Incredimail 2014 Annual Report Download - page 61

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 external director 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 or the external director proposed the reelection of the external director, 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.
An external director is entitled to compensation as provided in regulations under the Companies Law and is otherwise prohibited from
receiving any other compensation, directly or indirectly from us. We do not have, nor do our subsidiaries have, any directors’
service contracts
granting to the directors any benefits upon termination of their service in their capacity as directors.
Committees of the Board of Directors
Our board of directors has established an audit committee, a compensation committee, an investment committee and a nominating and
governance committee.
Audit Committee
Our audit committee is comprised of Mr. David Jutkowitz (Chairman), Mr. Avichay Nissenbaum and Mr.
Alan Gelman, and operates
pursuant to a written charter.
NASDAQ Requirements
Under the listing requirements of the NASDAQ Stock Market, a foreign private issuer is required to maintain an audit committee that
has certain responsibilities and authority .
The NASDAQ Listing Rules require that all members of the audit committee must satisfy certain
independence requirements. We have adopted an audit committee charter as required by the NASDAQ Listing Rules. Our audit committee
assists the board of directors in fulfilling its responsibility for oversight of the quality and integrity of our accounting, auditing and financial
reporting practices and financial statements. Our audit committee is also responsible for the establishment of policies and procedures for review
and pre-approval by the committee of all audit services and permissible non-
audit services to be performed by our independent auditor, in order
to ensure that such services do not impair our auditor’s independence. For more information see Item "16.C –
Principal Accountant Fees and
Services." Under the NASDAQ Listing Rules, the approval of the audit committee is also required to effect related-
party transactions that would
be required to be disclosed in our annual report.
Companies Law Requirements
Under the Companies Law, the board of directors of a public company must establish an audit committee. The audit committee must
consist of at least three directors who meet certain independence criteria and must include all of the external directors. The chairperson of the
audit committee must be an external director. The responsibilities of the audit committee under the Companies Law include to identify and
address problems in the management of the company, review and approve interested party transactions, establish whistleblower procedures and
procedures for considering controlling party transactions and oversee the company’
s internal audit system and the performance of the internal
auditor.
Compensation Committee
Our compensation committee consists of Mr. David Jutkowitz (Chairman), Mr. Alan Gelman and Mr. Avichay Nissenbaum, all of
whom satisfy the respective "independence" requirements of the Companies Law, SEC and NASDAQ Listing Rules for compensation
committee members. Our compensation committee meets at least once each quarter, with additional special meetings scheduled when required.
Our compensation committee is authorized to, among other things, review, approve and recommend to our board of directors base
salaries, incentive bonuses, including the specific goals and amounts, stock option grants, employment agreements, and any other benefits,
compensation or arrangements of our executive officers and directors. Pursuant to the Companies Law, our compensation committee must be
comprised of at least three directors, include all of the external directors, its other members must satisfy certain independence standards under
the Companies Law, and the chairman is required to be an external director. In addition, our compensation committee is required to propose for
shareholder approval by a special majority, a compensation policy governing the compensation of office holders based on specified criteria, to
review, from time to time, modifications to the compensation policy and examine its implementation; and to approve the actual compensation
terms of office holders prior to approval thereof by the board of directors. Our shareholders approved our Compensation Policy for Directors and
Officers on November 18, 2013. Our compensation committee also oversees the administration of our equity based incentive plan .
56