Incredimail 2011 Annual Report Download - page 65

Election of Directors
Our ordinary shares do not have cumulative voting rights in the election of directors. Therefore, the holders of ordinary shares representing more than 50% of
the voting power at the general meeting of the shareholders, in person or by proxy, have the power to elect all of the directors whose positions are being filled at that
meeting, to the exclusion of the remaining shareholders. External directors are elected by a majority vote at a shareholders’ meeting, provided that either:
See "Item 6.C Board Practices" regarding our staggered board.
Transfer Agent and Registrar
American Stock Transfer and Trust Company is the transfer agent and registrar for our ordinary shares.
Approval of Related Party Transactions
Office Holders
The Israeli Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Israeli Companies Law as
any general manager, chief business manager, deputy general manager, vice general manager, or any other person assuming the responsibilities of any of these
positions regardless of that person’
s title, as well as a director, or a manager directly subordinate to the general manager. Each person listed in the table under
"Management — Executive Officers and Directors" is an office holder under the Israeli Companies Law.
Fiduciary duties. An office holder’
s fiduciary duties consist of a duty of loyalty and a duty of care. The duty of loyalty requires the office holder to act in
good faith and to the benefit of the company, to avoid any conflict of interest between the office holder’
s position in the company and any other of his or her positions
or personal affairs, and to avoid any competition with the company or the exploitation of any business opportunity of the company in order to receive personal
advantage for himself or others. This duty also requires him or her to reveal to the company any information or documents relating to the company’
s affairs that the
office holder has received due to his or her position as an office holder. The duty of care requires an office holder to act with a level of care that a reasonable office
holder in the same position would employ under the same circumstances. This includes the duty to use reasonable means to obtain information regarding the
advisability of a given action submitted for his or her approval or performed by virtue of his or her position and all other relevant information pertaining to these
actions.
Compensation.
Under the Israeli Companies Law, all compensation arrangements for office holders who are not directors require approval of the audit
committee and the board of directors, in such order. Under our articles of association, our compensation committee has the authority to approve the compensation of
all office holders, subject to the requirements of the Israeli Companies Law as referred to above. Arrangements regarding the compensation of directors (including
officers who are also directors) require audit committee, board and shareholder approval, in such order.
Disclosure of personal interest.
The Israeli Companies Law requires that an office holder promptly disclose to the company 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. "Personal interest", as
defined by the Israeli Companies Law, includes a personal interest of any person in an act or transaction of the company, including a personal interest of his relative
and of a corporate body in which that person or a relative of that person is a 5% or greater shareholder, a holder of 5% or more of a company’
s outstanding shares or
voting rights, a director or general manager, or in which he or she has the right to appoint at least one director or the general manager, including a personal interest in
voting on the basis of a power of attorney that was given to a person by another person even if that other person has no personal interest, and also a vote by a person
who got a power of attorney to vote on behalf of a person who do have a personal interest, in the vote in question, all whether the one who votes has a discretion as to
how to vote or not. "Personal interest" does not apply to a personal interest stemming merely from the fact that the office holder is also a shareholder in the company.
The office holder must make the disclosure of his personal interest without delay and no later than the first meeting of the company’
s board of directors that
discusses the particular transaction. This duty does not apply to the personal interest of a relative of the office holder in a transaction unless it is an "Extraordinary
Transaction". The Israeli Companies Law defines an Extraordinary Transaction 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, and defines a relati
ve as a spouse, sibling, parent, grandparent, descendent, as well
as descendent, brother, sister or parent of the spouse and the spouse of any of the foregoing.
• the majority of shares voted for the election includes at least a majority of the shares held by non-
controlling shareholders voted at the meeting and
excluding shares held by a person with a personal interest in the approval of the election, excluding a personal interest which is not as a result of his
connection with the controlling shareholder (excluding abstaining votes); or
•
the total number of shares of non
-
controlling shareholders voted against the election of the external director does not exceed two percent of the
aggregate voting rights in the company.
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