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Exhibit 10.1
 
CONFIDENTIAL TREATMENT REQUESTED FOR
INFORMATION ON ATTACHMENT C OMITTED HERE AND
FILED SEPARATELY WITH THE COMMISSION
 
EXECUTIVE EMPLOYMENT AGREEMENT
 
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into on May 8,
2017 ("Execution Date") by and between MagicJack VocalTec Ltd. (the "Company")
and Don Carlos Bell III (the "Executive" and, together with the Company, the
"Parties").
 
WHEREAS, the Company desires for the Executive to be employed as President &
Chief Executive Officer ("CEO") of the Company, and Executive desires to accept
employment, subject to and on the terms and conditions set forth in this
Agreement; and
 
WHEREAS, both the Company and the Executive have read and understood the terms
and provisions set forth in this Agreement and have been afforded a reasonable
opportunity to review this Agreement with their respective legal counsel;
 
WHEREAS, the terms of this Agreement have been reviewed and approved by the
members of the Compensation Committee of the Board of Directors of the Company
(the "Board") and recommended by the Board for approval by the Company's
shareholders in compliance with Amendment 20 to the Israeli Companies Law (the
"Companies Law"); and
 
WHEREAS, the effectiveness of this Agreement remains subject to the approval of
the Company's shareholders in accordance with the Companies Law.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other valuable consideration the receipt and adequacy of which
is hereby acknowledged, the Parties hereby agree as follows:
 

1.
POSITION AND DUTIES.  The Company hereby agrees to employ the Executive in the
positions and titles of President & CEO of the Company, and the Executive hereby
agrees to be employed in such capacities. The Executive will perform all duties
and responsibilities inherent in the positions of President  & CEO. The
Executive shall report directly to the Board of the Company. He shall have all
authority and responsibility commensurate with the President & CEO titles,
including ultimate responsibility for and authority over all day-to-day matters
and personnel of the Company.

 

2.
TERM OF AGREEMENT AND EMPLOYMENT.  The term of the Executive's employment under
this Agreement will be three (3) years, beginning on March 9, 2017 (the "Start
Date") and terminating three years thereafter "Employment Term."

 

3.
DEFINITIONS.

 

A.
CAUSE.  For purposes of this Agreement, "Cause" for the termination of the
Executive's employment hereunder shall be deemed to exist if, in the reasonable
judgment of the Company's Board: (i) the Executive commits fraud, theft or
embezzlement against the Company or any subsidiary or affiliate thereof; (ii)
the Executive commits a felony or a crime involving moral turpitude; (iii) the
Executive breaches any non-competition, confidentiality or non-solicitation
agreement with the Company or any subsidiary or affiliate thereof; (iv) the
Executive's material breach of the Company's Insider Trading Policy, FD/Media
Policy or Investment Policy, (v) the Executive breaches any of the terms of this
Agreement and fails to cure such breach within thirty (30) days after the
receipt of written notice of such breach from the Company; or (vi) the Executive
engages in gross negligence or willful misconduct that causes harm to the
business and operations of the Company or a subsidiary or affiliate thereof.

 

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B.
GOOD REASON.  Termination by the Executive of his employment for "Good Reason"
shall mean a termination by the Executive of his employment upon the occurrence
of one of the following events or conditions without the consent of the
Executive:

 
(i)      A material reduction in the authority, duties or responsibilities of
the Executive;
 
(ii)     Any material reduction in the Executive's Annual Base Salary;
 
(iii)    Relocation of Executive's principal office more than 50 miles from its
current location in Dallas, Texas; or
 
(iv)   Any material breach of this Agreement by the Company.
 
Notwithstanding the foregoing, the Executive shall not be deemed to have
terminated his employment for Good Reason unless: (i) the Executive terminates
his employment no later than ninety (90) days following his initial discovery of
the above referenced event or condition which is the basis for such termination;
and (ii) the Executive provides to the Company a written notice of the existence
of the above-referenced event or condition which is the basis for the
termination within forty-five (45) days following his initial discovery of such
event or condition, and the Company fails to remedy such event or condition
within thirty (30) days following the receipt of such notice.
 

C.
CHANGE OF CONTROL.  For purposes of this Agreement, a "Change of Control" of the
Company shall be deemed to occur if there is a transaction in which (i) a Person
acquires ownership of stock that, together with stock held by such Person,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of the Company; or (ii) a Person (other than a
Person controlled, directly or indirectly, by shareholders of the Company)
acquires fifty percent (50%) or more of the gross fair market value of the
assets of the Company over a twelve (12) week period.

 
For purposes of the above, the terms "Person" shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, and shall include a "group" as defined in Section 13(d) thereof. 
It is intended that the definition of Change of Control complies with Section
409A of the Internal Revenue Code of 1986, as amended (the "Code"), and all
questions or determinations in connection with any such Change of Control shall
be construed and interpreted in accordance with the provisions of such
Regulations.  Notwithstanding the above, a Change of Control shall occur only if
it constitutes a "change of control" within the meaning of Section 409A of the
Code and the regulations promulgated thereunder.
 
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4.
COMPENSATION.

 

A.
ANNUAL BASE SALARY.  Executive shall be paid an annual base salary of
$500,000.00, subject to review each calendar year and possible increase in the
sole discretion of the Board, payable in equal twice monthly installments (the
"Annual Base Salary"), provided, however, Annual Base Salary earned between the
Start Date and the date of Shareholder Approval (as defined in Section 9
hereof), shall be paid on the first regular payroll date following the date of
Shareholder Approval.

 

B.
ANNUAL BONUS.  For each fiscal year of employment during which the Company
employs the Executive, Executive shall be eligible to receive a bonus (the
"Annual Bonus") based on the Company meeting certain performance criteria. 
Executive's target annual bonus will equal Executive's Annual Base Salary (the
"Target Annual Bonus").  The Annual Bonus will range from thirty-five percent
(35%) to two hundred percent (200%) of the Target Annual Bonus.  The Annual
Bonus formula and performance criteria for calendar year 2017 will be based: (i)
fifty percent (50%) on the Company meeting at least eighty percent (80%) and up
to one hundred and twenty percent (120%) of its target revenue for the fiscal
year; and (ii) fifty percent (50%) on the Company meeting at least eighty
percent (80%) and up to one hundred and twenty percent (120%) of its target
EBITDA for the fiscal year.  A table showing the Target Annual Bonus payable at
various increments is attached hereto as Attachment A.  The Company's target
revenue and target EBITDA shall be set forth in its 10-Q for the first quarter
of 2017 to be filed by the Company in May of 2017.  The Annual Bonus formula and
performance criteria for calendar years 2018 and 2019 will be based: (i) one
third (1/3) on the Company meeting at least eighty percent (80%) and up to one
hundred and twenty percent (120%) of its target revenue for the applicable
fiscal year; (ii) one-third (1/3) on the Company meeting at least eighty percent
(80%) and up to one hundred and twenty percent (120%) of its target EBITDA for
the applicable fiscal year, and (c) one-third (1/3) on the Company meeting at
least eighty percent (80%) and up to one hundred and twenty percent (120%) of
another objective key performance indicator (the "KPI Target") for the
applicable fiscal year to be determined by the Board, or the Compensation
Committee of the Board, after consultation with Executive.  A table showing the
Target Annual Bonus payable at various increments for calendar years 2018 and
2019 is attached hereto as Attachment B.  The Company's target revenue, target
EBITDA and the KPI Target for calendar years 2018 and 2019 shall be set forth in
its 10-K for calendar years 2017 and 2018 to be filed in March of 2018 and 2019.
For purposes of this Agreement, "EBITDA" shall mean earnings before interest,
taxes, depreciation and amortization calculated in accordance with generally
accepted accounting principles consistent with the application of such concepts
in developing the Company's annual budget, subject to adjustments for one-time
occurrences outside the ordinary course of business as deemed appropriate by the
Company's Compensation Committee

 
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The Annual Bonus payable to Executive shall be paid no later than 2-1/2 months
following the end of the calendar year with respect to which the Annual Bonus
was earned.
 
Except as otherwise provided in Section 7 below, Executive shall only be
entitled to receive an Annual Bonus if Executive is employed by the Company
pursuant to this Agreement at the close of business on the last day of the
applicable fiscal year with respect to the Annual Bonus.
 
If the Company's financial statements are restated for a period for which an
Annual Bonus has been paid under the terms of this Agreement, the Annual Bonus
amount for such period will be re-calculated by the Company (the "Recalculated
Bonus Amount").  In any such event, the difference between the Annual Bonus in
question and the Recalculated Bonus Amount shall be paid to or refunded by the
Executive, as applicable, not later than sixty (60) days after the restatement,
provided that no such adjustments will be made at any time after the 2nd
anniversary of the Annual Bonus payment in question.
 

C.
SIGNING BONUS.  Executive shall receive a signing bonus in the amount of
$500,000.00 within three (3) days after the date of Shareholder Approval (as
defined in Section 9 hereof).

 

D.
SPECIAL TRANSACTION BONUS.  If the closing of a Change of Control occurs before
the one year anniversary of the Execution Date and Executive is employed by the
Company on the closing date, then Executive shall be paid within five (5) days
after the Change of Control a bonus (the "Special Transaction Bonus") of up to
$2,500,000, which will be calculated pursuant to the criteria set forth in
Attachment C to this Agreement.  The Special Transaction Bonus is in addition to
any Annual Bonus Executive may earn pursuant to Section 4(B) of this Agreement,
or any Change of Control Termination Payment or any Termination Payment
Executive is entitled to be paid pursuant to Section 7 of this Agreement.

 

5.
EXECUTIVE BENEFITS AND REIMBURSEMENTS.  Executive will be entitled to twenty
(20) paid-time-off (PTO) days of vacation per fiscal year. The Executive will be
eligible to participate in, without action by the Board or any committee
thereof, any benefits and perquisites available to executive officers of the
Company, including any group health, dental, life insurance, disability, or
other form of executive benefit plan or program of the Company now existing or
that may be later adopted by the Company (collectively, the "Executive
Benefits"). The Company shall reimburse Executive for all ordinary and necessary
business expenditures made by Executive in connection with, or in furtherance
of, his employment.   In addition, the Company shall reimburse Executive for:
(a) physical training expenses incurred by Executive when Executive is working
at a location other than the Dallas office or his residence; and (b) the
attorneys' fees incurred by Executive in negotiating the agreements relating to
his employment by the Company in an amount not to exceed $25,000.  Subject to
Section 18 of this Agreement, the business expenditure and other reimbursements
described above will be paid upon presentation by Executive of expense
statements, receipts, vouchers or such other supporting information as may from
time to time be reasonably requested by the Board.

 
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6.
EQUITY GRANT. On the Execution Date, Executive shall be granted (a) 149,068
restricted ordinary shares of the Company (the "Restricted Stock") under the
terms of the magicJack Vocaltec Ltd. 2013 Stock Incentive Plan, as may be
amended and/or restated from time to time (the "Plan"), and (b) stock options to
purchase 1,883,165 shares of the Company's common stock under the terms of the
Amended and Restated magicJack Vocaltec Ltd. 2013 Stock Incentive Plan (the
"Amended Plan"), at an exercise price equal to the greater of 115% of the fair
market value of the Company's common stock as of the market close on May 5,
2017, or $9.51 (the "Options"), provided that the Options shall be forfeited if
the Amended Plan and its terms are not approved by the shareholders of the
Company within one (1) year following the Execution Date. The Options and
Restricted Stock will vest as set forth in the Option Agreement and Restricted
Stock Agreement granting the Options and the Restricted Stock.

 

7.
TERMINATION.  Either the Executive or the Company may terminate the Executive's
employment under this Agreement for any reason upon not less than thirty (30)
days prior written notice.

 

A.
TERMINATION OF EMPLOYMENT BY THE EXECUTIVE FOR GOOD REASON OR BY THE COMPANY
WITHOUT CAUSE.  Upon the termination of the Executive's employment prior to a
Change of Control under this Agreement by the Executive for Good Reason or by
the Company without Cause, the Executive shall be entitled to be paid a
termination payment (the "Termination Payment") equal to two (2) times
Executive's Annual Base Salary at the time of such termination. The Termination
Payment shall be paid in lump sum within fifteen (15) days after the Company's
receipt of a general release that has become irrevocable as specified in Section
7(F) following any termination pursuant to this Section 7(A).

 

B.
TERMINATION OF EMPLOYMENT BY RESIGNATION OF EXECUTIVE WITHOUT GOOD REASON, BY
THE COMPANY WITH CAUSE, DEATH OR DISABILITY.  Upon the termination of the
Executive's employment by the resignation of  Executive without Good Reason, by
the Company with Cause, death, disability or for any other reason other than a
reason described in Sections 7(A) or 7(C), the Executive shall be due no further
compensation other than what is due and owing through the effective date of such
Executive's resignation or termination (including any Annual Bonus that may be
due and payable to the Executive).

 
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C.
TERMINATION OF EMPLOYMENT BY THE EXECUTIVE FOR GOOD REASON OR BY THE COMPANY
WITHOUT CAUSE FOLLOWING A CHANGE OF CONTROL.  If upon or within six (6) months
subsequent to a Change of Control that both (i) closes at any time more than six
months following the Execution Date and (ii) is either (x) a transaction
described in Section 3(C)(i)  in which the purchase price is greater than or
equal to $9.51 per share, or (y) a transaction described in Section 3(C)(ii)
where the enterprise value is greater than or equal to $9.51 per share (a
"Qualifying Change in Control"), the Executive's employment under this Agreement
is terminated by the Executive for Good Reason or by the Company without Cause
("Change of Control Termination"), the Executive shall be entitled to and paid a
termination payment (the "Change of Control Termination Payment") equal to two
(2) times the sum of (a) Executive's Annual Base Salary at the time of such
termination and (b) the Executive's Target Annual Bonus for the fiscal year in
which his employment is terminated (as if the applicable performance criteria
have been met at the level that would result in payment of the Target Annual
Bonus at the 100% level irrespective of whether or not that is the case);
provided, however, a Qualifying Change of Control shall be deemed not to occur
if such transaction results from a written agreement entered into between the
Company and a Person described in Section 3(C)(i) or Section 3(C)(ii) within six
months following the Execution Date (regardless as to when such transaction
closes).  The Change of Control Termination Payment shall be made within five
(5) days after a Change of Control Termination.

 

D.
TERMINATION OF EMPLOYMENT BY THE EXECUTIVE FOR GOOD REASON OR BY THE COMPANY
WITHOUT CAUSE WITHIN 180 DAYS PRIOR TO A CHANGE OF CONTROL.  If the Executive's
employment under this Agreement is terminated by the Executive for Good Reason
or by the Company without Cause one hundred eighty (180) days prior to the
Company's execution of an agreement which, if consummated, would constitute a
Qualifying Change of Control, then upon consummation of such Qualifying Change
of Control, Executive shall receive an additional payment equal to the
difference between (i) the Change of Control Termination Payment described in
Section 7(C) and (ii) any Termination Payment previously provided to Executive
under Section 7(A).  Any additional payment pursuant to this Section 7(D) shall
be made within five (5) days after a Change of Control.

 

E.
PAYMENT REDUCTION UNDER SECTION 280G. Notwithstanding any other provision of
this Agreement, in the event that the Change of Control Termination Payment or
any payment or benefit received or to be received by Executive (whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement)
(collectively, the "Total Benefits") would be subject to the excise tax imposed
under Section 4999 of the Code (the "Excise Tax"), the Total Benefits shall be
reduced to the extent necessary so that no portion of the Total Benefits is
subject to the Excise Tax; provided, however, that no such reduction in the
Total Benefits shall be made if by not making such reduction, Executive's
Retained Amount (as hereinafter defined) would be greater than Executive's
Retained Amount if the Total Benefits are not so reduced.  In the event any such
reduction is required, the Total Benefits shall be reduced in the following
order: (i) the Change of Control Termination Payment, the Termination Payment,
and the payment provided for by Section 7(D) (pro rata to the extent more than
one is payable), (ii) any other portion of the Total Benefits that are not
subject to Section 409A of the Code (other than Total Benefits resulting from
any accelerated vesting of equity-based awards), (iv) Total Benefits that are
subject to Section 409A of the Code in reverse order of payment, and (v) Total
Benefits that are not subject to Section 409A and arise from any accelerated
vesting of any equity-based awards.  All determinations with respect to this
Section 7(D) and the assumptions to be utilized in arriving at such
determination shall be made by an independent public accounting firm with a
national reputation in the United States that is reasonably agreed to by the
Executive and the Company (the "Accounting Firm") which shall provide detailed
support and calculations both to the Company and to Executive. The parties
hereto hereby elect to use the applicable Federal rate that is in effect on the
date this Agreement is entered into for purposes of determining the present
value of any payments provided for hereunder for purposes of Section 280G of the
Code.  "Retained Amount" shall mean the present value (as determined in
accordance with sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of the
Total Benefits net of all federal, state and local taxes imposed on Executive
with respect thereto.

 
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F.
GENERAL RELEASE OF CLAIMS.  Executive shall not be entitled to any Termination
Payment, Change of Control Termination Payment, or the payment provided for by
Section 7.D (each, a "Severance Payment") unless (i) Executive has executed and
delivered to the Company a general release of claims (in such form as the
Executive and the Company shall reasonably agree) (the "Release") and such
Release has become irrevocable under the Age Discrimination in Employment Act
(ADEA) and its terms not later than fifty-six (56) days after the date of
Executive's termination of employment hereunder.  Notwithstanding anything
herein to the contrary, in the event such 56-day period falls into two (2)
calendar years, the Severance Payment shall not be paid until the second
calendar year but in no event later than 60 days following date of Executive's
termination of employment.  The Company shall deliver to Executive a copy of the
Release not later than three (3) days after the Company's termination of
Executive's employment without Cause or Executive's termination of Employment
for Good Reason.

 

G.
NO OFFSET AND NO MITIGATION.  Executive shall not be required to mitigate any
damages resulting from a breach by the Company of this Agreement by seeking
other comparable employment. The amount of any payment or benefit provided for
in this Agreement shall not be reduced by any compensation or benefits earned by
or provided to Executive as a result of his employment by another employer.

 

H.
CONTINUING OBLIGATIONS AFTER TERMINATION.  Following termination of employment,
Executive shall have the following continuing obligations to the Company:  (i)
to cooperate in good faith with the Company, without any additional
compensation, with respect to any legal matters involving potential or actual
litigation relating to an event occurring during the Employment Term, and any
renewals thereof, of which event Executive has actual knowledge; and, (ii) to
cooperate in good faith with the Company, without any additional compensation,
to transfer and transition Executive's pending and prior work and work-related
information to a person designated by the Company.  The Company agrees to make
reasonable efforts to schedule such assistance at times that do not interfere
with Executive's employment or other business activities, and to reimburse
Executive for reasonable travel costs incurred by Executive in providing such
assistance upon presentation by Executive of documentation required by Company
expense reimbursement policies, provided, however, that the obligations in
clause (ii) shall end: (x)  one (1) year after Executive's last day of
employment with the Company, if Executive is eligible to be paid any Termination
Payment or Change of Control Termination Payment after his employment ends
pursuant to Section 7(A) or 7(C) of this Agreement, or (y) ninety (90) days
after Executive's last day of employment with the Company, if Executive is not
eligible to be paid any Termination Payment or Change of Control Termination
Payment after his employment ends pursuant to Section 7(A) or 7(C) of this
Agreement.

 
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8.
REPRESENTATIONS.  The Executive hereby represents and warrants to the Company
that (i) the execution, delivery and full performance of this Agreement by the
Executive does not and will not conflict with, breach, violate or cause a
default under any agreement, contract or instrument to which the Executive is a
party or any judgment, order or decree to which the Executive is subject; and
(ii) upon the execution and delivery of this Agreement by the Executive and the
Company, this Agreement will be the Executive's valid and binding obligation,
enforceable in accordance with its terms.

 

9.
SHAREHOLDER APPROVAL.  Executive acknowledges and agrees that the terms of this
Agreement and the Amended Plan remain subject to shareholder approval (the
"Shareholder Approval") and that the terms of this Agreement may require
modification if such approval is not obtained at the Special Meeting referenced
in this Section 9.  Within thirty (30) days after the Execution Date, the
Company agrees to file a proxy statement and related documentation setting a
Special Meeting at which the Company will obtain shareholder approval of this
Agreement and the Amended Plan (the "Special Meeting").

 

10.
ASSIGNMENT; THIRD PARTY BENEFICIARY.  This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned, subcontracted, or delegated by
the Executive.  The Company may only assign its rights, and delegate its
obligations, hereunder to any successor in interest, provided, however, the
Company may not delegate its obligations under Section 4(D) or Section 7(D) of
this Agreement.  The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon and enforceable by its
respective successors and assigns. Neither the Executive nor the Executive's
beneficiary or beneficiaries will have any right to receive any compensation or
other benefits under this Agreement, except at the time, in the amounts and in
the manner provided in this Agreement.  As used in this Agreement, the term
"successor" means any person, firm, corporation or other business entity which
at any time, whether by merger, purchase or otherwise, acquires all or
substantially all of the capital stock or assets of the Company.

 
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11.
PREVAILING PARTY FEES; GOVERNING LAW.  If either party breaches this Agreement,
or any dispute arises out of, arises under, or relates to, this Agreement, the
prevailing party shall be entitled to its reasonable attorneys' fees,
paralegals' fees, and costs, at all levels.  In the event of any litigation
arising out of or relating to this Agreement, the exclusive venue shall be in
Palm Beach County, Florida, and shall be governed by the laws of the State of
Florida, without regard to its choice of law principles, except where the
application of federal law applies, and shall be decided by a judge, not a
jury.  THE PARTIES SPECIFICALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY. In the
event that either Party applies to seal any papers produced or filed in any
judicial proceedings to preserve confidentiality (the "Moving Party"), both
Parties hereby specifically agree (a) the Moving Party will provide the
attorneys for the other Party with copies of all such papers; (b) the other
Party will not oppose such application; and (c) the other Party will use his or
its best efforts to join such application.

 

12.
ENTIRE AGREEMENT.  This Agreement, the Option Agreement, the Restricted Stock
Agreement, the Proprietary Information Agreement, and the Indemnification
Undertaking (collectively, the "Executive Agreements") constitute the only
agreements between Company and the Executive regarding the Executive's
employment by the Company. The Executive Agreements supersede any and all other
agreements and understandings, written or oral, between the Company and the
Executive regarding the subject matter hereof and thereof. A waiver by either
party of any provision of this Agreement or any breach of such provision in an
instance will not be deemed or construed to be a waiver of such provision for
the future, or of any subsequent breach of such provision. This Agreement may be
amended, modified or changed only by further written agreement between the
Company and the Executive, duly executed by both Parties.

 

13.
NO WAIVER.  No failure to exercise, and no delay in exercising, any right, power
or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege.  No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the Parties.  No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts.  The rights and remedies of the Parties under this Agreement
are in addition to all other rights and remedies, at law or in equity, that they
may have against each other.  All rights are cumulative under this Agreement.

14.
SEVERABILITY; SURVIVAL.  In the event that any provision of this Agreement is
found to be void and unenforceable by a court of competent jurisdiction, then
such unenforceable provision shall be deemed modified so as to be enforceable
(or if not subject to modification then eliminated herefrom) to the extent
necessary to permit the remaining provisions to be enforced in accordance with
the Parties' intention. The provisions of Section 8 (and the restrictive
covenants contained therein) shall survive the termination for any reason of
this Agreement and/or the Executive's relationship with the Company.

 
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15.
NOTICES.  Any and all notices required or permitted to be given hereunder will
be in writing and will be deemed to have been given when deposited in United
States mail, certified or registered mail, postage prepaid. Any notice to be
given by the Executive hereunder will be addressed to the Company to the
attention of Chairman of the Board of Directors at 222 Lakeview Avenue, Suite
1600, West Palm Beach, Florida 33401. Any notice to be given to the Executive
will be addressed to the Executive at the Executive's residence address last
provided by the Executive to the Company. Either party may change the address to
which notices are to be addressed by notice in writing to the other party given
in accordance with the terms of this Section.

 

16.
HEADINGS.  Section headings are for convenience of reference only and shall not
limit or otherwise affect the meaning or interpretation of this Agreement or any
of its terms and conditions.

 

17.
COUNTERPARTS/ELECTRONIC TRANSMISSION.  This Agreement may be signed in any
number of counterparts and transmitted via electronic means (email, facsimile,
etc.), each of which shall be an original but all of which together shall
constitute one and the same instrument.

 

18.
SECTION 409A COMPLIANCE.

 

A.
GENERAL.  It is the intention of both the Company and the Executive that the
benefits and rights to which the Executive is entitled pursuant to this
Agreement comply with Code Section 409A or exceptions thereto and the provisions
of this Agreement shall be construed in a manner consistent with that intention.
If the Executive or the Company believes, at any time, that any such benefit or
right that is subject to Code Section 409A does not so comply, it shall promptly
advise the other and shall negotiate reasonably and in good faith to amend the
terms of such benefits and rights such that they comply with Code Section 409A
(with the most limited possible economic effect on the Executive and on the
Company).

 

B.
DISTRIBUTIONS ON ACCOUNT OF SEPARATION FROM SERVICE.  To the extent required to
comply with Code Section 409A, any payment or benefit required to be paid under
this Agreement on account of termination of the Executive's service (or any
other similar term) shall be made only in connection with a "separation from
service" with respect to the Executive within the meaning of Code Section 409A.

 

C.
NO ACCELERATION OF PAYMENTS.  Neither the Company nor the Executive,
individually or in combination, may accelerate any payment or benefit that is
subject to Code Section 409A, except in compliance with Code Section 409A and
the provisions of this Agreement, and no amount that is subject to Code Section
409A shall be paid prior to the earliest date on which it may be paid without
violating Code Section 409A.

 
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D.
SIX MONTH DELAY FOR SPECIFIED EMPLOYEES. In the event that the Executive is a
"specified employee" (as described in Code Section 409A), and any payment or
benefit payable pursuant to this Agreement constitutes deferred compensation
under Code Section 409A, then, to the extent required to comply with Section
409A of the Code, no such payment or benefit shall be made before the date that
is six months after the Executive's "separation from service" (as described in
Code Section 409A) (or, if earlier, the date of the Executive's death). Any
payment or benefit delayed by reason of the prior sentence shall be paid out or
provided in a single lump sum at the end of such required delay period in order
to catch up to the original payment schedule.

 

E.
TREATMENT OF EACH INSTALLMENT AS A SEPARATE PAYMENT.  For purposes of applying
the provisions of Code Section 409A to this Agreement, each separately
identified amount to which the Executive is entitled under this Agreement shall
be treated as a separate payment. In addition, to the extent permissible under
Code Section 409A, any series of installment payments under this Agreement shall
be treated as a right to a series of separate payments.

 

F.
REIMBURSEMENTS AND IN-KIND BENEFITS.  With respect to reimbursements and in‑kind
benefits that may be provided under the Agreement (the "Reimbursement Plans"),
to the extent any benefits provided under the Reimbursement Plans are subject to
Section 409A, the Reimbursement Plans shall meet the following requirements:

 
(i)         Reimbursement Plans shall use an objectively determinable,
nondiscretionary definition of the expenses eligible for reimbursement or of the
in-kind benefits to be provided;
 
(ii)       Reimbursement Plans shall provide that the amount of expenses
eligible for reimbursement, or in-kind benefits provided, during the Executive's
taxable year may not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided, however, that
Reimbursement Plans providing for reimbursement of expenses referred to in Code
Section 105(b) shall not fail to meet the requirement of this Section 17(F)(ii)
solely because such Reimbursement Plans provide for a limit on the amount of
expenses that may be reimbursed under such arrangements over some or all of the
period in which Reimbursement Plans remain in effect;
 
(iii)       The reimbursement of an eligible expense is made on or before the
last day of Executive's taxable year following the taxable year in which the
expense was incurred; and
 
(iv)       The right to reimbursement or in-kind benefits under the
Reimbursement Plans shall not be subject to liquidation or exchange for another
benefit.
 
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
 
11

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IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement under seal on the dates written below.
 
MAGICJACK VOCALTEC LTD.
 
Signature:  /s/ Donald Burns
Name:         Donald Burns
Title:           Chairman
Dated:        May 8, 2017
 
EXECUTIVE
 
Signature:  /s/ Don Carlos Bell III
Name:         Don Carlos Bell III
Dated:        May 8, 2017
 
12

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ATTACHMENT A
 
% of Revenue Target
   
Annual Target Bonus*
   
% of EBITDA Target
   
Annual Target Bonus*
                       
<80
%    $ -
<80
%    $ -    
80
%
 
$
87,500.00
   
80
%
 
$
87,500.00
   
81
%
 
$
95,625.00
   
81
%
 
$
95,625.00
   
82
%
 
$
103,750.00
   
82
%
 
$
103,750.00
   
83
%
 
$
111,875.00
   
83
%
 
$
111,875.00
   
84
%
 
$
120,000.00
     
84
%
 
$
120,000.00
   
85
%
 
$
128,125.00
     
85
%
 
$
128,125.00
   
86
%
 
$
136,250.00
     
86
%
 
$
136,250.00
   
87
%
 
$
144,375.00
     
87
%
 
$
144,375.00
   
88
%
 
$
152,500.00
     
88
%
 
$
152,500.00
   
89
%
 
$
160,625.00
     
89
%
 
$
160,625.00
   
90
%
 
$
168,750.00
     
90
%
 
$
168,750.00
   
91
%
 
$
176,875.00
     
91
%
 
$
176,875.00
   
92
%
 
$
185,000.00
     
92
%
 
$
185,000.00
   
93
%
 
$
193,125.00
     
93
%
 
$
193,125.00
   
94
%
 
$
201,250.00
     
94
%
 
$
201,250.00
   
95
%
 
$
209,375.00
     
95
%
 
$
209,375.00
   
96
%
 
$
217,500.00
     
96
%
 
$
217,500.00
   
97
%
 
$
225,625.00
     
97
%
 
$
225,625.00
   
98
%
 
$
233,750.00
     
98
%
 
$
233,750.00
   
99
%
 
$
241,875.00
     
99
%
 
$
241,875.00
   
100
%
 
$
250,000.00
     
100
%
 
$
250,000.00
   
101
%
 
$
262,500.00
     
101
%
 
$
262,500.00
   
102
%
 
$
275,000.00
     
102
%
 
$
275,000.00
   
103
%
 
$
287,500.00
     
103
%
 
$
287,500.00
   
104
%
 
$
300,000.00
     
104
%
 
$
300,000.00
   
105
%
 
$
312,500.00
     
105
%
 
$
312,500.00
   
106
%
 
$
325,000.00
     
106
%
 
$
325,000.00
   
107
%
 
$
337,500.00
     
107
%
 
$
337,500.00
   
108
%
 
$
350,000.00
     
108
%
 
$
350,000.00
   
109
%
 
$
362,500.00
     
109
%
 
$
362,500.00
   
110
%
 
$
375,000.00
     
110
%
 
$
375,000.00
   
111
%
 
$
387,500.00
     
111
%
 
$
387,500.00
   
112
%
 
$
400,000.00
     
112
%
 
$
400,000.00
   
113
%
 
$
412,500.00
     
113
%
 
$
412,500.00
   
114
%
 
$
425,000.00
     
114
%
 
$
425,000.00
   
115
%
 
$
437,500.00
     
115
%
 
$
437,500.00
   
116
%
 
$
450,000.00
     
116
%
 
$
450,000.00
   
117
%
 
$
462,500.00
     
117
%
 
$
462,500.00
   
118
%
 
$
475,000.00
     
118
%
 
$
475,000.00
   
119
%
 
$
487,500.00
     
119
%
 
$
487,500.00
   
120
%
 
$
500,000.00
     
120
%
 
$
500,000.00
 
>120
%   
$
500,000.00
   
>120
%   
$
500,000.00
 
 
*Based on Annual Base Salary of $500,000
                 

13

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ATTACHMENT B
 
% of Revenue Target
   
Annual Target Bonus*
   
% of EBITDA Target
   
Annual Target Bonus*
   

% of KPI Target
   
Annual Target Bonus*
                                   
<80
%   
$
-    
<80
%   
$
-    
<80
%   
$
-  
80
%
 
$
58,333.33
   
80
%
 
$
58,333.33
   
80
%
 
$
58,333.33
 
81
%
 
$
63,750.00
   
81
%
 
$
63,750.00
   
81
%
 
$
63,750.00
 
82
%
 
$
69,166.66
     
82
%
 
$
69,166.66
     
82
%
 
$
69,166.66
   
83
%
 
$
74,583.33
     
83
%
 
$
74,583.33
     
83
%
 
$
74,583.33
   
84
%
 
$
80,000.00
     
84
%
 
$
80,000.00
     
84
%
 
$
80,000.00
   
85
%
 
$
85,416.66
     
85
%
 
$
85,416.66
     
85
%
 
$
85,416.66
   
86
%
 
$
90,833.33
     
86
%
 
$
90,833.33
     
86
%
 
$
90,833.33
   
87
%
 
$
96,250.00
     
87
%
 
$
96,250.00
     
87
%
 
$
96,250.00
   
88
%
 
$
101,666.66
     
88
%
 
$
101,666.66
     
88
%
 
$
101,666.66
   
89
%
 
$
107,083.33
     
89
%
 
$
107,083.33
     
89
%
 
$
107,083.33
   
90
%
 
$
112,500.00
     
90
%
 
$
112,500.00
     
90
%
 
$
112,500.00
   
91
%
 
$
117,916.66
     
91
%
 
$
117,916.66
     
91
%
 
$
117,916.66
   
92
%
 
$
123,333.33
     
92
%
 
$
123,333.33
     
92
%
 
$
123,333.33
   
93
%
 
$
128,749.99
     
93
%
 
$
128,749.99
     
93
%
 
$
128,749.99
   
94
%
 
$
134,166.66
     
94
%
 
$
134,166.66
     
94
%
 
$
134,166.66
   
95
%
 
$
139,583.33
     
95
%
 
$
139,583.33
     
95
%
 
$
139,583.33
   
96
%
 
$
144,999.99
     
96
%
 
$
144,999.99
     
96
%
 
$
144,999.99
   
97
%
 
$
150,416.66
     
97
%
 
$
150,416.66
     
97
%
 
$
150,416.66
   
98
%
 
$
155,833.33
     
98
%
 
$
155,833.33
     
98
%
 
$
155,833.33
   
99
%
 
$
161,249.99
     
99
%
 
$
161,249.99
     
99
%
 
$
161,249.99
   
100
%
 
$
166,666.66
     
100
%
 
$
166,666.66
     
100
%
 
$
166,666.66
   
101
%
 
$
175,000.00
     
101
%
 
$
175,000.00
     
101
%
 
$
175,000.00
   
102
%
 
$
183,333.33
     
102
%
 
$
183,333.33
     
102
%
 
$
183,333.33
   
103
%
 
$
191,666.67
     
103
%
 
$
191,666.67
     
103
%
 
$
191,666.67
   
104
%
 
$
200,000.00
     
104
%
 
$
200,000.00
     
104
%
 
$
200,000.00
   
105
%
 
$
208,333.34
     
105
%
 
$
208,333.34
     
105
%
 
$
208,333.34
   
106
%
 
$
216,666.67
     
106
%
 
$
216,666.67
     
106
%
 
$
216,666.67
   
107
%
 
$
225,000.01
     
107
%
 
$
225,000.01
     
107
%
 
$
225,000.01
   
108
%
 
$
233,333.34
     
108
%
 
$
233,333.34
     
108
%
 
$
233,333.34
   
109
%
 
$
241,666.68
     
109
%
 
$
241,666.68
     
109
%
 
$
241,666.68
   
110
%
 
$
250,000.01
     
110
%
 
$
250,000.01
     
110
%
 
$
250,000.01
   
111
%
 
$
258,333.35
     
111
%
 
$
258,333.35
     
111
%
 
$
258,333.35
   
112
%
 
$
266,666.68
     
112
%
 
$
266,666.68
     
112
%
 
$
266,666.68
   
113
%
 
$
275,000.02
     
113
%
 
$
275,000.02
     
113
%
 
$
275,000.02
   
114
%
 
$
283,333.35
     
114
%
 
$
283,333.35
     
114
%
 
$
283,333.35
   
115
%
 
$
291,666.69
     
115
%
 
$
291,666.69
     
115
%
 
$
291,666.69
   
116
%
 
$
300,000.02
     
116
%
 
$
300,000.02
     
116
%
 
$
300,000.02
   
117
%
 
$
308,333.36
     
117
%
 
$
308,333.36
     
117
%
 
$
308,333.36
   
118
%
 
$
316,666.69
     
118
%
 
$
316,666.69
     
118
%
 
$
316,666.69
   
119
%
 
$
325,000.03
     
119
%
 
$
325,000.03
     
119
%
 
$
325,000.03
   
120
%
 
$
333,333.36
     
120
%
 
$
333,333.36
     
120
%
 
$
333,333.36
 
>120
%   
$
333,333.36
   
>120
%   
$
333,333.36
   
>120
%   
$
333,333.36
 
 
*Based on Target Bonus of $500,000
                         

14

--------------------------------------------------------------------------------

 
CONFIDENTIAL TREATMENT REQUESTED FOR
INFORMATION ON ATTACHMENT C OMITTED HERE AND
FILED SEPARATELY WITH THE COMMISSION
 
ATTACHMENT C
 
Special Transaction Bonus Calculation
 
A Special Transaction Bonus as described in Section 4(D) of the Agreement will
be calculated for a "Change of Control" as described in Section 3(C)(i)  based
on [*********************]  or for a "Change of Control" as described in Section
3(C)(ii)  based on [***********************], as follows:
 

·
Price/value less than [************] – $0;

 

·
Price/value [************] - $2 million

 

·
Price/value [************] - $2.5 million

 
15

--------------------------------------------------------------------------------