Incredimail 2011 Annual Report Download - page 54

Nasdaq Market Governance Requirements for Foreign Private Issuers
Assuming that we maintain our status as a foreign private issuer, under the Nasdaq Listing Rules, a foreign private issuer may generally follow its home
country rules of corporate governance except for certain matters such as composition of the audit committee (as discussed below). NASDAQ Listing Rules specify
that the board of directors must contain a majority of independent directors and that the independent directors must have regularly scheduled meetings at which only
independent directors are present. 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. See "Item 10.B
Memorandum and Articles of Association — NASDAQ Listing Rules and Home Country Practices" and "Item 16G –
Corporate Governance" for a summary of the
significant ways in which our corporate governance practices follow the requirements of Israeli law rather than Nasdaq governance requirements for domestic
companies. Investors are cautioned that there are other NASDAQ governance requirements with which, as a foreign private issuer, we may elect not to comply. If we
so elect, we will provide disclosure of any Nasdaq governance requirements we elect not to comply with in accordance with NASDAQ's disclosure requirements, as
may be in effect from time to time.
Committees of the Board of Directors
Our board of directors has established an audit committee, a compensation committee, investment committee and a nominating and governance committee.
Audit Committee
Our audit committee is comprised of David Jutkowitz, Avichay Nissenbaum (both of which are external directors) and Alan Gelman and operates pursuant to
a written charter. David Jutkowitz serves as the chairperson of the audit committee.
NASDAQ Requirements
Under the listing requirements of the NASDAQ Stock Market, a foreign private issuer is required to maintain an audit committee that has certain
responsibilities and authority (such as being directly responsible for the appointment, compensation, retention and oversight of the work of the issuer’
s public
accountants). In addition, applicable NASDAQ Listing Rules require that a foreign private issuer can maintain an audit committee that meets the requirements of Rule
10A-3(b)(subject to the exemptions provided in Rule 10A-
3(c)) under the Exchange Act, instead of an audit committee composed solely of independent directors. We
currently maintain a board of audit in accordance with Israeli home country regulations, meeting these requirements of Rule 10A-
3, in that our audit committee
complies with the requirements under Israeli law.
Israeli Companies Law Requirements
Under the Israeli Companies Law, the board of directors of a public company must establish an audit committee. The audit committee must consist of at least
three directors and must include all of the external directors, and the majority of its members must be independent directors. The audit committee may not include the
chairman of the board, any director employed by the company or employed by a person or entity controlling the company or by an entity in control of such a
controlling person or entity, director who provides services on an ongoing basis to the company, a person or entity controlling the company as well as a director who
derives most of his earnings from a controlling entity. The chairperson of the audit committee must be an external director, the required quorum for audit committee
meetings and decisions is a majority of the committee members, of which the majority of members present must be independent and external directors, and any person
who is not eligible to serve on the audit committee is further restricted from participating in its meetings and votes, unless the chairman of the audit committee
determines that such person’
s presence is necessary in order to present a certain matter, provided however, that company employees who are not controlling
shareholders or relatives of such shareholders may be present in the meetings but not for the actual votes, and likewise, company counsel and secretary who are not
controlling shareholders or relatives of such shareholders may be present in the meetings and for the decisions if such presence is requested by the audit committee.
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