99.1
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Notice and Proxy of Special General Meeting of Shareholders to be held on September 12, 2023
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99.2
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Form of Proxy Card
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ELTEK LTD.
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(Registrant)
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By: Ron Freund
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Ron Freund
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Chief Financial Officer
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EXHIBIT NO.
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DESCRIPTION
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1. |
To re-elect Messrs. Yitzhak Nissan, Mordechai Marmorstein, David Rubner and Erez Meltzer to the Company’s Board of Directors (the “Board”) and to elect Ms. Revital Cohen-Tzemach to the Board, to serve until the next annual general
meeting of the shareholders and until their successors have been duly elected and qualified;
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2. |
To re-elect Mr. Gad Dovev for a fourth term as an external director, to hold office for three (3) years, as of October 6, 2023;
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3. |
To approve the Company’s Second Amended and Restated Compensation Policy, as described in the Proxy Statement;
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4. |
To approve the grant of an annual bonus for the year 2022 to Ms. Revital Cohen-Tzemach, special project manager and daughter of our Controlling shareholder, as described in the Proxy Statement;
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5. |
To ratify and approve the extension of the Company’s employment of Ms. Revital Cohen-Tzemach, daughter of our Controlling shareholder, in the position of special project manager;
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6. |
To approve the grant of options to the Company’s directors (including the external directors, but excluding our Controlling shareholder and Chairman of the Board, Mr. Yitzhak Nissan, and his daughter, Ms. Revital Cohen-Tzemach), as
described in the Proxy Statement;
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7. |
To approve the grant of options to Mr. Eli Yaffe, the Company’s Chief Executive Officer (the “CEO”), as described in the Proxy Statement;
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8. |
To approve the grant of options to Ms. Revital Cohen-Tzemach, special project manager and daughter of our Controlling shareholder, as described in the Proxy Statement;
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9. |
To approve the issuance of an exculpation letter to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement;
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10. |
To approve the issuance of an indemnification letter to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement;
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11. |
To approve a determination regarding the vesting and exercisability of options granted to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement;
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12. |
To re-appoint Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, as the Company’s independent auditors for the year ending December 31, 2023 and for such additional period until the next annual general meeting of
shareholders, and to authorize the Board to approve their compensation; and
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13. |
To review the Auditor’s Report and the Company’s Consolidated Financial Statements for the fiscal year ended December 31, 2022.
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By Order of the Board of Directors,
Yitzhak Nissan
Chairman of the Board of Directors
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1. |
To re-elect Messrs. Yitzhak Nissan, Mordechai Marmorstein, David Rubner and Erez Meltzer to the Company’s Board of Directors (the “Board”) and to elect Ms. Revital Cohen-Tzemach to the Board, to serve until the next annual general
meeting of shareholders and until their successors have been duly elected and qualified;
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2. |
To re-elect Mr. Gad Dovev for a fourth term as an external director, to hold office for three (3) years, as of October 6, 2023;
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3. |
To approve the Company’s Second Amended and Restated Compensation Policy, as described in the Proxy Statement;
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4. |
To approve the grant of an annual bonus for the year 2022 to Ms. Revital Cohen-Tzemach, special project manager and daughter of our Controlling shareholder, as described in the Proxy Statement;
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5. |
To ratify and approve the extension of the Company’s employment of Ms. Revital Cohen-Tzemach, daughter of our Controlling shareholder, in the position of special project manager;
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6. |
To approve the grant of options to the Company’s directors (including the external directors, but excluding our Controlling shareholder and Chairman of the Board, Mr. Yitzhak Nissan, and his daughter, Ms. Revital Cohen-Tzemach), as
described in the Proxy Statement;
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7. |
To approve the grant of options to Mr. Eli Yaffe, the Company’s Chief Executive Officer (the “CEO”), as described in the Proxy Statement;
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8. |
To approve the grant of options to Ms. Revital Cohen-Tzemach, special project manager and daughter of our Controlling shareholder, as described in the Proxy Statement;
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9. |
To approve the issuance of an exculpation letter to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement;
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10. |
To approve the issuance of an indemnification letter to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement;
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11. |
To approve a determination regarding the vesting and exercisability of options granted to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement;
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12. |
To re-appoint Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, as the Company’s independent auditors for the year ending December 31, 2022 and for such additional period until the next annual general meeting of
shareholders, and to authorize the Board to approve their compensation; and
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13. |
To review the Auditor’s Report and the Company’s Consolidated Financial Statements for the fiscal year ended December 31 , 2022.
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• |
Voting in Person. If your shares are registered directly in your name with our transfer agent (i.e., you are a “registered shareholder”), you may attend and vote in person at the Meeting. If you
are a beneficial owner of shares registered in the name of your broker, bank, trustee or nominee (i.e., your shares are held in “street name”), you are also invited to attend the Meeting; however,
in order to vote in person at the Meeting as a beneficial owner, you must first obtain a “legal proxy” from your broker, bank, trustee or nominee, as the case may be, authorizing you to do so.
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• |
Voting by Proxy. You may submit your proxy by mail by completing, signing and mailing the enclosed proxy card in the enclosed, postage-paid envelope, or, for shares held in street name, by
following the voting instructions provided by your broker, bank, trustee or nominee. The proxy must be received by our transfer agent or at our registered office in Israel by no later than 10 A.M. Israel time, on September 10, 2023, to be
validly included in the tally of Ordinary Shares voted at the Meeting. Upon the receipt of a properly signed and dated proxy in the form enclosed, the persons named as proxies therein will vote the Ordinary Shares represented thereby in
accordance with the instructions of the shareholder indicated thereon, or, if no direction is indicated, in accordance with the recommendations of the Board.
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Name
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Number of Ordinary Shares
Beneficially Owned(1)
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Percentage of Ownership (2)
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Yitzhak Nissan(3)
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165,224
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2.79%
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Nistec Golan Ltd. (3)
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3,843,608
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65.00%
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(1)
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Beneficial ownership is determined in accordance with the rules of the U.S.
Securities and Exchange Commission (“SEC”) and generally includes voting or investment power with respect to securities. Ordinary Shares relating to options or convertible notes currently exercisable or exercisable within 60 days
of the date of this table are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and
subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them.
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(2)
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The percentages shown are based on 5,913,965 Ordinary Shares issued and outstanding as of August 3, 2023.
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(3)
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Nistec Golan Ltd. is an Israeli private company controlled by Mr. Yitzhak Nissan. Accordingly, Mr. Yitzhak Nissan may be deemed to be the beneficial owner of the Ordinary Shares held
directly by Nistec Ltd.
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Name
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Age
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Position
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Yitzhak Nissan
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74
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Chairman of the Board
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Mordechai Marmorstein
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75
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Director
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David Rubner
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83
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Director
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Erez Meltzer
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66
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Director
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Revital Cohen-Tzemach
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40
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Director-Nominee
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Country of Principal Executive Offices
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Israel
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Foreign Private Issuer
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Yes
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Disclosure Prohibited under Home Country Law
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No
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Total Number of Directors
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6
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Part I: Gender Identity
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Female
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Male
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Non-Binary
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Did Not Disclose
Gender
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Directors
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1
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5
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0
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0
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Part II: Demographic Background
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Underrepresented Individual in Home Country Jurisdiction
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0
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LGBTQ+
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0
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Did Not Disclose Demographic Background
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6
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Year Ended December 31, 2022
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Year Ended December 31, 2021
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Amount
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Percentage
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Amount
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Percentage
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Audit Fees (1)
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$
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98,000
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94
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%
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$
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75,800
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74
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%
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Audit-related fees(2)
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$
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0
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0
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%
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$
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21,700
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21
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%
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All other fees(2)
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$
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6,000
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6
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%
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$
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5,500
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5
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%
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Total
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$
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104,000
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100
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%
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$
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103,000
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100
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%
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(1)
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Audit fees relate to audit services provided for each of the years shown in the table, including fees associated with the annual audit, consultations on various accounting issues and audit
services provided in connection with statutory or regulatory filings
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(2)
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All of such fees were pre-approved by our Audit Committee.
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By Order of the Board of Directors,
Yitzhak Nissan
Chairman of the Board of Directors
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1. |
General background
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1.1. |
The following document presents Eltek Ltd.’s (the “Company”) Compensation Policy regarding the Company’s Officers (the “Compensation
Policy”) as determined by the Compensation Committee and the Company’s Board of Directors (the “BOD”).
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1.2. |
The Compensation Policy is intended to increase the transparency of the Company’s activities regarding all aspects of its Officers’ compensation and to enhance the shareholders' ability to express their opinion and influence the
Compensation Policy.
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1.3. |
The principles of the Compensation Policy were formulated following internal discussions held by the Compensation Committee and the BOD, which considered, among other things, the changes in the provisions of the law since the adoption
of the previous Compensation Policy; the experience and the lessons accumulated in the company during the period of the implementation of the previous compensation policy; and the changes in the company and its needs. The policy’s
principles are designed for determining reasonable, appropriate and fair compensation for the Company’s Officers, that will ensure that the Officers’ compensation will be compatible with the good of the company and its long-term and
short-term organizational strategy, considering the Company’s risk management policy while increasing the Officers’ sense of solidarity with the company and its activities, increasing their satisfaction and motivation and enabling the
company to both retain its high quality Officers for the long term and to hire new good quality officers.
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1.4. |
The considerations taken into account during the setting of the Compensation Policy principles:
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a. |
Promoting the Company’s goals, work plan and long-term policies.
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b. |
Creating appropriate incentives for the Company’s Officers while keeping in mind the Company’s risk management.
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c. |
The size of the Company and the nature of its activities.
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d. |
With regard to variable components of the Officers terms of service and employment - the Officer’s contribution to achieving the Company’s goals and maximizing profits; all with a long-term view and considering the position of each
Officer.
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1.5. |
Objectives of the Compensation Policy
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a. |
Encouraging the maximization of the Company’s profits via compensation incentives.
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b. |
Maximizing the Company’s performance without the Company’s Officers taking unreasonable risks.
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c. |
Supporting the implementation of the Company’s business strategy.
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d. |
Promoting the alignment of the Officers’ interests with those of the Company’s shareholders.
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e. |
Increasing the Company’s ability to recruit and retain Officers who can lead the Company and meet the market’s challenges.
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f. |
Creating a balance between the various types of compensation components.
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1.6. |
Measures for setting the Compensation Policy
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a. |
Each Officer’s education, skills, expertise and achievements.
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b. |
The positions, areas of responsibility and previous wage agreements signed with the Officers.
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c. |
The relationship between the fixed compensation components and the variable compensation components.
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d. |
An examination of the average terms of service and employment for the Officers in accordance with the Compensation Policy relative to the average and mean wage conditions of the Company’s employees and contract workers, and the
influence of the gaps between these conditions on the labor relations at the Company.
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1.7. |
The Compensation Policy determination and approval process
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1.8. |
Applicability
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1.8.1. |
The Compensation Policy will be valid for a period of three years, effective from September 1, 2022, following the approval of all the required organizations, in accordance with the provisions of Section 267A of the Companies Law (the
“Applicable Date”).
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1.8.2. |
The Compensation Policy will apply to the Company’s Officers in accordance with the definition of the term “officers” in the Companies Law.
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1.8.3. |
Accordingly, this Compensation Policy is intended to set the compensation terms of the Officers serving in the Company as of the Applicable Date, and as such as will be from time to time, including:
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a. |
Members of the BOD;
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b. |
The CEO;
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c. |
The deputy CEO, vice presidents (chief officers) and/or other Company Officers.
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1.9. |
The Compensation Policy, its principles and parameters shall not be construed as establishing any right for Company Officers and/or any other third party with respect to the Company. The Company Officers’ rights with respect to the
Company will be determined and defined only in accordance with the provisions of the law, the employment agreements, the compensation plans and other agreements that will be signed, as such will be signed, with the Company Officers.
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2. |
The components of the Compensation Policy
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2.1. |
The Compensation Policy for the Officers is composed of several components that combined to form an overall compensation appropriate for the Officers, in accordance with their duties and their contributions to the Company.
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2.2. |
The Compensation Policy includes the following components:
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a. |
Base Salary – this component consists of a monthly salary (in gross terms) or fixed monthly management fees, which correlates to the Officer’s education, skills, expertise, professional experience and takes into consideration
his achievements, jobs, areas of responsibility and previous wage agreements.
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b. |
Social and Fringe Benefits – including pension savings, severance pay, disability insurance, vacation, sick leave, recreation pay, continuing education savings, reimbursement of expenses, use of a company car, mobile phone, etc.
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c. |
Variable Rewards in cash (Bonus) – designed as in incentive for Officers to promote and achieve the Company’s goals in the medium and long term.
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d. |
Equity-Based Compensation – designed to create a link between actions that lead to maximizing the value of the Company’s shares over time and the reward given to the Officers for this maximizing, such that the link aligns the
Officers’ interests with the interests of the Company’s shareholders and contributes to the Officers’ motivation and the Company’s ability to retain quality Officers.
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e. |
End of service terms – designed to arrange the terms at the end of the Officers’ service at the Company, including in order to anchor the rights and obligations of the Company and the Officers toward one another.
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f. |
Provisions to protect Officers – include exemption, indemnification and responsibility insurance for Officers, and are designed to enable the Company to retain and recruit Officers suitable for serving in the Company, in light
of the Officers’ personal exposure to the consequences of actions undertaken in the framework of their jobs at the Company.
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2.3. |
Unless otherwise noted, the parameters for the fixed components1 in the compensation relate to an Officer employed in a fulltime position. If the relevant Officer is not a salaried employee and/or
is not employed fulltime, the requisite adjustments must be made.2 Thus for example, if an Officer is an independent contractor who provides the Company with services and is paid based on a tax
receipt, the requisite adjustments will be made such that the cost to the Company will not be higher than the cost if the worker were a salaried employee.
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2.4. |
The following policy rules concerning each of the Officers’ compensation components set an upper or lower limit in certain instance, for the compensation component, based on certain criteria. It is important to note that the Company is
not obligated to grant the Officer all the components detailed in this Compensation Policy and is not obligated to grant the maximum or minimum rate set for each of the components, as relevant.
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2.5. |
The Compensation rules do not relate to various benefits whose value is not significant and which the Company grants to its workers. These benefits include: parking, newspaper subscriptions, Internet access, clothing, holiday gifts,
etc., and the Company will not be restricted in this regard.
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3. |
Base Salary3
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3.1. |
Directors’ compensation
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1 |
The fixed components in the Compensation Policy refer to the Base Salary and to the Social and Fringe Benefits.
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2 |
The above notwithstanding, the value of car use, mobile phone use and the advance notice period to which the Officer is eligible will not be adjusted to the actual scope of the Officer’s position.
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3 |
The base salary is in terms of gross salary and does not include social and fringe benefits
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3.2. |
Maximum monthly base salary
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Officer |
Maximum monthly base
salary (gross) in NIS
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Scope of position4
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Active Chairman of the Board5
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100,000
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As may be Required
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CEO
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95,0006
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100%
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Deputy CEO, vice presidents and other Officers7
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55,000
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100%
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3.3. |
Linkage to the index
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3.4. |
Comparison to the market - benchmark
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4 |
If the Officer is employed less than fulltime, the ceiling for the monthly salary will be adjusted in accordance with the actual scope of the position.
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5 |
An active chairman of the board is a chairman of the board who proves services to the Company that are supplementary to the services he grants the Company in his capacity as a member of the BOD (including his position as chairman of
the board).
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6 |
An incremental allowance (“Tosefet Yoker”) shall be included in the CEO's Salary in accordance with provisions of the general collective agreements, and the expansion orders dealing with
incremental allowances, and as shall be updated from time to time.
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7 |
Officers, if and inasmuch as these will be in the future, who are not chairman of the board, CEO, deputy CEO or vice president (“other officers”).
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8 |
The base index for calculating the linkage of the compensation elements in accordance with this Compensation Policy will be the index published at the time of the approval of the Compensation Policy by the BOD.
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3.5. |
Updating the base salary
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3.6. |
The Company’s Officers (apart from the Directors who are not employed by the Company in additional positions) will be eligible for social and fringe benefits as detailed in Clause 4 below.
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4. |
Social and fringe benefits
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4.1. |
Pension contributions
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4.2. |
Contributions to continuing education funds
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4.3. |
Sick leave and sick pay
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4.4. |
Recreation pay
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4.5. |
Annual vacation
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4.5.1. |
Each of the Company’s Officers will be eligible for annual vacation9 amounting to no less than the minimum number of days established by the Annual Vacation Law 5711-1951 (the “Annual Vacation Law”) and the extension order for the metals, electricity and electronics industry and will not exceed the total maximum days specified in the table below for each work-year, as defined
in the Annual Vacation Law, in the year he serves in his position:
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Officer
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Maximum total number of days*
(in terms of work days)
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Active Chairman of the Board, CEO
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24
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Deputy CEO, vice presidents and other Officers
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24
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4.5.2. |
If the Officer does not serve in his position for a full work-year, the maximum number of vacation days for which he is eligible (in terms of work days) will be adjusted in accordance with the law.
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4.5.3. |
An Officer at the Company may accrue vacation days that he is not obligated to use under the Annual Vacation Law up to the limit set by the law (the “cumulative
ceiling”).
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4.5.4. |
Throughout the duration of the Officer’s service and subject to the Company’s approval or to the provisions of the Officer’s employment agreement and subject to the law, the Officer may redeem the vacation days that he has accrued.
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4.5.5. |
Upon the completion of his service at the Company, an Officer may redeem the vacation days he has accrued.
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4.6. |
Company car
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Officer
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Car price ceiling (NIS10)
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Active Chairman of the Board
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Up to NIS 300,000
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CEO
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Up to NIS 300,000
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Deputy CEO, vice presidents and other Officers
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Up to NIS 220,000
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4.7. |
Mobile phone
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4.8. |
Reimbursement of expenses
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4.8.1. |
An Officer at the Company is eligible for the reimbursement of the customary and accepted types of expenses in the Company’s business sphere, including the cost of hosting guests in Israel and abroad, travel and parking expenses, etc.
that are reasonable in the relevant circumstances, considering the Officer’s position, the scope of each expense and its necessity, and the provisions of the Company’s reimbursement of expenses procedures (including obtaining approval in
advance, if required); subject to the said expenses being incurred in the framework of the Officer’s fulfilling his duties in connection with the Company’s operations and for the purpose of promoting its interests.
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4.8.2. |
In accordance with the Company’s petty cash procedure and reimbursement of expenses procedure, every Officer is obligated to submit original receipts to the Company’s accountant in order to receive reimbursement for expenses incurred
on the job.
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4.9. |
If the Officer provides services to the Company as an independent contractor, or via a management company he controls, the BOD has the authority to grant the Officer the fringe benefits detailed in Clauses 4.3 to 4.8 above (as relevant
in each case), which will be added to the management fees.
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5. |
Bonuses
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5.1. |
The Company may grant the Officers bonuses based on financial results or based on other measurable parameters, as well as other bonuses in accordance with the Company’s discretion (and subject to the provisions of the law and the
obtaining of the requisite approvals). Such bonuses will be in accordance with the Company’s bonuses policy, which reflects the Company’s risk management policy and whose objectives are: to promote the improvement of the Company’s
business conduct and profitability; to achieve the Company’s long-term goals; to increase the Officers’ satisfaction and motivation; to increase each Officer’s contribution to achieving the Company’s goals and maximizing its profits, all
with a long-term view and considering the Officer’s position; and the correlation of some of the Company’s compensation costs to its financial performance.
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5.2. |
Annual Bonus Plan
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5.2.1. |
Each year, after receiving a recommendation from the Compensation Committee, the BOD may approve an Annual Bonus Plan for the Company’s Officers (the “Annual Bonus Plan”);
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5.2.2. |
The Annual Bonus Plan will be based upon at least one pre-defined measurable criteria such as: pre-tax profit, net profit, gross profit, operating profit, EBITDA, sales, (positive) cash flow,
capital raising for the company, or any other measurable financial criteria, amount of work accidents, yield, time compliance (customer order execution) (collectively, the “Criteria”).
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5.2.3. |
[Reserved.]
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5.2.4. |
With respect to the Criteria, as applicable, the Company will set the targets for that year (the “Targets”), such that a minimum target for the Criteria shall be set, as applicable, under which
the officer will not be eligible for a bonus for such Criteria (the “Threshold Conditions”). The CEO of the Company may determine the Targets of the officers reporting to the CEO, while the CEO’s or
the (active) Chairman's Targets shall be determined by the Compensation Committee and the BOD.
|
5.2.5. |
Personal Assessment – the Company may add to the yearly bonus for which an officer is entitled (in accordance with meeting the Targets as set in each of the Criteria) an amount of up to 30% of the bonus, at the discretion of the CEO
(with respect to the officers reporting to the CEO, except for the CFO); subject to the discretion of the CEO and the Chairman of the Audit Committee (with respect to the CFO); and subject to the discretion of the Compensation Committee
and the BOD (with respect to the CEO), provided, that the total amount of the annual bonus granted under the Annual Bonus Plan does not exceed the annual bonus cap. Notwithstanding the above, to
the extent that the CEO is paid a Discretionary Bonus in accordance with Clause 5.3 below, the amount of the Discretionary Bonus, shall not exceed 3 monthly salaries.
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5.2.6. |
The date of the Annual Bonus will be shortly after the approval of the Company’s Consolidated Financial Statements for the end of the calendar year for which the bonus is being granted.
|
5.2.7. |
The Bonus Ceiling
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CEO and Active Chairman of the Board
|
Company’s Officers
|
|
Grant Ceiling
|
Up to 9 Salaries
|
Up to 6 Salaries
|
5.2.8. |
Eligibility for a results-based bonus for partial employment period
|
5.2.8.1. |
If any of the Officers ceases to serve in his position before the end of the calendar year, the ratio of the Officer’s eligibility for the Annual Bonus will be adjusted for the number of months in which he served as an Officer in the
Company, relative to a full calendar year (“Partial Annual Bonus”). Note: The ceiling for the Partial Annual Bonus will likewise be adjusted (linearly, based on the number of full months).
|
5.2.8.2. |
The payment of the Partial Annual Bonus will be made only after the approval of the Company’s Consolidated Financial Statements for the calendar year for which the Annual Bonus is being granted.
|
5.2.8.3. |
All of the above notwithstanding, if the Officer ceases to serve in his position for reasons that render him ineligible for severance pay – he will lose his eligibility for a Partial Annual Bonus and any sum not yet paid to him in
respect of the bonus will be forfeited by the Company.
|
5.3. |
Discretionary Bonus to the CEO
|
5.3.1. |
Once a year the Company may grant the CEO a bonus that will not exceed the sum of three (3) monthly salaries, in gross terms, based on approval by the Compensation Committee and the BOD, which will relate, inter alia, to criteria that
are not financial and are not measurable; to the Officer’s long-term contribution and his performance in the year for which the bonus is being granted.11
|
5.3.2. |
The CEO will be eligible for a Discretionary Bonus only if he has served in this position for at least two (2) full quarters in the calendar year for which the bonus is being granted.
|
5.3.3. |
The payment of the Discretionary Bonus only after the approval of the Company’s periodic report for the end of the calendar year for which the Discretionary Bonus is being granted.
|
5.3.4. |
If the CEO received an Annual Bonus and a Discretionary Bonus in a single calendar year, the sum of the Discretionary Bonus will be adjusted such that the combined total of the two grants paid to the CEO will not exceed the Bonus
Ceiling set for Officers in Clause 5.2.7. above.
|
5.4. |
Bonuses for Officers subordinate to the CEO
|
5.4.1. |
Without detracting from the Company’s right to grant results-based bonuses, as detailed in Clause 5.2 above, note that, subject to obtaining approval from the Compensation Committee and the BOD, the Company will have the right to grant
bonuses of any type to Officers subordinate to the CEO, including financial results-based bonuses (including such as are not in accordance with the provisions of Clause 5.2 above); bonuses based on other measurable parameters; and other
bonuses in accordance with the Company’s discretion that are not based on measurable criteria, up to the Bonus Ceiling set in Clause 5.2.7. above.
|
5.4.2. |
These bonuses will be granted to the Officers subordinate to the CEO based on the considerations specified in this Compensation Policy above.
|
5.4.3. |
If an Officer subordinate to the CEO received an Annual Bonus and a Discretionary Bonus in a single calendar year, the sum of the Discretionary Bonus will be adjusted such that the combined total of the two grants paid to the Officer
will not exceed the Bonus Ceiling set for Officers in Clause 5.2.7, above.
|
5.5. |
Recovery of sums paid in error[Reserved]
|
5.6. |
BOD discretion in reducing a bonus
|
5.7. |
Officers will not be eligible for any social benefits in respect of any bonus they receive.
|
6. |
Equity Based Compensation
|
6.1. |
The Company may grant Directors and Officers serving at the Company compensation based on securities in order to promote improvement in commercial processes and the Company’s long-term profitability, to increase the Officers’ sense of
solidarity with the Company and with its operations, in increase the Officers’ satisfaction and motivation and retain the high quality Officers at the Company in the long term.
|
6.2. |
Accordingly, the Company can offer Officers to participate in a plan for the allocation of options for shares in the Company (the “Options Plan” and “Equity Grant”), considering, among other things, their education, skills, expertise, professional experience, positions and areas of responsibility of each of the said Officers. The Options Plan will be
defined and implemented such that it will comply, as much as possible, with the provisions of Section 102 of the Income Tax Ordinance (New Version) 5721-1961 (as much as possible and subject to the Company’s discretion, in the capital
gains track).
|
6.3. |
The maximum dilution with respect of the securities granted under the Option Plan, during the period of this Compensation Policy, shall not exceed 10% of the fully diluted basis share capital of the Company at the Equity Grant , taking
such Equity Grant into account.
|
6.4. |
The Options Plan will include the following terms:
|
6.4.1. |
The vesting period for the Equity Grant will be spread over at least three years, in keeping with a division into tranches: The first tranche of the Equity Grant will vest and be exercisable after at least 12 months from the date of
its granting, and the final tranche of the Equity Grant will vest and be exercisable after at least 36 months from the date of its granting.
|
6.4.2. |
The exercise price of the options will be set in accordance with the decision of the Compensation Committee and the BOD. Note: Exercise prices shall not reflect a discount relative to the share price (as defined below) close to the
date of the granting of the options. Accordingly, the exercise price will be calculated on the basis of the average share price on the stock exchange as of the date of the BOD’s decision on the matter and shall not be less than such
average calculation in the period of 30 days prior to the date of grant of the said options (the “Share Price").
|
6.4.3. |
The Options Plan may allow for the exercising of the options on the basis of the benefit element (cashless exercise).
|
6.4.4. |
The Company may include mechanisms in the Options Plan, including commonly accepted adjustments in the event of the distribution of benefit shares, a rights issue, the disbursement of dividends, changes in the Company’s capital,
structural changes in the Company, etc.
|
6.4.5. |
The value of the options benefit on the date of their granting for each year of vesting (based on annual average over the vesting period) will not exceed 30% of the relevant Officer’s annual base salary (as defined in Clause 2.2
above).
|
6.5. |
Ceiling on the value of the exercising of the options
|
6.6. |
The Company may include “acceleration mechanisms” in the Options Plan, that will facilitate the immediate eligibility to exercise the options, in the event of (1) a change in the control of the Company; (2) a merger, acquisition,
reorganization of the Company with or into another company, when the Company is not the surviving company; (3) the sale of all or a significant part of the Company’s property or shares, apart from in the framework of a public offer. In
addition, the BOD may include “partial acceleration” in the Options Plan, for special circumstances, when an officer who is not a controlling shareholder is dismissed, apart from when the dismissal is based on grounds that disqualify the
said Officer from being eligible for severance pay. In the event that the Company does not include such mechanisms, and an Officer ceased serving the Company before the expiration of the options allocated to him, all the options that have
not yet been exercised will expire will not acquire the Officer any rights.
|
7. |
Arrangements for the completion of service
|
7.1. |
Advance Notice
|
Officer
|
Maximum advance notice period
|
Active Chairman of the Board, CEO
|
Up to 6 months
|
other Officers
|
Up to 3 months
|
8. |
Ratio of fixed elements to variable elements
|
Officer
|
||
Ratio of the fixed elements12
to the total Compensation (%)
|
Ratio of the variable elements13
to the total Compensation (%)
|
|
Active Chairman of the Board
|
45-100
|
0-55
|
CEO
|
45-100
|
0-55
|
Deputy CEO, Vice Presidents and other Officers
|
52-100
|
0-48
|
12 |
The total fixed elements include the base salary, social benefits, fringe benefits and employers National Insurance Institute
payment. The calculation is done on the assumption that for each of the elements the Officer will be paid the maximum sum to which he is entitled in accordance with this Compensation Policy.
|
13 |
The total variable elements include bonuses (on the assumption that the Officer is granted the overall maximum allowable in
accordance with the Compensation Policy, as detailed in Clause 5.2.7 above) and a capital grant (partial for calendar year). The calculation is done on the assumption that for each of the elements the Officer will be paid the
maximum sum to which he is entitled in accordance with this Compensation Policy.
|
9. |
Ratio between the Officers’ compensation and the Company employees’ salaries
|
9.1. |
The Compensation Committee and the BOD examined the ratio between the terms of service and the employment of the Officers and the salaries of the remainder of the employees, including contract workers employed by the Company, and
specifically the relationship to the average and mean salaries of all these employees, with a focus on the influence of the gap between them on the labor relations at the Company, based on the assumption of the payment of the maximum base
salary, the payment of 100% of the maximum bonuses that can be granted under this Compensation Policy, and assuming maximum Equity Grant value in one vesting year.
|
Position
|
Relationship to the average
salary of the Company’s employees
|
Relationship to the mean
salary of the Company’s employees
|
Active Chairman of the Board
|
22
|
25
|
CEO
|
22
|
25
|
Deputy CEO, Vice Presidents and other Officers
|
15
|
20
|
9.2. |
The Compensation Committee and the BOD determined that the relationships are reasonable considering the size of the Company, the nature of its operations, the responsibility borne by each of the Officers at the Company, the mix of
human resources employed by the Company, the number of employees and their occupations, and determined that these relationships will not negatively influence the labor relations at the Company.
|
14
|
In practice, the will likely be a different ratio in the event that one or more of the compensation components is below the maximum.
|
10. |
Indemnification, Exemption and Insurance of Directors and Officers
|
10.1. |
The Directors and Officers may grant the Officers an exemption, indemnification (in advance and/or after the fact) and a Directors and Officers insurance liability policy (respectively “exemption,”
“indemnification” and “liability insurance”), subject to the requisite approvals under the Companies Law.
|
10.2. |
Insurance
|
10.2.1. |
The coverage that can be granted each Officer under the insurance policy will not exceed a total sum of US$15 million per insurance event and per period.
|
10.2.2. |
Each policy that will be purchased can include both insurance for the Company itself (“Entity Coverage”) for suits under the Securities Law, whether such suits are filed against the Company alone or against the Company and against
Directors and Officers.
|
10.2.3. |
The annual premiums and deductibles of the Company’s directors and officers liability insurance policy shall be determined according to the conditions of the insurance market at such time, as advised by the Company’s insurance
consultants, provided that such annual premiums and deductibles are not material to the Company.
|
10.2.4. |
Each policy that will be purchased can also include liability coverage for the Directors and Officers for issuing new securities. If such supplementary coverage is included, the supplement to the annual premium for that coverage will
not exceed 60% of the cost of the premium for that year.
|
10.2.5. |
The amount of the Deductible that will be set in the framework of each policy that is purchased is likely to be zero for the Directors and Officers and a different commonly accepted sum for the Company.
|
10.2.6. |
The terms of this insurance policy will be identical for Directors and Officers, including Directors and Officers who are among the controlling shareholders or their relatives, should they be serving at that time, apart from the
commonly accepted exclusions in this type of policy with respect to the controlling shareholders.
|
10.2.7. |
In the event of an insurance event, the order of payments under the policy will be as follows: (a) Payment to Directors and Officers; (b) payment to the Company for any sum the Company is required to pay to Directors and Officers in
accordance with the letter of indemnification given to them; (c) payment to the Company.
|
10.2.8. |
The Company may bring the specific terms of the insurance policy for the approval of the Compensation Committee alone. Such approval will be subject to compliance with the principles detailed above in this Clause 10.2, with a focus on
the conditions prevalent in the insurance market at the time of the purchase of the policy, as long as such policy is consistent with the market conditions and is not liable to substantively impact the Company’s profitability, property or
obligations.
|
10.3. |
Indemnification
|
10.3.1. |
The indemnification that can be granted to every Officer can be determined in advance or after the fact, for events that will be set interior design the BOD and will be detailed in the letter if indemnification given to the relevant
Officer.
|
10.3.2. |
The sum of the indemnification for all Officers will not exceed the (i) the value of 25% of the Company’s net equity according to the audited or reviewed financial statement known at the time the request for indemnification was
submitted; or (ii) $3,000,000, whichever is greater.
|
11. |
Updating of employment terms
|
11.1. |
Non-substantive change to the employment terms of an Officer subordinate to the CEO15
|
11.1.1. |
The change is approved by the CEO.
|
15 |
If an Officer subordinate to the CEO is a controlling shareholder or his relative, the implementation of the non-substantive change in his employment terms will require additional approvals as required by law.
|
11.1.2. |
The terms of service following the change are consistent with the Compensation Policy.
|
11.2. |
Renewal/extension of the contractual agreement with the CEO
|
11.2.1. |
The renewal or extension of the contractual agreement concern terms of service and employment that are not better than those in the previous contractual agreement, or if there is no real change in the terms and the remainder of the
pertinent circumstances;
|
11.2.2. |
The terms of service and employment are consistent with the Company’s Compensation Policy and the previous contractual agreement was approved under Section 272(c1) of the Companies Law.
|
11.3. |
Approval of the contractual agreement with the CEO/Director until the date of the next General Assembly
|
11.3.1. |
The terms of service and employment were approved by the Compensation Committee and the BOD in accordance with Sections 272(c1)(1) and 273(a) of the Companies Law, as relevant;
|
16 |
If a CEO is a controlling shareholder or his relative, the renewal or extension of will require additional approvals as required by law.
|
11.3.2. |
The terms of service and employment are consistent with the Compensation Policy;
|
11.3.3. |
The terms of service and employment are not better than the terms of service and employment of the previous CEO or no real changes between the two contractual agreements and the remainder of the pertinent circumstances, including the
scope of the employment.
|
12. |
Miscellaneous
|
12.1. |
Subject to the provisions of the law, nothing in this Compensation Policy will detract from the validity, nor add to the provisions of previous agreements between the Company and the Company’s Officers in connection with the principles
or compensation terms that were approved before the approval of this Compensation Policy or any that preceded it.
|
12.2. |
It is hereby clarified that nothing in this policy shall be construed as detracting from the directives of the Companies Law and/or the Company’s article of association concerning the manner of the approval of the contractual agreement
with any of the Officers concerning their service and employment.
|
12.3. |
If after the approval of the Compensation Policy, the law and/or the regulations and/or court orders and/or guidelines and/or statements by the Israel Securities Authority set lenient terms with respect to the Compensation Policy,
including with respect to the required approvals, the restrictions and/or threshold terms necessary for inclusion in the Compensation Policy as of the date of its approval, such lenient terms will be considered as included, as if they
were stated in the framework of the Compensation Policy from the outset.
|
12.4. |
From time to time a Company Director will examine the Compensation Policy and the need for its adjustment, if there are substantive changes in the circumstances that existed when the Compensation Policy was set, or for other reasons as
he sees fit.
|
12.5. |
The Company has adopted a policy for recovering erroneously awarded compensation intended to comply with the requirements of the Companies Law, Section 10D of the U.S. Securities Exchange Act of 1934, Rule
10D-1 promulgated by the U.S. Securities and Exchange Commission thereunder, and Listing Rule 5608 of the Nasdaq’s corporate governance rules (the “Clawback Policy”). Any provision of the Clawback
Policy shall be deemed to comply with this Compensation Policy. In the event of any inconsistency between this Compensation Policy and the Clawback Policy, the Clawback Policy shall prevail. For the avoidance of doubt, no amendments to,
or further corporate approvals in connection with, this Compensation Policy will be required in connection with the adoption or amendment of the Clawback Policy.
|
1. |
Proposal to re-elect Messrs. Yitzhak Nissan, Mordechai Marmorstein, David Rubner and Erez Meltzer to the Company’s Board of Directors (the “Board”) and to elect Ms. Revital Cohen-Tzemach to the Board, to serve until the next annual
general meeting of shareholders and until their successors have been duly elected and qualified.
|
☐ FOR ALL NOMINEES
|
|
☐ WITHHOLD AUTHORITY FOR ALL NOMINEES
|
2. |
Proposal to re-elect Mr. Gad Dovev for a fourth term as an external director, to hold office for three (3) years, as of October 6, 2023.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
3. |
Proposal to approve the Company’s Second Amended and Restated Compensation Policy, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
4. |
Proposal to approve the grant of an annual bonus for the year 2022 to Ms. Revital Cohen-Tzemach, special project manager and daughter of our Controlling shareholder, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
5. |
Proposal to ratify and approve the extension of the Company’s employment of Ms. Revital Cohen-Tzemach, daughter of our Controlling shareholder, in the position of special project manager, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
6. |
Proposal to approve the grant of options to the Company’s directors (including the external directors, but excluding our Controlling shareholder and Chairman of the Board, Mr. Yitzhak Nissan, and his daughter, Ms. Revital Cohen-Tzemach),
as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
7. |
Proposal to approve the grant of options to Mr. Eli Yaffe, the Company’s Chief Executive Officer, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
8. |
Proposal to approve the grant of options to Ms. Revital Cohen-Tzemach, special project manager and daughter of our Controlling shareholder, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
9. |
Proposal to approve the issuance of an exculpation letter to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
10. |
Proposal to approve the issuance of an indemnification letter to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
11. |
Proposal to approve a determination regarding the vesting and exercisability of options granted to Ms. Revital Cohen-Tzemach, as described in the Proxy Statement.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
I HAVE A PERSONAL INTEREST
|
YES ☐ NO ☐
|
12. |
Proposal to re-appoint Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, as the Company’s independent auditors for the year ending December 31, 2023 and for such additional period until the next annual general
meeting of shareholders, and to authorize the Board to approve their compensation.
|
☐ FOR
|
☐ AGAINST
|
☐ ABSTAIN
|
Controlling shareholder
|
☐
|
Senior officer
|
☐ |
Israeli Institutional Investor
|
☐ |
None of the foregoing | ☐ |
Signature of Shareholder
|
Date:
|
Signature of Shareholder
|
Date:
|