| Employee Stock Purchase
Plan
On
November 24, 1996, the Company adopted an Employee Stock
Purchase Plan (the "Purchase Plan"), which was ratified
by the Company's shareholders. Under the Purchase Plan,
6,000,000 ordinary shares were authorized for issuance.
As of February 28, 2002, 824,794 ordinary shares have
been issued under the Purchase Plan. The Purchase Plan,
which is intended to qualify under Section 423 of the
United States Internal Revenue Code, is implemented
by six-month offerings with purchases occurring at six-month
intervals in February and July. The Compensation Committee
of the Board administers the Purchase Plan. Employees
of the Company's United States subsidiary are eligible
to participate if they are employed for more than 20
hours per week. The Purchase Plan permits eligible employees
to purchase ordinary shares through payroll deductions,
which may not exceed 15% of an employee's compensation,
nor more than 1,875 shares per participant on any purchase
date. The price of the ordinary shares purchased under
the Purchase Plan will be 85% of the lower of the fair
market value of the ordinary shares at the beginning
of the six-month offering period or on the semi-annual
purchase date. Employees may terminate their participation
in the Purchase Plan at any time during the offering
period, and participation ends automatically on termination
of employment with the Company. Each outstanding purchase
right will be exercised immediately prior to a merger
or consolidation of the Company. The Board may amend
or terminate the Purchase Plan immediately after the
close of any purchase date. However, the Board may not,
without shareholder approval, materially increase the
number of ordinary shares available for issuance, alter
the purchase price formula so as to reduce the purchase
price payable for ordinary shares, or materially modify
the eligibility requirements for participation or the
benefits available to participants. The Purchase Plan
terminates by its terms in July 2006.
Change of Control Arrangements
The
Compensation Committee of the Board of Directors, as
administrator of the 1996 Plan, has the authority to
provide for accelerated vesting of the ordinary shares
subject to outstanding options held by the executive
officers in connection with certain changes in control
of the Company or the subsequent termination of the
officer's employment following the change in control
event.
Employees
As
of February 28, 2002, the Company had 1,178 employees,
of whom 326 were engaged in research, development, and
quality assurance, 512 were engaged in marketing and
sales, 210 were engaged in customer support and operations,
and 130 were engaged in MIS, administration and finance.
The Company believes that its relations with its employees
are satisfactory.
Substantially
all of the Company's employees are located in Israel
and the United States. With respect to its employees
in Israel, the Company is subject to various Israeli
labor laws and labor practices, and to administrative
orders extending certain provisions of collective bargaining
agreements between the Histadrut (Israel's General Federation
of Labor) and the Coordinating Bureau of Economic Organizations
(the Israeli federation of employers' organizations)
to all private sector employees. For example, mandatory
cost of living adjustments, which compensate Israeli
employees for a portion of the increase in the Israeli
consumer price index, are determined on a nationwide
basis. Israeli law also requires the payment of severance
benefits upon the termination, retirement or death of
an employee. The Company meets this requirement by contributing
on an ongoing basis towards "managers' insurance" funds
that combine pension, insurance and, if applicable,
severance pay benefits. In addition, Israeli employers
and employees are required to pay specified percentages
of wages to the National Insurance Institute, which
is similar to the United States Social Security Administration.
Other provisions of Israeli law or regulation govern
matters such as the length of the workday, minimum wages,
other terms of employment and restrictions on discrimination.
The Company is subject to the labor laws and regulations
of other jurisdictions in the world where it has employees.
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