COMMTOUCH SOFTWARE LTD.
1999 NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Capitalized terms used without definition in this Stock Option
Agreement (the "Option Agreement") shall have the meanings given such terms in
the Commtouch Software Ltd. 1999 Nonemployee Directors Stock Option Plan (the
"Plan").
I.
NOTICE OF STOCK OPTION GRANT
[[First]] [[Last]]
Option. You have been granted an option to purchase ordinary shares of
Commtouch Software Ltd., an Israeli company (the "Ordinary Shares"), subject to
the terms and conditions of the Plan and this Option Agreement, as follows:
Date of Grant: [[Date]], 2000
Exercise Price per Share: [[Price]]
Total Number of Ordinary Shares Granted: [[Shares]]
Total Exercise Price: [[Total_Price]]
Type of Option: NQ
Expiration Date: [[Date]], 2010
Vesting; Termination. This Option will vest with respect to [[Vest]]
ordinary shares three months after the date of grant and will vest with respect
to [[Vest]] ordinary shares every three months thereafter, provided that the
Optionee continues to serve as a Director of the Company. This Option may be
exercised, in whole or in part, with respect to any vested shares, on or before
[[Date]], 2010.
II.
AGREEMENT
1. Grant of Option. Commtouch Software Ltd., an Israeli company (the
"Company"), hereby grants to the Optionee (the "Optionee") named in the Notice
of Stock Option Grant set forth above (the "Notice of Grant") an option (the
"Option") to purchase the total number of Ordinary Shares set forth in the
Notice of Grant, at the exercise price per share set forth in the Notice of
Grant (the "Exercise Price"), subject to the terms, definitions and provisions
of the Plan, which is incorporated herein by reference. Capitalized terms used
without definition in this Option Agreement shall have the meanings given such
terms in the Plan.
2. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during its term
in accordance with the Vesting schedule set out in the Notice of Grant and with
the applicable provisions of the Plan and this Option Agreement.
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(b) Method of Exercise. This Option shall be exercisable by written
notice (in the form attached hereto as Exhibit A), which shall state the
election to exercise the Option, the number of Ordinary Shares with respect to
which the Option is being exercised, and such other representations and
agreements as to the Optionee's investment intent with respect to the Ordinary
Shares as may be required by the Company pursuant to the provisions of the Plan.
The written notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The written notice
shall be accompanied by payment of the Exercise Price. This Option shall be
deemed to be exercised upon receipt by the Company of such written notice
accompanied by the Exercise Price.
(c) Compliance with Law. No Ordinary Shares will be issued pursuant to
the exercise of any Option unless such issuance and such exercise shall comply
with all relevant provisions of law and the requirements of any stock exchange
upon which the Ordinary Shares may then be listed. Assuming such compliance, for
income tax purposes the Ordinary Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
shares.
3. Method of Payment. Payment of the Exercise Price shall be by cash or
check or by a combination thereof, at the election of the Optionee. Optionee
shall also deliver a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require
to effect an exercise of the Option. Exercise of an Option may be made pursuant
to a "cashless exercise/sale" procedure pursuant to which funds to pay for
exercise of the Option are delivered to the Company by a broker upon receipt of
stock from the Company, or pursuant to which Optionee obtains a margin loan from
a broker to fund the exercise of the Option.
4. Non-Transferability of Option; Right of Repurchase. This Option
shall not be transferable, except that (I) an Option may be distributed by will
or the laws of descent and distribution; or (ii) Optionee may transfer or assign
an Option to (a) any family member or trust for the benefit of Optionee or a
family member of Optionee, or (b) any entity which is an investor in the Company
and of which Optionee is a general or limited partner or a member of senior
management. This Option may be exercised during the lifetime of the Optionee
only by Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors, assigns and transferees of the Optionee.
5. Term of Option. This Option may be exercised only in accordance with
the terms set out in the Notice of Grant, and may be exercised prior to its
expiration date only, in accordance with the Plan and the terms of this Option
Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee's interest except by means of a writing signed by the Company and
Optionee. In case of conflict between the provisions in the Plan and this Option
Agreement, the provisions in the Plan shall prevail. This Option Agreement is
governed by California law except for that body of law pertaining to conflict of
laws.
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7. Acknowledgments of Optionee.
(a) NO RIGHT TO CONTINUATION OF BOARD MEMBERSHIP. OPTIONEE ACKNOWLEDGES
AND AGREES THAT THE VESTING OF ORDINARY SHARES PURSUANT TO THE OPTION IS EARNED
ONLY BY CONTINUING BOARD MEMBERSHIP AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING APPOINTED TO THE BOARD OF DIRECTORS, BEING GRANTED THIS OPTION OR
ACQUIRING ORDINARY SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMMTOUCH SOFTWARE LTD. 1999
NONEMPLOYEE DIRECTORS STOCK OPTION PLAN THAT IS INCORPORATED HEREIN BY
REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
BOARD MEMBERSHIP BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S BOARD MEMBERSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.
(b) Receipt of Plan. Optionee acknowledges receipt of a copy of the
Plan and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Option. Optionee further agrees to notify the Company upon any
change in the residence address indicated above.
Date: [[Date]], 2000 COMMTOUCH SOFTWARE LTD.
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Chief Financial Officer
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[[First]][[Last]]
Address:
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