Israel : (IsraelCorp)Compensation Policy - marked Complementary (007)Open link in a new window

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Appendix B

ISRAEL CORPORATION LTD.

COMPENSATION POLICY

In accordance with the provisions of the Companies Law, 5759 - 1999

Below is the Compensation Policy of Israel Corporation Ltd. (hereinafter: "Israel Corporation" or the "Company"), which was determined by the Board of Directors of the Company, after considering the recommendations submitted thereto by the Company's Compensation Committee.

1. The Objectives of the Compensation Policy - General

1. The Company's Compensation Policy is intended to advance the Company's objectives, its work plan and its policy with a long-term perspective, whilst providing a response to the Company's needs and requirements, taking into consideration the size of the Company, the complexity of its business and the ever-changing challenges which it faces, and also taking into consideration the uniqueness of the Company and the nature of its operations as a holding company.
2. In the determination of the Compensation Policy for the officers, various considerations were taken into account, inter alia, the position of the officers, the current terms and conditions of office at the Company, the managerial inputs required in the management of a company of this sort, the areas of responsibility of the officers and the officers' contribution to the achievement of the Company's objectives and to maximizing the Company's profits and for the benefit of its shareholders, with a long- term perspective.1
3. The objectives of this Compensation Policy are, inter alia, as set forth below:
4. 1. To retain the officers serving at the Company, who possess the skills and qualifications as required, and who also possess experience and knowledge of the Company, its characteristics and its various investments and the needs and requirements thereof;
   2. To advance the Company's ability to recruit to its ranks, in accordance with its needs, new officers, with the appropriate experience and qualifications;
   3. To create the appropriate incentives for the officers of the Company to act to maximize the Company's value and to advance its objectives in the long-term, taking into consideration, inter alia, the Company's risk management policy;

1 This was done after addressing the objectives of the policy and the considerations as set forth in Part A of the First Addendum A to the Companies Law.

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1. To provide a basis for compensating the officers, by incorporating fixed components and variable components, in such a manner so as to tie a part of the Officers' compensation to the creation of value for the shareholders of the Company;
2. The grant of terms of office to the directors which will guarantee the freedom of action and independence of the directors, inter alia, in accordance with the law and with the standard terms in office at the Company for directors, and also to guarantee appropriate compensation for directors, inter alia, taking into consideration the Company's objective to appoint directors with the appropriate qualifications, for the Company's benefit, and while taking into consideration the Company's objective to strengthen the alignment of the directors' interests with all of the shareholders' interest in maximizing the Company's value.

1.4. Definitions:

In this Compensation Policy, the following terms shall have the meaning set forth beside them (all as the context and the case may be):

"Annual Financial Reports" - the audited and consolidated annual financial reports of the Company;

The "Law" or the "Companies Law" - the Companies Law, 5759 - 1999; The "Related Terms" - as defined in section 5.2 of this Policy;

The "Corporate Headquarter Companies" - the Company and also the HQ companies, which are wholly owned by the Company.

"Officer/s" - as this term is defined in the Companies Law2;

"Net Profit" - in reference to a particular calendar year, the profit attributed to the owners of the Company, in the said year, as expressed in the Company's Annual Financial Statements;

"Salary" - the regular monthly salary (gross) paid to the Officers, as stated in section 4 of this Compensation Policy;

"Bonus Year" - the calendar year in respect of which an Officer is entitled to an annual bonus pursuant to this Compensation Policy;

"Compensation Regulations" - Companies Regulations (Rules Regarding Compensation and Expenses for Outside Directors), 5760-2000 (or any provisions of the law which shall replace and/or amend same).

12	Notwithstanding the foregoing, with regard to the terms of compensation for directors (including outside
	directors), see section 10 of the Compensation Policy. The reference in the rest of the sections of the
	Compensation Policy (excluding the general provisions) to the term "officers" is done for reasons of
	convenience, and it doesisnot intendedto include directors, unless stated otherwise.

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2. Structure of the Compensation Package

The compensation for the Officers of the Company shall include the following components:

1. Salary;
2. Related terms and conditions;
3. Retirement arrangements;
4. Periodic and/or special bonuses;
5. Capital compensation.

In addition, the Company's policy is that pursuant to the terms of office, the Officers shall be entitled to the Company's indemnity, release (if applicable)and insurance arrangements.

During the period of the Compensation Policy, no more than five VPs will serve in office at the Company.

It should be emphasized thatTogether with this Compensation Policy,the updatedterms and conditionsof office and employment of the Company's incumbent CEO, as of the date of the determination of this Compensation Policy, were approved by the General Meeting, which are consistent with the terms and conditions of this Compensation Policy, are also being brought for approvalof the Company's shareholders that was held on June 27, 2019,3and this Compensation Policy does not derogate from the terms and conditions of office that were approved by the aforesaid General Meeting. In this regard, it should be emphasized that a significant part of the adjustments to this Compensation Policy below is the incorporation in the Compensation Policy of the current terms of office that had been approved for the CEO before this Compensation Policy came into effect.4

In addition, it is clarified that the terms and conditions of this Compensation Policy are

in such format that takes into account, inter alia, the updating of and additions to the terms of compensation to which the CEO of the Company, Mr. Yoav Doppelt, shall be entitled from ICL Group Ltd. (hereinafter: "ICL"), effective from July 2022, in respect of his term in office as the chairman of the Board of Directors of ICL. According to this

1. As stated in the Report Convening a Meeting of the Company dated June 16, 2019 (Reference No. 2019-01- 059392), which is presented by way of incorporation by reference.
2. For details regarding the CEO's current terms of office immediately prior to the date of the approval of this Compensation Policy, see Article 21 of Part D of the Periodic Report for 2021, which was published on March 24, 2022 (Reference No.: 2022-01-034903)(hereinafter: the "Periodic Report for 2021"), which is incorporated herein by reference.

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format, effective from July 2022, ICL shall bear approximately one half5 of the total annual scope of the terms of compensation to which Mr. Doppelt shall be entitled in respect of his duties as the CEO of the Company and as the chairman of the Board of Directors of ICL (when, prior to the update, the Company bears most of the said overall terms of compensation), in such a manner that no significant change is expected to take place in the total scope of the compensation to which Mr. Doppelt shall be entitled in respect of his duties as the CEO of the Company and as the chairman of the Board of Directors of ICL, and this is together with the termination of the Management Agreement between the Company and ICL (effective from July 2022).6

It should be noted that there has been no change to the terms and conditions of the Company's incumbent CEO, and with respect to the provisions regarding the Capital Compensation in Acquired Companies, see section 9.7.3 below.

1. The Ratio between the Components of the Compensation Package
   Given the maximum compensation components as set forth in this Policy, the proportionate part of the variable compensation out of the total compensation is within a range of approximately 3050% - 5570% (in accordance with the position of the Officer, and the terms of his employment)7. It shall be clarified that the actual ratios may vary in accordance with the actual compensation. Thus, for example, in a year in which no bonus is given, or a bonus is given which is lower than the maximum bonus, the ratio between the variable compensation and the total compensation is expected to couldbe lower than that stated above.
   As part of the formulation of this Compensation Policy, the Compensation Committee and the Board of Directors gave their opinion regarding the mix of the compensation package and the desired ratio between the fixed compensation components and the variable compensation components and determined that the Company's policy is that the aforesaid ratio is appropriate and serves the objectives of the Compensation Policy.
2. The Salary of the Company's Officers4.1 Objective

The Company shall pay the Company's Officers an appropriate salary, so as to allow the Company to recruit and retain, for the long-term, managers with the optimal

1. This is assuming that the variable compensation shall be in the amount of the compensation ceilings to which Mr. Doppelt is likely to be entitled.
2. For further details regarding the changes in accordance with the updating of the terms of office at ICL, including in connection with the termination of the Management Agreement between the Company and ICL, effective from July 1, 2022, see Article 21 of Part D (Further Details) of the Periodic Report for 2021, which is incorporated herein by reference.
3. With regard to this estimated range: the retirement pay component is included in the fixed component.

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qualifications and abilities, in accordance with the Company's needs and requirements, characteristics, and the complexity of its business and investments, and for the purpose of advancing its objectives and its policy with a long-term perspective.

1. The Salary of the Company's Officers shall be determined and/or updated from time to time with reference to, inter alia, the objectives of the Compensation Policy as set forth in section 1 above and the following subjects, insofar as relevant:
2. 1. The position in which the Officer serves (or is intended to serve, as the case may be)8;
   2. The Officer's areas of responsibility;
   3. Previous salary agreements between the Company and Officers;
   4. The Officer's education, qualifications, expertise and professional experience9;
   5. The Officer's achievements and his contribution to the Company;
   6. The achievement of the Company's best interests in the retention of the Officer for the long-term;
   7. The ratio between the Officer's salary and the salary of other officers at the Company;
   8. An analysis of the relevant market conditions, taking into consideration the size of the Company, its complexity and the scope of its investments, which may justify higher compensation as compared to other companies, however, in any event, not beyond the maximum salary as set forth in section 4.4 below;
3. The Salary shall be linked to the Consumer Price Index, and the index known on the date of determination of the Salary shall serve as the base index.
4. The maximum monthly salary (gross) which shall be paid by the Company toof the Officersthe Officersshall not exceed the following amounts (in accordance with the Officer's position), which shall be linked to the index in respect of December 201210:

1. In this Policy document, reference to the officer's positions, to his areas of responsibility, and so on and so forth, relates to his actions, his duties and his responsibility, as the case may be, both at the Company and also at companies held by the Company. Nothing stated in this Compensation Policy shall derogate from the possibility that the Officers (including directors) have to receive compensation for their service as directors of companies held by the Company.The point of departure in the determination of this Compensation policy is that the Officers of the Company (with the exception of the Company's CEO as of the date of the determination of this Policy) will not receive compensation from companies held by the Company in respect of their serving in office thereat, with the exception of Capital Compensation in Acquired Companies, as set forth in section 9.7 below, insofar as granted.
2. In this regard, and for the purpose of the Compensation Committee's assessment regarding a new candidate, details will be presented regarding the Officer's general and/or academic education, and also his resume and/or a summary of his experience as relevant to his position at the Company.
3. It is clarified that for the purposes of this Compensation Policy, the term "monthly salary" includes updates made thereto, if any.