Incredimail 2014 Annual Report Download - page 63

In Israel we are subject to certain labor statutes and national labor court precedent rulings, as well as to some provisions of the
collective bargaining agreement between the Histadrut, which is the General Federation of Labor in Israel, and the Coordination Bureau of
Economic Organizations, including the Industrialist’
s Association of Israel. These provisions of collective bargaining agreements apply to our
Israeli employees by virtue of extension orders issued in accordance with relevant labor laws by the Israeli Ministry of Economy, and which
apply such agreement provisions to our employees even though they are not directly part of a union that has signed a collective bargaining
agreement. The laws and labor court rulings that apply to our employees principally concern minimum wage laws, procedures for dismissing
employees, determination of severance pay, leaves of absence (such as annual vacation or maternity leave), sick pay and other conditions for
employment. The extension orders which apply to our employees principally concern the requirement for the length of the workday and the
work-
week, annual recuperation pay and commuting expenses, compensation for working on the day before and after a holiday and payments to
pension funds and other conditions for employment. Furthermore, these provisions provide that the wages of most of our employees are adjusted
automatically. The amount and frequency of these adjustments are modified from time to time. Additionally, we are required to insure all of our
employees by a comprehensive pension plan or a managers' insurance according to the terms and the rates detailed in the order. In addition,
Israeli law determines minimum wages for workers, minimum paid leave or vacation, sick leave, working hours and days of rest, insurance for
work-
related accidents, determination of severance pay, the duty to give notice of dismissal or resignation and other conditions of employment.
In addition, certain laws prohibit or limit the employer’
s ability to dismiss its employees in special circumstances. We have never experienced a
work stoppage, and we believe our relations with our employees are good.
Israeli law generally requires the payment of severance by employers upon the retirement or death of an employee or upon termination
of employment by the employer or, in certain circumstances, by the employee. Most of our agreements with employees in Israel are in
accordance with Section 14 of the Severance Pay Law, 1963 (“Section 14”),
where our contributions for severance pay are paid in lieu of any
severance liability. Upon contribution of the full amount of the employee's monthly salary, and release of the policy to the employee, no
additional severance payments are required to be made by us to the employee. Additionally, the related obligation and amounts deposited
pursuant to such obligation are not stated on the balance sheet, as we are legally released from any obligation to employees once the deposit
amounts have been paid. Our liability for severance pay to employees not under Section 14 is calculated pursuant to Israel's Severance Pay Law
based on the employees' most recent monthly salaries, multiplied by the number of years of their employment, or a portion thereof, as of the
balance sheet date. This liability is provided for by monthly deposits into accounts for the benefit of the employees and by an accrual. The
deposited funds include profits (losses) accumulated up to the balance sheet date. As of December 31, 2014, our net accrued unfunded severance
obligations totaled $0.9 million.
Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute, which
covers, amongst other benefits, payments for state retirement benefits and survivor benefits (similar to the United States Social Security
Administration), as well as state unemployment benefits. These amounts also include payments for national health insurance. The payments to
the National Insurance Institute can equal up to approximately 18.5% of wages subject to a cap if an employee’
s monthly wages exceed a
specified amount, of which the employee contributes approximately 12% and the employer contributes approximately 6.75%.
E. SHARE OWNERSHIP
Security Ownership of Directors and Executive Officers
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of April 13, 2015 by all of our
directors and executive officers as a group and by each officer and director who beneficially owns 1% or more of our outstanding ordinary
shares.
Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a
person exercises sole or shared voting or investment power. Ordinary shares that are subject to warrants, RSUs or stock options that are vested or
will vest within 60 days of a specified date are deemed to be outstanding and beneficially owned by the person holding the stock options for the
purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage of
any other person.
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