Incredimail 2014 Annual Report Download - page 17

A loss of the services of our senior management and other key personnel could adversely affect execution of our business strategy.
We depend on the continued services of our senior management, particularly Josef Mandelbaum, our Chief Executive Officer. Our
current strategy is, to a great extent, a function of his capabilities and experience together with the experience and knowledge of our other senior
management. The loss of the services of these personnel could create a gap in management and could result in the loss of expertise necessary for
us to execute our business strategy and thereby adversely affect our business. We do not currently have "key person" life insurance with respect
to any of our senior management.
Further, our ability to execute our business strategy also depends on our ability to continue to attract, retain and motivate qualified and
skilled technical and creative personnel and skilled management, marketing and sales personnel. Competition for well-
qualified employees in
our industry is intense and our continued ability to compete effectively depends, in part, upon our ability to retain existing key employees and to
attract new skilled employees as well. If we cannot attract and retain additional key employees or lose one or more of our current key employees,
our ability to develop or market our products and attract or acquire new users could be adversely affected. Although we have established
programs to attract new employees and provide incentives to retain existing employees, particularly senior management, we cannot be assured
that we will be able to retain the services of senior management or other key employees as we continue to integrate the ClientConnect business
into our business or that we will be able to attract new employees in the future who are capable of making significant contributions. See "Item 6
Directors, Senior Management and Employees."
Under current Israeli law, we may not be able to enforce non-
competition covenants and, therefore, may be unable to prevent our
competitors from benefiting from the expertise of some of our former employees.
We have entered into non-
competition agreements with most of our employees. These agreements prohibit our employees, if they cease
working for us, from competing directly with us or working for our competitors for a limited period. Under current Israeli law, we may be
unable to enforce these agreements, in whole or in part, and it may be difficult for us to restrict our competitors from gaining the expertise that
our former employees gained while working for us. For example, Israeli courts have required employers seeking to enforce non-
compete
undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of
material interests of the employer which have been recognized by the courts, such as the secrecy of a company’
s confidential commercial
information or its intellectual property. If we cannot demonstrate that harm would be caused to us, we may be unable to prevent our competitors
from benefiting from the expertise of our former employees.
Our international operations involve special risks that could increase our expenses, adversely affect our operating results and require
increased time and attention of our management.
Most of our operations are performed from outside the United States. In addition, we derive and expect to continue to derive a
substantial portion of our revenues from users outside the United States. Our international operations and sales are subject to a number of
inherent risks, including risks with respect to:
•
potential loss of proprietary information due to piracy, misappropriation or laws that may be less protective of our intellectual
property rights than those of the United States;
• costs and delays associated with translating and supporting our products in multiple languages;
•
foreign exchange rate fluctuations and economic instability, such as higher interest rates and inflation, which could make our
products more expensive in those countries;
• costs of compliance with a variety of laws and regulations;
• restrictive governmental actions such as trade restrictions;
•
limitations on the transfer and repatriation of funds and foreign currency exchange restrictions;
•
compliance with different consumer and data protection laws and restrictions on pricing or discounts;
•
lower levels of adoption or use of the Internet and other technologies vital to our business and the lack of appropriate infrastructure
to support widespread Internet usage;
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