Exhibit 1: |
Notice of 2016 Annual General Meeting of Shareholders and Proxy Statement, dated December 1, 2016.
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Exhibit 2: |
Proxy Card for the registrant's 2016 Annual General Meeting of Shareholders.
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Perion Network Ltd.
By: /s/ Limor Gershoni Levy
Name: Limor Gershoni Levy
Title: Corporate Secretary & General Counsel
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Exhibit 1: |
Notice of 2016 Annual General Meeting of Shareholders and Proxy Statement, dated December 1, 2016.
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Exhibit 2: |
Proxy Card for the registrant's 2016 Annual General Meeting of Shareholders.
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1. |
To approve the re-election of Mr. Alan Gelman and Mr. Dror Erez as directors;
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2. |
To approve the election of Ms. Sarit Firon as an external director;
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3. |
To re-approve our compensation policy for directors and officers;
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4. |
To approve the reappointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as our independent public auditors, and to authorize our Board of Directors to fix their compensation; and
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5. |
To review the Company's financial statements for the year ended December 31, 2015, and to transact such other business as may properly come before the Meeting.
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By Order of the Board of Directors,
Alan Gelman
Chairman of the Board of Directors
Date: December 1, 2016
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1. |
To approve the re-election of Mr. Alan Gelman and Mr. Dror Erez as directors;
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2. |
To approve the election of Ms. Sarit Firon as an external director;
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3. |
To re-approve our compensation policy for directors and officers;
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4. |
To approve the reappointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as our independent public auditors, and to authorize our Board of Directors to fix their compensation; and
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5. |
To review the Company's financial statements for the year ended December 31, 2015, and to transact such other business as may properly come before the Meeting.
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Number of Ordinary Shares Beneficially Owned
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Percentage of Ordinary Shares Outstanding (1)
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Benchmark Israel II, L.P. (2)
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9,576,772
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12.34
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%
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J.P. Morgan Investment Management Inc. (3)
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9,422,946
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12.14
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%
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Dror Erez (4)
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9,190,642
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11.85
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%
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Ronen Shilo (5)
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8,858,847
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11.42
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%
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Zack and Orli Rinat (6)
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6,484,347
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8.36
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%
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_______________________
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(1) |
Based upon 77,569,088 Ordinary Shares outstanding as of November 25, 2016.
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(2) |
Based solely upon, and qualified in its entirety with reference to, a Schedule 13G/A filed with the SEC on February 16, 2016, by Benchmark Israel II, L.P. ("BI II") and affiliates. BCPI Partners II, L.P. ("BCPI-P"), the general partner of BI II may be deemed to have sole power to vote and dispose of the 9,293,742 shares directly held by BI II. BCPI Corporation II ("BCPI-C"), the general partner of BCPI-P, may be deemed to have sole power to vote and dispose of the shares directly held by BI II. Michael A. Eisenberg and Arad Naveh, the directors of BCPI-C, may be deemed to have shared power to vote and dispose of the shares directly held by BI II. 283,030 shares are held in nominee form for the benefit of persons associated with BCPI-C. BCPI-P may be deemed to have sole power to vote these shares, BCPI-C may be deemed to have sole power to vote these shares and Messrs. Eisenberg and Naveh may be deemed to have shared power to vote these shares.
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(3) |
Consists of: (i) 4,203,067 ordinary shares directly held by Project Condor LLC (“Condor”); (ii) 5,155,436 ordinary shares directly held by the National Council for Social Security Fund (“SSF”); and (iii) 64,443 ordinary shares held by 522 Fifth Avenue Fund, L.P. (“522 Fund”). J.P. Morgan Investment Management Inc. (“JPMIM”), a registered investment advisor, serves as investment advisor to each of SSF, 522 Fund and the members of Condor. JPMIM exercises its voting and dispositive power over these ordinary shares through an investment committee of over 30 individuals in its Private Equity Group, each with an equal vote. Based upon, and qualified in its entirety with reference to, a Schedule 13G filed with the SEC on December 10, 2015, by JPMIM and SSF and supplemental information provided by these shareholders to us.
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(4) |
Based solely upon, and qualified in its entirety with reference to, a Schedule 13D/A filed with the SEC on November 25, 2015, by Mr. Erez. Includes options to purchase 24,999 ordinary shares that are vested or will vest within 60 days of November 25, 2016.
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(5) |
Based solely upon, and qualified in its entirety with reference to, a Schedule 13D/A filed with the SEC on November 25, 2015, by Mr. Shilo.
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(6) |
Based solely upon, and qualified in its entirety with reference to, a Schedule 13G filed with the SEC on January 16, 2014, by Zack and Orli Rinat. The Ordinary Shares are held by Zack Rinat and Orli Rinat as community property.
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By Order of the Board of Directors,
Alan Gelman
Chairman of the Board of Directors
Date: December 1, 2016
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1. |
Objectives & Content
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2. |
General
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2.1. |
Compensation Policy Purposes:
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Officers' interests are aligned as closely as possible with the interests of Perion's shareholders;
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1 |
Where appropriate for any Officer that is employed by a subsidiary or affiliate of Perion, the terms Company or Perion shall include such subsidiary or affiliate.
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The correlation between performance and payment will be enhanced;
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Perion will be able to recruit and retain top level executives capable of leading the Company to further business success, facing the challenges ahead;
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Officers will be motivated to achieve a high level of business performance without taking unreasonable risks;
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An appropriate balance will be established between different compensation elements – fixed vs. variable, short term vs. long term and cash payments vs. equity based compensation.
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2.2. |
Business environment and its impact on Company Officers' compensation:
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3. |
Compensation of Directors and Officers in view of the Company's Values and Strategy
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3.1. |
The connection between the Company's results and Officers' compensation:
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3.2 |
The ratio between the compensation of Officers and the other employees of the Company:
The Compensation Committee and the Board of Directors (“BOD”) will review, from time to time, the ratio between the total cost of employment of each of Officers and the average and median total costs of employment of the rest of the employees (including contractors as defined in the Companies Law, if applicable), and discuss its possible impact on labor relations within the Company. Such ratios were reviewed when composing the Compensation Policy and it was determined by the Compensation Committee and the BOD that they are reasonable and will not harm the working relationship in the Company.2
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4. |
Basic Concepts of the Company's Compensation Policy
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Fixed Base Salary, and Management Service Fee – Compensates Officers for the time they devote to performing their roles with the Company and for the daily performance of their tasks. The fixed base salary correlates to the Officer's skills (such as: experience, position, knowledge, expertise, education, professional qualifications, etc.), on the one hand, and to the requirements of the position as well as the authority and responsibilities the position caries, on the other hand.
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Social and Fringe Benefits – Several of the social benefits are mandatory according to different local legislation (such as: pension and long term savings, severance pay, vacation, sick leave, etc.), others are provided according to market specific conventions and enable the Company to compete in the working environment (such as education funds and company cars in Israel) and the remainder are meant to complement the Fixed Base Salary and compensate the Officers for expenses incurred in connection with the requirements of their position (such as: travel expenses or allowances).
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Variable, Performance Based Cash Rewards (Annual Bonus and Commissions) – Reward Officers for their contributions to the Company’s success and achievement of business goals during a predefined timeframe.
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Equity Based Compensation – Designed to strengthen the link between long term shareholders’ returns and the Officers’ and Directors' rewards. This type of reward creates a stronger link between Directors’ and Officers’ motivation and interests and the interests of the Company’s shareholders. Another significant effect of Equity Based compensation is its contribution to retention, due to its inherent long term characteristics.
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5. |
Compensation Elements
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Business software and internet information companies;
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Public companies traded on the Tel-Aviv Stock Exchange, NASDAQ or NYSE markets with market cap and/or revenues that are similar to that of Perion;
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Companies competing with Perion for managerial talent and for potential Officers in particular;
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Customary Fixed Base Salary range for similar roles (including data distribution);
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Customary range for annual bonus (as a nominal amount and in terms of percentage of annual salary);
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Customary range for Equity Based Compensation as reported in the companies' Financial Reports / SEC filings (as a nominal amount and in terms of percentage of annual salary);
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The value of customary fringe and other benefits.
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The ratio between the Officer's compensation and the compensation of other Officers, particularly at the same level;
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The ratio between the Officer's cost of employment and the cost of employment of all other Company employees (including contractors as defined in the Companies Law, as applicable), as detailed in Section 3.2 above.
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5.1 |
Fixed Base Salary:
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5.1.1 |
Determining the Fixed Base Salary of the Company’s Officers
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Relevant peer group benchmark data, if available;
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Job requirements, authority and responsibilities the position caries and prior agreements with the Officer;
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Officer's education, skills, expertise, professional experience and achievements;
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Internal ratios between positions and between the Officer and the other employees (including contractors as defined in the Companies Law, if applicable) in the Company;
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The Company's financial situation, business challenges and goals.
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CEO: NIS 180,000;
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Other Officers: NIS 150,000.
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5.1.2 |
Annual salary review principles:
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5.1.3 |
Upon recruitment of a new Officer the relevant organs of the Company may approve a signing bonus to such Officer upon recruitment, in their sole discretion taking into consideration the above principles.
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5.2 |
Variable compensation:
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Linking part of the Officers' compensation to the achievement of business goals and targets which will, in the long term, maximize shareholders’ return and create a joint interest between Officers and shareholders;
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Increasing Officers' motivation to achieve long term Company goals; and
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Correlating part of the Company's pay expenses with its business performance, thus, increasing financial and operational flexibility.
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5.2.1 |
Ratio between elements of the compensation package
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CEO
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Other Officers
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Directors
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Annual base salary
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100%
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100%
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100%
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All other (fixed) social and fringe benefits
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30-40%
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30-40%
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Annual bonus
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Up to 200%
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Up to 100%
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Equity (Per vesting annum)
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Up to 400%
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Up to 260%
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US$200,000
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5.2.2 |
Annual Bonus Principles
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5.2.2.1 |
The Company's Officers will be entitled to participate in an annual bonus plan (the “Annual Bonus Plan”). The Annual Bonus Plan will be approved in accordance with the approvals required under the Companies Law and will include the following provisions:
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The target bonus will be paid when Company’s performance and individual performance objectives are met.
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The bonus will be calculated as a product of the Company performance, the individual performance and the target bonus.
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5.2.2.2 |
The measures based on which the annual bonus will be calculated:
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Company Performance Measures: Such as - Revenues, EBITDA, Net Income, etc. measured against the targets of the annual budget and work plan of the Company for the relevant year. The weight of Company performance will constitute at least 75%-80% of the total bonus;
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Individual Performance Measures: The performance measures may also include individual performance measures. Evaluation of each Officer's performance and contribution to the Company’s short and long term success. Performance evaluation may be based on quantitative measures, qualitative measures and/or discretion. The weight of individual performance will constitute up to 20%-25% of the total bonus.
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5.2.2.3 |
Bonus Payment and Threshold:
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A threshold for the payment of the annual bonus will be set based on achievement of a certain percentage of one or more of the Company performance measures;
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The maximum annual bonus payable for the Company's CEO will be equivalent to 200% of the annual base salary (24 monthly salaries); the maximum annual bonus payable for other Officers will be equivalent to 100% of the Officer's annual base salary (12 monthly salaries).
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5.2.2.4 |
Reviewing and reducing bonuses
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5.2.2.5 |
Claw Back Mechanism
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5.2.3 |
Equity Based Compensation
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5.2.3.1 |
Equity Based Compensation Grants:
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5.2.3.2 |
Equity Compensation Terms
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The value of the equity based compensation (at the date of grant) per vesting annum (on a linear basis), for each Officer, shall not exceed for the CEO 4 annual salaries, and for the other Officers 2.6 annual salaries of the Officer in question. However, the Compensation Committee and the BOD (subject to any additional required approvals) may determine in their sole discretion to deviate from the above mentioned caps in the following circumstances:
(i) for the purpose of a one-time grant of equity based compensation in connection with the recruitment of a new Officer, the value of the equity based compensation (at the date of grant) per vesting annum (on a linear basis), for such new Officer shall not exceed 3.6 annual salaries of the Officer in question; or
(ii) in cases where the BOD has determined that special circumstances exist (for example, in connection with an M&A transaction or where market conditions have changed and there is a need to recruit a new Officer to the Company) which justify deviation from the above caps, the value of the equity based compensation (at the date of grant) per vesting annum (on a linear basis) shall not exceed in such circumstances 25% of the maximum values detailed above.
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Equity based compensation granted to Officers shall vest over at least 3 years. The Compensation Committee and the BOD may determine acceleration provisions for specific circumstances.
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In addition to time-based vesting, the exercise or settlement of part or all of the equity based compensation of certain Officers may also be subject to the achievement of predetermined performance goals. Terms of equity based compensation will also include terms in connection with the Officer's termination or cessation of service (due to dismissal, resignation, death or disability) and changes in Company ownership. This may include provisions for extending the period for exercise of equity based compensation upon such termination, enabling acceleration of vesting of unvested equity based compensation, etc.
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5.3 |
Additional terms and fringe benefits
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6. |
Retirement and Termination Arrangements
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6.1 |
Advance Notice
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Position
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Advance Notice Period
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CEO, COO, CFO and other Senior Officers.
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Up to 12 months
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Other Officers
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Up to 6 months
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6.2 |
Termination Cash Payments
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6.3 |
Treatment of Equity Awards upon Termination
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7. |
Indemnification, Exemption and Insurance of Directors and Officers
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8. |
Directors’ Compensation
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8.1 |
Cash Compensation
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8.2 |
Equity based compensation
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☐ for | ☐ against | ☐ abstain |
☐ for | ☐ against | ☐ abstain |
☐ for | ☐ against | ☐ abstain |
☐ YES |
☐ for | ☐ against | ☐ abstain |
☐ YES |
☐ for | ☐ against | ☐ abstain |