1. |
To elect five (5) non-executive directors to the Board of Directors of the Company;
|
2. |
To elect an outside director to the Board of Directors of the Company;
|
3. |
To reapprove the Company's Compensation Policy;
|
4. |
To approve CEO Equity Plan;
|
5. |
To re-appoint the Company’s independent auditors and to authorize the Board to set their remuneration; and
|
6. |
To discuss the Company’s audited annual financial statements for the year ended December 31, 2020.
|
|
By Order of the Board,
Tali Mirsky
Corporate Vice President, General Counsel and
Corporate Secretary
|
2021 ANNUAL GENERAL MEETING OF
SHAREHOLDERS
Table of Contents
|
5
|
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7 | ||
8
|
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9
|
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12 | ||
16 | ||
18
|
||
21 | ||
26 | ||
27 |
Name
|
Number of Shares
|
Percent of Shares
Beneficially Owned (1)
|
Capital Research Global Investors
|
5,943,322(2)
|
9.4%
|
FMR LLC
|
4,150,204(3)
|
6.6%
|
Artisan Partners Limited Partnership
|
3,566,858(4)
|
5.6%
|
BlackRock, Inc.
|
3,359,464(5)
|
5.3%
|
(1) |
Based upon 63,121,441 ordinary shares issued and outstanding as of March 8, 2021.
|
(2) |
The information is based upon a Schedule 13G filed with the SEC by Capital Research Global Investors ("CRGI") on February 16, 2021. CRGI reported that more than 5% of the shares were owned on behalf of EuroPacific Growth Fund
|
(3) |
The information is based upon a Schedule 13G filed with the SEC by the reporting persons on February 8, 2021. FMR LLC and Abigail Johnson reported that these shares are held through certain specified entities.
|
(4) |
The information is based upon a Schedule 13G filed with the SEC by Artisan Partners Limited Partnership on February 10, 2021.
|
(5) |
The information is based upon a Schedule 13G filed with the SEC by BlackRock, Inc. on February 5, 2021.
|
Name
|
Audit Committee
|
Internal Audit Committee
|
Compensation Committee
|
Nominating Committee
|
Mergers &
Acquisitions
Committee
|
|||
David Kostman
|
Member
|
Member
|
Chair
|
|||||
Rimon Ben-Shaoul
|
Chair
|
Member
|
||||||
Dan Falk
|
Member*
|
Member
|
Chair
|
Member
|
Member
|
|||
Yocheved (Yochi) Dvir
|
Member*
|
Chair
|
Member
|
|||||
Yehoshua (Shuki) Ehrlich
|
Member
|
|||||||
Leo Apotheker
|
Member
|
Member
|
||||||
Joseph (Joe) Cowan
|
Member
|
Member
|
||||||
Zehava Simon
|
Member
|
Member
|
Member
|
• |
The Board reviews relevant aspects of risk management of our operations and business strategy and Board Committees review risk in their areas of expertise.
|
• |
Our Audit Committee operates under a formal charter and oversees our accounting and financial reporting processes and the audit of our financial statements and assists our Board of Directors in monitoring our financial systems and legal
and regulatory compliance. The Audit Committee assists the Board with the oversight of our financial reporting, independent auditors and internal controls.
|
• |
The Audit Committee also reviews our financial risk management policies, including our investment guidelines, financings and foreign exchange and currency hedging, as well as other financial transactions.
|
• |
The Internal Audit Committee oversees our internal audit function, as well as policies and practices for legal, regulatory and internal compliance (other than regarding financial reporting) and reviews policies and practices that may
impact our reputation and risk management.
|
• |
The Internal Audit Committee oversees the implementation and enforcement of our company-wide compliance program, that includes our Code of Ethics and Business Conduct, Anti-bribery and Corruption Policy, Insider Trading Policy and
Whistleblower Procedures. The full text of our Code of Ethics and Business Conduct is available on our website at http://www.nice.com under the “Corporate Responsibility” web page.
|
• |
The Compensation Committee oversees compensation, retention, succession and other human resources-related issues and risks.
|
• |
The Nominating Committee recommends candidates for election to our Board pursuant to a written charter and observes set procedures in identifying and evaluating candidates for election to the Board.
|
• |
A more detailed description of the responsibilities of each standing committee are described in the Annual Report.
|
• |
Our Compensation Committee is (and must be) comprised of at least three members of our Board, all of whom are (and must be) independent.
|
• |
We adopted a Compensation Policy that sets the framework and requirements (including limits) relating to directors' and executives' compensation, and we review this policy at least once a year, including review of peer group comparable
data, and require our shareholders to approve such policy at least once every three years (for more information refer to Item 3 of this Proxy Statement).
|
• |
We believe the compensation of our executives approved pursuant to our Compensation Policy is balanced and provides the appropriate incentive for delivery of both short-term and long-term shareholder value.
|
• |
We base a significant portion of the compensation of our executives on performance.
|
• |
We have a cap for annual equity-based compensation of both our Board members and executives pursuant to the Compensation Policy, and as approved in advance by our shareholders from time to time.
|
• |
We have a cap for annual cash bonus payments of our executives pursuant to the Compensation Policy.
|
• |
We have a claw-back policy for our directors and executives.
|
• |
We apply a double-trigger requirement for acceleration of executive equity awards upon a change of control or other corporate transaction.
|
• |
We reduced the scope of the authorized pool under our equity-based incentive plan.
|
• |
We prohibit short sales by executive officers and members of the Board, as required pursuant to our Insider Trading Policy.
|
David Kostman has served as one of our directors since 2001 (with the exception of the period between June 2007 and July 2008),
and as our Chairman of the Board since February 2013. Mr. Kostman is currently co-CEO and board member of Outbrain, Inc. and serves on the board of directors of ironSource Ltd. and Tivit S.A. Mr. Kostman is also a former board member of
publicly traded Retalix Ltd. (acquired by NCR). From 2006 until 2008, Mr. Kostman was a Managing Director in the investment banking division of Lehman Brothers, heading the Global Internet Group. From April 2003 until July 2006, Mr.
Kostman was Chief Operating Officer and then Chief Executive Officer of Delta Galil USA, a subsidiary of publicly traded Delta Galil Industries Ltd. From 2000 until 2002, Mr. Kostman was President of the International Division and Chief
Operating Officer of publicly traded VerticalNet Inc. Prior to that Mr. Kostman worked in the investment banking divisions of Lehman Brothers from 1994 to 2000, focusing on the technology and Internet sectors, and NM Rothschild & Sons
from 1992 to 1993, focusing on mergers and acquisitions and privatizations. Mr. Kostman holds a Bachelor’s degree in Law from Tel Aviv University and a Master’s degree in Business Administration from INSEAD.
|
Rimon Ben-Shaoul has served as one of our directors since
September 2001. Between 2001 and 2005, Mr. Ben-Shaoul has served as Co-Chairman, President, and Chief Executive Officer of Koonras Technologies Ltd., a technology investment company controlled by LEADER Ltd., an Israeli holding company.
Since 2002 Mr. Ben-Shaoul serves as Chairman of Grand AutoMotive LLP. Mr. Ben-Shaoul also served as a director of MIND C.T.I. Ltd., BVR Systems Ltd. and several private companies. In addition, he served as the President and Chief
Executive Officer of Polar Communications Ltd., which manages media and communications investments. Mr. Ben-Shaoul also served as the Chairman of T.A.T Technologies Ltd., a public company listed on NASDAQ and TASE. Between 1997 and 2001,
Mr. Ben-Shaoul was the President and Chief Executive Officer of Clal Industries and Investments Ltd., one of the largest holding companies in Israel with substantial holdings in the high-tech industry. During that time, Mr. Ben-Shaoul
also served as Chairman of the Board of Directors of Clal Electronics Industries Ltd., Scitex Corporation Ltd., and various other companies within the Clal Group. Mr. Ben-Shaoul also served as a director of ECI Telecom Ltd., Fundtech
Ltd., Creo Products, Inc. and Nova Measuring Instruments Ltd. From 1985 to 1997, Mr. Ben-Shaoul was President and Chief Executive Officer of Clal Insurance Company Ltd. and a director of the company and its various subsidiaries. Mr.
Ben-Shaoul holds a Bachelor’s degree in Economics and Statistics and a Master’s degree in Business Administration, both from Tel-Aviv University.
|
Yehoshua (Shuki) Ehrlich has served as one of our directors since September 2012. Mr. Ehrlich is an active social investor,
serving as Chairman of "Committed to Give", a group formed by Israeli social investors for promoting philanthropy in Israel and several other social organizations. Mr. Ehrlich also serves as a board member of the American Joint
Distribution Committee and a board member of AfterDox, an angels' investment group. Between the years 2000 and 2010, Mr. Ehrlich served as Managing Director at Giza Venture Capital, where he focused on the communications, enterprise
software and information technology sectors. Additionally, Mr. Ehrlich had a fifteen-year career with Amdocs, a public software company specializing in billing, CRM, order management systems for telecommunications and Internet service
providers. In his last role at Amdocs, Mr. Ehrlich served as Senior Vice President of Business Development. Mr. Ehrlich holds a Bachelor of Science in Mathematics and Computer Science from the Tel Aviv University.
|
Leo Apotheker has served as one of our directors since August 2013. Mr. Apotheker is the Co-Chief Executive Officer of
Burgundy Technology Acquisition Corp. Mr. Apotheker was the Managing Partner and co-founder of Efficiency Capital SAS, a growth capital advisory firm, from 2012 to 2014. From 2010 to 2011, Mr. Apotheker served as Chief Executive Officer
of Hewlett Packard. From 2008 to 2010, he served as Chief Executive Officer of SAP AG. In addition, he is currently chairman of the board of Unit4, a leading Dutch software company, Burgundy Technology Acquisition Corp. and Syncron AB,
Vice Chairman and Lead Director of Schneider SE, and a member of the board of MercuryGate, P2 Energy Services and Taulia Inc. Mr. Apotheker holds a Bachelor’s degree in Economics and International Relations from the Hebrew University of
Jerusalem.
|
Joe Cowan has served as one of our directors since August 2013. From October 2013 until September 2017, Mr. Cowan was the CEO
and director of Epicor. Since January 2021, Mr. Cowan has been a director of Drishti Technologies, Inc. and of Auburn University Foundation. Since September 2016 Mr. Cowan has been a director of ChannelAdvidsor, Inc. and since January
2019 the Chairman of the Board of SAI Global a private company owned by Baring Private Equity Asia. During 2013, Mr. Cowan also served as President of DataDirect Networks, Inc. From 2010 until 2013, Mr. Cowan served as the Chief
Executive Officer and President of Online Resources Corp. During 2009, he served as an Operating Executive and Consultant at Vector Capital. From 2007 to 2009, Mr. Cowan served as the Chief Executive Officer of Interwoven Inc. From 2004
to 2006, Mr. Cowan served as the President and Chief Executive Officer of Manugistics Inc. and Manugistics Group Inc. Prior to that, Mr. Cowan served in various senior executive positions, including as the Chief Operating Officer of
Baan Co. NV and Avantis GOB NV. He has been a Director of DataDirect Networks, Inc. between 2011 and February 2013. Mr. Cowan has also served on the boards of various publicly traded companies, including ChannelAdvidsor Inc., Interwoven
Inc., Online Resources Corporation, Manugistics Group Inc. and Blackboard Inc., as well as several private companies. Mr. Cowan holds an M.S. degree in Electrical Engineering from Arizona State University and holds a B.S. degree in
Electrical Engineering from Auburn University.
|
1.A. |
“RESOLVED, that Mr. David Kostman be elected to serve as a member of the Board of the Company until the next annual general meeting of the Company, effective immediately.”
|
1.B. |
“RESOLVED, that Mr. Rimon Ben-Shaoul be elected to serve as a member of the Board of the Company until the next annual general meeting of the Company, effective immediately.”
|
1.C. |
“RESOLVED, that Mr. Yehoshua (Shuki) Ehrlich be elected to serve as a member of the Board of the Company until the next annual general meeting of the Company, effective immediately.”
|
1.D. |
“RESOLVED, that Mr. Leo Apotheker be elected to serve as a member of the Board of the Company until the next annual general meeting of the Company, effective immediately.”
|
1.E. |
“RESOLVED, that Mr. Joseph (Joe) Cowan be elected to serve as a member of the Board of the Company until the next annual general meeting of the Company, effective immediately.”
|
Zehava Simon has served as one of our outside directors since July 2015. Zehava Simon has served as one of our outside
directors since July 2015. Ms. Simon served as a Vice President of BMC Software Inc. from 2000 until 2013, most recently as Vice President of Corporate Development. From 2002 to 2011, Ms. Simon also served as Vice President and General
Manager of BMC Software in Israel. Prior to that, Ms. Simon held various positions at Intel Israel, which she joined in 1982, including acting as leader of Finance and Operations and Business Development for Intel in Israel. Ms. Simon
is currently a board member of Audiocodes Ltd. and Nova Measurements, both public companies traded on NASDAQ and TASE. Ms. Simon is a former member of the board of directors of Insightec Ltd., M-Systems Ltd. (acquired by SanDisk Corp.),
Tower Semiconductor Ltd. and Amiad Water Systems, a public company traded on the London Stock Exchange. Ms. Simon holds a B.A. in Social Sciences from the Hebrew University, Jerusalem, a law degree (LL.B.) from the Interdisciplinary
Center in Herzliya and an M.A. in Business and Management from Boston University.
|
Citrix Systems, Inc.
|
Pegasystems, Inc.
|
Fiserv, Inc.
|
PTC, Inc.
|
Five9, Inc.
|
RingCentral, Inc.
|
Guidewire Software, Inc.
|
Splunk, Inc.
|
MongoDB, Inc.
|
Anaplan, Inc.
|
Nuance Communications, Inc.
|
Snowflake, Inc.
|
Okta, Inc.
|
Paycom Software, Inc.
|
Check Point Software Technologies Ltd.
|
Key Principles:
|
✔ Review of the Compensation Policy at least annually to ensure its compliance with applicable laws and regulations, market practices, and its conformity with the
Company’s targets and strategy.
|
✔ Completely independent Compensation Committee comprising of at least three members.
|
✔ Executive compensation that balances performance targets and time horizons through rewarding business results, long-term performance and strategic decisions.
|
✔ Regular review of executive compensation.
|
✔ Review of applicable benchmark information when making decisions relating to executive compensation.
|
✔ Require that the variable compensation of executives include a significant performance-based element.
|
✔ Large part of our executive compensation is performance-based, with annual and long-term incentive targets based on objective performance measures.
|
✔ Cap on annual equity-based compensation of both our Board members and executives.
|
✔ Cap on annual cash bonus payments of our executives.
|
✔ Executive annual equity grant must comprise of at least 40% performance-based criteria.
|
✔ Double-trigger requirement for acceleration of executive equity awards upon a change of control or other corporate transaction.
|
✔ Reduced authorized pool under our equity-based incentive plan.
|
✔ Significantly reduced the dilution levels over the last few years and are committed to maintaining dilution levels below the 10% threshold.
|
✔ Prohibition on short sales by executive officers and members of the Board.
|
✔ Claw-back policy.
|
• |
The structure (including the performance criteria) will be determined each year by our Compensation Committee and Board and will be set according to the principles described below, consistent with the Company's Compensation Policy and
with our equity grant strategy for executive officers.
|
• |
The annual grants will consist of restricted share units ("RSUs"), with at least 40% of the RSUs being subject also to performance-based vesting criteria (“PRSUs”).
|
• |
The RSUs shall vest in four equal annual installments over a period of four years, beginning upon the first anniversary of the date of their approval by the Board (and with respect to the PRSUs – also conditioned upon the achievement
of the performance criteria set therefor).
|
• |
The performance criteria of the PRSUs shall be based on year-over-year improvement of the Company's financial performance, based on financial performance criteria which the Compensation Committee and Board shall determine to be
appropriate performance metrics at such time for measuring the Company’s achievements and for continued long-term creation of shareholder value (e.g. for 2021 the financial performance criteria are based on a certain combination of
year-over-year growth of operating income per share and of revenues relative to a base line of the 2020 financial results).
|
• |
The year-over-year rate of improvement which will be required in order to achieve the performance vesting criteria shall be binary for the entire amount of PRSUs, so that there is no partial achievement with respect to the performance
criteria. The performance will be evaluated following the announcement of our financial results for the applicable year. The PRSUs can either, upon achievement of the performance criteria, become qualified for vesting subject to the
time-based vesting element, or otherwise expire.
|
• |
The performance criteria and targets of our CEO’s awards are commercially sensitive, and their disclosure would be detrimental to the interests of the Company and its shareholders alike. However, the Board shall consider whether to
disclose the performance criteria and targets in retrospect, to the extent their disclosure is at such time no longer detrimental to the interests of the Company and its shareholders.
|
• |
The value of each annual grant shall not exceed the cap set in our Compensation Policy for equity awards to our CEO. All of the terms of the equity awards granted under the Award Framework which are not specifically set forth herein,
shall be in accordance with the Company's 2016 Share Incentive Plan.
|
• |
For the extended period of the Award Framework, the Compensation Committee and Board have decided to also apply a claw-back provision, whereby PRSUs granted under the Award Framework will be subject to recoupment, to the extent amounts
payable thereunder are based on incorrect figures that are subsequently restated, in the same manner as set forth in our Compensation Policy.
|
• |
All annual equity awards granted to our CEO are subject to double trigger acceleration under the terms previously approved for our CEO.
|
I. |
Overview
|
1. |
Definitions
|
Company
|
NICE Ltd.
|
Law
|
The Israeli Companies Law 5759-1999 and any regulations promulgated under it, as amended from time to time.
|
Compensation Committee
|
A compensation committee satisfying the requirements of the Law.
|
Office Holder
|
Director, CEO, and any senior executive directly subordinate to the CEO all as defined in section 1 of the Law.
|
Executive
|
Office Holder, exculding a director.
|
Terms of Office and Employment
|
Terms of office or employment of an Executive or a Director, including the grant of an exemption, an undertaking to indemnify,
indemnification or insurance, Separation Package, and any other benefit, payment or undertaking to provide such payment, granted in light of such office or employment, all as defined in the Law.
|
Total Cash Compensation
|
The total annual cash compensation of an Executive, which shall include the total amount of: (i) the annual base salary; and the annual cash
target incentive (Target MBO as defined in section 9 below).
|
Equity Value
|
The value of the total annual Equity Based Components, valued using the same methodology utilized in the Company's financial statements.
|
2. |
Global Strategy Guidelines
|
2.1. |
Our Company is a global software company, operating in a competitive global market, with offices and employees globally spread.
|
2.2. |
Our vision and business strategy is directed towards growth, profitability, innovation, and customer focus, all with a long term perspective.
|
2.3. |
We strongly believe that our business success is much reliant on the excellence of our human resources through all levels. In particular we believe that the company’s ability to achieve its goals require us to recruit motivate and
retain high quality and experienced leadership team and directors.
|
2.4. |
Therefore, we believe in creating a comprehensive, customized compensation policy for our Office Holders (the "Policy"), which shall enable us to attract and retain highly qualified senior
leaders. Moreover, the Policy shall motivate our senior leaders to perform to the full extent of their abilities and to achieve ongoing targeted results in addition to a high level business performance in the long term, aligned with our
business strategy.
|
2.5. |
The Policy sets forth our philosophy regarding the Terms of Office and Employment of our Office Holders and is designed to allow us to be responsive to marketplace changes with respect to compensation levels and pay practices.
|
2.6. |
The Policy is tailored to ensure a compensation which balances performance targets and time horizons through rewarding business results, long-term performance and strategic decisions.
|
2.7. |
The policy provides our Compensation Committee and our Board of Directors with adequate measures and flexibility, to tailor each of our Executive's compensation package, based among others on geography, business tasks, role, seniority,
and skills.
|
2.8. |
The Policy shall provide the Board of Directors with guidelines as to exercising its discretion under the Company’s equity plans.
|
2.9. |
The Policy is guided by the applicable principles set forth in the Law.
|
3. |
Princlples of the Policy
|
3.1. |
The Policy shall guide the Company’s management, Compensation Committee and Board of Directors with regard to the Office Holders' compensation.
|
3.2. |
The Policy shall be reviewed at least annually by the Compensation Committee and the Board of Directors, to ensure its compliance with applicable laws and regulations as well as market practices, and its conformity with the Company’s
targets and strategy. As part of this review, the Board of Directors will analyze the appropriateness of the Policy in advancing achievement of its goals, considering the implementation of the Policy by the Company during previous years.
|
3.3. |
Any proposed amendment to the Policy shall be brought up to the approval of the Shareholders of the Company and the Policy as a whole shall be re-approved by the Shareholders of the Company at least every three years, or as otherwise
required by Law.
|
3.4. |
Our Policy shall be global, but its implementation shall be aligned with local practices and legal requirements and with our intention to treat our Executives fairly and consistently on a global basis.
|
3.5. |
The approval procedures of Terms of Office and Employment as well as back-up data shall be documented in detail and such documentation shall be kept in the Company’s offices for at least seven years following approval.
|
3.6. |
The compensation of each Office Holder shall be taxed and subject to mandatory or customary deductions and withholdings, in accordance with the applicable local laws.
|
3.7. |
Our CEO shall be entitled to determine that non-material changes (i.e. not exceeding an amount equal to two monthly base salaries for such calendar year) will be made to the benefit terms (i.e., not to the base salary or variable
components) of such Executives subordinate to our CEO, without seeking the approval of the Compensation Committee.
|
4. |
Compensation Committee Independence
|
4.1. |
Our Compensation Committee will be comprised of at least three members of our Board of Directors. Each member of our Compensation Committee must meet the independence requirements established under applicable law and/or the applicable
rules of any market on which the shares of the Company are traded.
|
II. |
Executive Compensation
|
1. |
When examining and approving Terms of Office and Employment, the Compensation Committee and Board members shall review the following factors and shall include them in their considerations and reasoning:
|
1.1. |
Executive’s education, skills, expertise, professional experience and specific achievements.
|
1.2. |
Executive’s role, scope of responsibilities and location.
|
1.3. |
Executive’s previous compensation.
|
1.4. |
The Company’s performance and general market conditions.
|
1.5. |
The ratio between the cost of an Executive’s compensation, including all components of the Executive’s Terms of Office and Employment, and the cost of salary of the Company’s employees in particular with regard to the average and
median ratios, and the effect of such ratio on work relations inside the Company as defined by the Law.
|
1.6. |
Comparative information, as applicable, as to former Executives in the same position or similar positions, as to other positions with similar scopes of responsibilities inside the Company, and as to Executives in peer companies
globally spread. The peer group shall include not less than 10 global companies similar in parameters such as total revenues, market cap, industry and number of employees. The comparative information, as applicable, shall address the base
salary, target cash incentives and equity and will rely, as much as possible, on reputable industry surveys, taking into consideration for each Executive, among other parameters, the compensation levels and practices applicable to such
Executives location.
|
2. |
The compensation of each Executive shall be composed of, some or all, of the following components:
|
i. |
Fixed components, which shall include, among others: base salary and benefits;
|
ii. |
Variable components, which may include: cash incentives and equity based compensation.
|
iii. |
Separation Package;
|
iv. |
Directors & Officers (D&O) Insurance, indemnification; and
|
v. |
Other components, which may include: change in control payment, Sign-on bonus, relocation benefits, studies opportunities and Leave of Absence, etc.
|
3. |
The plan for Executives compensation mix shall comprise of, some or all, of the following components:
|
Compensation Component
|
|
Purpose
|
|
Compensation Objective Achieved
|
Annual base salary
|
|
Provide annual cash income based on the level of responsibility, individual qualities, past performance inside the Company, and past experience inside and outside the Company.
|
|
• Individual role, scope and capability based compensation.
• Market competitiveness.
|
Performance-based cash
incentive compensation
|
|
Motivate and incentivize individual towards reaching Company, unit and individual's periodical and long-term goals and targets.
|
|
• Reward periodical accomplishments.
• Align Executive’ objectives with
Company, unit and individual's objectives.
• Market competitiveness.
|
Long-term equity-based
Compensation
|
|
Align the interests of the individual with the Shareholders of the Company, by creating a correlation between the Company’s success and the value of the individual holdings.
|
|
• Company performance based compensation.
• Reward long-term objectives.
• Align individual's objectives with shareholders’ objectives.
• Market Competitiveness.
|
4. |
The compensation package shall be reviewed with each Executive once a year, or as may be required from time to time.
|
5. |
Base Salary:
|
5.1. |
Our Compensation Committee and Board of Directors shall determine, from time to time, the target percentile, and/or range of precentiles, that our Executives' base salary shall meet, with respect to the peer group companies as
aforesaid.
|
5.2. |
The base salary is intended to provide annual cash income based on the level of responsibility, individual qualities, past performance inside the Company, and past experience inside and outside the Company.
|
6. |
Benefits
|
6.1. |
Benefits granted to Executives shall include any mandatory benefit under applicable law, as well as:
|
6.1.1. |
Pension plan/ Executive insurance as customary in each territory.
|
6.1.2. |
Additional benefits may be offered as part of the general employee benefits package (Private medical insurance disability and life insurance, transportation (including Company car), communication & media, Israeli education fund,
etc.) – in accordance with the local policy of the Company.
|
6.2. |
An Executive will be entitled to sick days and other special vacation days (such as recreation days), as required under local standards and practices.
|
6.3. |
An Executive will be entitled to vacation days (or redemption thereof), in correlation with the Executive’s seniority and position in the Company (generaly up to 28 days annualy), subject to the minimum vacation days requirements per
country of employmentas well as the local national holidays.
|
7. |
Variable Components
|
7.1. |
When determining the variable components as part of an Executive's compensation package, the contribution of the Executive to the achievement of the Company's goals, revenues, profitability and other key performance indicators ("KPI") shall be considered, taking into account, among others, the Company’s long term perspective and the Executive’s position.
|
7.2. |
Variable compensation components shall be comprised of cash components which shall be mostly based on measurable criteria and on equity components, all taking into consideration a long term perspective.
|
7.3. |
Our Board of Directors shall be authorized to reduce or cancel any cash incentive under circumstances which the Board of Directors deems, at its absolute discresion, to be exeptional.
|
8. |
Cash Incentives
|
8.1. |
Management by Objectives ("MBO") Plan
|
8.1.1. |
MBOs are incentive cash payments to the Executives that vary based on the Company and unit’s performance and on their individual performance and contribution of the Executive to the Company.
|
8.1.2. |
For each calendar year, our Compensation Committee and Board of Directors shall adopt an MBO plan, which will set forth, for each Executive, targets , a corresponding target MBO payment (which shall be referred to as the “Target MBO”), and the rules or formula for calculation of the MBO payment once actual achievements are known.
|
8.1.3. |
The Compensation committee and Board of Directors may include in the MBO plan predetermined thresholds, caps, multipliers, accelerators and deccelerators to corelate an Executive’s MBO payments with actual achievements.
|
8.1.4. |
The Target MBO of each Executive shall be calculated as a percentage of such Executive’s annual base salary, which shall not exceed 150% for each Executive.
|
8.1.5. |
The annual MBO payment for each Executive in a given year shall be capped as determined by our Board of Directors, but in no event shall exceed 200% of such Executive's Target MBO.
|
8.1.6. |
At least 80% of the targets shall be measurable. Such objective targets may include, among others, one or more of the following, with respect to the Executive:
|
8.1.7. |
The objective targets, as well as their weight, shall be determined in accordance with the Executive’s position, the Executive’s individual roles, and the Company and Unit’s long term and short term targets. The measurable objective
targets shall include one or more financial target, weighing at least 50% of the Target MBO.
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8.1.8. |
In the event that the Company's targets are amended by the Board of Directors during a particular year, the Board of Directors shall have the authorization to determine whether, and in which manner, such amendment shall apply to the
MBO plan.
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8.1.9. |
The Board of Directors shall annually determine a threshold with respect to the Company’s objective targets under which no MBO payments shall be distributed.
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8.1.10. |
Adjustment to the Company and/or Unit objective targets may be made, when applicable, following major acquisitions, divesture, organizational changes or material change in the business environment.
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8.1.11. |
The value of the aggregate MBO payments for all Executives in a calendar year shall not exceed 10% of the Company’s non-GAAP net operating income.
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8.2. |
Special Payments upon M&A
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8.2.1. |
Our Compensation Committee and Board of Directors shall be authorized to grant an Executive, in connection with an event of a Change in Control or the applicable events of Corporate Transaction (as such terms are defined in the
Company's most recent equity plan, currently the 2016 plan), with payment in cash, in equity, or by a combination thereof, equal to up to 200% of such Executive's annual Total Cash Compensation.
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8.2.2. |
Our Compensation Committee and Board of Directors shall be authorized, in the event they deem it is required or instrumental in the context of effecting an acquisition (or a merger where the Company is the surviving entity) by the
Company, to grant an executive of the target company who will become an Executives following the acquisition, a one-time equity grant equal to up to two times the maximum Equity Value permitted for our Executives under this Policy.
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9. |
Equity Based Compensation
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9.1. |
The Company shall grant its Executives, from time to time, equity based compensation, which may include any type of equity, including without limitation, any type of shares, options, restricted share units and restricted shares
(restricted share units and restricted shares shall each be referred to herein as "RSUs"), which may be subject to either time-based vesting only ("TRSUs") or
subject to vesting based on both time and performance criteria ("PRSUs"), share appreciation rights or other shares based awards (“Equity Based Components”),
under any existing or future equity plan (as may be adopted by the Company), and subject to any applicable law. Equity Based Components may include any equity in a subsidiary of the Company, which Equity Value shall be determined by an
independent appraisal and approved by the Board of directors.
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9.2. |
The Company believes that it is not in its best interest to limit the exercise value of Equity Based Components.
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9.3. |
Equity Based Components provide incentives in a long term perspective and shall be granted under the most recent equity plan of the company that defines the terms of these grants to all Company’s employees. Our Equity Based Components
(including PRSU's) shall be in accordance with and subject to the terms of our existing or future equity plan and shall vest gradually in installments, throughout a period which shall not be shorter than 3 years with at least a 1-year
cliff.
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9.4. |
Equity Based Componenets may consist of a combination of any type of equity provided that no less than 40% of the units and or shares, as applicable, under any grant of RSUs or options exercisable for the par value of the ordinary
shares shall be PRSUs or options as aforementioned with vesting terms based on both time and performance criteria, as applicable.
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9.4.1. |
With respect to the PRSU's, our Compensation Committee and Board of Directors shall determine for each Executive, measurable performance criteria, a corresponding performance payment and the rules or formula for calculation of the
payment once actual achievements are known.
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9.4.2. |
In the event that the Company's targets are amended by the Board of Directors during a particular year, the Board of Directors shall have the authorization to determine whether, and in which manner, such amendment shall apply to the
measurable performance criterias of the PRSU's.
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9.4.3. |
Adjustment to the Company's measurable performance criteria may be made, when applicable, following major acquisitions, divesture, organizational changes or material change in the business environment.
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9.5. |
In determining the Equity Based Componenets granted to each Executive, our Compensation Committee and our Board shall consider the factors specified in section II(1) hereinabove, and in any event its Equity Based Components granted to
an Executive in a single calendar year shall not exceed: (i) with respect to the CEO - 0.12% of the issued and outstanding share capital of the Company on the date of grant; and (ii) with respect to each of the other Executives - 0.06% of
the issued and outstanding share capital of the Company on the date of grant. Notwithstanding the foregoing, during a single calendar year in which one of the following special circumstances has occurred: (a) the hiring a new Executive
who loses the rights to significant equity or other variable compensation as a result of joining the Company; (b) hiring or retaining an Executive who has a unique value for the future business of the Company; or (c) special retention of
Executives in relation to a certain M&A event (each, a “Special Event”), then (i) the CEO may be granted additional Equity Based Components equal to 0.03% of the issued and outstanding share capital of the Company on the date of grant
(up to a total of 0.15%); and (ii) each other Executive may be granted additional Equity Based Components equal to 0.02% of the issued and outstanding share capital of the Company on the date of grant (up to a total of 0.08%).
The applicable dilution caps for Equity Based Components under this Section 9.5, shall be further subject to a value-based cap equal to an Equity Value reflecting a market cap of $12 billion and in any
event not be lower than the Equity Value which reflects a market cap of $6 billion.
The foregoing in this Section 9.5 shall constitute the cap under the Policy for all equity awards to the Company’s Executives.
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9.6. |
In the event of a Corporate Transaction or a Change in Control event (as such terms are defined in the Company's most recent equity plan, currently the 2016 plan), unvested equity based compensation may be accelerated as determined by
the Board of Directors.
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10. |
Separation Package
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10.1. |
The following criteria shall be taken into consideration when determining Separation Package: the duration of employment of the Executive, the terms of employment, the Company’s performance during such term, the Executive’s
contribution to achieving the Company’s goals and revenues and the retirement’s circumstances.
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10.2. |
Other than payments required under any applicable law, local practices, vesting of outstanding options, transfer or release of pension funds, manager's insurance policies etc. - the maximum Separation Package of each Executive shall
not exceed the value of a one-time Total Cash Compensation of such Executive's. Separation Package shall include any payment and/or benefit paid to an Executive in connection with such Executive's separation, all as defined in section 1
of the Law.
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11. |
Others
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11.1. |
Relocation – additional compensation per local practices and law may be granted to an Executive under relocation circumstances. Such benefits shall include reimbursement for out of pocket one
time payments and other ongoing expenses, such as housing allowance home leave visit, etc., in accordance with the Company's relocation practices, or otherwise approved as relocation expenses by the Compensation Committee and Board of
Directors. The Compensation Committee and Board of Directors may, if they deem it is appropriate under the circumstances, provide compensation for additional general relocation expenses, in an amount that does not exceed 15% of the annual
base salary.
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11.2. |
Leave of absence – an Executive shall be treated in accordance with pay practices in the relevant country, which may also have an effect on base salary and MBO payments, and vesting of equity in
accordance with the Company’s Equity plans.
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11.3. |
Our Compensation Committee and our Board of Directors may approve, from time to time, with respect to any Executive, if they deem to be required under special circumstances or in case of an exceptional contribution to the Company,
including in cases of retention or attraction of an Executive, the grant of a onetime incentive in cash, in equity, or by a combination thereof, of up to 100% the Executive's annual base salary.
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12. |
Clawback Policy
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12.1. |
In the event of a restatement of the Company’s financial results, we shall seek from our Office Holders reimbursement of any payment made due to erroneous restated data, with regards to each Office Holder’s Terms of Office and
Employment that would not otherwise have been paid. The reimbursement shall be limited to such payments made during the 3-year period preceding the date of restatement. The above shall not apply in case of restatements that reflect the
adoption of new accounting standards, transactions that require retroactive restatement (e.g., discontinued operations), reclassifications of prior year financial information to conform with the current year presentation, or discretionary
accounting changes. The above shall not derogate from any mandatory claw-back requirements pursuant to any applicable law and regulations.
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12.2. |
Our Compensation Committee and Board of Directors shall be authorized subject to any applicable law and regulations, not to seek recovery to the extent that (i) to do so would be unreasonable or impracticable or;(ii) there is low
likelihood of success under governing law versus the cost and effort involved;
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III. |
Director Remuneration:
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1. |
Cash Compensation:
|
1.1. |
The Company’s non-executive directors may be entitled to receive an equal cash fee per year and per meeting in the amount equal to up to 2 times the fixed amount1 under the Law.
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1.2. |
The Vice Chairman of the Board of Directors and/or the Chairman of any Committee of the Board of Directors may be entitled to receive a cash fee per year and per meeting of up to 3 times the fixed amount under the Law.
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1.3. |
The Chairman of the Board of Directors shall be entitled to receive a cash fee per year and per meeting of to up to 6 times the fixed amount under the Law.
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1.4. |
The Company’s non-executive directors shall be reimbursed for their reasonable expenses incurred in connection with attending meetings of the Board of Directors and of any Committees of the Board of Directors.
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2. |
Equity Based Compensation:
|
2.1. |
Each of the Company’s non-executive directors shall be entitled to receive equal equity based compensation per year, which value shall not exceed USD 250,000.
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2.2. |
The Vice Chairman of the Board of Directors and/or the Chairman of any Committee of the Board of Directors shall be entitled to receive equity based compensation per year of to up to twice the equity based compensation per year of the
other non-executive directors.
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2.3. |
The Chairman of the Board of Directors may be entitled to receive equity based compensation per year of up to three times the equity based compensation per year of the other non-executive directors.
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2.4. |
The aggregate annual equity based compensation granted to all the non-executive directors shall not exceed the Equity Value of number of securities granted under our relevant equity plan, convertible into 0.3% of the Company’s
outstanding share capital at the time of grant.
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2.5. |
The equity based compensation of each of the Company’s non-executive directors shall vest in 4 quarterly installments.
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2.6. |
Equity based compensation granted to our non-executive directors shall be granted under the existing or future equity plan of the Company.
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3. |
Outside Directors Compensation:
|
3.1. |
The compensation of our outside directors, if any, shall be determined and capped in accordance with the applicable laws and regulations (currently the comparative compensation mechanism specified in section 8a-8b of the Companies
Regulations (Rules regarding Compensation and Expense Reimbursement of Outside Directors) -2000).
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IV. |
Indemnification and Insurance
|
1.1. |
The Compensation Committee and our Board of Directors shall be authorized to approve a deviation of up to 15% from any limits, caps or standards detailed in this Policy, and such deviation shall be deemed to be in alignment with this
policy
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1.2. |
This Policy is set as guidance for the Company's relevant organs, with respect to matters involving the compensation of its Office Holders, and is not intended to, and shall not, confer upon any of the Office Holders, any rights with
respect to the Company.
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