Incredimail 2012 Annual Report Download - page 54

In accordance with our shareholders' approval in December 2007, as amended by our shareholders in July 2009, each of our directors
who is not an employee of the Company, receives for each year of service, options to purchase 10,000 ordinary shares of the Company (the
"Annual Grant"), pursuant to the following terms: (a) the Annual Grant shall be made immediately following the annual meeting of shareholders
in the relevant year, commencing with the shareholders meeting held in December 2007; (b) each option shall be exercisable for one ordinary
share at an exercise price equal to the closing price of our ordinary shares on the date of the annual meeting of shareholders upon which such
option was granted, as reported by the NASDAQ Global Market; (c) the options shall vest in three equal portions on each anniversary of the
Annual Grant, commencing with the first anniversary; (d) following termination or expiration of the applicable director's service with the
Company, provided that the termination or expiration is not for “
cause" (as such term is defined in the 2003 Plan) and not resulting from the
director's resignation, the stock options granted to such director shall retain their original expiration dates, and 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 the termination date; and (e) to avoid a possible conflict of interest while discussing a "Change of
Control" of the Company (which may result in the termination of the director’
s term of office), all unvested options held by the director shall
automatically vest and become exercisable upon such "Change of Control" event. "Change of Control" is defined for these purposes as: (i) a
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). Any and all other terms and
conditions pertaining to the grant of the options shall be in accordance with, and subject to, the 2003 Plan and our standard option agreement.
See "Item 10.B Memorandum and Articles of Association —
Approval of Related Party Transactions" for a discussion of the
requirements of Israeli law regarding special approvals for transactions involving directors and officers.
C. BOARD PRACTICES
Corporate Governance Practices
We are incorporated in Israel and therefore are subject to various corporate governance practices under the Companies Law, relating to
such matters as external directors, the audit committee, the internal auditor and approvals of interested party transactions. These matters are in
addition to the ongoing listing conditions of NASDAQ and other relevant provisions of U.S. securities laws. Under the NASDAQ Listing Rules,
a foreign private issuer may generally follow its home country rules of corporate governance in lieu of the comparable NASDAQ requirements,
except for certain matters such as composition and responsibilities of the audit committee. For further information, see “Item 16.G –
Corporate
Governance.”
NASDAQ Requirements
Under the NASDAQ Listing Rules, a majority of our directors are required to be “independent directors”
as defined in the NASDAQ
Listing Rules. Six out of the seven members of our board of directors, namely, Messrs. Tamar Gottlieb, Iris Beck,
Alan Gelman, David
Jutkowitz, Avichay Nissenbaum, and Adi Soffer Teeni, are independent directors under the NASDAQ requirements.
We are also required by the NASDAQ Listing Rules to have an audit committee, all of whose members must satisfy certain
independence requirements.
The NASDAQ Listing Rules require that director nominees be selected or recommended for the board’
s selection either by a committee
composed solely of independent directors or by a majority of the independent directors on the board. We have a nominating and governance
committee, composed solely of independent directors.
See Item "16.G – Corporate Governance" for exemptions that we have taken from certain NASDAQ Listing Rule requirements.
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