Agreement Varonis Employee Stock Purchase Plan Israel sub plan S-8 prospectus Varonis - EIS - ESPP Canada..

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1 Table of content 1. Subscription Agreement 2 2. Varonis Employee Stock Purchase Plan Israel sub plan S-8 prospectus Varonis - EIS - ESPP Canada Varonis - EIS - ESPP France Varonis - EIS - ESPP Germany Varonis - EIS ESPP Israel Varonis - EIS - ESPP - United Kingdom...57

2 VARONIS SYSTEMS, INC EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT x Original Application Offering Date: September 1, 2015 Change in Payroll Deduction Rate 1. I hereby elect to participate in the Varonis Systems, Inc Employee Stock Purchase Plan (the Plan ) and subscribe to purchase shares of the Company s Stock in accordance with this Subscription Agreement and the Plan. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Plan. 2. I hereby authorize payroll deductions from each paycheck in the amount of a specified percentage of my Compensation which will be selected by myself via the Morgan Stanley StockPlan Connect website and transmitted to the Company prior to each payday (from 1% to 15%) during the Offering Period in accordance with the Plan (Please note that no fractional percentages are permitted) (the "Payroll Deductions"). I hereby confirm that neither I nor anyone on my behalf will have any claim or demand of any kind whatsoever against the Company, its subsidiaries or any of their affiliates connected to, or arising out of, the Payroll Deductions and/or the Company's reliance on the information transmitted to it by the Morgan Stanley StockPlan Connect website. 3. I understand that said payroll deductions will be accumulated for the purchase of shares of Stock at the applicable Option Price determined in accordance with the Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option and purchase Stock under the Plan. 4. I understand that the Company may elect to terminate, suspend or modify the terms of the Plan at any time. I agree to be bound by such termination, suspension or modification regardless of whether notice is given to me of such event, subject in any case to my right to timely withdraw from the Plan in accordance with the Plan withdrawal procedures then in effect. 5. I have received a copy of the complete Plan and its accompanying prospectus. I understand that my participation in the Plan is in all respects subject to the terms of the Plan. 6. I understand that if I am a U.S. taxpayer and I dispose of any shares purchased under the Plan within two (2) years of the Offering Date (the first trading day of the Offering Period during which I purchased such shares) or one (1) year of the Exercise Date, I will be treated for U.S. federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased over the Option Price that I paid for the shares. I hereby agree to notify the Company in writing within ten (10) days after the date of any disposition of my shares, and I will make adequate provision for U.S. federal, state, foreign or other tax withholding obligations, if any, which arise upon the disposition of the Stock. The Company may, but will not be obligated 2

3 to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Stock by me. If I dispose of such shares at any time after the expiration of the two-year and one-year holding periods, I understand that I will be treated for U.S. federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (a) the excess of the fair market value of the shares at the time of such disposition over the Option Price which I paid for the shares, or (b) 15% of the fair market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 7. I acknowledge that, regardless of any action taken by the Company or, if different, my employer (the Employer ) with respect to any or all income tax, social security, payroll tax, fringe benefit, or other tax-related items related to my participation in the Plan and legally applicable to me ( Tax-Related Items ), the ultimate liability for all Tax-Related Items is and remains my responsibility and may exceed the amount actually withheld by the Company or the Employer. Furthermore, I acknowledge that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the options under the Plan, including the grant of such options, the purchase and sale of shares of Stock acquired under the Plan and/or the receipt of any dividends on such shares, and (ii) do not commit to and are under no obligation to structure the terms of the grant of options or any aspect of my participation in the Plan to reduce or eliminate my liability for Tax-Related Items or achieve any particular tax result. Further, if I am or become subject to Tax-Related Items in more than one jurisdiction, I acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. 8. Prior to the purchase of shares of Stock under the Plan or any other relevant taxable or tax withholding event, as applicable, I agree to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, I authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any withholding obligations with regard to all Tax-Related Items by one or a combination of the following: (1) withholding from my Compensation or other amounts paid to me by the Company and/or the Employer; or (2) withholding from proceeds of the sale of the shares of Stock purchased under the Plan either through a voluntary sale or through a mandatory sale arranged by the Company (on my behalf pursuant to this authorization). Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable maximum rates, in which case I will receive a cash refund of any over-withheld amount not remitted to tax authorities on my behalf and will have no entitlement to the Stock equivalent. Finally, I agree to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of my participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to purchase shares of Stock under the Plan on my behalf and/or refuse to issue or deliver the shares or the proceeds of the sale of shares if I fail to comply with my obligations in connection with the Tax-Related Items. 9. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. I hereby consent to receive such 3

4 documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. 10. The Subscription Agreement is governed by the internal substantive laws but not the choice of law rules of Delaware. Any and all disputes, controversies or issues arising out of, concerning or relating to the option, this Subscription Agreement or the relationship between the parties evidenced by this Subscription Agreement, including, without limitation, disputes, controversies or issues arising out of, concerning or relating to the construction, interpretation, breach or enforcement of this Subscription Agreement, shall be brought exclusively in the courts in the State of New York, City and County of New York, including the Federal Courts located therein (should Federal jurisdiction exist). Each of the parties hereby expressly represents and agrees that it/he/she is subject to the personal jurisdiction of said courts, irrevocably consents to the personal jurisdiction of such courts; and waives to the fullest extent permitted by law any objection which it/he/she may now or hereafter have that the laying of the venue of any legal lawsuit or proceeding related to such dispute, controversy or issue that is brought in any such court is improper or that such lawsuit or proceeding has been brought in an inconvenient forum. 11. Notwithstanding any provision of this Subscription Agreement, I understand that if I am working or resident in a country other than the United States, my participation in the Plan also shall be subject to the additional terms and conditions for participants outside the U.S. set forth in Appendix A attached hereto and any special terms and conditions for my country set forth in Appendix B attached hereto. Further, I understand that if I relocate to one of the countries included in Appendix B, the special terms and conditions for such country will apply to me to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix A and Appendix B constitute part of this Subscription Agreement. 12. The provisions of this Subscription Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions nevertheless shall be binding and enforceable. 13. I acknowledge that a waiver by the Company of breach of any provision of the Subscription Agreement shall not operate or be construed as a waiver of any other provision of the Subscription Agreement, or of any subsequent breach by me or any other participant. 14. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding my participation in the Plan, or my acquisition or sale of the underlying shares of Stock. I am hereby advised to consult with my own personal tax, legal and financial advisors regarding my participation in the Plan before taking any action related to the Plan. 15. I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan. 4

5 I UNDERSTAND THAT MY PARTICIPATION UNDER THE TERMS OF THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME OR IF I CEASE TO BE AN EMPLOYEE. 5

6 APPENDIX A VARONIS SYSTEMS, INC EMPLOYEE STOCK PURCHASE PLAN ADDITIONAL TERMS AND CONDITIONS FOR PARTICIPANTS OUTSIDE THE U.S. Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Varonis Systems, Inc Employee Stock Purchase Plan 1. Terms of Plan Participation for Participants Outside the U.S. I understand that this Appendix A contains additional terms and conditions that, together with the Plan and the Subscription Agreement, govern my participation in the Plan if I am working or resident in a country other than the United States. I further understand that my participation in the Plan also will be subject to any terms and conditions for my country set forth in Appendix B attached hereto. 2. Conversion of Payroll Deductions. I understand that if my payroll deductions under the Plan are made in any currency other than U.S. dollars, such payroll deductions will be converted to U.S. dollars on or prior to the Exercise Date using a prevailing exchange rate in effect at the time such conversion is performed, as determined by the Plan Administrator in its sole discretion. I understand and agree that neither the Employer nor the Company (nor any Subsidiary) will be liable for any foreign exchange rate fluctuation between my local currency and the U.S. dollar that may affect the amount of my contributions, the value of the options granted to me under the Plan or the value of any amounts due to me under the Plan, including the amount of proceeds due to me upon the sale of any shares of Stock acquired under the Plan. 3. Nature of Grant. By electing to participate in the Plan, I acknowledge, understand and agree that: (a) the Plan is established voluntarily by the Company and it is discretionary in nature; (b) all decisions with respect to future grants of options under the Plan, if any, will be at the sole discretion of the Company; (c) the grant of options under the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company, the Employer, or any other Subsidiary and shall not interfere with the ability of the Company or the Employer, as applicable, to terminate my employment (if any); (d) I am voluntarily participating in the Plan; (e) the options granted under the Plan and the shares of Stock underlying such options, and the income and value of same, are not intended to replace any pension rights or compensation; (f) the options granted under the Plan and the shares of Stock underlying such options, and the income and value of same, are not part of my normal or expected compensation for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, 6

7 end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (g) the future value of the shares of Stock underlying the options granted under the Plan is unknown, indeterminable and cannot be predicted with certainty; (h) the shares of Stock that I acquire under the Plan may increase or decrease in value, even below the Option Price; (i) no claim or entitlement to compensation or damages shall arise from the forfeiture of options granted to me under the Plan as a result of the termination of my status as an Employee (for any reason whatsoever, and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where I am employed or the terms of my employment agreement, if any) and, in consideration of the grant of options under the Plan to which I otherwise am not entitled, I irrevocably agree never to institute a claim against the Company, the Employer, or any other Subsidiary, waive my ability, if any, to bring such claim, and release the Company, the Employer, and any other Subsidiary from any such claim that may arise; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, I shall be deemed irrevocably to have agreed not to pursue such claim, and I agree to execute any and all documents necessary to request dismissal or withdrawal of such claim; and (j) in the event of the termination of my status as an Employee (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where I am employed or the terms of my employment agreement, if any), my right to participate in the Plan and any options granted to me under the Plan, if any, will terminate effective as of the date that I no longer am actively employed by the Company or one of its Subsidiaries and, in any event, will not be extended by any notice period mandated under the employment laws in the jurisdiction in which I am employed or the terms of my employment agreement, if any (e.g., active employment would not include a period of garden leave or similar period pursuant to the employment laws in the jurisdiction in which I am employed or the terms of my employment agreement, if any); the Company shall have the exclusive discretion to determine when I no longer am actively employed for purposes of my participation in the Plan (including whether I still may be considered to be actively employed while on a leave of absence) Data Privacy. (a) I hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data as described in the Subscription Agreement and any other Plan materials ( Data ) by and among, as applicable, the Employer, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing my participation in the Plan. I understand that Data may include certain personal information about me, including, but not limited to, my name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of Stock or directorships held in the Company, details of all options granted under the Plan or any other entitlement to shares of Stock awarded, canceled, exercised, vested, unvested or outstanding in my favor. (b) I understand that Data will be transferred to such stock plan service provider as may be designated by the Company from time to time (the Designated Broker ), which is assisting the Company with the implementation, administration and management of the Plan. I understand that the recipients of Data may be located in the United States or elsewhere, and that a recipient s country of operation (e.g., the United States) may have different data privacy laws and protections than my country.

8 I understand that I may request a list with the names and addresses of any potential recipients of Data by contacting my local human resources representative. (c) I authorize the Company, the Designated Broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing my participation in the Plan. I understand that Data will be held only as long as is necessary to implement, administer and manage my participation in the Plan. I understand that I may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing my local human resources representative. Further, I understand that I am providing the consents herein on a purely voluntary basis. If I do not consent, or if I later seek to revoke my consent, my employment status or career with the Company or the Employer will not be affected; the only consequence of refusing or withdrawing my consent is that the Company would not be able to grant me options under the Plan or other equity awards, or administer or maintain such awards. Therefore, I understand that refusing or withdrawing my consent may affect my ability to participate in the Plan. For more information on the consequences of my refusal to consent or withdrawal of consent, I understand that I may contact my local human resources representative. (d) Finally, upon request of the Company or the Employer, I agree to provide an executed data privacy consent form to the Company and/or the Employer (or any other agreements or consents that may be required by the Company and/or the Employer) that the Company and/or the Employer may deem necessary to obtain from me for the purpose of administering my participation in the Plan in compliance with the data privacy laws in my country, either now or in the future. I understand and agree that I will not be able to participate in the Plan if I fail to provide any such consent or agreement requested by the Company and/or the Employer. 5. Compliance with Law. Notwithstanding any other provision of the Plan or the Subscription Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the shares of Stock, the Company shall not be required to deliver any shares issuable upon purchase of shares under the Plan prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission ( SEC ) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. I understand that the Company is under no obligation to register or qualify the shares of Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, I agree that the Company shall have unilateral authority to amend the Plan and the Subscription Agreement without my consent to the extent necessary to comply with securities or other laws applicable to issuance of shares. 6. Language. If I have received the Subscription Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. 8

9 7. Insider Trading. By participating in the Plan, I agree to comply with the Company s policy on insider trading (to the extent that it is applicable to me). Further, I acknowledge that my country of residence also may have laws or regulations governing insider trading and that such laws or regulations may impose additional restrictions on my ability to participate in the Plan (e.g., acquiring or selling shares of Stock) and that I am solely responsible for complying with such laws or regulations. 8. Imposition of Other Requirements. The Company reserves the right to impose other requirements on my participation in the Plan, on any shares of Stock purchased under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require me to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 9

10 APPENDIX B VARONIS SYSTEMS, INC EMPLOYEE STOCK PURCHASE PLAN COUNTRY-SPECIFIC PROVISIONS FOR PARTICIPANTS OUTSIDE THE U.S. Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Varonis Systems, Inc Employee Stock Purchase Plan Terms and Conditions I understand that this Appendix B includes additional terms and conditions that govern the options to purchase shares of Stock granted to me under the Plan if I work or reside in one of the countries listed below. If I am a citizen or resident of a country other than the one in which I currently am working (or if I am considered as such for local law purposes), or if I transfer employment or residence to another country after enrolling in the Plan, I acknowledge and agree that the Company, in its discretion, will determine the extent to which the terms and conditions herein will be applicable to me. Notifications This Appendix B also includes information regarding securities laws, exchange controls and certain other issues of which I should be aware with respect to my participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of June Such laws are often complex and change frequently. As a result, the Company recommends that I do not rely on the information in this Appendix B as the only source of information relating to the consequences of my participation in the Plan because the information included herein may be out of date at the time that I acquire shares of Stock under the Plan or subsequently sell such shares. In addition, the information contained herein is general in nature and may not apply to my particular situation and the Company is not in a position to assure me of any particular result. Accordingly, I am advised to seek appropriate professional advice as to how the relevant laws in my country may apply to my individual situation. Finally, if I am a citizen or resident of a country other than the one in which I currently am working or residing (or if I am considered as such for local law purposes), or if I transfer employment or residence to another country after options have been granted to me under the Plan, the information contained herein may not be applicable to me in the same manner. 10

11 CANADA Terms and Conditions Labor Law Acknowledgement. The following provisions replace the acknowledgement contained in Section 3(j) of Appendix A to the Subscription Agreement: In the event of termination of my status as an Employee (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where I am employed or the terms of my employment agreement, if any), my right to participate in the Plan, if any, will terminate effective as of the date that is the earlier of: (i) the date that I receive written notice of termination of my employment from the Employer or (ii) the date that I am no longer actively employed by the Employer, with such date being determined by the Company in its sole discretion, regardless of any notice period or period of pay in lieu of such notice required under local law (including, but not limited to statutory law, regulatory law and/or common law). The following provisions will apply if I am a resident of Quebec: Authorization to Release Necessary Personal Information. I hereby authorize the Company (including any Subsidiary) and the Company s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. I further authorize the Company and any Subsidiary and the Company s Designated Broker to disclose and discuss the Plan with their advisors. I further authorize the Employer to record such information and to keep such information in my employee file. French Language Provision. I hereby provide my consent to receive Plan information in English through my enrollment in the Plan. Specifically, I acknowledge as follows: The parties acknowledge that it is their express wish that the Subscription Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les parties reconnaissent avoir exigé la redaction en anglais de cette convention ( Subscription Agreement ), ainsi que de tous documents exécutés, avis donnés et procedures judiciaries intentées, directement ou indirectement, relativement à la présente convention. Notifications Securities Law Information. I understand that there may be securities law implications if I sell shares of Stock acquired through the Plan through a broker other than a Designated Broker or the sale does not take place through the facilities of a stock exchange outside Canada on which the shares of Stock are listed. The shares of Stock are currently listed on the NASDAQ Global Select Market. Foreign Asset/Account Reporting Information. Foreign property (including options granted under the Plan and shares of Stock) held by Canadian residents must be reported annually on Form T1135 (Foreign 11

12 Income Verification Statement) if the total value of such foreign property exceeds C$100,000 at any time during the year. The form must be filed by April 30th of the following year. FRANCE Terms and Conditions Payroll Deduction Authorization. Section 2 of the Subscription Agreement has been translated into French in order for you to expressly authorize the payroll deductions under the Plan. La Section 2 du Contrat d Inscription a été traduite ci-dessous en français afin que vous puissiez autoriser de manière expresse les prélèvements sur votre salaire dans le cadre du Plan d Achat d Actions. I hereby authorize payroll deductions from each paycheck in the percentage entered in the first page of this Subscription Agreement in an amount from 0 to 15% of my Compensation on each payday during the Offering Period in accordance with the Plan. (Please note that no fractional percentages are permitted.) Par la présente, j'autorise les prélèvements sur mon salaire sur chacune de mes fiches de paie d un pourcentage qui figure sur la première page de ce contrat de souscription dont le montant est de 0 à 15% de mon Salaire et ce chaque jour de paie pendant la Periode d'offre en vertu du Plan. (Veuillez noter que les pourcentages ne peuvent contenir des décimales). Language Consent. By signing and returning or by otherwise accepting the Subscription Agreement, I confirm having read and understood the documents relating to this grant of the right to purchase shares of Stock (the Plan, the Subscription Agreement and this Appendix B) which were provided to me in the English language, except with respect to the payroll deduction authorization above. I accept the terms of those documents accordingly. Consentement Relatif à la Langue Utilisée. En signant et renvoyant, ou autrement acceptant, les termes et conditions du Contrat de Souscription, je confirme ainsi avoir lu et compris les documents relatifs à cette attribution du droit d'achat d'actions Cotées en Bourse (le Plan d Achat d Actions, le Contrat de Souscription, et la présente Annexe B) qui m ont été fournis dans la langue anglaise, sauf en ce qui concerne l'autorisation de retenues salariales ci-dessus. J accepte les termes de ces documents en connaissance de cause. Notifications Foreign Asset / Account Reporting Information. If I maintain a foreign bank account, I am required to report the account to the French tax authorities when filing my annual tax return. Failure to comply could trigger significant penalties. GERMANY Notifications 12

13 Exchange Control Information. I understand that cross-border payments in excess of 12,500 must be reported monthly to the German Federal Bank (Bundesbank). In addition, in the unlikely event that I hold shares of Stock exceeding 10% of the total capital of the Company, I must report my holdings in the Company to the Bundesbank on an annual basis. All reports must be filed electronically using the General Statistics Reporting Portal available via the Bundesbank s website ( ISRAEL Sub-Plan for Israeli Participants: I am aware that my participation in the Plan shall also be governed by the Sub-Plan for Israeli Participants (the Israeli Sub-Plan ), which is considered part of the Plan. The terms used herein shall have the meaning ascribed to them in the Plan or Israeli Sub-Plan. In the event of any conflict, whether explicit or implied, between the provision of this Subscription Agreement and the Israeli Sub-Plan, the provisions set out in the Israeli Sub-Plan shall prevail. I hereby confirm that the Payroll Deductions made pursuant to this Subscription Agreement are in accordance sections 25(A) and 25(B) to the Wage Protection Law Taxation and Trustee Arrangement: I understand that for Israeli tax purposes my participation in the Plan and the Shares purchased under the Plan for my benefit are meant to be subject to the capital gains route under section 102(c)(3) of the Ordinance subject to compliance with the requirements under Section 102 of the Ordinance and any rules or regulations thereunder, and further subject to compliance with the tax ruling received by the Company and my employer regarding the taxation of the Plan in Israel on 3 August 2015 the Tax Ruling. The option to purchase Shares under the Plan including the Shares purchased for my benefit and/or any additional rights, including without limitation any right to receive any dividends or any shares received as a result of an adjustment made under the Plan (the Additional Rights ) shall be issued to or controlled by the Trustee for my benefit under the provisions of the 102 Capital Gains Route for at least the period stated in Section 102 of the Ordinance and the Income Tax Rules (Tax Benefits in Share Issuance to Employees) (the Rules ). In the event that I or my Shares do not meet the requirements of Section 102 of the Ordinance, my Shares shall not qualify for the favorable tax treatment under the Capital Gains Route of Section 102 of the Ordinance. Any fees associated with my participation in the Plan shall be borne by me and the Trustee and/or the Company and/or any Affiliate shall be entitled to withhold or deduct such fees from payments otherwise due to/from the Company or an Affiliate or the Trustee. In accordance with the requirements of Section 102 of the Ordinance and the Capital Gains Route, I shall not sell nor transfer the Shares or Additional Rights from the Trustee until the end of the required Holding Period. Notwithstanding the above, if any such sale or transfer occurs before the end of the required Holding Period, I shall bear the sanctions under Section 102. Notwithstanding anything mentioned in the Plan or this Subscription Agreement and in addition thereto, as long as the Shares issued pursuant thereto are held or controlled by the Trustee on my behalf, all of my rights over the Shares are personal, cannot be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution. I hereby agree, declare and acknowledge as follows: (i) I am familiar with Section 102 and the regulations and rules promulgated thereunder, including without limitations the provisions of the applicable tax route, and agrees to comply with such provisions, as amended from time to time, provided that if such terms are not met, Section 102 may not apply; (ii) to the terms and conditions of the trust deed signed between the Trustee and the Company and/or my employer, including but not limited to the control of 13

14 the Shares by the Trustee; (iii) releasing the Shares from the control or holding of the Trustee prior to the termination of the Holding Period constitutes a violation of the terms of Section 102 and agrees to bear the relevant sanctions; (iv) authorize the Company and my employer to provide the Trustee with any information required for the purpose of administering the Plan including executing its obligations under the Ordinance, the trust deed and the trust agreement, including without limitation information about my Shares, income tax rates, salary bank account, contact details and identification number; (v) I am a resident of the State of Israel for tax purposes on the enrollment date and shall notify the Company upon any change in the residence address indicated below; (vi) if I cease to be an Israeli resident or if my engagement with the Company or Affiliate is terminated, the Shares shall remain subject to Section 102, the trust agreement, the Plan, this Subscription Agreement and the Tax Ruling; and (vii) I have read the Tax Ruling, I agree to the provisions of the Tax Ruling and I shall not ask to amend or alter its provisions. Securities Law: I am aware that the Company has obtained an exemption from the requirement to file and publish a prospectus in Israel regarding the Plan from the Israeli Securities Authority. Copies of the Plan and the Form S-8 registration statement for the Plan filed with the U.S. Securities and Exchange Commission will be made available by request from the Company s Legal Department. UNITED KINGDOM Terms and Conditions Tax-Related Items. The following provisions supplement Sections 7 and 8 of Appendix A to the Subscription Agreement: If payment or withholding of any income tax liability arising in connection with my participation in the Plan is not made by me to the Employer within ninety (90) days of the end of the U.K. tax year in which the event giving rise to such income tax liability occurred or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the Due Date ), I understand and agree that the amount of any uncollected income tax will constitute a loan owed by me to the Employer, effective on the Due Date. I understand and agree that the loan will bear interest at the then-current official rate of Her Majesty s Revenue and Customs, it will be immediately due and repayable by me, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to in the Plan or Section 8 of Appendix A to the Subscription Agreement. Notwithstanding the foregoing, I understand and agree that if I am a director or an executive officer of the Company (within the meaning of such terms for purposes of Section 13(k) of the Exchange Act), I will not be eligible for such a loan to cover the income tax liability. In the event that I am a director or executive officer and the income tax is not collected from or paid by me by the Due Date, I understand that the amount of any uncollected income tax may constitute an additional benefit to me on which additional income tax and National Insurance contributions may be payable. I understand and agree that I will be responsible for reporting and paying any income tax due on this additional benefit directly to Her Majesty s Revenue and Customs under the self-assessment regime and for reimbursing the Company or the Employer (as appropriate) for the value of any National Insurance contributions due on this additional benefit, which the Company or the Employer may recover from me by any of the means referred to in Section 8 of Appendix A to the Subscription Agreement. 14

15 Section 1. Purpose of the Plan VARONIS SYSTEMS, INC EMPLOYEE STOCK PURCHASE PLAN The Varonis Systems, Inc. Employee Stock Purchase Plan is intended to encourage employee participation in the ownership and economic progress of the Company pursuant to a plan that is designed to qualify as an "employee stock purchase plan" within the meaning of Section 423(b) of the Code. Section 2. Definitions Unless the context clearly indicates otherwise, the following terms have the meaning set forth below: Company. (a) "Board of Directors" or "Board" shall mean the Board of Directors of the (b) "Code" shall mean the United States Internal Revenue Code of 1986, as amended from time to time, together with any applicable regulations issued thereunder. (c) "Committee" shall mean the Board, or a committee designated by the Board to administer the Plan, which Committee shall administer the Plan as provided in Section 3 hereof. (d) "Company" shall mean Varonis Systems, Inc. or any successor corporation. (e) "Compensation" shall mean the fixed salary or base hourly wage paid by the Company or a Designated Subsidiary, as applicable, to an Employee as reported by the Company (or by a Designated Subsidiary) to the United States government (or other applicable government) for income tax purposes, including an Employee's portion of salary deferral contributions pursuant to Section 401(k) of the Code and any amount excludable pursuant to Section 125 of the Code, but excluding items such as commissions, bonuses, fees, overtime pay, severance pay, expenses, stock option or other equity incentive income, or other special emolument or any credit or benefit under any employee plan maintained by the Company. (f) "Continuous Status as an Employee" means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company (including, but not limited to, military or sick leave), provided that such leave is for a period of not more than 90 days or reemployment upon the expiration of such leave is guaranteed by contract or statute. (g) "Designated Subsidiary" shall mean any Subsidiary of the Company that has been designated by the Committee to participate in the Plan. 15

16 (h) "Employee" shall mean any employee of the Company or a Designated Subsidiary who is scheduled to work for the Company or such Designated Subsidiary, as the case may be, for a minimum of twenty hours per week. (i) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder. (j) "Exercise Date" shall mean the last trading day of each Offering Period, unless otherwise determined by the Committee. (k) "Fair Market Value" shall mean, with respect to a share of Stock, as of a date of determination, shall mean (1) the closing sales price per share of the Stock on the national securities exchange on which such Stock is principally traded on the relevant date, or (2) if the shares of Stock are not then listed on a national securities exchange or traded in an over-thecounter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith upon the advice of a qualified valuation expert. (l) "Offering Date" shall mean the first trading day of each Offering Period, unless otherwise determined by the Committee. (m) "Offering Period" or "Period" shall mean the Plan Half-Year beginning on an Offering Date and ending on the next succeeding Exercise Date, or such other period as determined by the Committee. As used herein, the term "Offering Period" shall refer to all Offering Periods under the Plan as the context requires. (n) "Option Price" shall mean the purchase price of a share of Stock hereunder as provided in Section 7(a) hereof. (o) "Participant" shall mean any Employee who (i) is eligible to participate in the Plan under Section 6(a) hereof and (ii) elects to participate in the Plan with respect to any Offering Period. (p) "Plan" shall mean the Varonis Systems, Inc Employee Stock Purchase Plan, as the same may be amended from time to time. (q) "Plan Account" or "Account" shall mean an account established and maintained in the name of each Participant. (r) "Plan Administrator" shall mean any Employee or Employees or a third party qualified to act as the Plan Administrator appointed pursuant to Section 3 hereof. (s) "Plan Half-Year" shall mean each six (6) month period during the term of the Plan, commencing on June 30, Company. (t) "Stock" means the common stock, par value $0.001 per share, of the 16

17 (u) "Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting an option, each of the corporations other than the last corporation in the unbroken chain owns shares possessing fifty percent (50%) or more of the total combined voting power of all classes of shares in one of the other corporations in such chain. Section 3. Administration of Plan Subject to oversight by the Board of Directors, the Committee shall have the sole authority and complete discretion to administer the Plan and to make and adopt rules and regulations not inconsistent with the provisions of the Plan or the Code. Further, the Committee shall have the sole authority to prescribe, amend and rescind rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws, which rules and regulations may be set forth in an appendix or appendixes to the Plan. Its interpretations and decisions in respect of the Plan shall, subject to the aforesaid, be final and conclusive. The Committee shall have the authority to appoint a Plan Administrator and to delegate to the Plan Administrator such authority with respect to the administration of the Plan as the Committee, in its sole discretion, deems advisable from time to time. Section 4. Effective Date of the Plan The Plan shall become effective on June 30, 2015, subject to the approval of the Company's stockholders. Section 5. Term of the Plan The Plan shall continue in effect until the earlier of (i) the date when no shares of Stock are available for issuance under the Plan (at which time the Plan shall be suspended as set forth in Section 8(c)), or (ii) the tenth anniversary of the Effective Date, unless terminated prior thereto by the Board of Directors or the Compensation Committee of the Board, each of which shall have the right to terminate the Plan at any time. Upon any such termination, the balance, if any, in each Participant's Account shall be refunded to him, or otherwise disposed of in accordance with the policies and procedures prescribed by the Committee in cases where such a refund is not possible. Section 6. Participation (a) Eligibility. Participation in the Plan is limited to Employees who also meet the requirements of this Section 6(a). Each Employee may become a Participant by completing the enrollment procedures prescribed by, or on behalf of, the Plan Administrator, as revised from time to time. An Employee may enroll upon the commencement of employment or prior to the Offering Date of the next Plan Half-Year during the term of the Plan. For new Employees, such enrollment shall be effective for the next Offering Period, subject to such administrative rules as the Committee or Plan Administrator may establish. Notwithstanding any provisions of the Plan to the contrary, no Employee shall be granted an option to purchase Stock under the 17

18 Plan if, immediately after the grant, such Employee (or any other person whose shares would be attributed to such Employee pursuant to Section 424(d) of the Code) would own shares and/or hold outstanding options to purchase shares possessing five percent (5%) or more of the total combined voting power or value of all classes of shares of the Company or of any Subsidiary or parent of the Company. Any amounts received from an Employee which cannot be used to purchase Stock as a result of this limitation will be returned as soon as practicable to the Employee without interest. (b) Payroll Deductions. Payment for shares of Stock purchased hereunder shall be made by authorized payroll deductions from each payment of Compensation in accordance with instructions received from a Participant. Such deductions shall be expressed as a whole number percentage which shall not be more than fifteen percent (15%) of the Participant's Compensation as in effect at the start of such Offering Period. A Participant may not increase the deduction during an Offering Period. However, a Participant may change the percentage deduction for any subsequent Offering Period by filing notice thereof with the Company prior to the Offering Date on which such Period commences. Employee contributions are accumulated during the Offering Period and used to purchase shares on the Exercise Date. During an Offering Period, a Participant may decrease the percentage deduction in effect for the remainder of such Offering Period (subject to such administrative rules as the Committee or Plan Administrator may establish), withdraw entirely from participation or discontinue payroll deductions but have the payroll deductions previously made during that Offering Period remain in the Participant's Account to purchase Stock on the next Exercise Date, provided that he or she is an Employee as of that Exercise Date. Any amount remaining in the Participant's Account after the purchase of Stock may be refunded without interest upon the written request of the Participant. Any Participant who discontinues payroll deductions during an Offering Period may again become a Participant for a subsequent Offering Period upon completion of the enrollment procedures prescribed by, or on behalf of, the Plan Administrator, as revised from time to time. Amounts deducted from a Participant's Compensation pursuant to this Section 6(b) shall be credited to such Participant's Account. (c) Account Statements. An individual Plan Account will be maintained for each Participant. Account statements will be given to Participants as soon as practicable following each Offering Period, which statements will set forth the amounts of payroll deductions, the per share Option Price, the number of shares of Stock purchased, the aggregate number of shares in the Participant's Account following the purchase and the remaining cash balance, if any. Section 7. Purchase of Shares (a) Option Price. The Option Price per share of the Stock sold to Participants hereunder shall be not less than 85% of the Fair Market Value of such share (the "Discounted Fair Market Value") on the Exercise Date of the applicable Offering Period, and in no event shall the Option Price per share be less than the par value of the Stock. No Offering Period may exceed five years from the Offering Date. Notwithstanding the foregoing, the Committee may 18

19 determine prior to the commencement of an Offering Period that the Option Price per share of the Stock sold to Participants hereunder in such Offering Period shall be the lesser of the Discounted Fair Market Value of such share on (A) the Exercise Date of the applicable Offering Period or (B) the Offering Date for such Offering Period, but in no event shall the Option Price per share be less than the par value of the Stock; provided that, in such case, the Offering Period may not exceed twenty-seven months from the Offering Date. (b) Purchase of Shares. On each Exercise Date, the amount in a Participant's Account shall be charged with the aggregate Option Price of the largest number of shares of Stock which can be purchased with such amount, including fractional shares, if so authorized by the Committee, and such shares will be purchased by the Participant hereunder. The balance, if any, in such Account following the purchase shall be carried forward to the next succeeding Offering Period. (c) Limitations on Purchase. Notwithstanding any provisions of the Plan to the contrary, no Participant shall be granted an option under the Plan which permits such Participant's right to purchase shares of Stock under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any Subsidiary to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of the Fair Market Value of such shares of Stock (determined as of the first date of the Offering Period) for any calendar year in which such option would be outstanding at any time. Any amounts received from a Participant which cannot be used to purchase Shares as a result of this limitation will be returned as soon as possible to the Participant without interest. To the extent necessary to comply with Section 423(b)(8) of the Code and the limitations on purchase in this Section 7(c), a Participant's payroll deductions may be decreased to 0% during any Offering Period which is scheduled to end during any calendar year, such that the aggregate of all payroll deductions accumulated with respect to such Offering Period and any other Offering Period ending within the same calendar year does not exceed the twenty-five thousand dollar ($25,000) limit described above. Payroll deductions shall re-commence at the rate provided for by the Participant's prior election at the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless suspended by the Participant pursuant to Section 6(b) of the Plan. (d) Transferability of Rights. Neither payroll deductions credited to a Participant s Account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 9(a). Section 8. Shares Reserved for Issuance Under the Plan (a) Shares Reserved; Delivery of Stock. Subject to Section 8(b), the number of shares of Stock that are initially reserved and available for issuance pursuant to purchases by 19