Incredimail 2008 Annual Report Download - page 57

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Since the third quarter of 2006, search revenues powered by Google’s AdSense program made a significant contribution to the Company’s
results. On July 1, 2008, we entered into an agreement with Google regarding our participation in Google’s AdSense program, which allows us to
receive a portion of the amount paid to Google by advertisers for the activity performed through the Company’
s applications. See Exhibits 4.1 and
4.4.
Our OEM Agreement with Commtouch Ltd., effective December 7, 2004 and most recently renewed effective July 15, 2008, is described
under “Item 4.B Business Overview – Intellectual Property” and a copy of this agreement is included in Exhibit 4.2. The purchase option granted
to the lead underwriter of our initial public offering, are described under “Item 7.B Related Party Transactions – Registration Rights.” The
employment agreements with our principal officers are described under “Item 6.C Board Practices – Employment Agreements”.
Non-residents of Israel who hold our ordinary shares are able to receive any dividends, and any amounts payable upon the dissolution,
liquidation and winding up of our affairs, freely repatriable in non-Israeli currency at the rate of exchange prevailing at the time of conversion.
However, Israeli income tax is required to have been paid or withheld on these amounts. In addition, the statutory framework for the potential
imposition of exchange controls has not been eliminated, and may be restored at any time by administrative action.
The following is a general summary only and should not be considered as income tax advice or relied upon for tax planning purposes.
ISRAELI TAXATION
THE FOLLOWING DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX
CONSEQUENCES RELATING TO THE OWNERSHIP OR DISPOSITION OF OUR ORDINARY SHARES. YOU SHOULD CONSULT
YOUR OWN TAX ADVISOR CONCERNING THE TAX CONSEQUENCES OF YOUR PARTICULAR SITUATION, AS WELL AS ANY
TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING
JURISDICTION.
62
The following is a summary of the material Israeli tax laws applicable to us, and some Israeli Government programs benefiting us. This
section also contains a discussion of some Israeli tax consequences to persons acquiring our ordinary shares. This summary does not discuss all
the acts of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of
investors subject to special treatment under Israeli law. Examples of this kind of investor include residents of Israel or traders in securities who are
subject to special tax regimes not covered in this discussion. Since some parts of this discussion are based on new tax legislation that has not yet
been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the
views expressed in this discussion.
The discussion below should not be construed as legal or professional tax advice and does not cover all possible tax considerations.
Potential investors are urged to consult their own tax advisors as to the Israeli or other tax consequences of the purchase, ownership and
disposition of our ordinary shares, including, in particular, the effect of any foreign, state or local taxes.
General Corporate Tax Structure in Israel
Israeli companies are generally subject to corporate tax at the rate of 26% in 2009. The rate was 27% for 2008, and is scheduled to
—
Compensation of Officers – Provided that the executive officer does not serve on our board, Israeli law does not require and we do
not require that independent members of our board determine the compensation of an executive officer.
—
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 are
required under Nasdaq Marketplace 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 Marketplace Rule 4350(i).
C.
MATERIAL CONTRACTS
D.
EXCHANGE CONTROLS
E.
TAXATION