Incredimail 2012 Annual Report Download - page 73

Under the Companies Law, a company may indemnify an office holder in respect of some liabilities, either in advance of an event or
following an event. If a company undertakes to indemnify an office holder in advance against monetary liability incurred in his or her capacity as
an office holder, whether imposed in favor of another person pursuant to a judgment, a settlement or an arbitrator’
s award approved by a court,
the indemnification must be limited to foreseeable events in light of the company’
s actual activities at the time of the indemnification
undertaking and to a specific sum or a reasonable criterion under such circumstances, as determined by the board of directors.
Under the Companies Law, only if and to the extent provided by its articles of association, a company may indemnify an office holder
against the following liabilities or expenses incurred in his or her capacity as an office holder:
Under the Companies Law, a company may obtain insurance for an office holder against liabilities incurred in his or her capacity as an
office holder, if and to the extent provided for in its articles of association. These liabilities include a breach of duty of care to the company or a
third-party, a breach of duty of loyalty and any monetary liability imposed on the office holder in favor of a third-party.
A company may, in advance only, exculpate an office holder for a breach of the duty of care, except in connection with a distribution of
dividends or a repurchase of the company’
s securities. A company may not exculpate an office holder from a breach of the duty of loyalty
towards the company.
Under the Companies Law, however, an Israeli company may only indemnify or insure an office holder against a breach of duty of
loyalty to the extent that the office holder acted in good faith and had reasonable grounds to assume that the action would not prejudice the
company. In addition, an Israeli company may not indemnify, insure or exculpate an office holder against a breach of duty of care if committed
intentionally or recklessly, or an action committed with the intent to derive an unlawful personal gain, or for a fine or forfeit levied against the
office holder.
Our audit committee and board of directors have resolved to indemnify our office holders and directors, where the resolution regarding
indemnification of our directors was approved by our shareholders as well, per the terms of the Companies law, to the extent permitted by the
Companies Law and by our articles of association for liabilities not covered by insurance and that are of certain enumerated events, subject to an
aggregate sum equal to 50.0% of the shareholders equity as set forth in the financial report of the preceding year to which a claim for
indemnification is made.
C. MATERIAL CONTRACTS
Search revenues powered by Google’
s AdSense for Search program contribute significantly to our revenues. In 2012, we obtained
approximately 63% of our revenues from this source. On January 31, 2013, we signed an amendment to our agreement with Google extending
the term of the agreement to May 31 2013, to coincide with the expiration date of the agreement between SweetIM and Google. On April 23,
2013, we entered into a new agreement with Google, effective from May 1, 2013 to April 30, 2015. The new agreement combines the activities
of Perion and SweetIM into one agreement and replaces both of the existing agreements with Google. Our agreement with Google relates to 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 our applications. The new agreement, as in past agreements, enables termination by either side after one year with 90 days
notice. In addition, Google is entitled to amend the agreement, change its policies and guidelines, and has other limited termination rights.
• any monetary liability whether imposed on him or her in favor of another person pursuant to a judgment, a settlement or an arbitrator’
s
award approved by a court;
• reasonable litigation expenses, including attorneys’
fees, incurred by him or her as a result of an investigation or proceedings instituted
against him or her by an authority empowered to conduct an investigation or proceedings, which are concluded either (i) without the
filing of an indictment against the office holder and without the levying of a monetary obligation in lieu of criminal proceedings upon
the office holder, or (ii) without the filing of an indictment against the office holder but with levying a monetary obligation in
substitute of such criminal proceedings upon the office holder for a crime that does not require proof of criminal intent; and
• reasonable litigation expenses, including attorneys’
fees, in proceedings instituted against him or her by the company, on the
company’s behalf or by a third-
party, or in connection with criminal proceedings in which the office holder was acquitted, or as a
result of a conviction for a crime that does not require proof of criminal intent.
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