NON-PLAN STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT dated as of March 27, 2006 between DATA SYSTEMS & SOFTWARE INC., a Delaware corporation (the "Company"), and Samuel M. Zentman (the "Optionee").
WHEREAS, on March 27, 2006 at a meeting of the Board of Directors of the Company (the “Board”), the Board by resolution authorized the granting to Samuel M. Zentman, a non-management director and member of the Board, an option to purchase 25,000 shares of the Company's Common Stock, par value $.01 per share ("Common Stock").
WHEREAS, the parties hereto desire to enter into this Agreement in order to set forth the terms of such option.
Accordingly, the parties hereto agree as follows:
1. Grant of Option; Exercise Price. Subject to the terms and conditions of this Agreement, the Company hereby grants to Optionee the option (the "Option") to purchase, from the Company, up to 25,000 shares of Common Stock (“Option Shares”) at a price per share of $2.65 (the “Exercise Price”). The Option Shares and the Exercise Price are subject to adjustment in accordance with the provisions set forth in Section 5 below.
2. Non-Incentive Stock Option. The Option is not intended to qualify as an "incentive stock option" within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended.
3. Vesting of Option. This Option shall vest and thereby become exercisable with respect to the Option Shares on the date of the next held annual meeting; to be held in 2006.
4. Termination of Option.
(a) This Option shall terminate upon the earlier of (i) the date 18 months from the date on which Optionee ceases to be a director or (ii) March 30, 2011 (the “Termination Date”).
(b) Upon the death of the Optionee, the portion of the Option, if any, that was exercisable as of the date of death may be thereafter be exercised by the legal representative of the estate or by the legatee of the Optionee under the will of the Optionee, for a period of one year from the date of such death or until the Termination Date, whichever is shorter.
(a) In the event of a stock split, stock dividend, combination of shares, or any other similar change in the Common Stock as a whole, the Board shall make equitable, proportionate adjustments in the number and kind of shares covered by the Option and in the Exercise Price.