This prospectus relates to the offer and sale from time to time in one or more offerings by the selling shareholder named in this prospectus, Triton Seller, LP (f/k/a Venafi Parent, LP), or its
permitted transferees (collectively, the “selling shareholder”) of up to 2,285,076 ordinary shares, par value NIS 0.01 per share (“Ordinary Shares”), of CyberArk Software Ltd., a company incorporated under the laws of the State of Israel (the
“Company”), issued to such selling shareholder in connection with the closing on October 1, 2024, of the acquisition by the Company of Venafi Holdings, Inc. (the “Acquisition”).
This prospectus also covers any additional securities that may become issuable by reason of share splits, share dividends or other similar transactions.
We are registering the securities described above for resale pursuant to the selling shareholder’s registration rights under the registration rights agreement between us and the selling
shareholder (the “Registration Rights Agreement”) entered into in connection with the Acquisition. Our registration of the securities covered by this prospectus does not mean that the selling shareholder will offer or sell, as applicable,
any of the securities. The selling shareholder may offer and sell the securities covered by this prospectus in a number of different ways and at varying prices. We provide more information about how the selling shareholder may sell the
Ordinary Shares in the section entitled “Plan of Distribution.”
We will not receive any proceeds from the sale of Ordinary Shares by the selling shareholder pursuant to this prospectus. However, we may pay certain expenses, other than any underwriting
discounts and commissions, associated with the sale of securities pursuant to this prospectus. We will pay certain expenses associated with the registration of the securities covered by this prospectus, as described in the section entitled
“Plan of Distribution.”
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 5 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT AND
ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Neither the Securities and Exchange Commission nor any state securities commission or any other regulatory body has approved or disapproved of these securities or passed upon
the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is October 22, 2024.
This prospectus is part of an automatic registration statement on Form F-3 that we filed with the U.S. Securities and Exchange Commission
(“SEC”), using a “shelf” registration process. By using a shelf registration statement, the selling shareholder may sell Ordinary Shares, from time to time, in one or more offerings as described in this prospectus. To the extent permitted
by law, we may file or authorize one or more prospectus supplements or free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement or free writing prospectus
may also add, update or change information contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or free writing
prospectus, you should rely on the prospectus supplement or free writing prospectus, as applicable. Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement (and any
applicable free writing prospectuses), together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”
Neither we, nor the selling shareholder, have authorized anyone to provide you with any information or to make any representations other than
those contained in this prospectus, any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We and the selling shareholder take no responsibility for, and can
provide no assurance as to the reliability of, any other information that others may give you. We and the selling shareholder will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover, that the information appearing in any applicable free
writing prospectus is accurate only as of the date of that free writing prospectus, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise.
Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus supplement or free writing prospectus may contain and incorporate by
reference, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or
completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included or incorporated by reference in this prospectus, any prospectus
supplement or any applicable free writing prospectus may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors”
contained in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus and any applicable
prospectus supplement. Accordingly, investors should not place undue reliance on this information.
On May 19, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with the selling shareholder and the other
parties listed in the Merger Agreement, pursuant to which the Company agreed to issue to the selling shareholder an aggregate of 2,285,076 Ordinary Shares when closing occurred.
When we refer to “CyberArk,” “we,” “our,” “us” and the “Company” in this prospectus, we mean CyberArk Software Ltd. and its consolidated
subsidiaries, unless otherwise specified. When we refer to “you,” we mean the potential holders of the Ordinary Shares.
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available Information
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”). We file reports and other
information with the SEC. Our Annual Report on Form 20-F for the year ended December 31, 2023 has been filed with the SEC. We have also filed current reports with the SEC on Form 6-K. Such reports and other information filed with the SEC
are available to the public over the Internet at the SEC’s website at http://www.sec.gov.
Our website address is www.cyberark.com. The information on our website, however, is not, and should
not be deemed to be, a part of this prospectus.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of
proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under
the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the
information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Other documents establishing the terms of the offered securities are or may be filed as exhibits to the
registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by
reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided
above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update
and supersede that information. Any statement contained in this prospectus or a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement
contained in this prospectus or a subsequently filed document incorporated by reference modifies or replaces that statement.
This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed
with the SEC:
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Our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 13, 2024; |
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Our Current Reports on Form 6-K furnished to the SEC on May 2, 2024, May 20, 2024, May 22, 2024,
June 27, 2024, August 8, 2024,
October 1, 2024, and October
22, 2024; and |
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The description of our Ordinary Shares contained in our registration statement on Form 8-A filed with the SEC on September
16, 2014 and any amendment or report filed with the SEC for the purpose of updating the description. |
All reports and other documents we subsequently file pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act, prior to the termination of
this offering, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and
documents. We may also incorporate by reference part or all of any reports on Form 6-K that we subsequently furnish to the SEC prior to the completion or termination of any offering by identifying in such Forms 6-K that such Form 6-K, or
certain parts or exhibits of such Form 6-K, are being incorporated by reference into this prospectus, and any Form 6-K (or parts thereof) so identified shall be deemed to be incorporated by reference in this prospectus and to be a part of
this prospectus from the date of submission of such document.
You may request a free copy of any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following
address:
CyberArk Software Ltd.
9 Hapsagot St.
Park Ofer 2, P.O. Box 3143
Petach-Tikva 4951041, Israel
Tel: +972 (3) 918-0000
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or
any accompanying prospectus supplement.
Overview
CyberArk Software Ltd. was founded in 1999 with the vision of protecting high-value business data and pioneering our Digital Vault technology. That same year, we began offering our
first product, the Sensitive Information Management Solution (previously called the Sensitive Document Vault), which provided a secure platform for our customers’ employees to share sensitive files. We began with our early vaulting
technology, which has enabled us to evolve into a company that provides a comprehensive solution to secure identities anchored on Privileged Access Management. In 2005, we introduced our Privileged Access Management Solution, upon
which we built our leadership position in the Privileged Access Management market, providing a layer of security that protects high-level and high-value access across an organization. In September 2014, we listed our Ordinary
Shares on the Nasdaq. In addition to investing in organic research and development, in 2015 we began to execute a merger and acquisition strategy and acquired Viewfinity, Inc., a provider of Windows least privilege management and
application control software, as well as Cybertinel Ltd., a cybersecurity company specializing in cyber threat detection technology. In May 2017, we acquired Conjur Inc., a provider of DevOps security software. In May 2020, we
acquired IDaptive Holdings, Inc., an Identity as a Service (IDaaS) provider. In March 2022, we acquired Aapi.io, a provider of no-code application integration and workflow automation solutions, in July 2022, we acquired C3M, LLC, a
provider of multi-cloud security and compliance solutions and in October 2024 we acquired Venafi Holdings, Inc. With our organic investment in research and development to drive new product releases and innovation, coupled with the
incremental acquisitions of selected technologies and the execution of our go-to-market (GTM) strategy, today CyberArk is the global leader in Identity Security, centered on intelligent privilege controls. We enable secure access
for all human and machine identities to help organizations secure critical business assets and applications, protect their distributed workforce and customers, and accelerate business across cloud, hybrid and self-hosted
environments. Our solutions enable Zero Trust by enforcing least privilege with continuous identity threat detection and protection.
We are a company limited by shares organized under the laws of the State of Israel. We are registered with the Israeli Registrar of
Companies. Our registration number is 51-229164-2. Our principal executive offices are located at 9 Hapsagot St., Park Ofer 2, P.O. Box 3143, Petach-Tikva, 4951041, Israel, and our telephone number is +972 (3) 918-0000. Our website
address is www.cyberark.com. Information contained on, or that can be accessed through, our website is not part of this prospectus and is not incorporated by reference herein. We have included our website address in this prospectus
solely for informational purposes. Our SEC filings are available to you on the SEC’s website at http://www.sec.gov. This site contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC. Our agent for service of process in the United States is CyberArk Software, Inc., located at 60 Wells Avenue, Newton, MA 02459, and our telephone number is (617) 965-1544.
Recent Developments
On October 1, 2024, we completed the Acquisition. For more information on the Acquisition see our Current Reports on Form 6-K furnished to
the SEC on May 20, 2024 and October 1, 2024.
On June 25, 2024, we entered into a revolving credit facility agreement with a certain institutional lender providing for revolving
borrowing commitments of up to $250 million (the “Credit Facility”). For more information on the Credit Facility, see “Operating and Financial Review and Prospects in connection with the Unaudited Condensed Consolidated Financial
Statements of the Company as of and for the six months ended June 30, 2024” filed as Exhibit 99.2 to our Current Report on Form 6-K furnished to the SEC on October 22, 2024.
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Issuer
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Resale of Ordinary Shares
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Ordinary Shares that may be offered
and sold from time to time by
the selling shareholder
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Up to 2,285,076 Ordinary Shares that were issued to the selling shareholder in connection with the closing of the Acquisition pursuant to the Merger Agreement.
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All of the Ordinary Shares offered by the selling shareholder pursuant to this prospectus will be sold by the selling shareholder for its own account. We will not
receive any of the proceeds from such sales.
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Terms of the Offering
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The selling shareholder will determine when and how it sells the Ordinary Shares offered in this prospectus, as
described in “Plan of Distribution.”
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Nasdaq Symbol
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Our Ordinary Shares are listed on Nasdaq under the symbol “CYBR.”
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| Risk Factors |
You should read the “Risk Factors” section of this prospectus for a discussion of factors to carefully consider before
deciding to invest in the Ordinary Shares.
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Investment in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks.
Before deciding whether to invest in our securities, you should carefully consider the risk factors described below and in our most recent Annual Report on Form 20-F incorporated by reference into this prospectus and in our updates, if any,
to those risk factors in our reports on Form 6-K incorporated by reference into this prospectus and all other information contained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange
Act, and the risk factors and other information contained in the applicable prospectus supplement and any applicable free writing prospectus. The occurrence of any of these risks might cause you to lose all or part of your investment in
the offered securities. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a
reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occur, our business, financial condition, results of operations or cash
flow could be seriously harmed. This could cause the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also carefully read the section entitled “Special Note Regarding
Forward-Looking Statements” included herein and included in our most recent Annual Report on Form 20-F and our updates, if any, to that section in our reports on Form 6-K incorporated by reference into this prospectus.
We may fail to fully execute, integrate, or realize the benefits expected from acquisitions, including the Acquisition, which
may require significant management attention, disrupt our business, dilute shareholder value, and adversely affect our financial condition and results of operations.
As part of our business strategy and to remain competitive, we continue to evaluate acquiring or making investments in complementary companies,
products, or technologies. We may not be able to find suitable acquisition candidates or complete such acquisitions on favorable terms. We may incur significant expenses, divert employee and management time and attention from other
business-related tasks and our organic strategy, and incur other unanticipated complications while engaging with potential target companies where no transaction is eventually completed.
If we do complete acquisitions, such as the Acquisition, we may not ultimately derive benefits commensurate with the purchase price paid for such
acquisition, strengthen our competitive position or achieve our goals or expected growth, profitability or cash flow generation, and any acquisitions we complete could be viewed negatively by our customers, analysts, and investors, or
create unexpected competition from market participants. Any integration process may require significant time and resources. We may not be able to manage the process successfully and may experience a decline in our profitability as we
incur expenses prior to fully realizing the benefits of the acquisition. We could expend significant cash and incur acquisition-related costs and other unanticipated liabilities associated with the acquisition, the product, or the
technology, such as contractual obligations, potential security vulnerabilities of the acquired company and its products and services and potential intellectual property infringement. Any acquisition, including the Acquisition, may involve
expansion into businesses that are outside our core competencies and into market segments where we do not have existing expertise, and as a result we may be unable to achieve the expected benefits. In addition, any acquired technology or
product may not comply with legal or regulatory requirements and may expose us to regulatory risk and require us to make additional investments to make them compliant. Further, we may not be able to provide the same support service levels
to the acquired technology or product that we generally offer with our other products. Furthermore, in connection with any completed acquisition, including the Acquisition, we may be responsible for related costs and liabilities, including
for unexpected liabilities that we failed to, or were unable to, discover in the course of performing our due diligence review of the acquired business. We cannot assure you that indemnification rights we may obtain will be enforceable,
collectible or sufficient in an amount, scope or duration to fully offset the possible liabilities associated with the acquired business. Any of these liabilities, individually or in the aggregate, could have a material adverse effect on
our business, financial condition or results of operations.
In particular, the integration process of Venafi Holdings, Inc. and its business has required, and will continue to require, significant time and resources. We may not be able to manage
the integration process successfully and may experience a decline in our profitability as we incur expenses prior to fully realizing the benefits of the Acquisition. We have expended significant cash and incurred costs related to the
Acquisition and its integration, and we may incur other unanticipated costs and liabilities associated with the Acquisition, such as legal claims, contractual obligations, security posture, costs related to claims of intellectual property
infringement, organizational maturity and costs to comply with legal or regulatory requirements. We may not successfully integrate and leverage the technology and provide a unified offering or retain key personnel and maintain
relationships with customers, partners and suppliers, and may be unable to achieve our expected results from the Acquisition, including our expectations regarding revenue growth, profitability, cash flow generation, accounting charges,
tax liabilities, market expansion and technology enhancements.
Any of these issues could have a material adverse impact on our business, financial condition and results of operations and may result in a
decline in the price of the Ordinary Shares.
Conditions in Israel, including the ongoing war between Israel and Hamas and other conflicts in the region, as well as
political and economic instability, may adversely impact our business operations.
Our headquarters, certain members of our board of directors and management, most of our research and development activities, and other
significant operations are located in Israel and may be impacted by regional instability and extreme security tension. Political, economic and security conditions in Israel and the surrounding region could directly affect our business.
Any political instability, terrorism, armed conflicts, reserve mobilization, cyberattacks, boycotts, direct or indirect sanctions and restrictions, or any other hostilities involving Israel or the interruption or curtailment of trade
between Israel and its trading partners could adversely affect our operations.
In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and
military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers. These attacks resulted in extensive deaths, injuries, and kidnapping of civilians and soldiers, as well as evacuations of tens of
thousands of civilians from their homes. Following the attacks, Israel’s security cabinet declared war against Hamas and commenced a military campaign.
Since the commencement of these events, there have been additional and escalating active hostilities, including with the Hezbollah organization
in Lebanon, Iran and its proxies in the region such as the Houthi movement. As a result of stepped-up attacks from Hezbollah, Israel has begun conducting a limited ground operation in Southern Lebanon, which has the potential to escalate
into a wider regional conflict. In addition, Iran has directly targeted Israel with ballistic missiles and other weaponry. It is possible that these hostilities will further escalate into a greater, more severe regional conflict, and that
additional terrorist organizations and, possibly, countries, will actively join the hostilities.
Further, as an Israeli company, there is heightened risk of cyberattacks on our and our supply chain’s IT networks by our adversaries in general,
and more so as a result of a war. Although the current war has not materially impacted our business or operations as of the date of this filing, any escalation or expansion of the war could have a negative impact on both global and
regional conditions and may adversely affect our business, financial condition, and results of operations.
Currently, the war has impacted the availability of a limited portion of our workforce in Israel in various ways – a small part of our workforce
has been called to active duty, and others have been supporting friends or family members engaged in the war. If the situation escalates, additional employees may be called for service, and those called may be absent for an extended period
of time. This may materially and adversely affect our business operations, including product development, information technology infrastructure, and our ability to meet our customers’ expectations, and could impact our competitive position
and cause our sales to decrease.
The scope, intensity and duration of the current war are difficult to predict, as are the economic implications on our business and operations
and on Israel’s economy in general. For example, these events may be intertwined with wider macroeconomic factors relating to a deterioration of Israel’s economic standing that may involve, for instance, a downgrade in Israel’s credit
rating by rating agencies (such as the recent downgrades by Moody’s of its credit rating of Israel from A1 to Baa1, as well as the downgrade of its outlook rating from “stable” to “negative” and by S&P and Fitch of their credit rating
of Israel from A+ to A). Any of these implications on Israel’s economy or financial conditions may have an adverse effect on our ability to effectively conduct our operations.
Moreover, the perception of Israel and Israeli companies by the global community (as represented, for example, by claims filed with the International Court of Justice (the “ICJ”), since the
outbreak of the current war) may cause an increase in sanctions and other adverse measures against Israel, Israeli companies and their products and services. Additionally, there have been increased efforts by countries, activists and
organizations to cause companies and consumers to boycott Israeli goods and services or otherwise restrict business with Israel and with Israeli companies, which may impact our ability to do business with our existing and potential
customers. Such efforts, particularly if they become widespread, as well as current and future rulings and orders of international tribunals (including the ICJ) against Israel, could materially and adversely impact our business
operations.
The hostilities with Hamas, Hezbollah, Iran and other organizations and countries have included and may include various methods of armed attacks
that have already caused and may cause further damage to private and public facilities, infrastructure, utilities, and telecommunication networks. This may require the temporary closure of our offices or facilities or affect our employees’
ability to work, negatively impacting our operational capacity and disrupting supply chains that impact our ability to conduct business efficiently, thereby leading to increased costs associated with alternative solutions or contingency
measures. Such attacks may also pose risks to the safety and effectiveness of our workforce and impair our ability to maintain business continuity, which would likely result in substantial direct and indirect costs that may not be
recoverable from our commercial insurance. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot be assured that such government coverage
will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business.
Any of the foregoing implications on Israel’s security, business, economical or financial conditions may have an adverse effect on our business,
our results of operations and our ability to raise additional funds or result in other negative impacts such as increased interest rates, currency fluctuations, inflation, civil unrest and volatility in securities markets, which could
adversely affect the conditions in which we operate and potentially deter foreign investors and organizations from investing or transacting business with Israeli-based companies.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events.
Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. These forward-looking statements are subject to risks and
uncertainties and include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. Words or phrases such as “anticipate,” “believe,” “can,”
“continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “possible,” “potential,” “predict,” “project,” “target,” “should,” “will” and “would,” or similar words or phrases, or the
negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements included or incorporated
by reference in this prospectus include, but are not limited to, statements concerning our operations, cash flows, financial position and dividend policy.
Forward-looking statements appear in a number of places in this prospectus including, without limitation, in the sections titled “Operating and
Financial Review and Prospects,” and “Information on the Company” included in our Annual Report on Form 20-F, which is incorporated by reference into this prospectus. There are important factors that could cause our actual results, levels
of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to:
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changes to the drivers of our growth and our ability to adapt our solutions to the information security market changes and demands;
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our ability to acquire new customers and maintain and expand our revenues from existing customers;
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our ability to find, complete, fully integrate or achieve the expected benefits of additional strategic acquisitions, including the Acquisition;
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intense competition within the information security market;
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real or perceived security vulnerabilities, gaps, or cybersecurity breaches of our, or our customers’ or partners’ systems, solutions or services;
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risks related to our compliance with privacy, data protection and artificial intelligence laws and regulations;
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fluctuation in our quarterly results of operations and our ability to successfully operate our business as a subscription company;
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our reliance on third-party cloud providers for our operations and software-as-a-service solutions;
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our ability to hire, train, retain and motivate qualified personnel;
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our ability to effectively execute our sales and marketing strategies;
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our ability to main successful relationships with channel partners, or if our channel partners fail to perform;
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risks related to sales made to government entities;
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prolonged economic uncertainties or downturns;
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our history of incurring net losses, our ability to generate sufficient revenue to achieve and sustain profitability and our ability to generate cash flow from operating activities;
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regulatory and geopolitical risks associated with our global sales and operations;
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risks related to intellectual property claims;
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fluctuations in currency exchange rates;
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the ability of our products to help customers achieve and maintain compliance with government regulations or industry standards;
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our ability to protect our proprietary technology and intellectual property rights;
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risks related to using third-party software, such as open-source software;
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risks related to share price volatility or activist shareholders;
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any failure to retain our “foreign private issuer” status or the risk that we may be classified, for U.S. federal income tax purposes, as a “passive foreign investment company”;
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risks related to our convertible notes, including the potential dilution to existing shareholders and our ability to raise the funds necessary to repurchase our convertible notes;
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our expectation to not pay dividends on our ordinary shares for the foreseeable future;
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risks related to our incorporation and location in Israel, including the ongoing war between Israel and Hamas and conflict in the region; and
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other economic, business, and/or competitive factors.
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Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that
could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the
factors described in “Risk Factors” in our Annual Report on Form 20-F incorporated by reference into this prospectus. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date thereof. We
undertake no obligation to publicly revise any forward-looking statement to reflect new circumstances or events or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the
reports we will file from time to time with the SEC after the date of this prospectus.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are
based on information available to us as of the date thereof and while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.
Although we believe the expectations reflected in the forward-looking statements were reasonable at the time made, we cannot guarantee future results, level of activity, performance or
achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to
in this section in connection with the forward-looking statements contained in this prospectus and any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf.
All of the Ordinary Shares offered by the selling shareholder pursuant to this prospectus will be sold by the selling shareholder for its
account. We will not receive any of the proceeds from such sales. We will pay certain expenses associated with the registration of the Ordinary Shares covered by this prospectus, as described in the section titled “Plan of Distribution.”
DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION
This section of the prospectus includes a description of the material terms of CyberArk’s amended and restated articles of
association and of applicable Israeli law. The following description is intended as a summary only and does not constitute legal advice regarding those matters and should not be regarded as such. The description is qualified in its
entirety by reference to the complete text of CyberArk’s amended and restated articles of association, which are included as an exhibit to the registration statement of which this prospectus forms a part. We urge you to read the full text
of CyberArk’s amended and restated articles of association.
Share Capital
Our authorized share capital consists of 250 million ordinary shares, par value NIS 0.01 per share, of which 43,573,526 ordinary shares were
issued and outstanding as of September 30, 2024.
Our board of directors may determine the issue prices and terms for such shares or other securities, and may further determine any other
provision relating to such issue of shares or securities. We may also issue and redeem redeemable securities on such terms and in such manner as our board of directors shall determine.
As of September 30, 2024, we had five holders of record of our ordinary shares in the United States, including Cede & Co., the nominee of The
Depository Trust Company. The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ordinary
shares were held by brokers or other nominees.
All of our outstanding ordinary shares are validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have
any preemptive rights.
The following descriptions of share capital and provisions of our amended and restated articles of association are summaries and are qualified by
reference to our amended and restated articles of association. A copy of our amended and restated articles of association is filed with the SEC as an exhibit to our registration statement, of which this prospectus forms a part.
Registration Number and Purposes of the Company
Our registration number with the Israeli Registrar of Companies is 51-229164-2. Our purpose, as set forth in article 3 of our amended and
restated articles of association, is to engage in any lawful activity.
Voting Rights
All ordinary shares have identical voting and other rights in all respects.
Transfer of Shares
Our fully paid ordinary shares are issued in registered form and may be freely transferred under our amended and restated articles of
association, unless the transfer is restricted or prohibited by another instrument, applicable law or the rules of a stock exchange on which the shares are listed for trade.
Election of Directors
Our ordinary shares do not have cumulative voting rights for the election of directors. As a result, the holders of a majority of the voting
power represented at a shareholders meeting have the power to elect all of our directors.
Under our amended and restated articles of association, our board of directors must consist of not less than four but no more than nine
directors, as may be fixed from time to time by our board of directors. Pursuant to our amended and restated articles of association, the vote required to appoint a director is a simple majority vote of holders of our voting shares,
participating and voting at the relevant meeting. In addition, our directors are divided into three classes that are each elected at the third annual general meeting of our shareholders, in a staggered fashion (such that one class is
elected each annual general meeting), and serve on our board of directors unless they are removed by a vote of 65% of the total voting power of our shareholders at a general meeting of our shareholders or upon the occurrence of certain
events, in accordance with the Israeli Companies Law, 5759-1999 (the “Companies Law”) and our amended and restated articles of association. In addition, our amended and restated articles of association allow our board of directors to fill
vacancies on the board of directors or to appoint new directors up to the maximum number of directors permitted under our amended and restated articles of association. Such directors serve for a term of office equal to the remaining period
of the term of office of the directors(s) whose office(s) have been vacated or in the case of new directors, for a term of office according to the class to which such director was assigned upon appointment.
Dividend and Liquidation Rights
We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Companies
Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. Our amended and restated articles of
association do not require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors.
Pursuant to the Companies Law, the distribution amount is limited to the greater of retained earnings or earnings generated over the previous two
years, according to our then last reviewed or audited financial statements (less the amount of previously distributed dividends, if not reduced from the earnings), provided that the end of the period to which the financial statements relate
is not more than six months prior to the date of the distribution. If we do not meet such criteria, then we may distribute dividends only with court approval; as a company listed on an exchange outside of Israel, however, court approval is
not required if the proposed distribution is in the form of an equity repurchase, provided that we notify our creditors of the proposed equity repurchase and allow such creditors an opportunity to initiate a court proceeding to review the
repurchase. If within 30 days such creditors do not file an objection, then we may proceed with the repurchase without obtaining court approval. In each case, we are only permitted to distribute a dividend if our board of directors and,
if applicable, the court determines that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.
In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary
shares in proportion to their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights
that may be authorized in the future.
Exchange Controls
There are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of the
ordinary shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of countries that are, or have been, in a state of war with Israel.
Registration Rights
The selling shareholder is entitled to certain registration rights under the terms of the Registration Rights Agreement, until the rights
otherwise terminate pursuant to the terms of the Registration Rights Agreement. The registration of shares as a result of the following rights being exercised would enable the selling shareholder to trade these shares without restrictions
under the Securities Act of 1933, as amended (the “Securities Act”), when the applicable registration statement is declared effective.
Piggyback Registration Statement
If we propose to register any shares or other securities under the Securities Act, subject to certain exceptions, the holders of registrable
securities will be entitled to notice of the registration and to include their registrable securities in the registration. If our proposed registration involves an underwriting, the managing underwriter of such offering will have the right
to limit the number of shares to be underwritten for reasons related to the marketing of the shares.
Form F-3 Registration Rights
Under the Registration Rights Agreement, we are required to effect a shelf registration statement on Form F-3 registering the Ordinary Shares
received by the selling shareholder under the Merger Agreement and to keep such registration statement effective subject to the terms of the Registration Rights Agreement.
Expenses and Indemnification
Ordinarily, other than underwriting discounts and commissions, we will be required to pay all expenses incurred by us related to any registration
effected pursuant to the exercise of these registration rights. These expenses may include all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of our counsel and the reasonable fees and
disbursements of a counsel for the selling shareholder. Additionally, we have agreed to indemnify the selling shareholder for damages, and any legal or other expenses reasonably incurred, arising from or based upon any untrue statement of
a material fact contained in any registration statement, an omission or alleged omission to state a material fact in any registration statement or necessary to make the statements therein not misleading, or any violation or alleged
violation by the indemnifying party of securities laws, subject to certain exceptions.
Restrictions on Sales
Pursuant to the Registration Rights Agreement, the selling shareholder may not, without our prior written consent, sell, transfer or dispose of
Ordinary Shares (i) in an amount that would exceed, in the aggregate but excluding any sale, transfer or disposition made in an underwritten offering, in any given week, 20% of the average weekly trading volume of our Ordinary Shares on
Nasdaq, in the four weeks preceding such sale, transfer or disposition, or (ii) in any underwritten offering, in an amount that would exceed, in the aggregate, 50% of the selling shareholder’s Ordinary Shares subject to the Registration
Rights Agreement as of its date.
Termination of Registration Rights
The registration rights terminate upon the earlier of (i) 18 months after the closing of the Acquisition, (ii) the date when the selling
shareholder ceases to beneficially hold Ordinary Shares entitled to be registered under the Registration Right Agreement and (iii) upon written notice by the selling shareholder.
Shareholder Meetings
Under Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later than
15 months after the date of the previous annual general meeting. All meetings other than the annual general meeting of shareholders are referred to in our amended and restated articles of association as special general meetings. Our board
of directors may call special general meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, the Companies Law provides that our board of directors is required to convene a
special general meeting upon the written request of (i) any two or more of our directors, (ii) one-quarter or more of the serving members of our board of directors, or (iii) as a company listed on an exchange in the U.S., one or more
shareholders holding, in the aggregate, either (a) 10% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 10% or more of our outstanding voting power.
Under Israeli law, one or more shareholders holding at least 1% of the voting rights at the general meeting of shareholders may request that the
board of directors include a matter in the agenda of a general meeting of shareholders to be convened in the future, provided that it is appropriate to discuss such a matter at the general meeting; however, in order to nominate a new
candidate for the position of director, the shareholder in question must hold at least 5% of the voting rights. Our articles of association contain procedural guidelines and disclosure items with respect to the submission of shareholder
proposals for general meetings.
Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at
general meetings are the shareholders of record on a date to be decided by the board of directors, which, as a company listed on an exchange outside Israel, may be between four and 60 days prior to the date of the meeting. Furthermore, the
Companies Law requires that resolutions regarding the following matters must be passed at a general meeting of our shareholders:
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amendments to our articles of association (in addition to the approval by our board of directors, as required pursuant to our amended and restated articles of association);
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appointment, termination or the terms of service of our auditors;
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appointment of external directors (if applicable);
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approval of certain related party transactions;
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increases or reductions of our authorized share capital;
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the exercise of our board of director’s powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
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The Companies Law requires that a notice of any annual general meeting or special general meeting be provided to shareholders at least 21 days
prior to the meeting and if the agenda of the meeting includes, among other things, the appointment or removal of directors, the approval of transactions with office holders or interested or related parties or the approval of a merger,
notice must be provided at least 35 days prior to the meeting. Under the Companies Law and our amended and restated articles of association, shareholders are not permitted to take action by way of written consent in lieu of a meeting.
Quorum
Pursuant to our amended and restated articles of association, holders of our ordinary shares have one vote for each ordinary share held on all
matters submitted to a vote before the shareholders at a general meeting. The quorum required for our general meetings of shareholders consists of at least two shareholders present in person, by proxy or written ballot, who hold or
represent between them at least one third of the total outstanding voting rights, within half an hour of the time fixed for the commencement of the meeting. A meeting adjourned for lack of a quorum shall be adjourned to the same day in the
next week, at the same time and place, to such day and at such time and place as indicated in the notice to such meeting, or to such day and at such time and place as the chairperson of the meeting shall determine. At the reconvened
meeting, any number of shareholders present in person or by proxy shall constitute a quorum, unless a meeting was called pursuant to a request by our shareholders, in which case the quorum required is one or more shareholders present in
person or by proxy and holding the number of shares required to call the meeting as described under “—Shareholder Meetings.”
Vote Requirements
Our amended and restated articles of association provide that all resolutions of our shareholders require a simple majority vote, unless
otherwise required by the Companies Law or by our amended and restated articles of association. Under the Companies Law, certain actions require a special majority, including: (i) the approval of an extraordinary transaction with a
controlling shareholder or in which the controlling shareholder has a personal interest, (ii) the terms of employment or other engagement of a controlling shareholder of the company or a controlling shareholder’s relative (even if such
terms are not extraordinary) and (iii) approval of certain compensation-related matters require the approval described under “Item 6. Directors, Senior Management and Employees—Board Practices—Compensation Committee” in our Annual Report
on Form 20-F for the year ended December 31, 2023 incorporated by reference herein. Under our amended and restated articles of association, the alteration of the rights, privileges, preferences or obligations of any class of our shares (to
the extent there are classes other than ordinary shares) may require a simple majority of the class so affected (or such other percentage of the relevant class that may be set forth in the governing documents relevant to such class), in
addition to the ordinary majority vote of all classes of shares voting together as a single class at a shareholder meeting.
Our amended and restated articles of association also provide that the removal of any director from office or the amendment of such provision,
and certain other provisions regarding our staggered board, shareholder proposals and the size of our board require the vote of at least 65% of the total voting power of our shareholders. Another exception to the simple majority vote
requirement is a resolution for the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Companies Law, which requires the approval of a majority of the holders
holding at least 75% of the voting rights represented at the meeting and voting on the resolution.
Access to Corporate Records
Under the Companies Law, shareholders are provided access to: minutes of our general meetings; our shareholders register and principal
shareholders register, articles of association and annual financial statements, certain other documents as provided in the Companies Law, and any document that we are required by law to file publicly with the Israeli Companies Registrar or
the Israel Securities Authority. In addition, shareholders may request to be provided with any document related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Companies
Law. We may deny this request if we believe it has not been made in good faith or if such denial is necessary to protect our interest or protect a trade secret or patent.
Acquisitions under Israeli law
Full Tender Offer
A person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued and
outstanding share capital or that of a certain class of shares is required by the Companies Law to make a tender offer to all of the company’s shareholders or the shareholders who hold shares of the relevant class for the purchase of all
of the issued and outstanding shares of the company or of the same class, as applicable.
If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the
applicable class of shares, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation
of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.
If the tender offer was not accepted, the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of
the company’s issued and outstanding share capital or of the applicable class from shareholders who accepted the tender offer.
Special Tender Offer
The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if, as a
result of the acquisition, the purchaser would become a holder of 25% or more of the voting rights in the company. This requirement does not apply if there is already another holder of at least 25% of the voting rights in the company.
Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting
rights in the company, if there is no other shareholder of the company who holds more than 45% of the voting rights in the company, subject to certain exceptions. These requirements do not apply if the acquisition occurs in the context
of a private placement approved by the general meeting as a private offering whose purpose is to give the acquirer at least 25% or 45% or more, as the case may be. A special tender offer may be consummated only if (i) at least 5% of the
voting power attached to the company’s outstanding shares will be acquired by the offeror and (ii) the special tender offer is accepted by a majority of the votes of those offerees who gave notice of their position in respect of the
offer; in counting the votes of offerees, the votes of a holder of control in the offeror, a person who has personal interest in acceptance of the special tender offer, holders of 25% or more of the voting rights in the company or anyone
on their behalf, including their relatives and entities controlled by them, will not be taken into account.
Merger
The Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements described under
the Companies Law are met, by a majority vote of each party’s shareholders.
For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of
shares represented at the shareholders meeting that are held by parties other than the other party to the merger, or by any person (or group of persons acting in concert) who holds (or hold, as the case may be) 25% or more of the voting
rights or the right to appoint 25% or more of the directors of the other party, vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a
personal interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions with controlling shareholders (as described under “Item 6. Directors, Senior Management
and Employees—Board Practices—Approval of Related Party Transactions under Israeli Law—Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions” in our most recently filed Annual Report on Form
20-F).
If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or the
exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and
reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders of the company.
Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there
exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure the rights of creditors.
In addition, a merger may not be consummated unless at least 50 days have passed from the date on which a proposal for approval of the merger
was filed by each party with the Israeli Registrar of Companies and at least 30 days have passed from the date on which the merger was approved by the shareholders of each party.
Borrowing Powers
Pursuant to the Companies Law and our amended and restated articles of association, our board of directors may exercise all powers and take all
actions that are not required under law or under our amended and restated articles of association to be exercised or taken by our shareholders, including the power to borrow money for company purposes.
Changes in Capital
We may, from time to time, by a resolution of our shareholders, increase our authorized share capital by the creation of new shares. Any such
increase shall be in such amount and shall be divided into shares of such nominal amounts, and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as such resolution shall provide. Except to
the extent otherwise provided in such resolution, any new shares included in the authorized share capital increased as aforesaid shall be subject to all the provisions of our amended and restated articles of association which are
applicable to shares of such class included in the existing share capital without regard to class (and, if such new shares are of the same class as a class of shares included in the existing share capital, to all of the provisions which
are applicable to shares of such class included in the existing share capital).
We may, from time to time, by a resolution of our shareholders, provide for shares with such preferred or deferred rights or other special
rights and/or such restrictions, whether in regard to dividends, voting, repayment of share capital or otherwise, as may be stipulated in such resolution.
If at any time our share capital is divided into different classes of shares, the rights attached to any such class, unless otherwise provided
by our amended and restated articles of association, may be modified or cancelled by the Company by a resolution of a general meeting of the shareholders holding all shares as one class, without any required separate resolution of any
class of shares.
We may, by or pursuant to an authorization of a resolution of our shareholders:
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consolidate all or any part of our issued or unissued authorized share capital into shares of a per share nominal value which is larger, equal to or smaller than the per share nominal value of our existing shares;
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divide or sub-divide our shares (issued or unissued) or any of them, into shares of smaller or the same nominal value, and the resolution whereby any share is divided may determine that, as among the holders of the shares
resulting from such subdivision, one or more of the shares may, in contrast to others, have any such preferred or deferred rights or rights of redemption or other special rights, or be subject to any such restrictions, as we may
attach to unissued or new shares;
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cancel any shares which, at the date of the adoption of such resolution, have not been taken or agreed to be taken by any person, and reduce the amount of our share capital by the amount of the shares so canceled; or
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reduce our share capital in any manner.
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Exclusive Forum
Our amended and restated articles of association provide that unless we consent in writing to the selection of an alternative forum, the federal
district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for
federal and state courts over all such Securities Act actions. Accordingly, both U.S. state and federal courts have jurisdiction to entertain such claims. This choice of forum provision may limit a shareholder’s ability to bring a claim
in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may increase the costs associated with such lawsuits, which may discourage such lawsuits against us and our directors,
officers and employees. Alternatively, if a court were to find these provisions of our amended and restated articles of association inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or
proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. Any person or entity purchasing or otherwise acquiring any
interest in our share capital shall be deemed to have notice of and to have consented to the choice of forum provisions of our amended and restated articles of association described above. This provision would not apply to suits brought to
enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.
Our amended and restated articles of association also provide that unless we consent in writing to the selection of an alternative forum, the
competent courts in Tel Aviv, Israel shall be the exclusive forum for any derivative action or proceeding brought on behalf of the Company, any action asserting a breach of a fiduciary duty owed by any of our directors, officers or other
employees to the Company or our shareholders or any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law, 1968.
Certain Insider Trading and Market Manipulation Laws
U.S. law contains rules intended to prevent insider trading and market manipulation. The following is a general description of those laws as
such laws exist as of the date of this document and should not be viewed as legal advice for specific circumstances. In connection with listing on Nasdaq, we adopted an insider trading policy. This policy provides for, among other things,
rules on transactions by members of our board of directors and employees in our Ordinary Shares or in financial instruments the value of which is determined by the value of the Ordinary Shares.
United States
The United States securities laws generally prohibit any person from trading in a security while in possession of material, non-public
information or assisting someone who is engaged in doing the same. The insider trading laws cover not only those who trade based on material, non-public information, but also those who disclose material non-public information to others who
might trade on the basis of that information (known as “tipping”). A “security” includes not just equity securities, but any security (e.g., derivatives). Thus, our board of directors, officers and other employees may not purchase or sell
our shares or other securities when they are in possession of material, non-public information about CyberArk (including our business, prospects or financial condition), nor may they tip any other person by disclosing material, non-public
information about CyberArk.
Transfer Agent
The Ordinary Shares are listed on Nasdaq in book-entry form and such Ordinary Shares, through the transfer agent, will not be certificated. We
appointed Equiniti Trust Company, LLC as our agent in New York to maintain our shareholders’ register and to act as transfer agent and registrar. Its address is 6201 15th Avenue, Brooklyn, New York, 11219, and its telephone number is (800)
937-5449.
Listing of Shares
Our Ordinary Shares are listed on Nasdaq under the symbol “CYBR.” Beneficial interests in the Ordinary Shares that are traded on Nasdaq are held
through the electronic book-entry system provided by The Depository Trust Company, or DTC. Each person holding Ordinary Shares held through DTC must rely on the procedures thereof and on institutions that have accounts therewith to
exercise any rights of a holder of the Ordinary Shares.
This prospectus relates to the possible offer and sale from time to time of up to 2,285,076 Ordinary Shares by the selling shareholder. The
selling shareholder acquired Ordinary Shares pursuant to the Merger Agreement.
The selling shareholder may from time to time offer and sell any or all of the Ordinary Shares set forth below pursuant to this prospectus,
subject to certain limitations provided in the Registration Rights Agreement. When we refer to the “selling shareholder” in this prospectus, we mean the person listed in the table below.
The following table is prepared based on information provided to us by the selling shareholder. It sets forth the name and address of the
selling shareholder, the aggregate number of Ordinary Shares that the selling shareholder may offer pursuant to this prospectus, and the beneficial ownership of the selling shareholder both before and after the offering. We have based
percentage ownership prior to this offering on 43,573,526 Ordinary Shares outstanding as of September 30, 2024.
The individuals and entities listed below have beneficial ownership over their respective securities. The SEC has defined “beneficial ownership”
of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security. A shareholder is also deemed to be, as of any date, the beneficial owner of all securities that such shareholder has
the right to acquire within 60 days after that date through (i) the exercise of any option, warrant or right, (ii) the conversion of a security, (iii) the power to revoke a trust, discretionary account or similar arrangement, or (iv) the
automatic termination of a trust, discretionary account or similar arrangement. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, Ordinary Shares subject to options or other
rights (as set forth above) held by that person that are currently exercisable, or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage
ownership of any other person.
We cannot advise you as to whether the selling shareholder will in fact sell any or all of such Ordinary Shares. In addition, the selling
shareholder may sell, transfer or otherwise dispose of, at any time and from time to time, the Ordinary Shares in transactions exempt from the registration requirements of the Securities Act after the date of this prospectus, subject to
applicable law.
Selling shareholder information for each additional selling shareholder, if any, will be set forth by prospectus supplement to the extent
required prior to the time of any offer or sale of such selling shareholder’s securities pursuant to this prospectus. Any prospectus supplement may add, update, substitute, or change the information contained in this prospectus, including
the identity of each selling shareholder and the number of Ordinary Shares registered on its behalf. A selling shareholder may sell all, some or none of such securities in this offering. See the section titled “Plan of Distribution.”
Name of Selling Shareholder
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Ordinary Shares Beneficially Owned Prior to the Offering
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Ordinary Shares Being Offered Hereby
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Ordinary Shares Beneficially Owned After the Offering(1)
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Triton Seller, LP(2)
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2,285,076
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5.24
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%
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2,285,076
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—
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—
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Assumes the selling shareholder sells all of the Ordinary Shares that may be offered from time to time pursuant to this prospectus.
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Thoma Bravo UGP, LLC (“Thoma Bravo UGP”) is the ultimate general partner of certain investment funds affiliated with Thoma Bravo UGP (the “Thoma Bravo Funds”), and the Thoma Bravo Funds and certain unaffiliated investors are
limited partners of the selling shareholder. By virtue of the relationships described in this footnote, Thoma Bravo UGP may be deemed to beneficially own the Ordinary Shares directly owned by the selling shareholder. The principal
address of each of the foregoing entities is c/o Thoma Bravo, L.P., 110 N. Wacker Drive, 32nd Floor, Chicago, IL 60606.
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CERTAIN TAX CONSIDERATIONS
Certain Material U.S. Federal Income Tax Consequences
The following discussion is a summary of certain material U.S. federal income tax consequences to U.S. Holders (as defined below) of the
purchase, ownership and disposition of Ordinary Shares and does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state,
local, or non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, judicial decisions, and published rulings and
administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing
interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a
court will not take a contrary position to that discussed below regarding the tax consequences discussed below.
This summary applies only to U.S. Holders that acquire Ordinary Shares in exchange for cash pursuant to this prospectus and that hold Ordinary
Shares as capital assets within the meaning of Section 1221 of the Code. This discussion does not address all U.S. federal income tax consequences that may be relevant to a U.S. Holder’s particular circumstances, including the impact of the
Medicare contribution tax on net investment income. In addition, it does not address all U.S. federal income tax consequences relevant to holders subject to special rules, including, without limitation:
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regulated investment companies or real estate investment trusts;
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brokers, dealers, or traders in securities;
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tax-exempt organizations or governmental organizations;
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U.S. expatriates and former citizens or long-term residents of the United States;
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persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States;
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persons subject to alternative minimum tax;
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persons holding Ordinary Shares as part of a hedge, straddle, constructive sale, or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
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banks, insurance companies, and other financial institutions;
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persons subject to special tax accounting rules as a result of any item of gross income with respect to Ordinary Shares being taken into account in an applicable financial statement;
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persons that actually or constructively own 10% or more (by vote or value) of our stock;
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S corporations, partnerships or other entities or arrangements treated as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein);
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U.S. Holders whose functional currency is not the U.S. dollar;
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persons who hold or received Ordinary Shares pursuant to the exercise of any employee stock option or otherwise as compensation; and
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tax-qualified retirement plans.
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If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Ordinary Shares, the tax treatment of a partner
in the partnership will depend on the status of the partner, the activities of the partnership, and certain determinations made at the partner level. Accordingly, partnerships holding Ordinary Shares and the partners in such partnerships
should consult their tax advisors regarding the U.S. federal income tax consequences to them.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF THE ORDINARY SHARES ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT
TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
Definition of a U.S. Holder
For purposes of this discussion, a “U.S. Holder” is any beneficial owner of Ordinary Shares that is for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity taxable as a corporation) created or organized under the laws of the United States, any state thereof, or the District of Columbia;
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an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
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a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be
treated as a United States person for U.S. federal income tax purposes.
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U.S. Holders
Distributions on Ordinary Shares
Subject to the discussion below under “—Passive Foreign Investment Company Rules,” if CyberArk makes distributions of cash or property on the
Ordinary Shares, the gross amount of such distributions (including any amount of foreign taxes withheld) to a U.S. Holder will generally be treated for U.S. federal income tax purposes first as a dividend to the extent of CyberArk’s current
or accumulated earnings and profits (as determined for U.S. federal income tax purposes), and then as a tax-free return of capital to the extent of the U.S. Holder’s tax basis in the Ordinary Shares, with any excess treated as capital gain
from the sale or exchange of the shares. Because CyberArk does not expect to maintain calculations of its earnings and profits under U.S. federal income tax principles, a U.S. Holder should expect all cash distributions to be reported as
dividends for U.S. federal income tax purposes. Any dividend will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.
Dividends received by certain non-corporate U.S. Holders (including individuals) may be “qualified dividend income,” which is taxed at the lower
applicable capital gains rates, provided that:
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either (a) the Ordinary Shares are readily tradable on an established securities market in the United States, or (b) CyberArk is eligible for the benefits of a qualifying income tax treaty with the United States that includes an
exchange of information program;
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CyberArk is neither a PFIC (as discussed below under “—Passive Foreign Investment Company Rules”) nor treated as such with respect to a U.S. Holder in CyberArk’s taxable year in which the dividend is paid or the preceding taxable
year;
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the U.S. Holder satisfies certain holding period requirements; and
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the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property.
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U.S. Treasury Department guidance indicates that the Ordinary Shares, which are listed on the Nasdaq, are readily tradable on an established
securities market in the United States. Thus, CyberArk believes that any dividends that it pays on the Ordinary Shares will be potentially eligible for the lower tax rates. U.S. Holders should consult their tax advisors regarding the
availability of the lower tax rates for dividends paid with respect to Ordinary Shares.
Subject to certain complex conditions and limitations (including a minimum holding period requirement), any foreign withholding taxes on
dividends (at a rate not exceeding any applicable treaty rate) may be treated as foreign taxes eligible for credit against a U.S. Holder’s U.S. federal income tax liability. For this purpose, dividends distributed by CyberArk with respect
to the Ordinary Shares generally will constitute foreign source income and “passive category income”, which may be relevant in calculating a U.S. Holder’s foreign tax credit limitation. Final Treasury regulations (the “Foreign Tax Credit
Regulations”) have imposed additional requirements for foreign taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be satisfied. However, recent notices from the IRS (the “Notices”)
indicate that the U.S. Department of the Treasury and the IRS are considering proposing amendments to such Treasury regulations and allow, subject to certain conditions, taxpayers to defer the application of many aspects of such Treasury
regulations until the date when a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). In addition, for periods in which CyberArk is a “United
States-owned foreign corporation,” a portion of dividends (generally attributable to earnings and profits from sources within the United States) paid by CyberArk may be treated as U.S. source solely for purposes of the foreign tax credit.
A United States-owned foreign corporation is any foreign corporation if 50% or more of the total value or total voting power of its stock is owned, directly, indirectly or by attribution, by United States persons. We believe that CyberArk
may be treated as a United States-owned foreign corporation. As a result, if 10% or more of its earnings and profits are attributable to sources within the United States, a portion of the dividends paid on Ordinary Shares allocable to
United States source earnings and profits may be treated as United States source for purposes of the foreign tax credit. In such event, subject to relief under an applicable income tax treaty, a U.S. Holder may not be able to offset any
foreign withholding taxes withheld as a credit against United States federal income tax imposed on that portion of dividends.
If such dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating
the foreign tax credit limitation will be limited to the gross amount of the dividend, multiplied by a fraction, the numerator of which is the reduced rate applicable to qualified dividend income and the denominator of which is the highest
rate of tax normally applicable to dividends. Instead of claiming a foreign tax credit, a U.S. Holder may be able to deduct any foreign withholding taxes on dividends in computing such U.S. Holder’s taxable income, subject to generally
applicable limitations under U.S. law (including that a U.S. Holder is not eligible for a deduction for foreign income taxes paid or accrued in a taxable year if such U.S. Holder claims a foreign tax credit for any foreign income taxes paid
or accrued in the same taxable year). The rules governing the foreign tax credit and deductions for foreign taxes are complex. U.S. Holders should consult their tax advisors regarding the availability of the foreign tax credit or a
deduction under their particular circumstances, including the effects of any applicable income tax treaty.
Sale, Exchange, Redemption or Other Taxable Disposition of Ordinary Shares.
Subject to the discussion below under “—Passive Foreign Investment Company Rules,” a U.S. Holder generally will recognize gain or loss on any
sale, exchange, redemption or other taxable disposition of Ordinary Shares in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. Holder’s adjusted tax basis in such Ordinary Shares. Any
gain or loss recognized by a U.S. Holder on a taxable disposition of Ordinary Shares generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder had a holding period in the Ordinary Shares of more
than one year. A non-corporate U.S. Holder, including an individual, who has held the Ordinary Shares for more than one year generally will be eligible for reduced tax rates for such long-term capital gains. The deductibility of capital
losses is subject to limitations.
Any such gain or loss recognized generally will be treated as U.S. source gain or loss. Accordingly, in the event any foreign tax (including
withholding tax) is imposed upon the sale, exchange, redemption or other taxable disposition of Ordinary Shares, a U.S. Holder may not be able to utilize foreign tax credits unless such U.S. Holder has foreign source income or gain in the
same category from other sources. In addition, subject to the Notices (as described above), any foreign taxes on disposition gains are likely not creditable under the Foreign Tax Credit Regulations unless a U.S. Holder is eligible for and
elects the benefits of an applicable income tax treaty. U.S. Holders are urged to consult their tax advisors regarding the U.S. federal income tax implications of any foreign taxes imposed on disposition gains in their particular
circumstances, including creditability, deductibility and determination of the amount realized as well as the application of any applicable income tax treaty to such U.S. Holder’s particular circumstances.
Passive Foreign Investment Company Rules
CyberArk will be classified as a passive foreign investment company (a “PFIC”), within the meaning of Section 1297 of the Code, for any taxable
year if either: (a) at least 75% of its gross income is “passive income” for purposes of the PFIC rules or (b) at least 50% of the value of its assets (generally determined on the basis of a quarterly average) is attributable to assets that
produce or are held for the production of passive income. For this purpose, CyberArk will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it
owns, directly or indirectly, 25% or more (by value) of the stock. Passive income generally includes dividends, interest, royalties, rents, annuities, net gains from the sale or exchange of property producing such income and net foreign
currency gains.
Under the PFIC rules, if CyberArk were considered a PFIC at any time that a U.S. Holder owns Ordinary Shares, CyberArk would continue to be
treated as a PFIC with respect to such investment by such U.S. Holder unless (i) CyberArk ceases to be a PFIC and (ii) such U.S. Holder makes a “deemed sale” election under the PFIC rules.
Based on the recent, current and anticipated composition of the income, assets and operations of CyberArk and its subsidiaries, CyberArk does not
expect to be treated as a PFIC in the current taxable year. This is a factual determination, however, that depends on, among other things, the composition of the income and assets, and the market value of the shares and assets, of CyberArk
and its subsidiaries from time to time as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations. Thus, the determination can only be made annually after the
close of each taxable year. Furthermore, because the value of CyberArk’s gross assets is likely to be determined in part by reference to its market capitalization, a decline in the value of the Ordinary Shares may result in CyberArk
becoming a PFIC. Accordingly, there can be no assurances that CyberArk will not be classified as a PFIC for the current taxable year or for any future taxable year.
If CyberArk is considered a PFIC at any time that a U.S. Holder owns Ordinary Shares, any gain such U.S. Holder recognizes on a sale or other
disposition of the Ordinary Shares, as well as the amount of any “excess distribution” (defined below) such U.S. Holder receives, would be allocated ratably over such U.S. Holder’s holding period for the Ordinary Shares. The amounts
allocated to the taxable year of the sale or other disposition (or the taxable year of receipt, in the case of an excess distribution) and to any year before CyberArk became a PFIC would be taxed as ordinary income. The amount allocated to
each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed. For purposes of these rules, distributions on
the Ordinary Shares that are received in a taxable year by a U.S. Holder will be treated as excess distributions to the extent that they exceed 125% of the average of the annual distributions on the Ordinary Shares received during the
preceding three years or the U.S. Holder’s holding period, whichever is shorter.
Under certain attribution rules, if CyberArk were considered a PFIC, U.S. Holders may be deemed to own their proportionate share of equity in any
PFIC owned by CyberArk (“lower-tier PFICs”), and generally will be subject to U.S. federal income tax in the manner discussed above on (1) a distribution to CyberArk on the shares of a lower-tier PFIC and (2) a disposition by CyberArk of
shares of a lower-tier PFIC, both as if the U.S. Holder directly held the shares of such lower-tier PFIC.
Certain elections may be available that would result in alternative treatments (such as qualified electing fund treatment or mark-to-market
treatment) of the Ordinary Shares if CyberArk is considered a PFIC. CyberArk does not intend to provide the information necessary for U.S. Holders of Ordinary Shares to make qualified electing fund elections, which, if available, would
result in tax treatment different from the general tax treatment for an investment in a PFIC described above. In addition, because a mark-to-market election with respect to CyberArk generally does not apply to any equity interests in
lower-tier PFICs owned by CyberArk, a U.S. Holder generally will continue to be subject to the PFIC rules with respect to its indirect interest in any investments held by CyberArk that are treated as equity interests in a PFIC for U.S.
federal income tax purposes.
If CyberArk is considered a PFIC at any time that a U.S. Holder owns Ordinary Shares, such a U.S. Holder would generally also be subject to
annual information reporting requirements. Failure to comply with such information reporting requirements may result in significant penalties and may suspend the running of the statute of limitations.
U.S. Holders should consult their tax advisors about the potential application of the PFIC rules to an investment in Ordinary Shares.
Information Reporting and Backup Withholding
Information reporting requirements may apply to distributions received by U.S. Holders of Ordinary Shares, and the proceeds received by U.S.
Holders on the sale or other taxable the disposition of Ordinary Shares effected within the United States (and, in certain cases, outside the United States), in each case other than for U.S. Holders that are exempt recipients (such as
corporations). Backup withholding (currently at a rate of 24%) may apply to such amounts if the U.S. Holder is not an exempt recipient and fails to provide an accurate taxpayer identification number (generally on an IRS Form W-9 provided
to the applicable withholding agent) and to certify that it is not subject to backup withholding. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding generally may be credited against the taxpayer’s U.S.
federal income tax liability, and a taxpayer may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information.
Additional Information Reporting Requirements
Certain U.S. Holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may include
the Ordinary Shares) are required to report information relating to such assets, subject to certain exceptions (including an exception for Offer Shares held in accounts maintained by certain financial institutions). U.S. Holders should
consult their tax advisors regarding the applicability of these requirements to their acquisition and ownership of Ordinary Shares, and the significant penalties for non-compliance.
The above description is not intended to constitute a complete analysis of all tax consequences relating to acquisition, ownership and
disposition of the Ordinary Shares. Prospective investors should consult their tax advisors concerning the tax consequences to them of an investment in the Ordinary Shares.
Material Israeli Tax Considerations
The following is a brief summary of the material Israeli tax laws applicable to us, and certain Israeli Government programs that benefit us. To
the extent that the discussion is based on new tax legislation that has not yet been subject to substantive judicial or administrative interpretation, we cannot provide assurance that the appropriate tax authorities or the courts will
accept the views expressed in this discussion. The discussion below is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which could
affect the tax consequences described below.
General Corporate Tax Structure in Israel
Ordinary taxable income is subject to a corporate tax rate of 23% as of 2018. However, the effective tax rate payable by a company that derives
income from an Approved Enterprise, a Benefited Enterprise, a Preferred Enterprise or a Preferred Technology Enterprise (as discussed below) may be considerably lower. Capital gains derived by an Israeli company are generally subject to
tax at the prevailing ordinary corporate tax rate.
Tax Benefits for Research and Development
Israeli tax law allows, under certain conditions, a tax deduction for research and development expenditures, including capital expenditures, for
the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:
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the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;
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the research and development is for the promotion or development of the company; and
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the research and development is carried out by or on behalf of the company seeking the deduction.
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However, the amount of such deductible expenses shall be reduced by the sum of any funds received through government grants for the finance of
such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation
rules of the Ordinance. Expenditures not so approved are deductible over a three-year period from the first year that the expenditures were made if the research or development is for the promotion or development of the company.
Law for the Encouragement of Industry (Taxes), 5729-1969
The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to as the Industry Encouragement Law, provides several tax
benefits for “Industrial Companies.”
The Industry Encouragement Law defines an “Industrial Company” as an Israeli resident company which was incorporated in Israel, of which 90% or
more of its income in any tax year, other than income from certain government loans, is derived from an “Industrial Enterprise” owned by it and located in Israel or in the “Area”, in accordance with the definition in the section 3A of the
Israeli Income Tax Ordinance (New Version) 1961 (the “Ordinance”). An “Industrial Enterprise” is defined as an enterprise which is held by an Industrial Company whose principal activity in a given tax year is industrial production.
The following tax benefits, among others, are available to Industrial Companies:
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amortization of the cost of purchased know-how, patents and rights to use a patent and know-how which are used for the development or promotion of the Industrial Enterprise, over an eight-year period commencing on the year in
which such rights were first exercised;
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under limited conditions, an election to file consolidated tax returns together with Israeli Industrial Companies controlled by it; and
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expenses related to a public offering of shares in a stock exchange are deductible in equal amounts over three years commencing on the year of offering.
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Eligibility for benefits under the Industry Encouragement Law is not contingent upon the approval of any governmental authority. We believe that
we generally qualify as an Industrial Company within the meaning of the Industry Encouragement Law. The Israel Tax Authority may determine that we do not qualify as an Industrial Company, which could entail our loss of the benefits that
relate to this status. There can be no assurance that we will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.
Law for the Encouragement of Capital Investments, 5719-1959
The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the Investment Law, provides certain incentives for
capital investments in production facilities (or other eligible assets) by “Industrial Enterprises” (as defined under the Investment Law).
The Investment Law was significantly amended effective April 1, 2005 (the “2005 Amendment”), further amended as of January 1, 2011 (the “2011
Amendment”), and further amended as of January 1, 2017 (the “2017 Amendment”). Pursuant to the 2005 Amendment, tax benefits granted in accordance with the provisions of the Investment Law prior to its revision by the 2005 Amendment remain
in force but any benefits granted subsequently are subject to the provisions of the 2005 Amendment. Similarly, the 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in
effect prior to the 2011 Amendment. However, companies entitled to benefits under the Investment Law as in effect prior to January 1, 2011 were entitled to choose to continue to enjoy such benefits, provided that certain conditions are
met, or elect instead, irrevocably, to forego such benefits and have the benefits of the 2011 Amendment apply. The 2017 Amendment introduced new benefits for Technological Enterprises which meet certain conditions, alongside the existing
tax benefits.
Tax Benefits Prior to the 2005 Amendment
An investment program that is implemented in accordance with the provisions of the Investment Law prior to the 2005 Amendment, referred to as an
“Approved Enterprise”, is entitled to certain benefits. A company that wished to receive benefits as an Approved Enterprise must have received approval from the Israeli Authority for Investments and Development of the Industry and Economy
(the “Investment Center”). Each certificate of approval for an Approved Enterprise relates to a specific investment program, delineated both by the financial scope of the investment, including sources of funds, and by the physical
characteristics of the facility or other assets.
The tax benefits available under any certificate of approval relate only to taxable income attributable to the specific program and are
contingent upon meeting the criteria set out in such certificate. Income derived from activity that is not integral to the activity of the Approved Enterprise will not enjoy tax benefits.
The tax benefits under the alternative benefits track include an exemption from corporate tax on undistributed income which was generated from an
Approved Enterprise for between two and ten years from the first year of taxable income, depending on the geographic location of the Approved Enterprise facility within Israel, and the taxation of income generated from an Approved
Enterprise at a reduced corporate tax rate of between 10% to 25% for the remainder of the benefits period, depending on the level of foreign investment in the company in each year, as detailed below.
In addition, a company that has an Approved Enterprise program is eligible for further tax benefits if it qualifies as a Foreign Investors’
Company (FIC), which is a company with a level of foreign investment, as defined in the Investment Law, of more than 25%.
If a company elects the alternative benefits track and subsequently distributes a dividend out of income derived by its Approved Enterprise
during the tax exemption period it will be subject to corporate tax in respect of the amount of the distributed dividend (grossed-up to reflect the pre-tax income that it would have had to earn in order to distribute the dividend) at the
corporate tax rate which would have been otherwise applicable if such income had not been tax-exempted under the alternative benefits track. This rate generally ranges from 10% to 25%, depending on the level of foreign investment in the
company in each year, as mentioned above. In addition, dividends paid out of income attributed to an Approved Enterprise (or out of dividends received from a company whose income is attributed to an Approved Enterprise) are generally
subject to withholding tax at source at the rate of 15% (in the case of non-Israeli shareholders – subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate, 15%, or at a lower
rate as provided under an applicable tax treaty). The 15% tax rate is limited to dividends and distributions out of income derived during the benefits period and actually paid at any time up to 12 years thereafter. After this period, the
withholding tax is applied at a rate of up to 30%, or at the lower rate under an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate). In the case of
a FIC, the 12-year limitation on reduced withholding tax on dividends does not apply.
The benefits available to an Approved Enterprise are subject to the continued fulfillment of conditions stipulated in the Investment Law and its
regulations and the criteria in the specific certificate of approval, as described above. If a company does not meet these conditions, it would be required to refund the amount of tax benefits, adjusted to the Israeli consumer price index,
and interest, or other monetary penalties.
Tax Benefits Subsequent to the 2005 Amendment
The 2005 Amendment applies to new investment programs commencing after 2004 but does not apply to investment programs approved prior to April 1,
2005. The 2005 Amendment provides that terms and benefits included in any certificate of approval that was granted before the 2005 Amendment became effective (April 1, 2005) will remain subject to the provisions of the Investment Law as in
effect on the date of such approval. Pursuant to the 2005 Amendment, the Investment Center will continue to grant Approved Enterprise status to qualifying investments. The 2005 Amendment, however, limits the scope of enterprises that may
be approved by the Investment Center by setting criteria for the approval of a facility as an Approved Enterprise, such as provisions generally requiring that at least 25% of the Approved Enterprise’s income be derived from exports.
Tax benefits are available under the 2005 Amendment to production facilities (or other eligible facilities) which are generally required to
derive more than 25% of their business income from export to specific markets with a population of at least 14 million in 2012 (such export criteria will further be increased in the future by 1.4% per annum).
A company qualifying for tax benefits under the 2005 Amendment which pays a dividend out of income derived by its Benefited Enterprise during the
tax exemption period will be subject to corporate tax in respect of the amount of the dividend distributed (grossed-up to reflect the pre-tax income that it would have had to earn in order to distribute the dividend) at the corporate tax
rate which would have otherwise been applicable. Dividends paid to Israeli shareholders out of income attributed to a Benefited Enterprise (or out of dividends received from a company whose income is attributed to a Benefited Enterprise)
are generally subject to withholding tax at source at the rate of 15% (in the case of non-Israeli shareholders –subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate, 15%, or
at a lower rate as provided under an applicable tax treaty). The reduced rate of 15% is limited to dividends and distributions out of income attributed to a Beneficiary Enterprise during the benefits period and actually paid at any time up
to 12 years thereafter except with respect to a FIC, in which case the 12-year limit does not apply.
The benefits available to a Benefited Enterprise are subject to the continued fulfillment of conditions stipulated in the Investment Law and its
regulations. If a company does not meet these conditions, it would be required to refund the amount of tax benefits, adjusted to the Israeli consumer price index, and interest, or other monetary penalties.
On November 15, 2021, the Investment Law was amended to provide, on a temporary basis, a reduced corporate income tax upon the distribution or
release, within a year from such amendment, of tax-exempt profits derived by Approved or Benefited Enterprises. The reduced tax rate was determined based on a formula, providing for an up to 60% reduction, as long as the corporate income
tax rate was not less than 6%. In order to qualify for the reduction, the taxpayer would also have to invest certain amounts in productive assets and research and development in Israel. The Company did not elect to apply for the
aforementioned temporary order.
In addition to the temporary amendment, the Investment Law was also amended to reduce the ability of companies to retain the tax-exempt profits
while distributing dividends from previously taxed profits. Accordingly, effective August 15, 2021, dividend distributions are deemed made on a pro-rata basis from all types of earnings, including exempt profits, thus triggering additional
corporate income tax. As of August 15, 2021, the Company did not distribute any dividends and does not intend to do so in the near future.
As of December 31, 2023, approximately $14,022 million was derived from tax exempt profits earned under the “Approved Enterprises” and “Beneficiary Enterprise.” If the retained tax-exempt
income is distributed, the income would be taxed at the applicable corporate tax rate as if it had not elected the alternative tax benefits under the Investment Law and an income tax liability of up to $3,443 million would be incurred as
of December 31, 2023.
Tax Benefits under the 2011 Amendment
The 2011 Amendment introduced new benefits for income generated by a “Preferred Company” through its “Preferred Enterprise” (as such terms are
defined in the Investment Law) as of January 1, 2011. The definition of a Preferred Company includes a company incorporated in Israel that is not wholly owned by a governmental entity, and that has, among other things, Preferred Enterprise
status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company was entitled to a reduced corporate tax rate of 15% with respect to its preferred income derived by its Preferred Enterprise in 2011 and
2012, unless the Preferred Enterprise is located in a development zone A, in which case the rate was 10%. Such corporate tax rate was reduced from 15% and 10%, respectively, to 12.5% and 7%, respectively in 2013, and then increased to 16%
and 9%, respectively, in 2014 until 2016. Pursuant to the 2017 Amendment, in 2017 and thereafter, the corporate tax rate for Preferred Enterprise which is located in development zone A was decreased to 7.5%, while the reduced corporate tax
rate for other development zones remains 16%. Income derived by a Preferred Company from a ‘Special Preferred Enterprise’ (as such term is defined in the Investment Law) could be entitled, under certain conditions and limitations, to
further reduced tax rates.
Dividends paid to Israeli shareholders out of preferred income attributed to a Preferred Enterprise are generally subject to withholding tax at
the rate of 20%, and in case of non-Israeli shareholders, such lower rate as may be provided in an applicable tax treaty (each subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax
rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld (although, if such dividends are subsequently distributed to individuals or a non-Israeli company, withholding tax at a rate of 20% or such
lower rate as may be provided in an applicable tax treaty will apply).
The 2011 Amendment also provided transitional provisions to address companies already enjoying existing tax benefits under the Investment Law.
These transitional provisions provide, among other things, that unless an irrevocable request is made to apply the provisions of the Investment Law as amended in 2011 with respect to income to be derived as of January 1, 2011: (i) the terms
and benefits included in any certificate of approval that was granted to an Approved Enterprise which chose to receive grants before the 2011 Amendment became effective will remain subject to the provisions of the Investment Law as in
effect on the date of such approval, and subject to certain other conditions; (ii) the terms and benefits included in any certificate of approval that was granted to an Approved Enterprise which had participated in an alternative benefits
track before the 2011 Amendment became effective will remain subject to the provisions of the Investment Law as in effect on the date of such approval, provided that certain conditions are met; and (iii) a Benefited Enterprise can elect to
continue to benefit from the benefits provided to it before the 2011 Amendment became effective, provided that certain conditions are met.
From time to time, the Israeli Government has discussed reducing the benefits available to companies under the Investment Law. The termination
or substantial reduction of any of the benefits available under the Investment Law could materially increase our tax liabilities.
We applied the new benefits under the 2011 Amendment instead of the benefits provided to our Approved Enterprise and Benefited Enterprise as of
2013 tax year onwards through 2016 tax year.
Tax Benefits under the 2017 Amendment
The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and is effective as of January 1,
2017. The 2017 Amendment provides new tax benefits for two types of “Technology Enterprises”, as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.
The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a “Preferred Technology Enterprise” (PTE) and
will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as PTE which is generally generated by “Benefited Intangible Assets,” as defined in the Investment Law. The tax rate is further reduced to 7.5% for a PTE
and/or for its segment located in development Zone A. In addition, a PTE will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain “Benefitted Intangible Assets” (as defined in the Investment Law) to a
related foreign company if the Benefitted Intangible Assets were acquired from a foreign company on or after January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the National Authority for Technological
Innovation (NATI).
The 2017 Amendment further provides that a technology company satisfying certain conditions will qualify as a “Special Preferred Technology
Enterprise” and will thereby enjoy a reduced corporate tax rate of 6% on “Preferred Technology Income” regardless of the company’s geographic location within Israel. In addition, a Special Preferred Technology Enterprise will enjoy a
reduced corporate tax rate of 6% on capital gain derived from the sale of certain “Benefitted Intangible Assets” to a related foreign company if the Benefitted Intangible Assets were either developed by the Special Preferred Technology
Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from NATI. A Special Preferred Technology Enterprise that acquires Benefitted Intangible Assets from a foreign company for more
than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law.
Dividends distributed to Israeli shareholders by a PTE or a Special Preferred Technology Enterprise, paid out of Preferred Technology Income, are
generally subject to withholding tax at source at the rate of 20%, and in case of non-Israeli shareholders, such lower rate as may be provided in an applicable tax treaty (each subject to the receipt in advance of a valid certificate from
the Israel Tax Authority allowing for such reduced tax rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld. If such dividends are distributed to a foreign company that holds alone or
together with other foreign companies 90% or more in the Israeli company and other conditions are met, the withholding tax rate will be 4%.
We have obtained a comprehensive tax ruling confirming, among others, that we generally qualify as a PTE since 2017 onwards and this status was
affirmed by the Israeli Tax Authority in corporate tax audit assessment agreements reached in 2021 and in 2022.
Certain Additional Israeli Tax Consequences
The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and
disposition of our ordinary shares. You should consult your tax advisor concerning the specific and individual tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state,
local, foreign or other taxing jurisdiction. This summary does not discuss all of the aspects of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of
investors subject to special treatment under Israeli law. Examples of such investors include residents of Israel or traders in securities who are subject to special tax regimes not covered in this discussion. Some parts of this discussion
are based on tax legislation which has not been subject to judicial or administrative interpretation. The discussion should not be construed as legal or professional tax advice and does not cover all possible tax considerations.
Capital Gains
Capital gain tax is generally imposed on the disposal of capital assets by an Israeli resident, and on the disposal of such
assets by a non-Israel resident if those assets are either (i) located in Israel, (ii) are shares or a right to a share in an Israeli resident corporation, or (iii) represent, directly or indirectly, rights to assets located in Israel,
unless a tax treaty in force between Israel and the seller’s country of residence provides otherwise. The Ordinance distinguishes between “Real Capital Gain” and the “Inflationary Surplus.” Real Capital Gain is the excess of the total
capital gain over Inflationary Surplus computed generally on the basis of the increase in the Israeli Consumer Price Index (CPI) between the date of purchase and the date of disposal.
The Real Capital Gain accrued by individuals on the sale of our ordinary shares (that were purchased after January 1, 2012,
whether listed on a stock exchange or not) will be taxed at the rate of 25%. However, if such shareholder is a “Significant Shareholder” (i.e., a person who holds, directly or indirectly, alone or together with such person’s relative or
another person who collaborates with such person on a permanent basis, 10% or more of one of the Israeli resident company’s means of control) at the time of sale or at any time during the preceding 12 month period and/or claims a deduction
for interest and linkage differences expenses in connection with the purchase and holding of such shares, such gain will be taxed at the rate of 30%. “Means of control” generally include the right to vote, receive profits, nominate a
director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right.
The Real Capital Gain derived by corporations will generally be subject to the ordinary corporate tax (23% in 2018 and
thereafter).
An individual shareholder dealing in securities, or to whom such income is otherwise taxable as ordinary business income are taxed in Israel at
their marginal tax rates applicable to business income (up to 47% in 2024). Certain Israeli institutions who are exempt from tax under section 9(2) or section 129I(a)(1) of the Ordinance (such as exempt trust fund, pension fund) may be
exempt from capital gains tax from the sale of our ordinary shares.
Capital Gains Taxes Applicable to Non-Israeli Resident Shareholders
A non-Israeli resident who derives capital gains from the sale of shares in an Israeli resident company that were purchased after the company was
listed for trading on a stock exchange outside of Israel should generally be exempt from Israeli capital gains tax so long as the capital gains derived from the sale of the shares was not attributed to a permanent establishment that the
non-resident maintains in Israel and that such shareholders are not subject to the Israeli Income Tax Law (Inflationary Adjustments) 5745-1985. However, non-Israeli corporations will not be entitled to the foregoing exemption if Israeli
residents: (i) have a controlling interest of more than 25% in such non-Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or
indirectly. Such exemption is not applicable to a person whose gains from selling or otherwise disposing of the shares are deemed to be a business income.
Additionally, a sale of shares by a non-Israeli resident (either an individual or a corporation) may be exempt from Israeli capital gains tax
under the eligibility to enjoy the provisions of an applicable tax treaty benefits which should generally supersede Israeli domestic legislation. For example, under the Convention between the United States and the Government of the State
of Israel with respect to Taxes on Income (the “United States-Israel Tax Treaty”), the disposition of shares by a shareholder who (i) is a U.S. resident (for purposes of the United States-Israel Tax Treaty), (ii) holds the shares as a
capital asset, and (iii) is entitled to claim the benefits afforded to such person by the United States-Israel Tax Treaty, is generally exempt from Israeli capital gains tax. Such exemption will not apply if: (i) the capital gain arising
from the disposition can be attributed to royalties; (ii) the shareholder holds, directly or indirectly, shares representing 10% or more of the voting capital during any part of the 12-month period preceding such sale, exchange or
disposition, subject to certain conditions; (iii) such U.S. resident is an individual and was present in Israel for a period or periods aggregating to 183 days or more during the relevant taxable year; (iv) the capital gain arising from
such sale, exchange or disposition is attributed to real estate located in Israel; or (v) the shareholder is a U.S. resident (for purposes of the United States-Israel Tax Treaty) and deemed a dealer or otherwise is deemed to have business
income from such sale, exchange or disposition of the shares attributed to a permanent establishment in Israel. In such case, the sale, exchange or disposition of our ordinary shares would be subject to Israeli tax, to the extent
applicable; however, under the United States-Israel Tax Treaty, a U.S. resident would be permitted to claim a credit for such taxes against the U.S. federal income tax imposed with respect to such sale, exchange or disposition, subject to
the limitations under U.S. law applicable to foreign tax credits. The United States-Israel Tax Treaty does not relate to tax credits against U.S. state or local taxes.
In some instances where our shareholders may be liable for Israeli tax on the sale of their ordinary shares, the payment of the consideration may
be subject to the withholding of Israeli tax at source. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale. Specifically, in
transactions involving a sale of all of the shares of an Israeli resident company, in the form of a merger or otherwise, the Israel Tax Authority may require from shareholders who are not liable for Israeli tax to sign declarations in forms
specified by this authority or to apply for and obtain a specific withholding tax certificate of exemption from the Israel Tax Authority to confirm their particular status as non-Israeli resident, and, in the absence of such declarations or
exemptions, may require the purchaser of the shares to withhold taxes at source.
Taxation of Non-Israeli Shareholders on Receipt of Dividends
Non-Israeli residents (either an individual or a corporation) are generally subject to Israeli income tax on the receipt of dividends paid on our
ordinary shares at the rate of 25%, unless an applicable relief is provided in a treaty between Israel and the shareholder’s country of residence. With respect to a person who is a “Significant Shareholder” at the time of receiving the
dividend or on any time during the preceding 12 months, the applicable tax rate is 30%. Such dividends paid to non-Israeli residents are generally subject to Israeli withholding tax at a rate of 25% so long as the shares are registered
with a Nominee Company (whether the recipient is a Significant Shareholder or not), unless a reduced tax rate is provided under an applicable tax treaty, provided that a certificate from the Israel Tax Authority allowing for a reduced
withholding tax rate is obtained in advance. However, subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate, a distribution of dividends to non-Israeli residents is subject
to withholding tax at source at a rate of 15% if the dividend is distributed from income attributed to an Approved Enterprise or generally 20% if the dividend is distributed from income attributed to a Preferred Enterprise (including
Preferred Technological Enterprise based on which the Company is taxed as from 2017 onwards), unless a reduced tax rate is provided under an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax
Authority allowing for a reduced tax rate). Under the United States-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our ordinary shares who is a U.S. resident (for purposes of the
United States-Israel Tax Treaty) is 25%. However, the maximum rate of withholding tax on dividends, not generated from an Approved Enterprise or Benefited Enterprise, that are paid to a United States corporation holding 10% or more of the
outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that no more than 25% of the gross income for such preceding year consists of certain types
of dividends and interest. Notwithstanding the foregoing, a distribution of dividends to non-Israeli residents is subject to withholding tax at source at a rate of 15% if the dividend is distributed from income attributed to an Approved
Enterprise for such U.S. corporation shareholder, provided that the condition related to our gross income for the previous year (as set forth in the previous sentence) is met. The aforementioned rates under the United States-Israel Tax
Treaty will not apply if the dividend income was attributed to a permanent establishment that the U.S. resident maintains in Israel. U.S. residents who are subject to Israeli withholding tax on a dividend may be entitled to a credit or
deduction for United States federal income tax purposes in the amount of the taxes withheld, subject to detailed rules contained in U.S. tax legislation. We cannot assure you that in the event we declare a dividend we will designate the
income out of which the dividend is paid in a manner that will reduce shareholders’ tax liability.
If the dividend is attributable partly to income derived from an Approved Enterprise, Benefited Enterprise or Preferred
Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. U.S. residents who are subject to Israeli withholding tax on a dividend may be
entitled to a credit or deduction for United States federal income tax purposes in the amount of the taxes withheld, subject to detailed rules contained in U.S. tax legislation. As indicated above, application for this reduced tax rate
requires appropriate documentation presented to and specific instruction received from the Israel Tax Authority.
A non-Israeli resident who receives dividends from which tax was duly withheld is generally exempt from the obligation to file tax returns in
Israel with respect to such income, provided that (i) such income was not generated from business conducted in Israel by the taxpayer; (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is
required to be filed, and (iii) the taxpayer is not liable to Excess Tax (as further explained below).
Payers of dividends on our ordinary shares, including the Israeli stockbroker effectuating the transaction, or the financial institution through
which the securities are held, are generally required, subject to any of the foregoing exemptions, reduced tax rates and the demonstration of foreign residence of the shareholder, to withhold tax upon the distribution of dividend at the
rate of 25%, so long as the shares are registered with a nominee company.
Excess Tax
Individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to an
additional tax at a rate of 3% on annual income exceeding a certain threshold (NIS 721,560 for 2024) which amount is linked to the annual change in the Israeli consumer price index, including, but not limited to, dividends, interest and
capital gain.
Estate and Gift Tax
Israeli law presently does not impose estate or gift taxes.
The Ordinary Shares beneficially owned by the selling shareholder covered by this prospectus may be offered and sold from time to time by the
selling shareholder in one or more transactions. The selling shareholder may sell such securities to or through one or more agents, underwriters, dealers, remarketing firms or other third parties or directly to one or more purchasers or
through a combination of any of these methods. The selling shareholder may also offer and sell, or agree to deliver, securities pursuant to, or in connection with, any option agreement or other contractual arrangement.
Subject to the limitations set forth in the Registration Rights Agreement, the selling shareholder may use any one or more of the following
methods when selling the securities offered by this prospectus:
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purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an over-the-counter distribution in accordance with the rules of Nasdaq or in the over-the-counter market;
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delayed delivery arrangement;
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to or through underwriters or broker-dealers;
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at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or
other similar offerings through sales agents;
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directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions;
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in options or other hedging transactions, whether through an options exchange or otherwise;
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through a combination of any of the above methods of sale; or
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any other method permitted pursuant to applicable law.
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There can be no assurance that the selling shareholder will sell all or any of the securities offered by this prospectus. In addition, the
selling shareholder may also sell securities under Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather than under this prospectus. The selling shareholder has the sole and absolute
discretion not to accept any purchase offer or make any sale of securities if it deems the purchase price to be unsatisfactory at any particular time.
The selling shareholder may elect to make an in-kind distribution of Ordinary Shares to its members, limited partners or stockholders pursuant to
the registration statement of which this prospectus is a part by delivering a prospectus supplement. To the extent that such members, partners or stockholders are not affiliates of ours, such members, partners or stockholders would thereby
receive freely tradable Ordinary Shares pursuant to the distribution through a registration statement.
With respect to a particular offering of the securities held by the selling shareholder, to the extent required, an accompanying prospectus
supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is a part, will be prepared and will set forth the following information:
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the specific securities to be offered and sold;
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the name of the selling shareholder;
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the respective purchase prices and public offering prices, the proceeds to be received from the sale, if any, and other material terms of the offering;
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the names of any participating agents, broker-dealers or underwriters; and
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any applicable commissions, discounts, concessions and other items constituting compensation from the selling shareholder.
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In order to facilitate the offering of the securities, any underwriters or agents, as the case may be, involved in the offering of such
securities may engage in transactions that stabilize, maintain or otherwise affect the price of our securities. Specifically, the underwriters or agents, as the case may be, may overallot in connection with the offering, creating a short
position in our securities for their own account. In addition, to cover overallotments or to stabilize the price of our securities, the underwriters or agents, as the case may be, may bid for, and purchase, such securities in the open
market. Finally, in any offering of securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allotted to an underwriter or a broker-dealer for distributing such securities in the offering
if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the
securities above independent market levels. The underwriters or agents, as the case may be, are not required to engage in these activities, and may end any of these activities at any time.
The selling shareholder may solicit offers to purchase the securities directly from, and it may sell such securities directly to, institutional
investors or others. In this case, no underwriters or agents would be involved. The terms of any of those sales, including the terms of any bidding or auction process, if utilized, will be described in the applicable prospectus
supplement.
It is possible that one or more underwriters may make a market in our securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. We cannot give any assurance as to the liquidity of the trading market for our securities. Our Ordinary Shares are listed on Nasdaq under the symbol “CYBR.”
The selling shareholder may authorize underwriters, broker-dealers or agents to solicit offers by certain purchasers to purchase the securities
at the public offering price set forth in the applicable prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The contracts will be subject only to those
conditions set forth in the applicable prospectus supplement, and the applicable prospectus supplement will set forth any commissions we or the selling shareholder pay for solicitation of these contracts.
The selling shareholder may use one or more underwriters to sell the securities covered by this prospectus.
Any compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters
within the meaning of the Securities Act and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into
agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those persons
for certain expenses. Except to the extent otherwise set forth in a prospectus supplement, in any underwritten offering, we and our officers, directors, and the selling shareholder may agree with the underwriter(s) not to dispose of or
hedge any of their Ordinary Shares or securities convertible into or exchangeable for Ordinary Shares for a period of time to be agreed with the underwriter(s), without the prior written consent of the lead managing underwriter or
underwriters, subject to certain exceptions.
The selling shareholder may be deemed to be an “underwriter” within the meaning of the Securities Act with respect to the shares it is offering
for resale.
The underwriter(s) and their affiliates may have engaged in, and may in the future engage in, investment banking, commercial banking, financial
advisory, and other commercial dealings in the ordinary course of business with us or our affiliates. They may have received, or may in the future receive, customary fees and commissions for these transactions.
Any underwriter(s) and/or their respective affiliates may act in various capacities and/or be lenders under our financing facilities from time to
time.
The selling shareholder may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus
supplement, including in short sale transactions. If so, the third party may use securities pledged by the selling shareholder or borrowed from the selling shareholder or others to settle those sales or to close out any related open
borrowings of stock, and may use securities received from the selling shareholder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and
will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, the selling shareholder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell
the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged by the selling shareholder may arrange for other broker-dealers to participate.
Broker-dealers or agents may receive commissions, discounts or concessions from the selling shareholder in amounts to be negotiated immediately prior to the sale.
We have agreed to indemnify the selling shareholder against certain liabilities, including certain liabilities under the Securities Act, the
Exchange Act or other federal or state law.
We have agreed with the selling shareholder pursuant to the Registration Rights Agreement to use reasonable best efforts to keep the registration
statement of which this prospectus constitutes a part effective until the earlier of the following: (i) the termination of the Registration Rights Agreement and (ii) the date on which the amount of Ordinary Shares beneficially held by the
selling shareholder entitled to be registered pursuant to the Registration Rights Agreement is less than 30% of the amount of the Ordinary Shares held by the selling shareholder as of the date of the Registration Rights Agreement.
The following table sets forth the expenses (other than underwriting discounts and commissions or agency fees and other items constituting
underwriters’ or agents’ compensation, if any) expected to be incurred by us in connection with a possible offering of securities registered under this registration statement. All amounts are estimated except for the SEC registration fee
and FINRA filing fee.
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SEC Registration Fee
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$
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102,889.46
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FINRA Fee
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—
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(1)
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Printing and engraving expenses
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—
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(1)
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Legal Fees and expenses
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—
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(1)
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Accounting fees and expenses
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—
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(1)
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Miscellaneous costs
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Total
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These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at the time.
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The validity of our ordinary shares and certain other matters of Israeli law will be passed upon for us by Meitar Law Offices. Certain legal
matters relating to U.S. law will be passed upon for us by Latham & Watkins LLP.
Additional legal matters may be passed upon for us, the selling shareholder or any underwriters, dealers or agents, by counsel that we will name
in the applicable prospectus supplement.
The consolidated financial statements of CyberArk appearing in CyberArk’s Annual Report (Form 20-F) for the year ended December 31, 2023, and the
effectiveness of CyberArk’s internal control over financial reporting as of December 31, 2023 have been audited by Kost, Forer, Gabbay and Kasierer, a member of EY Global, independent registered public accounting firm, as set forth in
their reports thereon, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Venafi Holdings, Inc. and Subsidiaries as of December 31, 2023 and 2022 and for each of the two years
in the period ended December 31, 2023, included in CyberArk’s Current Report on Form 6-K dated October 22, 2024, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon, included therein, and
incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of said firm as experts in auditing and accounting.
ENFORCEMENT OF CIVIL LIABILITIES
We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in this prospectus, most of whom
reside outside the United States, may be difficult to obtain within the United States. Furthermore, because most of our assets and substantial number of our directors and officers are located outside the United States, any judgment
obtained in the United States against us or any of our directors and officers may not be collectible within the United States.
We have irrevocably appointed CyberArk Software, Inc. as our agent to receive service of process in any action against us in any U.S. federal or
state court arising out of this offering or any purchase or sale of securities in connection with this offering. The address of our agent is 60 Wells Avenue, Newton, Massachusetts 02459.
We have been informed by our legal counsel in Israel, Meitar Law Offices, that it may be difficult to initiate an action with respect to U.S.
securities law in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum to hear such a claim. In addition, even if an Israeli court
agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact by expert witnesses which can be a
time-consuming and costly process. Certain matters of procedure may also be governed by Israeli law.
Subject to certain time limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain
exceptions, is non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that:
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the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment;
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the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and
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the judgment is executory in the state in which it was given.
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Even if these conditions are met, an Israeli court may not declare a foreign civil judgment enforceable if:
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the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases);
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the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel;
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the judgment was obtained by fraud;
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the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court;
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the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel;
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the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or
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at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel.
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If a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into
non-Israeli currency and transferred out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in Israeli
currency at the rate of exchange in force on the date of the judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily
will be linked to the Israeli consumer price index plus interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
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