Incredimail 2011 Annual Report Download - page 50

The aggregate direct compensation we paid to our directors who are not officers for their services as directors as a group for the year ended December 31,
2011 was approximately $256 thousand. Directors are also reimbursed for expenses incurred in order to attend board or committee meetings.
As of February 29, 2012, there were outstanding options to purchase 1,090,000 ordinary shares granted to 14 of our directors and officers, at a weighted
average exercise price of $5.57 per share. These options were granted under our 2003 Israeli Share Option Plan, as amended, (the "2003 Plan").
The compensation of our directors who are not officers of our Company, including our external directors, was approved by the Company’
s governing bodies,
as required under the Israeli law In accordance with these resolutions, (i) annual gross compensation for external directors is $25,000, and $500 (plus value added tax
(“V.A.T.”),
if applicable) per meeting, while other directors, who are not officers, receive annual gross compensation of $35,000, with no payment per meeting (plus
V.A.T., if applicable) to be paid in four equal quarterly installments; (ii) a grant of options to purchase 10,000 of our ordinary shares, with the following terms: (a)
each option shall be exercisable for one ordinary share at an exercise equal to the closing price on the date of grant of the options, as reported by the Nasdaq Capital
Market; (b) the options shall vest in three equal parts; and (c) any and all other terms and conditions pertaining to the grant of the options shall be in accordance with,
and subject to, the "2003 Plan" adopted by the Company in 2003 and our standard option agreement executed by each director and by the Company promptly after the
date of grant.
In accordance with the shareholders' approval of December 27, 2007 each of the directors who is not an employee of the Company, receives for each year of
service by such person as a director of the Company, an option to purchase 10,000 ordinary shares of the Company (in this subsection -
the "Annual Grant"), under the
following terms: (a) the Annual Grant shall be made immediately following the annual general meeting of the shareholders of the Company in the relevant year,
commencing with the shareholders meeting held on December 27, 2007; (b) each option shall be exercisable for one ordinary share at an exercise price equal to the
closing price of an ordinary share on the date of the annual general meeting of the shareholders of the Company upon which such option was granted, as reported by
the Nasdaq Global Market; and (c) the options shall vest in four equal portions on each anniversary of the Annual Grant, commencing with the first anniversary. Any
and all other terms and conditions pertaining to the grant of the options shall be in accordance with, and subject to, the 2003 Plan and our standard option agreement.
In accordance with this resolution, all directors who are not officers were granted 10,000 options on January 6, 2011 and on October 27, 2011, after the 2010 and 2011
annual general meetings.
On July 17, 2008, and following approval by our audit committee and board of directors, our shareholders approved a grant to Ms. Tamar Gottlieb of options
to purchase 10,000 ordinary shares of the Company, under the following terms: (a) each option shall be exercisable for one ordinary share at an exercise price equal to
the closing price of an ordinary share on July 17, 2008, as reported by the Nasdaq Global Market; and (b) the options shall vest in three equal portions on each
anniversary of the date of approval of the grant, commencing with the first anniversary. Any and all other terms and conditions pertaining to the grant of the options
hereunder shall be in accordance with, and subject to, the 2003 Plan and the Company's standard option agreement. See "Item 6.E Share Ownership —
Employee
Benefit Plans — The 2003 Plan" below.
On July 9, 2009, following approval by our audit committee and board of directors, our shareholders amended the terms of options granted to the external
directors and the directors of the Company. In accordance with the amendment, our directors' recurring annual stock option grants or an Annual Grant have a vesting
period of three years (instead of four years) from the date of grant. Also, upon termination or expiration of the applicable director's service with the Company,
provided that the termination or expiration is not "for Cause" and not resulting from the director's resignation, the stock options granted to such director shall retain
their original termination dates, and shall not terminate 90 days after the applicable termination date, and the next upcoming tranche of stock options, of each grant,
that are scheduled to vest immediately subsequent to the termination date, if any, shall automatically vest and become exercisable immediately prior to the termination
date. In addition, to avoid a possible conflict of interest while discussing a Change of Control of the Company (which may result in the termination of the director’
s
term of office), all unvested options held by the director shall automatically vest and become exercisable upon such "Change of Control" event. "Change of Control" is
defined for these purposes as: (i) merger, acquisition or reorganization of the Company with one or more other entities in which the Company is not the surviving
entity, (ii) a sale of all or substantially all of the assets of the Company; (iii) a transaction or a series of related transactions as a result of which more than 50% of the
outstanding shares or the voting rights of the Company are held by any party (whether directly or indirectly).
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