Exhibit
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Description
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CAESARSTONE LTD.
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Date: October 8, 2020
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By:
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/s/ Ron Mosberg
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Name: Ron Mosberg
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Title: General Counsel & Corporate Secretary
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Very truly yours,
Ariel Halperin
Chairman of the Board of Directors
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(i) |
a majority of the shares that are voted at the Meeting in favor of the proposal, excluding abstentions, includes a majority of the votes of shareholders present and voting who are not controlling shareholders or do not have a personal
interest in the proposal, excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder; or
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(ii) |
the total number of shares held by the shareholders mentioned in clause (i) above that are voted against the proposal does not exceed two percent (2%) of the aggregate voting rights in the Company.
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(i) |
a majority of the shares that are voted at the Meeting in favor of the proposal, excluding abstentions, includes a majority of the votes of shareholders present and voting who are not controlling shareholders or do not have a personal
interest in the approval of the proposal; or
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(ii) |
the total number of shares held by the shareholders mentioned in clause (i) above that are voted against the proposal does not exceed two percent (2%) of the aggregate voting rights in the Company.
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(i) |
a majority of the shares that are voted at the Meeting in favor of the proposal, excluding abstentions, includes a majority of the votes of shareholders present and voting who do not have a personal interest in the approval of the
proposal; or
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(ii) |
the total number of shares held by the shareholders mentioned in clause (i) above that are voted against the proposal does not exceed two percent (2%) of the aggregate voting rights in the Company.
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Kibbutz Sdot-Yam, MP Menashe 3780400, Israel
October 1, 2020
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BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ariel Halperin
Dr. Ariel Halperin
Chairman of the Board of Directors
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(iii) |
a majority of the shares that are voted at the Meeting in favor of the proposal, excluding abstentions, includes a majority of the votes of shareholders present and voting who are not controlling shareholders or do not have a personal
interest in the proposal, excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder; or
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(iv) |
the total number of shares held by the shareholders mentioned in clause (i) above that are voted against the proposal does not exceed two percent (2%) of the aggregate voting rights in the Company.
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(i) |
a majority of the shares that are voted at the Meeting in favor of the proposal, excluding abstentions, includes a majority of the votes of shareholders present and voting who are not controlling shareholders or do not have a personal
interest in the approval of the proposal; or
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(ii) |
the total number of shares held by the shareholders mentioned in clause (i) above that are voted against the proposal does not exceed two percent (2%) of the aggregate voting rights in the Company.
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(iii) |
a majority of the shares that are voted at the Meeting in favor of the proposal, excluding abstentions, includes a majority of the votes of shareholders present and voting who do not have a personal interest in the approval of the
proposal; or
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(iv) |
the total number of shares held by the shareholders mentioned in clause (i) above that are voted against the proposal does not exceed two percent (2%) of the aggregate voting rights in the Company.
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• |
Shareholders of Record. If you are a shareholder of record (that is, you hold a share certificate that is registered in your name or you are listed as a shareholder in the Company’s share
register), you can submit your vote by completing, signing and submitting a proxy card, which has or will be sent to you and which will be accessible at the ‘Investor Relations’ portion of the Company’s website, as described below under
“Availability of Proxy Materials”.
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• |
Shareholders Holding in “Street Name”. If you hold ordinary shares in “street name” through a bank, broker or other nominee, the voting process will be based on your directing the bank, broker or
other nominee to vote the ordinary shares in accordance with the voting instructions on your voting instruction card. Please follow the instructions on the voting instruction card received from your bank, broker or nominee. You may also be
able to submit voting instructions to a bank, broker or nominee by phone or via the Internet if your voting instruction card describes such voting methods. Please be certain to have your control number from your voting instruction card
ready for use in providing your voting instructions. It is important for a shareholder that holds ordinary shares through a bank or broker to instruct its bank or broker how to vote its shares if the shareholder wants its shares to count
for the proposal.
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Name of Beneficial Owner
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Number of
Shares Beneficially Owned |
Percentage of
Shares Beneficially Held |
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Mifalei Sdot-Yam Agricultural Cooperative Society Ltd. (1)(3)
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14,029,494
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40.7
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%
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Tene Investment in Projects 2016, L.P.(2)(3)
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14,029,494
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40.7
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%
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The Phoenix Holdings Ltd. (4)
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1,893,810
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5.5
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%
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All current directors and executive officers as a group (23 persons) (5)
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14,497,198
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42.1
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%
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●
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The parties agreed to vote at general meetings of our shareholders in the same manner, following discussions intended to reach an agreement on any matters proposed to be voted upon, with
Tene determining the manner in which both parties will vote if no agreement is reached, except with respect to certain carved-out matters, with respect to which Mifalei Sdot-Yam will determine the manner in which both parties will vote if
no agreement is reached.
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●
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The parties agreed to use their best efforts to prevent any dilutive transactions that would reduce Mifalei Sdot-Yam’s holdings in us below 26% on a fully diluted basis, provided that such
agreement will not apply as of the date on which the percentage of Mifalei Sdot-Yam’s holdings decreases below 26% of our outstanding shares on a fully diluted basis, for any reason whatsoever, or if Mifalei Sdot-Yam receives a satisfactory
written certification from the Israel Land Authority permitting Mifalei Sdot-Yam’s holdings in us to decrease below 26%. Subject to certain exceptions, Mifalei Sdot-Yam will also continue to hold at least 6,850,000 of our ordinary shares
for the seven-year term of the Shareholders’ Agreement, and in no case fewer than the number of ordinary shares that would permit Tene to exercise the Call Option in full.
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●
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The parties agreed to use their best efforts to cause that at least four directors be elected to our board (one identified by Mifalei Sdot-Yam, two identified by Tene and another identified
by Mifalei Sdot-Yam with Tene’s consent), provided that the parties will not propose a resolution at a general meeting of our shareholders that will contradict a recommendation of our board on elections.
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●
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The parties granted each other certain tag-along rights with respect to their dispositions of ordinary shares.
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•
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To establish pre-determined caps, which are lower than in the currently effective Compensation Policy, for the amount of equity-based compensation that can be granted to each of the
Company’s directors and Chief Executive Officer (such that, with respect to the Chief Executive Officer, the fair value of the equity-based compensation that may be granted shall not exceed his or her base salary);
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•
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Annual performance-based cash bonuses for executive officers (other than the Chief Executive Officer), will be based on, inter alia, a discretionary evaluation of such executive officer’s
overall performance by the Chief Executive Officer, which shall be limited to 25% of the respective executive officer’s annual base salary;
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•
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Annual performance-based cash bonuses for the Chief Executive Officer will be based mainly (at least 75%) on measurable objectives, and, with respect to its less significant part (up to
25%), may be based on a discretionary evaluation of the Chief Executive Officer’s overall performance, using both quantitative and qualitative criteria, by the compensation committee and the board of the directors; and
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•
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The removal of certain limitations on the maximum premiums for directors’ and officers’ liability insurance that the Company may purchase.
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(i) |
Mr. Dagim’s monthly retainer of $55,000 shall be converted pursuant to the USD/NIS conversion rate as of the date of the shareholders meeting that originally
approved his engagement terms, and therefore following this approval, Mr. Dagim’s monthly retainer (in terms of employment cost and inclusive of all social benefits) shall be NIS 205,000; and; and
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(ii) |
Based on Mr. Dagim’s existing terms of compensation, Mr. Dagim is entitled to receive an annual cash bonus that will not exceed the Maximum Amount, of which, only
for the fiscal year 2018, the Board has discretion to pay up to 20% of such Maximum Amount based on the evaluation of Mr. Dagim’s performance by our Board. In light of current market conditions, and following the approval hereof, 25% of
such Maximum Amount shall be determined based on the evaluation of Mr. Dagim’s performance by our Board; provided, however, that such discretionary bonus will not be granted to the CEO in the event the Company does not have a positive
EBITDA for the given fiscal year.
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2019
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2018
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(in thousands of U.S. dollars)
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Audit fees(1)
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$
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472
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$
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657
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Audit-related fees(2)
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48
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27
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Tax fees(3)
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49
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25
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All other fees(4)
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249
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60
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Total
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$
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818
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$
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769
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(1) |
“Audit fees” include fees for services performed by our independent public accounting firm in connection with the integrated audit of our annual audit consolidated financial statements for 2019 and 2018, and its internal control over
financial reporting as of December 31, 2019 and 2018, certain procedures regarding our quarterly financial results submitted on Form 6-K, and consultation concerning financial accounting and reporting standards.
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(2) |
“Audit-related fees” relate to assurance and associated services that are traditionally performed by the independent auditor.
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(3) |
“Tax fees” include fees for professional services rendered by our independent registered public accounting firm for tax compliance and tax advice and tax planning services on actual or contemplated transactions.
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(4) |
“Other fees” include fees for services rendered by our independent registered public accounting firm with respect to government incentives, due diligence investigations and other matters.
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Kibbutz Sdot-Yam, M.P Menashe 3780400, Israel
October 8, 2020
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By order of the Board:
/s/ Ariel Halperin
Dr. Ariel Halperin
Chairman of the Board
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A - 3
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A - 5
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A - 6
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A - 9
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A - 10
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A - 11
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A - 13
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A - 13
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A - 14
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1. |
Introduction
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2. |
Objectives
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2.1. |
To closely align the interests of the Executive Officers with those of Caesarstone’s shareholders in order to enhance shareholder value;
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2.2. |
To align the Executive Officers’ compensation with Caesarstone’s short and long-term goals and performance;
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2.3. |
To provide the Executive Officers with a structured compensation package, including competitive salaries, performance-motivating cash and equity incentive programs and benefits, and to promote for each Executive Officer an opportunity
to advance in a growing organization;
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2.4. |
To strengthen the retention and the motivation of Executive Officers in the long term;
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2.5. |
To provide appropriate awards in order to incentivize superior individual excellence and corporate performance; and
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2.6. |
To maintain consistency in the way Executive Officers are compensated.
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3. |
Compensation Instruments
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3.1. |
Compensation instruments under this Compensation Policy may include the following:
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3.1.1. |
Base salary;
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3.1.2. |
Benefits and perquisites;
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3.1.3. |
Cash bonuses;
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3.1.4. |
Equity based compensation; and
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3.1.5. |
Retirement and termination of service arrangements.
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3.2. |
Any grant of a compensation instrument shall be subject to this Compensation Policy and to the obtainment of all approvals required under any applicable law.
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4. |
Inter-Company Compensation Ratio
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4.1. |
In the process of drafting this Policy, the Compensation Committee and the Board have examined the ratio between employer cost associated with the engagement of the Executive Officers and the average and median employer cost of the
other employees of Caesarstone (including contractor employees as defined in the Companies Law), per territory and on a global basis (the “Ratio”).
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4.2. |
The possible ramifications of the Ratio on the work environment in Caesarstone were examined and will continue to be examined by the Company from time to time in order to ensure that levels of executive compensation, as compared to the
overall workforce will not have a negative impact on work relations in Caesarstone.
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5. |
Overall Compensation - Ratio Between Fixed and Variable Compensation
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5.1. |
This Policy aims to balance the mix of “Fixed Compensation” (comprised of base salary and benefits) and “Variable Compensation” (comprised of cash bonuses and equity-based compensation) in order to, among other things, appropriately
incentivize Executive Officers to meet Caesarstone’s short- and long-term goals while taking into consideration the Company’s need to manage a variety of business risks.
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5.2. |
The value of the annual target Variable Compensation of each Executive Officer, to which such Executive Officer may be entitled subject to meeting his or her respective key performance indicators and/or by way of equity-based
incentives, shall be at least 30% of such Executive Officer’s annual Fixed Compensation.
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6. |
Base Salary
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6.1. |
A base salary provides stable compensation to Executive Officers and allows Caesarstone to attract and retain competent executive talent and maintain a reliable management team. The base salary varies between Executive Officers, and is
individually determined according to the educational background, prior vocational experience, qualifications, role, business responsibilities and the past performance of each Executive Officer.
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6.2. |
Since a competitive base salary is essential to Caesarstone’s ability to attract and retain highly skilled professionals, Caesarstone will seek to establish a base salary that is competitive with the base salaries paid to comparable
Executive Officers, while considering, among others, Caesarstone’s size, performance and field of operation and the geographical location of the employed Executive Officer as well as his personal and professional skills. To that end,
Caesarstone shall utilize as a reference, comparative market data and practices, which may include, among others, a compensation survey that compares and analyses the level of the overall compensation package offered to an Executive
Officer of the Company with compensation packages in similar positions to that of the relevant officer in other companies operating in sectors which are similar in their characteristics to Caesarstone’s, as much as possible, while
considering, among others, such companies’ size and characteristics including their revenues, profitability rate, number of employees and operating arena (in Israel or globally), which shall be reviewed by the Compensation Committee.
Such compensation survey may be conducted internally or through an external consultant.
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6.3. |
The Compensation Committee and the Board may periodically consider and approve base salary adjustments for Executive Officers. The main considerations for salary adjustment are similar to those used in initially determining the base
salary, but may also include, among others, change of role or responsibilities, recognition for professional achievements, regulatory or contractual requirements, relocation, budgetary constraints or market trends. The Compensation
Committee and the Board will also consider the previous and existing compensation arrangements of the Executive Officer whose base salary is being considered for adjustment.
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6.4. |
The base salary, for the purpose of this Policy, means the monthly fixed payment due to an Executive Officer, whether an Executive Officer is an employee who is paid a salary or a contractor whose monthly consideration is paid against
a tax invoice, in which case, the base salary shall be deemed as 75% of the monthly payment against a tax invoice.
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7. |
Benefits
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7.1. |
The following benefits may be granted to the Executive Officers in order, among other things, to comply with legal requirements:
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7.1.1. |
Vacation days in accordance with applicable law and market practice;
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7.1.2. |
Sick days in accordance with applicable law and market practice;
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7.1.3. |
Convalescence pay according to applicable law and market practice;
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7.1.4. |
Monthly remuneration for a study fund, as allowed by applicable law and with reference to Caesarstone’s practice and market practice;
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7.1.5. |
Caesarstone shall contribute on behalf of the Executive Officer to an insurance policy or a pension fund, as allowed by applicable law and with reference to Caesarstone’s policies and procedures and the practice in peer group
companies; and
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7.1.6. |
Caesarstone shall contribute on behalf of the Executive Officer towards work disability insurance, as allowed by applicable law and with reference to Caesarstone’s policies and procedures and to the practice in peer group companies.
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7.2. |
In the event an Executive Officer relocates, such Executive Officer may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which he or she is employed. Such benefits shall include
reimbursement of out of pocket one-time payments and other ongoing expenses, such as real estate broker fees, moving costs, car allowance, and home leave visit, etc.
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7.3. |
Caesarstone may offer additional benefits to its Executive Officers, which will be comparable to customary market practices, such as, but not limited to: cellular phone benefits, company car and travel benefits, reimbursement of
business travel expenses, including a daily stipend when traveling, and other business related expenses, insurances, professional licenses, membership fees in professional organizations and other benefits (such as newspaper
subscriptions, academic and professional studies and welfare activities), provided, however, that such additional benefits shall be determined in accordance with Caesarstone’s policies and procedures.
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8. |
Annual Cash Bonuses - The Objective
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8.1. |
Compensation in the form of an annual cash bonus is an important element in aligning Executive Officers’ compensation with Caesarstone’s objectives and business goals. Therefore, a pay-for-performance element is an important part of
compensation, as payout eligibility and levels are determined based on actual financial and operational results, as well as individual performance.
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8.2. |
An annual cash bonus may be awarded to Executive Officers upon the attainment of pre-set periodical objectives and individual targets determined by the CEO and approved by the Compensation Committee at the beginning of each fiscal year
or several fiscal years, or upon engagement, in case of newly hired Executive Officers, taking into account Caesarstone’s short and long-term goals, as well as its compliance and risk management policies. The Compensation Committee and
the Board shall also determine applicable minimum thresholds that must be met for entitlement to the annual cash bonus (all or any portion thereof) and the formula for calculating the annual cash bonus payout. In special circumstances, as
determined by the Compensation Committee and the Board (e.g., regulatory changes, changes in Caesarstone’s business environment, objectives or timelines, a significant organizational change and a significant merger and acquisition
events), the Compensation Committee and the Board may modify the bonus plan during the calendar year.
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8.3. |
In the event the employment of an Executive Officer is terminated prior to the end of a fiscal year, the Company may pay such Executive Officer a full annual cash bonus (provided that the termination date occurs in the third or fourth
quarter of such fiscal year) or a prorated one. Such bonus will become due on the termination day of the Executive Officer's engagement with the Company or on the same scheduled date for annual cash bonus payments by the Company.
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8.4. |
The actual annual cash bonus to be awarded to Executive Officers shall be approved by the Compensation Committee and the Board.
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9. |
Annual Cash Bonuses - The Formula
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9.1. |
The annual cash bonus of Caesarstone’s Executive Officers other than Caesarstone’s chief executive officer (“CEO” and “VPs”, respectively) will be based on the measurable objectives of the Company, measurable personal objectives or
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9.2. |
The annual cash bonus which may be awarded to each of the VPs will not exceed such VP’s monthly base salary multiplied by eight (8).
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9.3. |
The annual bonus of Caesarstone’s CEO will be based mainly on measurable objectives of the Company and subject to a minimum threshold. The measurable objectives will be approved by the Compensation Committee and the Board at the
commencement of each fiscal year or several fiscal years (or upon engagement, in case of newly hired CEO or in special circumstances as indicated in Section 8.2 above).
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9.4. |
The annual cash bonus which may be awarded to Caesarstone’s CEO with respect to a fiscal year shall not exceed an amount equal to 2.5% of Caesarstone’s adjusted net income in such fiscal year and in any case the accumulated amount of
the annual bonus and the annual base salary of the CEO shall not exceed two (2) million US dollars.
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9.5. |
The annual cash bonus will be based mainly (at least
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10. |
Other Bonuses
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10.1. |
Special Bonus. Caesarstone may grant its Executive Officers a special bonus as an award for special achievements (such as in connection with mergers and acquisitions, offerings, achieving target budget or business plan under
exceptional circumstances or special recognition in case of retirement) at the CEO’s discretion (and in the CEO’s case, at the Board’s discretion), subject to any additional approval as may be required by the Companies Law (the “Special Bonus”). The Special Bonus will not exceed twelve (12) monthly base salaries of the Executive Officer.
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10.2. |
Signing Bonus. Caesarstone may grant a newly recruited Executive Officer a signing bonus at the CEO’s discretion (and in the CEO’s case, at the Board’s discretion), subject to any additional approval as may be required by the
Companies Law (the “Signing Bonus”). The Signing Bonus will not exceed six (6) monthly base salaries of the Executive Officer’s first annual compensation package.
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10.3. |
Relocation Bonus. In the event an Executive Officer relocates, such Executive Officer may receive other similar, comparable or customary benefits as applicable in the relevant jurisdiction in which he or she is employed. Such
benefits shall include reimbursement for out of pocket one-time payments and other ongoing expenses, such as real estate broker fees, moving costs, home leave visit, etc. The relocation bonus will not exceed six (6) monthly base salaries
of the Executive Officer.
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10.4. |
Non-Compete Grant. Upon termination of employment and subject to applicable law, Caesarstone may grant to its Executive Officers a non-compete grant as an incentive to refrain from competing with Caesarstone for a defined period
of time. The terms and conditions of the non-compete grant shall be decided by the Board and shall not exceed such Executive Officer’s monthly base salary multiplied by twelve (12).
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11. |
Compensation Recovery (“Clawback”)
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11.1. |
In the event of an accounting restatement, Caesarstone shall be entitled to recover from its Executive Officers the annual bonus compensation or performance-based equity compensation in the amount in which such compensation exceeded
what would have been paid under the financial statements, as restated, provided that a claim is made by Caesarstone prior to the second anniversary of the fiscal year end of the restated financial statements.
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11.2. |
Notwithstanding the aforesaid, the compensation recovery will not be triggered in the following events:
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11.2.1. |
The financial restatement is required due to changes in the applicable financial reporting standards; or
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11.2.2. |
The Compensation Committee has determined that clawback proceedings in the specific case would be impossible, impractical or not commercially or legally efficient.
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11.3. |
Nothing in this Section 11 derogates from any other “clawback” or similar provisions regarding disgorging of profits imposed on Executive Officers by virtue of applicable securities laws.
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12. |
The Objective
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12.1. |
The equity based compensation for Caesarstone’s Executive Officers is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance
the alignment between the Executive Officers’ interests with the long-term interests of Caesarstone and its shareholders, and to strengthen the retention and the motivation of Executive Officers in the long term. In addition, since
equity-based awards are to be structured to vest over several years, their incentive value to recipients is aligned with longer-term strategic plans.
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12.2. |
The equity-based compensation may be in a form of share options and/or other equity-based awards, such as restricted share units and phantom options, in accordance with the Company’s equity incentive plan in place as may be updated
from time to time.
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12.3. |
The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal
responsibilities of the Executive Officer.
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13. |
General Guidelines for the Grant of Awards
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13.1. |
The fair value of the equity based compensation per vesting year (on a linear basis), determined in accordance with acceptable valuation practices at the time of grant, of each of
Caesarstone’s VPs
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13.2. |
The fair value of the equity based compensation per vesting year (on a linear basis), determined in accordance with acceptable valuation practices at the time of grant, of Caesarstone’s CEO shall not exceed 150% of the CEO’s annual
base salary.
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13.4. |
The Compensation Committee and the Board may approve the grant of equity awards with a cap on the benefit deriving from the exercise of equity‐based compensation.
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13.5. |
Equity-based compensation awarded by the Company to employees, Executive Officers or directors shall not be, in the aggregate, in excess of 10% of the Company’s share capital on a fully diluted basis at the date of grant.
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13.6. |
All equity-based incentives granted to Executive Officers shall be subject to vesting periods in order to promote long-term retention of the awarded Executive Officers. Unless determined otherwise in a specific award agreement approved
by the Compensation Committee and the Board, grants to Executive Officers shall vest gradually over a period of between three (3) to four (4) years or based on performance. The exercise price of options shall be determined in accordance
with Caesarstone’s equity award policies, the main terms of which shall be disclosed in the annual report of Caesarstone.
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13.7. |
All other terms of the equity awards shall be in accordance with Caesarstone’s incentive plans and other related practices and policies. Accordingly, the Board may, following approval by the Compensation Committee, extend the period of
time for which an award is to remain exercisable and make provisions with respect to the acceleration of the vesting period of any Executive Officer’s awards, including, without limitation, in connection with a change of control, subject
to any additional approval if such may be required by the Companies Law.
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13.8. |
The fair value of the equity-based compensation for the Executive Officers will be determined according to acceptable valuation practices at the time of grant.
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14. |
Advanced Notice Period and Adjustment Period
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14.1. |
Caesarstone may provide a VP a prior notice of termination and/or an adjustment period accumulated to up to nine (9) months, during which the VP may be entitled to all of the compensation elements, and to the continuation of vesting of
his options.
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14.2. |
Caesarstone may provide the CEO with a prior notice of termination and/or an adjustment period accumulated to up to twelve (12) months, during which the CEO may be entitled to all of the compensation elements, and to the continuation
of vesting of his options.
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14.3. |
The Executive Officer shall be required not to compete with the Company during the advanced notice period and the adjustment period.
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15. |
Additional Retirement and Termination Benefits
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15.1 |
Arrangements related to termination of service or employment may be determined based on the circumstances of such termination (whether upon retirement, resignation, termination by the Company or otherwise), the term of service or
employment of the VP or CEO, his/her compensation package during such period, market practice in the relevant geographic location, Caesarstone’s performance during such period and the VP’s or CEO’s contribution to Caesarstone achieving
its goals and maximizing its profits and other considerations that may be found relevant by Caesarstone. For example, the Compensation Committee and the Board may, at their discretion, determine not to provide some or any post-service or
employment benefits, compensation or protection, in the event of termination for “cause,” which will be as defined in the applicable arrangement or plan document.
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15.2 |
Caesarstone shall provide additional retirement and terminations benefits and payments as may be required by applicable law (e.g., mandatory severance pay under Israeli labor laws), and may provide additional retirement and
terminations benefits and payments which will be comparable to customary market practices, provided that such additional retirement and termination benefits together with the termination benefits provided under Section 14.1 and 14.2 shall
not exceed 24 monthly base salaries of the Executive Officer.
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16. |
Exculpation
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17. |
Insurance and Indemnification
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17.1. |
Caesarstone may indemnify its directors and Executive Officers to the fullest extent permitted by applicable law, for any liability and expense that may be imposed on the director or Executive Officer, either retroactively or in
advance as provided in the indemnity agreement between such individuals and Caesarstone, all subject to applicable law and the Company’s articles of association.
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17.2. |
Caesarstone will provide “Directors’ and Officers’ Liability Insurance” (the “Insurance Policy”) for its directors and Executive Officers, as follows:
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17.2.1. |
The limit of liability of the insurer shall not exceed US$150 million per claim and in the aggregate for an annual policy and an additional limit of liability, exceeding the limit of liability in the policy, for defense costs in
compliance with Section 66 of the Israeli Insurance Contract Law – 1981 (the “Insurance Law”);
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17.2.2. |
The Insurance Policy, as well as the limit of liability and the premium for each extension or renewal, shall be approved by the Compensation Committee which shall determine whether (i) the sums are reasonable considering Caesarstone’s
exposures, the scope of coverage and market conditions and (ii) the Insurance Policy reflects then prevailing market conditions, and, provided, further, that the Insurance Policy shall not materially affect the Company’s profitability,
assets or liabilities; and
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17.2.3. |
The insurance terms and conditions will be the subject of negotiations between the Company and the insurer (and if necessary alternative quotations will be considered). The insurance coverage is and will be extended to indemnify the
Company for losses it may incur that derive from a claim against it concerning a wrongful act of the Company alleging a breach of the securities laws. The policy may include priorities for payment of any insurance benefits pursuant to
which the rights of the directors and Officers to receive indemnity from the
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17.3. |
The Company shall be entitled, subject to the approval of the Compensation Committee, to the following:
|
17.3.1. |
To purchase an insurance coverage for wrongful acts occurring before the effective date of the change in risk (the "Run Off Coverage") of up to seven (7) years, from the same insurer or any other
insurer, in Israel or overseas;
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17.3.2. |
The limit of liability of the insurer shall not exceed US$150 million per claim and in the aggregate for the term of the policy and an additional limit of liability exceeding the limit of liability in the policy for defense costs in
compliance with Section 66 of the Insurance Law;
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17.3.3. |
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Caesarstone may extend an existing Insurance Policy to include coverage for liability pursuant to a future public offering of securities, provided, however, that
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17.4. |
Such extension and consequent additional premium shall be approved by the Compensation Committee which shall determine whether (i) the sums are reasonable considering Caesarstone’s exposures, the scope of coverage and market conditions
and (ii) said extension reflects then prevailing market conditions, and, provided, further, that the extension shall not materially affect the Company’s profitability, assets or liabilities.
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17.5. |
Any other insurance coverage purchased by Caesarstone may be extended to include directors and Officers as additionally insured beneficiaries, in so far as such extension will not result in an additional premium.
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18. |
The following benefits may be granted to the Executive Officers in addition to the benefits applicable in the case of any retirement or termination of service or adverse adjustment of the service in a material way which were upon or
in connection with a “Change of Control”:
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18.1. |
Vesting acceleration of outstanding options or other equity-based awards.
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18.2. |
Extension of the exercising period of options for Caesarstone’s VPs and CEO for a period of up to one (1) year and two (2) years, respectively, following the date of employment termination.
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18.3. |
Up to an additional six (6) months of continued base salary, benefits and perquisites following the date of employment termination (the “Additional Adjustment Period”). For avoidance of doubt,
such additional Adjustment Period shall be in addition to the advance notice and adjustment periods pursuant to Section 14 of this Compensation Policy, and in any case shall not exceed 24 monthly base salaries as set forth in Section
15.2.
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18.4. |
In the case of the CEO, a cash bonus equal to up to twelve (12) monthly base salaries.
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19. |
Cash Compensation
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19.1. |
All Caesarstone’s Board members, excluding the chairman of the Board, the external directors and independent directors, shall be entitled to a compensation as shall be determined from time to time and approved by the Compensation
Committee, the Board and the Company’s shareholders, based on the director’s relevant skills and experience, up to, on an annual basis, (i) for a director who is an Israeli resident, the total compensation payable annually to the
Company’s external and independent directors, including annual fees and participation compensation; and (ii) for a director who is a non-Israeli resident, 400% of the annual fees and 400% the participation compensation payable to the
Company’s external and independent directors.
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19.2. |
The compensation of the Company’s external directors and independent directors shall be in accordance with the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director), 5760-2000, as amended by the
Companies Regulations (Reliefs for Public Companies Traded in Stock Exchange Outside of Israel), 5760-2000, as such regulations may be amended from time to time (“Compensation of Directors Regulations”).
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19.3. |
The chairperson of the Board shall be entitled to an annual base compensation that shall not exceed five (5) times the total annual compensation of an external director (assuming a total of nine (9) Board and committee meetings per
year). In addition, the chairperson of the Board may be granted an annual bonus based on measurable parameters to be defined by the Compensation Committee and the Board, and approved by the Company’s shareholders, which shall amount to up
to 50% of the chairperson’s annual base compensation.
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20. |
Equity Based Compensation
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20.1. |
Directors may also be awarded equity-based compensation, as shall be determined from time to time and approved by the Compensation Committee, the Board and the Company’s shareholders.
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20.2. |
The fair value of the equity-based compensation per vesting year (on a linear basis) determined in accordance with acceptable valuation practices at the time of grant, of each director shall not exceed
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20.3. |
The Compensation Committee and the Board may approve the grant of equity awards with a cap for the benefit deriving from the exercise of equity‐based compensation.
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20.4. |
All equity-based awards granted to directors shall be subject to vesting periods. Unless determined otherwise in a specific award agreement, grants to directors shall vest gradually over a period of between three (3) to four (4) years.
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20.5. |
All other terms of the equity awards shall be in accordance with Caesarstone’s incentive plans and other related practices and policies. Accordingly, the Board may, following approval by the Compensation Committee, extend the period of
time for which an award is to remain exercisable and make provisions with respect to the acceleration of the vesting period of any director’s awards, including, without limitation, in connection with a change of control, subject to any
additional approval if such may be required by the Companies Law.
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20.6. |
The fair value of the equity-based compensation for directors will be determined according to acceptable valuation practices at the time of grant.
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21. |
Expense Reimbursement
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21.1. |
Members of Caesarstone’s Board shall be entitled to reimbursement of expenses incurred in the performance of their duties and other services to the Company.
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22. |
Nothing in this Policy shall be deemed to grant any of Caesarstone’s Executive Officers, directors or employees or any third party any right or privilege in connection with their engagement with the Company. Such rights and privileges
shall be governed by the respective personal employment or engagement agreements. The Board may determine that none or only part of the payments and benefits shall be granted, and is authorized to cancel or suspend a compensation package
or part thereof, subject to any applicable law.
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23. |
An Immaterial Change in the terms of employment of a VP may be approved by the CEO, provided that the amended terms of employment are in accordance with this Compensation Policy, and subject to the following mechanism: following the
CEO's approval of an Immaterial Change, any further change to the terms of employment of that certain VP (whether Immaterial Change or not) shall be subject to the approval of the Compensation Committee and the Board, and, after their
approvals, the next Immaterial Change in the terms of employment of such VP may be once again approved by the CEO.
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24. |
In the event that new regulations or law amendment in connection with Executive Officers’ and directors’ compensation will be enacted following the adoption of this Compensation Policy, Caesarstone may follow such new regulations or
law amendments, even if such new regulations and law amendments are in contradiction to the compensation terms set forth herein.
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Caesarstone Ltd.
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2020 Share Incentive Plan
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1. |
PURPOSE; TYPES OF AWARDS; CONSTRUCTION.
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2. |
DEFINITIONS.
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Term
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Section
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102 Awards
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1.2(i)
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102 Capital Gains Track Awards
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9.1
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102 Non-Trustee Awards
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9.2
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102 Ordinary Income Track Awards
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9.1
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102 Trustee Awards
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9.1
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3(i) Awards
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1.2(ii)
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Award Agreement
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6
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Cause
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6.6.4.4
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Company
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1.1
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Disqualifying Disposition
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8.11
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Effective Date
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24.1
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Election
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9.2
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Eligible 102 Grantees
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9.3.1
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Incentive Stock Options
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1.2(iii)
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Information
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16.4
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ITA
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1.2(i)
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Market Stand-Off
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17
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Market Stand-Off Period
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17
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Nonqualified Stock Options
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1.2(iv)
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Plan
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1.1
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Pool
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5.1
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Prior Plan
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5.2
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Recapitalization
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14.1
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Required Holding Period
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9.5
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Restricted Period
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11.2
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Restricted Share Agreement
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11
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Restricted Share Unit Agreement
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12
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Restricted Shares
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1.1
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RSUs
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1.1
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Rules
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1.2(i)
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SAR
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13.2
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Securities
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17.1
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Successor Corporation
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14.2.1
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Withholding Obligations
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18.5
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3. |
ADMINISTRATION.
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4. |
ELIGIBILITY.
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5. |
SHARES.
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6. |
TERMS AND CONDITIONS OF AWARDS.
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7. |
NONQUALIFIED STOCK OPTIONS.
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8. |
INCENTIVE STOCK OPTIONS.
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9. |
102 AWARDS.
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10. |
3(i) AWARDS.
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11. |
RESTRICTED SHARES.
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12. |
RESTRICTED SHARE UNITS.
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13. |
OTHER SHARE OR SHARE-BASED AWARDS.
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14. |
EFFECT OF CERTAIN CHANGES.
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15. |
NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.
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16. |
CONDITIONS UPON ISSUANCE OF SHARES; GOVERNING PROVISIONS.
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17. |
MARKET STAND-OFF
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18. |
AGREEMENT REGARDING TAXES; DISCLAIMER.
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19. |
RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.
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20. |
NO REPRESENTATION BY COMPANY.
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21. |
NO RETENTION RIGHTS.
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22. |
PERIOD DURING WHICH AWARDS MAY BE GRANTED.
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23. |
AMENDMENT OF THIS PLAN AND AWARDS.
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24. |
APPROVAL.
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25. |
RULES PARTICULAR TO SPECIFIC COUNTRIES; SECTION 409A.
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26. |
GOVERNING LAW; JURISDICTION.
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27. |
NON-EXCLUSIVITY OF THIS PLAN.
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28. |
MISCELLANEOUS.
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CAESARSTONE LTD.
KIBBUTZ SDOT-YAM
MP MENASHE 37804000
ISRAEL
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day
before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future years.
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the meeting date. Have your
proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.
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D25270-P45587
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KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY
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CAESARSTONE LTD.
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THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" PROPOSAL NOS. 1, 2, 3, 4, 5, 6, 7 and 8.
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1.
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To re-elect the following individuals to serve as directors of the Company until the close of the next annual general meeting of shareholders of the Company:
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For
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Against
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Abstain
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For
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Against
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Abstain
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5.
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To approve the grant of equity-based compensation to the Company’s directors that are non-affiliates of controlling
shareholders of the Company, subject to his or her election or re-election as a director at the Meeting.
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1a. |
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Ariel Halperin
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☐
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☐
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☐
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☐
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☐
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☐
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1b. |
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Dori Brown
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☐
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☐
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☐
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1c. |
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Roger Abravanel
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☐
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☐
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☐
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6.
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To approve the grant of equity-based compensation to certain of the Company’s directors that are currently affiliates
of controlling shareholders of the Company, subject to his or her re-election as a director at the Meeting.
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☐
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☐
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☐
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1d. |
Ronald Kaplan
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☐ | ☐ | ☐ | ||||||||||||||||
Yes | No | |||||||||||||||||||
1e. | Ofer Tsimchi | ☐ | ☐ | ☐ | 6a. |
Do you have a personal interest in the approval of Proposal No. 6 (If your interest arises solely from the
fact that you hold shares in the Company, you would not be deemed to have a personal interest)? (Please note: If you do not mark either Yes or No, your shares will not be voted for
Proposal No. 6).
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☐ | ☐ | |||||||||||||||||||
1f. | Shai Bober | ☐ | ☐ | ☐ | ||||||||||||||||
1g. | Tom Pardo Izhaki | ☐ | ☐ | ☐ | ||||||||||||||||
For | Against | Abstain | ||||||||||||||||||
2. | To elect the following individuals to serve as external directors of the Company for a three year term, commencing on December 1, 2020, and to
approve their terms of cash compensation: |
7. |
To approve an amendment to the terms of engagement of Mr. Yuval Dagim, the Company’s Chief Executive
Officer.
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☐ | ☐ | ☐ | ||||||||||||||||||
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7a. |
Are you a controlling shareholder in the Company, or have a personal interest in the approval of Proposal
No. 7 (If your interest arises solely from the fact that you hold shares in the Company, you would not be deemed to have a personal interest)? (Please note: If you do not mark either Yes
or No, your shares will not be voted for Proposal No. 7).
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Yes | No | ||||||||||||||||
2a. | Nurit Benjamini | ☐ | ☐ | ☐ | ||||||||||||||||
☐ | ☐ | |||||||||||||||||||
2b. | Lily Ayalon | ☐ | ☐ | ☐ | ||||||||||||||||
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2aa. | Are you a controlling shareholder in the Company, or have a personal interest in the approval of Proposal No. 2, excluding a personal interest that does not result from the shareholder's relationship with the controlling shareholder? (Please note: If you do not mark either Yes or No, your shares will not be voted for Proposal No. 2). | Yes | No | |||||||||||||||||
For | Against | Abstain | ||||||||||||||||||
☐ | ☐ | 8. |
To approve the reappointment of Kost, Forer, Gabbay & Kasierer (a member of Ernst & Young Global)
as the Company’s independent auditors for the year ending December 31, 2020, and its service until the annual general meeting of shareholders to be held in 2021 and to authorize the Company’s board of directors, upon
recommendation of the audit committee of the Company, to determine the compensation of the auditors in accordance with the volume and nature of their services and receive an update regarding the Company’s independent auditors’
remuneration for the past year.
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☐ | ☐ | ☐ | ||||||||||||||||||
For | Against | Abstain | ||||||||||||||||||
3. | To approve and adopt the 2020 Share Incentive Plan for the Company. | |||||||||||||||||||
☐ | ☐ | ☐ | ||||||||||||||||||
4. | To approve an amended and restated Compensation Policy, effective as of the date of the Meeting for a period of three years. | ☐ | ☐ | ☐ | ||||||||||||||||
Yes | No | |||||||||||||||||||
4a. |
Are you a controlling shareholder in the Company, or have a personal interest in the approval of Proposal
No. 4 (If your interest arises solely from the fact that you hold shares in the Company, you would not be deemed to have a personal interest)? (Please note: If you do not mark either Yes
or No, your shares will not be voted for Proposal No. 4).
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A "controlling shareholder" is any shareholder that has the ability
to direct the company’s activities (other than by means of being a director or office holder (as defined in the Israeli Companies Law) of the company), including, with respect to Proposal Nos. 6 & 7, a person who holds 25%
or more of the voting rights in the general meeting of the company if there is no other person who holds more than 50% of the voting rights in the company. Two or more persons holding voting rights in the company each of which
has a personal interest in the approval of the transaction being brought for approval of the company will be considered to be joint holders. A person is presumed to be a controlling shareholder if it holds or controls, by
himself or together with others, one half or more of any one of the “means of control” of the company. “Means of control” is defined as any one of the following: (i) the right to vote at a
general meeting of the company, or (ii) the right to appoint directors of the company or its chief executive officer.
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☐ | ☐ | |||||||||||||||||||
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A "personal interest" of a shareholder in an action or transaction
of a company includes (i) a personal interest of any of the shareholder’s relative (i.e. spouse, brother or sister, parent, grandparent, child as well as child, brother, sister or parent of such shareholder’s spouse or the
spouse of any of the above) or an interest of a company with respect to which the shareholder or the shareholder’s relative (as detailed above) holds 5% or more of such company’s issued shares or voting rights, in which any such
person has the right to appoint a director or the chief executive officer or in which any such person serves as a director or the chief executive officer, including the personal interest of a person voting pursuant to a proxy
whether or not the proxy grantor has a personal interest; and (ii) excludes an interest arising solely from the ownership of ordinary shares of the company.
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|||||||||||||||||||
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In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the Meeting or
any adjournment or postponement thereof.
The undersigned acknowledges receipt of the Notice and Proxy Statement of the Company relating to the Meeting.
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Note: Please sign exactly as your name or names appear(s) on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If
signer is a partnership, please sign in partnership name by authorized person.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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D25271-P45587
|
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