Incredimail 2014 Annual Report Download - page 58

Compensation Terms of our Chief Executive Officer
Josef Mandelbaum, our Chief Executive Officer since July 2010, is currently entitled to a base salary of ILS 140,000 per month. He is
entitled to an annual salary increase at a rate equal to the average rate of the increase in annual salaries of our senior management in the
applicable year. In addition, Mr. Mandelbaum is entitled to an annual bonus equal to up to 50% of his base salary, subject to our meeting our
annual targets for revenue and EBIT set by our Board of Directors. Half of the bonus depends on meeting the revenue target and half on meeting
the EBIT target.
We granted to Mr. Mandelbaum 200,000 RSUs on November 18, 2013 and 232,400 RSUs on January 2, 2014. These RSUs were
granted under the Incentive Plan and have a purchase price of ILS 0.01 per share. They vest over a period of three years, subject to continued
employment, with 20% of each grant vesting on the first anniversary of the applicable grant date, 30% on the second anniversary and 50% on the
third anniversary.
Mr. Mandelbaum's employment agreement does not provide for a specified term and may be terminated by either party. If we terminate
his employment, we are required to provide him with twelve months' notice. If Mr. Mandelbaum resigns, he must provide us with six months’
notice, during which time his employment would continue in accordance with the terms of his employment agreement, provided, however, we
may determine to reduce such period to three months, during which time Mr. Mandelbaum would not be obligated to continue his employment.
During the notice period, Mr. Mandelbaum would be entitled to all payments and benefits pursuant to his then-
current compensation terms,
including continued vesting of any equity-
based awards. As required by Israeli law, we will also remit severance payment to Mr. Mandelbaum in
an amount equal to one month’
s salary for each year of employment with us. Such amount of severance payment will be payable even if he
resigns. In the event that Mr. Mandelbaum resigns, his vested options will be exercisable for one year from the termination date, the amount of
unvested options equal to the pro rata options (as such term is defined in Mr. Mandelbaum's option agreement) will become vested. In the event
that Mr. Mandelbaum's employment is terminated by us without "cause" (as defined in the Incentive Plan), his vested options will be exercisable
until the expiration date thereof and the amount of unvested options equal to the pro rata options (as such term is defined in Mr. Mandelbaum's
option agreement) will become vested.
(2)
Salary cost includes the Covered Executive's gross salary plus payment of social benefits made by the Company on behalf of such
Covered Executive. Such benefits may include, to the extent applicable to the Covered Executive, payments, contributions and/or
allocations for savings funds ( e.g., Managers' Life Insurance Policy), education funds (referred to in Hebrew as " keren hishtalmut
"),
pension, severance, risk insurances ( e.g., life, or work disability insurance), payments for social security and tax gross-
up payments,
vacation, car, medical insurances and benefits, phone, convalescence or recreation pay and other benefits and perquisites consistent with
the Company
’
s policies.
(3)
In addition, salary cost annual bonuses granted to the Covered Executives based on formulas set forth in the annual compensation plan
approved by the Board of Directors.
(4) Represents the equity-
based compensation expenses recorded in our consolidated financial statements for the year ended December 31,
2014. Such numbers are based on the option or RSU grant date fair value in accordance with accounting guidance for equity-
based
compensation and does not necessarily reflect the cash proceeds to be received by the applicable officer upon the vesting and sale of the
underlying shares. For a discussion of the assumptions used in reaching this valuation, see Note 2s to our Financial Statements.
(5)
Appointed as General Manager, CodeFuel Division as of December 2014. Included in the "Salary Cost" column of Mr. Nahmias are
sales commissions paid to him pursuant to his sales commission plan, which was cancelled upon his appointment as General Manager.
(6)
Not with the Company as of February 2015.
(7)
Date of employment termination was June 19, 2014. The Company reached a settlement under which it accelerated 479,980 stock
options, granted originally by Conduit, upon termination. In accordance with ASC 718, "Compensation -
Stock Compensation", the
Company reversed expenses previously recorded in connection with the unvested stock options and remeasured the award as of the
termination date. Total incremental expense incurred in connection with the acceleration is included in general and administrative
expenses. Included in the "Salary Cost" column of Mr. Wine is an additional fixed bonus payment, which is an amount that was paid to
him pursuant to Mr. Wine's employment agreement that he entered into with ClientConnect prior to the acquisition of Perion by
ClientConnect.
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