Incredimail 2011 Annual Report Download - page 21

If we were to lose our foreign private issuer status under US federal securities laws, we would incur additional expenses associated with compliance with the
US securities laws applicable to US domestic issuers.
We are a foreign private issuer, as such term is defined under US federal securities laws, and, therefore, we are not required to comply with all of the periodic
disclosure and current reporting requirements applicable to US domestic issuers. If we lost this status, we would be required to comply with the reporting and other
requirements applicable to US domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. The regulatory and
compliance costs to us under US securities laws, if we are required to comply with the reporting requirements applicable to a US domestic issuer, may be significantly
higher than the cost we currently incur as a foreign private issuer.
The rights and responsibilities of our shareholders are governed by Israeli law and differ in some respects from the rights and responsibilities of
shareholders under U.S. law.
We are incorporated under Israeli law. The rights and responsibilities of holders of our ordinary shares are governed by our memorandum of association, our
articles of association and by Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S.
corporations. In addition, as a foreign private issuer, we are permitted by the listing requirements of the NASDAQ to rely on home country governance requirements
and certain exemptions thereunder rather than relying on the corporate governance requirements of the NASDAQ. See "Item 16.G Corporate Governance." In
particular, a shareholder of an Israeli company has a duty to act in good faith toward the company and other shareholders and to refrain from abusing his power in the
company, including, among other things, in voting at the general meeting of shareholders on certain matters. Israeli law does not currently describe the substance of
this duty of fairness, but provides that laws applicable to a breach of contract, adjusted according to the circumstances shall apply to a breach of such duties. See "Item
10.B Memorandum and Articles of Association —
Approval of Related Party Transactions" for additional information concerning this and other duties of a
shareholder under Israeli law. Because Israeli corporate law has undergone extensive revision in recent years, there is relatively little case law available to assist in
understanding the implications of these provisions that govern shareholder behavior.
Provisions of our articles of association and Israeli law may delay, prevent or make difficult an acquisition of our Company, which could prevent a change of
control and, therefore, depress the price of our shares.
Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions
involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. In addition, our articles of
association contain provisions that may make it more difficult to acquire our Company, such as provisions establishing a classified board. Furthermore, Israeli tax
considerations may make potential transactions unappealing to us or to some of our shareholders. See "Item 10.B Memorandum and Articles of Association —
Approval of Related Party Transactions" and "Item 10.E – Taxation — Israeli Taxation" for additional discussion about some anti-takeover effects of Israeli law.
These provisions of Israeli law may delay, prevent or make difficult an acquisition of our Company, which could prevent a change of control and therefore
depress the price of our shares.
Future sales of our ordinary shares could reduce our stock price.
Sales by shareholders of substantial amounts of our ordinary shares, or the perception that these sales may occur in the future, could materially and adversely
affect the market price of our ordinary shares. In addition, although our executive officers and directors have certain limitations regarding how and when they may
trade our securities, neither they or relatively large shareholders are subject to contractual restrictions on the sale by them of shares, resulting in a substantial number
of shares held by them in the public market. Furthermore, the market price of our ordinary shares could drop significantly if our executive officers, directors, or certain
large shareholders sell their shares, or are perceived by the market as intending to sell them.
ITEM 4. INF OR MATION ON THE COMPANY
A. HISTORY AND DEVELOPMENT OF THE COMPANY
Our History
We were incorporated in the State of Israel in November 1999 under the name Verticon Ltd. We changed our name to Incredimail Ltd. in November 2000,
and in November 2011 to Perion Network Ltd., to better reflect the diverse nature of our business. We operate under the laws of the State of Israel. Our headquarters
are located at 4 HaNechoshet Street, Tel-Aviv 69710, Israel. Our phone number is (972-3) 769-6100. Our website address is www.perion.com
. The information on
our websites does not constitute a part of this annual report.
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