Incredimail 2010 Annual Report Download - page 60

On July 9, 2009, at an extraordinary general meeting the shareholders approved a proposal to amend the terms of options granted to the
directors of the Company. It was resolved that; (a) the recurring annual stock option grants to the directors, for board service, will have a vesting
period applicable to one term of office of a director, which under the Company's articles of association is a term of three (3) years (instead of a
vesting period of four (4) years as was formerly approved by the shareholders) from the date of grant; (b) the stock options granted to a director
shall retain their original expiration dates specified upon the date of grant, and shall not terminate 90 days after the Termination Date as set forth
in the directors' option agreements, provided that the termination or expiration is not "for Cause" and not resulting from the director's
resignation; and (c) the next upcoming tranche of stock options, of each grant, that are scheduled to vest immediately subsequent to the
Termination Date, if any, shall automatically vest
and become exercisable immediately prior to that Termination Date. In addition, to avoid a
possible conflict of interest with respect to a potential Change of Control of the Company (which may result in the termination of the director’
s
term of office), all unvested options held by a director, shall automatically vest and become exercisable upon a "Change of Control"
event. "Change of Control" was defined for these purposes as: (i) merger, acquisition or reorganization of the Company with one or more other
entities in which the Company is not the surviving entity, (ii) a sale of all or substantially all of the assets of the Company; (iii) a transaction or a
series of related transactions as a result of which more than 50% of the outstanding shares or the voting rights of the Company are held by any
party (whether directly or indirectly).
C. INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
Our audited consolidated financial statements for the year ended December 31, 2010 are included in this annual report pursuant to Item
18.
Legal Proceedings
We are not aware of any legal proceedings the outcome of which would have a significant impact on the Company's financial condition.
Policy on Dividend Distribution
On November 4, 2010 we announced that as we are focusing on growth and intend to utilize our cash and investments to achieve that
growth, we have decided to change our dividend policy so that beginning with earnings of 2011 and beyond, we do not intend to distribute any
dividends to the holders of our ordinary shares.
All of the ordinary shares of the Company are entitled to an equal share in any dividends declared and paid.
On January 23, 2008 the Company announced that its Board of Directors had resolved to adopt a share buyback plan, and on March 25,
2009, the Company announced that it had elected to continue with the second phase of this plan that authorizes the purchase of up to an
additional $1 million of its ordinary shares. Up to March 5, 2009, the Company repurchased 346,019 ordinary shares in open market
transactions.
The distribution of dividends and the buy-
back plan is subject to limitations under Israeli law, including permitting the distribution of
dividends (and purchasing the company’s own shares) only out of profits. See "Item 10.B Memorandum and Articles of Association —
Dividend
and Liquidation Rights." In addition, the payment of dividends is subject to Israeli withholding taxes. See "Item 10.E Taxation —
Israeli
Taxation —Taxation of our Shareholders—Taxation of Non-Israeli Shareholders on Receipt of Dividends."
B. SIGNIFICANT CHANGES
Since the date of our audited financial statements included elsewhere in this report, there have not been any significant changes other
than as set forth in this report under Item 4.A. – "Recent Developments".
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