Incredimail 2008 Annual Report Download - page 55

things, voting power or means of appointing the board of directors.
Under the Israeli Companies Law, a merging company must inform its creditors of the proposed merger. Any creditor of a party to the
merger may seek a court order to delay or block the merger, if there is a reasonable concern that the surviving company will not be able to satisfy
all of the obligations of the parties to the merger. Moreover, a merger may not be completed until all of the required approvals have been filed by
both merging companies with the Israeli Registrar of Companies and (i) 30 days have passed from the time both companies’
shareholders resolved
to approve the merger, and (ii) at least 50 days have passed from the time that the merger proposal was filed with the Israeli Registrar of
Companies.
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Tender Offer. The Israeli Companies Law requires a purchaser to conduct a tender offer in order to purchase shares in publicly held
companies, if as a result of the purchase the purchaser would hold more than 25% of the voting rights of a company in which no other shareholder
holds more than 25% of the voting rights, or the purchaser would hold more than 45% of the voting rights of a company in which no other
shareholder holds more than 45% of the voting rights. The requirement to conduct a tender offer shall not apply to (i) the purchase of shares in a
private placement, provided that such purchase was approved by the company’
s shareholders as a private placement that is intended to provide the
purchaser with more than 25% of the voting rights of a company in which no other shareholder holds more than 25% of the voting rights, or with
more than 45% of the voting rights of a company in which no other shareholder holds more than 45% of the voting rights; (ii) a purchase from a
holder of more than 25% of the voting rights of a company that results in a person becoming a holder of more than 25% of the voting rights of a
company, and (iii) a purchase from the holder of more than 45% of the voting rights of a company that results in a person becoming a holder of
more than 45% of the voting rights of a company.
Under the tender Companies Law, a person may not purchase shares of a public company 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, the ownership of the remaining shares will be transferred to the purchaser. However, 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, 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. However, as described below, an
undertaking to indemnify an office holder in advance of an event need not be limited with respect to reasonable litigation expenses, including
attorneys’ fees.
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