Exhibit 4.2
NESS TECHNOLOGIES, INC.
OPTION AGREEMENT
Made this [date]
BETWEEN: Ness Technologies, Inc., a Delaware corporation
having offices at Kiryat Atidim, Tel Aviv, Israel
(hereinafter, the "Company")
on the one part
AND: Name:
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I.D. No.
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residing at
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(hereinafter the "Optionee")
on the other part
WHEREAS, the Company's stockholders adopted, at its annual meeting on June
13, 2007, the 2007 Stock Option Plan (the "2007 Plan") attached hereto as
Exhibit A and forming an integral part hereof; and
WHEREAS, the Company's Stock Option and Compensation Committee ("the
Committee") has approved the granting of an option to the Optionee on the date
hereof and subject to all the terms and conditions as set forth in the 2007 Plan
and as provided herein.
NOW, THEREFORE, it is agreed as follows:
PREAMBLE AND DEFINITIONS
The preamble to this Option Agreement constitutes an integral part hereof.
Unless otherwise defined herein, capitalized terms used herein shall have the
meaning ascribed to them in the 2007 Plan.
GRANT OF OPTIONS
The Company hereby grants the Optionee the number of options set forth in
Section 1 of Exhibit B attached hereto and forming an integral part hereof (the
"Options"), each Option shall be exercisable for one share of the Company's
common stock, par value $.01 per share (the "Shares"), taken from the total
number of shares reserved for purposes of the 2007 Plan in the Company's
authorized capital, at a price per Share set forth in Section 2 of such Exhibit
B (the "Purchase Price"), on the terms and subject to the conditions hereinafter
provided.
The Purchase Price is stated and will be paid in U.S. dollars.
The Optionee acknowledges that the Company intends to issue additional Shares,
options and other instruments convertible into shares in the future to various
entities and individuals, as the Company in its sole discretion shall determine.
PERIOD OF OPTIONS AND CONDITIONS OF EXERCISE
The term of this Option Agreement shall commence on the date hereof (the "Date
of Grant") and shall terminate at the Expiration Date (as set forth in Section 3
of Exhibit B), or at any other time at which the Options expire pursuant to the
terms of the 2007 Plan or pursuant to this Option Agreement.
Subject to the provisions of the 2007 Plan, Options shall vest and first become
exercisable according to the vesting dates set forth in Exhibit B hereto.
Once vested, Options may be exercised by the Optionee, at any time or from time
to time, in whole or in part, prior to the Expiration Date, provided that,
subject to the provisions of Section 8 of the 2007 Plan, the Optionee is an
employee or providing services to the Company or any of its Affiliates at all
times during the period beginning with the Date of Grant through the relevant
vesting date and ending upon the date of exercise.
The Options may be exercised only to purchase whole Shares, and in no case may a
fraction of a Share be purchased. If any fractional Shares would be deliverable
upon exercise, such fraction shall be rounded up to the nearest whole number in
the event it equals one-half or more, or otherwise rounded down, to the nearest
whole number.
CHANGE OF CONTROL
Upon the occurrence of a "Change in Control" (as defined in the 2007 Plan), the
Committee may accelerate the vesting and exercisability of outstanding Options,
in whole or in part, as determined by the Committee in its sole discretion. In
its sole discretion, the Committee may also determine that, upon the occurrence
of a Change in Control, each outstanding Option shall terminate within a
specified number of days after notice to the Optionee thereunder, and each such
Optionee shall receive, with respect to each share of Company Stock subject to
such Option, an amount equal to the excess of the Fair Market Value of such
shares immediately prior to such Change in Control over the exercise price per
share of such Option; such amount shall be payable in cash, in one or more kinds
of property (including the property, if any, payable in the transaction) or a
combination thereof, as the Committee shall determine in its sole discretion.
EXERCISE OF OPTIONS
Options may be exercised in accordance with the provisions of Section 8.4 of the
2007 Plan.
In order for the Company to issue Shares upon the exercise of any of the
Options, the Optionee hereby agrees to sign any and all documents required by
any applicable law and/or by the Company's incorporation documents. The Optionee
further agrees that in the event that the Company and its counsel deem it
necessary or advisable, in their sole discretion, the issuance of Shares may be
conditioned upon certain representations, warranties, and acknowledgments by the
Optionee.
The Optionee acknowledges that the Company has transferred the day-to-day
administration of its options system, including the Options, to an independent
contractor and undertakes to follow the rules and practices of such independent
contractor (currently ▇▇▇▇▇ ▇▇▇▇▇▇▇ Employees Benefits Ltd.) regarding the
exercise of the Options. The Optionee acknowledges that the Company may, from
time to time and in its sole discretion, transfer the day-to-day administration
of its options system, including the Options, to another independent contractor
or decide to administer its option system internally.
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The Company shall not be obligated to issue any Shares upon the exercise of an
Option if such issuance, in the opinion of the Company, might constitute a
violation by the Company of any provision of law.
Each Option shall be subject to the further requirement that, if at any time the
Board (or the Committee) shall determine in its sole discretion that the consent
or approval of any governmental regulatory body, is necessary as a condition of,
or in connection with, the granting of such Option or the issuance of Shares
thereunder, such Option may not be exercised in whole or in part, unless such
consent or approval shall have been affected or obtained free of any conditions
not acceptable to the Board or the Committee.
RESTRICTIONS ON TRANSFER OF OPTIONS AND SHARES
The transfer of Options and the transfer of Shares to be issued upon exercise of
the Options shall be subject to the limitations set forth in the 2007 Plan and
in the Company's incorporation documents, in any shareholders' agreement to
which the holders of shares of common stock of the Company are bound or in or in
any applicable law including securities law of any jurisdiction
With respect to any Approved 102 Option, subject to the provisions of Section
102 of the Israeli Income Tax Ordinance (New Version), 1961, and any rules or
regulation or orders or procedures promulgated thereunder, an Optionee shall not
sell or release from trust any Share received upon the exercise of an Approved
102 Option and/or any share received subsequently following any realization of
rights, including without limitation, bonus shares, until the lapse of the
Holding Period required under Section 102 of the Ordinance. Notwithstanding the
above, if any such sale or release occurs during the Holding Period, the
sanctions under Section 102 of the Ordinance and under any rules or regulation
or orders or procedures promulgated thereunder shall apply to and shall be borne
by such Optionee.
With respect to Unapproved 102 Option, if the Optionee ceases to be employed by
the Company or any Affiliate, the Optionee shall extend to the Company and/or
its Affiliate a security or guarantee for the payment of tax due at the time of
sale of Shares, all in accordance with the provisions of Section 102 and the
rules, regulation or orders promulgated thereunder.
The Optionee acknowledges that in the event additional shares of the Company
shall be registered for trading in any public market, the Optionee's right to
sell Shares may be subject to limitations (including a lock-up period), as will
be requested by the Company or its underwriters, and the Optionee
unconditionally agrees and accepts any such limitations.
The Optionee acknowledges that in order to enforce the above restriction, the
Company may impose stop-transfer instructions with respect to the exercised
Shares.
The Optionee shall not dispose of any Shares in transactions which violate, in
the opinion of the Company, any applicable laws, rules and regulations or any
lock up imposed by the Company.
The Optionee agrees that the Company shall have the authority to imprint upon
the certificate or certificates representing the Shares such legends referring
to the foregoing restrictions, and any other applicable restrictions as it may
deem appropriate (which do not violate the Optionee's rights according to this
Option Agreement).
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With respect to any person subject to the reporting requirements of Section
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (a
"Reporting Person"), transactions under the 2007 Plan are intended to comply
with all applicable conditions of Rule 16b-3 under the Exchange Act. To the
extent any provision of the 2007 Plan or any action by an authority under the
2007 Plan fails to so comply, such provision or action shall, without further
action by any person, be deemed to be automatically amended to the extent
necessary to effect compliance with Rule 16b-3, provided that if such provision
or action cannot be amended to effect such compliance, such provision or action
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the appropriate authority. Each Option to a Reporting Person under
the 2007 Plan shall be deemed issued subject to the foregoing qualification.
TAXES; INDEMNIFICATION
The receipt of the Options and the acquisition of the Shares to be issued upon
the exercise of the Options may result in tax consequences. THE OPTIONEE IS
ADVISED TO CONSULT A TAX ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF
RECEIVING OR EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
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 and/or its Affiliates, the Trustee or the Optionee), hereunder, shall be
borne solely by the Optionee. The Company and/or its Affiliates 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 hereby agrees to indemnify the Company and/or its
Affiliates 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 Optionee will not be entitled to receive from the Company and/or the Trustee
any Shares allocated or issued upon the exercise of Options prior to the full
payment of the Optionee's tax or other liabilities arising from Options which
were granted to him and/or from the Shares issued upon the exercise of Options.
With respect to Approved 102 Options, the Optionee hereby acknowledges that he
is familiar with the provisions of Section 102 and the regulations and rules
promulgated thereunder, including without limitations the type of Option granted
hereunder and the tax implications applicable to such grant. The Optionee
accepts the provisions of the trust agreement, attached as Exhibit C hereto, and
agrees to be bound by its terms.
MISCELLANEOUS
NO OBLIGATION TO EXERCISE OPTIONS. The grant and acceptance of these Options
imposes no obligation on the Optionee to exercise any or all of the Options.
CONFIDENTIALITY. The Optionee shall regard the information in this Option
Agreement and its exhibits attached hereto as confidential information and the
Optionee shall not reveal its contents to anyone except when required by law or
for the purpose of gaining legal or tax advice.
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CONTINUATION OF EMPLOYMENT OR SERVICE. Neither the 2007 Plan nor this Option
Agreement shall impose any obligation on the Company or an Affiliate to continue
the Optionee's employment or service and nothing in the 2007 Plan or in this
Option Agreement shall confer upon the Optionee any right to continue in the
employ or service of the Company and/or an Affiliate or restrict the right of
the Company or an Affiliate to terminate such employment or service at any time.
ENTIRE AGREEMENT. Subject to the provisions of the 2007 Plan, which have been
incorporated herein by reference, this Option Agreement, together with the
exhibits hereto, constitute the entire agreement between the Optionee and the
Company with respect to Options granted hereunder, and supersedes all prior
agreements, understandings and arrangements, oral or written, between the
Optionee and the Company with respect to the subject matter hereof.
FAILURE TO ENFORCE - NOT A WAIVER. The failure of any party to enforce at any
time any provisions of this Option Agreement or the 2007 Plan shall in no way be
construed to be a waiver of such provision or of any other provision hereof.
PROVISIONS OF THE 2007 PLAN. The Options provided for herein are granted
pursuant to the 2007 Plan and said Options and this Option Agreement are in all
respects governed by the 2007 Plan and subject to all of the terms and
provisions of the 2007 Plan.
Any interpretation of this Option Agreement will be made in
accordance with the 2007 Plan but in the event there is any
contradiction between the provisions of this Option Agreement and
the 2007 Plan, the provisions of the Option Agreement will prevail.
ARBITRATION. Notwithstanding anything to the contrary contained in the 2007
Plan, any dispute in relation with the 2007 Plan and this Option Agreement and
the exercise or rights thereunder, shall be decided by arbitration by the legal
counsel to the Company or any person nominated by such legal counsel (the
"Arbitrator"), who shall decide such dispute in accordance with the provisions
of the Arbitration Law, 1968 and its supplement. The decision of the Arbitrator
shall be final and shall bind the Company and the Optionee. The Optionee will
exempt the Arbitrator from any liability in respect of any action or decision
made in connection with the arbitration.
BINDING EFFECT. The 2007 Plan and this Option Agreement shall be binding upon
the heirs, executors, administrators and successors of the parties hereof.
NOTICES. All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed by registered mail or delivered by
email or facsimile with written confirmation of receipt to the Optionee and/or
to the Company at the addresses shown on the letterhead above, or at such other
place as the Company may designate by written notice to the Optionee. The
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Optionee is responsible for notifying the Company in writing of any change in
the Optionee's address, and the Company shall be deemed to have complied with
any obligation to provide the Optionee with notice by sending such notice to the
address indicated below.
Company's Signature:
By: By:
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Name: ▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary & General Counsel Title: Compensation and Benefits
Manager
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Optionee's Acknowledgement and Acceptance
I, the undersigned, hereby acknowledge receipt of a copy of the 2007 Plan
and accept the Options subject to all of the terms and provisions thereof. I
have reviewed the 2007 Plan and this Option Agreement in its entirety, and fully
understand all provisions of this Option Agreement. I agree to notify the
Company upon any change in the residence address indicated above.
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Date Optionee's Signature
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EXHIBIT A
Ness Technologies, Inc. 2007 Stock Option Plan
EXHIBIT B
TERMS AND CONDITIONS OF THE OPTIONS
1. Number of Options granted: [________]
2. Price per Share: NASDAQ closing price on [____________]
3. Date of Grant:____________
4. Expiration Date:__________
5. Vesting and Exercise dates as follows:
Number of Options Vesting Date
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[______________] [33 1/3%] [______________]
[______________] [33 1/3%] [______________]
[______________] [33 1/3%] [______________]
Signatures:
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The Optionee The Company
EXHIBIT C
Trust Agreement