Incredimail 2011 Annual Report Download - page 68

Under the Israeli Companies Law, a person may not purchase shares of a public company or rights to vote in such a company or a class of shares if, following
the purchase of shares, the purchaser would hold more than 90% of the company’
s shares or of any class of shares unless the purchaser makes a tender offer to
purchase all of the target company’
s shares or all the shares of the particular class, as applicable. If, as a result of the tender offer, the purchaser would hold more than
95% of the company’
s shares or a particular class of shares and more than half of the offerees that has no personal interest has accepted the offer, the ownership of the
remaining shares will be transferred to the purchaser. However, the purchaser will be able to purchase all shares if the percentage of the offerees that did not accept the
offer constitute less than 2% of the company’
s shares or of any class of shares subject to the offer. If the purchaser is unable to purchase 95% or more of the
company’s shares or class of shares, the purchaser may not own more than 90% of the shares or class of shares of the target company.
Tax Law. Israeli tax law treats some acquisitions, such as a stock-for-
stock swap between an Israeli company and a foreign company, less favorably than U.S.
tax law. For example, Israeli tax law may subject a shareholder who exchanges his ordinary shares for shares in a foreign corporation to immediate taxation. Please see
"Item 10.E Taxation — Israeli Taxation."
Exculpation, Indemnification and Insurance of Directors and Officers
Our articles of association allow us to indemnify, exculpate and insure our office holders, which includes our directors, to the fullest extent permitted by the
Israeli Companies Law (other than as stated below with respect to certain expenses in connection with administrative enforcement proceedings under the Israeli
Securities Law), provided that procuring this insurance or providing this indemnification or exculpation is approved by the audit committee and the board of directors,
as well as by the shareholders if the office holder is a director. Our articles of association also allow us to insure or indemnify any person who is not an office holder,
including any employee, agent, consultant or contractor who is not an office holder.
Under the Israeli Companies Law, a company may indemnify an office holder in respect of some liabilities, either in advance of an event or following an
event. If a company undertakes to indemnify an office holder in advance against monetary liability incurred in his or her capacity as an office holder whether imposed
in favor of another person pursuant to a judgment, a settlement or an arbitrator’
s award approved by a court, the indemnification must be limited to foreseeable events
in light of the company’
s actual activities at the time of the indemnification undertaking and to a specific sum or a reasonable criterion under such circumstances, as
determined by the board of directors.
Under the Israeli Companies Law, only if and to the extent provided by its articles of association, a company may indemnify an office holder against the
following liabilities or expenses incurred in his or her capacity as an office holder:
• any monetary liability whether imposed on him or her in favor of another person pursuant to a judgment, a settlement or an arbitrator’
s award approved by a
court;
•
reasonable litigation expenses, including attorneys
’
fees, incurred by him or her as a result of an investigation or proceedings instituted against him or her by
an authority empowered to conduct an investigation or proceedings, which are concluded either (i) without the filing of an indictment against the office
holder and without the levying of a monetary obligation in lieu of criminal proceedings upon the office holder, or (ii) without the filing of an indictment
against the office holder but with levying a monetary obligation in substitute of such criminal proceedings upon the office holder for a crime that does not
require proof of criminal intent; and
• reasonable litigation expenses, including attorneys’ fees, in proceedings instituted against him or her by the company, on the company’s behalf or by a third-
party, or in connection with criminal proceedings in which the office holder was acquitted, or as a result of a conviction for a crime that does not require
proof of criminal intent.
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