Incredimail 2010 Annual Report Download - page 68

C. MATERIAL CONTRACTS
Since the third quarter of 2006, search revenues powered by Google’
s AdSense for Search program made a significant contribution to
the Company’
s results, (we obtained approximately 70% of our revenues for the year ended December 31, 2010 from this venue). 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. The July 1, 2008 agreement with
Google was amended in January 2009, primarily so as to add our HiYo product to our collaboration with Google, on July 1, 2009 it was
amended and extended for another two years, and in June 2010 it was amended to end December 31, 2010. Most recently, we signed a new two-
year agreement with Google which is effective as of January 1, 2011. However, the agreement may be terminated by either side after one year
and in addition; Google has other limited termination rights.
• Independence of Directors – Our board contains two independent directors in accordance with the provisions contained in Sections 239-
249 of the Israeli Companies Law – 1999 and Rule 10A-
3 of the general rules and regulations promulgated under the Securities Act of
1933, rather than a majority of independent directors. Israeli law does not require, nor do our independent directors conduct, regularly
scheduled meetings at which only they are present.
• Audit Committee –
Our audit committee complies with all of the requirements under Israeli law, and is composed of two independent
directors, which are all of our independent directors, and one other director. Consistent with Israeli law, the independent auditors are
elected at a meeting of shareholders instead of being appointed by the audit committee.
•
Nomination of our Directors
–
With the exception of our independent directors, our directors are elected in three staggered classes by
the vote of a majority of the shareholders’
general meeting. The directors of only one class are elected at each annual meeting for a
three year term, so that the regular term of only one class of directors expires annually. The nominations for director which are
presented to our shareholders are generally made by our directors but may be made by one or more of our shareholders. However, any
shareholder or shareholders holding at least 5% of the voting rights in our issued share capital may nominate one or more persons for
election as directors at a general meeting only if a written notice of such shareholder’
s intent to make such nomination or nominations
has been given to our secretary and each such notice sets forth all the details and information as required to be provided under our
articles of association.
•
Compensation of Officers
–
Provided that the executive officer does not serve on our board, according to the Israeli law compensation
of an executive officer requires the 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", in which case the approval of the audit committee will
be required, prior to the approval of the board. Our articles of association provide that our compensation committee has the authority to
approve the compensation of all office holders who are not directors. Arrangements regarding the compensation of directors (including
officers who are also directors) require audit committee, board and shareholder approval, in such order. Our compensation committee
includes three members of the board, one of whom is an independent director.
•
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).
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