Incredimail 2012 Annual Report Download - page 89

ITEM 16G. CORPORATE GO V ERNANCE
We are a foreign private issuer whose ordinary shares are listed on the NASDAQ Global Market. As such, we are required to comply
with U.S. federal securities laws, including the Sarbanes-
Oxley Act, and the NASDAQ Listing Rules, including the NASDAQ corporate
governance requirements. The NASDAQ Listing Rules provide that foreign private issuers may follow home country practice in lieu of certain
qualitative listing requirements subject to certain exceptions and except to the extent that such exemptions would be contrary to U.S. federal
securities laws, so long as the foreign issuer discloses that it does not follow such listing requirement and describes the home country practice
followed in its reports filed with the SEC. Below is a concise summary of the significant ways in which our corporate governance practices
differ from the corporate governance requirements of NASDAQ applicable to domestic U.S. listed companies:
Shareholder Approval.
Although the NASDAQ Listing Rules generally require shareholder approval of equity compensation plans and
material amendments thereto, we follow Israeli practice, which is to have such plans and amendments approved only by the board of directors,
unless such arrangements are for the compensation of chief executive officer or directors, in which case they also require the approval of the
compensation committee and the shareholders.
In addition, rather than follow the NASDAQ Listing Rules requiring shareholder approval for the issuance of securities in certain
circumstances, we follow Israeli law, under which a private placement of securities requires approval by our board of directors and shareholders
if it will cause a person to become a controlling shareholder (generally presumed at 25% ownership) or if:
Shareholder Quorum.
The NASDAQ Listing Rules require that an issuer have a quorum requirement for shareholders meetings of at
least one-third of the outstanding shares of the issuer’
s common voting stock. We have chosen to follow home country practice with respect to
the quorum requirements of an adjourned shareholders meeting. Our articles of association, as permitted under the Companies Law, provide that
if at the adjourned meeting a legal quorum is not present after 30 minutes from the time specified for the commencement of the adjourned
meeting, then the meeting shall take place regardless of the number of members present and in such event the required quorum shall consist of
any number of shareholders present in person or by proxy.
Annual Reports.
While the NASDAQ Listing Rules generally require that companies send an annual report to shareholders prior to the
annual general meeting, we follow the generally accepted business practice for companies in Israel. Specifically, we file annual reports on Form
20-
F, which contain financial statements audited by an independent accounting firm, electronically with the SEC and post a copy on our website.
Executive Sessions
. While the NASDAQ Listing Rules require that "independent directors," as defined in the NASDAQ Listing Rules,
must have regularly scheduled meetings at which only "independent directors" are present. Israeli law does not require, nor do our independent
directors necessarily conduct, regularly scheduled meetings at which only they are present.
Approval of Related Party Transactions
. Although the NASDAQ Listing Rules (Rule 5630(a)) require the approval of the audit
committee or another independent body of a company's board of directors for all "related party transactions" required to be disclosed pursuant to
Item 7.B. of Form 20-
F, we follow the provisions of the Israeli Companies Law. Specifically, that all related party transactions are approved in
accordance with the requirements and procedures for approval of interested party acts and transactions, set forth in sections 268 to 275 of the
Israeli Companies Law, and the regulations promulgated thereunder, which allow for the approval of certain related party transactions, which are
immaterial, in the normal course of business and on market terms, by the board of directors. Other specified transactions can require audit
committee approval and shareholder approval, as well as board approval. See also "Item 10.B Memorandum and Articles of Association
—
Approval of Related Party Transactions" for the definition and procedures for the approval of related party transactions.
ITEM 16H. MINE S AFE TY DISCLOSURE
Not applicable.
• the securities issued amount to 20% or more of our outstanding voting rights before the issuance;
•
some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and
• the transaction will increase the relative holdings of a shareholder that holds 5% or more of our outstanding share capital or
voting rights or will cause any person to become, as a result of the issuance, a holder of more than 5% of our outstanding share
capital or voting rights.
79