Exhibit 1.2
This is an English translation from the original
Hebrew version. In case of any discrepancy, the
binding version is the Hebrew original.
ARTICLES
OF
AMERICAN ISRAELI PAPER MILLS LTD.
INTRODUCTION
1. 1.1 In these Articles, unless the context otherwise requires -
"Person" or "Persons" - Including a corporation;
"In writing" - In handwriting, print, type, photo, telex,
facsimile or in any other manner that can be
read;
"Shareholder" - Whoever is a shareholder on the determining date
as per section 182 of The Companies Law, if
there is a determining date for such matter;
"Registered Shareholder" - The shareholder registered in the Shareholders
Register of the Company;
"Non-Registered Shareholder" - A shareholder within the meaning of section
177(1) of the Law;
"The Company" - American Israeli Paper Mills Ltd.
"The Law" or
"The Companies Law" - The Companies Law 5759-1999, as from time to
time in force, and also the Regulations issued
thereunder;
"The Secretary" - Whoever may be appointed as secretary of the
Company;
"The Register" or
"The Shareholders Register" - The register of shareholders of the Company
which must be maintained by law;
"The Office" or
"The Registered Office" - The office of the Company, the address of which
is from time to time registered with the
Registrar;
"The Ordinance" or
"The Companies Ordinance" - The Companies Ordinance (New Version),
5743-1983, as from time to time in force, and
also the Regulations issued thereunder;
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"Special Majority" - A majority of sixty percent of all votes of the
shareholders present at a general meeting or
class meeting, as the case may be, who are
entitled to vote and who voted at such meeting,
without taking abstentions into account;
"Ordinary Majority" - A simple majority of all votes of the
shareholders present at a general meeting or
class meeting, as the case may be, who are
entitled to vote and who voted at such meeting,
without taking abstentions into account;
"Year" or "Month" - In accordance with the Gregorian calendar;
"Corporation" - A company, partnership, cooperative society,
association and any other body of persons
whether incorporated or unincorporated;
"These Articles" or
"The Articles" - The Articles of Association in the version of
this document, as may from time to time be
amended;
1.2 Any expression in these Articles which is not defined in these
Articles, shall have the meaning designated to it in the Companies Law,
unless this may involve any contradiction to the subject written or its
content; words in the singular - shall mean also the plural, and vice
versa, words in masculine gender - shall mean also feminine gender.
1.3 The headings in these Articles are meant for the purpose of convenience
only and shall not be used for the interpretation of these Articles.
1.4 In any place in these Articles which provides that the provisions
thereof shall apply subject to the provisions of the Ordinance and/or
subject to the provisions of the Companies Law and/or subject to the
provisions of any law, the intention is to provisions of the Ordinance
and/or provisions of the Companies Law and/or provisions of any law,
which are not elective, unless the context otherwise demands.
1.5 Provisions which in accordance with the Companies Law are elective
shall apply to the Company, to the extent that it is not otherwise
provided in these Articles and to the extent that there is no
contradiction between them and between the provisions of these
Articles.
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Name of the Company
2. The name of the Company is as follows:
2.1 In Hebrew -
2.2 In English - American Israeli Paper Mills Ltd.
Limitation of Liability
3. The liability of the shareholders is limited to the payment of par value
of the shares unless the provisions of section 304 of The Law exist.
Objects of the Company
4. The objects of the Company are as specified in the Memorandum of
Association of the Company.
Business
5. The Company may, at any time, engage in any branch or kind of business
in which it is, expressly or by implication, authorized to engage in
accordance with Article 4 above. The Company may also cease to engage in
such businesses, whether or not it has commenced to engage in such
branch or kind of business.
Donations
6. The Company may donate reasonable amounts for deserving causes, even
though the donation is not within the framework of the business
considerations of the Company.
Registered Office
7. The registered office of the Company shall be the address determined by
the Board, as may from time to time be changed.
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The Articles
8. The Company may alter these Articles by resolution carried at a General
Meeting by a majority of sixty percent of all the votes of the
shareholders present at the General Meeting who are entitled to vote and
who voted at the meeting, without taking abstention votes into account.
9. A resolution carried at a General Meeting by the majority required for
alteration of the Articles, as aforesaid in Article 8 above, which
alters any provision of the provisions of these Articles, shall be
deemed to constitute a resolution for the alteration of these Articles
even though the resolution does not expressly state "alteration of
Articles".
10. Subject to the provisions of the Companies Law, alterations of these
Articles shall be valid as from the date of adoption of the resolution
by the Company or from such later date as may be determined in the
resolution.
Registered Share Capital
11. The registered share capital of the Company is NIS 200,000 divided into
20,000,000 Ordinary Shares of par value NIS 0.01 each (hereinafter -
"The Ordinary Shares"). The Company may alter the registered share
capital in accordance with the provisions of the Companies Law and of
these Articles.
The Shares
12. Every Ordinary Share in the capital of the Company is of equal rights,
for all intents and purposes, to every other Ordinary Share, including
the right to dividend, to bonus shares and to participation in the
surplus assets of the company upon liquidation, proportionately to the
par value of each share, without taking into consideration any premium
paid in respect thereof, all the aforesaid subject to the provisions of
these Articles.
13. Each of the Ordinary Shares entitles the holder thereof to participate
at and to one vote at General Meetings of the Company.
14.14.1 14.1.1 A shareholder is any person who is registered as a
shareholder in the Shareholders Register , and any person to
whose credit a share is registered with a member of the Stock
Exchange and such share is included among the shares
registered in the Shareholders Register of the Company in the
name of a Nominee Company.
14.1.2 A shareholder who is a trustee shall be registered in the
Shareholders Register with a note as to his trusteeship, and
for the purpose of the Companies Law he shall be deemed to be
a shareholder.
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Without derogating from the aforesaid, the Company shall
recognize a trustee, as aforesaid, as a shareholder, for all
intents and purposes, and shall not recognize any other person
whomsoever, including the beneficiary, as the owner of any
right whatsoever to the share.
14.2 Without derogating from the aforesaid, and subject to the
provisions of these Articles, apart from shareholders of the
Company, as aforesaid in Article 14.1 above, no person will be
recognized by the Company as the owner of any right whatsoever
to a share and the Company will not be bound and will not
recognize any beneficial right in accordance with the laws of
equity or trustee relations or a future or partial right to
any share or any beneficial right in a fraction of a share or
any other right in respect of a share, but only the right of
the shareholder as aforesaid in Article 14.1 above to the
share in its entirety, all the aforesaid except if a court of
competent jurisdiction may otherwise direct.
Share Certificates
15. he certificates evidencing the right of ownership to shares shall bear
the stamp of the Company or its printed name and the signatures of one
Director together with the CEO of the Company or together with the
secretary of the Company or the signatures of any two persons appointed
by the Board for such purpose.
The Board may resolve that a signature or signatures as aforesaid may be
effected by any mechanical means, as may be determined by the Board.
16. Except in the event that the conditions of the issuance of shares
otherwise provide:
16.1 Every registered shareholder is, at his request, entitled to
receive from the Company within a period of two months
following the allotment or the registration of transfer, as
the case may be, one certificate evidencing his ownership of
the shares registered in his name, or, with the consent of the
Company, several such certificates.
16.2 A Nominee Company is, at its request, entitled to receive from
the Company within a period of two months following the
allotment or the registration of transfer, as the case may be,
one certificate evidencing the number of shares and class of
shares registered in its name in the Shareholders Register.
17. Subject to the provisions of the Companies Law, there shall be detailed
in every certificate the number of shares in respect of which the
certificate was issued, their serial numbers and par value.
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18. A certificate which relates to a share registered in the name of two or
more persons, shall be delivered to the person whose name appears first
in the Shareholders Register in respect of such share, unless all the
registered shareholders of such share shall direct the Company, in
writing, to deliver the certificate to another of the registered
shareholders.
19. If a share certificate is destroyed, spoiled, lost or damaged, the
Board may order the cancellation thereof and the issue of a new
certificate in place thereof, provided that the share certificate is
delivered to the Company and destroyed by it, or that it is proved to
the satisfaction of the Board that the certificate has been lost or
destroyed and the Company has received securities to the satisfaction
of the Board against any possible damage. A reasonable sum as may be
determined by the Board, from time to time, shall be paid in respect of
every certificate issued pursuant to this Article.
Payments for Shares
20. All shares in the issued capital of the Company shall be fully paid up.
Forfeit of Shares
21. Without derogating from the aforesaid in Article 20 above, the Board may
forfeit a share allotted by the Company and may sell the same, if the
consideration which the shareholder undertook to pay to the Company, in
whole or in part, has not been paid to the Company, and the provisions
of the Companies Law shall apply to such matter.
Transfer and transmission of Shares
22. Every transfer of shares registered in the Shareholders Register in the
name of a registered shareholder, including by or to the Nominee
Company, shall be made in writing, provided that the Deed of Transfer
shall be signed in handwriting only by the transferor and by the
transferee, in person or by their attorneys and also by witnesses to
their signature, and shall be delivered to the registered office of the
Company or to such other place as may be fixed by the Board for such
purpose. Subject to the provisions of the Companies Law, a transfer of
shares shall not be registered in the Shareholders Register except
after a Deed of Transfer shall have been delivered to the Company, as
aforesaid; the transferor shall continue to be deemed to be the
shareholder of the shares transferred until the registration of the
transferee in the Shareholders Register as shareholder of the shares
transferred.
23. A Deed of Transfer of a share shall be made in writing, in the form
usual in Israel or in such other form as may be approved by the Board.
If the transferor or the transferee is a corporation, a certificate of
an advocate or of an accountant or of any other person acceptable by the
Board, shall be given
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with regard to the authority of the signatories on behalf of the
corporation to make or receive the transfer, as the case may be.
24. The Company may close the Shareholders Register for a period fixed by
the Board provided that such period shall not exceed thirty days in any
year. When the Register is closed, no transfer of shares shall be
registered in the Register. Without derogating from the aforesaid, the
Board may fix a determining date for the purpose of entitlement to vote
at a General Meeting, or to receive a dividend or any rights allotment
or for any other legal purpose.
25. Subject to the provisions of these Articles or to the terms of the issue
of shares of any class, shares may be transferred without necessity for
approval by the Board.
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26. Every Deed of Transfer shall be lodged for registration at the
office or any other place as may be fixed by the Board,
together with the share certificates of the shares to be
transferred, if such a certificate has been issued, and
together with any other proof required by the Board as to the
proprietary right of the transferrer or his right to transfer
the shares. Deeds of Transfer which are registered shall
remain with the Company but any Deed of Transfer which the
Board refuses to transfer, shall be returned to the person who
lodged the same, at his request.
27. If the Board refuses to approve the transfer of shares, it
shall notify the transferrer of same not later than one month
from the date of receipt of the Deed of Transfer.
28. The Company shall be entitled to charge a fee for registration
of transfer in an amount to be fixed by the Board from time to
time and which is reasonable in the circumstances of the
matter.
29.29.1 Subject to the provisions of the Companies Law and to the
provisions of these Articles, if there shall be proved to the
Company to the satisfaction of the Board in such manner as may
be determined by it, the existence of the legal requirements
for the transmission of shares registered in the name of a
registered shareholder, the Company shall recognize the
assignee alone as the owner of the right to the said shares.
29.2 Notwithstanding the aforesaid, in the event of the death of
one or more of the shareholders in whose joint names shares
are registered in the Shareholders Register, the Company shall
recognize only the surviving shareholders as owners of the
proprietary right to such shares.
30. 30.1 Subject to the provisions of these Articles, the Company shall
change the registration of the ownership of shares in the
Shareholders Register in the event that there shall be lodged
with the Company a court order for the amendment of the
Register or if there shall be proved to the Company, to the
satisfaction of the Board in the manner fixed by the Board,
the existence of the legal requirements for the transmission
of shares, and the Company shall not recognize any right of
any person to shares unless his right shall first be proved,
as aforesaid.
30.2 Without derogating from the aforesaid, the Board may refuse to
effect the registration or delay the same, as it would have
been entitled to do had the registered shareholder himself
transferred the share, prior to the transmission of the right.
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31. Subject to the provisions of the Companies Law and to the provisions of
these Articles, a person who becomes entitled to a share as aforesaid in
Article 29 above, shall be entitled to transfer the shares in the same
way that the registered owner was entitled to do himself, prior to the
transmission of the right.
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32. The Company may destroy the Deeds of Transfer of shares on the expiration
of seven years from registration in the Register, the Company may also
destroy share certificates which have been cancelled on the expiration of
seven years from their cancellation, and there shall be a prima facie
presumption that the Deeds of Transfer and certificates destroyed were
fully valid and that the transfers, cancellations and registrations, as
the case may be, were correctly effected.
Alteration of Capital
33. The Company may, by resolution carried at a General Meeting by a
special majority, increase the registered share capital of the Company,
by classes of shares, as it may determine.
34. Subject to the provisions of the Companies Law, the Company may, by
resolution carried at a General Meeting by an ordinary majority:
34.1 To consolidate all or part of its shares and to divide them
into shares of a greater par value than the par value of the
existing shares;
34.2 To split all or part of its shares, by way of subdivision,
into shares of lesser par value than the par value of the
existing shares;
34.3 To decrease the capital of the Company and of any reserve fund
from redemption of capital.
For the execution of any resolution as aforesaid, the Board may, at its
discretion, resolve any difficulty which may arise in connection
therewith.
35. Without derogating from the generality of the authority of the Board,
as aforesaid, if as a result of the consolidation or split, as
aforesaid, fractions of a share shall stand to the credit of the
shareholders, the Board is authorized at its discretion, to act as
follows:
34.1 To determine that fractions of shares which do not entitle
their owners to a whole share, shall be sold by the Company
and that the consideration for the sale be paid to the
beneficiaries, on the terms and in the manner which may be
determined.
34.2 To allot to every shareholder whom the consolidation and/or
split leaves with a fraction of a share, shares of the class
which existed in the Company's capital prior to the
consolidation and/or split, in such quantity which, when
consolidated with the fraction, will constitute one whole
share, and such allotment shall be deemed to be valid
immediately prior to the consolidation or split, as the case
may be.
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34.1 To determine the manner in which the amounts to be paid for
shares allotted as aforesaid in Article 35.2 above, shall be
paid up, including on account of bonus shares.
34.1 To determine that the owners of fractions of shares shall not
be entitled to receive a whole share in respect of a share
fraction.
34.2 To determine that shareholders shall not be entitled to
receive a whole share in respect of a fraction of a whole
share of a determined par value or less than same, and that
they shall be entitled to receive a whole share in respect of
a fraction of a whole share the par value of which is greater
than such determined par value.
36. The Company may, by resolution carried at a General Meeting, by a
special majority, annul registered share capital which has not yet been
issued, provided that the Company has no undertaking, including a
provisional undertaking, to allot such shares.
Modification of Rights
37. At any time during which the share capital is divided into different
classes, the Company may by resolution carried at a General Meeting, by
a special majority, except if the terms of the issuance of the shares
of such class otherwise provide, annul, convert, expand, supplement,
restrict, amend or otherwise modify the rights of a class of shares of
the Company, provided that the consent, in writing, of all the
shareholders of such class thereto shall be received or that the
resolution shall have been approved by a General Meeting of the
shareholders of such class by special majority, or in the event that it
was otherwise provided in the terms of the issuance of a particular
class of the shares of the Company, as may have been provided in the
terms of issuance of such class.
38. The provisions of these Articles concerning General Meetings shall
apply, subject to the necessary changes, to any class meeting provided
that the quorum at the class meeting shall be the presence, in person
or by proxy, at the opening of the meeting of at least two shareholders
who own at least twenty five percent of the number of the issued shares
of such class. However if there is no such quorum, the meeting shall be
adjourned to another date and at the adjourned meeting a quorum shall
be constituted by any number of participants regardless of the number
of shares held by them.
39. The rights conferred upon the shareholders or owners of a class of
shares, whether issued with ordinary rights or with preference rights
or with other special rights, shall not be deemed to have been
converted, restricted, prejudiced or altered in any other manner by the
creation or issuance of additional shares of any class, whether of the
same degree or in a degree different or preferable to them, nor shall
they be deemed to have been converted, restricted, prejudiced or
altered in any other manner by a change of the rights linked to any
other class of shares, all the aforesaid unless otherwise expressly
provided in the terms of the issuance of such shares.
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Issuance of Shares and Other Securities
40. The Board may issue shares and other securities which are convertible
or realizable for shares, up to the extent of the registered share
capital of the Company; for this purpose convertible securities which
may be converted or realized for shares shall be deemed to have been
converted or realized at the time of issue. Without derogation from the
generality of the aforesaid, the Board may issue shares and other
securities, as aforesaid, to grant optional rights for the purchase
thereof including options or to confer them in any other manner, all
the aforesaid to such persons as may be determined by the Board and at
such times, for such prices and upon such conditions as may be
determined by the Board, and also to determine any other provision in
connection therewith, including provisions as to the manner of the
distribution of the shares and the securities issued by the Company,
between the purchasers thereof, including in the case of over
subscription, all the aforesaid at the discretion of the Board.
41. Without derogating from the generality of the foregoing, and subject to
the provisions of the Companies Law and of these Articles, the Board
may determine, at its discretion, that the consideration for shares
shall be paid in cash or in kind, including in securities or in any
other manner, or that the shares shall be allotted as bonus shares or
be allotted for a consideration equal to or greater than their par
value, either in units or in series, all the aforesaid on the terms and
at the times as may be determined by the Board at its discretion.
42. In a resolution for the increase of the registered share capital of the
Company, the General Meeting may determine that the new shares included
in the amount by which the registered share capital was increased as
aforesaid (hereinafter - "the New Shares"), or any part of them, shall
first be offered, at par value or at a premium, to all the existing
shareholders in proportion to the par value of their shares in the
Company or may determine other provisions with regard to the issuance
and allotment of the new shares. However, in the absence of such a
determination by the General Meeting in the resolution to increase the
registered share capital of the Company, the Board may offer such
shares as aforesaid in Article 40 above.
43. The Board may resolve to pay commissions or underwriting fees to any
person, at the time of subscription or a subscription agreement or the
procurement of subscriptions or pledge of subscriptions for shares or
debentures or other securities of the Company. In the event of any
issuance of securities of the Company, the Board may also resolve to
pay agency commissions, the aforesaid in cash, in shares of the Company
or in other securities issued by the Company, or in any other manner,
or partly in one manner and partly in another manner, all the aforesaid
subject to the provisions of law.
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Redeemable Securities
44. Subject to the provisions of the Companies Law the Company may issue
securities which may be redeemed on such terms and in such manner as
may be determined by the Board at its discretion.
Registers
45. 45.1 The Company shall maintain a Shareholders Register and shall,
shortly after the issuance of any shares of the Company,
register therein the names of the shareholders and the other
particulars required by the Companies Law. Subject to the
provisions of the Law, upon registration in the Register the
registered shareholder shall be deemed to be the owner of the
shares registered in his name even if share certificates have
not been issued in respect of such shares.
45.2 The Company shall maintain a Register of Material
Shareholders, as required by the Companies Law.
46. The Company may maintain an additional Shareholders Register outside of
Israel on the terms provided for such purpose by the Companies Law.
47. The Company shall maintain a Register of Debenture Holders and
Convertible Security Holders and all the provisions of these Articles
relating to shares shall apply with regard to such Convertible
Securities, as regards registration in the Register, issue of
certificates, exchange of certificates, transfer and transmission,
subject to such changes as the context may require, all the aforesaid
subject to the terms of the issue of the securities.
General Meetings
48. Resolutions of the Company in the following matters shall be adopted at
a General Meeting:
48.1 Alterations of the Articles or Memorandum of the Company;
48.2 Exercise of the authorities of the Board of Directors by
General Meeting in the event that the Board is not able to
exercise its authorities and the exercise of any authority is
vital for the proper management of the Company, as provided in
section 52(a) of the Companies Law;
48.3 Appointment and termination of employment of auditors;
48.4 Appointment and dismissal of Directors;
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48.5 Approval of actions and transactions which are subject to
approval at a General Meeting in accordance with the
provisions of sections 255 and 268 to 275 of the Companies
Law;
48.6 Increase of the registered share capital and the decrease
thereof in accordance with the provisions of sections 286 and
287 of the Companies Law as well as alterations in capital as
provided for in Article 34 above;
48.7 Merger in accordance with section 320(a) of the Companies Law;
48.8 Any matter which in accordance with these Articles is required
to be adopted by resolution of a General Meeting.
49. The Company shall hold an Annual General Meeting each year not later
than fifteen months after the previous Annual Meeting, at such time and
place as may be determined by the Board.
50. The Agenda of the Annual General Meeting shall include the following
items:
50.1 Discussion of the Financial Statements and Directors' Report
regarding the Company's business which are presented to the
General Meeting;
50.2 Appointment of Directors and determination of their
remuneration;
50.3 Appointment of auditors;
50.4 Report of the Board as to the auditor's fee for auditing and
additional services, if any;
50.5 In addition to the aforesaid, there may be included on the
agenda of the Annual Meeting any other matter determined in
accordance with Article 53 hereafter.
A General Meeting as aforesaid is referred to as an "Annual Meeting"
and any other General Meeting is referred to as a "Special Meeting".
51. The Board of Directors of the Company shall convene a Special Meeting
as may be decided by the Board, and shall also convene a Special
Meeting at the demand of any one of the following:
51.1 Any two Directors or one quarter of the officiating Directors.
51.2 One or more shareholders who hold at least five percent of the
issued capital and one percent of the voting rights, or one or
more shareholders who hold at least five percent of the voting
rights.
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If the Board receives a demand for the convocation of a Special Meeting
as aforesaid, the Board shall within twenty one days of receipt of the
demand convene the meeting for a date fixed in the notice as to the
Special Meeting in accordance with Article 55.1 hereafter, provided
that the date for convocation shall not be later than thirty five days
from the date of publication of the notice, all the aforesaid subject
to the provisions of the Companies Law.
52. In the event that the Board does not convene a Special Meeting demanded
in accordance with Article 51 above, the persons making the demand, and
in the case of shareholders, such part of them as hold more than one
half of their voting rights, may themselves convene the meeting
provided that it shall not be held more than three months after the
date that the demand was lodged as aforesaid, and the meeting shall be
convened, to the extent possible, in the same manner as the convocation
of meetings by the Board.
53. 53.1 The agenda at a General Meeting shall be fixed by the
Board and shall include also items in respect of which a
demand for the convocation of a Special Meeting has been made
in accordance with Article 51 above and any matter requested
in accordance with Article 53.2 hereafter.
53.2 One or more shareholders who hold at least one percent of the
voting rights at the General Meeting, may request the Board to
include any matter on the agenda of a meeting to be held
provided that such matter is appropriate for deliberation at a
General Meeting.
53.3 A request as aforesaid in Article 53.2 above shall be lodged
with the Company at least seven days prior to the giving of
notice of the convocation of the General Meeting, and there
shall be attached thereto a draft of the resolution proposed
by the shareholder.
54. 54.1 A notice of a General Meeting shall be published in at
least two widely distributed daily newspapers published in
Hebrew; The notice shall be published at least fourteen days
prior to the convocation of the meeting.
54.2 Apart from the notice as to the General Meeting as in Article
54.1 above, the Company shall not give any notice as to the
General Meeting, either to the registered shareholders or to
shareholders who are not registered, subject to provisions of
the law and/or any other applicable law.
55. 55.1 The notice as to a General Meeting shall detail the place, the
day and the hour at which the meeting will be held and shall
include the agenda as well as a summary of the proposed
resolutions and any other details required by law.
55.2 In the resolution of the Board to convene a meeting, the Board
may, at its discretion and subject to the provisions of the
Law, fix the manner in which the items on the agenda will be
detailed and notified to the shareholders entitled to
participate at the meeting.
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55.3 Without derogating from the authority of the Board as
aforesaid in this Article 55 and without derogating from the
generality of the provisions of these Articles relating to
delegation of the authority of the Board, the Board may
delegate its authority as aforesaid in this Article 55, to a
Committee of the Board and/or to an officer of the company,
either for the purpose of a specific General Meeting or for a
period.
56. A defect made bona fide in the convocation of a General Meeting or the
management of the meeting including a fault resulting from the
non-performance of a provision or condition fixed by law or by these
Articles, including as to the manner of the convocation or management
of the General Meeting, shall not invalidate any resolution carried at
the General Meeting and shall not prejudice the proceedings thereof,
subject to the provisions of any law.
Proceedings at General Meetings
57. No business shall be transacted at any General Meeting unless a quorum
is present at the time the meeting proceeds to business. A quorum shall
be constituted when two shareholders, holding collectively at least
twenty five percent of the voting rights, are present in person or by
proxy within half an hour from the time appointed for commencement of
the meeting, unless otherwise determined in these Articles.
58. If a quorum is not present within half an hour, the meeting shall stand
adjourned for seven days, to the same day of the week at the same time
and place, without need for notification to the shareholders, or to
such other day, time and place as the Board may by notice to the
shareholders appoint.
59. At an adjourned meeting a quorum shall be constituted when two
shareholders, holding collectively at least twenty five percent of the
voting rights, are present in person or by proxy within half an hour
from the time appointed for commencement of the adjourned meeting. If a
quorum is not present as aforesaid, at the adjourned meeting, the
meeting shall be dissolved.
60. The Chairman of the Board or in his absence, any Director appointed for
such purpose by the Board, shall take the chair at every General
Meeting of the Company. If there shall be no Chairman as aforesaid or
if at any particular meeting, no such person is present within fifteen
minutes from the time appointed for commencement of the meeting, or if
they shall be unwilling to act as Chairman of the meeting, the
Directors present may by majority vote elect as Chairman one of the
Directors or officers of the Company present at the meeting, and in
default of their so doing, the shareholders present in person or by
proxy may elect as Chairman one of the Directors or officers of the
Company present at the meeting. If no Directors or officers are present
or if all of the Directors or officers shall be unwilling to act as
Chairman, one of the shareholders or the proxy of a shareholder shall
be elected to act as Chairman.
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61. The Company shall maintain Minutes of the proceedings at the General
Meeting which shall include the following details:
61.1 The names of the shareholders participating at the General
Meeting and the number of shares held by them;
61.2 The matters transacted at the General Meeting and the
resolutions carried.
62. Minutes signed by the Chairman of the General Meting shall constitute
prima facie evidence as to the contents thereof.
Voting and Carrying of Resolutions at General Meetings
63. A shareholder who wishes to vote at a General Meeting shall prove to
the Company his ownership of his share in the manner required by the
Companies Law. Without derogating from the aforesaid,the Board may
issue directives and procedures relating to the proof of ownership of
shares of the Company.
64. A shareholder is entitled to vote at a General Meeting or Class
Meeting, in person or by proxy, in accordance with the provisions of
these Articles and subject to the provisions of the Companies Law. A
voting proxy need not be a shareholder of the Company.
65. Subject to the provisions of any law, in the event of joint holders,
each of them, in person or by proxy, is entitled to vote at any meeting
in respect of the jointly owned shares as though he were the sole
owner. In the event that more than one of the joint owners is present
at the meeting, in person or by proxy, the shareholder entitled to vote
will be the one whose name appears first in the Register or in the
Ownership Certificate issued by a member of the Stock Exchange
(hereinafter "Ownership Certificate"), or in such other document
determined by the Board for such purpose, as the case may be. Several
executors or administrators of a deceased shareholder shall for the
purpose of this Article be deemed joint owners of the shares.
66. Any person entitled to shares in accordance with Article 29 above, may
vote at any General Meeting in respect thereof in the same manner as if
he were the registered holder of such shares, provided that at least
forty eight hours before the time for the meeting or the adjourned
meeting, as the case may be, at which he proposes to vote, he shall
satisfy the Board of his right to vote such shares unless the Company
shall have previously recognized his right to vote the shares at such
meeting.
67. The instrument appointing a proxy (hereinafter "The Proxy Appointment")
shall be in writing signed by the principal, or if the principal is a
corporation the proxy appointment shall be in writing and signed by
authorized signatories of the corporation; The Board is entitled to
demand that prior to the holding of the
17
meeting, there shall be produced to the Company a confirmation in
writing of the authority of signatories to bind the corporation to the
satisfaction of the Board. The Board may also issue provisions and
procedures relating to such matter.
The proxy appointment or an office copy to the satisfaction of the
Board shall be deposited at the registered office or at such other
place or places, in or outside of Israel, - as may from time to time be
determined by the Board, either generally or in respect of a specific
meeting - at least forty eight hours prior to the commencement of the
meeting or the adjourned meeting, as the case may be, at which the
proxy proposes to vote on the strength of such proxy appointment.
Notwithstanding the aforesaid, the Chairman of the meeting may, at his
discretion, accept such proxy appointment after such time if he so
deems fit at his discretion. If the proxy appointment is not received
as aforesaid in this Article, it shall not be valid at such meeting.
68. A voting proxy is entitled to participate in the proceedings at the
General Meeting and to be elected as chairman of the meeting in the
same manner as the appointing shareholder, unless the proxy appointment
otherwise provides.
68.1 The proxy appointment shall be in form usual in Israel or any
other form which may be approved by the Board.
68.2 The proxy appointment shall state the class and number of
shares in respect of which it is given. If the proxy
appointment does not state the number of shares in respect of
which it is given or states a number of shares which exceeds
the number registered in the name of the shareholder or stated
in the Ownership Certificate, as the case may be, the proxy
instrument shall be deemed to have been given in respect of
all the shares of the shareholder.
68.3 If the proxy appointment is given in respect of a number of
shares which is less than the number of shares registered in
the name of the shareholder or stated in the Ownership
Certificate, as the case may be, the shareholder shall be
deemed not to have participated in the voting in respect of
the excess shares and the proxy appointment shall be valid in
respect of the number of shares stated therein.
69. Without derogating from the provisions of these Articles relating to
the appointment of a proxy for voting, a shareholder who holds more
than one share is entitled to appoint more than one proxy, subject to
the following provisions:
61.1 Each proxy appointment shall state the class and number of
shares in respect of which it is given.
61.2 If the total number of shares of any class stated in proxy
appointments given by such shareholder exceeds the number of
shares registered in the name of the shareholder or stated in
the Ownership Certificate, as the case may be, all the proxy
appointments given by such shareholder shall be invalid.
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70. A shareholder or his voting proxy may vote in respect of part only of
the shares held by him or in respect of which he acts as proxy, and he
may vote one way in respect of some of the shares and another way in
respect of some thereof.
71. A vote given by virtue of a proxy appointment shall be valid
notwithstanding any defect in the proxy appointment and also in case of
the decease of the principal or declaration of his legal incapacity or
revocation of the proxy appointment or transfer of the shares in
respect of which the vote is given prior to the meeting, unless a
notice in writing has been received at the office prior to the meeting
as to such defect, death, incapacity, revocation or transfer, as the
case may be. Notwithstanding the aforesaid the chairman of the meeting
may, at his discretion accept such a notice also during the meeting if
he shall so deem fit at his discretion.
72. A proxy appointment shall be valid also in respect of an adjourned
meeting of the meeting to which the proxy appointment relates unless
otherwise provided in the proxy appointment.
73. Each Ordinary Share entitles the holder thereof to participate at a
General Meeting of the Company and to one vote at a poll.
74. Any resolution standing to the vote of a General Meeting shall be
decided by a poll of the votes of the shareholders voting; A poll shall
be taken in such manner as the chairman of the meeting may direct. In
case of any dispute as to the acceptance or rejection of any vote on a
poll, the chairman of the meeting shall determine the matter and his
bona fide decision shall be final and binding.
75. A declaration by the chairman that a resolution has been carried or
rejected, whether unanimously or by a particular majority, and an entry
to that effect in the minutes of the meeting, shall constitute prima
facie evidence of such fact, and there shall be no necessity to prove
the number of votes (or the relative proportion thereof) cast in favor
of, or against the proposed resolution.
76. Subject to the provisions of the Companies Law or the provisions of
these Articles requiring any other majority, resolutions of a General
Meeting shall be adopted by a simple majority. In the event of an
equality of votes for and against, the chairman of the meeting shall
not have a second or casting vote.
77. The chairman of a General Meeting may, with the consent of a meeting at
which a quorum is present, and shall if so directed by the meeting,
adjourn the meeting or adjourn the proceedings with regard to any
particular matter on the agenda, to another time and place as may be
decided. No business shall be transacted at the adjourned meeting other
than business which was on the agenda but unfinished at the meeting
from which the adjournment took place. It shall not be necessary to
give notice of the adjourned meeting unless the adjournment exceeds
twenty one days, in which case notice of the adjourned meeting shall be
given as provided for in Articles 54 and 55.
The Board of Directors
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78. The number of Directors shall not be less than five and shall not
exceed fifteen, including the External Directors.
79. The Directors shall be appointed at the Annual Meeting and, with the
exception of the External Directors, shall continue in office until the
termination of the first Annual Meeting following their appointment.
Notwithstanding the aforesaid, if no Directors were appointed at the
Annual Meeting, the Directors appointed at the previous Annual Meeting
shall continue in office. Directors whose period of office is expiring
are eligible for re-appointment.
80. No person other than a person who acted as a Director up to the Annual
Meeting, shall be appointed as a Director at the Annual Meeting, unless
recommended for appointment by the Board, or unless a shareholder of
the Company who wishes to propose a candidate shall have lodged at the
Office, not later than seven days after the publication of the notice
of the meeting, a document in writing signed by the shareholder
notifying his intention to propose such candidate for appointment as a
Director, to which document there shall be attached the consent of the
candidate to act as a Director.
81. The Board may from time to time appoint an additional Director or
Directors, whether in order to fill the office of a Director which has
become vacant for any reason whatsoever or as an additional Director or
Directors, provided that the total number of Directors shall not exceed
the maximum number fixed in Article 78 above. The office of a Director
appointed as aforesaid shall terminate at the end of the Annual Meeting
held following his appointment and he shall be eligible for
re-appointment.
82. The Company may, at an Special Meeting, appoint an additional Director or
Directors, whether in order to fill the office of a Director which has
become vacant for any reason whatsoever or as an additional Director or
Directors, provided that the total number of Directors shall not exceed
the maximum number fixed in Article 78 above. The office of Directors,
other than External Directors, appointed as aforesaid shall terminate at
the end of the Annual Meeting held following their appointment.
83. The General Meeting or the Board may provide that the office of a
Director appointed by them, as the case may be, shall commence at a date
later than his appointment.
84. Notwithstanding the aforesaid, the General Meeting may at any time, by
a simple majority, remove any Director, other than an External
Director, from office prior to the expiration of his office, provided
that there shall be afforded to such Director a reasonable opportunity
to present his standpoint before the General Meeting. Any General
Meeting may also appoint, by a simple majority, another person as a
Director in place of a Director removed from office as aforesaid. A
Director appointed as aforesaid shall continue in office only during
such time as the Director in whose place he was appointed would have
held office.
85. Without prejudice to the provisions of any law, the office of any
Director, other than an External Director, shall terminate prior to the
termination of the period for
20
which he was appointed, in the event that there shall be served upon
him a demand that he should resign signed by at least two thirds of the
Directors then officiating.
86. In the event of the vacation of the office of a Director, the Board may
continue to act in all matters so long as the number of Directors does
not fall below the minimum number of Directors fixed in Article 78
above. If the number of Directors shall fall below such number, the
Board may not act otherwise than for the convocation of a General
Meeting for the purpose of the appointment of additional directors but
not for any other purpose.
87. A Director may resign by notice to the Board, to the chairman or to the
office, as required by the Companies Law, and his resignation shall
come into effect upon delivery of such notice, unless the notice shall
determine a later date. A Director shall state the reasons for his
resignation.
88. Subject to the provisions of the Companies Law, the Company may pay the
Directors remuneration for carrying out their duty as Directors.
89. 89.1 A Director may appoint a substitute director in his place
subject to the approval of the substitute by the Board
(hereinafter - "The Substitute Director"). Notwithstanding the
aforesaid, there shall not be appointed as a Substitute
Director, any person who is not himself qualified to be
appointed a director, or who himself already officiates as a
Director of the Company or as a Substitute Director of another
Director or a representative of a corporation.
89.2 The same rules shall apply to a Substitute Director as to the
Director who appointed the Substitute Director and the
Substitute Director may attend a meeting of the Board and/or
committees of the Board, to participate and vote thereat, in
the same manner as could the Director who appointed the
Substitute.
89.3 A Director who has appointed a Substitute Director may,
subject to the provisions of law, revoke the appointment at
any time. In addition, the office of a Substitute Director
shall be vacated at any time that the office of the Director
who appointed the Substitute is vacated in any manner
whatsoever.
89.4 Any appointment or revocation of the appointment of a
Substitute Director, as aforesaid, shall be made by notice in
writing which shall be lodged with the Substitute Director and
with the Company, and which shall come into force after the
lodging of the instrument of appointment as aforesaid or upon
such date as is fixed in the instrument of appointment,
whichever is the later.
89.5 Subject to the provisions of the Companies Law, the Company
may pay Substitute Directors remuneration for participation at
meetings of the Board.
External Directors
21
90. At least two External Directors shall officiate in the Company with
respect to whom the provisions fixed in the Companies Law shall be
applicable.
Powers and Duties of The Board
91. The Board shall have all the powers and authorities conferred upon it
by these Articles, by the Companies Law and by any law.
92. Without derogating from the provisions of these Articles, the Board
shall formulate the policies of the Company and shall supervise the
performance of the office and actions of the General Manager, including
inter alia -
92.1 Determination of the business plans of the Company, financing
principles and priorities;
92.2 Examination of the financial position of the Company and
determination of the credit framework which the Company may
receive;
92.3 Fixing the organizational structure and salary policies;
92.4 Decision as to the issue of a series of debentures;
92.5 Responsibility for the preparation and approval of Financial
Statements , in accordance with section 117 of the Companies
Law;
92.6 Reporting to the Annual Meeting on the affairs of the Company
and business results, in accordance with section 173 of the
Companies Law;
92.7 Appointment and dismissal of the General Manager;
92.8 Decision with regard to activities and transactions which
require approval of the Board in accordance with these
Articles or in accordance with the provisions of sections 255
and 268 to 275 of the Companies Law;
92.9 Allotment of shares and securities convertible into shares up
to the registered share capital of the Company;
92.10 Decision as to the distribution of dividends or bonus shares,
as the case may be;
92.11 Decision as to acquisition within the meaning of section 1 of
the Companies Law, from all or part or any of the shareholders
of the Company, at its discretion;
92.12 Opinion as to a special acquisition tender, in accordance with
the provisions of section 329 of the Companies Law;
22
93. The powers of the Board in accordance with Article 92 may not be
delegated to the General Manager.
94. Any power of the Company which has not been conferred by law or by
these Articles to any other body, may be exercised by the Board.
95. 95.1 The Board may resolve that the powers vested in the
General Manager shall be transferred to the authority of the
Board, the aforesaid in respect of a specific matter or for a
particular period.
95.2 Without derogating from the aforesaid, the Board may instruct
the General Manager as how to act with regard to a specific
matter. If the General Manager shall not carry out such
instruction, the Board may exercise instead of him the powers
necessary for carrying out such instruction.
95.3 If the General Manager is unable to carry out his powers, the
Board may carry them out in his place.
96. Subject to the provisions of the Companies Law, the Board may delegate
its powers to the General Manager, to an officer of the Company or to
any other person. Delegation of the powers of the Board may be with
regard to a specific matter or for a particular period, the aforesaid
at the discretion of the Board.
Grant of Mortgages
97. Without derogating from any power vested in the Board in accordance
with these Articles, the Board may, from time to time, at its
discretion, decide upon the issue of a series of debentures, including
capital notes or undertakings, including debentures, capital notes or
undertakings which can be converted into shares, and also the terms
thereof, and mortgage of the property of the Company, in whole or in
part, at present or in future, by floating or fixed charge. Debentures,
capital notes, undertakings or other securities, as aforesaid, may be
issued either at a discount or at a premium or in any
other manner, whether with deferred rights or special rights and/or
preferred rights and/or other rights, all the aforesaid as the Board
may, at its discretion, determine.
Committees of the Board
98. Subject to the provisions of the Companies Law, the Board may, as it
deems fit, set up committees of two or more members, appoint members of
such committees from members of the Board (hereinafter - "A Board
Committee), and delegate its powers, in whole or in part, to a Board
Committee. Notwithstanding the aforesaid, the Board shall not delegate
to a Board Committee any of its powers in the following matters
otherwise than for the receipt of recommendations only:
98.1 Determination of the general policies of the Company;
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98.2 Distribution, unless than with regard to the purchase of
shares of the Company in accordance with the framework
already determined by the Board;
98.3 Determination of the standpoint of the Board in any matter
which is subject to approval by a General Meeting or
formulating an opinion with regard to the merit of a
special acquisition tender in accordance with section 329
of the Companies Law;
98.4 Appointment of directors;
98.5 Allotment of shares or of securities which may be
converted or realized for shares, or a series of
debentures, other than the allotment of shares resulting
from the realization or conversion of securities of the
Company;
98.6 Approval of the Financial Statements;
98.7 Approval of transactions and actions which require
approval by the Board in accordance with sections 255 and
268 to 275 of the Companies Law.
99. A resolution carried or an action taken by a Board Committee shall be
as effective as a resolution carried or action taken by the Board,
unless otherwise expressly determined by the Board with regard to a
specific matter or with regard to a specific committee. The Board may
from time to time enlarge, limit or annul the delegation of powers to
a Board Committee, however no such limitation or annulment as
aforesaid, shall prejudice the validity of any resolution of the
Board Committee in accordance with which the Company shall have acted
vis-a-vis a third party who was not aware of the annulment.
100.100.1 The quorum for proceeding to business at a meeting of a
Board Committee shall be two committee members officiating
at the time of the meeting, in person or by their
substitute, unless otherwise determined by the Board.
100.2 The provisions of these Articles with regard to actions of
the Board, shall apply, except as the context otherwise
requires, also to Board Committees, so long as they shall
not have been replaced by instructions of the Board in
such respect, all the aforesaid subject to the provisions
of the Companies Law.
100.3 A Board Committee shall regularly report its resolutions
and recommendations to the Board.
101. 101.1 The Board shall, from among its members, appoint an Audit
Committee. The number of members of the Audit Committee
shall not be less than three and all the External
Directors shall be members thereof. The following persons
shall not be members of the Audit Committee: The
24
Chairman of the Board, any director who is employed by the
Company or who provides the Company with services on a
fixed basis, any controlling shareholder of the Company or
a relative of same.
101.2 The functions of the Audit Committee shall be as
determined by the Companies Law including any other
function which may be imposed upon it by the Board.
Proceedings of the Board
102. Subject to the provisions of these Articles, the Board may hold
meetings to carry out its functions, may adjourn its meetings and may
organize its actions and deliberations as it may deem fit.
103. The Board shall appoint one of its members to act as Chairman of the
Board and may appoint more than one Chairman of the Board (each of
whom is hereinafter referred to as - "The Chairman of the Board").
The Board may also remove the Chairman of the Board from office and
appoint another in his place. The Board may appoint one or more of
its members as Vice-chairman of the Board who shall serve in place of
the Chairman in his absence. The Board may fix the period during
which the Chairman and Vice-Chairmen of the Board shall remain in
office. If no such period is fixed, the Chairman and Vice-Chairmen of
the Board shall remain in office so long as they officiate as
directors.
104. The Chairman of the Board shall preside at and manage the proceedings
at meetings of the Board. If the Chairman of the Board is absent from
a meeting of the Board in accordance with advance notice given by
him, or if he is not present at the meeting within 15 minutes from
the time fixed for the meeting, then the Vice-Chairman of the Board
(if appointed) shall preside at the meeting. In the absence from the
meeting of both the Chairman and Vice-Chairmen of the Board, the
Board members present shall elect one of their number as chairman of
the meeting.
105. The Board shall hold meetings in accordance with the needs of the
Company.
106. The Chairman is authorized to convene the Board at any time and to
determine the place and time of any Board meeting.
107. Without derogating from the aforesaid, the Chairman is obliged to
convene the Board in any of the following instances:
107.1 On receipt of a demand from at least two directors for the
convocation of the Board, for discussion of the matter
detailed in such demand;
107.2 On receipt of a notice or report from the General Manager
which requires an action by the Board;
107.3 On receipt of a notice from the auditor as to material
defects in the bookkeeping of the Company.
25
Upon receipt of such a notice or demand as above, the Chairman shall
convene the Board, without delay, and not later than within 14 days
of the date of the demand, notice or report, as the case may be.
108. 108.1 Prior notice of the convening of the Board shall be given
to all members of the Board reasonably in advance of the
meeting.
108.2 Notwithstanding the aforesaid, with the consent of all the
directors, the Board may hold a meeting without notice.
109. The agenda of Board meetings shall be determined by the Chairman, and
shall include:
109.1 Matters determined by the Chairman;
109.2 Matters fixed in accordance with Article 107 above;
109.3 Any matter which a director or the General Manager may,
reasonably in advance of the convening of a Board meeting,
request the Chairman to include on the agenda.
(Hereinafter - "The Agenda").
110. There shall be detailed in the notice convening the Board, the time
and place at which the meeting is to be held and reasonable details
as to the matters on the agenda of the meeting.
111. Notice of a meeting of the Board shall be delivered to the address of
the director furnished to the Company unless the director has
requested that the notice be delivered to him at another address.
112. The quorum for commencing a meeting of the Board shall be half of the
members of the Board officiating at the time of the meeting, in
person or by their substitute, or four members - the smallest.
113. 113.1 Each director shall have one vote on a poll of the Board.
Resolutions of the Board shall be carried by a majority of
the votes of the directors present and voting at the
meeting without taking abstention votes into account. The
Chairman of the Board shall not have an additional or
casting vote.
113.2 In the event of an equality of votes, the resolution voted
upon shall be deemed to have been rejected.
114. The Board may hold its meetings by the use of any means of
communication provided that all the directors can hear one another at
the same time. The Board may determine the mode and methods for
conducting a meeting by means of communication.
115. The Board is authorized to adopt resolutions even without actually
holding a meeting, provided that all the directors entitled to
participate in the proceedings and
26
to vote on the matter, have so consented. The provisions of Article
113 above subject to the changes required by the context, shall apply
to such a resolution. A resolution carried in accordance with this
Article shall be valid for all intents and purposes, as though it had
been carried at a duly convened and conducted meeting of the Board.
Minutes
116. The Board shall cause minutes of the proceedings at meetings of the
Board to be kept; The minutes shall be filed in registers kept for
such purpose and, inter alia, shall include the following details:
116.1 The names of directors participating in and the names of
other persons present at each meeting;
116.2 The matters discussed at the meetings and the resolutions
carried.
All minutes shall be signed by the Chairman of the Board or the
Chairman of the meeting, as the case may be, minutes approved and
signed as aforesaid, shall constitute prima facie evidence as to the
contents thereof.
117. The provisions of Article 116 above shall apply also with regard to
the meetings of every Committee of the Board and with regard to the
carrying of resolutions by the Board without meeting as in Article
115 above.
The General Manager
118. The Board may from time to time appoint a General Manager of the
Company or more than one General Manager (each one of whom is
hereinafter referred to as - "The General Manager"). The Board may
also dismiss or replace the General Manager at any time at its
discretion, subject to the terms of any contract between the General
Manager and the Company.
119. The General Manager is not bound to be a shareholder of the Company
or a director.
120. The General Manager shall be responsible for the current management
of the affairs of the Company within the framework of the policies
determined by the Board and subject to the directives of the Board.
121. The General Manager shall have all the management and executive
powers which are not conferred by law or in accordance with these
Articles on any other organ of the Company, with the exception of
such powers, if any, as may be transferred from the General Manager
to the Board in accordance with the provisions of Article 95.1 above;
The General Manager shall be subject to the supervision of the Board.
122. Subject to the provisions of the Companies Law and to the provisions
of these Articles, the Board may, from time to time, at its
discretion give to and confer upon the General Manager any of the
powers of the Board in accordance with these
27
Articles, and may confer such powers for such period, for such
purposes, upon such terms and with such limitations as the Board may
deem fit, and the Board may also confer such powers, either with or
without waiving its own powers in such matter or in place and instead
of them, in whole or in part, and may from time to time annul,
rescind and change such powers, in whole or in part.
123. The General Manager may, with the approval of the Board, delegate his
powers to another person or persons under his authority; Such
approval may be either general or with regard to a specific matter.
124. Without derogating from the provisions of the Companies Law or from
any other law, the General Manager shall submit to the Board reports
on such matters, at such times and to such extent as may be required
by the Board, either by a specific resolution or within the framework
of the procedures of the Board.
125. The remuneration of the General Manager may be paid by way of salary
or by commission or participation in profits or by the grant of or
right to purchase securities, or in any other manner.
Validity of Actions and Approval of Transactions
126. Subject to the provisions of any law, all actions of the Board or of
a Committee of the Board or of any person acting as a director or as
a member of a Committee of the Board or of the General Manager, as
the case may be, shall be valid even though it may subsequently
transpire that there was some defect in the appointment of the Board,
of the Committee of the Board, of the director who is a committee
member or of the General Manager, as the case may be, or that any of
the said officials was not qualified to hold office.
127. 127.1 Subject to the provisions of the Companies Law, the fact
that an officer of the Company holds shares of the Company
or is an interested party or an officer in any other
corporation, including a corporation in which the Company
is an interested party or a shareholder of the Company,
shall not disqualify the officer from being an officer of
the Company. In addition, an officer shall not be
disqualified from being an officer of the Company, as a
result of the entering into a contract with the Company,
in any matter and in any manner whatsoever, by himself or
by such a corporation as above.
127.2 Subject to the provisions of the Companies Law, the fact
that a person is an officer of the Company shall not
disqualify him and/or a relative of his and/or a
corporation in which he is an interested party, from
entering into an agreement with the Company in respect of
any transactions in which the officer has any personal
interest.
127.3 Subject to the provisions of the Companies Law, an officer
shall be entitled to participate in the deliberations and
vote with regard to the approval of transactions in which
he has a personal interest.
28
128. Subject to the provisions of the Companies Law, a transaction of the
Company with an officer of the Company or with a controlling
shareholder, or a transaction of the Company with a third party in
which an officer of the Company or a controlling shareholder has a
personal interest, and which are not out of the ordinary course of
business, shall be approved in the following manner:
128.2 Such agreement as above, which is not out of the ordinary
course of business, shall be approved by the Board or by
the Audit Committee or by such other organ empowered by
the Board for such purpose, whether by a specific
resolution or within the framework of the Board
procedures, whether by general approval or by approval
with regard to a specific type of transaction or by
approval of a specific transaction.
128.3 The approval of transactions which are not out of the
ordinary course of business as aforesaid, may be given by
a general approval of a specific type of transaction or by
approval of a specific transaction.
129. Subject to the provisions of the Companies Law, a general
notification given to the Board by an officer or by a controlling
shareholder, with regard to a personal interest in any particular
body, detailing such personal interest, shall constitute a disclosure
by the officer or controlling shareholder to the Company of his
personal interest as aforesaid, for the purpose of the entering into
an agreement with such body in a transaction which is not out of the
ordinary course of business.
Signature on behalf of the Company
130. Subject to the provisions of the Companies Law and of these Articles,
the Board may authorize any person to act and sign on behalf of the
Company, whether on his own or jointly with any other person, whether
generally or with regard to specific matters.
131. The Company shall have a stamp bearing the name of the Company. No
signature on a document shall bind the Company unless signed by the
persons authorized to sign in the name of the Company together with
the stamp or the printed name of the Company.
Appointment of Attorneys
132. Subject to the provisions of the Companies Law, the Board may at any
time grant a Power of Attorney to any person to act as attorney of
the Company for such purposes, with such powers and discretion, for
such period and subject to such conditions, all the aforesaid as the
Board may deem fit.The Board may confer upon such person, inter alia,
power to assign, in whole or in part, to another person, the powers,
authority and discretion conferred upon him.
Exemption, Indemnity and Insurance
29
133. Subject to the provisions of the Companies Law, the Company may
exempt any officer of the Company from liability, in whole or in
part, in respect of damage resulting from a breach of his duty of
care to the Company.
134. Subject to the provisions of the Companies Law, the Company may
insure the liability of any officer of the Company in respect of
liability which may be imposed upon him as a result of any act
carried out by him in his capacity as an officer of the Company, in
any of the following instances:
134.1 Breach of a duty of care to the Company or to any other
person;
134.2 Breach of a duty of trust to the Company provided that the
officer acted bona fide and had reasonable grounds for
believing that the act would not harm the interests of the
Company;
134.3 A financial liability imposed upon him to a third party;
134.4 Any other event in respect of which insurance of an
officer is permitted and/or may be permitted.
135. Subject to the provisions of the Companies Law -
135.1 The Company may undertake, in advance, to indemnify one of
its officers for a liability or expense as set out in
section 136 below, imposed upon him as the result of an
action taken by virtue of service as an officer of the
Company, provided such liability is restricted to the type
of events that in the opinion of the Board of Directors
are foreseen in light of the Company's actual activities,
at the time such undertaking for indemnification is made,
and for such amount or measure as the Board of Directors
determined, is reasonable in the circumstances of the case
and does not exceed, cumulatively, twenty five percent of
the Company's equity according to the consolidated
financial statements last published before the de facto
grant of indemnification payment (hereinafter: " the
Undertaking to Indemnify")
135.2 Without derogating from the aforesaid in Article 135.1
above, the Company may indemnify an officer of the Company
retroactively in respect of a liability or expense as
detailed in Article 136 hereafter, imposed upon him as a
result of an act carried out by him in his capacity as an
officer of the Company, provided that the amount of the
indemnity shall not exceed the amount specified on Article
135.1 above.
136. An Indemnity undertaking or an Indemnity, as aforesaid in Article 135
above, may be issued with respect to a liability or expense as
detailed in Articles 136.1 to 136.3 below, which is imposed upon the
officer as a result of an act carried out by him in his capacity as
an officer of the Company, as follows:
30
136.1 A monetary liability imposed upon him in favor of a third
party pursuant to a judgment, including a judgment by way
of compromise or a judgment of an arbitrator approved by a
court;
136.2 Reasonable expenses of the proceedings, including lawyers
fees, expended by the officer or imposed upon him by the
court, in proceedings issued against him by or on behalf
of the Company or by a third party, or with regard to
criminal proceedings from which the officer was acquitted
or criminal proceedings in which he was convicted but
which do not require proof of a criminal intention;
136.3 Reasonable legal expenses, including attorney's fees, that
the officer paid following an investigation or proceeding
against him by an authority authorized to perform such
investigation or proceeding, ending without any criminal
indictment being filed against him, and without having any
financial liability imposed upon him as an alternative to
a criminal proceeding, or having ended without any
criminal indictment being filed but having a financial
liability imposed upon him as an alternative to a criminal
proceeding for a crime not requiring proof of criminal
intent.
136.4 Any other liability or expense regarding which it is
permitted and/or will be permitted by law to indemnify an
officer.
137. Subject to the provisions of the Companies Law -
137.1 The Company may undertake, in advance, to indemnify any
person, including a Company officer, currently serving or
who has served on behalf of the Company by its request as
a director of another company in which the Company
directly or indirectly holds shares, or in which the
Company possesses any interest (hereinafter: a director in
the other company), for a liability or expense as set out
in article 136 above, imposed upon him on account of an
action undertaken by virtue of being a director of the
other company, provided such liability is restricted to
the type of events that in the opinion of the board of
directors are foreseen in light of the Company's actual
activities, at the time such undertaking for
indemnification is made, and for such amount or measure as
the board of directors prescribes, being reasonable under
the circumstances and not exceeding, cumulatively, twenty
five percent of the Company's shareholders' equity
according to the last consolidated financial statements
published before actually making such indemnification
payment (hereinafter: "indemnification undertaking").
137.2 Without derogating from the aforesaid in Article 137.1
above, the Company may indemnify a Director of the other
company retroactively in respect of a liability or expense
as detailed in Article 136 above, imposed upon him as a
result of an act carried out by him in his capacity as a
director of the other company,
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provided that the amount of the indemnity shall not exceed
the amount specified on Article 137.1 above.
138. Subject to the provisions of the Companies Law, the Company may issue
an undertaking in advance to indemnify an employee or clerk of the
Company who is not an officer of the Company or to indemnify him
retroactively with respect to any monetary liability imposed upon him
in favor of any third party with respect to an act carried out by him
bona fide in his capacity as an employee or clerk of the Company,
provided that the amount of the indemnity shall not exceed the amount
specified on Article 137.1 above.
139. Subject to the provisions of the Companies Law, nothing in these
Articles shall limit the Company, in any manner whatsoever, with
regard to taking out insurance or to the grant of exemption or
indemnity:
139.1 With respect to an officer of the Company or a director of
the other company, to the extent that the insurance, the
exemption or the indemnity are not forbidden by law.
139.2 With respect to any person who is not an officer of the
Company or a director of the other company, including but
without derogating from the generality of the aforesaid,
employees, contractors or consultants.
Dividends, Reserve Funds and Capitalization of Reserve Funds and Profits
140. The Board may, before deciding on the distribution of a dividend as
in Article 142 hereafter, appropriate out of the profits, such sums,
as the Board may deem fit, to a General Fund or a Reserve Fund for
the distribution of dividends, distribution of bonus shares or any
other purpose, as the Board may in its discretion determine.
141. Until use is made of the said funds, the Board is authorized to
invest the monies appropriated as aforesaid and the monies of the
funds, in any investment as the Board may deem fit, to manage such
investments, to vary them or otherwise to use them, and the Board is
authorized to divide the Reserve Fund into special funds and to use
each fund or part thereof for the purpose of the business of the
Company, without holding the same distinct from the other assets of
the Company, all the aforesaid at the discretion of the Board and
upon such terms as the Board may determine.
142. Subject to the provisions of the Companies Law, the Board may resolve
upon the distribution of a dividend. When deciding on the
distribution of a dividend, the Board may decide that the dividend
shall be paid, in whole or in part, in cash or by way of the
distribution of assets in specie, including securities, or in any
other manner at the discretion of the Board.
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143. 143.1 A. Subject to the provisions of the Companies
Law, the Board may
resolve upon the allotment of bonus shares and
to convert to share capital part of the profits
of the Company, within the meaning of section
302(b) of the Companies Law, part of a premium
of shares or part of any other source included
in the shareholders equity of the Company as
stated in the last Financial Statements of the
Company, in such amount as may be determined by
the Board and which is not less than the par
value of the bonus shares.
B. When deciding on the allotment of bonus shares,
the Board shall determine whether the bonus
shares shall be of one class to all
shareholders notwithstanding the classes of
shares held by them, or that each such
shareholder shall receive bonus shares of the
same class with respect to each class of shares
held by him.
C. Bonus shares allotted in accordance with this
Article shall be deemed fully paid up.
143.2 When deciding upon the allotment of bonus shares, the
Board may decide that the Company shall transfer to a
special fund designated for the distribution of bonus
shares in the future, such sum as the conversion thereof
to share capital shall be sufficient to allot to any
person who is at such time entitled for any reason
whatsoever to purchase shares in the Company (including an
entitlement which can only be realized at a subsequent
date), those bonus shares to which such person would have
been entitled had he realized his entitlement to purchase
such shares prior to the date determining the right to
receive the bonus shares (in this Article - "The
Determining Date"). If subsequent to the determining date,
such person shall realize his entitlement to purchase the
shares or part of them, the Company shall allot to him
those bonus shares of a par value which he would have
received had he realized, prior to the determining date,
his entitlement to purchase those shares which he actually
did purchase, the aforesaid by converting to share capital
an appropriate part of the aforesaid special fund. Bonus
shares shall entitle the holders thereof to participate in
the distribution of cash dividends or bonus shares
commencing from such time as is fixed by the Board. For
the purpose of fixing the amount to be appropriated to the
aforesaid special fund, any amount appropriated to the
fund with respect to previous distributions of bonus
shares, shall be deemed as though it had already been
capitalized and there had been allotted therefrom shares
entitling the persons entitled to purchase shares, to the
bonus shares.
144. Subject to the rights assigned to the classes of shares issued by the
Company and to the provisions of these Articles, a dividend or bonus
shares shall be
33
distributed to the shareholders proportionately to the par value of
each share without taking into consideration any premium paid for
such share.
145. In order to carry out any resolution for the distribution of a
dividend or for the allotment of bonus shares, the Board is
authorized:
145.1 To settle as it may deem fit any difficulty which may
arise and to take such steps as it may deem necessary in
order to overcome the difficulty.
145.2 To decide that fractions or fractions less than an amount
fixed by the Board, shall not be taken into account in
order to adjust the entitlement of the shareholders or to
decide on the sale of fractions of shares and the
distribution of the net proceeds to the persons entitled
thereto.
145.3 To authorize signatures on behalf of the shareholders of
any agreement or other document which may be required in
order to give effect to the allotment and/or distribution,
and in particular to authorize the signing and lodging for
registration of a document in writing in accordance with
section 291 of the Companies Law.
145.4 To determine the value of assets to be distributed and to
decide that payments in cash shall be paid to the
shareholders on the basis of the valuation so determined.
145.5 To vest monies or specific assets in trustees for the
persons entitled thereto, as the Board may deem expedient.
145.6 To make any other arrangement or settlement as may in the
opinion of the Board be required in order to enable the
allotment or the distribution, as the case may be.
146. Dividends or other benefits with respect to shares shall not bear
interest.
147. The Board may withhold any dividend or bonus shares or other rights
with respect to shares the consideration for which, in whole or in
part, has not been paid to the Company, and to collect any such
amount as aforesaid or consideration received from the sale of the
bonus shares or other rights, on account of the debts or liabilities
with respect to the said shares, the aforesaid whether the said
shares are solely owned by the shareholder in debt or whether the
shares are owned jointly with other shareholders.
148. The Board may withhold any dividend or bonus shares or other rights
with respect to shares of which a person is entitled to be registered
as owner thereof in the Register or which he is entitled to transfer,
in accordance with Article 29 or 31 above, as the case may be, until
such person is registered as the owner thereof or until he shall duly
transfer them, as the case may be.
149. The Board may, from time to time, decide upon the mode of payment of
dividends or allotment of bonus shares or transfer thereof to the
persons entitled thereto and may also determine instructions,
procedures and arrangements
34
relating thereto, both with regard to the registered shareholders and
also with regard to unregistered shareholders. Without derogating
from the generality of the aforesaid, the board may determine as
follows:
149.1 A. Subject to the provisions of sub-article B.
hereafter, any dividend or monies to be
distributed to a registered shareholder, shall
be paid by posting a check to his address as
registered in the Shareholders Register, or in
the case of jointly registered shareholders, to
the person whose name appears first in the
Shareholders Register with regard to such
shares. The posting of any check as aforesaid
shall be at the risk of the registered
shareholder; without derogating from the
aforesaid, the Board may determine that any
dividend less than a specific amount fixed by
the Board, shall not be sent by check as
aforesaid and that the provisions of
sub-article B. hereafter shall apply thereto.
B. The Board may determine that payment of a
dividend or monies to be distributed to
registered shareholders shall be effected at
the Office or at such other place as the Board
may fix.
149.2 Any dividend distributed to unregistered shareholders
shall be transferred to such shareholders by means of the
Nominees Company or in such other manner as the Board may
determine.
150. If two or more persons are registered in the Register as joint owners
of any share, each of them is entitled to give a valid receipt with
respect to any dividend, share or other security, or other monies or
rights payable with respect to such share.
Company Documents
151. 151.1 Shareholders are entitled to peruse the documents of the
Company detailed in section 184 of the Companies Law in
the circumstances fixed for such purpose.
151.2 Without derogating from the aforesaid in Article 151.1
above, the Board may, at its discretion, permit the
perusal of the documents of the Company, or any of them,
also to shareholders or any of them, as it may in its
discretion deem fit.
151.3 Shareholders shall not have a right to peruse the
documents of the Company or any of them, unless such right
has been conferred upon them by any legislation or
regulation or unless permitted so to do by the Board as in
Article 151.2 above.
152. Subject to the provisions of any law, any book, list or register
which the Company is, by law or by these Articles, bound to
35
maintain, shall be kept by such technical, mechanical or other means
as may be decided by the Board.
Financial Statements
153. The Financial Statements of the Company shall be signed by the
persons authorized by the Board for such purpose, as required by law.
Auditors
154. An accountant auditor or accountant auditors shall be appointed at
every Annual Meeting and shall officiate in that capacity until the
closing of the following Annual Meeting.
155. 155.1 The Board shall in its discretion determine the auditing
fees of the accountant auditor appointed.
155.2 Fees of the accountant auditor with respect to additional
services to the Company which are not audit acts, shall be
determined by the Board at its discretion.
Notices
156. The giving of notices or service of documents to shareholders and to
the Nominees Company, in accordance with the provisions of the
Companies Law or of these Articles, shall be effected in one of the
manners referred to in this Chapter.
157. Notice of a General Meeting shall be served as provided in Article 54
above.
158. 158.1 Without derogating from the aforesaid, the Company may
serve a shareholder with any notice or document, by
delivery by hand or by facsimile or by dispatch by post or
by email. Dispatch by post shall be to the address of the
shareholder registered in the Register, or if no such
address is registered, to such address as may have been
furnished by him to the Company for the purpose of sending
notices to him. A notice delivered by facsimile shall be
sent to the shareholder according to the address furnished
by him to the Company. A notice delivered by e-mail shall
be sent to the shareholder according to the e-mail
furnished by him to the Company.
158.2 A. notice or document delivered to a
shareholder, shall be deemed to have been
served at such time as delivered by hand.
36
B. A notice or document dispatched by post, shall
be deemed to have been duly served, if handed
in for dispatch at any post office when
correctly addressed and properly stamped.
Service shall be deemed to have been effected
at such time as the letter is delivered by the
post in the usual course and not later than two
days from the date that the letter containing
such notice was handed to the post office.
C. A notice sent by facsimile or by email shall be
deemed to have been served twenty four hours
after dispatch.
159. Without derogating from the aforesaid, the Company may, subject to
the provisions of the Law and/or another applicable law, serve a
notice to the shareholders by a single publication in two daily
newspapers published in Israel in Hebrew, either in addition or in
place of a notice as in Article 158 above. The date of publication in
the newspaper shall be deemed to be the date on which notice was
received by the shareholders.
160. The Company may give notice as to service of a document at the Office
or at such other place as may be fixed by the Board or as to service
in any other manner, including by means of the Internet.
161. The Company may serve a notice or document to joint shareholders by
the dispatch of the same to the shareholder whose name appears first
in the Shareholders Register with regard to such share.
162. The service of a notice or document to one member of a family
residing together with the person for whom the notice or document is
intended, shall be deemed as service of same to the intended person.
163. Any person who by operation of law, transfer or other means shall
become entitled to any share, shall be bound by every notice with
respect to such share which was duly given, prior to the entry of his
details in the register, to the person from whom he derives his title
to such share.
164. Any notice or document given to a shareholder of the Company in
accordance with the provisions of these Articles, shall be deemed to
have been duly served notwithstanding the decease, bankruptcy or
liquidation of such shareholder or the transmission of the right to
the shares by law (whether or not the Company is aware of same), so
long as no other person has been registered as owner of the shares in
his place, and despatch or delivery as aforesaid shall for all
intents and purposes be deemed sufficient with regard to any person
having an interest in such shares and/or entitled to them by
37
virtue of transmission of the right by law,whether jointly with such
shareholder or on his behalf or in his place.
165. Subject to the provisions of any law, any shareholder, director or
other person entitled to receive notice in accordance with these
Articles or by the Companies Law, may waive receipt of same, either
in advance or retroactively, either with regard to a specific
instance or generally, and by his doing so, it shall be deemed as
though the notice had been duly given, and any procedure or act with
respect to which the notice was bound to be given, shall be deemed as
valid and effective.
166. A certificate in writing signed by a Director or by the Secretary of
the Company with regard to the dispatch or giving of a notice in one
of the manners detailed in these Articles, shall constitute
conclusive evidence to the facts detailed in such certificate.
167. When prior notice of a given number of days or a notice effective for
a specific period is required to be given, the day of service shall,
unless otherwise determined, be counted in the number of days or the
specific period. If notice is given in more than one of the manners
detailed above, it shall be deemed to have been given at the earliest
on which it is deemed to have been served as aforesaid.
Merger
168. Approval of merger as provided in section 327 of the Companies Law,
is subject to a simple majority at the General Meeting or Class
Meeting, as the case may be, all the aforesaid subject to the
applicable provisions of any law.
Winding Up
169. Subject to the provisions of any law, the liquidator, whether on
voluntary or other liquidation, may in accordance with a resolution
of a General Meeting carried by a special majority, distribute among
the shareholders in specie, the excess assets, in whole or in part,
and may in accordance with a resolution of a General Meeting carried
by a special majority, vest any part of the excess assets in trustees
upon such trust for the shareholders as the liquidator may deem fit.
For the purpose of the distribution of the excess assets in specie,
the liquidator may determine the proper value of the assets available
for distribution and determine how the distribution among the
shareholders will be carried out taking into consideration the rights
of the various classes of shares of the Company owned by them.
(sec'-50192)