Exhibit 1.2
ARTICLES OF ASSOCIATION
OF
IIS INTELLIGENT INFORMATION SYSTEMS LIMITED
Amended and Restated as of November 19, 2000
ARTICLES OF ASSOCIATION
OF
IIS INTELLIGENT INFORMATION SYSTEMS LIMITED
________________________________________________________________________
INTERPRETATION
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1. In these Articles, the words in the first column of the following table
shall bear the meanings set opposite them respectively in the second column
thereof, if not inconsistent with the subject or context:
Words Meanings
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The Company The above-named Company.
Companies Law The Companies Law, 1999 (the "Companies Law") and all
orders and regulations issued thereunder as amended from
time to time, including any law or statute replacing it.
The Statutes The Companies Law, the Securities Law of 1968 and every
other ordinance or law for the time being in force
concerning companies and affecting the Company.
These Articles These Articles of Association, as shall be amended from
time to time.
Officer A Director, President, General Manager, Chief Executive
Officer, Vice President, Chief Financial Officer, any
other manager directly subordinate to the President, and
any person who fills one of the said positions in the
Company, even if he carries a different title.
Audit Committee As defined in the Companies Law.
The Office The registered office of the Company.
The Seal Any of (i) the rubber stamp of the Company, (ii) the
facsimile signature of the Company, or (iii) the
electronic signature of the Company as approved by the
Board of Directors.
"Shareholder" (a) A holder of one or more of the shares of the
Company;
(b) a person registered as such in the Register of
Shareholders;
Shareholders
Register The shareholders register required to be kept
according to the Companies Law and any other
shareholders register permitted to be kept by the
Company according to the Companies Law.
Month A Gregorian month.
NIS New Israeli Shekel
Writing Printing, lithography, photography and any other mode or
modes of representing or reproducing words in a visible
form.
Words importing the masculine gender shall include the feminine gender, and
words importing person shall include corporations.
Subject as aforesaid, any words or expressions defined in the Statutes
shall, except where the subject or context forbids, bear the same meanings
in these Articles.
PUBLIC COMPANY
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3. The Company is a limited public company, and the following apply:
(a) no limitations will apply to the transfer of its shares;
(b) the number of shareholders will be unlimited;
(c) the Company may issue shares, debentures or any other securities to the
public.
(d) the liability of its shareholders is limited by shares.
SHARE CAPITAL
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4. (a) The share capital of the Company is NIS fifty thousand (50,000), divided
into 16,666,666 Ordinary Shares of NIS 0.003 nominal value each
("Ordinary Shares").
(b) Each Ordinary Share entitles its holder to receive notice of, and to
participate in, all General Meetings of the Company, and to one (1) vote
in such meetings for every share, and the other rights specified in
these Articles.
AMENDMENT OF ARTICLES
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5. These Articles may be amended by a majority vote at a meeting of
shareholders of the Company, with the exception of Article 50 which may be
amended only by the affirmative vote of 75% of the shareholders present (in
person or by proxy) and voting on such resolution at a General Meeting.
If the Company's shares are divided into classes of shares, then a change
that infringes on the rights of a class of shares shall be made only with
the approval of a General Meeting of that
class; the provisions of these Articles shall apply, mutatis mutandis, to
the adoption of decisions by a class meeting.
Notwithstanding the provisions of this Article , a change of these Articles
that obligates a shareholder to acquire additional shares or to increase the
extent of his liability shall not obligate the shareholder without his
consent.
SHARES
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6. Subject to these Articles or to the terms of any resolution creating new
shares, the unissued shares in the registered share capital of the Company
from time to time shall be under the control of the Board of Directors,
which shall have the power to allot shares or otherwise dispose of them to
such persons, on such terms and conditions, and either at par or at a
premium or, subject to the provisions of the Statutes, at a discount, and at
such times as the Board of Directors may think fit, and the power to give to
any person the option to acquire from the Company any shares, either at
nominal value or at a premium or, subject as aforesaid, at a discount,
during such time and for such consideration as the Board of Directors may
determine.
7. If two or more persons are registered as joint holders of any share, any one
of such persons may give effectual receipts for any dividends or other
monies in respect of such share.
The Company shall not be required to recognize any holder of a share as a
holder other than the registered holder of such share.
8. Every shareholder registered in the Shareholders' Register shall be
entitled, without payment, to receive within thirty days after allotment or
registration of transfer (unless the conditions of issuance provide for a
longer interval), one certificate under the Seal for all the shares
registered in his name, and if the Board of directors so approves, several
certificates, each for one or more of such shares. Each certificate shall
specify the number and denoting numbers of the shares in respect of which it
is issued and may also specify the amount paid up thereon; provided that,
in the case of joint holders, the Company shall not be bound to issue more
than one certificate to all the joint holders, and delivery of such
certificate to one of them shall be sufficient delivery to all. Every
certificate shall be signed by one Director and countersigned by the
Secretary or some other person nominated by the Board of Directors for this
purpose.
9. If any share certificate shall be defaced, worn out, destroyed or lost, it
may be renewed on such evidence being produced, and such indemnity (if any)
being given as the Board of Directors shall require and (in the case of
defacement or wearing out) upon delivery of the old certificate and, in any
case, upon payment of such sum not exceeding NIS 50 (fifty New Israeli
Shekels) as the Board of Directors may from time to time require.
10. The Company may, directly or indirectly, purchase its own shares subject to
the provisions of the Companies Law. If the Company purchases its own
shares, such shares will not have any rights as long as they are owned by
the Company.
11. (a) A subsidiary or some other corporate body under the Company's control
(in this Article: "acquiring corporate body") may acquire shares of the
Company subject to the provisions of the Companies Law, on condition
that the subsidiary's Board of Directors
or the Directors of the acquiring corporate body determined that - had
the acquisition been made by the Company - it would have been permitted
by the provisions of the Companies Law.
(b) If the Company's shares were acquired by a subsidiary or by an acquiring
corporate body, such shares shall not grant voting rights as long as
they are owned by the subsidiary or by the acquiring body corporate.
(c) If a prohibited distribution (as defined in Section 301 to the Companies
Law) was made, then the refund specified in Section 310 to the Companies
Law shall be made to the subsidiary or to the acquiring body corporate
and the provisions of Section 311 shall apply, mutatis mutandis, to the
Directors of the subsidiary and to the Directors of the acquiring body
corporate. However, if the Company's Board of Directors determined that
the distribution is permitted, then the responsibility shall be that of
the Company's Directors, as provided in Section 311 to the Companies
Law.
(d) Notwithstanding the provisions of Sub-article (a), acquisition by a
subsidiary or by an acquiring corporate body that is not wholly owned
by the Company constitutes a distribution in an amount equal to the
amount of the acquisition, multiplied by the proportion of rights in the
subsidiary's capital or in the capital of the acquiring corporate body
held by the Company.
TRANSFER OF SHARES
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12. No transfer of shares shall be registered unless a proper writing or
instrument of transfer (in any customary form or any other form satisfactory
to the Board of Directors) has been submitted to the Company (or its
transfer agent), together with the share certificate(s) and such other
evidence of title as the Board of Directors may reasonably require. Until
the transferee has been registered in the Shareholders Register (which the
Company guarantees to perform promptly from submission to it of the
foregoing) in respect of the shares so transferred, the Company may continue
to regard the transferor as the owner thereof.
13. The Board of Directors may refuse, without giving any reasons therefor, to
register any transfer of shares where the Company has a lien on the shares,
constituting the subject matter of the transfer, but fully paid-up shares
may be transferred freely and such transfers do not require the approval of
the Board of Directors.
All instruments of transfer shall remain in the custody of the Company, but
any such instrument which the Board of Directors refused to register shall
be returned to the person from whom it was received, if such request be made
by him.
14. The Transfer Records and the Shareholders Register and Debenture Holders (if
any) Register and Debenture Stock Holders (if any) Register and other
securities (if any) Register of the Company may be closed during such time
as the Board of Directors may deem fit, not exceeding, in the aggregate,
thirty (30) days in each year.
TRANSMISSION OF SHARES
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15. In the case of the death of a shareholder, or a holder of a debenture, the
survivor or survivors, where the deceased was a joint holder, and the
executors and/or administrators and/or the legal heirs of the deceased where
he was a sole or only surviving holder, shall be the only persons recognized
by the Company as having any title to his shares or his debentures, but
nothing herein contained shall release the estate of a deceased joint holder
from any liability in respect of any share or any debenture jointly held by
him.
16. Any person who becomes entitled to a share or a debenture in consequence of
the death or bankruptcy or any shareholder may, upon producing such evidence
of title as the Board of Directors shall require, with the consent of the
Board of Directors, be registered himself as holder of the share or the
debenture or, subject to the provisions as to transfers herein contained,
transfer the same to some other person.
17. A person entitled to a share or a debenture by transmission shall be
entitled to receive, and may given a discharge for, any dividends or
interest or other monies payable in respect of the share or debenture, but
he shall not be entitled in respect of it to receive notices of, or to
attend or vote at meetings of the Company or, save as aforesaid, to exercise
any of the rights or privileges of a shareholder or a holder of a debenture
unless and until he shall become a shareholder in respect of the share or a
holder of the debenture.
ALTERATIONS OF CAPITAL
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18. Subject to the provisions of the Companies Law, the Company may from time to
time by a majority vote at a meeting of shareholders of the Company:
(a) consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares; or
(b) cancel registered share capital that has not yet been issued, on
condition that there are no undertakings of the Company - including
conditional undertakings - to issue such shares; or
(c) divide its share capital or any part thereof into shares of smaller
amount than is fixed by its Articles of Association by sub-division of
its existing shares or any of them , and so that as between the
resulting shares, one or more of such shares may, by the Resolution by
which such sub-division is effected, be given any preference or
advantage as regards dividend, return of capital, voting or otherwise
over the others or any other shares; or
(d) reduce its share capital and any capital redemption reserve fund in any
way that may be considered expedient.
19. The Company may, subject to the Companies Law, issue redeemable shares and
redeem the same according to the terms and conditions which the Company
shall determine.
INCREASE OF CAPITAL
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20. The Company may from time to time by a majority vote at a meeting of
shareholders, whether all the shares for the time being authorized shall
have been issued or all the shares for the time being issued shall have been
fully called up or not, increase its share capital by the creation of new
shares; such new capital to be of such amount and to be divided into shares
of such respective amounts and (subject to any special rights for the time
being attached to any existing class of shares) to carry such preferential,
deferred or other special rights (if any) or to be subject to such
conditions or restrictions (if any) in regard to dividend, return of
capital, voting or otherwise as the General Meeting deciding upon such
increase directs.
21. Except so far as otherwise provided by or pursuant to these Articles or by
the conditions of issuance, any new share capital shall be considered as
part of the original ordinary share capital of the Company, and shall be
subject to the same provisions with reference to liens, transfer,
transmission and otherwise as the original share capital.
MODIFICATION OF CLASS RIGHTS
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22. If, at any time, the share capital is divided into different classes of
shares, the rights attached to any class (unless otherwise provided by the
terms of issuance of the shares of that class) may be varied with the
consent in writing of the holders of all the issued shares of that class, or
with the sanction of a majority vote at a meeting of the shareholders passed
at a separate meeting of the holders of the shares of the class. The
provisions of these Articles relating to General Meetings shall apply,
mutatis mutandis, to every such separate General Meeting. Any holder of
shares of the class present in person or by proxy may demand a secret poll.
23. Unless otherwise provided by the conditions of issuance, the enlargement of
an existing class of shares, or the issuance of additional shares thereof,
shall not be deemed to modify or abrogate the rights attached to the
previously issued shares of such class or of any other class.
BORROWING POWERS
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24. The Board of Directors may from time to time, in its discretion, cause the
Company to borrow or secure the payment of any sum or sums of money for the
purposes of the Company, and may secure or provide for the repayment of such
sum or sums in such manner, at such times and upon such terms and conditions
in all respects as it sees fit and, in particular, by the issuance of bonds,
perpetual or redeemable debentures, debenture stock, or any mortgages,
charges or other securities on the undertaking, or the whole or any part of
the property of the Company, both present and future, including units
uncalled or called but unpaid capital for the time being.
POWERS OF THE GENERAL MEETING
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25. Without derogating from the authority of the General Meeting pursuant to
these Articles, the Company's decisions on the following matters shall be
adopted at a General Meeting:
(1) any changes in these Articles;
(2) exercise of the powers of the Board of Directors in accordance with the
provisions of Section 52(a) of the Companies Law;
(3) appointment of the Company's Auditor;
(4) appointment of External Directors, in accordance with the provisions of
the Companies Law;
(5) approval of acts and transactions that require approval by the General
Meeting under the provisions of Articles 255 and 268 to 275 of the
Companies Law;
(6) the increase and reduction of the registered share capital, in
accordance with the provisions of Articles 286 and 287 to the Companies
Law;
(7) a merger, as specified in Article 320(a) to the Companies Law.
GENERAL MEETINGS
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26. (a) General Meetings shall be held at least once in every calendar year at
such time, not being more than fifteen months after the holding of the
last preceding General Meeting, and at such time and place as may be
determined by the Board of Directors. Such Annual General Meetings shall
be called "Annual Meetings", and all other General Meetings of the
shareholders shall be called "Special Meetings". The Annual Meeting
shall receive and consider the Directors' Report, the Financial
Statements, appoint auditors, elect directors, and transact any other
business which, under these Articles or by the Companies Law, may be
transacted at a General Meeting of the Company, provided that notice of
such other business was given to shareholders in accordance with the
provisions of these Articles. At a General Meeting, decisions shall be
adopted only on matters that were specified on the agenda.
(b) Any reference in these Articles to a "General Meeting" will be either a
General Meeting or a Special Meeting, according to the context.
27. The Board of Directors may, whenever it deems necessary, and shall upon such
requisition in writing as is provided by Section 63(b) of the Companies Law,
convene a General Meeting. Any such request must state the purposes for
which the meeting is to be called, be signed by the requesting shareholders,
and must be deposited at the Office. Such request may consist of several
documents in like form, each signed by one or more requesting shareholder.
28. Unless a longer period for notice is prescribed by the Companies Law, at
least ten (10) days and not more than sixty (60) days notice of any General
Meeting shall be given, specifying the place, the day and the hour of
meeting and, in the case of special business, the nature of such business,
shall be given in the manner hereinafter mentioned, to such shareholders as
are under the provisions of these Articles, entitled to receive notices from
the Company. Notices shall be given by mail or by personal delivery to every
registered shareholder of the Company, to his address as described in the
Shareholders Register of the Company or such other address as designated by
him in writing for this purpose. Provided that the accidental omission to
give such notice to, or the non-receipt of such notice by, any such
shareholder shall not invalidate any resolution passed or proceeding held at
any such meeting and, with
the consent of all the shareholders for the time being entitled to receive
notice of meetings, a meeting may be convened upon a shorter notice or
without notice, and generally in such manner as such shareholders may
approve. Such consent may be given at the meeting or retrospectively after
the meeting. If the shareholder did not provide the Company any address for
the delivery of notices, the shareholder shall be deemed to have waived his
right to receive notices.
29. Only shareholders of record as reflected on the Company's Share Register at
the close of business on the date fixed by the Board of Directors as the
record date determining the then shareholders who will be entitled to vote,
shall be entitled to notice of, and to vote, in person or by proxy, at a
General Meeting and any postponement or adjournment thereof. The Board of
Directors will fix the record date of not less than ten (10) nor more than
sixty (60) days before the date of the General Meeting.
PROCEEDINGS AT GENERAL MEETINGS
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30. No business shall be transacted at any General Meeting unless a quorum is
present when the meeting proceeds to business. The quorum at any Meeting
shall be two shareholders present in person or by proxy, holding or
representing at least thirty twenty five percent (25%) of the total voting
rights in the Company. A company being a shareholder shall be deemed to be
personally present for the purpose of this Article if represented by its
representative duly authorized in accordance with Article 42.
31. If, within half an hour from the time appointed for the holding of a General
Meeting, a quorum is not present, the meeting shall stand adjourned to the
same day in the next week at the same time and place, or any time and hour
as the Board of Directors shall designate and state in a notice to the
shareholders entitled to vote at the original meeting, and if, at such
adjourned meeting, a quorum is not present within half an hour from the time
appointed for holding the meeting any two shareholders present in person or
by proxy shall constitute a quorum. Notwithstanding the aforesaid, if a
General Meeting was convened at the demand of shareholders as permitted by
Section 63(b) of the Companies Law, then a quorum at such adjourned meeting
shall be present only if one or more shareholders are present who held in
the aggregate at least 5% of the issued share capital of the Company and at
least 1% of the voting rights in the Company or one or more shareholders who
hold in the aggregate at least 5% of the voting rights in the Company.
32. (a) At every General Meeting, a chairman shall be elected for that meeting.
(b) The election of the meeting's chairman shall be held at the beginning of
the meeting's discussions, which shall be opened by the chairman of the
Board of Directors or by a Director whom the Board of Directors
authorized to do so.
33. The chairman may, with the consent of any meeting at which a quorum is
present, and shall, if so directed by the meeting, adjourn any meeting from
time to time and from place to place as the meeting shall determine.
Whenever a meeting is adjourned pursuant to the provisions of this Article
for more than seven days, notice of the adjourned meeting shall be given in
the same manner as in the case of an original meeting. Save as aforesaid,
no shareholder shall be entitled to any notice of an adjournment, or of the
business to be transacted at an adjourned meeting. No business shall be
transacted at any adjourned
meeting other than the business which might have been transacted at the
meeting from which the adjournment took place.
VOTES OF SHAREHOLDERS
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34. Except as otherwise provided in these Articles, any resolution at a General
Meeting shall be deemed adopted if approved by the holders of a majority of
the voting rights in the Company represented at the meeting in person or by
proxy and voting thereon. In the case of an equality of votes, either on a
show of hands or a poll, the chairman of the meeting shall not be entitled
to a further or casting vote.
35. At all General Meetings, a resolution put to a vote at the meeting shall be
decided on a show of hands unless, before or upon the declaration of the
result of the show of hands, a poll in writing be demanded by the chairman
(being a person entitled to vote), or by at least two shareholders present,
in person or by proxy, holding at least 5% of the issued share capital of
the Company and, unless a poll be so demanded, a declaration by the chairman
of the meeting that a resolution has been carried, or has been carried
unanimously or by a particular vote, or lost, or not carried by a particular
vote, shall be conclusive, and an entry to that effect in the Minute Book of
the Company shall be conclusive evidence thereof, without proof of the
number or proportion of the votes recorded in favor of or against such
resolution.
36. If a poll be demanded in manner aforesaid, it shall be taken forthwith, and
the result of the poll shall be deemed to be the resolution of the meeting
at which the poll was demanded. The demand of a poll shall not prevent the
continuance of a meeting for the transaction of any business other than the
question on which a poll has been demanded.
37. Any shareholder which is not a natural person may, by resolution of its
directors or other governing body, authorize such person as it thinks fit to
act as its representative at any General Meeting, and the person so
authorized to the satisfaction of the Company shall be entitled to exercise
the same powers on behalf of such company, which he represents as that
company could exercise if it were an individual shareholder.
38. Subject to any rights or restrictions for the time being attached to any
class or classes of shares, every shareholder shall have one vote for each
share of which he is the holder, whether on a show of hands or on a poll.
39. If any shareholder be a lunatic, idiot, or non compos mentis, he may vote by
his committee, receiver, curator bonis or other legal curator, and such
last-mentioned persons may give their votes either personally or by proxy.
40. If two or more persons are jointly entitled to a share then, in voting upon
any question, the vote of the senior person who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes of the
other registered holders of the share and, for this purpose, seniority shall
be determined by the order in which the names stand in the Shareholders
Register.
41. Votes may be given either personally or by proxy. A proxy need not be a
shareholder of the Company.
42. (a) The instrument appointing a proxy shall be in writing in the usual
common form, or such form as may be approved by the Board of Directors,
and shall be signed by the appointor or by his attorney duly authorized
in writing or, if the appointor is a corporation, the corporation shall
vote by its representative, appointed by an instrument duly signed by
the corporation.
(b) The instrument appointing a proxy shall be deemed to include
authorization to demand a poll or to vote on a poll on behalf of the
appointor.
43. A vote given in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death or insanity of the principal, or
revocation of the proxy, or transfer of the share in respect of which the
vote is given, unless an intimation in writing of the death, revocation or
transfer shall have been received at the Office before the commencement of
the meeting or adjourned meetings at which the proxy is used.
44. The instrument appointing a proxy shall be deposited at the Office or at
such other place or places, whether in Israel or elsewhere, as the Board of
Directors may from time to time, either generally or in a particular case or
class of cases prescribe, at least forty-eight (48) hours before the time
appointed for holding the meeting or adjourned meeting at which the person
named in such instrument proposes to vote; otherwise, the person so named
shall not be entitled to vote in respect thereof; but no instrument
appointing a proxy shall be valid after the expiration of twelve months from
the date of its execution.
45. Subject to the provisions of the Companies Law, a resolution in writing
(approved by letter, telex, facsimile or otherwise) by all the shareholders,
in person or by proxy, for the time being entitled to vote at a General
Meeting of the Company, shall be as valid and as effectual as a resolution
adopted by a General Meeting duly convened, held and constituted for the
purpose of passing such resolution.
46. A shareholder will be entitled to vote at the Meetings of the Company by
several proxies appointed by him, provided that each proxy shall be
appointed with respect to different shares held by the appointing
shareholder. Every proxy so appointed on behalf of the same shareholder
shall be entitled to vote as he sees fit.
47. No person shall be entitled to vote at any General Meeting (or be counted as
a part of the quorum thereof) unless all calls then payable by him in
respect of his shares in the Company shall have been paid.
DIRECTORS POWERS AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS
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48. (a) Without derogating from the authority of the General Meeting
pursuant to these Articles and the Companies Law, the Board of Directors
shall formulate the Company's policy and shall supervise the exercise of
the General Manager's office and his acts, and as part thereof it -
(1) shall determine the Company's plans of activity, the principles for
financing such plans and the order of priority among them;
(2) shall examine the Company's financial situation and set the
framework of credit which the Company may take;
(3) shall determine the organizational structure and the compensation
policy of employees;
(4) may decide to issue a series of debentures;
(5) is responsible for the preparation and approval of the financial
reports according to Section 171 to the Companies Law;
(6) shall report to the Annual Meeting about the state of the Company's
affairs and on its business results, as required by Section 173 to
the Companies Law;
(7) shall appoint and dismiss the General Manager, as provided by
Section 250 to the Companies Law;
(8) shall decide on the acts and transactions that require its approval
in accordance with these articles or under the provisions of
Sections 255 and 268 to 275 to the Companies Law;
(9) may issue shares and securities convertible into shares up to the
limit of the Company's registered share capital, under the
provisions of Section 288 to the Companies Law;
(10) may decide on a distribution according to Sections 307 and 308 to
the Companies Law;
(11) shall express its opinion on a special purchase offer, according to
Section 329 to the Companies Law.
(b) The powers of the Board of Directors under this Article cannot be
delegated to the General Manager.
DIRECTORS
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49. The Board of Directors of the Company shall consist of a minimum of two (2)
and a maximum of eleven (11) Directors.
50. (a) Except for External Directors (as defined in the Companies Law) and the
Chief Executive Officer of the Company, all directors shall be
classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible, one
class to hold office initially for a term expiring at the 2001 Annual
Meeting of the Company, another class to hold office initially for a
term expiring at the 2002 Annual Meeting of the Company, and another
class to hold office initially for a term expiring at the 2003 Annual
Meeting of the Company, with the members of each class to hold office
until their successors have been duly elected and qualified. At each
Annual Meeting following the 2001 Annual Meeting, the class of directors
whose term expires at that meeting shall be elected to hold office for a
term expiring at the Annual Meeting of the Company held in the third
year following the year of their election and until their successors
have been duly elected and qualified.
(b) Any director or directors may be removed from office at any time, but
only for "cause" and only by the affirmative vote of (i) the holders of
the majority of the Ordinary Shares present in person or by proxy and
voting thereon, or (ii) a majority of the Board of Directors. For
purposes of this clause (b): "cause" shall mean the willful and
continuous failure of a director substantially to perform such
director's duties to the Company (other than any such failure resulting
from incapacity due to physical or mental illness) or the willful
engaging by a director in gross misconduct materially and demonstrably
injurious to the Company.
(c) The Company shall appoint External Directors as and to the extent
required by, and they shall hold office according to, the Companies Law,
as long as the Company is required by the Companies Law to appoint
External Directors.
(d) The Chief Executive Officer of the Company will automatically be a
director of the Company and his term of office as a director shall shall
be vacated, ipso facto, when he ceases to serve as Chief Executive
Officer of the Company.
51. (a) No person shall be nominated for the office of a director at a General
Meeting, except for directors whose term of office expired at the time
the General Meeting was convened, persons nominated for the office of
a director by the Board of Directors, and as provided for in Article
51(b).
(b) Any shareholder entitled to receive notice of and vote at a General
Meeting desiring to propose a nominee for director to be elected at an
Annual General Meeting of Shareholders has to deliver notice to the
Secretary, at the Company's principal offices, not later than ninety
(90) days prior to the date of the annual General Meeting at which
meeting such election is to occur, whichever date is later. The
notice shall set forth: (i) the name and address, as they appear on
the Company's share register, of the shareholder proposing such
nominee, (ii) the identity and background of the nominee, (iii) the
class and number of shares of the Company beneficially owned by such
shareholder, (iv) a representation that such shareholder is a
shareholder of record and intends to appear by person or by proxy at
such General Meeting to bring the General Meeting the nominee
specified in the notice, (v) a brief description of the reasons for
wanting to nominate such nominee as a director, (vi) any material
interest that the shareholder has in the election of such nominee and
(vii) the written consent of the nominee to be elected as a director
of the Company.
52. The Directors in their capacity as such, shall be entitled to receive
remuneration and reimbursement of expenses incurred by them in the course of
carrying out their duties as Directors.
53. The office of a Director shall be vacated, ipso facto:
(a) upon his resignation by written notice signed by him and delivered to
the Office;
(b) if he becomes bankrupt or enters into an arrangement with his creditors;
(c) if he is or becomes of unsound mind;
(d) if he be relieved of his office as provided in Article 50(b) hereof;
(e) if he is prevented by applicable law from serving as a director of the
Company.
(f) if the Board of Directors terminate his office according to Section 231
of the Companies Law;
(g) if court order is given according to Section 233 of the Companies Law.
54. (a) Subject to the provisions of the Companies Law, no Director shall be
disqualified by virtue of his office from holding any office, or
deriving any profit from any other office in the Company or from any
company in which the Company shall be a shareholder or otherwise
interested, or from contracting with the Company as a vendor, purchaser
or otherwise.
(b) Transactions entered into by the Company in which an office holder of
the Company has a personal interest, directly or indirectly, will be
valid in respect of the Company and the office holder only if approved
by the Company's Board of Directors and, if such transactions are
"irregular transactions" as defined in the Companies Law, only if
approved in accordance with the requirements of the Companies Law.
55. A Director who has a personal interest in a matter which is brought for
discussion before the Board of Directors may participate in said discussion,
provided that he shall neither vote in nor attend discussions concerning the
approval of the activities or the arrangements. If said Director did vote
or attend as aforesaid, the approval given to the aforesaid activity or
arrangements shall be invalid.
56. In the event of one or more vacancies on the Board of Directors, the
continuing Directors may continue to act as long as the Board of Directors
consists of at least a majority of the total number of Directors elected.
However, in the event that the remaining Directors are not a majority of the
total number of Directors elected, the remaining Director or Directors may
call for the convening of a General Meeting for the purpose of the election
of Directors.
57. Subject to the limitation on the number of Directors as specified in
Article 49, the Board of Directors may, at any time and from time to time,
appoint any other person as a Director, whether to fill a vacancy or to add
to their number. Any Director so appointed shall hold office until the next
Annual Meeting at which the term of the class to which they have been
elected expires, and may be re-elected.
58. In case of any increase in the number of directors, the additional director
or directors, and in case of any vacancy in the Board of Directors due to a
death, resignation, removal, disqualification or any other cause, the
successors appointed according to Article 57 to fill the vacancies shall be
elected by a majority of the directors then in office.
CONVENING THE BOARD OF DIRECTORS
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59. (a) The Chairman of the Board of Directors may convene a meeting of the
Board of Directors at any time.
(b) The Board of Directors shall hold a meeting on a specified subject on
the demand of two Directors, or if the Board of Directors consists of up
to five Directors - one Director;
(c) The Chairman of the Board of Directors shall convene the Board of
Directors upon a demand said in Sub-article (b) of this Article 59 or if
Section 122(d) to the Companies Law applies, due to a notice or report
from the General Manager or due to a notice from the Auditor of the
Company under Section 169 to the Companies Law.
(d) If a meeting of the Board of Directors was not convened within 14 days
after the date of a demand pursuant to Sub-article (b) of this Article
59, or after the date of a notice or report of the General Manager
according to Section 122(d) to the Companies Law, or after notice of the
Auditor under Section 169 to the Companies Law, then each of those
persons enumerated in Sub-articles (b) and (c) may convene a meeting of
the Board of Directors, which shall discuss the subject specified in the
demand, notice or report, as the case may be.
MEETINGS OF THE BOARD OF DIRECTORS AND THEIR CONDUCT
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60. The agenda of a meeting of the Board of Directors shall be set by the
Chairman of the Board of Directors, and it shall include:
(1) subjects determined by the Chairman of the Board of Directors;
(2) subjects determined as said in Section 98 to the Companies Law;
(3) any subject which a Director or the General Manager requested at a
reasonable time before the meeting was convened - of the Chairman of
the Board of Directors to include in the agenda
61. (a) Notice of a meeting of the Board of Directors shall be delivered to all
its members at a reasonable time before the meeting, but not later than
forty eight (48) hours prior to the time set for any such meeting,
(b) A notice under Sub-article (a) shall be delivered to the Director's
address that was given to the Company in advance, and in it shall be
stated the time of the meeting and the place where it will convene, as
well as reasonable details on all the subjects on the agenda.
62. Notwithstanding the provision of Article 61 hereto, the Board of Directors
may - with the consent of all the Directors - convene for a meeting without
notice.
GENERAL MANAGER
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63. The Board of Directors will appoint one or more persons as General Manager,
and they will be titled as President or Chief Executive Officer (CEO) or
Chief Operating Officer (COO). The Board of Directors may from time to time
remove or discharge him or them from office (subject to the provisions of
any agreement between any such person and the Company) and appoint another
or others in his or their place or places.
64. The Board of Directors may from time to time appoint one or more Vice
Presidents for certain functions, to carry out duties delegated to him
(them) by the President, CEO or COO.
65. To the extent permitted by the Companies Law, the Board of Directors may
from time to time confer upon and delegate to a President, CEO, COO or other
Executive Officer then holding office, such authorities and duties of the
Board of Directors as they may deem fit, and they may delegate such
authorities and duties for such period and for such purposes and subject to
such conditions and restrictions which they consider in the bests interests
of the Company, and they may delegate such authorities and duties without
waiving the authorities of the Board of Directors with respect thereto and
it may from time to time revoke, cancel and alter such authorities and
duties in whole or in part.
66. The remuneration of a President, CEO, COO or other Executive Officer shall
be fixed by the Board of Directors, taking into consideration any agreement
between him and the Company, and it may be in whole or in part, in the form
of salary, share options, or commissions or profit sharing or a combination
thereof.
DIRECTOR'S ACTS AND AUTHORITIES
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67. The management of the business of the Company shall be vested in the Board
of Directors, which may exercise all such powers and do all such acts and
things as the Company is authorized to exercise and do, and are not hereby
or by law required to be exercised or done by the Company in a General
Meeting. The authority conferred on the Board of Directors by this Article
67 shall be subject to the provisions of the Companies Law, of these
Articles and any regulation or resolution consistent with these Articles
adopted from time to time by the Company in a General Meeting, provided,
however that no such regulation or resolution shall invalidate any prior act
done by or pursuant to a decision of the Board of Directors which would have
been valid if such regulation or resolution had not been adopted.
68. The Directors may postpone their meetings and otherwise regulate them as
they shall deem fit. The quorum for the dispatch of business by the Board
of Directors shall be determined by the Directors and, if not so determined,
shall be the majority of the Directors then holding office.
69. A resolution in writing signed or otherwise approved in writing (by letter,
telegram, telex, facsimile, electronic mail or otherwise) by all the
Directors then in office shall be as valid and as effectual as a resolution
adopted by the Board of Directors at a meeting of the Board of Directors
duly convened and held.
70. Members of the Board of Directors, or of any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors,
or of any committee, by means of a telephone conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute attendance in person at the meeting.
71. (a) The Board of Directors shall elect a Chairman for the meeting and fix
the term of his office. The CEO shall not serve as Chairman of the Board
of Directors and vice versa unless the holders of two thirds of the
voting rights in the Company represented in person or by proxy and
voting on such resolution at a General Meeting, who are not controlling
shareholders of the Company or their representatives and who are present
at the vote, adopt a decision to appoint the Chairman of the Board of
Directors as the CEO, for a period not exceeding three years after the
date of the adoption of the decision.
(b) In the event that a Chairman was not elected or if the Chairman should
fail to be present at a meeting fifteen (15) minutes after the time set
for its convening, the remaining Directors shall elect one of those
present to be Chairman of the meeting.
(c) All questions that arise at meetings of the Board of Directors shall be
decided by a majority of votes. In the event of a tie vote, the
Chairman of the Board of Directors shall cast the deciding vote.
72. Any meeting of the Board of Directors at which a quorum is present shall
have the authority to exercise all or part of the authorities, powers of
attorney and discretion invested at such time in the Directors or regularly
exercised by them.
73. Subject to the Companies Law, the Board of Directors may delegate its
authorities in whole or in part to committees as it shall deem fit, and it
may from time to time revoke such delegation. Any committee so created must,
in exercising the authorities granted to it, adhere to all the instructions
of the Board of Directors given from time to time and/or to the provisions
of the Companies Law.
74. All acts done bona fide at any meeting of the Board of Directors, or of a
committee of the Board of Directors or by any person(s) acting as
Director(s) shall, notwithstanding that it may afterwards be discovered that
there was some defect in the appointment of the participants in such meeting
or any of them or any person(s) acting as aforesaid, or that they or any of
them or any person(s) acting as aforesaid, or that they or any of them were
disqualified, be as valid as if there were no such defect or
disqualification.
75. The Board of Directors shall cause proper Minutes to be kept of the
following:
(a) the names of all the Directors present at any meeting of the Board of
Directors and at any meeting of a committee of the Board of Directors;
(b) all proceedings and resolutions of General Meetings of the Company,
Board of Directors' meetings and Committees of the Board of Directors'
meetings.
Any Minutes as aforesaid, if purporting to be signed by the Chairman of such
meeting or by the Chairman of the next succeeding meeting, shall be accepted
as prima facie evidence of the matters therein recorded.
76. [Reserved.]
SHAREHOLDERS REGISTERS
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77. Subject to, and in accordance with, the provisions of the Companies Law, the
Company may cause Shareholder Register to be kept at any place in Israel and
may cause a copy of the Shareholder Register to be kept outside Israel as
the Board of Directors may think fit and, subject to all applicable legal
requirements, the Board of Directors may from time to time adopt such rules
and procedures as it may think fit in connection with the keeping of such
registers. In addition to the Shareholders Register, the Company shall also
keep a Register of Substantial Shareholders as defined in the Companies Law.
SECRETARY
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78. The Board of Directors may from time to time appoint a Secretary to the
Company as it deems fit, and may appoint a temporary Assistant Secretary who
shall act as Secretary for the term of his appointment.