1998 STOCK OPTION AND INCENTIVE
PLAN
AMENDED ON JANUARY 23,
2008
1. PURPOSE;
TYPE OF AWARDS; CONSTRUCTION
The purpose of the
Amdocs Limited 1998 Stock Option and Incentive Plan (the
“Plan”) is to afford an incentive to officers,
directors, employees and consultants of Amdocs Limited (the
“Company”), or any subsidiary of the Company which now
exists or hereafter is organized or acquired by the Company, to
acquire a proprietary interest in the Company, to continue as
employees, directors and consultants, to increase their efforts on
behalf of the Company and to promote the success of the
Company’s business. It is further intended that options
granted by the Committee (as such a term is defined below) pursuant
to Section 8 of the Plan shall constitute “incentive
stock options” (“Incentive Stock Options”) within
the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), and options granted by
the Committee pursuant to Section 7 of the Plan shall
constitute “nonqualified stock options”
(“Nonqualified Stock Options”). The Committee may also
grant restricted shares (“Restricted Stock”) under the
Plan pursuant to Section 9 of the Plan. If the Committee so
determines it may grant Nonqualified Stock Options or Restricted
Stock pursuant to the provisions of Section 102 of the Israel
Income Tax Ordinance (New Version) 1961, and any regulations,
rules, orders or procedures promulgated thereunder (“102
Securities”).
As used in this
Plan, the following words and phrases shall have the meanings
indicated:
(a)
“Ordinary Shares” shall mean shares of ordinary shares,
par value L0.01 per share, of the Company.
(b)
“Disability” shall mean the inability of a Grantee (as
defined in Section 3 hereof) to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or
that has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.
(c)
“Fair Market Value” per share as of a particular date
shall mean
(i) if the
shares of Ordinary Shares are not then listed on a national
securities exchange or traded in an over-the-counter market, such
value as the Committee, in its sole discretion, shall determine; or
(ii) if the shares of Ordinary Shares are then traded on a
national securities exchange the closing sales price per share of
Ordinary Shares on the national securities exchange, on which the
Ordinary Shares are principally traded, for the last preceding date
on which there was a sale of such Ordinary Shares on such exchange,
or (iii) if the shares of Ordinary Shares are then traded in
an over-the-counter market, the average of the closing bid and
asked prices for the shares of Ordinary Shares in such
over-the-counter market for the last preceding date on which there
was a sale of such Ordinary Shares in such market.
(d)
“Option” or “Options” shall mean a grant to
a Grantee (as defined in Section 3 hereof) of an option or
options to purchase shares of Ordinary Shares. Options granted by
the Committee (as defined in Section 3 hereof), pursuant to
the Plan shall constitute either Incentive Stock Options or
Nonqualified Stock Options.
(e)
“Parent” shall mean any company (other than the
Company) in an unbroken chain of companies ending with the Company
if, at the time of granting an award, each of the companies other
than the Company owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one
of the other companies in such chain.
(f)
“Subsidiary” shall mean any company (other than the
Company) in an unbroken chain of companies beginning with the
Company if, at the time of granting an award, each of the companies
other than the last company in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other companies in such
chain.
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(g)
“Ten Percent Stockholder” shall mean a Grantee (as
defined in Section 3 hereof), who, at the time an Incentive
Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary.
The Plan shall be
administered by a committee (the “Committee”)
established by the Board of Directors of the Company (the
“Board”).
The Committee
shall have the authority in its discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer
the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable
in the administration of the Plan, including, without limitation,
the authority to grant Options and Restricted Stock; to determine
which Options shall constitute Incentive Stock Options and which
Options or Restricted Stock shall constitute Nonqualified Stock
Options or 102 Securities; to determine the kind of consideration
payable (if any) with respect to awards; to determine the period
during which Options may be exercised and Restricted Stock shall be
subject to restrictions, and whether in whole or in installments;
to determine the persons to whom, and the time or times at which
awards shall be granted (such persons are referred to herein as
“Grantees”); to determine the number of shares to be
covered by each award; to interpret the Plan; to prescribe, amend
and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the agreements (which need
not be identical) entered into in connection with awards granted
under the Plan (the “Agreements”); to cancel or suspend
awards, as necessary; and to make all other determinations deemed
necessary or advisable for the administration of the
Plan.
The Committee may
delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with
respect to any responsibility the Committee or such person may have
under the Plan. All decisions, determinations and interpretations
of the Committee shall be final and binding on all Grantees of any
awards under this Plan.
The Board shall
fill all vacancies, however caused, in the Committee. The Board may
from time to time appoint additional members to the Committee, and
may at any time remove one or more Committee members and substitute
others.
No member of the
Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any
award granted hereunder.
Officers,
Directors, other employees and consultants of the Company or of any
Subsidiary or Parent shall be eligible to receive awards hereunder.
In determining the persons to whom awards shall be granted and the
number of shares to be covered by each award, the Committee, in its
sole discretion, shall take into account the contribution by the
eligible individuals to the management, growth and/or profitability
of the business of the Company and such other factors as the
Committee shall deem relevant.
The maximum number
of Ordinary Shares reserved for grant of awards under the Plan
shall be 55,300,000. Such shares may, in whole or in part, be
authorized but unissued shares. The foregoing numbers of shares may
be increased or decreased by the events set forth in
Section 10 hereof.
If any outstanding
award under the Plan should, for any reason expire, be canceled or
be terminated without having been exercised in full, the shares of
Ordinary Shares allocable to the unexercised, canceled or
terminated portion of such award shall (unless the Plan shall have
been terminated) become available for subsequent grants of awards
under the Plan; provided that an award under the plan may not again
be made available for issuance under the plan if such Ordinary
Shares are: (i) Ordinary Shares that were subject to
stock-settled stock appreciation rights and were not issued upon
the net settlement or net exercise of such stock appreciation
rights, (ii) Ordinary Shares used to pay the Option Price,
(iii) Ordinary Shares delivered to or withheld by the Company
to pay the withholding
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taxes related
to an Option or stock appreciation right, or (iv) Ordinary
Share repurchased on the open market with proceeds of an Option
exercise.
6. TERMS AND
CONDITIONS OF OPTIONS
Each Option
granted pursuant to the Plan shall be evidenced by a written
agreement between the Company and the Grantee (the “Option
Agreement”), in such form as the Committee shall from time to
time approve, which Option Agreement shall comply with and be
subject to the following terms and conditions:
(a) Number
of Shares. Each Option Agreement shall state the number of shares
of Ordinary Shares to which the Option relates.
(b) Type
of Option. Each Option Agreement shall specifically state that the
Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option.
(c) Option
Price. Each Option Agreement shall state the Option Price, which
shall not be less than one-hundred percent (100%) of the Fair
Market Value of the shares of Ordinary Shares covered by the Option
on the date of grant. The Option Price shall be subject to
adjustment as provided in Section 10 hereof. The date on which
the Committee adopts a resolution expressly granting an Option
shall be considered the day on which such Option is
granted.
(d) Medium
and Time of Payment. The Option Price shall be paid in full, at the
time of exercise and may be made in cash, by the delivery of shares
of Ordinary Shares with a fair market value equal to the Option
Price, provided that any such shares acquired by the Grantee
pursuant to the exercise of an Incentive Stock Option shall have
been held by the Grantee for a period of at least one year, or by a
combination of cash and such shares that have been held by the
Grantee for a period of at least one year whose fair market value
together with such cash shall equal the Option Price. The Committee
may also permit Grantees, either on a selective or aggregate basis,
simultaneously to exercise Options and sell the shares of Ordinary
Shares thereby acquired pursuant to a brokerage or a similar
arrangement, approved in advance by the Committee, and use the
proceeds from such sale as payment of the Purchase Price of such
shares.
(e) Term
and Exercisability of Options. Each Option Agreement shall be
exercisable at such times and under such conditions as the
Committee, in its discretion, shall determine; provided, however,
such exercise period shall not exceed ten (10) years from the
date of grant of such Option. The exercise period shall be subject
to earlier termination as provided in Sections 6(f) and 6(g)
hereof. An Option may be exercised, as to any or all full shares of
Ordinary Shares as to which the Option has become exercisable, by
giving written notice of such exercise to the Committee or its
designated agent.
Options
shall become exercisable in cumulative installments of 25% on the
first, second, third and fourth anniversary of the date on which
such Option is granted, or at such other times and in such other
installments (which may be cumulative) as the Committee shall
provide in the terms of the respective Option Agreements; provided,
however, that the Committee, in its absolute discretion, may, on
such terms and conditions as it may determine to be appropriate,
accelerate the time at which such Option or any portion thereof may
be exercised. The Option may contain performance goals and
measurements, and the provisions with respect to any Option need
not be the same as the provisions with respect to any other
Option.
(f) Termination.
Except as provided in this Section 6(f) and in Section 6(g) hereof,
an Option may not be exercised unless the Grantee is then in the
service or employ of the Company or a Parent or Subsidiary (or a
company or a parent or subsidiary company of such company issuing
or assuming the Option in a transaction to which Section 424(a) of
the Code applies), and unless the Grantee has remained continuously
so employed or has continuously performed such services since the
date of grant of the Option. In the event that the employment of a
Grantee shall terminate or Grantee shall cease performance of
services for the Company, a Parent or a Subsidiary thereof (in
either event, other than by reason of death or disability), all
Options of such Grantee that are exercisable at the time of such
termination or cessation may, unless earlier terminated in
accordance with their terms, be exercised within ninety
(90) days after the date of such termination or cessation;
provided, however, that if the Company, Subsidiary, or Parent, as
the case may be, shall terminate the Grantee’s employment for
cause (as determined by the Committee), all Options theretofore
granted to such
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Grantee shall,
to the extent not theretofore exercised, terminate on the date of
such termination or cessation unless otherwise determined by the
Committee. In the case of a Grantee whose principal employer is a
Subsidiary, the Grantee’s employment shall be deemed to be
terminated for purposes of this Section 6(f) as of the date on
which such principal employer ceases to be a Subsidiary.
(g) Death
or Disability of Grantee. If a Grantee shall die while employed by,
or performing services for, the Company or a Parent or subsidiary
thereof, or within ninety (90) days after the date of
cessation of such Grantee’s employment or performance of
services other than as a result of termination for cause (or within
such longer period as the Committee may have provided pursuant to
Section 6(e) hereof), or if the Grantee’s employment shall
terminate or performance of services shall cease by reason of
Disability, all Options theretofore granted to such Grantee may,
unless earlier terminated in accordance with their terms, be
exercised by the Grantee or by the Grantee’s estate or by a
person who acquired the right to exercise such Options by bequest
or inheritance or otherwise by reason of the death or Disability of
the Grantee, at any time within twelve months after the date of
death or Disability of the Grantee. In the event that an Option
granted hereunder shall be exercised by the legal representatives
of a deceased or former Grantee, written notice of such exercise
shall be accompanied by a certified copy of letters testamentary or
equivalent proof of the right of such legal representative to
exercise such Option.
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