Document:

Exhibit 10.4

 

 

 

 

 

 

 

 

 

Safe-T
Group Ltd.

 

(hereafter
– “the Company)

 

Remuneration
Policy for Company’s Office Holders

 

 

 

 

 

 

 

 

 

     

     

    

 

		1.	Introduction

 

		1.1	Pursuant
                                         to the provisions of the Companies Law, 1999 (hereafter – “the Companies
                                         Law”), on July 3, 2017, the Company’s Board of Directors approved a remuneration
                                         policy (hereafter – “the remuneration policy”) with respect
                                         to the terms of service and employment of Company’s office holders1
                                         (hereafter – “the office holders”), after discussing and considering
                                         the recommendations of the Company’s Remuneration Committee regarding this matter.

 

		1.2	The
                                         provisions of the remuneration policy shall be subject to the provisions of any cogent
                                         law applicable to the Company and its office holders in any territory.

 

		1.3	The
                                         underlying principles and purposes of the Remuneration Policy are as follows: (a) promoting
                                         the Company’s goals, its work plan and its policy for the long-term; (b) remunerating
                                         and providing incentives to office holders, while considering the risks that the Company’s
                                         activities involve; (c) adjusting the remuneration package to the size of the Company
                                         and the nature and scope of its activities; (d) creating incentives that are suitable
                                         to Company’s office holders by remunerating those entitled for remuneration under
                                         the Remuneration Policy in accordance with their positions, areas of responsibility and
                                         contribution to the development of the Company’s business, the promotion of its
                                         targets and the maximization of profits in the short and long-term, taking into account,
                                         among other things, the need to recruit and retain qualified, highly-skilled officers
                                         in a global and competitive market; and (e) adjusting the remuneration of office holders
                                         to the contribution of the office holder to the achievement of the Company’s goals
                                         and maximization of its profits.

 

		1.4	This
                                         Remuneration Policy is a multi-annual policy that will be effective for a period of three
                                         years from the date of its approval. This policy shall be brought forward for re-approval
                                         by the Company’s Board of Directors and the general meeting of its shareholders
                                         (at the recommendation of the Company’s Remuneration Committee) after three years
                                         have elapsed since the date of approval thereof and so forth, unless any changes need
                                         to be made to the remuneration policy in accordance with the law and/or in accordance
                                         with the Company’s needs.

 

		1.5	Without
                                         derogating from the provisions set out in Section 1.4 above, the Company’s Remuneration
                                         Committee and Board of Directors shall check, from time to time, whether the remuneration
                                         that is granted under this policy, does, indeed, comply with the terms of this policy
                                         and the parameters set therein for each Company office holder.

 

 

		1.6	This
                                         remuneration policy is based, among other things, on the Company’s assessments
                                         as to the competitive environment in which it operates and the challenge it faces in
                                         recruiting and retaining high-quality officers in such an environment; it is also based
                                         on employment terms generally accepted in public companies operating in the Company’s
                                         area of activity and on existing employment agreements between the Company and its office
                                         holder, which – in order to remove any doubt – this policy cannot change.

 

		2.	The
                                         remuneration policy

 

		2.1	Components
                                         of the remuneration policy

 

In
accordance with the Company’s remuneration policy, the remuneration of the Company’s office holders shall be based
on all or some of the following components:

 

		2.1.1	Basic
                                         salary component 2– basic salary/monthly consultation fees;

 

 

		1	The
                                         meaning of the term “office holder” is as defined in the Companies Law, i.e.,
                                         general manager, chief business manager, deputy general manager, vice-general manager,
                                         any person filling any of these positions in the Company even if he holds a different
                                         title, and any other manager directly subordinate to the general manager.

		2	Whenever
                                         the term “basic salary” is used in this remuneration policy, it refers to
                                         the “gross” monthly salary of that employee, excluding any social benefits
                                         and related benefits). Whenever the term “annual basis salary” is used, it
                                         means the basic salary for the month of December in the relevant year times 12

 

    	 	2	 

     

    

 

		2.1.2	Social
                                         and related benefits – social benefits as prescribed by law (pension savings, contributions
                                         towards severance pay, contributions towards training fund, vacation pay, sick leave,
                                         recreation pay, etc.) and related benefits, such as company vehicle/vehicle maintenance,
                                         telephone expenses, meals at the workplace, gifts on public holidays, etc.

 

		2.1.3	Variable
                                         cash remuneration (bonus) – short and medium-term remuneration, which includes
                                         annual bonuses, which are based on results and achievement of targets. The Company may
                                         also determine that a certain office holder will be paid discretionary annual bonuses,
                                         taking into account his/her contribution to the Company and the restrictions placed under
                                         this policy.

 

		2.1.4	Variable
                                         equity-based remuneration – share-based payment or another long-term remuneration
                                         (subject to the existence of valid long-term remuneration plans and provided that the
                                         Company decides to award such remuneration).

 

(the
components in sections 2.1.3 and 2.1.4 above shall be called hereafter: “the variable components”).

 

At
the time of approval of the remuneration package of an office holder, the Remuneration Committee and Board of Directors of the
Company shall assess the compliance of each of those components and of the total cost of employment with the criteria set out
in this plan.

 

		2.2	Parameters
                                         for reviewing remuneration terms

 

As
a general rule, some or all of the following parameters will be taken into account when reviewing the remuneration terms of a
Company office holder.

 

		2.2.1	Education,
                                         skills, expertise, tenure (specifically in the Company and in the office holder’s
                                         field of expertise in general), professional experience and achievements of the office
                                         holder;

 

		2.2.2	The
                                         role of the office holder, his areas of responsibility and his employment terms under
                                         previous wage agreements entered into with this office holder;

 

		2.2.3	The
                                         office holder’s contribution to the Company’s business, the achievement of
                                         its strategic goals and implementation of its work plans, the maximization of its profits
                                         and the enhancement of its strength and stability.

 

		2.2.4	The
                                         extent of responsibility delegated to the office holder.

 

		2.2.5	The
                                         Company’s need to recruit or retain an office holder with unique skills, knowledge
                                         or expertise.

 

		2.2.6	Whether
                                         a material change has been made to the role or function of the office holder, or to the
                                         Company’s requirements from this office holder.

 

		2.2.7	The
                                         size of the Company and the nature of its activities.

 

		2.2.8	As
                                         to service and employment terms that include retirement grants – the term of service
                                         or employment of the office holder, the terms of his service and employment over the
                                         course of this period, the Company’s performances in the said period, the office
                                         holder’s contribution to the achievement of the Company’s goals, the maximization
                                         of its profits and the circumstances of the retirement.

 

    	 	3	 

     

    

 

		2.2.9	(a)
                                         The market conditions of the industry in which the Company operates at any relevant time,
                                         including the office holder’s salary compared to the salaries of other office holders
                                         working in similar positions (or in position of comparable level) in companies whose
                                         characteristics are similar to those of the Company in terms of its activity (as described
                                         in section 2.3.1 below; (b) the availability of suitable candidates that can serve as
                                         office holders in the Company, the recruitment and retainment of the office holders and
                                         the need to offer an attractive remuneration package in a global competitive market;
                                         and (c) changes in the Company’s area of activity and in the scope and complexity
                                         of its activities.

 

		2.3	Payroll
                                         review

 

		2.3.1	For
                                         the purpose of determining the payroll that can be offered to an office holder upon recruitment,
                                         the Company will review from time to time the payroll generally accepted in the relevant
                                         markets for similar positions in companies, which are similar to the Company in terms
                                         of its area of activity/scope of activity/complexity of activity/market value/ revenues
                                         and other relevant parameters (if such companies exist).

 

		2.3.2	The
                                         payroll review will be conducted by the Company itself, or by an external advisor, at
                                         the Company’s discretion, after the Remuneration Committee has issued its recommendations
                                         with regard to this matter.

 

		2.4	Remuneration
                                         terms to new office holders

 

As
a general rule, the remuneration terms of new office holders shall be approved before they start working for the Company and not
in retrospect, except in exceptional circumstances.

 

		2.5	The
                                         ratio between the remuneration of office holders and the remuneration of all other Company
                                         employees

 

The
ratio between the cost of terms of service and employment of Company’s office holders3 and the cost of payroll4
of all other Company employees (on a full-time basis):

 

	 	The ratio between the
    average cost of salary of office holders and the average cost of salary of all other Company employees shall not exceed:	 	Active
                           Chairman of the Board of Directors:

        1 (to the Chairman) to
        0.35

        CEO: 1 (to the CEO) to 0.35

        VPs 1 (to the VPs) to
        0.4

        Foreign office holders:
        1 (to the foreign office holders) to 0.3

	 	 	 	 
	 	The ratio between the
    cost of median payroll of office holders to cost of median payroll of of all other Company employees shall not exceed:	 	Active Chairman of the
        Board of Directors:

        1 (to the Chairman) to
        0.35

        CEO: 1 (to the CEO) to
        0.35

        VPs 1 (to the VPs) to
        0.4

        Foreign office holders:
        1 (to the foreign office holders) to 0.3

 

In
the opinion of the Company’s Remuneration Committee and Board of Directors, the said ratio is reasonable and appropriate
and does not have an adverse effect on work relations in the Company, taking into account the nature of the Company, its size,
the manpower mix employed therein, its area of activity and the areas of responsibility of each office holder.

 

 

		3	Cost
                                         of terms of service and employment of Company office holders for the purpose of this
                                         analysis include the existing remuneration of the office holders and an amount that reflects
                                         the annual bonus ceiling (as defined below) that is set by the remuneration policy set
                                         forth below.

		4	“Cost
                                         of payroll” – basic salary + benefits in terms of cost to the employer.

 

    	 	4	 

     

    

 

		2.6	Basic
                                         salary, benefits and other related benefits

 

		2.6.1	The
                                         basic salary of a new Company office holder shall be determined taking into accounts
                                         the parameters described in section 2.2 above and the conclusions of the payroll review
                                         described in section 2.3 above (should such a review be conducted).

 

		2.6.2	The
                                         basic salary shall be in absolute numbers. The Company may determine that an office holder’s
                                         salary shall be linked to a certain currency or index.

 

		2.6.3	In
                                         any case, the basic monthly salary, or alternatively, the monthly consultation fees shall
                                         not exceed the maximum amount set out below in respect of full-time position (linked
                                         to the Consumer Price Index commencing May 2015):

 

	 	Position	 	Maximum
    basis salary* in ILS**	 
	 	 	 	 	 
	 	Active director	 	 	55,000	 
	 	Company’s CEO	 	 	55,000	 
	 	Vice Presidents	 	 	50,000	 
	 	Office holders in foreign
    subsidiaries	 	 	70,000	 

 

		*	An
                                         amount paid to an office holder as monthly consultation fees (in respect of which an
                                         invoice is issued), which is up to 1.4 times higher than the maximum basic salary set
                                         for his position, shall not be considered to be a deviation from the remuneration policy.

 

		**	The
                                         amounts presented above are in respect of a full-time position; those amounts shall change
                                         in proportion to the scope of position of the office holder.

 

		2.6.4	Social
                                         benefits5, related benefits, reimbursement of expenses

 

The
remuneration package may include benefits that are generally acceptable in the market, such as vacation pay6, contributions
towards pension, life insurance, training fund saving, health insurance, social rights and benefits, mobile phone (including grossing
up of the taxable value of the phone), internet and landline, gifts on public holidays, recreation, medical tests, medical insurance
and/or undertaking such an insurance policy and other expenses, all as approved by the Remuneration Committee and the Company’s
Board of Directors, at their discretion and in accordance with the applicable Company policy.

 

		2.6.5	Vehicle

 

Company
office holders shall be entitled to receive participation in vehicle expenses or a Company vehicle (including by way of leasing)
in accordance with acceptable standards for office holders holding similar positions in companies operating in the Company’s
area of activity, or in companies, whose scope of activities is similar to that of the Company, including grossing up the taxable
value of this benefit, fuel expenses, licensing, insurance and other related expenses.

 

		2.6.6	Insurance,
                                         indemnification and exemption

 

		2.6.6.1	Company’s
                                         office holders shall be entitled to insurance coverage to be provided by a liability
                                         insurance policy of directors and office holders, which the Company will purchase from
                                         time to time, subject to the approvals required by law.

 

		2.6.6.2	Subject
                                         to the provisions of the law, as amended from time to time, and without detracting from
                                         the provisions of section 2.6.6.1 above, the Company’s office holders shall be
                                         entitled to benefit from coverage provided by a liability insurance of directors and
                                         office holders, which the Company will purchase from time to time, subject to the approval
                                         of the Remuneration Committee alone (and the approval of the Board of Directors, if required
                                         by law), provided that the insurance policy meets the following criteria and provided
                                         that the engagement with the insurer is entered into under market conditions and will
                                         not have a material effect on the Company’s profitability, its assets or liabilities:

 

		a.	The
                                         limit of insurer’s liability under the insurance policy shall not exceed $ 50 million
                                         per claim and over the insurance period covered by that policy, plus reasonable litigation
                                         expenses in excess of the abovementioned limit and the maximal coverage for a POSI insurance
                                         policy (Public Offering of Securities Insurance) that will supplement the insurance coverage
                                         for events that were not taken into account at the time of purchasing the insurance policy
                                         (such as an share offering, share offering in a foreign stock exchange, financing, or
                                         publication of a prospectus, etc. – shall not exceed $ 15 million.

 

 

		5	As
                                         to an office holder that has entered into engagement with the Company whereby no employer-employee
                                         relationship exists, the Company may pay the social benefits described above on top of
                                         his salary in lieu of the said expenses.

		6	An
                                         office holder shall be entitled to annual leave as prescribed by law, but the Company
                                         grant him further paid leave up to a ceiling of 24 working days per year. The Company
                                         may allow the office holder to accumulate vacation days over his term of office in accordance
                                         with Company’s procedures.

 

    	 	5	 

     

    

 

		b.	The
                                         insurance policy may include an entity cover that will cover the Company itself in case
                                         of lawsuits filed against it under the securities law (whether those lawsuits are filed
                                         only against the Company and whether they are filed against the Company and office holder
                                         thereof or an office holder in its related companies).

 

		c.	Total
                                         annual premium that the Company will pay to an insurance company for the office holders
                                         liability insurance as described above, shall not exceed a total of $ 50,000 if the Company’s
                                         securities are listed on the Israeli stock exchange alone and a total of % 120,000 if
                                         the Company’s securities are also listed in foreign stock exchanges. The annual
                                         premium payable for a POSI policy shall not exceed $ 80,000.

 

		d.	The
                                         excess amounts set in the insurance policies shall not exceed the amounts normally applicable
                                         in the insurance market for policies of this type as of the date of purchasing and renewing
                                         the insurance on a periodic basis.

 

		2.6.6.3	The
                                         Company’s office holders may be entitled to an indemnification arrangement in accordance
                                         with arrangements that are normally acceptable and subject to the provisions of the law
                                         and the Company’s articles of association. The overall amount of indemnification
                                         per event to all office holders shall not exceed 25% of the effective shareholders’
                                         equity of the Company (the maximum indemnification amount). For that purpose, the “effective
                                         shareholders’ equity of the Company” means the amount of the Company’s
                                         shareholders’ equity in accordance with the last consolidated audited or reviewed
                                         financial statements of the Company (as applicable) at the time of actual payment of
                                         the indemnification. It is hereby clarified, that the indemnification shall be paid in
                                         excess of any amount paid under the liability insurance of directors and office holders,
                                         which the Company has purchased or will purchase from time to time.

 

		2.6.6.4	Company
                                         office holders may be entitled to an exemption arrangement in accordance with arrangements
                                         that are normally acceptable and subject to the provisions of the law and the Company’s
                                         articles of association.

 

		2.7	Remuneration
                                         in connection with termination of employment

 

		2.7.1	Advance
                                         notice period

 

		2.7.1.1	An
                                         office holder may be entitled to advance notice period or payment in lieu of advance
                                         notice period. The advance notice period shall be determined for each and every office
                                         holder, taking into account the parameters listed in section 2.2 above.

 

    	 	6	 

     

    

 

		2.7.1.2	As
                                         a general rule, the advance notice period of an office holder shall not exceed 4 months
                                         and the Remuneration Committee and Board of Directors of the Company, and where required
                                         – the General Meeting of the Company’s shareholders, may, at their discretion,
                                         taking into account the position of the office holder, his area of responsibility and
                                         his other remuneration components, approve an advance notice period that is different
                                         than the one specified above.

 

		2.7.1.3	Over
                                         the course of the advance notice period, the office holder shall continue to do his job
                                         in the Company at the request of the Company, unless the Company decides that he will
                                         not do so, in which case the office holder may be entitled to continue and receive over
                                         the advance notice period all employment and service terms, which were agreed upon in
                                         his employment agreement.

 

		2.7.1.4	The
                                         service and employment terms of the office holders may include a provision whereby the
                                         Company may terminate the employment of the office holder without an advance notice period
                                         in cases which deny eligibility for severance pay according to the law, including the
                                         following cases: (a) conviction of an offence involving moral turpitude; (b) an office
                                         holder who will conduct himself in a disloyal and/or unreliable and/or dishonest manner
                                         in his relations with the Company and/or while carrying out actions on its behalf and/or
                                         will harm the Company’s reputation; (c) in case the office holder will breach the
                                         confidentiality duty towards the Company and/or his duty to protect the Company rights
                                         which were developed due to or as part of his work at the Company; (d) Any other case
                                         in which the Company is legally entitled to refrain from payment of severance pay.

 

		2.7.2	Adaptation
                                         period

 

Subject
to the approval of Remuneration Committee and Board of Directors of the Company, and where required – the General Meeting
of the Company’s shareholders and subject to the provisions of the law, as amended from time to time, the office holder
may be entitled to an adaptation period that will not exceed two months after the end of the advance notice period. Over the adaptation
period, the office holder will receive his salary and other related employment terms as described above. The Company may approve
adaptation grants to office holders provided that he did not end his service in Company under circumstances which deny eligibility
for severance pay according to the law.

 

		2.7.3	Severance
                                         pay

 

Office
holders, who are Company’s employees, will be entitled to severance pay in accordance with the provisions of the law.

 

		2.7.4	Retirement
                                         terms

 

		2.7.4.1	The
                                         retirement terms of Company’s office holders shall be determined in accordance
                                         with the parameters set out in section 2.2 above.

 

		2.7.4.2	An
                                         office holder may be entitled to a retirement grant at a total aggregate amount that
                                         will not exceed the basic salary component (as this term is defined in sections 2.1.1
                                         and 2.6 above) of a six (6) month period. When determining the amount of the retirement
                                         grant, the Company will take into account, among other things, the period of service
                                         or employment of the office holder, the terms of service and employment over the course
                                         of this period, his contribution to the achievement of the Company’s goals and
                                         maximization of its profits and the circumstances of the retirement.

 

    	 	7	 

     

    

 

		2.8	Annual
                                         bonus

 

In
addition to the basic salary, the remuneration package of Company’s office holders may include eligibility to an annual
bonus that is based on measurable targets and to an annual discretionary bonus (hereafter jointly: “the annual bonus”).

 

		2.8.1	Components
                                         of the bonus

 

		●	With
                                         regard to the Company’s CEO and an active director – most of the annual
                                         bonus will be based on measurable targets and an immaterial portion of the annual bonus
                                         (for that purpose “immaterial portion” – the higher of (a) a
                                         total of 3 (gross) monthly salaries or (b) 25% of the variable components of the bonus
                                         (actual bonus and equity-based payment) shall be a discretionary bonus that is based
                                         on qualitative criteria. Notwithstanding the above, if in a specific year the Company
                                         does not pay the CEO or the active director (as applicable) an annual bonus that is based
                                         on measurable targets (i.e., if the discretionary annual bonus paid to the CEO or the
                                         active director (as applicable) constitutes the total annual bonus paid on that year),
                                         then the amount of the discretionary bonus that the Company may pay to the CEO and to
                                         the active director (as applicable and separately) shall not exceed three (3) gross monthly
                                         salaries of that office holder.

 

		●	With
                                         regard to office holders who report to the Company’s CEO – subject to
                                         the provisions of the law, office holders, who report to the CEO, may be eligible to
                                         an annual bonus that is based on measurable targets and to a discretionary annual bonus.
                                         It should be clarified that the whole amount of annual bonus payable to office holders,
                                         who report to the Company’s CEO may be a discretionary bonus (unlike an annual
                                         bonus that is based on measurable targets).

 

		2.8.2	Annual
                                         bonus that is based on measurable targets

 

The
amount of the annual bonus that is based on measurable targets shall be calculated based on measurable criteria, that will be
determined (if they are determined) for each and every office holder at the time of determining the Company’s budget for
the forthcoming year, in accordance with the role of the relevant office holder, by the competent organs of the Company (in accordance
with the provisions of the law and the positions of the Securities Authority, as amended from time to time), provided that the
targets applicable to office holders, who report to the CEO, shall be determined by the Company’s Remuneration Committee
and Board of Directors, at the recommendation of the CEO.

 

		2.8.2.1	Subject
                                         to the provisions of the law and the positions of the Securities Authority (as amended
                                         from time to time):

 

		a.	The
                                         Remuneration Committee and Board of Directors alone will be allowed to determine the
                                         measurable targets applicable to active directors, if one of the following is fulfilled:

 

		(1)	All
                                         of the following conditions are met: (a) the resolution is in line with the remuneration
                                         policy; (b) the grant in question is based only on measurable targets; (c) the amount
                                         of the potential grant is immaterial (up to three salaries); and (d) the targets were
                                         pre-determined by the Remuneration Committee and Board of Directors.

 

		(2)	All
                                         of the following conditions are met: (a) the resolution is in line with the remuneration
                                         policy; (b) the office holder in question serves both as a director and in an operational
                                         role in the Company; (c) The Remuneration Committee and Board of Directors approved the
                                         targets, but the directors, who receive from the Company a bonus based on measurable
                                         targets, did not take part in the approval of those targets (whether in their capacity
                                         as directors or in their capacity as other office holders in the Company).

 

    	 	8	 

     

    

 

		b.	The
                                         Remuneration Committee and Board of Directors alone will be allowed to determine the
                                         measurable targets applicable to an office holder, who is a controlling shareholder or
                                         a relative thereof (as these terms are defined in the Companies Law), if one of the following
                                         is fulfilled:

 

		(1)	All
                                         of the following conditions are met: (a) the resolution is in line with the remuneration
                                         policy; (b) the grant in question is based only on measurable targets; (c) the amount
                                         of the potential grant is immaterial (up to three salaries); and (d) the targets were
                                         pre-determined by the Remuneration Committee and Board of Directors.

 

		(2)	The
                                         Board of Directors has determined a clear target that is based on financial statements
                                         data and which applies in the same manner to the controlling shareholder and his relative
                                         and to other office holders, who are not related to the controlling shareholder.

 

Set
forth below are some suggested criteria for the annual bonus that is based on measurable targets. It should be clarified that
this list is not a closed and binding list. The Remuneration Committee and the Board of Directors may consider adding or removing
some of those criteria, taking into account the role of each office holder, this areas of responsibility and the Company’s
activity.

 

		1.	Bonus
                                         that is based on financial targets – a bonus that is based on meeting principal
                                         and personal performance metrics that are quantified and set out in the Company’s
                                         work plan and attributed to the relevant office holder. These performance metrics may
                                         include, among other things: sales and marketing targets.

 

		(a)	Engagement
                                         in products distribution contracts.

		(b)	Engagement
                                         in collaboration contracts.

		(c)	Achievement
                                         of product development milestones.

		(d)	Completion
                                         of development of new technologies.

		(e)	Production
                                         and growth metrics relating to scope of activity.

		(f)	Recruitment
                                         and retainment of customers.

		(g)	Reducing
                                         costs.

		(h)	Implementation,
                                         promotion and completion of planned projects.

		(i)	Achievement
                                         of targets/milestones relating to implementation of principal projects and processes
                                         of the Company.

		(j)	Promotion
                                         of strategic plans and targets, including targets which were set for the office holder,
                                         and which are relevant to the relevant office holder’s area of activity.

		(k)	Achievement
                                         of financial targets: raising loans, bonds, public offering of shares, etc.

 

At
the end of each year, the Remuneration Committee and Board of Directors will review the office holders’ meeting their measurable
targets in order to determine that component of the annual bonus, which is based on measurable targets. The Remuneration Committee
and Board of Directors may determine to pay only part of the component of the annual bonus, which is based on measurable targets,
if the office holder meets only some of the targets.

 

		2.8.2.2	Neutralization
                                         of one-off events

 

As
part of the calculation of the eligibility to annual bonus that is based measurable targets on the basis of financial statements
data (if such targets are set) the Board of Directors or the Remuneration Committee will be authorized to neutralize the effect
of “one-off events”, or alternatively to decide that such events should not be neutralized in a certain year, as applicable.

 

    	 	9	 

     

    

 

		2.8.3	Annual
                                         discretionary bonus

 

Subject
to the recommendation of the Company’s CEO in connection with office holders who report to him, and in respect of the CEO
and the active directors – subject to the recommendation of the Board of Directors, the Company’s competent organs
shall be allowed (subject to the provisions of the law and the positions of the Securities Authority (as amended from time to
time)), to award a discretionary bonus to Company’s office holders, based, among other things, on the following qualitative
criteria (hereafter – “annual discretionary bonus”).

 

		1.	The
                                         office holder’s contribution to the Company’s business, the maximization
                                         of its profits and the enhancement of its strength and stability.

 

		2.	The
                                         Company’s need to recruit or retain an office holder with unique skills, knowledge
                                         or expertise.

 

		3.	The
                                         extent of responsibility delegated to the office holder.

 

		4.	Changes
                                         that have taken place over the last year with regards to the areas of responsibility
                                         of the office holder.

 

		5.	Satisfaction
                                         from the performance and functioning of the office holder.

 

		6.	Appreciation
                                         to the office holder’s ability to work in collaboration and coordination with the
                                         team.

 

		7.	The
                                         office holder’s contribution to corporate governance and to proper control environment
                                         and ethics.

 

		8.	The
                                         office holder’s contribution to the promotion and development of employees and
                                         managers, insofar as this is relevant to his role.

 

The
Company’s competent organs shall approve this component based, among other things, on data presented by the Company’s
management and based on personal assessment and recommendation issued by the Company’s CEO (with regard to office holders
who report to him) and by the Company’s Board of Directors with regard to active directors and the CEO, while listing the
underlying reasons for their recommendation.

 

		2.8.4	The
                                         annual bonus ceiling of office holders as of date of payment thereof (both in respect
                                         of discretionary bonus and in respect of bonus based on measurable targets:

 

	 	Role	 	Maximum
    annual bonus7 as of date of payment thereof

(in terms of basic salary2)
	 	 	 	 
	 	Active director	 	Up to 7 salaries (subject to the provisions
    of section 2.8.1 above)
	 	CEO	 	Up to 7 salaries (subject to the provisions
    of section 2.8.1 above)
	 	CFO, VPs Marketing and other office holders,
    who report to the CEO	 	Up to 6 salaries
	 	VPs Sales and sales managers, who report directly
    to the CEO	 	Up to 12 salaries
	 	Office holders in foreign subsidiaries	 	Up to 12 salaries

 

		2.8.5	The
                                         Remuneration Committee and Board of Directors may decide to postpone the payment of the
                                         annual bonus or reduce the amount of the annual bonus to which the office holder is entitled,
                                         at their own discretion.

 

 

		7	The
                                         ceiling is in respect of the whole annual bonus – bonus based on measurable targets
                                         + discretionary bonus.

 

    	 	10	 

     

    

 

		2.8.6	The
                                         Company may pay an office holder, who has not completed a full year of employment, a
                                         proportionate share of the bonus according to the period of employment of the office
                                         holder.

 

		2.8.7	The
                                         office holder shall repay to the Company that portion of the bonus he received, which
                                         was based on measurable targets, should it be determined that this component was paid
                                         to him on the basis of erroneous data and/or data that were restated in the Company’s
                                         financial statements, provided that the date of restatement of the financial statements
                                         does not fall later than three years after the original approval of the relevant financial
                                         statements.

 

		2.9	Long-term
                                         remuneration

 

		2.9.1	Subject
                                         to the approval of a long-term remuneration plan by the Company in accordance with the
                                         provisions of the law, the Company may allocate to office holders and from time to time
                                         options and/or restricted shares (“share-based payment”) and/or another
                                         long-term remuneration, including a remuneration that is based on the performance of
                                         the Company’s share (such as phantom options), as part of the remuneration package.

 

		2.9.2	The
                                         annual value of the share-based payment8 paid to each shareholder, as of the
                                         date of grant thereof, shall not exceed the following ceilings:

 

	 	Role	 	Maximum
    value of equity-based payment as of date of award thereof 

(in relation to annual cost of payroll4)
	 	 	 	 
	 	Active Chairman of the Board of Directors	 	Up to 4.0 times bigger
	 	Active director	 	Maximum value of up to 500,000 ILS
	 	CEO	 	Up to 2.5 times bigger
	 	CFO, VPs Marketing and other office holders,
    who report directly to the CEO, if any	 	Up to 1.25 times bigger
	 	VPs Sales and sales managers, who report directly
    to the CEO	 	Maximum value of equity-based payment is equal
    or less than the annual cost of payroll
	 	Office holders in foreign subsidiaries	 	Up to 1.25 times bigger

 

		2.9.3	Should
                                         the Company decide the award options:

 

		2.9.3.1	The
                                         Company will maintain securities-based remuneration scheme in accordance with Section
                                         2012 to the Income Tax Ordinance or other tax provisions that apply to the Company and/or
                                         its employees in accordance with the territory in which they operate.

 

		2.9.3.2	Each
                                         of the options that the Company will award will be exercisable into one ordinary Company
                                         share in consideration for a price that will not be less than the average share price
                                         on the Tel Aviv Stock Exchange over the last 30 trading days preceding the date on which
                                         the Board of Directors of the Company decided to award the options.

 

		2.9.3.3	The
                                         vesting period of the options to be awarded by the Company will be at least 3 years until
                                         vesting of all options that were allocated and at least six months in respect of the
                                         first batch of options. Nevertheless, the Remuneration Committee and the Company’s
                                         Board of Directors are authorized to determine that despite the above vesting provisions,
                                         the options shall be exercisable upon the achievement of targets that they will set close
                                         before the award of the options.

 

		2.9.3.4	The
                                         vesting period may be accelerated upon the occurrence of special events, such as change
                                         of control in the Company and/or sale of operations and/or the end of the tenure of an
                                         office holder under special circumstances (such as death of illness).

 

 

		8	“the
                                         annual value of the share-based payment” – in this section – is
                                         the result of dividing the value of the options and/or restricted shares at the time
                                         of award, as determined by accounting principles, by the number of vesting years.

 

    	 	11	 

     

    

 

		2.9.3.5	The
                                         options shall expire no later than 10 years after the date of allocation.

 

		2.9.4	As
                                         part of the discussion on the award of share-based payment to a Company office holder,
                                         the Remuneration Committee and the Company’s Board of Directors, and where required
                                         – the general meeting of the Company’s shareholders, will assess whether
                                         the said award constitutes an appropriate incentive that will contribute to the maximization
                                         of the Company’s value in the long-term.

 

		2.9.5	Share-based
                                         payment shall be awarded after the assessment of the economic value of the said award,
                                         the exercise prices and the exercise periods.

 

		2.10	The
                                         ratio between the basic salary component and the variable components9

 

	 	Role	 	The
    ratio between the variable components and the fixed components
	 	 	 	 
	 	Active director	 	Up to 4.60
	 	CEO	 	Up to 3.10
	 	CFO, VPs Marketing and other office holders,
    who report directly to the CEO, if any	 	Up to 1.85
	 	VPs Sales and sales managers, who report directly
    to the CEO	 	Up to 2.00
	 	Office holders in foreign subsidiaries	 	Up to 2.00

 

		2.11	Extending
                                         the term of existing agreements with Company office holders and making amendments to
                                         those agreements

 

		2.11.1	Prior
                                         to extending the term of the employment agreement with a Company office holder (whether
                                         this involves changes to the terms of employment or not), the office holder’s existing
                                         remuneration package will be assessed in relation to the parameters set out in section
                                         2.2 above and bearing in mind the payroll review, which was conducted by the Company
                                         as per section 2.3 above.

 

		2.11.2	Subject
                                         to the provisions of the law and the positions of the Securities Authority, as amended
                                         from time to time, immaterial changes made to the service terms of the Company’s
                                         CEO will need to be approved by the Remuneration Committee alone, if the latter approved
                                         that the changes are, indeed, immaterial and the change complies with the provisions
                                         of this remuneration policy.

 

		2.11.3	Subject
                                         to the provisions of the law and the positions of the Securities Authority, as amended
                                         from time to time, immaterial changes made to the service and employment terms of the
                                         office holders who report to the Company’s CEO shall be approved by the Company’s
                                         CEO alone and the approval of the Remuneration Committee will not be required, provided
                                         that the service and employment terms of that office holder comply with the provisions
                                         of this remuneration policy.

 

In
sections 2.11.2 and 2.11.3 above, “immaterial changes to the service and employment terms” are changes, the
aggregate value of which does not exceed 10% of the overall annual cost of remuneration of the office holder.

 

		2.12	Remuneration
                                         of directors

 

		2.12.1	Company’s
                                         directors will be eligible to remuneration in accordance with the Companies Regulations
                                         (Rules Regarding Remuneration and Expenses to External Director), 2000 (hereafter –
                                         “the remuneration regulations”) and which will not exceed the maximum
                                         remuneration set in the remuneration regulations (including the maximum remuneration
                                         to an external expert director, which is set in the remuneration regulations). This section
                                         will not apply to directors, who will serve as active directors and who will be eligible
                                         to remuneration in accordance with other provisions of this remuneration policy.

 

 

		9	For
                                         that purpose, the “variable components” include the annual value of the share-based
                                         payment.

 

    	 	12	 

     

    

 

		2.12.2	Notwithstanding
                                         the provisions of section 2.12.1, directors, who serve in other positions in the Company
                                         in addition to their service as directors, shall be eligible to salary as paid in the
                                         Company for similar positions.

 

		2.12.3	The
                                         directors, who serve in the Company, may be eligible to reimbursement of reasonable expenses;
                                         they will also be eligible to insurance, indemnification and exemption arrangements as
                                         described in section 2.6.6 above, all in accordance with the provisions of the Company’s
                                         articles of association and the provisions of this remuneration policy.

 

		3.	The
                                         powers of the Remuneration Committee and the Company’s Board of Directors with
                                         regard to the remuneration policy

 

		3.1	The
                                         Company’s Board of Directors is charged with the management of the remuneration
                                         policy and all actions required for management thereof, including the power to interpret
                                         the provisions of the remuneration policy where doubts arise as to the manner of its
                                         implementation.

 

		3.2	The
                                         Company’s Remuneration Committee and Board of Directors will assess, from time
                                         to time, the remuneration policy and the need to adjust it, inter alia, in accordance
                                         with the considerations and principles set out in this policy, while taking into account
                                         the changes in the Company’s goals, market conditions, Company’s profits
                                         and revenues in previous periods in in real time and any other relevant information.

 

		3.3	In
                                         order to assess the Company’s remuneration policy, the Company’s Remuneration
                                         Committee and its Board of Directors will monitor the implementation of the remuneration
                                         policy in the Company.

 

    	 	13EX-10.1

 Exhibit 10.1 

2017 EQUITY INCENTIVE PLAN OF 

FUSE MEDICAL, INC. 

AMENDMENT NO. 4 

June 28, 2018 

Section 4.1. Section 4.1 of the 2017 Equity Incentive Plan of Fuse Medical, Inc., dated April 5, 2017, is removed in its
entirety and replaced by the following: 
 4.1    Subject to adjustment in accordance with Section 11, a total of
8,000,000 shares of Common Stock shall be available for the grant of Awards under the Plan; provided, however, that Incentive Stock Options granted to any single individual in a calendar year may not exceed $100,000 in Fair Market Value. Any
shares of Common Stock granted in connection with Options and Stock Appreciation Rights shall be counted against this limit as one (1) share for every one (I) Option or Stock Appreciation Right awarded. Any shares of Common Stock granted
in connection with Awards other than Options and Stock Appreciation Rights shall be counted against this limit as two (2) shares of Common Stock for every one (1) share of Common Stock granted in connection with such Award. During the
terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards. 
  

			
	Fuse Medical, Inc.
		
	By:	 	/s/ William E. McLaughlin, III
		 	William E. McLaughlin, III
		 	Chief Financial Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00285-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00285-of-00352.parquet"}]]