{"url_path":"/sec/nice/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 Additional Information.","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-02-26","source_url":"https://www.sec.gov/Archives/edgar/data/1003935/0001003935-26-000010-index.html","accession_number":"0001003935-26-000010","cik":"0001003935","ticker":"NICE","issuer_name":"NICE Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1003935/0001003935-26-000010-index.html","primary_entity_key":"0001003935","primary_entity_name":"NICE Ltd."},"word_count":12834,"has_tables":true,"body_markdown":"Item 10.    Additional Information.\n\nMemorandum and Articles of Association\n\nOrganization and Register\n\nWe are a company limited by shares organized in the State of Israel under the Israeli Companies Law. We are registered with the Registrar of Companies of the State of Israel and have the company number 52-0036872.\n\n79\n\nObjectives and Purposes\n\nOur objectives and purposes include a wide variety of business purposes, including all kinds of research, development, distribution, service and maintenance of products in all fields of technology and engineering and to engage in any other kind of business or commercial activity. Our objectives and purposes are set forth in detail in Section 2 of our memorandum of association.\n\nDirectors\n\nOur articles of association provide that the number of directors serving on the Board shall be not less than three but shall not exceed thirteen. As discussed above in Item 6, “Directors, Senior Management and Employees – Board Practices – External Directors,” in December 2016, our shareholders approved amendments to our articles of association, pursuant to which our Board of Directors may elect to opt out of such requirements and we would not be required to have external directors serve on our Board of Directors. At this time, our Board of Directors has not made an election to opt out of such requirements. Our directors, other than external directors, are elected at the annual shareholders meeting to serve until the next annual meeting or until their earlier death, resignation, bankruptcy, incapacity or removal by resolution of the general shareholders meeting. Directors may be re-elected at each annual shareholders’ meeting. The Board may appoint additional directors to fill a vacancy however occurring (including a vacancy resulting from the number of directors serving being less than the maximum number stated in articles 32(a) of our articles of association), to serve until the next annual shareholders meeting, provided, however, that the Board shall have no obligation to fill any vacancy unless the number of directors is less than three. Our officers serve at the discretion of the Board.\n\nThe Board of Directors may meet and adjourn its meetings according to the Company’s needs but must meet at least once every three months. A meeting of the Board may be called at the request of any two directors. The quorum required for a meeting of the Board consists of a majority of directors who are lawfully entitled to participate in the meeting and vote thereon. The adoption of a resolution by the Board requires approval by a simple majority of the directors present at a meeting in which such resolution is proposed. In lieu of a Board meeting, a resolution may be adopted if all of the directors lawfully entitled to vote thereon consent not to convene a meeting.\n\nSubject to the Israeli Companies law, the Board may appoint a committee of the Board and delegate to such committee all or any of the powers of the Board, as it deems appropriate. Under the Israeli Companies Law, the Board of Directors must appoint an internal audit committee comprised of at least three directors. The function of the internal audit committee is to review irregularities in the management of the Company’s business and recommend remedial measures. The committee is also required, under the Israeli Companies Law, to approve certain related party transactions and to assess our internal audit system and the performance of our internal auditor. Notwithstanding the foregoing, the Board may, at any time, amend, restate or cancel the delegation of any of its powers to any of its committees. The Board has appointed an internal audit and ESG committee which has three members, an audit committee which has five members, a compensation committee which has four members, a nominating committee which has two members and a mergers and acquisitions committee which has five members. For more information on the Company’s committees, please see Item 6, “Directors, Senior Management and Employees—Board Practices” in this annual report.\n\nFiduciary Duties of Officers\n\nThe Israeli Companies Law codifies the fiduciary duties that “office holders,” including directors and executive officers, owe to a company. An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of loyalty includes avoiding any conflict of interest between the office holder’s position in the company and his personal affairs, avoiding any competition with the company, avoiding exploiting any business opportunity of the company in order to receive personal advantage for himself or others, and revealing to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.\n\nApproval of Certain Transactions\n\nThe Israeli Companies Law requires that an office holder of a company promptly disclose any personal interest that he or she may have and all related material information known to him or her, in connection with any existing or proposed transaction by the company. In addition, if the transaction is an extraordinary transaction as defined under Israeli law, the office holder must also disclose any personal interest held by the office holder’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants and the spouses of any of the foregoing. In addition, the office holder must also disclose\n\n80\n\nany interest held by any corporation in which the office holder is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager. An extraordinary transaction is defined as a transaction not in the ordinary course of business, not on market terms, or that is likely to have a material impact on the company’s profitability, assets or liabilities.\n\nIn the case of a transaction which is not an extraordinary transaction, after the office holder complies with the above disclosure requirement, only Board approval is required unless the articles of association of the company provide otherwise. The transaction must not be adverse to the company’s interest. Furthermore, if the transaction is an extraordinary transaction, then, in addition to any approval stipulated by the articles of association, it also must be approved by the company’s internal audit committee and then by the Board of Directors, and, under certain circumstances, by a meeting of the shareholders of the company. An office holder who has a personal interest in a transaction that is considered at a meeting of the Board of Directors or the internal audit committee generally may not be present at the deliberations or vote on this matter, unless the chairman of the Board or chairman of the internal audit committee, as the case may be, determined that the presence of such person is necessary to present the transaction to the meeting. If a majority of the directors have a personal interest in an extraordinary transaction with the company, shareholder approval of the transaction is required.\n\nIt is the responsibility of the audit committee to determine whether or not a transaction should be deemed an extraordinary transaction. In addition, the audit committee must also establish (i) procedures for the consideration of any transaction with a controlling shareholder, even if it is not extraordinary, such as a competitive process with third parties or negotiation by independent directors, and (ii) approval requirements for controlling shareholder transactions that are not negligible. \n\nThe Israeli Companies Law applies the same disclosure requirements to a controlling shareholder of a public company, which includes a shareholder that holds 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in the company. Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, and the terms of management fees of a controlling shareholder or compensation of a controlling shareholder who is an office holder, require the approval of the audit committee, the Board of Directors and the shareholders of the company by simple majority; provided that either such majority vote must include at least a simple majority of the shareholders who have no personal interest in the transaction and are present at the meeting (without taking into account the votes of the abstaining shareholders), or that the total shareholdings of those who have no personal interest in the transaction who vote against the transaction represent no more than two percent of the voting rights in the company. Any such extraordinary transaction whose term is longer than three years requires further shareholder approval every three years, unless (with respect to transactions not involving management fees or employment terms) the internal audit committee approves that a longer term is reasonable under the circumstances.\n\nIn addition, under the Israeli Companies Law, a private placement of securities requires approval by the Board of Directors and the shareholders of the company if it will cause a person to become a controlling shareholder or if:\n\n•the securities issued amount to 20% or more of the company’s outstanding voting rights before the issuance;\n\n•some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and\n\n•the transaction will increase the relative holdings of a shareholder that holds 5% or more of the company’s outstanding share capital or voting rights or that will cause any person to become, as a result of the issuance, a holder of more than 5% of the company’s outstanding share capital or voting rights.\n\nAccording to the Company’s articles of association, certain resolutions, such as resolutions regarding mergers and windings up, require approval of the holders of 75% of the shares represented at the meeting and voting thereon.\n\nApproval of Office Holder Compensation\n\nUnder the Israeli Companies Law, we are required to adopt a compensation policy, recommended by the compensation committee, and approved by the Board of Directors and the shareholders, in that order, at least once every three years. The shareholder approval requires a majority of the votes cast by shareholders, excluding any controlling shareholder and those who have a personal interest in the matter (similar to the threshold described above). Our current Compensation\n\n81\n\nPolicy was approved by our shareholders at our 2023 annual general meeting. At our 2024 annual general meeting, our shareholders approved updates to our current Compensation Policy with respect to Executive Equity Award Caps and Performance Mix. In general, all office holders’ terms of compensation – including fixed remuneration, bonuses, equity compensation, retirement or termination payments, indemnification, liability insurance and the grant of an exemption from liability - must comply with the Company’s Compensation Policy, subject to certain exemptions under the Companies Law. Although Nasdaq rules generally require shareholder approval when an equity-based compensation plan is established or materially amended, as a foreign private issuer we follow the aforementioned requirements of the Israeli Companies Law.\n\nIn addition, the compensation terms of directors, the chief executive officer, and any employee or service provider who is considered a controlling shareholder generally must be approved separately by the compensation committee, the Board of Directors and the shareholders of the company, in that order. The shareholder approval of the compensation of the chief executive officer requires a majority of the votes cast by shareholders, excluding any controlling shareholder and those who have a personal interest in the matter.\n\nNotwithstanding the foregoing, in certain limited circumstances, prescribed by the Companies Law, a company’s compensation committee and board of directors are permitted to approve the compensation policy or the compensation terms of the chief executive officer, without shareholders' approval.\n\nThe compensation terms of other officer holders require the approval of the compensation committee and the Board of Directors. An amendment of existing compensation terms of an office holder who is not a director, if the compensation committee determines that the amendment is not material, requires the approval of the compensation committee only. Pursuant to regulations promulgated under the Israeli Companies Law, an amendment of the existing compensation terms of office holders who are subordinate to the chief executive officer, if the amendment is not material and the changes are in line with the existing Compensation Policy, requires only the chief executive officer’s approval. Under our Compensation Policy, our Chief Executive Officer is authorized to approve non-material changes to the compensation terms of office holders subordinated to him, without seeking the approval of the compensation committee.\n\nThe Compensation Policy sets forth the guidelines for the compensation of our office holders. It is tailored to ensure a compensation which balances performance targets and time horizons through rewarding business results and long-term performance. The Compensation Policy requires that compensation of our office holders include a mix of fixed amounts (such as annual based salaries), variable performance-based components (such as performance-based cash incentive compensation), and long term incentive components (such as long-term equity-based compensation, including performance- based equity). Pursuant to the Compensation Policy, performance-based compensation granted may be based on our overall performance, the particular unit performance, individual performance and the results of the customer satisfaction survey conducted annually. Our Compensation Policy includes applicable clawback provisions and references the Company's compensation recovery policy adopted pursuant to the Nasdaq listing rules in response to Exchange Act Rule 10D-1.\n\nDuties of Shareholders\n\nUnder the Israeli Companies Law, a shareholder has a duty to act in good faith towards the company and other shareholders and to refrain from abusing his or her power in the company including, among other things, voting in a general meeting of shareholders on the following matters:\n\n•any amendment to the articles of association;\n\n•an increase of the company’s authorized share capital;\n\n•a merger; or\n\n•approval of interested party transactions which require shareholder approval.\n\nIn addition, any controlling shareholder, any shareholder who knows that it possesses power to determine the outcome of a shareholder vote and any shareholder who, pursuant to the provisions of a company’s articles of association, has the power to appoint or prevent the appointment of an office holder in the company, is under a duty to act with fairness towards the company. The Israeli Companies Law does not describe the substance of this duty but provides that a breach of his duty is tantamount to a breach of fiduciary duty of an officer of the company.\n\n82\n\nExemption, Insurance and Indemnification of Directors and Officers\n\nExemption of Office Holders\n\nUnder the Israeli Companies Law, an Israeli company may not exempt an office holder from liability for breach of his duty of loyalty but may exempt in advance an office holder from liability to the company, in whole or in part, for a breach of his duty of care (except in connection with distributions), provided the articles of association of the company allow it to do so. Our articles of association do not allow us to do so.\n\nOffice Holder Insurance\n\nOur articles of association provide that, subject to the provisions of the Israeli Companies Law, including the receipt of all approvals as required therein or under any applicable law, we may enter into an agreement to insure an office holder for any responsibility or liability that may be imposed on such office holder in connection with an act performed by such office holder in such office holder’s capacity as an office holder of us with respect to each of the following:\n\n•a violation of his duty of care to us or to another person;\n\n•a breach of his duty of loyalty to us, provided that the office holder acted in good faith and had reasonable grounds to assume that his act would not prejudice our interests;\n\n•a financial obligation imposed upon him for the benefit of another person;\n\n•a payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law, 5728-1968, as amended (the “Securities Law”) and Litigation Expenses (as defined below) that the office holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law; and\n\n•any other event, occurrence or circumstance in respect of which we may lawfully insure an office holder.\n\nIndemnification of Office Holders\n\nOur articles of association provide that, subject to the provisions of the Israeli Companies Law, including the receipt of all approvals as required therein or under any applicable law we may indemnify an office holder with respect to any liability or expense for which indemnification may be provided under the Israeli Companies Law, including the following liabilities and expenses, provided that such liabilities or expenses were imposed upon or incurred by such office holder in such office holder’s capacity as an office holder of us:\n\n•a monetary liability imposed on or incurred by an office holder pursuant to a judgment in favor of another person, including a judgment imposed on such office holder in a settlement or in an arbitration decision that was approved by a court of law;\n\n•reasonable Litigation Expenses, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent (mens rea) or in connection with a financial sanction;\n\n•“conclusion of a proceeding without filing an indictment” in a matter in which a criminal investigation has been instigated and “financial liability in lieu of a criminal proceeding,” have the meaning ascribed to them under the Israeli Companies Law. The term “Litigation Expenses” shall include, without limitation, attorneys’ fees and all other costs, expenses and obligations paid or incurred by an office holder in connection with investigating, defending, being a witness or participating in (including on appeal), or preparing to defend, be a witness or participate in any claim or proceeding relating to any matter for which indemnification may be provided;\n\n83\n\n•reasonable Litigation Expenses, which the office holder incurred or with which the office holder was charged by a court of law, in a proceeding brought against the office holder, by the Company, on its behalf or by another person, or in a criminal prosecution in which the office holder was acquitted, or in a criminal prosecution in which the office holder was convicted of an offense that does not require proof of criminal intent (mens rea);\n\n•a payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and Litigation Expenses that the office holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law; and\n\n•any other event, occurrence or circumstance in respect of which we may lawfully indemnify an office holder.\n\nThe foregoing indemnification may be procured by us (a) retroactively and (b) as a commitment in advance to indemnify an office holder, provided that, in respect of the first bullet above, such commitment shall be limited to (A) such events that in the opinion of the Board of Directors are foreseeable in light of our actual operations at the time the undertaking to indemnify is provided, and (B) to the amounts or criterion that the Board of Directors deems reasonable under the circumstances; and further provided that such events and amounts or criterion are set forth in the undertaking to indemnify, and which shall in no event exceed, in the aggregate, the greater of: (i) 25% of our shareholder’s equity at the time of the indemnification or (ii) 25% of our shareholder’s equity at the end of fiscal year of 2010.\n\nWe have undertaken to indemnify our directors and officers pursuant to applicable law and we have obtained directors' and officers' liability insurance for the benefit of our directors and officers.\n\nLimitations on Exemption, Insurance and Indemnification\n\nThe Israeli Companies Law provides that a company may not exempt or indemnify an office holder, or enter into an insurance contract, which would provide coverage for any monetary liability incurred as a result of any of the following:\n\n•a breach by the office holder of his duty of loyalty unless, with respect to insurance coverage or indemnification, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;\n\n•a breach by the office holder of his duty of care if the breach was done intentionally or recklessly (other than if solely done in negligence);\n\n•any act or omission done with the intent to derive an illegal personal benefit; or\n\n•a fine, civil fine or ransom levied on an office holder, or a financial sanction imposed upon an office holder under Israeli Law.\n\nRequired Approvals\n\nIn addition, under the Israeli Companies Law, any exemption of, indemnification of, or procurement of insurance coverage for, our office holders must be approved by our compensation committee and our Board of Directors and, if the beneficiary is the chief executive officer or a director, by our shareholders. We have obtained such approvals for the procurement of liability insurance covering our officers and directors and for the grant of indemnification letters to our officers and directors.\n\nRights of Ordinary Shares\n\nOur ordinary shares confer upon our shareholders the right to receive notices of, and to attend, shareholder meetings, the right to one vote per ordinary share at all shareholders’ meetings for all purposes, and to share equally, on a per share basis, in such dividends as may be declared by our Board of Directors; and upon liquidation or dissolution, the right to participate in the distribution of any surplus assets of the Company legally available for distribution to shareholders after payment of all debts and other liabilities of the Company. All ordinary shares rank pari passu in all respects with each other. Our Board of Directors may, from time to time, make such calls as it may think fit upon a shareholder in respect of any sum\n\n84\n\nunpaid in respect of shares held by such shareholder which is not payable at a fixed time, and each shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments).\n\nMeetings of Shareholders\n\nAn annual general meeting of our shareholders shall be held once in every calendar year (and no later than 15 months after the preceding annual meeting) at such time and at such place either within or without the State of Israel as may be determined by our Board of Directors.\n\nOur Board of Directors may, whenever it thinks fit, convene a special general meeting at such time and place, within or without the State of Israel, as may be determined by the Board of Directors. In addition, the Israeli Companies Law provides that our Board of Directors is required to convene a special meeting upon the written request of (i) any two of our directors or one-quarter of the members of our Board of Directors or (ii) as a company listed on an exchange in the U.S., one or more shareholders holding, in the aggregate, either (a) 10% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 10% or more of our outstanding voting power.\n\nUnder the Israeli Companies Law, one or more shareholders holding at least 1% of the voting rights at the general meeting may request that the board of directors include a matter in the agenda of a general meeting to be convened in the future, provided that it is appropriate to discuss such a matter at the general meeting. Notwithstanding the foregoing, as a company listed on an exchange outside of Israel, a matter relating to the appointment or removal of a director may only be requested by one or more shareholders holding at least 5% of the voting rights at the general meeting of the shareholders.\n\nThe quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy who hold or represent between them at least 25% of the outstanding voting shares, unless otherwise required by applicable rules. Although Nasdaq generally requires a quorum of 33-1/3%, subject to an exemption under the Nasdaq rules we follow the generally accepted business practice for companies in Israel, which have a quorum requirement of 25%. A meeting adjourned for lack of a quorum generally is adjourned to the same day in the following week at the same time and place or any time and place as the chairman may designate with the consent of a majority of the voting power represented at the meeting and voting on the matter adjourned. At such reconvened meeting, the required quorum consists of any two members present in person or by proxy.\n\nMergers and Acquisitions\n\nA merger of the Company shall require the approval of the holders of 75% of the voting power represented at the annual or special general meeting in person or by proxy or by written ballot, as shall be permitted, and voting thereon in accordance with the provisions of the Israeli Companies Law. Upon the request of a creditor of either party of the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger, the surviving company will be unable to satisfy the obligations of any of the parties to the merger. In addition, a merger may not be completed unless at least (i) 50 days have passed from the time that the requisite proposal for the merger has been filed by each party with the Israeli Registrar of Companies and (ii) 30 days have passed since the merger was approved by the shareholders of each party.\n\nThe Israeli Companies Law also provides that an acquisition of shares of a public company must be made by means of a tender offer if, as a result of the acquisition, the purchaser would become a 25% or greater shareholder of the company and there is no existing 25% or greater shareholder in the company. An acquisition of shares of a public company must be made by means of a tender offer if, as a result of the acquisition, the purchaser would hold more than 45% of the company and there is no existing shareholder of more than 45% in the company. These requirements do not apply if the acquisition (i) occurs in the context of a private placement by the company that received shareholder approval for the purpose of reaching such threshold, (ii) was from a 25% shareholder of the company and resulted in the acquirer becoming a 25% shareholder of the company or (iii) was from a greater than 45% shareholder of the company and resulted in the acquirer becoming a greater than 45% shareholder of the company. The tender offer must be extended to all shareholders, but the offeror is not required to purchase more than 5% of the company’s outstanding shares, regardless of how many shares are tendered by shareholders. The tender offer may be consummated only if (i) at least 5% of the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer.\n\nIf as a result of an acquisition of shares the acquirer will hold more than 90% of a company’s outstanding shares, the acquisition must be made by means of a tender offer for all of the outstanding shares. If as a result of a full tender offer the\n\n85\n\nacquirer would own more than 95% of the outstanding shares, then all the shares that the acquirer offered to purchase will be transferred to it. The law provides for appraisal rights if any shareholder files a request in court within six months following the consummation of a full tender offer, but the acquirer is entitled to stipulate that tendering shareholders forfeit their appraisal rights. If as a result of a full tender offer the acquirer would own 95% or less of the outstanding shares, then the acquirer may not acquire shares that will cause his shareholding to exceed 90% of the outstanding shares.\n\nMaterial Contracts\n\nNotes and Indenture\n\n2020 Notes and Indenture\n\nOn August 27, 2020, we issued $400 million aggregate principal amount of 0% exchangeable senior notes due 2025 (the “2020 Notes”) and on September 4, 2020, we issued an additional $60 million of the 2020 Notes pursuant to the exercise of the initial purchasers’ option. The 2020 Notes are general unsecured obligations of the Company. The sale of the 2020 Notes generated net proceeds of approximately $451 million. The 2020 Notes were issued pursuant to an indenture (the “2020 Indenture” and collectively with the 2017 Indenture, the \"Indentures\") between us and U. S. Bank National Association, as trustee (the “Trustee”).\n\nThe 2020 Notes did not bear regular interest, and the principal amount of the 2020 Notes did not accrete. However, the remaining debt discount was amortized as additional non-cash interest expense using an effective annual interest rate.\n\nOn December 31, 2021, the Company irrevocably elected that all conversions occurring on or after December 31, 2021 would be settled pursuant to Combination Settlement (as defined in the 2020 Indenture) with a Specified Dollar Amount (as defined in the 2020 Indenture) no less than $1,000 per $1,000 principal amount of 2020 Notes. Generally, under this settlement method, the conversion value corresponding to the principal amount will be converted in cash, and the conversion value over the principal amount will be settled, at the Company’s election, in cash or shares or a combination thereof.\n\nThe 2020 Notes fully matured on September 15, 2025 and were settled in cash in the amount of $460 million. There was no conversion value over the principal amount.\n\nCredit Agreement\n\nOn February 18, 2026, we and NICE Systems entered into a secured Credit Agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. The Company completed the closing of the Credit Agreement on February 20, 2026. The Credit Agreement provides for a senior secured revolving facility in an aggregate amount of $300 million USD. The obligations under the Credit Agreement are guaranteed by most of our U.S. material subsidiaries and secured by substantially all of the assets of the Company and the guarantors, subject to certain customary exceptions. Unless terminated earlier, the commitments under the revolving credit facility will expire on February 20, 2029.\n\nWe have the right to prepay borrowings under the Credit Agreement and to reduce the unutilized portion of the revolving credit facility, in each case, at any time without premium or penalty (except for customary breakage fees, if any). The interest rates under the Credit Agreement are variable based on SOFR or an alternative base rate (“Base Rate”) at the time of borrowing plus an applicable margin. The applicable margin depends on the Company’s credit rating status. In the case of SOFR rate loans, the applicable margin is 1.50% per annum; provided that, solely during the period (i) starting on the third business day following the date on which NiCE’s corporate credit rating is rated by any two of S&P, Moody’s and Fitch BBB-, Baa3 and/or BBB- (or higher) and (ii) ending on the third business day following the date on which the NiCE’s corporate credit rating is not rated by at least two of S&P, Moody’s and Fitch BBB-, Baa3 and/or BBB- (or higher) (an “IG Rating Period”), such margin shall equal 1.25%. In the case of Base Rate loans, the applicable margin is 0.50% per annum; provided that solely during an IG Rating Period, such margin shall equal 0.25%. A commitment fee will accrue on the average daily unused portion of the revolving facility at a rate of 0.25% per annum, provided that solely during an IG Rating Period, such rate shall equal 0.20%.\n\nThe Credit Agreement contains customary covenants, which include, among others, limitations or restrictions on the incurrence of indebtedness, the incurrence of liens, and entry into sales and leaseback transactions, investments, acquisitions, mergers, transfers, leases, licenses, sublicenses or dispositions of assets, including any Equity Interest (as defined in the Credit Agreement) owned by us or any of our subsidiaries, transactions with affiliates and certain transactions limiting the ability of subsidiaries to pay dividends, in each case, subject to certain exceptions. The Credit Agreement also includes a requirement that we maintain a leverage ratio, to be tested quarterly, measured by the ratio of consolidated total net\n\n86\n\nindebtedness to consolidated EBITDA, net of any unrestricted cash and cash equivalents of the Company and its restricted subsidiaries (“Total Net Leverage Ratio”), that does not exceed 3.00 to 1.00; provided that after any acquisition or series of related acquisitions consummated within a six-month period by any loan party with aggregate consideration of at least $250 million, we shall have the option to increase the maximum Total Net Leverage Ratio for each of the four consecutive fiscal quarters ending thereafter (commencing with the fiscal quarter during which such acquisition is consummated) by 0.50:1.00. For these ratios, consolidated EBITDA and consolidated total net indebtedness are calculated in a manner defined in the Credit Agreement. The Credit Agreement also includes customary events of defaults.\n\nAs of February 26, 2026, the Company has not drawn any amounts under the Credit Agreement, and the full committed amount remained available.\n\nExchange Controls\n\nHolders of ADSs are able to convert dividends and liquidation distributions into freely repatriable non-Israeli currencies at the rate of exchange prevailing at the time of repatriation, pursuant to regulations issued under the Currency Control Law, 5738–1978, provided that Israeli income tax has been withheld by us with respect to amounts that are being repatriated to the extent applicable or an exemption has been obtained.\n\nOur ADSs may be freely held and traded pursuant to the General Permit and the Currency Control Law. The ownership or voting of ADSs by non-residents of Israel are not restricted in any way by our memorandum of association or articles of association or by the laws of the State of Israel, except subjects of a country deemed an “enemy country” under Israeli legislation or persons or individuals on weapon of mass destruction or terror sanctions lists.\n\nTaxation\n\nThe following is a discussion of Israeli and United States tax consequences material to our shareholders. The discussion is not intended, and should not be construed, as legal or professional tax advice and does not exhaust all possible tax considerations.\n\nHolders of our ADSs should consult their own tax advisors as to the United States, Israeli or other tax consequences of the purchase, ownership and disposition of our ADSs, including, in particular, the effect of any foreign, state or local taxes.\n\nIsraeli Tax Considerations\n\nThe following is a summary of both the general corporate tax laws applicable to companies in Israel, with special reference to their effect on us, and a discussion of the material tax consequences to holders of our ordinary shares or ADSs related to our domicile in Israel. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular holder in light of his or her personal circumstances or to some types of holders subject to special treatment under Israeli law. To the extent that the discussion is based on new tax legislation which has not been subject to judicial or administrative interpretation, we cannot assure that the views expressed in the discussion will be accepted by the appropriate tax authorities or the courts. The discussion below is subject to change, including due to amendments to Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change could affect the tax consequences described below. The discussion is not intended, and should not be construed, as a legal or professional tax advice and is not exhaustive of all possible tax considerations. You are urged to consult your own tax advisors as to the Israeli or other tax consequences of the purchase, ownership, and disposition of our ordinary shares or ADSs, including, in particular, the effect of any foreign, state or local taxes.\n\nGeneral Corporate Taxation in Israel\n\nGenerally, Israeli-resident companies are subject to corporate tax on their taxable income, including capital gains, at the rate of 23% for 2024 and 2025. However, the effective tax rate payable by a company that is eligible for tax benefits under the Israeli Law for the Encouragement of Capital Investments-1959 (the \"Investments Law\"), and in particular the 6% tax rate in 2025 and in 2024 under the Special Preferred Technology Enterprise and Preferred Technology Enterprise regime (as discussed below), may be considerably less.\n\nForeign Exchange Regulations\n\nWe are permitted to measure our Israeli taxable income in U.S. dollars pursuant to regulations published by the Israeli Minister of Finance, which provide the conditions for doing so. We believe that we meet, and will continue to meet,\n\n87\n\nthe necessary conditions and as such, we measure our results for tax purposes based on the U.S. dollar/NIS exchange rate on December 31 of the relevant tax year.\n\nTax Benefits under the Israeli Law for the Encouragement of Capital Investments, 1959, as amended.\n\nPursuant to the Investments Law and its various amendments, our Company and its Israeli subsidiary have been granted “Approved Enterprise” status, allowing us to benefit from significant tax benefits through our “Approved, Beneficiary, Preferred Enterprise” programs up to 2016 tax year. From 2017 onwards, the Company has been eligible to tax benefits as a \"Preferred Technological Enterprise\", and as a \"Special Preferred Technological Enterprise\" from 2024 onwards. Continued eligibility for these benefits requires compliance with specific conditions; non-compliance may result in revocation of benefits and interest and inflation adjustments. As of December 31, 2025, we believe that we comply with all the conditions required by the Investments Law.\n\nThe New Technological Enterprise Incentives Regime - the “2017 Amendment”\n\nThe 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and became effective January 1, 2017. The 2017 Amendment provides new tax benefits for two types of \"Technology Enterprise\", as described below, applicable to both the Company and its Israeli subsidiary from the 2017 tax year. The 2017 Amendment is in addition to the other existing tax beneficial programs under the Investments Law.\n\nBenefits under the “Preferred Technology Enterprise” and \"Special Preferred Enterprises\" regimes include:\n\n•A reduced corporate tax rate of 12% (or 7.5% in Development Area A) on income that qualifies as Preferred Technology Income(as defined in the Investments Law), subject to conditions, including a minimal amount or ratio of annual R&D expenditures and R&D employees, and having at least 25% of annual income derived from export. A technology company satisfying certain conditions (among others, group consolidated revenues of at least NIS 10 billion) will qualify as a Special Preferred Technological Enterprises and will thereby enjoy a reduced corporate tax rate of 6% on such Preferred Technology Income, regardless of the company’s geographic location within Israel;\n\n•A reduced 12% capital gains tax rate on the sale of certain Preferred Intangible Assets (as defined in the Investments Law) by Preferred Technology Enterprise to a foreign related enterprise, provided that the asset was initially purchased from a foreign resident (as defined in the Investment Law) at an amount of NIS 200 million or more and the sale receives prior approval from the IIA. In addition, Special Preferred Technological Enterprises are subject to a reduced corporate tax rate of 6% on capital gains tax derived from the sale of certain “Benefitted Intangible Assets” to a related foreign company if the Benefitted Intangible Assets were either developed by the Special Preferred Technological Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the Israel Innovation Authority. A Special Preferred Technology Enterprise that acquires Benefitted Intangible Assets from a foreign company for more than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the Investment Law; and\n\n•Dividends distributed to Israeli shareholders by a Preferred Technology Enterprise or a Special Preferred Technology Enterprise, paid out of Preferred Technology Income , are generally subject to withholding tax at source at the rate of 20% (in the case of non-Israeli shareholders – subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate, 20% or such lower rate as may be provided in an applicable tax treaty). However, if such dividends are paid to an Israeli company, no tax is required to be withheld (although, if such dividends are subsequently distributed to individuals or a non-Israeli company, the aforesaid will apply). Such rate may be reduced to 4% on dividends paid to a foreign resident company that holds solely or together with other foreign companies 90% or more in the Israeli company and other conditions are met (or a lower rate under a tax treaty, if applicable, subject to the receipt in advance of a valid certificate from the Israel Tax Authority, allowing for a reduced tax rate).\n\n88\n\nThe effective tax rate applying to our Special Preferred Technological Enterprises and Preferred Technology Enterprise is calculated based on the Nexus Principles, considering eligible and ineligible R&D expenses incurred by us, as prescribed in the Regulations.\n\nIncome from sources other than the Special Preferred Technological Enterprises and Preferred Technology Income are taxable at regular corporate tax rates of 23% for 2024 and 2025.\n\nFull details regarding our Preferred, Preferred Technology Enterprises and Special Preferred Technological Enterprises may be found in Note 13(a)(1) of our consolidated financial statements.\n\nTax Benefits and Grants for Research and Development\n\nIsraeli tax law allows, under specified conditions, a tax deduction for expenditures, including capital expenditures in scientific research, for the year in which they are incurred. These expenses must relate to scientific research and development projects and must be approved by the relevant Israeli government ministry, determined by the field of research, and the research and development must be conducted for the promotion of the company and carried out by or on behalf of the company seeking such deduction. However, the amount of such deductible expenses is reduced by the sum of any funds received through government grants for the financing of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Tax Ordinance. Expenditures not so approved, but otherwise qualifying for deduction, are deductible in equal amounts over a three‑year period. From time to time we may apply for approval to allow a tax deduction for all or most of research and development expenses during the year incurred.\n\nTax Benefits under the Law for the Encouragement of Industry (Taxes), 1969\n\nUnder the Law for the Encouragement of Industry (Taxes), 1969 (the “Industry Encouragement Law”), Industrial Companies (as defined below) are entitled to the following tax benefits, among others:\n\n•amortization of the cost of purchased patent, rights to use a patent, and know how that were purchased in good faith and are used for the development or advancement of the Industrial Enterprise, over an eight-year period commencing on the year in which such rights were first exercised;\n\n•amortization in equal amounts over a three-year period of expenses involved with the issuance and listing of shares on a stock market, commencing on the year of the offering; and\n\n•the right to elect, under specified conditions, to file a consolidated tax return with other related Israeli Industrial Companies controlled by it.\n\nEligibility for benefits under the Industry Encouragement Law does not require prior approval from any governmental authority. Under the Industry Encouragement Law, an “Industrial Company” is defined as an Israeli resident company for tax purposes, incorporating in Israel, deriving at least 90% of its income (other than income from certain government loans), in any tax year, from an “Industrial Enterprise” owned by it and located in Israel or in the \"Area\" in accordance with the definition under section 3A of the Tax Ordinance.\n\nAn “Industrial Enterprise” is defined as an enterprise, which is held by an Industrial Company, whose principal activity in a given tax year is industrial production activity. We believe that we currently qualify as an Industrial Company under the Industry Encouragement Law. There can be no assurance that we will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.\n\n89\n\nTaxation of Holders of Ordinary Shares\n\nThe following discussion is a short summary of certain provisions of the tax environment to which holders of our ordinary shares may be subject. However, the same tax treatment would apply to holders of our ADSs.\n\nCapital Gains Tax on Sales of Our Ordinary Shares\n\nIsraeli law generally imposes a capital gains tax on the disposition of any capital assets by residents of Israel, as defined for Israeli tax purposes, and on the disposition of assets (i) located in Israel, (ii) shares or a right to shares in Israeli companies, or (iii) represent, directly or indirectly, rights to assets located in Israel, by both residents and non-residents of Israel, unless a specific exemption is available or unless an applicable tax treaty between Israel and the shareholder’s country of residence provides otherwise. The Tax Ordinance distinguishes between \"Real Capital Gain\" and \"Inflationary Surplus\". The Inflationary Surplus is a portion of the total capital gain equivalent to the increase of the relevant asset’s purchase price attributable to an increase in the Israeli consumer price index, or, under certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of sale. The Real Capital Gain is the excess of the total capital gain over the inflationary surplus.\n\nTaxation of Israeli Residents\n\nIsraeli individuals are generally subject to a tax rate of 25% on capital gains derived from the sale of shares, whether listed on a stock market or not unless such shareholder claims a deduction for financing expenses in connection with such shares, in which case the gain is generally taxed at a rate of 30%. In addition, if such shareholder is considered a “Substantial Shareholder\" (i.e., a shareholder that directly or indirectly, including jointly with such shareholder's \"Relative” or another person who collaborates with such shareholder with respect to the material matters of the corporation on a permanent basis pursuant to an agreement, holds at least 10% of any \"Means of Control\" in the company), at any time during the 12-month period preceding such sale, the tax rate will be 30%. “Means of Control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or direct someone who holds any of such rights on how to exercise these rights, regardless of the source of such right. Individual holders dealing in securities in Israel for whom the income from the sale of securities is considered “business income” as defined in Section 2(1) of the Tax Ordinance are subject to tax at the marginal tax rates applicable to business income (up to 47% in 2025). Certain Israeli institutions that are exempt from tax under Section 9(2) or Section 129C(a)(1) of the Tax Ordinance (such as exempt trust funds and pension funds) may be exempt from capital gains tax on the sale of the shares.\n\nIsraeli companies are subject to the corporate tax rate (23 % in 2025) on capital gains derived from the sale of listed shares.\n\nDifferent tax rates may apply to dealers in securities and shareholders who acquired their shares prior to an initial public offering.\n\nTaxation of Non-Israeli Residents\n\nNon-Israeli residents, both individuals and corporations, are generally exempt from Israeli capital gains tax on gains from the sale of shares publicly traded on the TASE, provided, among others, that such gains were not attributed to a fixed enterprise that the non-resident maintains in Israel. Non-Israeli residents are also exempt from capital gains tax on shares of Israeli companies traded on recognized foreign markets, as long as the shares were not acquired before the issuer’s initial public offering and the gains are not attributed to a fixed enterprise that the non-resident maintains in Israel. However, non-Israeli corporations will not be entitled to the foregoing exemption if Israeli residents (i) hold, whether directly or indirectly, over 25% of the Means of Control, as such term is defined above, in such non-Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of its revenues or profits of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the shares are deemed to be business income.\n\nAdditionally, a sale of securities by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty. For example under the Convention Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended (the “United States-Israel Tax Treaty”), a shareholder who is a United States resident (for purposes of the treaty) holding the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the United States-Israel Tax Treaty (a “U.S. Resident”) is generally exempt from Israeli capital gains tax for sale, exchange or disposition of our ordinary shares under the U.S.-Israel\n\n90\n\nTax Treaty unless: (i) (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such U.S. Resident directly or indirectly, holds 10% or more of our voting power during any part of the 12 months period preceding the disposition, subject to certain conditions; or (v) such U.S. Resident is an individual and was present in Israel for 183 days or more in the aggregate during the relevant year. In any such case, the sale, exchange or disposition of such shares would be subject to Israeli tax, to the extent applicable. However, under the under the United States-Israel Tax Treaty, a U.S. Resident may be permitted to claim a credit for the Israeli tax against the U.S. federal income tax imposed with respect to the sale, exchange or disposition of the shares, subject to the limitations under U.S. laws applicable to foreign tax credits. The United States-Israel Tax Treaty does not provide such credit against any U.S. state or local taxes.\n\nShareholders potentially liable for Israeli tax may face withholding at source and must demonstrate their exemption status. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale (i.e., resident certificate or other documentation). Specifically, in transactions involving the sale of all shares of an Israeli resident company, the Israel Tax Authority may require non-Israeli shareholders to sign a declaration in forms specified by this authority or obtain a specific exemption and, in the absence of such declarations or exemptions, may require the purchaser of the shares to withhold taxes at source.\n\nA tax return, including a computation of the tax due, must be filed and an advance payment must be paid by January 31 and July 31 for sales of securities traded on a stock exchange made in the last six months of the preceding year or the first six months of the current year. However, if all tax due was withheld at source according to applicable provisions of the Tax Ordinance and the regulations promulgated thereunder, the return does not need to be filed if (i) such income was not generated from business in Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed and an advance payment does not need to be made, and (iii) the taxpayer is not obligated to pay surtax (as detailed below). Capital gains must also be reported on the annual income tax return.\n\nTaxation of Dividends Paid on our Ordinary Shares\n\nTaxation of Israeli Residents\n\nIsraeli resident individuals are generally subject to Israeli income tax on dividends received on our ordinary shares. The general applicable tax on dividends is 25% or 30% for a Substantial Shareholder at any time within the 12-month preceding such distribution. Dividends from profits sourced from ordinary income are subject to a 25% withholding tax rate if the shares are registered with a nominee company (whether the recipient is a Substantial Shareholder or not). Dividends from Approved and Beneficiary Enterprises are taxed at 15%, while those from our Preferred Enterprise and Preferred Technology Enterprise are taxed at 20%. If the recipient of the dividend is an Israeli resident corporation, such dividend income is exempt from tax, provided the dividend was derived from income accrued within Israel and received from another corporation subject to Israeli corporate tax. Certain tax exempt Israeli institutions, such as exempt trust funds and pension funds (under Section 9(2) or Section 129C(a)(1) of the Tax Ordinance) may also be exempt from tax on dividends. We cannot guarantee that we will designate the profits that are being distributed in a way that will reduce shareholders’ tax liability.\n\nDividend distributions to Israeli resident corporations are generally not subject to a withholding tax.\n\nTaxation of Non-Israeli Residents\n\nNon-residents of Israel, both individuals and companies, are generally subject to Israeli income tax on dividends paid on our ordinary shares at the rate of 25%, with tax withheld at source, unless an applicable treaty between Israel and the shareholder’s country of residence specifies otherwise. With respect to a person who is a “Substantial Shareholder” (as defined above) at the time of receiving the dividend or on any time during the preceding 12 months, the applicable tax rate is 30%. Such dividends are generally subject to Israeli withholding tax at a rate of 25% if the shares are registered with a nominee company (whether the recipient is a substantial shareholder or not), 15% if the dividend is distributed from income attributed to an Approved Enterprise or Beneficiary Enterprise, 20% if the dividend is distributed from income attributed to a Preferred Enterprise or a Technological Enterprise, and 4% if the dividend is distributed from income attributed to a Technological Enterprise to a foreign company that holds solely or together with other foreign companies 90% or more in the Israeli company and other conditions are met, (please note that the reduced withholding tax rate of 4% will apply only on profits generated after the Preferred Technological Enterprise was acquired by a foreign company), unless a reduced rate is provided under an applicable tax treaty (the reduced rates stated in this paragraph are subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for such reduced tax rate).\n\n91\n\nFor example, under the U.S.-Israel Treaty, the maximum withholding tax on dividend paid by us to a U.S. Resident is 25%. However, the maximum rate of withholding tax on dividends, not generated by an Approved Enterprise, Beneficiary Enterprise, Preferred Enterprise or a Preferred Technological Enterprise, that are paid to a United States corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year. is 12.5%, provided that not more than 25% of the gross income for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to an Approved Enterprise, Beneficiary Enterprise, Preferred Enterprise or a Preferred Technological Enterprise are not entitled to such reduced rate under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the condition related to our gross income for the previous year (as set forth in the previous sentence) is met.\n\nU.S. residents typically have withholding tax deducted at source in Israel and may claim a credit for U.S. federal income tax purposes subject to detailed rules contained in United States tax statutes, rules and regulations. If dividends are attributable to a combination of income derived from income that was subject to tax under the Investments Law and to other sources of income mixed income sources, a blended withholding rate will apply. We cannot guarantee that we will designate distributed profits to reduce shareholders’ tax liability.\n\nNon-resident individuals or corporations receiving dividend income from an Israeli company, from which the full tax was withheld, are generally exempt from the obligation to file tax returns in Israel with respect to such income, provided that (i) such income was not derived from a business conducted in Israel, by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed, and (iii) the taxpayer is not subject to income surtax (as further explained below).\n\nSurtax\n\nSubject to applicable tax treaties, individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to a surtax at the rate of 3% on annual income (including, but not limited to, dividends, interest and capital gain) exceeding NIS 721,560 for each of the years 2025 - 2027 which amount is generally linked to the annual change in the Israeli consumer price index (with the exception that based on Israeli new legislation such amount, and certain other statutory amounts will not be linked to the Israeli consumer price index for the years 2025-2027). Additionally, as of January 1, 2025, an additional 2% will be imposed on \"Capital Sourced income\" (defined as income from any source other than employment income, business income or income from “personal effort”), to the extent that the Individual’s Capital Sourced Income exceeds the specified threshold of NIS 721,560 (and regardless of the employment/business income amount of such individual). This new surtax will apply, among other things, to income from capital gains, dividends, interest, rental income, or the sale of real property.\n\nU.S. Federal Income Tax Considerations\n\nThe following is a summary of certain material U.S. federal income tax consequences that generally apply to U.S. holders (defined below) who hold ADSs as capital assets for tax purposes. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), existing final, temporary and proposed U.S. Treasury regulations thereunder, judicial decisions and published positions of the Internal Revenue Service (the \"IRS\") and the U.S.-Israel income tax treaty, in each case as in effect as of the date of this annual report, all of which are subject to change at any time (including changes in interpretation), possibly with retroactive effect, in a manner that could adversely affect a U.S. holder.\n\nThis summary does not address all U.S. federal income tax matters that may be relevant to a particular prospective holder or all tax considerations that may be relevant with respect to an investment in ADSs, including the U.S. federal estate or gift tax, the Medicare tax on net investment income, or any state, local or non-U.S. tax consequences, of the acquisition, ownership and disposition of ADSs.\n\nThis summary does not address tax considerations applicable to a holder of an ADS that may be subject to special tax rules including, without limitation, the following:\n\n•dealers or traders in securities, currencies or notional principal contracts;\n\n•financial institutions, banks and financial services entities;\n\n92\n\n•insurance companies;\n\n•real estate investment trusts;\n\n•persons subject to special tax accounting rules under Section 451(b) of the Code;\n\n•investors subject to any alternative minimum tax;\n\n•tax-exempt organizations;\n\n•regulated investment companies;\n\n•investors that actually or constructively own 10% or more of our shares and/or other equity by vote or value;\n\n•investors that will hold the ADSs as part of a hedging or conversion transaction or as a position in a straddle or a part of a synthetic security or other integrated transaction for U.S. federal income tax purposes;\n\n•investors that are treated as partnerships or other pass-through entities for U.S. federal income tax purposes and persons who hold the ADSs through partnerships or other pass-through entities;\n\n•investors that acquired the ADSs in a compensatory transaction;\n\n•individual retirement accounts and other tax-deferred accounts;\n\n•traders that elect to use a mark-to-market method of accounting;\n\n•investors whose functional currency is not the U.S. dollar; and\n\n•expatriates or former long-term residents of the United States.\n\nYou are urged to consult your own tax advisor regarding the foreign and U.S. federal, state and local and other tax consequences of an investment in ADSs.\n\nFor purposes of this summary, a “U.S. holder” is a beneficial owner of ADSs that is, for U.S. federal income tax purposes:\n\n•an individual who is a citizen or a resident of the United States;\n\n•a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof;\n\n•an estate whose income is subject to U.S. federal income tax regardless of its source; or\n\n•a trust if:\n\n(a)the trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes; or\n\n(b)(i) a court within the United States is able to exercise primary supervision over the administration of the trust; and (ii) one or more United States persons as described in the Code Section 7701(a)(30) have the authority to control all substantial decisions of the trust.\n\nIf an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds ADSs, the U.S. federal income tax treatment of its partners will generally depend upon the status of the partners and the activities of the partnership. Entities that are treated as partnerships for U.S. federal income tax purposes and persons holding ADSs through such entities should consult their own tax advisors.\n\n93\n\nIn general, if you hold ADSs, you will be treated as the holder of the underlying shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if you exchange ADSs for the underlying shares represented by those ADSs.\n\nU.S. holders should consult their own tax advisors regarding the U.S. federal income tax consequences to them with respect to the acquisition, ownership and disposition of ADSs in light of their particular circumstances.\n\nU.S. Taxation of ADSs\n\nDistributions\n\nSubject to the discussion under “Passive Foreign Investment Companies” below, any distribution received by a U.S. holder of ADSs, including Israeli taxes withheld (see “Israeli Tax Considerations”), will be taxable as a dividend to the extent of our current and accumulated earnings and profits under U.S. federal tax principles. Distributions exceeding earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. holder’s adjusted tax basis in the ADSs and thereafter taxable as capital gains. We do not maintain calculations of our earnings and profits under U.S. federal tax principles. Therefore, U.S. holders should expect to treat a distribution as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as a capital gain under the rules described above. The dividends will not be eligible for the dividends received deduction available to U.S. holders that are corporations in respect of dividends received\n\nfrom other United States corporations.\n\nUnder the Code, certain dividends received by non-corporate U.S. holders may be “qualified dividend income,” taxed at a lower capital gains rate. This reduced rate only applies to dividends from a “qualified foreign corporation” that is not a “passive foreign investment company” and only for shares held by a qualified U.S. holder (i.e., a non-corporate holder) for a minimum period (generally 61 days during the 121-day period beginning 60 days before the ex-dividend date). A non-U.S. corporation (other than a corporation that is a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered a qualified foreign corporation if (i) it is eligible for the benefits of a comprehensive tax treaty with the U.S., which includes an exchange of information program or (ii) with respect to dividends it pays on shares that are readily tradable on an established securities market in the U.S. In this regard, shares are generally considered to be readily tradable on an established securities market in the U.S. if they are listed on The Nasdaq Stock Market, as our ADSs are.\n\nDistributions in currency other than U.S. dollars (a “foreign currency”) will be included in gross income of a U.S. holder based on the U.S. dollar value at the exchange rate on the date of receipt. If the payment is converted to U.S. dollars on that date, no foreign currency gain or loss is recognized. If the payment is not converted, the U.S. holder will have a basis in the foreign currency equal to its U.S. dollar value on the receipt date, with any subsequent gain or loss treated as ordinary income or loss.\n\nGenerally, dividends received by a U.S. holder with respect to ADSs will be treated as foreign source income for calculating the foreign tax credit limitation. Subject to certain conditions and limitations, any Israeli taxes withheld on dividends at the rate provided by the U.S.-Israel tax treaty may be deducted from taxable income or credited against a U.S. holder’s federal income tax liability. Pursuant to applicable U.S. Treasury regulations (subject to temporary relief potentially available under applicable IRS Notices until further IRS guidance), however, if a U.S. holder is not eligible for the benefits of an applicable income tax treaty or does not elect to apply such tax treaty, then such holder may not be able to claim a foreign tax credit arising from any foreign tax imposed on a distribution on ADSs, depending on the nature of such foreign tax.\n\nThe limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to various categories of income, including “passive” income and “general” income. The rules relating to foreign tax credits and the timing thereof are complex. U.S. holders should consult their own tax advisors regarding the availability of a foreign tax credit under their particular situation and the potential impact of the applicable U.S. Treasury regulations and IRS Notices.\n\nSale or Other Disposition of ADSs\n\nIf a U.S. holder sells or disposes of ADSs, gain or loss will be recognized for U.S. federal income tax purposes as the difference, if any, between the amount realized and the holder’s adjusted tax basis in the ADSs. If any Israeli tax is imposed on the sale or other disposition of the ADSs, a U.S. holder’s amount realized will include the gross amount of the proceeds before the deduction of the Israeli tax. Subject to the discussion below under the heading “Passive Foreign Investment Companies,” generally, this gain or loss will be a capital in nature, and if the ADSs were held for more than one year, it will be classified as long-term capital gain or loss. Long-term capital gains for individual U.S. holders are generally\n\n94\n\nsubject to a lower deferral income tax rate (currently up to 20%) than ordinary income. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as United States source income or loss for purposes of the foreign tax credit. Because gain for the sale or other disposition of the ADSs will be treated as United States source income, and U.S. holders may use foreign tax credits against only the portion of United States federal income tax liability that is attributed to foreign source income in the same category, U.S. holders’ ability to utilize a foreign tax credit with respect to the Israeli tax imposed on any such sale or other disposition, if any, may be significantly limited. In addition, if a U.S. holder is eligible for the benefit of the income tax convention between the United States and the State of Israel and pays Israeli tax in excess of the amount applicable to the U.S. holder under such convention or if the Israeli tax paid is refundable, the U.S. holder will not be able to claim any foreign tax credit or deduction with respect to such excess portion of the Israeli tax paid or the amount of the Israeli tax refunded. In addition, pursuant to applicable U.S. Treasury regulations (subject to temporary relief potentially available under applicable IRS Notices until further IRS guidance), if a U.S. holder is not eligible for the benefits of an applicable income tax treaty or does not elect to apply such tax treaty, then such holder may not be able to claim a foreign tax credit arising from any foreign tax imposed on the disposition of the ADSs, depending on the nature of such foreign tax. The rules governing the treatment of foreign taxes imposed on a U.S. holder and foreign tax credits are complex, and U.S. holders should consult their tax advisors as to whether the Israeli tax on gains may be creditable or deductible in light of their particular circumstances, including their eligibility for benefits under an applicable treaty and the potential impact of applicable U.S. Treasury regulations and IRS Notices.\n\nIf a U.S. holder receives foreign currency upon a sale or exchange of ADSs, gain or loss, if any, recognized on the subsequent sale, conversion or disposition of such foreign currency will be ordinary income or loss, and will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. However, if such foreign currency is converted into U.S. dollars on the date received by the U.S. holder, a cash basis or electing accrual basis U.S. holder generally should not be required to recognize any gain or loss on such conversion.\n\nU.S. holders using an Israeli stockbroker or intermediary may be subject to Israeli withholding tax on capital gains unless they obtain an exemption from the Israeli Tax Authorities or claim any allowable refunds or reductions (see “Israeli\n\nTax Considerations”). U.S. holders are advised that any Israeli tax paid under circumstances in which an exemption from (or a refund of or a reduction in) such tax was available will not give rise to a deduction or credit for foreign taxes paid for U.S. federal income tax purposes. If applicable, U.S. holders are advised to consult their Israeli stockbroker or intermediary regarding the procedures for obtaining an exemption or reduction.\n\nPassive Foreign Investment Companies\n\nFor U.S. federal income tax purposes, we will be considered a passive foreign investment company (“PFIC”) for any taxable year in which, after the application of certain look-through rules, either (i) 75% or more of our gross income is \"passive income\", as defined in the relevant provisions of the Code; or (ii) 50% or more of our assets (generally determined on a quarterly basis) produce or are held for the production of passive income. For this purpose, passive income generally includes, among other things, dividends, interest, royalties, rents, annuity income and the excess of gains over losses from the disposition of assets which produce passive income. If we were determined to be a PFIC for U.S. federal income tax purposes, highly complex rules would apply to U.S. holders owning ADSs.\n\nBased on our market capitalization, the composition of our gross income and our gross assets and the nature of our business, we do not believe that we were classified as a PFIC for the taxable year ended December 31, 2025. Our status in any taxable year will depend on the composition of our assets and activities in each year and because this is a factual determination made annually at the end of each taxable year, there can be no assurance that we will not be considered a PFIC for any taxable year. Moreover, the value of our assets (including intangible assets such as unbooked goodwill) for purposes of the PFIC determination generally will be determined by reference to the trading price of our ordinary shares and ADSs, which could fluctuate significantly. In addition, it is possible that the IRS may take a contrary position with respect to our determination in any particular year. If we were treated as a PFIC in any year during which a U.S. holder owns ADSs, such U.S. holder may be subject to materially adverse tax consequences, including additional U.S. federal income tax liability and tax filing obligations.\n\nYou are urged to consult your own tax advisor regarding the possibility of us being classified as a PFIC and the potential tax consequences arising from the ownership and disposition (directly or indirectly) of an interest in a PFIC.\n\nBackup Withholding and Information Reporting\n\n95\n\nPayments of dividends with respect to ADSs and the proceeds from the sale, retirement, or other disposition of ADSs made by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. holder as may be required under applicable U.S. Treasury regulations. Any paying agent may be required to withhold tax (backup withholding), currently at the rate of 24%, if a non-corporate U.S. holder that is not otherwise exempt fails to provide an accurate taxpayer identification number and comply with other IRS requirements concerning information reporting. Certain U.S. holders (including, among others, corporations and tax-exempt organizations) are not subject to backup withholding. Any amount of backup withholding withheld may be used as a credit or refundable against your U.S. federal income tax liability provided that all the required information is timely furnished to the IRS. U.S. holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.\n\nForeign Asset Reporting\n\nCertain U.S. holders who are specified individuals or specified domestic entities are required to report information relating to an interest in our ADSs on IRS Form 8938 (Statement of Specified Foreign Financial Assets) if the aggregate value of certain foreign financial assets exceeds certain threshold amounts, subject to certain exceptions (including an exception for shares held in accounts maintained by financial institutions). U.S. holders are encouraged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ADSs.\n\nDocuments on Display\n\nWe are subject to certain of the information reporting requirements of the Exchange Act. As a foreign private issuer, we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares; however, following recent amendment to Section 16(a) of the Exchange Act, our directors and certain of our officers will become subject to the reporting provisions set forth therein, effective March 18, 2026. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. Nasdaq rules generally require that companies send an annual report to shareholders prior to the annual general meeting, however we rely upon an exception under the Nasdaq rules and follow the generally accepted business practice for companies in Israel. Specifically, we file annual reports on Form 20-F, which contain financial statements audited by an independent accounting firm, electronically with the SEC and post a copy on our website. We also furnish to the SEC quarterly reports on Form 6-K containing unaudited financial information after the end of each of the first three quarters.\n\nThe SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, and our SEC reports can be viewed or downloaded there. The address of this web site is http://www.sec.gov. In addition, information that we furnish or file with the SEC, including annual reports on Form 20-F, reports on Form 6-K, proxy and information statements and any amendments to, or exhibits included in, those reports are available to be viewed or download, free of charge, on our website at http://www.nice.com/company/investors as soon as reasonably practicable after such materials are filed or furnished with the SEC. Information contained, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein, and we have included our website address in this annual report solely for informational purposes."}