Incredimail 2010 Annual Report Download - page 66

At the general meeting of a merging company which shares are held by the other party to the merger or by any person holding at least
25% of any control measures of the other party to the merger, a merger shall not be deemed approved if the shareholders holding the majority of
the voting power present at the meeting object to the merger. In calculating this majority, (i) the abstaining shareholders and (ii) shareholders
that are part of the other party to the merger or hold 25% or more of any control measures of the other party to the merger are excluded. Shares
held by relatives or companies controlled by a person are deemed held by that person. The term "control measures" of a company includes,
among other 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.
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 Israeli 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.
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