Incredimail 2009 Annual Report Download - page 61

Modification of Class Rights
The Israeli Companies Law provides that, unless otherwise provided by the articles of association, the rights of a particular class of
shares may not be adversely modified without the vote of a majority of the affected class at a separate class meeting.
Election of Directors
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.
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 and provided that such arrangements is not considered to
be an "Extraordinary Transaction" (see definition below), in which case the approval of the audit committee will be required as well, prior to the
approval of the board. Under our articles of association, our compensation committee has the authority 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.
●
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.
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