Incredimail 2011 Annual Report Download - page 57

As of December 31, 2011, 93 of our employees were located in Israel, and 46 employees located in the US. 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 Industry,
Trade and Labor, 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 expansion 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 senior employees' 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. The Company’
s agreements with employees in Israel, joining the Company since February 2, 2008, are in
accordance with section 14 of the Severance Pay Law -1963, whereas, the Company’
s contributions for severance pay shall be instead of its severance liability. Upon
contribution of the full amount of the employee’
s monthly salary, and release of the policy to the employee, no additional calculations shall be conducted between the
parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Further, the related obligation and amounts
deposits on behalf of such obligation are not stated on the balance sheet, as they are legally released from obligation to employees once the deposit amounts have been
paid.
We currently fund most of our ongoing severance obligations through insurance policies. As of December 31, 2011, our net accrued unfunded severance
obligations totaled $0.5 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 17.9% 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 5.9%.
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 February 29, 2012 by:
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 or stock options that are presently exercisable or exercisable 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.
• each of our executive officers;
•
each of our directors; and
•
all of our directors and executive officers as a group.
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