REG - MTI Wireless Edge - Half-year Report <Origin Href="QuoteRef">MWEE.L</Origin> - Part 2

MTI Wireless EdgeAnnouncement

03/08/2016 07:35

- Part 2: For the preceding part double click  ID:nRSC0588Ga 

Leaseincome        (36)                        (60)                       (104)  
 
 
Leaseincome 
 
(36) 
 
(60) 
 
(104) 
 
Compensation of key management personnel of the Group: 
 
                                    Six monthsended   June 30,    Year ended December 31,    
                                    2016                          2015                       2015  
                                    U.S. $ in thousands         
                                    Unaudited                     Audited                  
 Short-term employee benefits *)    353                           355                        738   
                                                                                                   
                                                                                                       
 
 
*) Including Management fees for the CEO, Directors Executive Management and
other related parties 
 
All Transactions are made at market value. 
 
Note 4 -TRANSACTIONS AND BALANCES WITH RELATED PARTIES (CONT.): 
 
Balances with related parties: 
 
                                              As at                
                                              30.6.2016              30.6.2015    31.12.2015  
                                              U.S. $ in thousands  
                                              Unaudited              Audited    
 Other receivables (Other accounts payables)  (90)                   9            50          
                                                                                              
 
 
50 
 
Amendment to Service Agreement with controlling shareholder: 
 
Following the receipt of recommendations of both the remuneration committee
and the board of directors of the company, an amendment to the service
agreement between the Company and the controlling shareholders (via their
management company) was approved by a shareholders' meeting held on May 18,
2016. According to the amendment, the agreement is in place for 3 years
starting June 1, 2016, after which it will be renewed for periods of 3 years
in accordance to the relevant rules and regulations. Nevertheless the
agreement can be terminated by either party by providing 90 days' notice. The
agreement includes remuneration (per month) of: 
 
1.     25,000 NIS to Mr. Zvi Borovitz (raise from 20K NIS prior to this
approval) for his service as a chairman of the board of the company in
capacity of at least 25% and 
 
2.     65,000 NIS to Mr. Moni Borovitz (raise from 60K NIS prior to this
approval) for his service as CFO of the company in capacity of at least 80%. 
 
All amounts are prior to VAT which will be added to the invoices and are
linked to the increase in the consumer price index. 
 
In addition to the above, and in accordance to the remuneration policy adopted
by the company, as required under rule 20 to the Israeli Companies Law, a
bonus scheme was granted to each of the managers. The bonus scheme states that
Zvi Borovitz and Moni Borovitz will be entitled (each one of them) to a bonus
amounting 2.5% of the company's net profit exceeding 400,000 USD per year
(raise from $250K prior to this approval), prior to any bonuses grant in the
Company. In case of a loss in a year the bonus for the next year will be for a
net profit exceeding 400,000 USD above the loss made in the previous year. In
addition Mr. Moni Borovitz shall be entitled to a bonus equal to two months
management fee, based on the meeting of targets specified by the remuneration
committee at the beginning of each year. 
 
A ceiling to the bonuses was set at 8 months management fees for Mr. Moni
Borovitz and 100,000 USD for Mr. Zvi Borovitz. 
 
The agreement also states that the Company shall reimburse the management of
the company for any expense made in performance of the manager's duty. The
Company shall also provide each of the managers with a car and phones and will
be responsible for all its related expenses, including all relevant taxes. 
 
Note 5 - SIGNIFICANT EVENTS: 
 
a.  On January 12, 2016, following the approval of its shareholders, the
Company adopted a change to its articles of association allowing the Company
the ability to pay dividends by way of scrip, meaning the board would be able
to announce a dividend which could be paid in cash or through the issue of new
shares in the Company (the "Scrip Dividend Policy"). Under the Scrip Dividend
Policy, shareholders could, in the future, be given the option to elect to
receive dividends in new shares of the Company rather than in cash. The
default arrangement will be for the payment of dividends in cash, and if the
shareholder prefers to receive their dividends in new shares of the Company,
then they would have to make an election. There would be no ability to make
mixed elections and each shareholder would be able to choose either cash or
new shares but not both. The decision to offer shareholders a scrip dividend
alternative for future dividend payments will be at the sole discretion of the
Board. 
 
b.  During the first half of 2016 several employees exercised options to 155
thousand shares in exchange for approximately of $21 thousand. 
 
c.  On April 1, 2016 the company paid a dividend of US 1.1 cents per share
totaling approximately $567 thousand 
 
d.  On May 2, 2016 shares in Mottech Water Management (Pty) Ltd. in South
Africa ("Mottech SA") were allotted to its general manager. Following this
allotment the Company owns 85% of Mottech SA. 
 
e.  A new option scheme for key employees was approved at the Company's Annual
General Meeting on May 18, 2016. Under the plan, options to purchase 800
thousands ordinary shares were granted (each option to one ordinary share).
This represents approximately 1.5% of the Company's current issued and voting
share capital on a fully diluted basis. The vesting period of the options
shall be as follows: 2 years for 50% of the options, 3 years for additional
25% of the options and 4 years for the reminder of the option. Unexercised
options expire six years after date of the grant after which they will be
void. Options are forfeited when the employee leaves the Company. There is no
cash settlement of the options. 
 
The weighted average fair value of the options as at the grant date is 6 pence
(approximately 9 cents) per option, and was estimated using a Black and
Scholes option pricing model based on the following significant data and
assumptions: 
 
Share price - 19.88 pence (representing approximately 29 cents) 
 
Exercise price - 27 pence (representing approximately 39 cents) 
 
Expected volatility - 45.34% 
 
Risk-free interest rate - 0.85% 
 
And expected average life of options 4.375 years 
 
The volatility measured at the standard deviation of expected share price
returns is based on the historical volatility of the Company. The options were
granted as part of a plan that was adopted in accordance with the provision of
section 102 of the Israeli Income Tax Ordinance. 
 
This information is provided by RNS
The company news service from the London Stock Exchange