As filed with the Securities and Exchange
Commission on November 24, 2003
Registration No. 333-____
_____________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
B.O.S. BETTER ONLINE SOLUTIONS LTD.
___________________________________________________
(Exact name of the Registrant as specified in its charter)
ISRAEL NOT APPLICABLE
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Beit Rabin, Teradion Industrial Park
MISGAV, ISRAEL 20179
(Address of Principal Executive Offices) (Zip Code)
2003 ISRAELI SHARE OPTION PLAN
(Full title of the Plans)
BEIT RABIN, TERADION INDUSTRIAL PARK,
MISGAV, ISRAEL
(972-4) 990-7555
Corporation Service Company
1177 Avenue of the Americas, 17th Floor
NEW YORK, NY 10036
(Name and address of agent for service)
Tel: (212) 299-9101
(Telephone number, including area code, of agent for service)
COPY TO:
Ephraim Abramson & Co.
16B King George Street
Jerusalem, Israel 94229
(972) 2-624-5881
CALCULATION OF REGISTRATION FEE
Title of Securities Amount To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered Offering Per Share* Price Aggregate Registration Fee
Offering Price*
Ordinary Shares, par 625,000** $3.055 $1,909,375 $154.46
value NIS 4.00 per
share
* Estimated solely for the purpose of calculating the registration fee pursuant
to Securities Act Rule 457(h)(1) and (c) on the basis of the average of the high
and low sale prices of the Registrant's Ordinary Shares on The NASDAQ National
Market System on November 19, 2003 (which date is within 5 business days prior
to the date of the filing of this Registration Statement)
** Represents shares underlying options that may be issued pursuant to
Registrant's 2003 Israel Share Option Plan. This Registration Statement shall
also cover any additional Ordinary Shares as may be issuable pursuant to the
antidilution provisions of the Plans/Agreement, such as a share dividend, stock
split, recapitalization or other similar transaction..
THE COMPANY HAS RECEIVED FROM THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN
EXEMPTION FROM THE OBLIGATION TO PUBLISH THIS FORM S-8 IN THE MANNER REQUIRED
FOR THE PUBLICATION OF A PROSPECTUS PURSUANT TO THE PREVAILING LAWS OF THE STATE
OF ISRAEL. NOTHING IN SUCH EXEMPTION SHALL BE CONSTRUED AS AUTHENTICATION OR
APPROVAL OF THE RELIABILITY OR ACCURACY OF THE MATTERS CONTAINED IN THIS FORM
S-8 OR AS AN EXPRESSION OF OPINION AS TO THE QUALITY OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS FORM S-8.
PART 1
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 will be sent or given to employees as specified by Rule
428(b) (1) of the Securities Act of 1933, as amended.
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) or
additional information about the stock option plans and their administrators are
available without charge by contacting:
B.O.S. Better On-Line Solutions Ltd.
Beit Rabin
Teradion Industrial Park,
Misgav, 20179
Israel
Attn: Nehemia Kaufman
011 (972) 4-990-7555
2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by B.O.S Better Online Solutions Ltd., an
Israeli corporation, with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference and deemed to be a part
hereof from the date of the filing of such documents:
(a) The Registrant's Current Report on Form 6-K, as filed with the Commission
on September 2, 2003;
(b) The Registrant's Annual Report on Form 20-F for the fiscal year ended
December 31, 2002, as filed with the Commission on June 27, 2003;
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all such securities then remaining unsold, shall be deemed to
be incorporated by reference in this registration statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference herein or deemed to be incorporated by
reference in this registration statement shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any subsequently filed document that also is,
or is deemed to be, incorporated by reference in this registration statement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
The description of the Ordinary Shares contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission on April 1, 1996,
has undergone some changes due to the adoption of new Articles of Association by
the Shareholders at the Annual Meeting held March 13, 2002 (incorporated by
reference from the Registrant's Annual Report on Form 20-F for the fiscal year
ended December 31, 2002, as filed with the Commission on June 27, 2003). The
following is a summary of the description of the Ordinary Shares under the new
Articles of Association (the "Articles"):
DIVIDEND AND LIQUIDATION RIGHTS. All holders of paid-up Ordinary Shares of the
Company have an equal right to participate in a distribution of (i) dividends,
whether by cash or by bonus shares; (ii) Company assets; and (iii) the Company's
surplus assets upon winding up, all pro rata to the nominal value of the shares
held by them.
The Board of Directors may issue shares and other securities which are
convertible or exercisable into shares, up to the limit of the Company's
authorized share capital.
The Company's Board of Directors is the organ authorized to decide upon the
distribution of dividends or bonus shares.
VOTING, SHAREHOLDERS' MEETINGS, NOTICES AND RESOLUTIONS. Holders of paid-up
Ordinary Shares have one vote for each share held on all matters submitted to a
vote of shareholders. Such voting rights may be affected in the future by the
grant of any special voting rights to the holders of a class of shares with
preferential rights.
3
The quorum required for a general meeting of shareholders (whether annual
or special) consists of at least two shareholders present in person or by
proxy/voting instrument and holding, or representing, at least 25% of the voting
rights of the issued share capital. A meeting adjourned for lack of quorum shall
be postponed by one week, to the same day, time and place, or to a later time if
stated in the invitation to the meeting or in the notice of the meeting. The
quorum for the commencement of the adjourned meeting shall be any number of
participants.
Unless otherwise determined by the Israeli Companies Law 1999 or the
Company's Articles of Association, a resolution requires approval by the holders
of a majority of the shares represented at the meeting, in person or by proxy,
and voting thereon.
The Companies Law 1999 requires that certain transactions, actions and
arrangements be approved by shareholders, including (i) arrangements with a
director as to the terms of his office and compensation and arrangements for
insurance, exemption and indemnity of directors; (ii)certain Extraordinary
Transactions (as defined in the Companies Law) of the Company with its
controlling shareholders or any Extraordinary Transaction in which a controlling
shareholder has a personal interest; (iii)certain private placements; and (iv)
any action or Extraordinary Transaction in which the majority of the members of
the Board of Directors have a personal interest.
Each shareholder of record is entitled to receive at least a 21day prior
notice of shareholders' meetings. The accidental omission to give notice of a
meeting to any member, or the non receipt of notice sent to such member, shall
not invalidate the proceedings at such meeting. For purposes of determining the
shareholders entitled to notice and to vote, the Board of Directors may fix a
record date subject to the provisions of the law. Currently, Israeli law
provides that the record date not be any earlier than 40 days prior to the
meeting.
TRANSFER OF SHARES. Fully paid Ordinary Shares may be transferred freely. The
transfer of Ordinary Shares not fully paid up requires the approval of the Board
of Directors.
MODIFICATION OF CLASS RIGHTS. Subject to the provisions of any law, the rights
attached to any class (unless otherwise provided by the terms of issue of such
class), such as voting, rights to dividends and the like, may be altered after a
resolution is passed by the Company, with the approval of a resolution passed by
a majority of the voting power present by person or proxy and voting hereon at a
general meeting of the holders of the shares of such class, or the written
agreement of all the class holders. The rights vested in the holders of shares
of a particular class that were issued with special rights shall not be deemed
to have been altered by the creation or issue of further shares ranking equally
with them, unless otherwise provided in such shares' issue terms.
ELECTION OF DIRECTORS. The Company's directors are elected by the shareholders
at a shareholders' meeting. The Ordinary Shares do not have cumulative voting
rights in the election of directors. The holders of Ordinary Shares conferring
more than 50% of the voting power present by person or by proxy at the
shareholders' meeting, have the power to elect the directors. The directors
elected shall hold office until the next annual meeting, or sooner if they cease
to hold office pursuant to the provisions of the Company's Articles. In
addition, the Board of Directors may appoint a director (to fill a vacancy or
otherwise) between shareholder meetings, and such appointment shall be valid
until the next annual meeting or until such appointee ceases to hold office
pursuant to the provisions of the Company's Articles. In compliance with the
Companies Law, the Company has two external directors. The external directors
are also appointed by the shareholders and their term of office is three years.
4
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the provisions of the Israeli Companies Law, 1999 (the
"Companies Law"), the amended Articles of Association of the Registrant (the
"Articles") include provisions permitting the Registrant to procure insurance
coverage for its "office holders", exempt them from certain liabilities and
indemnify them, to the maximum extent permitted by law. An "office holder" is
defined in the Companies Law and the Articles as a director, managing director,
chief business manager, executive vice president, vice president, other manager
reporting directly to the managing director and any other person assuming the
responsibilities of any of the foregoing positions without regard to such
person's title.
INSURANCE
Under the Companies Law, a company may obtain insurance for any of its
office holders for: (i) a breach of his duty of care to the company or to
another person; (ii) a breach of his duty of loyalty to the company provided
that the office holder acted in good faith and had reasonable cause to assume
that his act would not prejudice the company's interests; or (iii) a financial
liability imposed upon him in favor of another person concerning an act
preformed by him in his capacity as an office holder.
We have obtained directors' and officers' liability insurance covering our
officers and directors and those of our subsidiaries.
INDEMNIFICATION
The Companies Law provides that a company may indemnify an officer holder
against: (i) a financial liability imposed on him in favor of another person by
any judgment concerning an act preformed in his capacity as an office holder;
and (ii) reasonable litigation expenses, including attorneys' fees, expended by
the office holder or charged to him by a court relating to an act preformed in
his capacity as an office holder in connection with: (a) proceedings the company
institutes against him or instituted on its behalf or by another person; (b) a
criminal charge from which he was acquitted; or (c) a criminal charge in which
he was convicted for a criminal offence that does not require proof of criminal
intent. The Articles of the Registrant authorize the Registrant to indemnify its
office holders to the fullest extent permitted under the law. The Companies Law
also authorizes a company to undertake in advance to indemnify an office holder,
provided that the undertaking is: (a) limited to the categories of events which
the board of directors determines that can be anticipated; and (b) limited in
amount determined by the board of directors to be reasonable for the
circumstances.
We have entered into indemnification agreements with directors and some
officers providing for indemnification under certain circumstances for acts and
omissions which may not be covered (or not be covered in full) by any directors'
and officers' liability insurance. Such indemnification agreement appears in the
Registrant's Current Report on Form 6-K as filed with the Commission on January
17, 2003.
5
EXEMPTION
Under the Companies Law, an Israeli company may not exempt an office holder
from liability for a breach of his duty of loyalty, but may exempt in advance an
office holder from his liability to the company, in whole or in part, for a
breach of his duty of care. The Articles authorize the Registrant to exempt any
office holder from liability to the Registrant to the extent permitted by law.
Both the Companies Law and the Articles provide that the Registrant may not
exempt or indemnify an office holder nor enter into an insurance contract which
would provide coverage for liability incurred as a result of any of the
following: (a) a breach by the office holder of his duty of fidelity (however,
the Registrant may insure such breach if the office holder acted in good faith
and had a reasonable basis to believe that the act would not prejudice the
Registrant); (b) a breach by the office holder of his duty of care if the breach
was done intentionally or recklessly; (c) any act of omission done with the
intent to derive an illegal personal benefit; or (d) any fine or monetary
penalty levied against the office holder.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. THE FOLLOWING EXHIBITS ARE FILED HEREWITH:
Exhibit No. Description
4.1 Specimen Certificate for Ordinary Shares;
4.2 Articles of Association of B.O.S. Better On-Line Solutions Ltd; *
4.3 Registrant's 2003 Israeli Share Option Plan;
5 Opinion of Ephraim Abramson & Co. with respect to the legality of the Ordinary
Shares being registered;
23.1 Consent of Kost, Forer and Gabbay;
23.2 Consent of Somekh Chaikin;
23.3 Consent of Ephraim Abramson & Co. - contained in the opinion filed as Exhibit 5 to
this Registration Statement;
24 Powers of Attorney - included on the signature page of this Registration Statement,
Part II hereof.
* Incorporated by reference from the Registrant's Annual Report on Form
20-F for the fiscal year ended December 31, 2002, as filed with the Commission
on June 27, 2003.
6
Item 9. UNDERTAKINGS.
We hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or for the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement;
(iii) include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (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
SEC by us pursuant to section 13 or section 15(d) of the Securities
Exchange Act that are incorporated by reference in this 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.
We hereby undertake that, for purposes of determining any liability under
the Securities Act, each filing of our annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion
of the SEC 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 us of
expenses incurred or paid by one of our directors, officers 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, we will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and we will be
governed by the final adjudication of such issue.
7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, B.O.S. Better On-Line Solutions Ltd., 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, thereunto duly authorized, in Misgav, State of
Israel, on November 16, 2003.
B.O.S. BETTER ONLINE SOLUTIONS LTD.
By: /S/ Israel Gal
-------------------
ISRAEL GAL
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Israel Gal his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
this Registration Statement and any and all future amendments (including
post-effective amendments) to the Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or substitute or
substitutes, may lawfully 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 TITLE DATE
/S / Israel Gal President and Chief Executive Officer November 16, 2003
---------------
Israel Gal
/S/ Edouard Cukierman Chairman of the Board of Directors November 16, 2003
---------------------
Edouard Cukierman
/S/ Nehemia Kaufman Chief Financial Officer November 16, 2003
-------------------
Nehemia Kaufman
/S/ Zvika Greengold Director November 16, 2003
-------------------
Zvika Greengold
/S/ Eli Ben-Mayor Director November 19, 2003
-----------------
Eli Ben-Mayor
/S/ Boaz Harel Director November 16, 2003
--------------
Boaz Harel
/S/ Yair Shamir Director November 16, 2003
---------------
Yair Shamir
8
/S/ Yael Ilan Director November 16, 2003
-------------
Yael Ilan
/S/ Adi Raveh Director November 16, 2003
-------------
Adi Raveh
/S/ Ronen Zavlik Director November 16, 2003
----------------
Ronen Zavlik
Authorized Representative in the United States:
/S/ Corporation Service Company
-------------------------------
Corporation Service Company
November 18, 2003
9
INDEX OF EXHIBITS
Exhibit No. Description
4.1 Specimen Certificate for Ordinary Shares;
4.2 Articles of Association of B.O.S. Better On-Line Solutions Ltd; *
4.3 Registrant's 2003 Israeli Share Option Plan;
5 Opinion of Ephraim Abramson & Co. with respect to the legality of the Ordinary
Shares being registered;
23.1 Consent of Kost, Forer and Gabbay;
23.2 Consent of Somekh Chaikin;
23.3 Consent of Ephraim Abramson & Co. - contained in the opinion filed as Exhibit 5 to
this Registration Statement;
24 Powers of Attorney - included on the signature page of this Registration Statement,
Part II hereof.
* Incorporated by reference from the Registrant's Annual Report on Form 20-F for
the fiscal year ended December 31, 2002, as filed with the Commission on June
27, 2003.
10
Exhibit 4.1
[FACE OF CERTIFICATE]
B.O.S. BETTER ONLINE SOLUTIONS LTD.
INCORPORATED UNDER THE LAWS OF THE STATE OF ISRAEL
BOS
CUSIP M20115 13 1
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES that
is the registered holder of
FULLY PAID AND NON-ASSESSABLE ORDINARY SHARES, OF THE NOMINAL VALUE OF 4.00 NEW
ISRAELI SHEKELS EACH, OF B.O.S. BETTER ONLINE SOLUTIONS LTD.
(hereinafter called the "Corporation") transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney, upon
surrender of this certificate properly endorsed. This certificate shares
represented hereby are issued and shall be held subject to all the provisions of
the Memorandum of Association and Articles of Association of the Corporation and
amendments thereto, copies of which are on file at the office of the Transfer
Agent and Registrar, and the holder hereof, by acceptance of this certificate,
consents to and agrees to be bound by all of said provisions. This certificate
is not valid unless countersigned by the Transfer Agent and Registrar.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be executed
by the facsimile signatures of the duly authorized officers of the Corporation
and a facsimile of its corporate
seal imprinted hereon.
Dated:
[CORPORATE SEAL]
[SIGNATURE]
NEHEMIA KAUFMAN, Chief Financial Officer
[SIGNATURE]
ISRAEL GAL, President and Chief Executive Officer
Countersigned and Registered:
American Stock Transfer & Trust Company
(New York, NY) Transfer Agent and Registrar
By
Authorized Signature.
[BACK OF CERTIFICATE]
B.O.S. BETTER ONLINE SOLUTIONS LTD.
The Corporation will furnish without charge to each shareholder who so requests
a complete statement of the powers, designations, preferences and relative
participating optional or other special rights of each class of share capital or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. Any such request should be addressed to the Chief
Financial Officer of the Corporation.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common
TEN ENT as tenants by the entireties
JT TEN as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT - ..................Custodian....................
(Cust) (Minor)
under Uniform Gifts to Minors Act
.................................................
(State)
Additional abbreviations may also be used though not in the above list
For Value Received,
hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
Please print or typewrite name and address including postal zip code of assignee
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint
Attorney to transfer the said Ordinary Shares on the books of the within-named
Corporation with full power of substitution in the premises.
Dated
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION,
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C.RULE 17Ad-15.
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
Exhibit 4.3
B.O.S BETTER ON-LINE SOLUTION LTD.
THE 2003 ISRAELI SHARE OPTION PLAN
(*IN COMPLIANCE WITH AMENDMENT NO. 132 OF THE ISRAELI TAX ORDINANCE, 2002)
This plan, as amended from time to time, shall be known as B.O.S. Better On-Line
Solution Ltd 2003 Israeli Share Option Plan (the "ISOP").
1. PURPOSE OF THE ISOP
The ISOP is intended to provide an incentive to retain, in the employ of
the Company and its Affiliates (as defined below), persons of training,
experience, and ability, to attract new employees, directors, consultants,
service providers and any other entity which the Board shall decide their
services are considered valuable to the Company, 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.
2. DEFINITIONS
For purposes of the ISOP and related documents, including the Option
Agreement, the following definitions shall apply:
2.1 "AFFILIATE" means any "employing company" within the meaning of
Section 102(a) of the Ordinance.
2.2 "APPROVED 102 OPTION" means an Option granted pursuant to Section
102(b) of the Ordinance and held in trust by a Trustee for the benefit
of the Optionee.
2.3 "BOARD" means the Board of Directors of the Company.
2.4 "CAPITAL GAIN OPTION (CGO)" as defined in Section 5.4 below.
2.5 "CAUSE" means, (i) conviction of any felony involving moral turpitude
or affecting the Company; (ii) any refusal to carry out a reasonable
directive of the chief executive officer, the Board or the Optionee's
direct supervisor, 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) reasonably determined by the Board to be materially
detrimental to the Company.
2.6 "CHAIRMAN" means the chairman of the Committee.
2.7 "CODE" means the United States Internal Revenue Code of 1986, as now
in effect or as hereafter amended.
2.8 "COMMITTEE" means a share option compensation committee of the Board,
designated from time to time by the resolution of the Board, which
shall consist of no fewer than two members of the Board. The Committee
shall consist of directors who are "outside directors" as defined in
Section 162(m) of the Code and "Non-Employee Directors" as defined in
Rule 16b-3 promulgated by the Securities and Exchange Commission under
the United States Securities Exchange Act of 1934. The Board will be
able to delegate its authorities to the Committee subject to any
applicable law.
2.9 "COMPANY" means B.O.S Better On-line Solution Ltd., an Israeli
company.
2.10 "COMPANIES LAW" means the Israeli Companies Law 5759-1999.
2.11 "CONTROLLING SHAREHOLDER" shall have the meaning ascribed to it in
Section 32(9) of the Ordinance.
2.12 "DATE OF GRANT" means, the date of grant of an Option, as determined
by the Board and set forth in the Optionee's Option Agreement.
2.13 "EMPLOYEE" means a person who is employed by the Company or its
Affiliates, including an individual who is serving as a director or an
office holder, but excluding Controlling Shareholder.
2.14 "EXPIRATION DATE" means the date upon which an Option shall expire, as
set forth in Section 10.2 of the ISOP.
2.15 "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 Board deems reliable.
Without derogating from the above, solely for the purpose of
determining the tax liability pursuant to Section 102(b)(3) of the
Ordinance, if at the Date of Grant the Company's shares are listed on
any established stock exchange or a national market system or if the
Company's shares will be registered for trading within ninety (90)
days following the Date of Grant, the Fair Market Value of a Share at
the Date of Grant shall be determined in accordance with the average
value of the Company's shares on the thirty (30) trading days
preceding the Date of Grant or on the thirty (30) trading days
following the date of registration for trading, as the case may be;
(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.
2.16 "ISOP" means this 2003 Israeli Share Option Plan.
2.17 "ITA" means the Israeli Tax Authorities.
2.18 "NON-EMPLOYEE" means a consultant, adviser, service provider,
Controlling Shareholder or any other person who is not an Employee.
2.19 "ORDINARY INCOME OPTION (OIO)" as defined in Section 5.5 below.
2.20 "OPTION" means an option to purchase one or more Shares of the Company
pursuant to the ISOP.
2.21 "102 OPTION" means any Option granted to Employees pursuant to Section
102 of the Ordinance.
2.22 "3(I) OPTION" means an Option granted pursuant to Section 3(i) of the
Ordinance to any person who is Non- Employee.
- 2 -
2.23 "OPTIONEE" means a person who receives or holds an Option under the
ISOP.
2.24 "OPTION AGREEMENT" means the share option agreement between the
Company and an Optionee that sets out the terms and conditions of an
Option.
2.25 "ORDINANCE" means the 1961 Israeli Income Tax Ordinance [New Version]
1961 as now in effect or as hereafter amended.
2.26 "PURCHASE PRICE" means the price for each Share subject to an Option.
2.27 "RETIREMENT" shall mean Optionee's retirement pursuant to applicable
law or in accordance with the terms of any tax-qualified retirement
plan maintained by the Company or any of its Affiliates in which the
Optionee participates.
2.28 "SECTION 102" means section 102 of the Ordinance as now in effect or
as hereafter amended.
2.29 "SHARE" means the ordinary shares, 1.00 NIS par value each, of the
Company.
2.30 "SUCCESSOR COMPANY" means any entity the Company is merged to or is
acquired by, in which the Company is not the surviving entity.
2.31 "TRANSACTION" means (i) merger, acquisition or reorganization of the
Company with one or more other entities in which the Company is not
the surviving entity, (ii) a sale of all or substantially all of the
assets of the Company.
2.32 "TRUSTEE" means any individual appointed by the Company to serve as a
trustee and approved by the ITA, all in accordance with the provisions
of Section 102(a) of the Ordinance.
2.33 "UNAPPROVED 102 OPTION" means an Option granted pursuant to Section
102(c) of the Ordinance and not held in trust by a Trustee.
2.34 "VESTED OPTION" means any Option, which has already been vested
according to the Vesting Dates.
2.35 "VESTING DATES" means, as determined by the Board, the date as of
which the Optionee shall be entitled to exercise the Options or part
of the Options, as set forth in section 11 of the ISOP.
3. ADMINISTRATION OF THE ISOP
3.1 The Board shall have the power to administer the ISOP, all as provided
by applicable law and in the Company's Articles of Association.
3.2 The Committee shall select one of its members as its 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.
3.3 The Board shall have the full power and authority to: (i) designate
participants; (ii) determine the terms and provisions of the
respective Option Agreements, including, but not limited to, the
number of Options to be granted to each Optionee, the number of Shares
to be covered by each Option, provisions concerning the time and the
extent to which the Options may be exercised and the nature and
duration of restrictions as to the transferability or restrictions
constituting substantial risk of forfeiture and to cancel or suspend
awards, as necessary; (iii) determine the Fair Market Value of the
Shares covered by each Option; (iv) make an election as to the type of
Approved 102 Option; and (v) designate the type of Options.
- 3 -
In Addition the Board shall have the full power and authority to (i)
alter any restrictions and conditions of any Options or Shares subject
to any Options (ii) interpret the provisions and supervise the
administration of the ISOP; (iii) accelerate the right of an Optionee
to exercise in whole or in part, any previously granted Option; (iv)
determine the Purchase Price of the Option; (v) prescribe, amend and
rescind rules and regulations relating to the ISOP; and (vi) make all
other determinations deemed necessary or advisable for the
administration of the ISOP.
3.4 The Board shall have the authority to grant, at 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 of the original
Option so surrendered and canceled and containing such other terms and
conditions as the Board may prescribe in accordance with the
provisions of the ISOP.
3.5 Subject to the Company's Articles of Association, all decisions and
selections made by the Board pursuant to the provisions of the ISOP
shall be made by a majority of its members except that no member of
the Board shall vote on, or be counted for quorum purposes, with
respect to any proposed action of the Board relating to any Option to
be granted to that member. Any decision reduced to writing shall be
executed in accordance with the provisions of the Company's Articles
of Association, as the same may be in effect from time to time.
3.6 The interpretation and construction by the Board of any provision of
the ISOP or of any Option Agreement thereunder shall be final and
conclusive unless otherwise determined by the Board.
3.7 Subject to the Company's Articles of Association and the Company's
decision, and to all approvals legally required, including, but not
limited to the provisions of the 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.
4. DESIGNATION OF PARTICIPANTS
4.1 The persons eligible for participation in the ISOP as Optionees shall
include any Employees and/or Non-Employees of the Company or of any
Affiliate; provided, however, that (i) Employees may only be granted
102 Options; (ii) Non-Employees may only be granted 3(i) Options; and
(iii) Controlling Shareholders may only be granted 3(i) Options.
4.2 The grant of an Option hereunder shall neither entitle the Optionee to
participate nor disqualify the Optionee from participating in, any
other grant of Options pursuant to the ISOP or any other option or
share plan of the Company or any of its Affiliates.
4.3 Anything in the ISOP to the contrary notwithstanding, all grants of
Options to directors and office holders shall be authorized and
implemented in accordance with the provisions of the Companies Law or
any successor act or regulation, as in effect from time to time.
5. DESIGNATION OF OPTIONS PURSUANT TO SECTION 102
5.1 The Company may designate Options granted to Employees pursuant to
Section 102 as Unapproved 102 Options or Approved 102 Options.
5.2 The grant of Approved 102 Options shall be made under this ISOP
adopted by the Board as described in Section 15 below, and shall be
conditioned upon the approval of this ISOP by the ITA as required by
Section 102.
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5.3 Approved 102 Option may either be classified as Capital Gain Option
("CGO") or Ordinary Income Option ("OIO").
5.4 Approved 102 Option elected and designated by the Company to qualify
under the capital gain tax treatment in accordance with the provisions
of Section 102(b)(2) shall be referred to herein as CGO.
5.5 Approved 102 Option elected and designated by the Company to qualify
under the ordinary income tax treatment in accordance with the
provisions of Section 102(b)(1) shall be referred to herein as OIO.
5.6 The Company's election of the type of Approved 102 Options as CGO or
OIO granted to Employees (the "ELECTION"), shall be appropriately
filed with the ITA before the Date of Grant of an Approved 102 Option.
Such Election shall become effective beginning the first Date of Grant
of an Approved 102 Option under this ISOP and shall remain in effect
until the end of the year following the year during which the Company
first granted Approved 102 Options. The Election shall obligate the
Company to grant ONLY the type of Approved 102 Option it has elected,
and shall apply to all Optionees who were granted Approved 102 Options
during the period indicated herein, all in accordance with the
provisions of Section 102(g) of the Ordinance. For the avoidance of
doubt, such Election shall not prevent the Company from granting
Unapproved 102 Options simultaneously.
5.7 All Approved 102 Options must be held in trust by a Trustee, as
described in Section 6 below.
5.8 For the avoidance of doubt, the designation of Unapproved 102 Options
and Approved 102 Options shall be subject to the terms and conditions
set forth in Section 102 of the Ordinance and the regulations
promulgated thereunder.
5.9 With regards to Approved 102 Options, the provisions of the ISOP
and/or the Option Agreement shall be subject to the provisions of
Section 102 and the Tax Assessing Officer's permit, and the said
provisions and permit shall be deemed an integral part of the ISOP and
of the Option Agreement. Any provision of Section 102 and/or the said
permit which is necessary in order to receive and/or to keep any tax
benefit pursuant to Section 102, which is not expressly specified in
the ISOP or the Option Agreement, shall be considered binding upon the
Company and the Optionees.
6. TRUSTEE
6.1 Approved 102 Options which shall be granted under the ISOP and/or any
Shares allocated or issued upon exercise of such Approved 102 Options
and/or other shares received subsequently following any realization of
rights, including without limitation bonus shares, shall be allocated
or issued to the Trustee and held for the benefit of the Optionees for
such period of time as required by Section 102 or any regulations,
rules or orders or procedures promulgated thereunder (the "HOLDING
PERIOD"). In the case the requirements for Approved 102 Options are
not met, then the Approved 102 Options may be treated as Unapproved
102 Options, all in accordance with the provisions of Section 102 and
regulations promulgated thereunder.
6.2 Notwithstanding anything to the contrary, the Trustee shall not
release any Shares allocated or issued upon exercise of Approved 102
Options prior to the full payment of the Optionee's tax liabilities
arising from Approved 102 Options which were granted to him and/or any
Shares allocated or issued upon exercise of such Options.
6.3 With respect to any Approved 102 Option, subject to the provisions of
Section 102 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.
- 5 -
6.4 Upon receipt of Approved 102 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 Approved 102 Option or Share granted to him
thereunder.
7. SHARES RESERVED FOR THE ISOP; RESTRICTION THEREON
7.1 The Company has reserved 2,500,000 (two million five hundred thousand)
authorized but unissued Shares, for the purposes of the ISOP and for
the purposes of any other share option plans which may be adopted by
the Company in the future, subject to adjustment as set forth in
Section 9 below. Any Shares which remain unissued and which are not
subject to the outstanding Options at the termination of the ISOP
shall cease to be reserved for the purpose of the ISOP, but until
termination of the ISOP the Company shall at all times reserve
sufficient number of Shares to meet the requirements of the ISOP.
Should any Option for any reason expire or be canceled prior to its
exercise or relinquishment in full, the Shares subject to such Option
may again be subjected to an Option under the ISOP or under the
Company's other share option plans.
7.2 Each Option granted pursuant to the ISOP, shall be evidenced by a
written Option Agreement between the Company and the Optionee, in such
form as the Board shall from time to time approve. Each Option
Agreement shall state, among other matters, the number of Shares to
which the Option relates, the type of Option granted thereunder
(whether a CGO, OIO, Unapproved 102 Option or a 3(i) Option), the
Vesting Dates, the Purchase Price per share, the Expiration Date and
such other terms and conditions as the Board in its discretion may
prescribe, provided that they are consistent with this ISOP.
8. PURCHASE PRICE
8.1 The Purchase Price of each Share subject to an Option shall be
determined by the Board 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.
8.2 The Purchase Price shall be payable upon the exercise of the Option in
a form satisfactory to the Board, including without limitation, by
cash or check. The Board shall have the authority to postpone the date
of payment on such terms as it may determine.
8.3 The Purchase Price shall be denominated in the currency of the primary
economic environment of, either the Company or the Optionee (that is
the functional currency of the Company or the currency in which the
Optionee is paid) as determined by the Company.
9. 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:
9.1 In the event of Transaction, the unexercised Options then outstanding
under the ISOP shall be assumed or substituted for 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)
as were distributed to the shareholders of the Company in connection
and with respect to the Transaction. In the case of such assumption
and/or substitution of Options, appropriate adjustments shall be made
to the Purchase Price so as to reflect such action and all other terms
and conditions of the Option Agreements shall remain unchanged,
including but not limited to the vesting schedule, all subject to the
determination of the Board, which determination shall be in their sole
discretion and final. The Company shall notify the Optionee of the
Transaction in such form and method as it deems applicable at least
ten (10) days prior to the effective date of such Transaction.
- 6 -
9.2 Notwithstanding the above and subject to any applicable law, the Board
shall have full power and authority to determine that in certain
Option Agreements there shall be a clause instructing that, if in any
such Transaction as described in section 9.1 above, the Successor
Company (or parent or subsidiary of the Successor Company) does not
agree to assume or substitute for the Options, the Vesting Dates shall
be accelerated so that any unvested Option or any portion thereof
shall be immediately vested as of the date which is ten (10) days
prior to the effective date of the Transaction.
9.3 For the purposes of section 9.1 above, an Option shall be considered
assumed or substituted if, following the Transaction, the Option
confers the right to purchase or receive, for each Share underlying an
Option immediately prior to the Transaction, the consideration
(whether shares, options, cash, or other securities or property)
received in the Transaction by holders of shares 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 Board 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 Board 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.
9.4 If the Company is voluntarily liquidated or dissolved while
unexercised Options remain outstanding under the ISOP, the Company
shall immediately notify all unexercised Option holders of such
liquidation, and the Option holders shall then have ten (10) days to
exercise any unexercised Vested Option held by them at that time, in
accordance with the exercise procedure set forth herein. Upon the
expiration of such ten-days period, all remaining outstanding Options
will terminate immediately.
9.5 If the outstanding shares of the Company shall at any time be changed
or exchanged by declaration of a share dividend (bonus shares), share
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 the 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 Section 7 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.
10. TERM AND EXERCISE OF OPTIONS
10.1 Options shall be exercised by the Optionee by giving written notice to
the Company and/or to any third party designated by the Company (the
"REPRESENTATIVE"), in such form and method as may be determined by the
Company and when applicable, by the Trustee in accordance with the
requirements of Section 102, which exercise shall be effective upon
receipt of such notice by the Company and/or the Representative and
the payment of the Purchase Price at the Company's or the
Representative's principal office. The notice shall specify the number
of Shares with respect to which the Option is being exercised.
- 7 -
10.2 Options, to the extent not previously exercised, shall terminate
forthwith upon the earlier of: (i) the date set forth in the Option
Agreement; and (ii) the expiration of any extended period in any of
the events set forth in section 10.5 below.
10.3 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 exercisable, prior to the Expiration Date, and provided
that, subject to the provisions of section 10.5 below, the Optionee is
employed by or providing services to the Company or any of its
Affiliates, at all times during the period beginning with the granting
of the Option and ending upon the date of exercise.
10.4 Subject to the provisions of section 10.5 below, in the event of
termination of Optionee's employment or services, with the Company or
any of its Affiliates, all Options granted to such Optionee will
immediately expire. A notice of termination of employment or service
shall be deemed to constitute termination of employment or service.
For the avoidance of doubt, in case of such termination of employment
or service, the unvested portion of the Optionee's Option shall not
vest and shall not become exercisable.
10.5 Notwithstanding anything to the contrary hereinabove and unless
otherwise determined in the Optionee's Option Agreement, an Option may
be exercised after the date of termination of Optionee's employment or
service with the Company or any Affiliates during an additional period
of time beyond the date of such termination, but only with respect to
the number of Vested Options at the time of such termination according
to the Vesting Dates, if:
(i) termination is without Cause, in which event any Vested Option
still in force and unexpired may be exercised within a period of
ninety (90) days after the date of such termination; or-
(ii) termination is the result of death or disability of the Optionee,
in which event any Vested Option still in force and unexpired may
be exercised subject to the period determined in section 15.
(iii) prior to the date of such termination, the Board shall authorize
an extension of the terms of all or part of the Vested 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.
(iv) termination is the result of Retirement of the Optionee, in which
event any Vested Option still in force and unexpired may be
exercised within a period of twelve (12) months after the date of
such termination;
For avoidance of any doubt, if termination of employment or service is
for Cause, any outstanding unexercised Option (whether vested or
non-vested), will immediately expire and terminate, and the Optionee
shall not have any right in connection to such outstanding Options.
10.6 To avoid doubt, the Optionees 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 Option, nor shall they be deemed
to be a class of shareholders or creditors of the Company for purpose
of the operation of sections 350 and 351 of the Companies Law or any
successor to such section, until registration of the Optionee as
holder of such Shares in the Company's register of shareholders upon
exercise of the Option in accordance with the provisions of the ISOP,
but in case of Options and Shares held by the Trustee, subject to the
provisions of Section 6 of the ISOP.
10.7 Any form of Option Agreement authorized by the ISOP may contain such
other provisions as the Board may, from time to time, deem advisable.
10.8 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.
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11. VESTING OF OPTIONS
11.1 Subject to the provisions of the ISOP, each Option shall vest
following the Vesting Dates and for the number of Shares as shall be
provided in the Option Agreement. However, no Option shall be
exercisable after the Expiration Date.
11.2 An Option may be subject to such other terms and conditions on the
time or times when it may be exercised, as the Board may deem
appropriate. The vesting provisions of individual Options may vary.
12. PURCHASE FOR INVESTMENT
The Company's obligation to issue or allocate Shares upon exercise of an
Option granted under the ISOP is expressly conditioned upon: (a) the
Company's completion of any registration or other qualifications of such
Shares under all applicable laws, rules and 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 the Optionee.
13. DIVIDENDS
With respect to all Shares (but excluding, for avoidance of any doubt, any
unexercised Options) allocated or issued upon the exercise of Options
purchased by the Optionee and held by the Optionee or by the Trustee, as
the case may be, the Optionee shall be entitled to receive dividends in
accordance with the quantity of such Shares, subject to the provisions of
the Company's Articles of Association (and all amendments thereto) and
subject to any applicable taxation on distribution of dividends, and when
applicable subject to the provisions of Section 102 and the rules,
regulations or orders promulgated thereunder.
14. RESTRICTIONS ON ASSIGNABILITY AND SALE OF OPTIONS
14.1 No Option or any right with respect thereto, purchasable hereunder,
whether fully paid or not, shall be assignable, transferable or given
as collateral or any right with respect to it given to any third party
whatsoever, except as specifically allowed under the ISOP, 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.
14.2 As long as Options and/or Shares are held by the Trustee on behalf of
the Optionee, all rights of the Optionee over the Shares are personal,
can not be transferred, assigned, pledged or mortgaged, other than by
will or pursuant to the laws of descent and distribution.
- 9 -
15. EFFECTIVE DATE AND DURATION OF THE ISOP
The ISOP shall be effective as of the day it was adopted by the Board and
shall terminate at the end of ten (10) years from such day of adoption.
16. AMENDMENTS OR TERMINATION
The Board may at any time, but when applicable, after consultation with the
Trustee, amend, alter, suspend or terminate the ISOP. No amendment,
alteration, suspension or termination of the ISOP shall impair the rights
of any Optionee, unless mutually agreed otherwise between the Optionee and
the Company, which agreement must be in writing and signed by the Optionee
and the Company. Termination of the ISOP shall not affect the Board's
ability to exercise the powers granted to it hereunder with respect to
Options granted under the ISOP prior to the date of such termination.
17. GOVERNMENT REGULATIONS
The ISOP, and 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 the
Ordinance and to such approvals by any governmental agencies or national
securities exchanges as may be required. Nothing herein shall be deemed to
require the Company to register the Shares under the securities laws of any
jurisdiction.
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 an Affiliate thereof, to continue any
Optionee in its employ or service, 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 an Affiliate thereof or
restrict the right of the Company or an Affiliate 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 Haifa, Israel shall have sole jurisdiction in
any matters pertaining to the ISOP.
20. TAX CONSEQUENCES
20.1 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 shall agree 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.
20.2 The Company and/or, when applicable, the Trustee shall not be required
to release any Share certificate to an Optionee until all required
payments have been fully made.
- 10 -
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 Options otherwise than 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 Board may also grant more
than one Option to a given Optionee during the term of the ISOP, either in
addition to, or in substitution for, one or more Options previously granted
to that Optionee.
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Exhibit 5
November 20, 2003
B.O.S. Better Online Solutions Ltd.
Beit Rabin, Teradyon Industrial Park
Misgav, Israel
Re: FORM S-8
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-8 ("Registration
Statement") of B.O.S. Better Online Solutions Ltd. (the "Company"), an Israeli
corporation, with respect to the registration of 625,000 Ordinary Shares,
nominal value NIS 4.00 per share, of the Company.
We have been requested to furnish an opinion to be included as an Exhibit to the
Registration Statement. In conjunction with the furnishing of this opinion, we
have examined such corporate documents and have made such investigation of
matters of act and law as we have deemed necessary to render this opinion.
In such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as copies. As to various questions
of fact material to the opinions expressed herein, we have relied, without
independent investigation, upon statements and certificates of officers of the
Company and public officials.
We are qualified to practice law in the State of Israel only, and the opinions
expressed herein are limited to the laws of the State of Israel.
Based upon such examination and investigation, and upon the assumption that
there will be no material changes in the documents examined and the matters
investigated, we are of the opinion that the 625,000 Ordinary Shares which are
the subject of the Registration Statement, have been duly authorized by the
Company and that, when issued upon the exercise of options in accordance with
the terms of the stock option plans, will be validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Yours truly,
/s/ Ephraim Abramson & Co.
--------------------------
Ephraim Abramson & Co.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the 2003 Stock Option Plan of B.O.S. Better Online
Solutions Ltd. ("B.O.S.")., of our report dated March 24, 2003, with respect to
the consolidated financial statements of B.O.S. included in the Registration
Statement in its Annual Report (Form 20-F) for the year ended December 31, 2002,
filed with the Securities and Exchange Commission.
/s/ Kost Forer and Gabbay
-------------------------
Tel-Aviv, Israel KOST FORER and GABBAY
November 20, 2003 A Member of Ernst & Young Global
Exhibit 23.2
To the Board of Directors of
B.O.S. Better OnLine Solutions Ltd.
We consent to the incorporation by reference in this Registration Statement on
Form S-8 by B.O.S. Better OnLine Solutions Ltd. (the "Company"), of our
Auditors' Report to the Shareholders of the Company, dated, April 4, 2001, with
respect to the consolidated balance sheet of the Company as of December 31,
2000, and the related consolidated statements of operations, shareholders'
equity and cash flows for the year ended December 31, 2000, which report appears
in the Company's Annual Report on Form 20-F for the year ended December 31,
2002, filed by the Company with the U. S. Securities and Exchange Commission on
June 27, 2003.
/s/ Somekh Chaikin
------------------
Somekh Chaikin
Certified Public Accountants (Isr.)
Member Firm of KPMG International
Haifa, November 20, 2003