This excerpt taken from the NVMI 6-K filed Oct 3, 2005.
Presently, under the Stock Option Plans, the option Exercise Price is defined as the fair Market Value of the Ordinary Shares of the Company at the time such option is granted. Fair Market Value is generally defined as the closing price of the Companys ordinary shares on the NASDAQ National Market on the last business day immediately preceding the date of grant. The proposed amendment would replace the existing definition of Exercise Price with the following definition: Exercise Price shall mean the Fair Market Value of the Ordinary Shares of the Company at the time such option is granted to the Employee, unless resolved otherwise by the Board. The result of the proposed amendment would be the allow the Board of Directors to determine the exercise price of any stock option granted pursuant to Stock Option Plans 6, 7, 7A, 7B and 7C without regard to the fair market value of the stock.
The issuance of options with exercise prices below fair market value or the re-pricing of option so that the exercise price is below fair market value could adversely affect the price of the Companys Ordinary Shares or could have the effect of diluting the value of the Companys outstanding ordinary shares. In providing for the vesting of options over a period of several years, the Company hoped to provide employees with further incentive to remain employed by the Company and to devote themselves to the success of the Company. The acceleration of options could reduce the benefits the Company hoped to receive by issuing options. The adverse effects to the Company and the price of its Ordinary Shares that may result from the acceleration of vesting or the pricing of options at below fair market value, if any, cannot be accurately predicted.
The following resolution, to accept the amendments to the terms of the stock option plans, is proposed for consideration by the shareholders:
RESOLVED, to approve the amendment of the terms of Stock Option Plans 6, 7, 7A, 7B and 7C as detailed above.
The Board of Directors expresses no recommendation as to the vote on the above resolutions.