The Compensation Committee and the Board noted in their respective approvals that the vesting of the Options over a five (5)-year period provides the required alignment and reflects their respective views of the Company's CEO’s expected contributions to the future growth and profitability of the Company as well as of his experience and past compensation.
In addition, the Compensation Committee and the Board emphasized that during his tenure as the Company's CEO, Mr. Machlis has presented strong leadership supporting the continuous growth of the Company. The Compensation Committee and Board believe that it is highly important for the Company to provide the Company's CEO a competitive compensation package, which is challenging but also rewarding and strongly linked to the Company's achievements. The Compensation Committee and the Board determined that the Options to be granted to the Company's CEO as a component of his compensation package achieve such goal. The Compensation Committee and the Board also determined that the Company should honor the commitment made to the Company's CEO as set forth in the Approved Employment Terms of the CEO and that the grant of the Options pursuant to the above mentioned terms is also in line with the New Compensation Policy.
In accordance with the Companies Law, the granting of the Options to the Company's CEO, being considered as part of his employment terms, requires the approval of the Company's shareholders by a Special Uninterested Majority. In the event the grant of the options to the Company's CEO is not so approved by the shareholders, the Board may nonetheless approve it, provided that the Compensation Committee and the Board, following further discussion of the matter and for specified reasons, determine that the approval of the grant of the Options to the Company's CEO is in the best interests of the Company.
At the Meeting, the Board will propose that the following resolution be adopted:
“RESOLVED, that the granting of the Options to the Company's CEO, all as described in Item 2 of the Proxy Statement, is approved”.
The Board of Directors recommends a vote FOR approval of this resolution.
ITEM 3 - APPROVAL OF THE GRANT BY PO OF OPTIONS TO THE COMPANY'S CEO
POCell Tech.Ltd. ("PO") is a privately-held Israeli commercial company, which was established by the Company as a start-up subsidiary based on the Company's in-house developed energy technology for civilian transportation applications. Following the establishment of PO, an international strategic investor invested in PO in exchange for a portion of PO's shares and certain rights in the technologies. The Company currently holds sixty-nine and fifty-six one hundredths of a percent (69.56%) of the shares of PO, on a fully diluted basis.
In 2017, the board of directors of PO (the "PO Board") adopted an employee stock option plan (the "PO ESOP") for PO's employees, directors and consultants. On January 30, 2018, ("Date of the PO Board Resolution") the PO Board approved the appointment of the Company's CEO, Mr. Bezhalel Machlis, as a member of the PO Board and approved the granting to the Company's CEO of options under the PO ESOP, as follows:
Quantity and Type: The PO Board approved a one-time grant of one hundred thousand (100,000) options to purchase ordinary shares of PO (the "PO Options"). In accordance with the PO ESOP, the PO Options will be granted pursuant to the terms of the capital gains route under Section 102 of the Ordinance.
Exercise Price and Value of Benefit: The exercise price of a PO Option in accordance with the PO ESOP is four euro (€4) (approximately four dollars and ninety cents) ($4.90) per Option. The benefit embedded in the PO Options, calculated in accordance with an acceptable valuation method is twenty-five thousand dollars ($25,000) per year.
Vesting: In accordance with the PO ESOP the vesting of the PO Options is as follows: ten percent (10%) on the first anniversary of the grant date, twenty percent (20%) on the second anniversary thereof, thirty percent (30%) on the third anniversary and the remaining forty percent (40%) on the fourth anniversary of the grant date.
Other Terms - The PO Options are subject to the terms of the PO ESOP, which sets forth customary terms pursuant to which the PO Options may be accelerated in cases such as a merger and acquisition transaction or an initial public offering and other customary terms.
Pursuant to the Companies Law, the grant of the PO Options to the Company's CEO requires the approvals of the Compensation Committee and the Board, as well as of the Company's shareholders by a Special Uninterested Majority.
On February 27, 2018, following the approval by the Compensation Committee, the Board approved the grant of the PO Options to the Company's CEO under the provisions of the PO ESOP and in accordance with the resolution of the PO Board, subject to the approval of the New Compensation Policy under Item 1 of this Proxy Statement (whether by the Company's