Equity Based Compensation
| 6.6. | The Company shall grant its Executives, from time to time, equity based compensation, which may include any type of equity, including, without limitation, any type of shares, options, restricted share units (RSUs),) (which may be subject to either time-based vesting only (“TRSUs”) or subject to vesting based on both time and performance criteria (“PRSUs”)), share appreciation rights, restricted shares or other shares based awards (“Equity Based Components”), under the Ceragon Networks Ltd. Amended and Restated Share Option and RSU Plan2024 Equity Incentive Plan, as may be amended from time to time, or future equity plan (as may be adopted by the Company), and subject to any applicable law. The Company believes that it is not in its best interest to limit the exercise value of Equity Based Components. |
| 6.7. | Equity Based Components provide incentives with a long term perspective and shall be granted under the most recent equity plan of the Company that defines the terms of these grants to all Company’s employees. Equity Based Components for Executives shall be in accordance with and subject to the terms of our existing or future equity plan and shall vest in installments throughout a period which shall not be shorter than 3 years with at least a 1 year1year cliff, taking into account adequate incentives in a long term perspective. |
| 6.8. | The Company shall balance the mixture of Equity Based Components taking into account the importance of motivating its Executives as well as its shareholders’ interest in limiting dilution from equity awards. |
| 6.9. | When determining grants of Equity Based Components to Executives, the Compensation Committee and the Board of Directors shall take into account the interests of the Company’s investors and the effect of such grants on the dilution of its shareholders. |
| 6.10. | The total yearly Equity Value granted shall not exceed with respect to the CEO - 550% of his annual base salary and with respect to all other Executives 350% of such Executive's annual base salary. |
| 6.11. | In an event of "Corporatea “ Transaction",”, unvested Equity Based Components may, at the discretion of the Compensation Committee and the Board of directors, be accelerated, under a double trigger mechanism, as provided in the Company's equity plan. Company's policy is not to re-price the exercise price of any outstanding security granted to its Executives without prior approval of its shareholders. |
| 6.12. | Adjustment to any performance criteria set for vesting of any equity awards subject to performance based vesting may be made by the Compensation Committee and the Board of Directors, when applicable, following major acquisitions. |
A - 7
| 7.1. | The following criteria shall be taken into consideration when determining Separation Package: the duration of employment of the Executive, the terms of employment, the Company’s performance during such term, the Executive’s contribution to achieving the Company’s goals and revenues and the retirement’s circumstances. |
| 7.2. | As a guideline, the notice period for the termination of an Executive shall not exceed 6 months or payment in lieu of such notice. In special circumstances, our Compensation Committee and Board of Directors shall be authorized to increase the notice period or the payment in lieu such notice by up to additional 12 months, provided, however, that the maximum Separation Package of each Executive shall not exceed 18 monthly salaries of such Executive (excluding vesting of unvested equity pursuant to a double trigger acceleration mechanism, if applicable)., and any payments of benefits granted in accordance with applicable local law). |
| 8.1. | Non-Material Changes - the Company's CEO shall be entitled to determine that non-material changes (i.e. changes not exceeding an amount equal to two monthly base salaries for any calendar year) may be made to the terms of the benefits and perquisites, but not to the base salary or variable components, of all Executives reporting, directly, or indirectly, to the CEO, without seeking the approval of the Compensation Committee. |
| 8.2. | Relocation– additional compensation pursuant to local practices and law may be granted to an Executive under relocation circumstances. Such benefits shall include reimbursement for out of pocket one time payments and other ongoing expenses, such as housing allowance, schooling allowance, car or transportation allowance, home leave visit, health insurance for executive and family, etc, all as reasonable and customary for the relocated country and in accordance with the Company's relocation practices, as shall be approved by the Compensation Committee and Board of Directors. |
| 8.3. | Special Bonus - Our Compensation Committee and our Board of Directors may approve, from time to time, with respect to any Executive, if they deem required under special circumstances or in case of an exceptional contribution to the Company, including in cases of retention or attraction of a new Executive ("Sign On"), the grant of a onetime cash incentive, of up to 100% the Executive's annual base salary. |
A - 8
| 9.1. | In the event of a restatement of the Company’s financial results, we shall seek reimbursement from our Office Holders of any payment made due to erroneous restated data, with regards to each Office Holder’s Terms of Office and Employment that would not otherwise have been paid. The reimbursement shall be limited to such payments made during the 3-years period preceding the date of restatement. The above shall not apply in case of restatements that reflect the adoption of new accounting standards, transactions that require retroactive restatement (e.g., discontinued operations), reclassifications of prior year financial information to conform with the current year presentation, or discretionary accounting changes |
| 9.2. | Our Compensation Committee and Board of Directors shall be authorized not to seek recovery to the extent that (i) to do so would be unreasonable or impracticable; or (ii) there is low likelihood of success under governing law versus the cost and effort involved. |
| 9.3. | The Company intends to adopt and comply withhas adpoted a “clawback policy” (the “Clawback Policy”), as contemplated pursuant to Rule 10D-1 under the Securities and Exchange Act of 1934, as amended, which directs national securities exchanges, including The Nasdaq Stock Market LLC, to establish listing standards for purposes of complying with Rule 10D-1; To the extent there will be any inconsistencies between this Policy and the Clawback Policy to be adopted by the Company, the latter shall take precedence, and, for the avoidance of any doubt, no amendments to, or further corporate approvals in connection with, this Policy will be required in connection with the adoption of the Clawback Policy. The provisions of this Section 9 - “Clawback Policy” shall be deemed amended to conform to any mandatory forfeiture and clawback requirements that the Company becomes subject to after the date this Policy is adopted. |
| III. | The Company has adpoted a “clawback policy” (the “Clawback Policy”), pursuant to Rule 10D-1 under the Securities and Exchange Act of 1934, as amended, which directs national securities exchanges, including The Nasdaq Stock Market LLC, to establish listing standards for purposes of complying with Rule 10D-1. |
|---|
| IV. | Director Remuneration: Our non-executive directors may be entitled to remuneration composed of cash compensation which includes annual fee and meeting participartion fee, as well as equity based compensation, as an incentive for their contribution and efforts as directors of the Company. In setting the compensation of our non-executive Directors, the Compensation Committee shall consider, among others, parameters it deems necessary in order to attract and retain highly skilled and experienced Directors. |
|---|
| 1.1. | The Company’s non-executive directors may be entitled to receive an annual cash fee and a participation feefees for each meeting in accordance with the amounts set forth in the Law regarding compensation and expense reimbursement of external directors. |
| 1.2. | The Company’s non-executive directors may be reimbursed for their reasonable expenses incurred in connection with attending meetings of the Board of Directors and of any Committees of the Board of Directors, all in accordance with the Law. |
| 2. | Equity Based Compensation: |
| 2.1. | Each of the Company’s non-executive directors shall be entitled to receive equal annual equity based compensation, which value shall not exceed USD 150,000. |
| 2.2. | The Chairman of any Committee of the Board of Directors may be entitled to receive annual equity based compensation of up to 1.5 times the annual equity based compensation of the other directors. |
| 2.3. | The Chairman of the Board of Directors may be entitled to receive an annual equity based compensation of to up to 3 the annual equity based compensation of the other directors. |
A - 9
| 3. | External Directors' Compensation: |
| 3.1. | The compensation of our external directors, if any, shall be determined and capped in accordance with the Companies Regulations (Rules Regarding Compensation and Expense Reimbursement of External Directors) -2000. |
| V. | Indemnification, Insurance and Exemption |
|---|
| 1. | The Office Holders shall be entitled to the same directors and officer’s indemnification and exemption of up to the maximum amount permitted by law, directors and officers liability insurance policy, which may include a "Run Off" and a "Claims Made" coverage (“Insurance Policy”), as shall be approved by the Compensation Committee, the Board of Directors and our shareholders, all in accordance with any applicable law and the Company’s articles of association. |
| 2. | We shall be authorizeauthorized to provide our directors and officers with a liability insurance policy (including but not limited to claims associated with M&A transaction) which aggregate coverage shall be up to US$45 million. |
| 3. | The Insurance Policy, as well as the limit of liability and the premium for each extension or renewallevels per annum shall be approved by the derived from the coverage limitations under this Compensation Policy and be determined by our Compensation Committee (and, if required by law, by the Board) which shall determine that the sums are reasonable considering Ceragon’s exposures, the scope of coverage and the in accordance with market conditions and thatat the Insurance Policy reflectstime the current market conditions, and itliability insurance is purchased, and provided they shall not materially affecthave no material impact on the Company’s profitability, assets or liabilitiesproperty or financial obligations of the Company. |
| 4. | The Compensation Committee may extend the Insurance Policy in place to include cover for liability pursuant to a future public offering of securities provided that the Insurance Policy, as well as the additional premium shall be approved by the Compensation Committee (and if required by law, by the Board), which shall determine that the sums are reasonable considering the exposures pursuant to such public offering of securities, the scope of cover and the market conditions and that the Insurance Policy reflects the current market conditions, and that it does not materially affect the Company’s profitability, assets or liabilities. |
| 4. | Our Compensation Committee shall be authorized, with respect to a specific offering, transaction or a series of related transactions - to the extent such insurance coverage is required in the opinion of our Compensation Committee, in order to provide adequate coverage for our directors and officers with respect to such a transaction – to purchase coverage in amounts of up to 3 times the then existing limit of coverage, with costs of up to 3 times the then existing limit of premium amounts, without an additional shareholder approval, if and to the extent permitted under the Law. |
| 1. | The Compensation Committee and our Board of Directors shall be authorized to approve a deviation of up to 10% from any limits, caps or standards detailed in this Policy, and such deviation shall be deemed to be in alignment with this Policy. |
| 2. | This Policy is set as guidance for the Company's relevant organs, with respect to matters involving the compensation of its Office Holders, and is not intended to, and shall not confer upon any of the Office Holders, any rights with respect to the Company. |
A - 10
