Exhibit (a)(1)(B)
| SUBJECT: |
|
Check
Point Software Technologies Ltd. Offer to Exchange Certain Outstanding Options
for Restricted Stock Units |
Today,
we are happy to announce that we are offering you the opportunity to participate in an
Employee Stock Option/Restricted Stock Unit Exchange Program. Equity awards are a valuable
motivation and retention tool and, as such, help to align employee and shareholder
interests. Many of the currently outstanding stock options held by our employees and the
employees of our subsidiaries are “underwater,” which means that the per share
exercise prices of the stock options are greater than the current market price of our
ordinary shares. As a result, the Board of Directors has approved a Stock
Option/Restricted Stock Unit Exchange Program, which will allow you to exchange certain
underwater stock options for restricted stock units. Restricted stock units are a type of
award that is essentially a promise by us to issue ordinary shares to you in the future,
as described below, and is structured to help insure that employees receive appropriate
incentive to continue to grow our business and meet our objectives.
We
know that the materials included with this letter describing the Employee Stock
Option/Restricted Stock Unit Exchange Program may seem voluminous, but it is very
important that you read and try to understand and act on all of these materials. The
various summaries in this letter and in the Offer to Exchange Certain Outstanding Options
for Restricted Stock Units (the “Offer to Exchange”) are a good way to get
started. In addition, below is a summary of some aspects of the Employee Stock
Option/Restricted Stock Unit Exchange Program that should help familiarize you with the
principal terms. We believe this program is potentially very important to you and urge you
to take the time to study the materials, ask questions about anything you do not
understand and make an informed decision about whether or not to participate. If you do
nothing, you will be making a decision not to participate and you will retain your current
options under their current terms and conditions.
| |
— |
A
restricted stock unit is an equity grant valued in terms of our ordinary shares, but
ordinary shares are not issued at the time of the grant. Instead, after you satisfy any
vesting requirements, such as continued service to Check Point, we will distribute the
number of shares equal to the number of vested restricted stock units. |
| |
— |
The
purchase price of a restricted stock unitwill be the nominal value of our ordinary
shares which is equal to 0.01 New Israeli Shekels per share. If the ordinary shares
underlying the restricted stock units are issued to you upon vesting, the nominal
value will be paid by Check Point. As a result, you do not have to make any cash payment
to Check Point to receive your restricted stock units or the ordinary shares upon
vesting. |
| |
— |
You
may only exchange outstanding options that were granted on or after January 1, 2004 under
our 1996 Israel Stock Option Plan, our 1996 United States Stock Option Plan, our 2000 RoW
Stock Option Plan (a sub-plan of our 1996 Israel Stock Option Plan), our 2005 Israel
Equity Incentive Plan, our 2005 RoW Master Equity Incentive Plan (a sub-plan of our 2005
Israel Equity Incentive Plan) or our 2005 United States Equity Incentive Plan. |
| |
— |
The
number of restricted stock units you will receive will be equal to the Option Value (as
defined in the Offer to Exchange) of each exchanged option as determined by the Company
on September 12, 2006 divided by $19.20, which was the fair market value of an ordinary
share on September 12, 2006. |
| |
š |
The Check Point Addendum spreadsheet attached to this e-mail lists the number of
outstanding shares subject to your eligible option grants, the Option Value of such
eligible option grants and the number of restricted stock units you will receive for each
eligible option grant you exchange. |
| |
— |
For example, if you exchange 500 options with an Option Value of $2,500, on the restricted
stock unit grant date you will receive 131 restricted stock units. This is equal to the
$2,500 value divided by $19.20 (which is equal to the fair market value of an ordinary
share of our stock as of September 12, 2006) and rounded up to the nearest whole
restricted stock unit. |
| |
— |
The
restricted stock units will vest according to the following, subject to your continued
service on each relevant vesting date: |
| |
š |
None
of the restricted stock units will be vested on the restricted stock unit grant date; |
| |
š |
20%
of the restricted stock units will vest one (1) year from the restricted stock unit
grant date; |
| |
š |
20%
of the restricted stock units will vest two (2) years from the restricted stock unit
grant date; |
| |
š |
30%
of the restricted stock units will vest three (3) years from the restricted stock
unit grant date; and |
| |
š |
30%
of the restricted stock units will vest four (4) years from the restricted stock unit
grant date. |
We expect the restricted stock unit
grant date will be October 23, 2006 (which due to the time difference will be October 24,
2006 in Israel and certain other countries outside of the United States where eligible
employees reside).
The
Stock Option/Restricted Stock Unit Exchange Program is being made under the terms and
subject to the conditions of the Offer to Exchange and the related election form and
withdrawal form, which are available in our SEC filing which can be accessed on the
SEC’s web site at http://www.sec.gov. You should carefully read all of these
documents before you decide whether to participate in the offer.
We
have attempted to anticipate many of the questions you may have regarding the terms of the
Employee Stock Option/Restricted Stock Unit Exchange Program and have included some
frequently asked questions in the Offer to Exchange.
Participation
is completely voluntary. Participating in the offer involves risks that are discussed in
the Offer to Exchange. We recommend that you speak with your personal financial, legal
and/or tax advisors to weigh the benefits and risks involved in participating in the
Employee Stock Option/Restricted Stock Unit Exchange Program. If you choose not to
participate, you will retain your current options under their current terms and
conditions.
If
you choose to participate in the offer, you must deliver the completed election form by
facsimile, e-mail, portable document format (PDF) or by hand delivery before
5:00 p.m., Pacific Time, on October 23, 2006 (which due to the time difference will
be 2:00 a.m. on October 24, 2006 in Israel) to:
- 2 -
|
|
| Geula Gomen |
| Check Point Software Technologies Ltd. |
| 3A Jabotinsky St., Diamond Tower |
| Ramat Gan 52520 Israel |
| Fax: +972-3-7534950 |
| E-mail: geula@checkpoint.com |
If
Geula Gomen has not received your properly completed and signed election form before the
offer expires, you will have rejected this offer and you will keep your current options.
These forms are included in the offer documents and are also available on our intranet
site at: http://cpi.checkpoint.com/WWFinance/EmployeeServices/248387.asp.
Please
carefully read all of the offer documents. This letter is an introduction to the offer,
but does not detail all the terms and conditions that apply. Please direct any questions
you may have to John Slavitt, General Counsel, at:
Check
Point Software Technologies, Inc.
800
Bridge Parkway
Redwood
City, California 94065
(650)
628-2110
- 3 -