However no Option shall be exercisable after the Expiration Date. 21 10.4 Options granted under the ISOP shall not be transferable by Optionees other than by will or laws of descent and distribution, and during an Optionee's lifetime shall be exercisable only by that Optionee. 10.5 The Options may be exercised by the Optionee in whole at any time or in part from time to time, to the extent that the Options become vested and excercisable, prior to the Expiration Date, and provided that, subject to the provisions of Section 10.7below and unless the Board or Committee resolves otherwise, the Optionee is an employee of the Company or any of its Subsidiaries or continuing to provide services to such entities, at all times during the period beginning with the granting of the Option and ending upon the date of exercise. 10.6 Subject to the provisions of Section 10.7 below, in the event of termination of Optionee's employment with the Company or any of its subsidiaries, or if applicable, the termination of services given by the Optionee to the Company or any of its subsidiaries all Options granted to him will immediately expire. A notice of termination of employment or services shall be deemed to constitute termination of employment or services. 10.7 Notwithstanding anything to the contrary in Section 10.6 above, an Option may be exercised after the date of termination of Optionee's service or employment with the Company or any subsidiary of the Company only with respect to the number of Options already vested and unexpired at the time of such termination according to the vesting and expiration periods of the Options set forth in exhibit B of such Optionee's Option Agreement, and only provided that either: 10.71 prior to the date of such termination, the Board or Committee shall authorize an extension of the terms of all or part of the Options beyond the date of such termination for a period not to exceed the period during which the Options by their terms would otherwise have been exercisable; or - 10.7.2 Such termination is without Cause (as defined below), in which event the Options may be exercised within a period of 90 days from the date of such termination; or - 10.7.3 Termination is the result of death or disabillity of the Optionee, in which event the Options may be exercised within a period of 12 (twelve) months from such date of termination. 22 The term "CAUSE" shall mean (i) conviction of any felony involving moral turpitude or affecting the Company; (ii) any refusal to carry out a reasonable directive of the CEO which involves the business of the Company or its affiliates and was capable of being lawfully performed; (iii) embezzlement of funds of the Company or its affiliates; (iv) any breach of the Optionee's fiduciary duties or duties of care of the Company; including without limitation disclosure of confidential information of the Company; and (v) any conduct (other than conduct in good faith) as reasonably determined by the Board of Directors to be materially detrimental to the Company. 10.8 Subject to the provisions of Section 11 below, the holders of Options shall not have any of the rights or privileges of shareholders of the Company in respect of any Shares purchasable upon the exercise of any part of an Option, nor shall they be deemed to be a class of shareholders or creditors of the Company for purpose of the operation of section 350 and 351 of the Companies Law or successor to such section, until registration of the Optionee as holder of such Shares in the Company's register of members upon exercise of the Option in accordance with the provisions of the ISOP. 10.9 Any form of Option Agreement authorized by the ISOP may contain such other provisions as the Committee may, from time to time, deem advisable. Without limiting the foregoing, the Committee may, with the consent of the Optionee, from time to time cancel all or any portion of any Option then subject to exercise, and the Company's obligation in respect of such Option may be discharged by (i) payment to the Optionee of an amount in cash equal to the excess, if any, of the Fair Market Value of the Shares at the date of such cancellation subject to the portion of the Option so canceled over the aggregate Purchase Price of such Shares, (ii) the issuance or transfer to the Optionee of Shares of the Company with a Fair Market Value at the date of such transfer equal to any such excess, or (iii) a combination of cash and shares with a combined value equal to any such excess, all as determined by the Committee in its sole discretion. 10.10 Options shall vest (i.e., Options shall become exercisable) at the dates set forth in Section 3 of EXHIBIT "B" to the Option Agreement (the "VESTING DATE"). An Option may be subject to such other terms and conditions on the time or times when it may be exercised, as the Committee or the Board may deem appropriate. 11. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL 11.1 Notwithstanding anything to the contrary in the Articles of Association of the Company, none of the Optionees shall have a right of first refusal in relation with any sale of shares in the Company. 23 11.2 Sale of Shares by the Optionee shall be subject to the right of first refusal of other shareholders as set forth in the Articles of Association of the Company. In the event that the Articles of Association of the Company shall not contain any provision regarding rights of first refusal, then, unless otherwise provided by the Board, until such time as the Company shall effectuate an IPO, the sale of Shares issuable upon exercise of an Option, shall be subject to a right of first refusal on the part of the Repurchaser(s). Repurchaser(s) means (i) the Company, if permitted by applicable laws; (ii) if the Company is not permitted by applicable laws, then any affiliate or Subsidiary of the Company designated by a unanimous decision is reached by the Board of Directors; or (iii) if no unanimous decision is reached by the Board of Directors , then the company existing shareholders (save, for avoidance of doubt , for other Optionees who already exercised their Options), pro rata in accordance with their shareholding. The Optionee shall give a notice of sale ("THE NOTICE") to the Company in order to offer the Shares to the Repurchaser(s), and the Company will forward the Notice to the existing shareholders. The Notice shall specify the Number of Shares offered for sale, the price per Share, the payment terms the name of each proposed purchaser or other Transferee ("PROPOSED TRANSFEREE"). The Repurchaser(s) will be entitled for 30 days from the day of receipt of the Notice ("THE 30 DAYS PERIOD"), to purchase all or part of the offered Shares. If by the end of the 30 Days Period not all of the offered Shares have been purchased by the Repurchaser(s), the Optionee will be entitled to sell such Shares at any time during the 90 days following the end of the 30 Days Period on terms not more favorable than those set out in the Notice, provided that the proposed Transferee agrees in writing that the provisions of this section shall continue to apply to the Shares in the hands of such proposed Transferee. 24 12. VESTING OF OPTIONS Options shall vest (i.e., Options shall become exercisable) at the dates set forth in Section 3 of exhibit B to the Option Agreement (the "VESTING PERIODS"). An Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Optionees may vary. 13. DIVIDENDS With respect to all Shares (in contrast to unexercised Options) issued upon the exercise of Options purchased by the Optionee and held by the Trustee, the Optionee shall be entitled to receive dividends in accordance with the quantity of such Shares, and subject to any applicable taxation on distribution of dividends. During the period in which Shares issued to the Trustee on behalf of a Optionee are held by the Trustee, the cash dividends paid with respect thereto shall be paid directly to the Optionee. 14. ASSIGNABILITY AND SALE OF OPTIONS No Option, purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect to them given to any third party whatsoever, and during the lifetime of the Optionee each and all of such Optionee's rights to purchase Shares hereunder shall be exercisable only by the Optionee. Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void. As long as the Shares are held by the Trustee in favor of the Optionee, than all rights the last possesses over the Shares are personal, can not be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution. 15. TERM OF THE ISOP The ISOP shall be effective as of the date that it is adopted by the Board and shall terminate at the end of ten (10) years from such day of adoption. 16. AMENDMENTS OR TERMINATION Board may, at any time and from time to time, but after consultation with the Trustee, amend, alter or discontinue the ISOP, except that no amendment or alteration shall be made which would impair the rights of the holder of any Option therefore granted, without his written consent. Termination of the ISOP shall not affect the committee's and/or the Board's ability to exercise the powers granted to it hereunder with respect to the Options granted under the ISOP prior to the date of such termination. 25 17. GOVERNMENT REGULATIONS The ISOP, the granting and exercise of Options hereunder, and the obligation of the Company to sell and deliver Shares under such Options, shall be subject to all applicable laws, rules, and regulations, whether of the State of Israel or of the United States or any other State having jurisdiction over the Company and the Optionee, including the registration of the Shares under the United States Securities Act of 1933, and to such approvals by any governmental agencies or national securities exchanges as may be required. 18. CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES Neither the ISOP nor the Option Agreement with the Optionee shall impose any obligation on the Company or a Subsidiary thereof, to continue any Optionee in its employ, or the hiring by the Company of the Optionee's services and nothing in the ISOP or in any Option granted pursuant thereto shall confer upon any Optionee any right to continue in the employ or service of the Company or a Subsidiary thereof or restrict the right of the Company or a Subsidiary thereof to terminate such employment or service at any time. 19. GOVERNING LAW & JURISDICTION The ISOP shall be governed by and construed and enforced in accordance with the laws of the State of Israel applicable to contracts made and to be performed therein, without giving effect to the principles of conflict of laws. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matters pertaining to the ISOP. 20. TAX CONSEQUENCES Any tax consequences arising from the grant or exercise of any Option, from the payment for Shares covered thereby or from any other event or act (of the Company, the Trustee or the Optionee), hereunder, shall be borne solely by the Optionee. The Company and/or its subsidiaries and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Optionee shall agree to indemnify the Company and/or the subsidiaries and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee. The Committee and/or the Trustee shall not be required to release any Share certificate to an Optionee until all required payments have been fully made. 26 21. NON-EXCLUSIVITY OF THE ISOP The adoption of the ISOP by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock Options otherwise then under the ISOP, and such arrangements may be either applicable generally or only in specific cases. For the avoidance of doubt, prior grant of options to Optionees of the Company under their employment agreements, and not in the framework of any previous option plan, shall not be deemed an approved incentive arrangement for the purpose of this Section. 22. MULTIPLE AGREEMENTS The terms of each Option may differ from other Options granted under the ISOP at the same time, or at any other time. The Committee may also grant more than one Option to a given Optionee during the term of the Option Plan, either in addition to, or in substitution for, one or more Options previously granted to that Optionee. 27 EX-4.5 3 0003.txt EXHIBIT 4.5 EXALINK LTD. 2000 U.S. STOCK OPTION PLAN 1. NAME This Plan, as amended from time to time, shall be known as the EXALINK LTD. 2000 U.S. Stock Option Plan (the "USSOP"). 2. PURPOSE OF THE OPTION PLAN The USSOP is intended to provide an incentive and to retain, in the employ of EXALINK LTD. (the "COMPANY") and its subsidiaries, persons of training, experience and ability, to attract new employees, directors and consultants whose services are considered valuable, to encourage the sense of proprietorship of such persons, and to stimulate the active interest of such persons in the development and financial success of the Company by providing them with opportunities to purchase shares of the Company, pursuant to the USSOP approved by the board of directors of the Company (the "BOARD"). Options granted to the Optionees may or may not contain such terms as will qualify such options as Incentive Stock Options ("ISOS") within the meaning of Section 422 (b) of the United States Internal Revenue Code of 1986, as amended (the "CODE"). Options that do not contain terms as will qualify them as ISOs shall be referred to herein as Non-Qualified Stock Options ("NQSOS"). All options granted hereunder, whether aggregately or separately, shall be hereinafter referred to as "OPTIONS". The term "SUBSIDIARY" shall mean for the purposes of the USSOP: any company (other than the Company) in an unbroken chain of companies beginning with the Company if, at the time of granting an option, each of the companies other than the last company in the unbroken chain owns shares possessing fifty percent (50%) or more of the total combined voting power of all classes of shares in one of the other companies in such chain. 3. ADMINISTRATION OF THE USSOP The Board and a share option committee appointed and maintained by the Board for such purpose (the "COMMITTEE") shall have the power to administer the USSOP. Notwithstanding the above, the Board shall automatically have a residual authority if no committee shall be constituted or if such Committee shall cease to operate for any reason whatsoever. The Committee shall consist of such number of members (not less than two (2)) as may be fixed by the Board. The Committee may select one of its members as its chairman ( the "CHAIRMAN") and shall hold its meetings at such times and places as the Chairman shall determine subject to the terms of Company's Article of Association. The Committee shall keep records of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable. Any member of such Committee shall be eligible to receive Options under the USSOP while serving on the Committee, unless otherwise specified herein, and subject to applicable law. The Committee shall recommend the Board and the Board shall have full power and authority regarding: 3.1 Designation of participants. 3.2 The terms and provisions of respective Option agreements (which need not be identical) including, but not limited to, the number of shares in the Company to be covered by each Option, provisions concerning the time or times when and the extent to which the Options may be exercised and the nature and duration of restrictions as to transferability or restrictions constituting substantial risk of forfeiture. 3.3 Acceleration of the right of an Optionee to exercise, in whole or in part, any previously granted Option. The Committee shall have full power and authority to: 3.4 Designate Options as ISO Options or NQSO Options. 3.5 Interpret the provisions and supervise the administration of the USSOP; 3.6 Determine the Fair Market Value (as defined below) of the Shares (as defined below). 3.7 Determine any other matter which is necessary or desirable for, or incidental to administration of the USSOP. Notwithstanding the above, the identity of each of the Optionees and the number of Shares covered by each Option must be ratified by the Board. The Board shall have the authority to grant, in its discretion, to the holder of an outstanding Option, in exchange for the surrender and cancellation of such Option, a new Option having a purchase price equal to, lower than or higher than the Purchase Price provided in the Option so surrendered and canceled, and containing such other terms and conditions as the Board may prescribe in accordance with the provisions of the USSOP. 2 Subject to the Articles of Association of the Company, all decisions and selections made by the Board or the Committee pursuant to the provisions of the USSOP shall be made by a majority of its members except that no member of the Board or the Committee shall vote on any proposed action of the Board or the Committee relating to any Option to be granted to that member. Subject to the Articles of Association of the Company any decision reduced to writing and signed by all of the members who are authorized to make such decision shall be fully effective as if it had been made by a majority at a meeting duly held. The interpretation and construction by the Committee of any provision of the USSOP or of any Option Agreement thereunder shall be final and conclusive unless otherwise determined by the Board. Subject to the Company's article of association, each member of the Board or the Committee shall be indemnified and held harmless by the Company against any cost or expense (including counsel fees) reasonably incurred by him, or any liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the USSOP, unless arising out of such member's own fraud or bad faith, to the extent permitted by applicable law. Such indemnification shall be in addition to any rights of indemnification the member may have as a director or otherwise under the Company's Articles of Association, any agreement, any vote of shareholders or disinterested directors, insurance policy or otherwise. "FAIR MARKET VALUE" means, as of any date, the value of a Share determined as follows: (I) If the Shares are listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market system, or The Nasdaq SmallCap Market of the Nasdaq Stock Market , the Fair Market Value shall be the closing sales price for such Shares (or the closing bid, if no sales were reported), as quoted on such exchange or system for the last market trading day prior to time of determination, as reported in the Wall Street Journal, or such other source as the Administrator deems reliable. (ii) If the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the Shares on the last market trading day prior to the day of determination, or; (iii) In the absence of an established market for the Shares, the Fair Market Value thereof shall be determined in good faith by the Board or the Committee. 3 4. DESIGNATION OF PARTICIPANTS 4.1 The persons eligible to participate in the USSOP as recipients of Options shall include any employees, directors, consultants and service providers of the Company or of any Subsidiary. The grant of an Option hereunder shall neither entitle the Optionee to participate nor disqualify from participating in, any other grant of Options pursuant to the USSOP or any other option or stock plan of the Company or any of its affiliates. 4.2 Incentive Stock Options may be granted only to employees of the Company, its Parent (if any), and any Subsidiaries. Non-Qualified Stock Options may be granted to employees, Non-Employee Directors, consultants and advisers who, in the opinion of the Board, are in a position to make a significant contribution to the success of the Company, its Parent (if any), and any Subsidiaries. 4.3 To the extent applicable and anything in the USSOP to the contrary notwithstanding, all grants of Options to directors and office holders - as such term is defined in the Israeli Companies Law -( the "COMPANIES LAW") shall be authorized and implemented in accordance with the provisions of the Companies Law, as in effect from time to time. 5. SHARES RESERVED UNDER THE OPTION PLAN; RESTRICTIONS THEREON 5.1 Subject to adjustments as set forth in Section 7 below, the Company has reserved a total of 500,000 authorized but unissued Ordinary Shares par value NIS 0.01 each, of the Company (the "SHARES"), for purpose of the USSOP and for the purpose of the EXALINK LTD 2000 Israeli Stock Option Plan (the "OPTION PLAN")subject to the adjustments as set forth in paragraph 7 below. The Shares are hereby reserved for such purpose out of the authorized share capital of the Company and may only be issued under the terms hereof. Any of such Shares which may remain unissued and which are are not subject to outstanding Options upon the termination of the USSOP shall cease to be reserved for the purpose of the USSOP, but until termination of the USSOP the Company shall at all times reserve sufficient number of Shares to meet the requirements of the USSOP. Should any Option for any reason expire or be canceled prior to its exercise or termination in full, the unissued Shares subject to such Option may again be subjected to an Option under the Option Plan or the USSOP. 5.2 Each Option granted pursuant to the USSOP, shall be evidenced by a written agreement between the Company and the Optionee (the "OPTION AGREEMENT"), in such form as the Board or the Committee shall from time to time approve. Each Option Agreement shall state a number of the Shares to which the 4 Option relates and the type of Option granted thereunder (whether a an ISO or an NQSO). 5.3 To the extent that the aggregate fair market value (determined at the time of the grant) of Shares with respect to which incentive stock options are exercisable for the first time by the Participant during any calendar year under all plans of the Company and its affiliates exceeds $100,000, the options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as non-qualified stock options. It should be understood that, because of such limit, there is no assurance the all of the Options will, in fact, be treated as an incentive stock options. 6. PURCHASE PRICE 6.1 The purchase price of each Share subject to an Option to be granted or any portion thereof shall be determined by the Board or the Committee in its sole and absolute discretion in accordance with applicable law, subject to any guidelines as may be determined by the Board from time to time (the "PURCHASE PRICE"). The Purchase Price of the Shares covered by each ISO shall be not less than the Fair Market Value of the Company shares on the date the Option is granted; provided, however, that the purchase price of the Shares subject to any ISO may not be less than 110% of the Fair Market Value of the Company's shares on the date the Option is granted with respect to Options granted to an eligible employee who owns more than 10% of the outstanding voting stock of the Company. 6.2 THE PURCHASE PRICE SHALL BE PAYABLE UPON THE EXERCISE OF THE OPTION IN A FORM SATISFACTORY TO THE BOARD OR THE COMMITTEE BY CASH OR CHECK. THE COMMITTEE SHALL HAVE THE AUTHORITY TO POSTPONE THE DATE OF PAYMENT ON SUCH TERMS AS IT MAY DETERMINE. 7. ADJUSTMENTS Upon the occurrence of any of the following described events, Optionee's rights to purchase Shares under the USSOP shall be adjusted as hereafter provided: 7.1 IN THE EVENT OF A MERGER OF THE COMPANY WITH OR INTO ANOTHER COMPANY (THE "Successor Company"), OR THE SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OR SHARES OF THE COMPANY (THE "Transaction") WHILE UNEXERCISED OPTIONS REMAIN 5 OUTSTANDING UNDER THE USSOP, THEN EACH UNEXERCISED OPTION SHALL BE ASSUMED, OR SUBSTITUTED FOR BY AN APPROPRIATE NUMBER OF SHARES, OF EACH CLASS OF SHARES OR OTHER SECURITIES OF THE SUCCESSOR COMPANY (OR A PARENT OR SUBSIDIARY OF THE SUCCESSOR COMPANY) WHICH WERE DISTRIBUTED TO THE SHAREHOLDERS OF THE COMPANY IN RESPECT OF SUCH SHARES. IN THE CASE OF SUCH ASSUMPTION AND/OR SUBSTITUTION OF SHARES, APPROPRIATE ADJUSTMENTS SHALL BE MADE IN THE PURCHASE PRICE TO REFLECT SUCH ACTION, AND ALL OTHER TERMS AND CONDITIONS OF THE OPTION AGREEMENTS, SUCH AS THE VESTING DATES, SHALL REMAIN IN FORCE, ALL AS WILL BE DETERMINED BY THE COMMITTEE WHOSE DETERMINATION SHALL BE FINAL. 7.2 NOTWITHSTANDING THE ABOVE AND SUBJECT TO ANY APPLICABLE LAW, UNLESS THE BOARD OR THE COMMITTEE DETERMINES OTHERWISE WITH RESPECT TO CERTAIN OPTION AGREEMENTS, THERE SHALL BE A CLAUSE IN EACH OPTION AGREEMENT INSTRUCTING THAT IF IN ANY SUCH TRANSACTION AS DESCRIBED IN SECTION 7.1 ABOVE, THE SUCCESSOR COMPANY (OR PARENT OR SUBSIDIARY OF THE SUCCESSOR COMPANY) DOES NOT AGREE TO ASSUME OR SUBSTITUTE FOR THE OPTIONS, ALL UNEXERCISED OPTIONS SHALL BE EXPIRED AS OF THE DATE OF THE TRANSACTION. 7.3 FOR THE PURPOSES OF SECTION 7.1 ABOVE, THE OPTION SHALL BE CONSIDERED ASSUMED OR SUBSTITUTED IF, FOLLOWING THE MERGER OR ACQUISITION, THE DOCUMENT PURSUANT TO WHICH THE TRANSACTION OCCURS PROVIDE THAT THE OPTIONEE HAS THE RIGHT TO PURCHASE OR RECEIVE, FOR EACH SHARE OF OPTIONED SHARES IMMEDIATELY PRIOR TO THE TRANSACTION, THE CONSIDERATION (WHETHER SHARES, OPTIONS, CASH, OR OTHER SECURITIES OR PROPERTY) RECEIVED IN THE TRANSACTION BY HOLDERS OF SHARES FOR EACH SHARE HELD ON THE EFFECTIVE DATE OF THE TRANSACTION (AND IF SUCH HOLDERS WERE OFFERED A CHOICE OF CONSIDERATION, THE TYPE OF CONSIDERATION CHOSEN BY THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES) MINUS THE OPTION PRICE PER SHARE; PROVIDED, HOWEVER, THAT IF SUCH CONSIDERATION RECEIVED IN THE TRANSACTION IS NOT SOLELY ORDINARY SHARES (OR THEIR EQUIVALENT) OF THE SUCCESSOR COMPANY OR ITS PARENT OR SUBSIDIARY, THE COMMITTEE MAY, WITH THE CONSENT OF THE SUCCESSOR COMPANY, PROVIDE FOR THE CONSIDERATION TO BE RECEIVED UPON THE EXERCISE OF THE OPTION TO BE SOLELY ORDINARY SHARES (OR THEIR EQUIVALENT) OF THE SUCCESSOR COMPANY OR ITS PARENT OR SUBSIDIARY EQUAL IN FAIR MARKET VALUE TO THE PER SHARE CONSIDERATION RECEIVED BY HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES IN THE TRANSACTION; AND PROVIDED FURTHER THAT THE COMMITTEE MAY DETERMINE, IN ITS DISCRETION, THAT IN LIEU OF SUCH ASSUMPTION OR SUBSTITUTION OF OPTIONS FOR OPTIONS OF THE SUCCESSOR COMPANY OR ITS PARENT OR SUBSIDIARY, SUCH OPTIONS WILL BE SUBSTITUTED FOR ANY OTHER TYPE OF ASSET OR PROPERTY INCLUDING CASH WHICH IS FAIR UNDER THE CIRCUMSTANCES. 7.4 IF THE COMPANY IS LIQUIDATED OR DISSOLVED WHILE UNEXERCISED OPTIONS REMAIN OUTSTANDING UNDER THE USSOP, THEN THE BOARD IN ITS OWN DISCRETION MAY DETERMINE THAT ALL SUCH OUTSTANDING OPTIONS MAY BE EXERCISED IN FULL BY THE OPTIONEES AS OF THE EFFECTIVE DATE OF ANY SUCH LIQUIDATION OR DISSOLUTION OF THE COMPANY WITHOUT REGARD TO THE VESTING PROVISIONS HEREOF. IF THE BOARD DETERMINES THAT THE OUTSTANDING OPTIONS MAY BE EXERCISED, ALL SUCH OUTSTANDING OPTIONS MAY BE 6 EXERCISED IN FULL BY THE OPTIONEES GIVING NOTICE IN WRITING TO THE COMPANY OF THEIR INTENTION TO SO EXERCISE TOGETHER WITH PAYMENT OF THE OPTION PRICE 7.5 IF THE OUTSTANDING SHARES OF THE COMPANY SHALL AT ANY TIME BE CHANGED OR EXCHANGED BY DECLARATION OF A STOCK DIVIDEND (BONUS SHARES), STOCK SPLIT, COMBINATION OR EXCHANGE OF SHARES, RECAPITALIZATION, OR ANY OTHER LIKE EVENT BY OR OF THE COMPANY, AND AS OFTEN AS THE SAME SHALL OCCUR, THEN THE NUMBER, CLASS AND KIND OF SHARES SUBJECT TO THE USSOP OR SUBJECT TO ANY OPTIONS THEREFORE GRANTED, AND THE PURCHASE PRICES, SHALL BE APPROPRIATELY AND EQUITABLY ADJUSTED SO AS TO MAINTAIN THE PROPORTIONATE NUMBER OF SHARES WITHOUT CHANGING THE AGGREGATE PURCHASE PRICE, PROVIDED, HOWEVER, THAT NO ADJUSTMENT SHALL BE MADE BY REASON OF THE DISTRIBUTION OF SUBSCRIPTION RIGHTS (RIGHTS OFFERING) ON OUTSTANDING STOCK. UPON HAPPENING OF ANY OF THE FOREGOING, THE CLASS AND AGGREGATE NUMBER OF SHARES ISSUABLE PURSUANT TO THE USSOP(AS SET FORTH IN PARAGRAPH 6 HEREOF), IN RESPECT OF WHICH OPTIONS HAVE NOT YET BEEN EXERCISED, SHALL BE APPROPRIATELY ADJUSTED, ALL AS WILL BE DETERMINED BY THE BOARD WHOSE DETERMINATION SHALL BE FINAL. 7.6 ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, IF PRIOR TO THE COMPLETION OF AN INITIAL PUBLIC OFFERING ALL OR SUBSTANTIALLY ALL OF THE SHARES OF THE COMPANY ARE TO BE SOLD, OR UPON A TRANSACTION REORGANIZATION OR THE LIKE, ALL OR SUBSTANTIALLY ALL OF THE SHARES OF THE COMPANY ARE TO BE EXCHANGED FOR SECURITIES OF ANOTHER COMPANY, THEN EACH OPTIONEE SHALL BE OBLIGED TO SELL OR EXCHANGE, AS THE CASE MAY BE, ANY SHARES SUCH OPTIONEE PURCHASED UNDER THE USSOP, IN ACCORDANCE WITH THE INSTRUCTIONS ISSUED BY THE BOARD IN CONNECTION WITH THE TRANSACTION, WHOSE DETERMINATION SHALL BE FINAL. 8. TERM AND EXERCISE OF OPTIONS 8.1 AN OPTION SHALL BE EXERCISED BY THE OPTIONEE BY GIVING WRITTEN NOTICE TO THE COMPANY, IN SUCH FORM AND METHOD AS MAY BE DETERMINED BY THE COMPANY, AND PAYMENT OF OPTION PRICE. SUCH EXERCISE SHALL BE EFFECTIVE UPON RECEIPT OF SUCH NOTICE AND FULL PAYMENT FOR THE SHARES WITH RESPECT TO WHICH THE OPTION IS BEING EXERCISED, BY THE COMPANY AT ITS PRINCIPAL OFFICE. THE NOTICE SHALL SPECIFY THE NUMBER OF SHARES WITH RESPECT TO WHICH THE OPTION IS BEING EXERCISED. 8.2 AN OPTION MAY BE EXERCISED BY THE OPTIONEE IN WHOLE AT ANY TIME OR IN PART FROM TIME TO TIME, TO THE EXTENT THAT THE OPTION BECOMES VESTED AND EXCERCISABLE FOLLOWING THE DATES FOR THE NUMBER OF SHARES AS SHALL BE PROVIDED FOR IN EXHIBIT B TO THE OPTION AGREEMENT., AND UP TO THE NUMBER OF SHARES, AS PROVIDED IN EXHIBIT B TO THE OPTIONEE'S OPTION AGREEMENT, BUT NO LATER THAN THE EARLIER OF: (I) IN THE EVENT OF GRANT OF ISO'S, THE EXPIRATION OF EXPIRATION DATE (AS DEFINED IN OPTIONEE'S OPTION AGREEMENT) OR 10 YEARS AFTER THE DATE OF GRANT, 7 (II) IN THE EVENT OF GRANT OF ISO'S TO HOLDERS OF MORE THAN 10% OF THE SHARES, THE EXPIRATION OF 5 YEARS FROM THE DATE OF GRANT; OR THE EXPIRATION DATE (AS DEFINED IN THE OPTION AGREEMENT). 8.3 AN OPTION SHALL NOT BE TRANSFERABLE BY AN OPTIONEE OTHER THAN BY WILL OR LAWS OF DESCENT AND DISTRIBUTION, AND DURING AN OPTIONEE'S LIFETIME MAY BE EXERCISABLE ONLY BY THAT OPTIONEE. 8.4 THE OPTIONS MAY BE EXERCISED BY THE OPTIONEE IN WHOLE AT ANY TIME OR IN PART FROM TIME TO TIME, TO THE EXTENT THAT THE OPTIONS BECOME VESTED AND ARE EXERCISABLE AND PROVIDED THAT, SUBJECT TO THE PROVISIONS OF SECTION 8.6 BELOW, THE OPTIONEE IS AN EMPLOYEE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, AT ALL TIMES DURING THE PERIOD BEGINNING WITH THE GRANTING OF THE OPTION AND ENDING UPON THE DATE OF EXERCISE. 8.5 SUBJECT TO THE PROVISIONS OF SECTION 8.6 BELOW, IN THE EVENT OF TERMINATION OF OPTIONEE'S EMPLOYMENT WITH THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR IF APPLICABLE, THE TERMINATION OF SERVICES GIVEN BY THE OPTIONEE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, ALL UNEXERCISED OPTIONS GRANTED TO THE OPTIONEE WILL IMMEDIATELY EXPIRE. A NOTICE OF TERMINATION OF EMPLOYMENT OR SERVICES SHALL BE DEEMED TO CONSTITUTE TERMINATION OF EMPLOYMENT OR SERVICES. 8.6 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTION 8.4 AND 8.5 ABOVE, AN OPTION MAY BE EXERCISED AFTER THE DATE OF TERMINATION OF OPTIONEE'S SERVICE OR EMPLOYMENT WITH THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY ONLY WITH RESPECT TO THE NUMBER OF SHARES SUBJECT TO THE PORTION OF THE OPTION THAT HAS ALREADY VESTED AND IS UNEXPIRED AT THE TIME OF SUCH TERMINATION ACCORDING TO THE VESTING AND EXPIRATION PERIODS OF THE OPTIONS SET FORTH IN EXHIBIT B OF SUCH OPTIONEE'S OPTION AGREEMENT, PROVIDED THAT EITHER: 8.6.1 prior to the date of such termination, the Committee shall authorize an extension of the exercise period of all or part of the Option beyond the date of such termination for a period not to exceed the period during which the Option by its terms would otherwise have been exercisable; or - 8.6.2 such termination is without Cause (as defined below), in which event the Option may be exercised within a period of 90 days from the date of such termination; or - 8.6.3 such termination is the result of death or disability of the Optionee, in which event the Option may be exercised within a period of 12 (twelve) months from such date of termination. The term "cause" shall mean (i) material misconduct which has an adverse effect on the business and affairs of Company; (ii) Optionee's (a) willful or continued failure to substantially perform his material job duties hereunder, or (b) material misconduct which reasonably could be expected to have an adverse effect on Company, including without limitation disregard of lawful written instructions of Company's Board of Directors consistent with Optionee's position relating to the business of 8 Company or neglect of duties or failure to act, provided in each such case Company has given at least thirty (30) day's prior written notice describing the alleged breach, failure or misconduct in detail and the Optionee has failed to cure such deficiency within such thirty-day (30-day) period (provided such breach, failure or misconduct is capable of being cured within such period); (iii) gross negligence, gross neglect of duties, including fiduciary duties, or gross insubordination; (iv) conviction or plea of no contest to common law fraud, a felony criminal act or a crime involving moral turpitude; (v) abuse of alcohol or other drugs or controlled substances to the material detriment of Company; (vi) unauthorized appropriation of Company's property. 8.6 SUBJECT TO THE PROVISIONS OF SECTION 9 BELOW, THE HOLDERS OF OPTIONS SHALL NOT HAVE ANY OF THE RIGHTS OR PRIVILEGES OF SHAREHOLDERS OF THE COMPANY IN RESPECT OF ANY SHARES PURCHASABLE UPON THE EXERCISE OF ANY PART OF AN OPTION, NOR SHALL THEY BE DEEMED TO BE A CLASS OF SHAREHOLDERS OR CREDITORS OF THE COMPANY FOR PURPOSE OF THE OPERATION OF SECTION 350 AND 351 OF THE COMPANIES LAW OR SUCCESSOR TO SUCH SECTION, UNTIL REGISTRATION OF THE OPTIONEE AS HOLDER OF SUCH SHARES IN THE COMPANY'S REGISTER OF MEMBERS UPON EXERCISE OF THE OPTION IN ACCORDANCE WITH THE PROVISIONS OF THE USSOP. 8.7 ANY FORM OF OPTION AGREEMENT AUTHORIZED BY THE USSOP MAY CONTAIN SUCH OTHER PROVISIONS AS THE COMMITTEE MAY, FROM TIME TO TIME, DEEM ADVISABLE. WITHOUT LIMITING THE FOREGOING THE COMMITTEE MAY, WITH THE CONSENT OF THE OPTIONEE, FROM TIME TO TIME, CANCEL ALL OR ANY PORTION OF ANY OPTION THEN SUBJECT TO EXERCISE, AND THE COMPANY'S OBLIGATION IN RESPECT OF SUCH OPTION MAY BE DISCHARGED BY (I) PAYMENT TO THE OPTIONEE OF AN AMOUNT IN CASH EQUAL TO THE EXCESS, IF ANY, OF THE FAIR MARKET VALUE OF THE SHARES AT THE DATE OF SUCH CANCELLATION SUBJECT TO THE PORTION OF THE OPTION SO CANCELED OVER THE AGGREGATE PURCHASE PRICE OF SUCH SHARES, (II) THE ISSUANCE OR TRANSFER TO THE OPTIONEE OF SHARES OF THE COMPANY WITH A FAIR MARKET VALUE AT THE DATE OF SUCH TRANSFER EQUAL TO ANY SUCH EXCESS, OR (III) A COMBINATION OF CASH AND SHARES WITH A COMBINED VALUE EQUAL TO ANY SUCH EXCESS, ALL AS DETERMINED BY THE COMMITTEE IN THEIR SOLE DISCRETION. 8.8 Options shall vest (i.e., Options shall become exercisable ) at the dates set forth in Section 3 OF EXHIBIT "B" to the Option Agreement (the "VESTING DATE"). An Option may be granted subject to such other terms and conditions on the time or times when it may be exercised, as the Committee or the Board may deem appropriate to include in the Option Agreement. 9 9. SHARES SUBJECT TO RIGHT OF FIRST REFUSAL 9.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE ARTICLES OF ASSOCIATION OF THE COMPANY, THE OPTIONEE SHALL NOT HAVE A RIGHT OF FIRST REFUSAL IN RELATION TO ANY SALE OF SHARES IN THE COMPANY. 9.2 SALE OF SHARES BY THE OPTIONEE SHALL BE SUBJECT TO THE RIGHT OF FIRST REFUSAL OF OTHER SHAREHOLDERS AS SET FORTH IN THE ARTICLES OF ASSOCIATION OF THE COMPANY. IN THE EVENT THAT THE ARTICLES OF ASSOCIATION OF THE COMPANY SHALL NOT CONTAIN ANY PROVISION REGARDING RIGHTS OF FIRST REFUSAL, THEN, UNLESS OTHERWISE PROVIDED BY THE BOARD, UNTIL SUCH TIME AS THE COMPANY SHALL EFFECTUATE AN INITIAL PUBLIC OFFERING, THE SALE OF SHARES ISSUABLE UPON EXERCISE OF AN OPTION, SHALL BE SUBJECT TO A RIGHT OF FIRST REFUSAL ON THE PART OF THE REPURCHASER(S). THE TERM Repurchaser(s) SHALL MEANS (I) THE COMPANY, IF PERMITTED BY APPLICABLE LAWS; ( II) IF THE COMPANY IS NOT PERMITTED BY APPLICABLE LAWS, THEN ANY AFFILIATE OR SUBSIDIARY OF THE COMPANY DESIGNATED BY A UNANIMOUS DECISION IS REACHED BY THE BOARD OF DIRECTORS; OR ( III) IF NO UNANIMOUS DECISION IS REACHED BY THE BOARD OF DIRECTORS , THEN THE COMPANY EXISTING SHAREHOLDERS (SAVE, FOR AVOIDANCE OF DOUBT , FOR OTHER OPTIONEES WHO ALREADY EXERCISED THEIR OPTIONS), PRO RATA IN ACCORDANCE WITH THEIR SHAREHOLDING. THE OPTIONEE SHALL GIVE A NOTICE OF SALE (THE "Notice") TO THE COMPANY IN ORDER TO OFFER THE SHARES TO THE REPURCHASER(S), AND THE COMPANY WILL FORWARD THE NOTICE TO THE EXISTING SHAREHOLDERS. The Notice shall specify the Number of Shares offered for sale, the price per Share, the payment terms the name of each proposed purchaser or other Transferee ( "PROPOSED TRANSFEREE"),. The Repurchaser(s) will be entitled for 30 days from the day of receipt of the Notice ("THE 30 DAYS PERIOD"), to purchase all or part of the offered Shares. If by the end of the 30 Days Period not all of the offered Shares have been purchased by the Repurchaser(s) , the Optionee will be entitled to sell such Shares at any time during the 90 days following the end of the 30 Days Period on terms not more favorable than those set out in the Notice, provided that the proposed Transferee agrees in writing that the provisions of this section shall continue to apply to the Shares in the hands of such proposed Transferee. 10. PURCHASE FOR INVESTMENT The Company's obligation to issue Shares upon exercise of an Option granted under the Plan is expressly conditioned upon (a) the Company's completion of any registration or other qualifications of such Shares under any state and/or federal law, rulings or regulations or (b) representations and undertakings by the Optionee (or his legal 10 representative, heir or legatee, in the event of the Optionee's death) to assure that the sale of the Shares complies with any registration exemption requirements which the Company in its sole discretion shall deem necessary or advisable. Such required representations and undertakings may include representations and agreements that such Optionee (or his legal representative, heir, or legatee): (a) is purchasing such Shares for investment and not with any present intention of selling or otherwise disposing thereof; and (b) agrees to have placed upon the face and reverse of any certificates evidencing such Shares a legend setting forth (i) any representations and undertakings which such Optionee has given to the Company or a reference thereto and (ii) that, prior to effecting any sale or other disposition of any such Shares, the Optionee must furnish to the Company an opinion of counsel, satisfactory to the Company, that such sale or disposition will not violate the applicable laws, rules and regulations whether of the state of Israel or of the United States or any other State having jurisdiction over the Company and/or the Optionee requirements of State and federal laws and regulatory agencies. 11. ASSIGNABILITY AND SALE OF OPTIONS Except as provided in section 8.3, no option granted hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect to them given to any third party whatsoever, and during the lifetime of the Optionee each and all of such Optionee's rights to purchase Shares hereunder shall be exercisable only by the Optionee. Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void. 12. TERM OF THE OPTION PLAN The USSOP shall become effective on the date that it is adopted by the Board of Directors; provided, however, that no Option may be exercised until the Option Plan has been approved by the sharehholders of of the Company within 12 months before or after the date the USSOP is adopted by the Board . If the USSOP is not approved by the shareholders of the Company within twelve months after the date the USSOP is adopted by the Board, the USSOP and all Options granted thereunder shall be null and void. The USSOP shall terminate at the end of 10 years from the day of its adoption by the Board, unless earlier terminated pursuant to section 13. 13. AMENDMENT; TERMINATION THE BOARD MAY, AT ANY TIME AND FROM TIME TO TIME, AMEND, ALTER OR DISCONTINUE THE USSOP, EXCEPT THAT NO AMENDMENT OR ALTERATION SHALL BE MADE WHICH WOULD 11 IMPAIR THE RIGHTS OF THE HOLDER OF ANY OPTION PREVIOUSLY GRANTED, WITHOUT HIS WRITTEN CONSENT. TERMINATION OF THE USSOP SHALL NOT AFFECT THE COMMITTEE'S AND/OR THE BOARD'S ABILITY TO EXERCISE THE POWERS GRANTED TO IT HEREUNDER AND UNDER THE TERMS OF AN OPTION AGREEMENT WITH RESPECT TO THE OPTIONS GRANTED UNDER THE USSOP PRIOR TO THE DATE OF SUCH TERMINATION. 14. GOVERNMENT REGULATIONS The USSOP, the granting and exercise of Options hereunder, and the obligation of the Company to sell and deliver Shares issued upon exercise of such Options, shall be subject to all applicable laws, rules, and regulations of the United States or any other state having jurisdiction over the Company and the Optionee, including the registration of the Shares under the 1933 Act , and to such approvals by any governmental agencies or national securities exchanges as may be required. 15. CONTINUANCE OF EMPLOYMENT OR HIRED SERVICES Neither the USSOP nor the Option Agreement with an Optionee shall impose any obligation on the Company or a subsidiary thereof, to continue employing any Optionee or hiring of the Optionee's services, and nothing in the USSOP or in any Option granted pursuant thereto shall confer upon any Optionee any right to continue in the employ or service of the Company or a subsidiary thereof or restrict the right of the Company or a subsidiary thereof to terminate such employment or service hiring at any time, with or without notice. 16. GOVERNING LAW & JURISDICTION This USSOP shall be governed by and construed and enforced in accordance with the laws of the State of Israel applicable to contracts made and to be performed therein, without giving effect to the principles of conflict of laws. The competent courts of Tel-Aviv, Israel shall have sole jurisdiction in any matters pertaining to the USSOP. 17. TAX CONSEQUENCES Any tax consequences arising from the grant or exercise of any Option, from the payment for Shares issued upon exercise of an Option or from any other event or act hereunder (of the Company and or its Subsidiaries or the Optionee), shall be borne solely by the Optionee. The Company and/or its subsidiaries shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including the withholding of taxes at source. Furthermore, the Optionee shall agree to indemnify the Company and/or its subsidisries and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee. 12 18. NON-EXCLUSIVITY OF THE USSOP The adoption of the USSOP by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangements or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock Options otherwise then under the USSOP, and such arrangements may be either applicable generally or only in specific cases. For the avoidance of doubt, prior grant of options to Optionees of the Company under their employment agreements, and not in the framework of any previous option plan, shall not be deemed an approved incentive arrangement for the purpose of this Section. 19. MULTIPLE AGREEMENTS THE TERMS OF EACH OPTION MAY DIFFER FROM OTHER OPTIONS GRANTED UNDER THE USSOP AT THE SAME TIME, OR AT ANY OTHER TIME. THE COMMITTEE MAY ALSO GRANT MORE THAN ONE OPTION TO A GIVEN OPTIONEE DURING THE TERM OF THE OPTION PLAN, EITHER IN ADDITION TO, OR IN SUBSTITUTION FOR, ONE OR MORE OPTIONS PREVIOUSLY GRANTED TO THAT OPTIONEE. 13 EXHIBIT B --------- TERMS OF THE OPTION ------------------- NAME OF THE OPTIONEE: ____________________ DATE OF GRANT: ____________________ DESIGNATION: ISO / NQSO OPTION NUMBER: ____________________ 1. NUMBER OF SHARES SUBJECT TO THE OPTION: ___________________________ 2. PURCHASE PRICE PER SHARE: ___________________________ 3. VESTING PERIODS: -------------------------------------------- ----------------------------------------- NUMBER VESTING DATE -------------------------------------------- ----------------------------------------- -------------------------------------------- ----------------------------------------- -------------------------------------------- ----------------------------------------- -------------------------------------------- ----------------------------------------- -------------------------------------------- ----------------------------------------- -------------------------------------------- ----------------------------------------- -------------------------------------------- -----------------------------------------
4. EXPIRATION DATE: 10 YEARS FROM THE DATE OF GRANT 14 EX-5.1 4 0004.txt EXHIBIT 5.1 WILLIAM F. SORIN 17 EAST 89TH STREET NEW YORK, NY 10128 October 25, 2000 Comverse Technology, Inc. 170 Crossways Park Drive Woodbury, New York 11797 Ladies and Gentlemen: I have acted as counsel to Comverse Technology, Inc., a New York corporation (the "Company"), in connection with the registration, pursuant to a Registration Statement on Form S-8 under the Securities Act of 1933, as amended (the "Registration Statement"), of an aggregate of 810,377 shares of Common Stock of the Company, par value $0.10 per share ("Common Stock"), issuable upon the exercise of options ("Options") which have been granted under the Israeli Employee Stock Option Plan of Exalink Ltd. ("Exalink") and 2000 U.S. Stock Option Plans of Exalink (collectively, the "Plans"). I have examined originals, or copies certified to my satisfaction, of the Certificate of Incorporation and By-Laws of the Company, the minutes and other records of the proceedings of the Board of Directors and of the Stockholders of the Company, the Plans and such other documents, corporate and public records, agreements and certificates of officers of the Company and of public and other officials, and I have considered such questions of law, as I have deemed necessary as a basis for the opinions hereinafter expressed. In such examination I have assumed the genuineness of all signatures and the authenticity of all documents submitted to me as originals and the conformity to original documents of all documents submitted to me as certified or photostatic copies. Based on and subject to the foregoing, I hereby advise you that, in my opinion, the issuance of shares of Common Stock, upon exercise of the Options in accordance with the provisions and subject to the conditions set forth in the Plans and in the agreements executed thereunder governing the issuance and exercise of the Options, has been duly authorized and, when the consideration for such shares has been received by the Company and such shares have been issued in accordance with and subject to such terms and conditions, such shares of Common Stock will be legally issued, fully paid and nonassessable. I hereby consent to the filing of this opinion with the Securities and Exchange Commission in connection with the Registration Statement. Very truly yours, /S/ WILLIAM F. SORIN --------------------- William F. Sorin EX-23.2 5 0005.txt EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Comverse Technology, Inc. on Form S-8 of our report dated September 20, 2000, appearing in the Current Report on Form 8-K of Comverse Technology, Inc. dated September 28, 2000. /S/ Deloitte & Touche LLP New York, New York October 25, 2000 -----END PRIVACY-ENHANCED MESSAGE-----