Incredimail 2013 Annual Report Download - page 60

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 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. Generally, the amount of severance pay equals one month's salary
per each year of employment. We deposit funds into segregated accounts on a monthly basis to cover this liability. As of December 31, 2013,
our net accrued unfunded severance obligations totaled $0.2 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 6.5%.
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 3, 2014 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 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.
Except as indicated in the footnotes to this table, each shareholder in the table has sole voting and investment power for the shares
shown as beneficially owned by them. Percentage ownership is based on 67,664,679 ordinary shares outstanding as of April 3, 2014.
____________________________
(1) Based solely upon, and qualified in its entirety with reference to, a Schedule 13D filed with the SEC on January 13, 2014, by Mr. Erez.
(2) Includes options to purchase 952,199 ordinary shares, exercisable within 60 days of April 3, 2014.
Employee Benefit Plans
The Incentive Plan, our current equity incentive plan, was initially adopted in 2003, providing certain tax benefits in connection with
share-
based compensation under the tax laws of Israel and the United States. The term of the Incentive Plan will expire on December 9, 2022.
Please also see Note 11 to our consolidated financial statements included in this annual report for information on the options issued under the
Incentive Plan.
Name
Number of
Ordinary
Shares
Beneficially
Owned
Percentage
of Ordinary
Shares
Outstanding
Dror Erez (1)
9,843,163
14.5
%
All directors and officers as a group (16 persons) (2)
11,605,521
16.9
%
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