This excerpt taken from the CHKP 20-F filed Apr 4, 2005.
United States stock option plan
The 1996 U.S. Plan was adopted by the Board of Directors on April 12, 1996 and was approved by the shareholders as the successor to the Companys 1995 Stock Option Plan (the 1995 Plan). The 1996 U.S. Plan was restated, most recently in May 2004. The 1996 U.S. Plan authorizes the issuance of up to 60,278,415 ordinary shares. As of February 28, 2005, 37,359,271 ordinary shares have been issued under the 1996 U.S. Plan, options to purchase 6,928,169 ordinary shares were outstanding (including options incorporated from the 1995 Plan) and options to purchase 15,990,974 ordinary shares remained available for future grant. The option exercise prices range between $2.65 and $86.54. Ordinary shares subject to outstanding options, including options granted under the 1995 Plan, which expire or terminate prior to exercise, would be available for future issuance under the 1996 U.S. Plan. Options granted under the 1996 U.S. Plan are generally exercisable over four years.
Under the 1996 U.S. Plan, employees (including officers) and independent consultants may, at the discretion of the plan administrator, be granted options to purchase ordinary shares at an exercise price not less than 85% of the fair market value of such shares on the grant date (the Company does not intend to issue options at an exercise price of less than fair market value). Non-employee members of the Board of Directors will be eligible solely for automatic option grants under the 1996 U.S. Plan.
The Compensation Committee of the Board administers the 1996 U.S. Plan. The Compensation Committee has complete discretion to determine which eligible individuals are to receive option grants, the number of shares subject to each such grant, the status of any granted option as either an incentive option or a non-statutory option under U.S. Federal tax laws, the vesting schedule to be in effect for each option grant and the maximum term for which each granted option is to remain outstanding. In no event, however, may any one participant in the 1996 U.S. Plan acquire ordinary shares under the 1996 U.S. Plan in excess of 3,000,000 shares, exclusive of any option grants received prior to January 1, 1996.
The exercise price for options granted under the 1996 U.S. Plan may be paid in cash. Options may also be exercised on a cashless basis through the same-day sale of the purchased shares. The Compensation Committee may also permit the optionee to pay the exercise price through a promissory note payable in installments. The amount financed may include any U.S. Federal or state income and employment taxes incurred by reason of the option exercise.
The Compensation Committee may cancel outstanding options under the 1996 U.S. Plan, in return for the grant of new options with an exercise price per share based upon the fair market value of ordinary shares on the new grant date.
In the event the Company is acquired by merger, consolidation or asset sale, the ordinary shares subject to each option outstanding at the time under the 1996 U.S. Plan will terminate to the extent not assumed by the acquiring entity. The Compensation Committee also has discretion to provide for the acceleration of one or more outstanding options under the 1996 U.S. Plan and the vesting of shares subject to outstanding options upon the occurrence of certain hostile tender offers.
The Board may amend or modify the 1996 U.S. Plan at any time. The 1996 U.S. Plan terminates by its terms on April 11, 2006.