Incredimail 2008 Annual Report Download - page 53

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 director, general manager, chief business manager, deputy general manager, vice general manager, other manager directly
subordinate to the general manager or any other person assuming the responsibilities of any of these positions regardless of that person’s title.
Each person listed in the table under “Management – Executive Officers and Directors” is an office holder under the Israeli Companies Law.
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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 board of directors, unless the articles of association provide otherwise. Our compensation committee will be required to approve the
compensation of all office holders. 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 or 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. “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 relative as a spouse, sibling, parent, grandparent, descendent, spouse’s descendant and the spouse of any of the foregoing.
Approvals. The Israeli Companies Law provides that a transaction with an office holder or a transaction in which an office holder has a
personal interest may not be approved if it is adverse to the company’s interest. In addition, such a transaction generally requires board approval,
unless the transaction is an extraordinary transaction or the articles of association provide otherwise. If the transaction is an extraordinary
transaction, or if it concerns exculpation, indemnification or insurance of an office holder, then in addition to any approval stipulated by the
articles of association, approval of the company’s audit committee and the board of directors is required. Exculpation, indemnification, insurance
or compensation of a director also would require shareholder approval. A director who has a personal interest in a matter that is considered at a
—
the majority of shares voted for the election includes at least one-third of the shares of non-controlling shareholders voted at the
meeting (excluding abstaining votes); or
—
the total number of shares of non-controlling shareholders voted against the election of the external director does not exceed one
percent of the aggregate voting rights in the company.