Incredimail 2012 Annual Report Download - page 71

Disclosure of personal interest.
The Companies Law requires that an office holder promptly disclose to the company any personal
interest that he or she may have and all related material information known to him or her, in connection with any existing or proposed transaction
by the company. "Personal interest", as defined by the Companies Law, includes a personal interest of any person in an act or transaction of the
company, including a personal interest of his relative and of a corporate body in which that person or a relative of that person is a 5% or greater
shareholder, a holder of 5% or more of a company’
s outstanding shares or voting rights, a director or general manager, or in which he or she has
the right to appoint at least one director or the general manager, including a personal interest in voting on the basis of a power of attorney that
was given to a person by another person even if that other person has no personal interest, and also a vote by a person who got a power of
attorney to vote on behalf of a person who do have a personal interest, in the vote in question, all whether the one who votes has a discretion as
to how to vote or not. "Personal interest" does not apply to a personal interest stemming merely from the fact that the office holder is also a
shareholder in the company.
The office holder must make the disclosure of his personal interest without delay and no later than the first meeting of the company’
s
board of directors that discusses the particular transaction. This duty does not apply to the personal interest of a relative of the office holder in a
transaction unless it is an "Extraordinary Transaction". The Companies Law defines an Extraordinary Transaction as a transaction not in the
ordinary course of business, not on market terms or that is likely to have a material impact on the company’
s profitability, assets or liabilities,
and defines a relative as a spouse, sibling, parent, grandparent, descendent, as well as descendent, brother, sister or parent of the spouse and the
spouse of any of the foregoing.
Approvals.
The Companies Law provides that a transaction with an office holder or a transaction in which an office holder has a
personal interest may not be approved if it is adverse to the company’
s interest. In addition, such a transaction generally requires board approval,
unless the transaction is an extraordinary transaction, in which case it requires audit committee approval prior to the approval of the board of
directors. A person, including a director, who has a personal interest in a matter that is considered at a meeting of the board of directors or the
audit committee may not attend that meeting or vote on that matter; however, an office holder who has a personal interest in a transaction may be
present during the presentation of the matter if the board or committee chairman determined that such presence is necessary for the presentation
of the matter. A director with a personal interest in a matter that is considered at a meeting of the board of directors or the audit committee may
attend that meeting or vote on that matter if a majority of the board of directors or the audit committee also has a personal interest in the matter;
however, in that situation, shareholder approval is also required.
Shareholders
The Companies Law imposes the same disclosure requirements, as described above, on a controlling shareholder of a public company
that it imposes on an office holder. For these purposes, a controlling shareholder is any shareholder that has the ability to direct the company’
s
actions, including any shareholder holding 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in
the company. The shareholdings of two or more shareholders with a personal interest in the approval of the same transaction are aggregated for
this purpose.
Approval of the audit committee, the board of directors and our shareholders is required for extraordinary transactions with a controlling
shareholder or in which a controlling shareholder has a personal interest.
The shareholder approval must include the majority of shares voted at the meeting. In addition, either:
•
the majority must include at least a majority of the shares of the voting shareholders who have no personal interest in the
transaction voted at the meeting (excluding abstaining votes); or
•
the total shareholdings of those who have no personal interest in the transaction and who vote against the transaction must not
represent more than 2% of the aggregate voting rights in the company.
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