Incredimail 2011 Annual Report Download - page 70

NASDAQ Listing Rules and Home Country Practices
In accordance with Israeli law and practice and subject to the exemption set forth in NASDAQ Listing Rule 5615(a)(3), we follow the provisions of the
Israeli Companies Law – 1999 with respect to the following requirements:
• Distribution of annual and quarterly reports to shareholders –
Under Israeli law we are not required to distribute annual and quarterly reports directly to
shareholders and the generally accepted business practice in Israel is not to distribute such reports to shareholders. We do however make our audited financial
statements available to our shareholders at the Company's offices and mail such reports to shareholders upon request. We also file our annual reports with the
SEC. As a foreign private issuer, we are generally exempt from the SEC's proxy solicitation rules.
•
Quorum
–
Under Israeli law a company is entitled to determine in its articles of association the number of shareholders and percentage of holdings required
for a quorum at a shareholders meeting. Our articles of association provide that a quorum of two or more shareholders holding at least 33.3% of the voting
rights in person or by proxy is required for commencement of business at a general meeting. However, the quorum set forth in our articles of association with
respect to an adjourned meeting, consists of two or more shareholders in person or by proxy.
• Independence of Directors – Our board contains two external directors in accordance with the provisions contained in Sections 239-
249 of the Israeli
Companies Law – 1999 and Rule 10A-
3 of the general rules and regulations promulgated under the Securities Act of 1933. Israeli law does not require, nor
do our independent directors conduct, regularly scheduled meetings at which only they are present.
• Audit Committee –
Our audit committee complies with all of the requirements under Israeli law, there are three members to our audit committee, two of
which are our external directors. Consistent with Israeli law, the independent auditors are elected at a meeting of shareholders instead of being appointed by
the audit committee.
•
Nomination of our Directors
–
With the exception of our external directors, our directors are elected in three staggered classes by the vote of a majority of the
shareholders’
general meeting. The directors of only one class are elected at each annual meeting for a three year term, so that the regular term of only one
class of directors expires annually. The nominations for director which are presented to our shareholders are generally made by our directors but may be made
by one or more of our shareholders. However, any shareholder or shareholders holding at least 5% of the voting rights in our issued share capital may
nominate one or more persons for election as directors at a general meeting only if a written notice of such shareholder’
s intent to make such nomination or
nominations has been given to our secretary and each such notice sets forth all the details and information as required to be provided under our articles of
association. Furthermore, one or more shareholders of a company holding at least one percent of the voting power of the company may nominate a currently
serving external director for an additional three year term.
•
Compensation of Officers
–
Provided that the executive officer does not serve on our board, according to the Israeli law compensation of an executive officer
requires the approval of the audit committee and the board of directors, in such order. Our articles of association provide that 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. Our compensation committee includes three members of the board, two of whom are our external directors.
• Approval of Related Party Transactions –
All related party transactions are approved in accordance with the requirements and procedures for approval of
interested party acts and transactions, set forth in sections 268 to 275 of the Israeli Companies Law-
1999, and the regulations promulgated thereunder, which
require audit committee approval and shareholder approval, as well as board approval, for specified transactions, rather than approval by the audit committee
or other independent body of our board which are required under Nasdaq Listing Rules. See also "Item 10.B Memorandum and Articles of Association —
Approval of Related Party Transactions" for the definition and procedures for the approval of related party transactions.
• Shareholder Approval –
We seek shareholder approval for all corporate action requiring such approval, in accordance with the requirements of the Israeli
Companies Law
–
1999, which are different or in addition to the requirements for seeking shareholder approval under NASDAQ Listing Rules.
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