Incredimail 2012 Annual Report Download - page 72

Under the Companies Law, a shareholder has a duty to act in good faith towards the company and other shareholders and to refrain
from abusing his or her power in the company including, among other things, when voting in a general meeting of shareholders or in a class
meeting on the following matters:
A shareholder has a general duty to refrain from depriving any other shareholder of their rights as a shareholder. In addition, any
controlling shareholder, any shareholder who knows that it possesses the power to determine the outcome of a shareholder or class vote and any
shareholder who, pursuant to the company’
s articles of association has the power to appoint or prevent the appointment of an office holder in the
company, is under a duty to act with fairness towards the company.
Anti-Takeover Provisions; Mergers and Acquisitions
Merger. The Companies Law permits merger transactions with the approval of each party’s board of directors and shareholders.
Under the 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 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 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, unless the purchaser makes a tender offer to purchase all of the target company’
s shares. If,
as a result of the tender offer, the purchaser would hold more than 95% of the company’
s shares and more than half of the offerees that have no
personal interest have accepted the offer, the ownership of the remaining shares will be transferred to the purchaser. Alternatively, the purchaser
will be able to purchase all shares if the percentage of the offerees that did not accept the offer constitute less than 2% of the company’
s shares.
If the purchaser is unable to purchase 95% or more of the company’
s shares, the purchaser may not own more than 90% of the 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 Companies Law (other than with respect to certain expenses in connection with administrative enforcement proceedings
under the Israeli Securities Law), provided that procuring this insurance or providing this indemnification or exculpation is duly approved by the
requisite corporate bodies (as described above under "Related Party Transactions—Compensation").
• any amendment to the articles of association;
• an increase in the company’s authorized share capital;
•
a merger; or
•
approval of related party transactions that require shareholder approval.
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