Incredimail 2013 Annual Report Download - page 57

If the number of directors constituting our board of directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case will a decrease in the number of
directors constituting our board of directors reduce the term of any then current director.
Our board of directors may appoint any other person as a director, whether to fill a vacancy or as an addition to the then current number
of directors, provided that the total number of directors shall not at any time exceed seven directors. Any director so appointed shall hold office
until the annual meeting of shareholders at which the term of his class expires, unless otherwise determined by our board of directors. There is
no limitation on the number of terms that a non-external director may serve.
Shareholders may remove a non-
external director from office by a resolution passed at a meeting of shareholders by a vote of the
holders of more than two-thirds of our voting power.
A resolution proposed at any meeting of our board of directors is deemed adopted if approved by a majority of the directors present and
voting on the matter. Under the Companies Law, our board of directors must determine the minimum number of directors having financial and
accounting expertise, as defined in the regulations that our board of directors should have. In determining the number of directors required to
have such expertise, the board of directors must consider, among other things, the type and size of the company and the scope and complexity of
its operations. Our board of directors has determined that we require at least one director with the requisite financial and accounting expertise
and that Mr. David Jutkowitz has such expertise.
Under the Companies Law, the chairman of the board of a company is not permitted to hold another position in the company or a
subsidiary thereof other than chairman or director of a subsidiary or, if approved by a special majority of shareholders, chief executive officer of
the company.
External Directors
Under the Companies Law, Israeli companies whose shares have been offered to the public in or outside of Israel are required to
appoint at least two individuals to serve as external directors. Our external directors under the Companies Law are Mr. Avichay Nissenbaum,
whose second three-year term commenced on September 27, 2012, and Mr. David Jutkowitz, whose third three-
year term commenced on
January 6, 2014.
External directors are required to possess independence and professional qualifications as set out in the Companies Law and regulations
promulgated thereunder. Each committee of a company's board of directors that is authorized to exercise any powers of the board of directors is
required to include at least one external director. The audit committee and the compensation committee must include all the external directors.
External directors are elected by a majority vote at a shareholders’ meeting, as long as either:
The initial term of an external director is three years and such director may be reappointed for up to two additional three-
year terms.
Thereafter, he or she may be reelected by our shareholders for additional periods of up to three years each only if the audit committee and the
board of directors confirm that, in light of the external director’
s expertise and special contribution to the work of the board of directors and its
committees, the reelection for such additional period is beneficial to us. Reelection of an external director may be effected through one of the
following mechanisms: (1) the board of directors proposed the reelection of the nominee and the election was approved by the shareholders by
the majority required to appoint external directors for their initial term; or (2) a shareholder holding 1% or more of the voting rights proposed the
reelection of the nominee, and the reelection is approved by a majority of the votes cast by the shareholders of the company, excluding the votes
of controlling shareholders and those who have a personal interest in the matter as a result of their relations with the controlling shareholders,
provided that the aggregate votes cast in favor of the reelection by such non-
excluded shareholders constitute more than 2% of the voting rights
in the company. An external director may be removed only in a general meeting, by the same percentage of shareholders as is required for
electing an external director, or by a court, and in both cases only if the external director ceases to meet the statutory qualifications for
appointment or if he or she has violated the duty of loyalty to us.
• the majority of shares voted on the matter, including at least a majority of the shares of non-
controlling shareholders voted on the
matter, vote in favor of election; 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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