RETALIX LTD.

RETALIX LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 8 – COMMITMENTS, PLEDGES AND CONTINGENT LIABILITIES:
a. Commitments:
1) Lease agreements:
The Group has entered into operating lease agreements for the premises it uses; the last lease expires in 2010. In
addition, the Company leases vehicles under standard commercial leases for periods of three years per vehicle.
The projected charges under the above leases are mainly denominated in U.S. $, at rates in effect as of December 31,
2005, as follows:
F-28
U.S. $
in thousands
Year ending December 31:
2006 5,810
2007 4,639
2008 2,517
2009 1,429
2010 636
15,031
Office lease expenses totaled $3,048,000, $1,922,000 and $1,504,000 in the years ended December 31, 2005, 2004 and
2003, respectively.
2) Effective April 1, 1998, the Company’s Chief Executive Officer (“the CEO”), is entitled to receive a bonus subject to the
Company’s attaining certain performance milestones: For the first $1,000,000 of the Company’s net income, he is
entitled to a bonus of $65,000 and for every subsequent $1,000,000 of net income $5,000 less than the entitlement in
respect of the previous $1,000,000, but not less than a bonus of $35,000 for every million over the seventh million of net
income.
In addition, according to the same arrangement, the CEO is entitled to options to be granted beginning each calendar
year, equal to 1% of the Company’s issued share capital per grantee for each year. The exercise price of the options is
equal to the closing market price of the shares at the day preceding the grant date. The options are blocked over three
years from grant date, and become exercisable in three equal portions at the end of each year during said three-year
period.
3) Royalty commitments:
The Company and some of its subsidiaries are committed to pay the Government of Israel royalties on revenues derived
from certain products, the research and development of which, is partly financed by royalty-bearing Government
participations. These funding programs are managed by the Israeli government within the jurisdiction of The Ministry of
Commerce and Industry and specifically by the Office of the Chief Scientist. At the time the grants were received,
successful development of the related projects was not assured.