EXHIBIT 3.1
The Companies Law 5759-1999
Public Company Limited by Shares
ARTICLES OF ASSOCIATION
OF
BLUEPHOENIX SOLUTIONS LTD.
(formerly known as Crystal Systems Solutions ltd.)
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CONTENTS
PART A: DEFINITIONS AND INTERPRETATION
1. Definitions
2. Interpretation
PART B: THE COMPANY, ITS OBJECTS AND THE SHARE CAPITAL
3. The Company and its Objects
4. Limited Liability
5. Share Capital
6. Changes in the Share Capital
7. Rights attached to the Shares and Issuance of Shares
8. Shareholders
PART C: THE SHARES
9. Share Certificates
10. Transfer of Shares
11. Decedents' Shares
12. Receivers and Liquidators
PART D: GENERAL MEETINGS
13. Annual a General Meeting
14. Special Meeting
15. Record Date
16. Convening the Meeting
17. Proceedings at General Meetings
18. Voting
19. Voting by Proxy
20. Powers of the General Meeting
PART E: THE BOARD OF DIRECTORS
21. Appointment and Dismissal of Directors
22. Alternate Director
23. Corporate Representative
24. Chairman of the Board of Directors
25. Convening and Conduct of Meetings of the Board of Directors
26. Notice of Meetings of the Board of Directors
27. Authorities of the Board of Directors
28. Remuneration of Directors
29. Committees of the Board of Directors
PART F: THE GENERAL MANAGER AND OTHER OFFICERS
30. The General Manager
31. Secretary and Officers
32. Personal Interest in Transactions of the Company
33. Insurance, Release and Indemnification of Officers
34. Signature Rights
PART G: MINUTES, REGISTERS AND BOOKS OF ACCOUNTS
35. Minutes
36. Books and Registers of the Company
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PART H: AUDIT
37. Auditor
38. Internal Auditor
PART I: RESERVES, DISTRIBUTIONS AND BONUS SHARES
39. Reserves
40. Distribution of Dividends and Bonus Shares
41. Buy-Back
PART J: NOTICES
42. Notices
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THE COMPANIES LAW, 1999
A PUBLIC COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
CRYSTAL SYSTEMS SOLUTIONS LTD.
PART A: DEFINITIONS AND INTERPRETATION
1. DEFINITIONS
In these Articles, the following terms shall have the meaning
appearing opposite them, unless another interpretation is expressly stated
herein:
"ALTERNATE DIRECTOR" As defined in Part E below;
"ARTICLES" OR "THESE These Articles of Association, as amended from time to
ARTICLES" time by the General Meeting;
"BOARD" OR "BOARD OF The Board of Directors of the Company elected or properly
DIRECTORS" appointed in accordance with the provisions of these
Articles; any committee of the Board of Directors to the
extent that any of the authorities of the Board of
Directors are delegated to it; any person authorized by
the Board of Directors, to the extent so authorized, for
the purposes of any matter or class of matters;
"BUSINESS DAY" A day on which customer services are provided by a
majority of the commercial banks in Israel;
"COMPANIES LAW" The Companies Law, 5759 - 1999, as amended from time to
time, or any other law which shall replace it, and any
regulations promulgated thereunder;
"COMPANIES The Companies Ordinance [New Version] 5743 - 1983, as
ORDINANCE" amended from time to time, or any other law which shall
replace it and any regulations promulgated thereunder;
"COMPANY" Crystal Systems Solutions Ltd.;
"CORPORATE As defined in Part E below;
REPRESENTATIVE"
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"EXTRAORDINARY A transaction which is not in the ordinary course of
TRANSACTION" business of the Company; a transaction which is not on
market terms or a transaction liable to have a material
affect on the profitability of the Company, its assets or
its liabilities; an arrangement between the Company and
an Officer regarding the terms of his office and
engagement, including the grant of a release from
liability, insurance, and an undertaking to indemnify or
an indemnity according to the indemnity permit;
"GENERAL MANAGER" The person holding this title and any person having the
authority of a General Manager, whatever his title;
"MEMORANDUM" The Memorandum of Association of the Company as amended
from time to time;
"OFFICE" OR "THE The registered office of the Company at the relevant
OFFICES OF time;
THE COMPANY"
"OFFICER" An Office Holder, as such term is defined in the
"REGISTER" Companies Law; The shareholders register together with
any additional shareholders register that the Company may
maintain outside Israel;
"SECURITY" Share, debenture, capital note, security, certificate or
right entitling membership or participation in the
Company or a claim from it (if issued in series),
a certificate or right entitling the holder to acquire a
security of the Company, in each case whether the
security is in name form or bearer form including a
debenture or option convertible into shares;
"SIMPLE MAJORITY" A majority of those present and voting at a General
Meeting or meeting of the Board of Directors. The vote of
any person present at a meeting as aforesaid who does not
vote or abstains from voting with respect to any matter
on the agenda shall not be included in the number of
votes cast;
"TRANSACTION" A contract or an agreement or a unilateral decision to
bestow a right or some other benefit;
"YEAR" OR "MONTH" According to the Gregorian calendar;
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2. INTERPRETATION
2.1 Subject to the provisions of Article 1 above, and unless the context
expressly requires some other interpretation, the terms defined in the
Companies Law or in the Companies Ordinance, as the case may be, shall
bear the same meaning in these Articles; words in the singular shall
include the plural and, vice versa; masculine terms shall include the
feminine gender, and words indicating individuals shall include
corporations.
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2.2 Any Article in these Articles which provides for an arrangement which
differs in whole or in part from any provision in the Companies Law,
the Companies Ordinance or any other provisions of any law, which can
be stipulated against, amended or added to, in whole or with regard to
specific matters or within specific limitations, in accordance with
any law, shall be considered a stipulation against the provision of
the Companies Law or Companies Ordinance, as the case may be, even if
the actual stipulation is not specified in the said Article, and even
if it is expressly stated in the Article (in whatever form) that the
effectiveness of the Article is subject to the provisions of any law.
2.3 In the event of a contradiction between any Article and the provisions
of any law that may not be stipulated against, amended or added to,
the provisions of the said law shall prevail, provided that nothing
thereby shall nullify or impair the effectiveness of these Articles or
any other Article therein.
2.4 In interpreting any Article or examining its effectiveness, the
interpretation shall be given to that Article which is most likely to
achieve its purpose as appearing therefrom or as appearing from the
other Articles included within these Articles.
PART B: THE COMPANY, ITS OBJECTS AND THE SHARE CAPITAL
3. THE COMPANY AND ITS OBJECTS
3.1 The Company is a public Company.
3.2 The objects of the Company shall be as specified in the Memorandum.
3.3 The Company may contribute reasonable amounts for any suitable purpose
or categories of purpose even if such contributions do not fall within
business considerations of the Company. The Board of Directors may
determine the amounts of the contributions, the purpose or category of
purposes for which the contribution is to be made, and the identity of
the recipients of any contribution.
3.4 The Company may at any time undertake any kind of business activity
which is permitted to the Company under the terms of these Articles,
expressly or by implication, and may refrain from these activities,
whether or not the Company has commenced that kind of business
activity, all in the absolute discretion of the Board of Directors.
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4. LIMITED LIABILITY
The liability of the shareholders of the Company for the indebtedness
of the Company shall be limited as follows:
4.1 If the shares of the Company have a nominal value, the liability of
each shareholder for the indebtedness of the Company is limited to
payment of the nominal value of the shares of that shareholder.
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4.2 If at any time the Company shall issue shares with no nominal value,
the liability of the shareholders shall be limited to payment of the
amount which the shareholders should have paid to the Company in the
respect of each share according to the conditions of issue.
5. SHARE CAPITAL
The authorized share capital of the Company is NIS 300,000 (Three hundred
thousand New Israeli Shekels) divided into 30,000,000 ordinary shares of
NIS 0.01 nominal value each.
6. CHANGES IN THE SHARE CAPITAL
6.1 The General Meeting of the Company may, from time to time, increase
the share capital of the Company or change the class of authorized
shares (whether issued or not), by creating new shares, whether or not
all of the shares that have been resolved to be issued have in fact
been issued at such time, and whether or not all of the shares which
have been issued at such time have been paid in full. Such increase or
change in share capital shall be in such amount and divided into
shares and shall be made subject to such terms and conditions and with
such rights and preferences as specified in the resolution creating
the shares, and if no such directions are included within the
resolution, as the Board of Directors shall determine, and in
particular, the shares may be issued with preferred or subordinated
rights (or without rights) to dividends, voting, repayment of capital
or with respect to any other matters.
6.2 Unless the resolution authorizing the increase in share capital
provides otherwise, the new shares shall be issued subject to all of
the provisions of these Articles which apply to the existing share
capital of the Company.
6.3 The General Meeting may, from time to time, cancel any of its unissued
authorized share capital, unless there is any outstanding obligation
on the part of the Company, including a conditional obligation, to
issue the shares.
6.4 Subject to the provisions of any law and the provisions of these
Articles, the Company shall be entitled, from time to time, to cancel
any issued share capital.
7. RIGHTS ATTACHED TO THE SHARES AND ISSUANCE OF SHARES
7.1 Unless these Articles provide otherwise, all of the shares shall carry
equal rights for all purposes, and each share shall vest in the holder
thereof:
(a) The right to receive an invitation to and to participate in each
General Meeting of the Company, annual or special, and the right
to one vote in respect of each share that he holds in every vote
at each General Meeting of the Company in which he participates
(whether in person or by proxy, including through a written
ballot), provided that the share is owned by the shareholder on
the record date specified in the resolution to convene the
General Meeting;
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(b) The right to receive dividends (if and to the extent
distributed), the right to receive bonus shares (if and to the
extent distributed), in each case in accordance with the nominal
value of the shares (without taking into account any premium paid
in connection with such shares) that the holder holds in relation
to the total nominal value of the shares outstanding, all on the
date upon which it is resolved to distribute the dividend or
bonus shares or other distribution (as the case may be) or at
such later date as shall be provided in the resolution in
question and in accordance with the number of shares the holder
holds on the said date;
(c) The right to participate in the distribution of any surplus
assets of the Company upon liquidation in accordance with the
nominal value of each share in relation to the total nominal
value of the shares outstanding.
The provisions of these Articles with respect to General Meetings
shall apply to all meetings of any class of shareholders, mutatis
mutandis.
7.2 The unissued shares forming part of the authorized share capital of
the Company shall at all times be under the control of the Board of
Directors. Without prejudice to any special rights granted to the
current shareholders of the Company prior to such date, if any, the
Company (acting through the Board of Directors) may issue shares,
whether included within the original capital of the Company or as a
result of an increase in capital, with rights that are superior or
inferior to the outstanding shares, or may issue shares which are
preferred or subordinated with regard to distributions, voting rights,
the right to repayment of capital or in connection with any other
matter, all as the Company shall determine from time to time.
7.3 The Company may issue redeemable securities upon such terms as the
Board of Directors shall determine. The Board of Directors may attach
to redeemable securities the attributes of shares, including voting
rights and the right to participate in profits.
7.4 The Board of Directors may pay brokerage, underwriting or agents fees
in connection with any issue of securities of the Company, in such a
manner as the Board of Directors shall determine, and subject to the
provisions of any law.
7.5 In the event of an issuance of shares or other securities by the
Company, the Company will have no obligation to offer such shares or
other securities to the Company's shareholders first.
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7.6 If at any time the share capital is divided into different classes of
shares, the General Meeting may, unless the terms of issue of that
class of shares provide otherwise, amend, convert, expand, add to or
otherwise alter the rights, preferences, limitations and directions
relating to those shares (or which do not relate at such time to one
of the classes), provided that the holders of the class of shares that
have been issued and whose rights will be affected thereby agree
thereto at a meeting of the holders of the shares of the said class.
The special rights of the holders of any shares or class of shares
that have been issued, including shares issued with preferred rights
or other special rights, shall not be deemed to have been altered or
impaired as a result of the creation or issue of additional shares of
equal rank or as a result of the cancellation of authorized share
capital of the same class which have not yet been issued, unless it is
otherwise specified in the conditions of issue of those shares.
The consolidation or division of the share capital of the Company
shall not be deemed to amend the rights attached to the shares which
are the subject of such consolidation or division.
8. SHAREHOLDERS
8.1 Unless otherwise specified in any law or in these Articles, the
Company shall be entitled to treat the registered holder of any share,
including a shareholder registered as holding a share on trust, as the
absolute owner, and accordingly shall not, except as ordered by a
court of competent jurisdiction, or as required under any law, be
bound to recognize any equitable or other claim to, or interest in,
such share of any other person.
8.2 The Company will be entitled, in accordance with its absolute
discretion, to transfer and to pay any amount (in any manner of
payment that it selects), any asset of any sort, including bonus
shares, to shareholders of the Company whose shares are not registered
in their name in the Register, by executing such transfer to a
Registration Company or to members of the stock exchange on which the
shares of the Company are traded or to a trustee that the Company
shall appoint for such matter. As long as the Company has acted based
upon information that appears to have been provided to the Company by
the shareholders thereof (including information provided by a
Registration Company or a member of the stock exchange), the Company
shall not be responsible for any unpaid amount or any asset that was
not transferred to such shareholder, and the Company shall be deemed
as if it has paid the said amounts and transferred the said assets, as
the case may be, in full, on the date such amounts or assets were
transferred to such Registration Company, member of the stock exchange
or trustee.
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8.3 The Board of Directors of the Company may, from time to time, settle
procedures in connection with determining the identity of shareholders
and in connection with the manner in which any right, benefit, asset
or amount should be transferred to or distributed among them,
including, without limitation, with respect to the distribution of
dividends or bonus shares, and with respect to the grant of any right,
asset or other benefit to the shareholders of the Company in their
capacity as such. Any amounts, bonus shares, rights or property of any
kind that are transferred to a shareholder (including to his agent,
attorney or to any other person that the shareholder directs) whose
identity has been authenticated in accordance with the procedures as
aforesaid shall be deemed settlement in full and release of the
indebtedness of the Company towards any person claiming a right to
such payment, transfer, distribution or grant of right, as the case
maybe.
PART C: THE SHARES
9. SHARE CERTIFICATES
9.1 Share certificates shall be signed by two directors of the Company, or
by any other person authorized by the Board of Directors, alongside
the name of the Company.
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9.2 Each shareholder whose name appears in the Register shall be entitled
to receive one share certificate in respect of the shares registered
in his name, or, if the Board of Directors so authorizes (and after
payment of the amount which the Board of Directors shall determine
from time to time) a number of share certificates, each one in respect
of one or more of these shares. Each share certificate shall indicate
the name of the shareholder, the number of shares in respect of which
it has been issued, and any additional information as shall be
determined by the Board of Directors.
9.3 A certificate in respect of a share registered in the names of two or
more persons shall be delivered to such person as all of the
registered shareholders of that share shall direct, and in the absence
of agreement, to the person whose name appears first on the Register
from among the names of the joint owners.
9.4 If a share certificate is defaced, lost or destroyed, it may be
replaced, upon payment of such fee, and upon the furnishing of such
evidence of ownership and such indemnity, as the Board of Directors
may think fit.
9.5 The Company shall not issue shares other than shares that are paid in
full. Shares shall be deemed to have been paid in full if the full
amount of the nominal value and any premium thereon has been paid, in
accordance with the terms of issue of the shares.
9.6 The Company may issue bearer shares or exchange a bearer certificate
for a bearer share certificate.
10. TRANSFER OF SHARES
10.1 A transfer of shares shall be effected by way of delivery of a share
transfer deed in the form set forth below, which shall include all of
the details and bear the signature of the transferor and the
transferee and of the witnesses to their signatures.
10.2 The transferor shall be deemed to have remained a shareholder until
the name of the transferee is registered in the Register in respect of
the share that is transferred.
10.3 The Company is entitled to require payment for the registration of a
transfer of shares in the Register (including registration of a
transfer of shares registered in the name of a Registration Company to
the names of the owner of those shares) in such amount as the Board of
Directors shall determine from time to time.
10.4 The Board of Directors or any other person authorized thereto by the
Board of Directors for such purpose, is entitled:
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(a) to refuse to recognize a share transfer unless the certificate of
the transferred shares is being presented, and the transferor
provides any additional details necessary to prove his or her
entitlement to transfer the shares. The share transfer deeds that
are registered shall remain with the Company. Any share transfer
deed that the Board of Directors refuses to register shall be
returned to the person delivered it to the Company, at his
request;
(b) to refuse to recognize any share transfer until receipt of
payment in respect of registration of the transfer.
10.5 The share transfer deed shall be substantially in the form set forth
below, or in such regular or customary form as shall be approved by
the Board of Directors:
"The undersigned, I.D. Number/Company Number ______________
(hereinafter "the Transferor") in consideration for the payment
of NIS ________ that has been paid to me by ___________, whose
address is at ________________________, (hereinafter "the
Transferee") hereby transfer to the Transferee ________ shares of
NIS ________ each, numbered from __ until ________ inclusive, in
Crystal Systems Solutions Ltd., so that the Transferee shall hold
the same in accordance with the terms upon which the undersigned
held the shares immediately prior to signature of this deed;
and the Transferee, agrees to receive the abovementioned shares
upon the abovementioned terms.
IN WITNESS WHEREOF the parties have executed this deed, the
________ day of ______________.
______________________________ ______________________________
Transferor Transferor
______________________________ ______________________________
Witness to the signature of Witness to the signature of
Transferor Transferee"
10.6 Notwithstanding other provisions of these Articles, the Company shall
amend the Register by order of the court, or if the Board of Directors
is satisfied that the legal requirements for the assignment or
transmission of the right to shares are fulfilled.
10.7 The provisions of this Article shall apply also a transfer of a right
to a share held by a number of holders jointly, mutatis mutandis.
10.8 The Company may destroy share transfer deeds seven years after
registration of the transfer, and share certificates that have been
cancelled three years after cancellation, and there shall be a
presumption that all share transfer deeds and certificates that have
been destroyed were in full force and that the transfers and
cancellations and the registrations that were effected based thereon
were lawfully carried out.
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11. DECEDENTS' SHARES
Any person becoming entitled to a share in consequence of the death of
any person, upon producing evidence of the grant of probate or letters of
administration or declaration of succession (or such other evidence as the
Board of Directors may reasonably deem sufficient that he sustains the
character in respect of which he proposes to act under this Article or of
his title), shall be registered as a member in respect of such share, or
may, transfer such share.
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12. RECEIVERS AND LIQUIDATORS
The Company may recognize the receiver or liquidator of any corporate
member in winding-up or dissolution, or the receiver or trustee in
bankruptcy of any member, as being entitled to the shares registered in the
name of such member. The receiver or liquidator of a corporate member in
winding-up or dissolution, or the receiver or trustee in bankruptcy of any
member, upon producing such evidence as the Board of Directors deems
sufficient that he sustains the character in respect of which he proposes
to act under this Article or of his title, shall with the consent of the
Board of Directors (which the Board of Directors may grant or refuse in its
absolute discretion), be registered as a member in respect of such shares,
or may, subject to the regulations as to transfer herein contained,
transfer such shares.
PART D - GENERAL MEETINGS
13. ANNUAL GENERAL MEETING
The Company shall hold an Annual General Meeting once every year and no
later than fifteen months following the last Annual General Meeting held.
The Agenda for the Annual Meeting shall be determined by the Chairman of
the Board of Directors in accordance with the instructions of the Board of
Directors and shall include, inter alia, discussing the Financial
Statements, any matter to be discussed at such meeting according to these
Articles or any law, and any other matter that the Board of Directors may
determine. To the extent required, the agenda may include appointment of
directors, appointment of an auditor, receipt of report from the Board of
Directors regarding the fees of the auditor in connection with the audit
and any other matter that may require the convening of a Special Meeting.
14. SPECIAL MEETING
All General Meetings other than Annual General Meetings shall be
called "Special Meetings". The Board of Directors may, whenever it deems
fit, and it shall, within 21 days after receiving a demand in writing by
shareholders or directors, as provided in the Companies Law, convene a
Special Meeting, at such time and place, as may be determined by the Board
of Directors. Any such demand must state the purpose for which the meeting
is to be convened, be signed by the petitioners, and deposited at the
Office.
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15. RECORD DATE
Notwithstanding any provision of these Articles to the contrary, and
to allow the Company to determine the shareholders entitled to notice of,
or to vote at, any General Meeting, or to express consent to or dissent
from any corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of, or to take or be
the subject to, any other action, the Board of Directors may fix, a record
date, which shall not be more than forty (40) days (or any longer period
permitted under the Companies Law), nor less than four (4) days before the
date of such meeting or other action. A determination of holders of record
entitled to notice of or to vote at a meeting shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors
may fix a new record date for the adjourned meeting.
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16. CONVENING THE MEETING
16.1 The time and place of each General Meeting shall be determined by the
Board of Directors or by the Chairman thereof. If no location for the
convening of the meeting is specified by the Board of Directors or by
the Chairman of the Board of Directors, the meeting shall convene at
the Offices of the Company.
16.2 The Board of Directors may, in its absolute discretion, resolve to
enable persons entitled to attend a General Meeting to do so by
simultaneous attendance and participation at the principal meeting
place and a satellite meeting place or places anywhere in the world
and the shareholders present in person, by proxy or by written ballot
at satellite meeting places shall be counted in the quorum for and
entitled to vote at the General Meeting in question, and that meeting
shall be duly constituted and its proceedings valid, provided that the
Chairman of the General Meeting is satisfied that adequate facilities
are available throughout the General Meeting to ensure that all
shareholders attending at the meeting place are able to:
(a) participate in the business for which the meeting has been
convened;
(b) hear all persons who speak (whether by the use of microphones,
loudspeakers audio-visual communications equipment or otherwise)
at the principal meeting place and any satellite meeting place,
and
(c) be heard by all other persons so present in the same way.
The Chairman of the General Meeting shall be present at, and the
meeting shall be deemed to take place at, the principal meeting place.
16.3 Unless otherwise expressly directed by a court of competent
jurisdiction, the provisions of these Articles shall apply, with such
changes as required in the circumstances, to the convening, conduct
and proceedings of a General Meeting convened by order of a court of
competent jurisdiction and of a General Meeting lawfully convened
other than by the Board of Directors, and to any vote at such meeting.
16.4 The Company shall not be required to give notice under Section 69(b)
of the Companies Law.
17. PROCEEDINGS AT GENERAL MEETINGS
17.1 No discussion shall be commenced at a General Meeting unless a quorum
is present at the commencement of the meeting.
Other than where a different rule is provided in these Articles or by
any law or by a court of competent jurisdiction, a quorum shall be two
or more shareholders present in person or by proxy or by written
proxy, who hold an aggregate of at least 35% (thirty five percent) of
the voting rights in the Company.
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17.2 If within an hour from the time set for the General Meeting no quorum
is present, the meeting shall automatically be adjourned to the same
day and same time one week thereafter (unless such day shall fall on a
public holiday either in Israel or the United States, in which case
the General Meeting will be adjourned to the first day, not being
Friday, Saturday or Sunday, which follows such public holiday), at the
same place fixed for the original meeting (with no need for any notice
to the shareholders) or until such other later time if such time is
specified in the original notice convening the General Meeting, or if
the Company gives notice to the shareholders no less than 72 hours
before the date fixed for the adjourned meeting.
17.3 If at an adjourned meeting there is no quorum present half an hour
after the time set for the meeting, any two shareholders present in
person or by proxy, shall constitute a quorum.
17.4 Notwithstanding any other provision in these Articles, if the
convening of a Special Meeting is demanded other than by resolution of
the Board of Directors of the Company, the adjourned meeting shall
take place only if there are present at least two shareholders holding
voting rights in an amount no less than the amount required in order
to convene the original meeting. If there is no quorum as aforesaid at
the adjourned meeting, the meeting shall not be adjourned to another
date and all of the proposed resolutions on the agenda shall be deemed
to have been rejected by the meeting.
17.5 The Chairman of the Board of Directors of the Company shall act as
Chairman of every General Meeting of the Company. If there is no
Chairman of the Board of Directors and the Board of Directors has not
determined that another individual shall act as Chairman of the
meeting as aforesaid, or if the proposed Chairman is not present
fifteen minutes after the time set for the meeting, or if that person
does not wish to act as Chairman of the meeting, the shareholders
present at the meeting shall in person or by their proxies elect a
shareholder or a proxy present at the meeting to act as Chairman of
the meeting.
17.6 The Chairman of the meeting may, with the consent of a meeting at
which a quorum is present, postpone the meeting from time to time and
from place to place, and he must postpone the meeting as aforesaid if
the meeting directs him to do so. At a resumption of the meeting that
has been adjourned as aforesaid, only those matters which were on the
agenda of the original meeting and the discussion of which was not
completed or commenced, shall be discussed. Notwithstanding anything
in these Articles to the contrary, if a meeting is adjourned for
twenty-one (21) days or more, a notice shall be given of the adjourned
meeting as in the case of an original meeting. Except as aforesaid, no
shareholder shall be entitled to receive any notice of an adjournment
or of the business to be transacted at the adjourned meeting.
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17.7 At any General Meeting, a resolution, in respect of any business put
to a vote at the meeting shall be decided by a poll. Such poll shall
be held in the manner and at the time and place as the Chairman of the
General Meeting directs (including the use of ballots or tickets),
whether immediately or after an interval or postponement, or in any
other way, and, subject to the other provisions of these Articles and
the Companies Law, the results of the poll shall be deemed to be a
resolution of the General Meeting. The holding of a poll shall not
prevent the continued business of the General Meeting.
17.8 Unless specified otherwise under any law, each resolution of the
General Meeting (including a resolution with respect to the amendment,
alteration or addition to these Articles or replacement thereof) shall
be carried by a simple majority.
17.9 The announcement by the Chairman that a resolution has been carried
unanimously or by a certain majority or has been rejected shall be
prima facie evidence of that fact. An announcement as aforesaid and a
notification to this effect that has been recorded in the minute books
of the Company shall be prima facie evidence of the matter stated
therein and there shall be no need to prove the number of votes or the
proportion of the votes cast in favor or against the proposed
resolution.
18. VOTING
18.1 Each share shall entitle the holder thereof to one vote for a share
which held by him and to which a voting right is attached without
regard to the nominal value of that share, unless the terms of issue
of the share provide otherwise.
18.2 A corporation which is a shareholder may authorize an officer in the
corporation to be its representative at any meeting of the Company. A
person authorized as aforesaid shall be entitled to use, on behalf of
the corporation that he represents, the same powers which the
corporation itself could have used if it was an individual
shareholder.
18.3 A shareholder who is a minor and a shareholder who has been declared
legally incompetent by a court of competent jurisdiction may vote only
through his guardian, and the said guardian may vote by proxy.
18.4 In the case of joint owners of a share, the vote of the principal
joint owner shall be accepted by the Company, whether given in person
or by proxy, and the vote of the remaining joint owners shall not be
accepted. For the purpose of this Article, the principal joint owner
shall be deemed to be the shareholder whose name first appears in the
Register with respect to the relevant shares.
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19. VOTING BY PROXY
19.1 A shareholder may appoint a proxy to vote in his place and the proxy
need not be a shareholder in the Company. The appointment of a proxy
shall be in writing signed by the person making the appointment or by
an attorney authorized for this purpose, and if the person making the
appointment is a corporation, by a person or persons authorized to
bind the corporation.
19.2 The document appointing the proxy to vote (the "Appointment") and
power of attorney (if any) pursuant to which the Appointment has been
signed, or a copy thereof certified to the satisfaction of the Board
of Directors, shall be deposited in the Office (or at such other place
in Israel or abroad as the Board of Directors may direct from time to
time) or at the location set for the meeting not less than 2 (two)
hours (or not less than 24 (twenty four) hours with respect to a
meeting to be held outside of Israel), before the time of the meeting,
or shall be delivered by hand to the Chairman at the commencement of
the meeting, provided that the Chairman of the meeting may waive this
requirement for any meeting. Any question that may be raised
concerning the eligibility of an Appointment will be decided by the
Chairman of the meeting and his decision will be final.
19.3 A shareholder holding more than one share may appoint more than one
proxy, subject to the following provisions:
(a) The Appointment shall indicate the class and number of shares in
respect of which it is given;
(b) If the number of the shares of any class specified in the
Appointments that have been given by one shareholder exceeds the
number of shares of that class held by him, all of the
Appointments given by that shareholder shall be void;
(c) If only one proxy is appointed by the shareholder and the
Appointment does not indicate the number and class of shares in
respect of which it is given, the Appointment shall be deemed to
have been given with respect to all of the shares owned by the
shareholder at the time for determining the entitlement to
participate and vote at the meeting (if the Appointment is given
for a specific meeting) or in respect of all of the shares held
by the shareholder at the date of depositing the Appointment with
the Company or on the date of delivery to the Chairman of the
meeting, as the case may be. In the event that an Appointment is
given with respect to a number of shares less than the number of
shares held by the shareholder, the shareholder shall be deemed
to have abstained from voting with respect to the remainder of
the shares that he owns and the Appointment shall be valid with
respect to the number of shares specified therein.
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19.4 Each appointment of a proxy, whether for a specific meeting or
otherwise, shall, to the extent that the circumstances permit, be
substantially in the following form:
"I, ________ (I.D. Number/Company Number ________) of
____________________, in my capacity as shareholder of Crystal Systems
Solutions Ltd., hereby appoint ________, (I.D. Number/Company Number
______________) of ____________________, or in his/her absence,
______________, (I.D. Number/Company Number ______________) of
______________, to vote on my behalf and in my name with respect to
________ Class __ shares held by me at the (annual/special) meeting of
the Company that shall be held on the ___ day of ________, and at any
adjournment of such meeting.
In witness whereof I have signed hereon this ___ day of ________.
____________________
Name and Signature"
19.5 A vote cast pursuant to an Appointment appointing a proxy shall be
valid notwithstanding the death of the person making the Appointment
or the cancellation of the power of attorney or the transfer of the
share in respect of which the vote is cast as aforesaid, unless notice
in writing of the death, cancellation or transfer as aforesaid has
been received in the Offices of the Company or by the Chairman of the
meeting, by the time of the vote.
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19.6 Subject to the provisions of the Companies Law and any other
regulations that may be enacted form time to time pursuant thereto,
the Board of Directors is entitled, from time to time, at its absolute
discretion, to determine which resolutions may also be approved at the
general meeting or any other type of meeting (whether applying
generally or applying one-time only) by proxy and to change the said
matters determined by the General Meeting and also to determine from
time to time any administrative provisions with respect to any matter
connected with the proxies or position papers.
Should the Board of Directors formulate procedures and matters as
specified above, such procedures and matters will be brought to the
attention of the shareholders such that they will be available for
review by the shareholders at any reasonable time at the Office or at
any other place or in any other manner to be determined by the Board
of Directors.
19.7 Subject to the provisions of any law, resolutions approved by a
General Meeting, at which the shareholders are entitled to vote by
proxy, will not be invalidated if the Company, in error:
(a) did not send to the shareholders a proxy, notice of convening the
General Meeting or a notice regarding the possibility of voting
at that General Meeting by way of proxy or if it did not send any
position paper or any other document to the shareholders;
(b) sent documents and notices late or to an incorrect address;
(c) did not count the shareholders votes or counted the votes as said
but in an incorrect or imprecise manner, provided that such
counting of votes did not result in a change of the resolutions
passed at the General Meeting or in the derogation of the
validity of the General Meeting or of the validity of the passed
resolution had the votes for such resolution been counted
precisely.
(d) did not act in accordance with the provisions of the law or
procedures prescribed by the Board of Directors with regard to
voting by way of proxies and the sending of position papers.
20. POWERS OF THE GENERAL MEETING
The Company's decisions on the following matters shall be adopted by the
General Meeting in accordance with the required majority provided by with
any law and any provision of these Articles:
20.1 Changes in the Articles.
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20.2 Changes in the Memorandum with respect to the Company's name and its
purposes only.
20.3 Appointment of the Company's auditor and the termination of his
service.
20.4 Appointment of directors, including outside directors, and the
termination of their service, all as provided in these Articles.
20.5 The increase and reduction of the registered share capital and a
change of the rights attached to the existing shares, all in
accordance with the provisions of any law.
20.6 A merger, in accordance with the provisions of any law.
20.7 Approval of acts and transactions that require the approval of the
General Meeting under the provisions of any law or of these Articles.
20.8 Exercise of the powers of the Board of Directors in the events
prescribed under the law.
PART E: THE BOARD OF DIRECTORS
21. APPOINTMENT AND DISMISSAL OF DIRECTORS
21.1 Until such time as the General Meeting decides otherwise, the number
of members of the Board of Directors shall be not less than three (3)
and not more than twelve (12).
21.2 The directors will be elected by the General Meeting (whether at the
Annual General Meeting or at a Special Meeting) on the agenda of which
will be the appointment of directors.
21.3 For as long as the Company is required in accordance with any law, to
appoint outside directors, the Company's General Meeting (whether the
Annual General Meeting or Special Meeting) shall appoint any number of
outside directors, on any conditions in a manner prescribed by law.
21.4 In addition to the directors who are appointed by the General Meeting
as aforesaid, the Board of Directors of the Company may at its
discretion appoint additional directors, provided that the number of
members of the Board of Directors after such appointment shall not
exceed the maximum number of directors fixed in these Articles.
21.5 Subject to the provisions of any law regarding the cessation of the
service of outside directors, the General Meeting is entitled to
dismiss a director, including a director that was not appointed by the
General Meeting, before the completion of his service for any reason,
provided that the director is given a reasonable opportunity to bring
his position before the General Meeting.
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21.6 Any dismissal, replacement, appointment or re-appointment of a
director that was appointed by the Board of Directors shall be
approved by the majority of directors present and voting at a meeting
of the Board of Directors, in which the agenda includes the
appointment.
21.7 An organ that is entitled to appoint a director will be entitled to
determine the commencement of his service that will either be at the
time of the appointment of that director or at a later time.
21.8 The service of a director that was appointed by the General Meeting
will cease (if he has not been dismissed earlier by the General
Meeting, as described above) at the end of the first Annual General
Meeting held after the said date of appointment (without a need to
give the director an opportunity to present his position).
21.9 Subject to the provisions of any law, a director who has ceased to
serve as a director is eligible to be re-appointed.
21.10 Subject to the provisions of any law, the office of a director
(including the office of an Alternate Director and a Corporate
Representative) shall be vacated automatically in each of the
following events:
(a) upon his death;
(b) if he is declared to be legally incompetent;
(c) if he is declared bankrupt, and if the director is a corporation,
if a liquidator, receiver, special manager or trustee (in each
case temporary or permanent) is appointed for the corporation or
its assets within the context of a creditors scheme of
arrangement or an order of stay of proceedings;
(d) if he resigns from office by written notice to the Company, to
the Chairman of the Board of Directors or to the Board of
Directors, in which case the office of the director shall be
vacated on the date of service of notice or at such later date as
specified in the notice as the effective date of resignation;
(e) if his term of office was terminated in accordance with the
provisions of these Articles;
(f) if the director is convicted in a final judgment of an offence of
a nature which disqualifies a person from serving as a company
director;
(g) if a court of a competent jurisdiction decides to terminate his
office in a decision or judgment for which no stay of enforcement
granted.
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21.11 Notwithstanding anything stated in these Articles, the appointment of
a director, an Alternate Director or a Corporate Representative, as
the case may be, (together "the Appointee") shall not come into effect
before the Appointee has delivered to the Company a notice in writing
in which the Appointee declares that he is lawfully competent to be
appointed as a director of the Company and that he agrees to be
appointed as a director of the Company. The notice shall include the
personal details of the appointee required by law. The form of the
aforesaid notice shall be set down by the Board of Directors from time
to time and may be in the form of an affidavit prepared and
authenticated in accordance with the law.
21.12 If any director is not appointed, or if the appointment of any
director does not come into effect, or if the office of a director
becomes vacant, the remaining directors may act in any manner provided
that their number does not fall below the minimum number specified in
these Articles. If the number of directors falls below the minimum
number as aforesaid, the directors shall not be able to act other than
in emergencies, or for the purpose of convening a General Meeting, or
for the purpose of the appointment of additional directors by the
Board of Directors.
21.13 A corporation is fit to act as a director and as an Alternate
Director of the Company.
22. ALTERNATE DIRECTOR
22.1 A director may at any time appoint an alternate ("the Alternate
Director"), who is competent to serve as director of the Company. A
person who at that time is serving as a director, an Alternate
Director of another director or a Corporate Representative may not
serve as an Alternate Director. The Alternate Director shall have all
of the duties, rights and authorities (other than the authority to
appoint an alternate for himself) which the director who appointed him
has, provided, however, than an Alternate Director shall have no
standing in any meeting in which the director who appointed him is
present.
22.2 The appointment of an Alternate Director and the cancellation thereof
shall be by a written notice to be delivered by the appointing
director to the Company. The appointment and cancellation of an
appointment shall come into effect on the date of delivery of the
notice to the Company or at the date specified in the notice,
whichever is later.
22.3 A director who appoints an Alternate Director may at any time cancel
the appointment. In addition, the office of an Alternate Director
shall be vacated whenever the Alternate Director notifies the Company
in writing of his resignation, with effect from the date of his notice
or whenever the director who has appointed the Alternate Director
ceases to be a director of the Company for whatever reason.
22.4 An Alternate Director shall alone be responsible for his own acts and
defaults, and he shall not be deemed the agent of the director who
appointed him.
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23. CORPORATE REPRESENTATIVE
23.1 A corporation which acts as a director or an Alternate Director shall
appoint an individual qualified to be appointed as a director of the
Company to act on its behalf in the Board of Directors (the "Corporate
Representative").
23.2 The appointment of a Corporate Representative and the cancellation
thereof shall be by a written notice to be delivered by the appointing
corporation to the Company. The appointment shall come into effect on
the date of service of notice to the Company or on the date specified
in the notice, whichever is later.
23.3 The appointing corporation is entitled to the rights and authorities
of a director only at the time at which the corporation has validly
appointed a Corporate Representative.
24. CHAIRMAN OF THE BOARD OF DIRECTORS
24.1 The Board of Directors may appoint one of the directors (other than an
Alternate Director or a Corporate Representative) to act as a Chairman
of the Board of Directors, remove such Chairman from office and
appoint another person in his place. The Chairman of the Board of
Directors shall not have an additional or casting vote at meetings of
the Board of Directors.
24.2 The service of the Chairman of the Board of Directors continues even
after the convening of the General Meeting at which directors are
appointed or dismissed and will cease upon the occurrence of any of
the following events:
(a) the completion of the period of service that was determined in
the appointment resolution;
(b) where the Chairman of the Board of Directors resigns such
position by a written notice to the Board of Directors. In such a
case, his service will cease on the date upon which the notice is
delivered or on the date prescribed in the notice to be the
effective date of the resignation, whichever is later.
(c) the Chairman of the Board of Directors ceases to serve as a
director for any reason;
(d) the Chairman is dismissed by the Board of Directors.
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24.3 The Chairman of the Board of Directors may, from time to time by a
written notice to the Board of Directors, appoint another director to
act as a Deputy Chairman of the Board of Directors, to dismiss the
Deputy Chairman and to appoint another in his place, provided that the
tenure of the Deputy Chairman of the Board of Directors shall not
cease even if the person who appointed him ceases to act as Chairman
of the Board of Directors or as a director, unless the Board of
Directors decides otherwise. If the Chairman of the Board of Directors
is not present 15 minutes after the beginning of a meeting of the
Board of Directors, or if he does not wish to sit as Chairman of the
meeting, the Deputy Chairman or in the absence of a Deputy Chairman,
any other director chosen by the Board of Directors to be the Chairman
of such meeting, shall conduct the meeting and may exercise all of the
authorities vested in the Chairman of the Board of Directors.
24.4 The Chairman of the Board of Directors shall have all of the powers,
rights and authorities granted to him under these Articles or by law.
Without prejudice to the generality of the aforesaid, the Chairman of
the Board of Directors shall have all power and authority necessary in
order to carry out his functions and to exercise his rights and
authorities in an efficient manner, including the authority to act in
the name of the Company and on its behalf in the matters referred to
above and to give directions to the General Manager of the Company and
to employees and consultants of the Company for this purpose.
24.5 If both the Chairman of the Board of Directors and the Deputy Chairman
are absent 15 minutes after the beginning of a meeting of the Board of
Directors, or they do not wish to act as Chairman, or no Chairman of
the Board of Directors has been appointed for the Company, the Board
of Directors shall appoint one of its members (including an Alternate
Director or Corporate Representative) to be the Chairman of such
meeting.
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25. CONVENING AND CONDUCT OF MEETINGS OF THE BOARD OF DIRECTORS
25.1 The Board of Directors shall convene as often as the needs of the
Company require and shall do so at least once every three months.
25.2 The Board of Directors shall be convened as follows:
(a) In accordance with a decision of the Chairman of the Board of
Directors;
(b) At the request of two directors, but if the Board of Directors
comprises up to five members, at the request of one director;
(c) By the Chairman of the Board of Directors if and when a notice or
a report from the General Manager is received requiring the
action of the Board of Directors or a notice from the auditor
regarding substantial defects in the audit of the Company.
(d) In any other case in which it is required by law to convene a
meeting of the Board of Directors.
25.3 If a meeting of the Board of Directors is convened by the Chairman of
the Board of Directors or by a majority of the members of the Board of
Directors, the meeting shall be convened no earlier than the next
business day following delivery of a notice of the meeting to all of
the members of the Board of Directors, unless the Chairman of the
Board of Directors or a majority of the members of the Board of
Directors determine that because of the urgent nature of any matter on
the agenda, the meeting must be convened within a shorter time. In
such a case, the meeting shall be convened in the manner which allows
the participation of the maximum number of members of the Board of
Directors in the meeting.
25.4 The Board of Directors may hold meetings using any means of
communication, provided that all of directors participating can hear
one another at the same time, as well as in any other manner permitted
by law. Such a meeting will be considered for the purposes of any
matter, including the matters of sending notices, legal quorums and
the recording of protocols, as an ordinary meeting of the Board of
Directors.
25.5 Until otherwise unanimously decided by the Board of Directors, a
quorum at a meeting of the Board of Directors shall be constituted by
the presence of a majority of the directors then in office who are
lawfully entitled to participate in the meeting, but shall not be less
than two.
25.6 The Board of Directors may make a decision without actually convening,
provided that all of the directors entitled to participate in the
discussion and vote on the matter brought for decision agree thereto.
A resolution in writing signed unanimously by all the directors then
in office and lawfully entitled to vote thereon or to which all of the
directors have given their unanimous written consent (by letter,
e-mail, facsimile or otherwise) shall be deemed to have been adopted
by a meeting of the Board of Directors duly convened and held.
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25.7 Other than expressly provided in these Articles, the minutes of each
meeting of the Board of Directors, shall be signed by the Chairman of
the Board of Directors, or the Chairman of the meeting, as the case
may be.
25.8 At a vote of the Board of Directors, each director shall have one
vote.
25.9 Resolutions of the Board of Directors shall be carried by a simple
majority of the directors voting on any matter on the agenda.
25.10 Any action taken by or in accordance with a resolution of the Board
of Directors or by or in accordance with a decision of a Committee of
the Board of Directors or by a director acting in his capacity as
director is valid and effective even if it is subsequently discovered
that there was a defect in the appointment of the directors or the
election of the directors or if all or one of them was disqualified,
in each case as if each of the directors had been lawfully elected and
as if he was fully qualified to act as director, Alternate Director,
Corporate Representative or member of the said Committee, as the case
may be.
26. NOTICE OF MEETINGS OF THE BOARD OF DIRECTORS
26.1 Notice of a meeting of the Board of Directors shall be delivered to
each director verbally, by telephone, in writing or by any other means
of communication. If a director has appointed an Alternate for
himself, notice shall be delivered to the Alternate. Notice to a
director which is a corporation shall be delivered to the Corporate
Representative.
26.2 A notice convening a meeting of the Board of Directors shall include
reasonable particulars of all of the matters on the agenda, as well as
the place and time fixed for the meeting.
26.3 All of the directors may agree to waive prior notice of a meeting of
the Board of Directors.
27. AUTHORITIES OF THE BOARD OF DIRECTORS
27.1 The Board of Directors shall set the policy guidelines for the Company
and shall supervise the performance and activities of the General
Manager, and as part thereof it:
(a) shall determine the Company's plans of activity, the principles
of financing them and the order of priority among them;
33
(b) shall examine the Company's financial situation and set a
framework of credit which the Company may take;
(c) shall determine the organizational structure and the wage policy;
(d) may decide to issue a series of debentures;
(e) is responsible for the preparation and approval of the financial
reports;
(f) shall appoint and dismiss the General Manager of the Company;
(g) shall decide on the acts and transactions that require its
approval in accordance with these Articles or the Companies Law;
(h) may allocate shares and securities convertible into shares up to
the limit of the Company's registered share capital;
(i) may decide on a distribution;
(j) shall express its opinion on a special purchase offer.
27.2 Without prejudice to the generality of the aforesaid, the Board of
Directors shall be entitled to use all of its authorities and powers
and to carry out all the actions vested in it by law or by these
Articles.
27.3 The Board of Directors may exercise any authority of the Company which
has not been delegated by these Articles or by law to the General
Manager or to the General Meeting, and such authority shall be deemed
to have been delegated to the Board of Directors by these Articles.
27.4 The power of the Board of Directors shall be subject to the provisions
of any law, and to any article that shall be adopted by the Company in
General Meeting, provided that no such article shall invalidate any
action taken prior thereto by the Board of Directors or pursuant to a
decision thereof which would have been legally valid but for the
adoption of the said article.
27.5 The General Meeting may assume the authority vested in the Board of
Directors (including the authorities vested in the Board of Directors
in the absence of a General Manager) for a specific matter or for a
specific period of time.
27.6 For the purpose of exercising the general authorities vested in the
Board of Directors and without limiting or restricting in any way
whatsoever the said authorities or any of them, it is hereby expressly
stated that the Board of Directors shall have the following
authorities:
34
(a) From time to time to appoint one or more persons (whether or not
that person is a member of the Board of Directors) as a General
Manager or another Officer of the Company, either for a fixed
period of time or for an unlimited period of time, and from time
to time (bearing in mind the terms of any contract between the
Company and such person or persons) to dismiss him or them from
office and appoint another person or persons in his or their
place.
(b) Subject to any rule of law, to fix the remuneration of the
General Manager or of any other Officer from time to time
(bearing in mind the terms of any contract between the Company
and such person). Such remuneration may be in the form of a fixed
salary, payment based on the profits or turnover of the Company
or of any other company in which the Company is interested, or by
way of participation in such profits, or by way of receipt of
securities of the Company, or in one or more of these ways, or in
any other manner which the Board of Directors deems fit.
(c) To determine the remuneration of the auditor of the Company.
27.7 For the purpose of setting the policy guidelines for the Company and
supervising its activities, any director may examine the documents and
records of the Company and receive copies thereof, examine the assets
of the Company and receive professional advice at the expense of the
Company if the Board of Directors or the court approves the covering
of this expense.
28. REMUNERATION OF DIRECTORS
A director, (other than the Outside directors), an Alternate Director and a
Corporate Representative shall not be paid any remuneration by the Company
for their services as directors. However, they are entitled to receive from
the Company remuneration for their employment with the Company in other
functions, subject to the approvals required therefor, in accordance with
any law.
29. COMMITTEES OF THE BOARD OF DIRECTORS
29.1 The Board may delegate all or any of its powers, authorities and
responsibilities (except for those powers, authorities and
responsibilities which, under the Companies Law, the Board is unable
to delegate) to any committee consisting of such members of the Board
as the Board may, from time to time, think fit, subject to the
Companies Law, widen, curtail or revoke such delegation of powers,
authorities and responsibilities.
29.2 To the fullest extent permitted by law, the Board, after determining a
number of shares reserved for the issuance of shares, options or
warrants to the Company's employees, directors, and consultants, may
delegate the power to issue such options and shares to a committee of
the Board.
35
29.3 Any committee of the Board shall in the exercise of the power,
authorities and responsibilities so delegated conform to any
regulations that may be lawfully imposed on it by the Board.
29.4 The meetings and proceedings of a Committee of the Board shall be
governed by the provisions herein contained for regulating the
meetings and proceedings of the Board, so far as the same are
applicable thereto and are not lawfully suspended or superseded by any
regulations imposed by the Board.
29.5 The Board shall appoint an audit committee consisting of at least
three (3) members, the members of which and the authorities, powers
and responsibilities of which shall be governed by the Companies Law
and any other applicable law or rule.
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PART F: THE GENERAL MANAGER AND OTHER OFFICERS
30. THE GENERAL MANAGER
30.1 The Board of Directors of the Company shall appoint one or more
General Manager for the Company. If more than one General Manager is
appointed, the Board of Directors may determine that the authorities
of a General Manager be divided between the General Managers.
30.2 The General Manager shall have full managerial and operational
authority to carry out all of the activities which the Company may
carry on by law and under these Articles and which have not been
vested by law or by these Articles in any other organ of the Company.
The General Manager shall be subject to the supervision of the Board
of Directors.
30.3 The General Manager may, with the approval of the Board of Directors,
delegate his authority to another person who is subordinate to him.
30.4 The Board of Directors may decide to transfer any authority vested in
the General Manager to the Board of Directors, in a specific instance
or for a specific period of time.
31. SECRETARY AND OFFICERS
31.1 The Board of Directors may appoint a Secretary for the Company and
determine his duties and authorities. The Secretary, if appointed,
shall be subject to the Board of Directors and shall report to it.
31.2 Officers of the Company, except directors and the General Manager,
will be appointed and dismissed by the Board of Directors. The
conditions of service, employment and retirement of the said Officers
will be determined by the General Manager with the approval of the
relevant committee of the Board of Directors, unless it is determined
otherwise in any law or by the Board of Directors.
32. PERSONAL INTEREST IN TRANSACTIONS OF THE COMPANY
Any transaction which is not an Extraordinary Transaction and which is
(i) a transaction with an Officer or (ii) a transaction of the Company with
another person in which an Officer has a personal interest, may be approved
by the same organ authorized to approve such a transaction, assuming that
no party has a personal interest in it.
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33. INSURANCE, RELEASE AND INDEMNIFICATION OF OFFICERS
33.1 Subject to the provisions of the Companies law, the Company may
prospectively exculpate an Officer from all or some of the Officer's
responsibility for damage resulting from the Officer's breach of his
or her duty of care to the Company.
33.2 Subject to the provisions of the Companies Law, the Company may
indemnify an Officer to the maximum extent permitted by the law, in
respect of an obligation or expense specified below imposed on the
Officer or incurred by him in respect of an act performed in his
capacity as an Officer, as follows:
(i) a financial obligation imposed on him in favor of another person
by a court judgment, including a compromise judgment or an
arbitrator's award approved by court;
(ii) reasonable litigation expenses, including attorney's fees,
incurred by the Officer as a result of an investigation or
proceeding instituted against him by a competent authority,
provided that such investigation or proceeding concluded without
the filing of an indictment against the Officer and either (A)
concluded without the imposition of any financial liability in
lieu of a criminal proceeding; or (B) a financial liability was
imposed on him in lieu of a criminal proceeding for an offense
that does not require proof of criminal intent; and
(iii) reasonable litigation expenses, including attorney's fees,
expended by an Officer or charged to the Officer by a court, in a
proceeding instituted against the Officer by the Company or on
its behalf or by another person, or in a criminal charge from
which the Officer was acquitted, or in a criminal charge from
which the Officer was acquitted, or in a criminal proceeding in
which the Officer was convicted of an offense that does not
require proof of criminal intent.
The Company may undertake to indemnify an Officer as aforesaid, (aa)
prospectively, provided that in respect of Article 33.2(i), the
undertaking is limited to categories of events which in the opinion of
the Board of Directors are foreseeable in light of the Company's
actual activities at the time the undertaking to indemnify is given,
and for an amount or criteria which the Board of Directors has
determined are reasonable under the circumstances, and further
provided that such events and amount or criteria are stated in the
undertaking to indemnify, and (bb) retroactively.
33.3 Subject to the provisions of the Companies law, the Company may enter
into a contract for the insurance of all or a part of the liability of
any Officer imposed on the Officer in respect of an act performed in
his capacity as an Officer, in respect of each of the following:
38
(i) a breach of his duty of care to the Company or to another person;
(ii) a breach of his duty of loyalty to the Company, provided that the
Officer acted in good faith and had reasonable cause to assume
that such act would not prejudice the interests of the Company;
(iii) a financial obligation imposed on him in favor of another
person.
33.4 The provisions of Articles 26.1, 26.2 and 26.3 above are not intended
, and shall not be interpreted, to restrict the Company in any manner
in respect of the procurement of insurance and/or in respect of
indemnification (i) in connection with any person who is not an
Officer, including, without limitation, any employee, agent,
consultant or contractor of the Company who is not an Officer, and/or
(ii) in connection with any Officer to the extent that such insurance
and/or indemnification is not specifically prohibited under law;
provided that the procurement of any such insurance and/or the
revision of any such indemnification shall be approved by the Audit
Committee.
33.5 The provisions of this Article shall apply to a Corporate
Representative and an Alternate Director.
34. SIGNATURE RIGHTS
The signature rights in the name of the Company shall be determined by
the Board of Directors, generally, for a class of matters or for a specific
matter. Any signature in the name of the Company shall be accompanied by
the name of the Company. The authorized signatories do not have to be
directors.
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PART G: MINUTES, REGISTERS AND BOOKS OF ACCOUNTS
35. MINUTES
35.1 The Board of Directors shall ensure that records of the following
matters are duly maintained in books that shall be prepared for this
purpose:
(a) The names of members of the Board of Directors who are present at
any meeting of the Board of Directors and at any meeting of a
Committee of the Board of Directors (including any decision of
the Board of Directors or of its Committees which is adopted
without actually convening).
(b) The names of the registered shareholders participating in any
General Meeting.
(c) The instructions given by the Board of Directors to the
Committees of the Board of Directors.
(d) The proceedings at General Meetings, meetings of the Board of
Directors, and meetings of the Committees of the Board of
Directors, including resolutions adopted without actually
convening these meetings.
35.2 Any minute of a meeting of the Board of Directors or of any Committee
of the Board of Directors or of the General Meeting of the Company
which purports to be signed by the Chairman of the meeting or by the
Chairman of the next following meeting shall be prima facie evidence
of the matters stated therein.
36. BOOKS AND REGISTERS OF THE COMPANY
36.1 Each book, register and registration that the Company must maintain in
accordance with the provisions of the Companies Law or these Articles
shall be made in regular books or by electronic means, as the General
Manager shall determine, provided that the persons entitled to inspect
them are able to receive copies of the documents.
36.2 The Company may destroy any request for entering any change in the
Register seven years after the date of the change in the Register, and
there shall be a prima facie assumption that all requests for changes
in the Register were valid and that any action taken by virtue or as a
result thereof was lawfully taken.
36.3 Subject to any provision of law, the Company may determine the manner
and form in which documents which shareholders are entitled to inspect
are presented to them, and may decide that copies of documents be
provided against payment.
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PART H: AUDIT
37. AUDITOR
37.1 At least once in each calendar year, the financial statements of the
Company shall be audited by an auditor or auditors who will express
their opinion as to the financial statements.
37.2 The Company shall appoint at the Annual Meeting an auditor or auditors
to serve in this capacity until the following Annual Meeting, but the
General Meeting may appoint an auditor to serve for a longer period,
not extending beyond the end of the third Annual Meeting after the
appointment.
37.3 Subject to the provisions of the Companies Law, any act of the auditor
of the Company shall be valid with regard to any person acting in good
faith with the Company, notwithstanding any defect in the appointment
or qualification of the auditor.
37.4 The fees of the auditor shall be fixed by the Board of Directors. The
Board of Directors shall report at the Annual Meeting the fees of the
auditor so fixed.
37.5 The Board of Directors will notify the auditor of General Meetings and
of meetings of the Board of Directors in which the financial
statements audited by the auditor are presented, and the auditor shall
be entitled to attend such meetings.
38. INTERNAL AUDITOR
38.1 As long as the Company is a public company, the Company will have an
internal auditor, to be appointed by the Board of Directors in
accordance with the proposal of the Audit Committee.
38.2 The role and authorities of the internal auditor shall be as provided
in the Companies Law.
PART I: RESERVES, DISTRIBUTIONS AND BONUS SHARES
39. RESERVES
39.1 The Board of Directors may at any time allocate such amounts as it
sees fit from the surpluses (as defined in the Companies Law) to a
reserve for any purpose determined by it. Likewise, the Board of
Directors may direct the management of, and the uses to which, any
reserve or part thereof is put, including using of any reserve or part
thereof for the business of the Company, without need to maintain such
amount separate from the remaining assets of the Company.
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39.2 The Board of Directors may from time to time, subject to the
provisions of any law and the provisions of these Articles, change the
purpose for which any capital reserve has been designated or the
manner in which it is managed, to combine or split reserves and to
transfer the amount of any capital reserve to the surplus account or
to any other account in the accounting records of the Company.
Notwithstanding the aforesaid, the Board of Directors may not transfer
any amount from the share premium account other than to the share
capital of the Company or for the purposes of a distribution that does
not satisfy the profit test.
40. DISTRIBUTION OF DIVIDENDS AND BONUS SHARES
40.1 Subject to these Articles, the Company may declare and pay any
dividend or decide on a distribution permitted under the Companies
Law.
40.2 No dividend shall bear interest or linkage against the Company.
40.3 A dividend may be paid, in whole or in part, by way of distribution of
assets of any kind. A distribution of assets as aforesaid shall be
made by a transfer, assignment, transfer of title, grant of a
contractual or proprietary right or in any other manner as the Board
of Directors directs.
40.4 If the Board of Directors decides to distribute a dividend, in whole
or in part by way of an allotment of shares in the Company to those
shareholders entitled to the dividend, at a price lower than the
nominal value of those shares or to distribute bonus shares, the
Company shall convert to share capital a portion of its profits or of
its share premiums or of any other source included in the equity in
its last financial statements (all as defined in the Companies Law) in
an amount equal to the difference between the nominal value of the
said shares and the price paid therefor.
40.5 The Board of Directors may allot from time to time bonus shares and
determine the source of such distribution. Such bonus shares shall
form part of the share capital of the Company and shall be considered
to be fully paid in such amount, being not less than the nominal value
of the shares, as the Board of Directors shall direct. The said bonus
shares shall be allotted without payment to the shareholders of the
Company who would have been entitled to receive the amount converted
to share capital for the purpose of distribution of the bonus shares
if that amount had been distributed by way of cash dividend and in the
same proportion.
40.6 The Board of Directors may decide that bonus shares shall be of the
same class of shares as these shares which entitle the holders thereof
to participate in the distribution of bonus shares, or that all bonus
shares shall be of a single class which shall be distributed to all
persons entitled thereto without taking into account the class of
shares which they hold, or that bonus shares be a combination of
classes of shares.
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40.7 The Board of Directors may from time to time issue to the holders of
the Company's securities that are convertible into the Company's
shares, bonus shares or dividends as if the said securities had been
converted into shares prior to the distribution in question, in each
case subject to the terms of issue of the said securities.
The Board of Directors may make any arrangement and take any action
necessary for the efficient and speedy implementation of the
provisions of this Article, to determine the rights which the holders
of convertible securities receive and the manner in which they receive
these rights, and to carry out any necessary adjustment with respect
to the rights of the holders, in this respect. The Board of Directors
may exercise any authority granted to it in connection with the
distribution of a dividend or bonus shares or rights to the
shareholders in the Company, mutatis mutandis, all in the absolute
discretion of the Board of Directors.
In order to implement any resolution regarding the distribution of a
dividend or bonus shares or in connection with the acquisition of
securities of the Company, the Board of Directors may sign any
document and effect any arrangement which is, in the opinion of the
Board of Directors, necessary in order to enable or facilitate the
distribution, including the issuance of certificates for partial
shares or to decide that shares in the Company which entitle the
holder thereof to partial shares in an amount lower than the level
fixed by the Board of Directors shall not entitle the holder to
participate in that distribution, or to sell the partial shares and to
pay the net proceeds of sale (after deduction of the expenses of sale
and any tax that shall be payable in respect of the sale) to the
persons entitled thereto;
40.8 The Board of Directors may appoint a trustee or trustees ("the
Trustee") to hold dividends, bonus shares or any other right (together
"the Benefit") which the Company has issued or distributed to its
shareholders and which was not demanded by any of the shareholders.
Any action taken by the Trustee, and any agreement between the Board
of Directors and the Trustee shall be valid and shall bind the
shareholders in connection with the Benefit to which they are entitled
and for which the Trustee has been appointed.
40.9 The Trustee shall be appointed for the purpose of exercising,
collecting, receiving or depositing the Benefit, but the Trustee shall
not be entitled to transfer the Benefit or part thereof or to grant
any right in the Benefit or to make any use thereof. The Trustee shall
not be entitled to vote in respect of any securities of the Company
which are included in the Benefit.
40.10 The Trustee shall transfer the Benefit, including any income arising
thereon, less the Trustee's fee as settled by the Board of Directors,
to the shareholders entitled to the Benefit as soon as possible after
he receives the first written demand from the shareholders, subject to
authentication of the identity of any shareholder and details of the
Benefit to which he is entitled.
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40.11 If the payment of the dividend is not demanded within seven (7) years
from the date of the decision to distribute that dividend, the person
entitled thereto shall be deemed to have waived the dividend, and
ownership thereof shall return to the Company.
40.12 The Board of Directors may pay all dividends or money due in respect
of shares by sending checks in the mail, and if the Benefit is, in
whole or in part, an asset or a right, by sending by mail any document
confirming or creating the said right. Any check or document sent to
the address of the shareholder as appearing in the Register shall be
dispatched at the risk of the shareholder.
40.13 The transferee of any shares shall not be entitled to any dividend or
any other distribution with respect to such shares, which has been
declared after the date of transfer but before registration of the
transfer in the Register, and in the event of the transfer of shares
which is subject to the approval of the Board of Directors, before the
date of said approval.
40.14 The Board of Directors may deduct from any dividend, distribution or
other amounts which are to be paid to a shareholder (including to a
person who is one of the joint holders of a share) any amounts due
from such a person to the Company in his capacity as shareholder.
40.15 If there is a number of persons registered as joint holders of a
share, each one may give a valid receipt to the Company for any
Benefit granted in respect of that share.
41. BUY-BACK
A decision regarding the acquisition of securities which have been
issued by the Company and the manner in which these securities shall be
dealt with by the Company shall be taken by the Board of Directors.
PART J: NOTICES
42. NOTICES
42.1 Subject to these Articles, any notice to shareholders of the Company
shall be given in accordance with the provisions of the law.
42.2 Any written notice or other document may be served by the Company upon
any shareholder either personally or by sending it by prepaid mail
(air mail if sent internationally) or by cablegram, telex, facsimile
or email addressed to such shareholder at his address as described in
the Register or such other address as he may have designated in
writing for the receipt of notices and other documents. Such
designation may include a broker or other nominee holding shares at
the instruction of the shareholder. Proof that an envelope containing
a notice was properly addressed, stamped and posted shall be
conclusive evidence that notice is given. A declaration of an
authorized person on behalf of the stock transfer agent of the Company
or other distribution agent stating that a notice was mailed to a
shareholder will suffice as proof of notice for purposes of this
Article.
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42.3 Any written notice or other document may be served by any shareholder
upon the Company by tendering the same in person to the Secretary or
the General Manager at the Offices of the Company or by sending it by
any of the means provided for in Article 42.2 to the Company at its
Office.
42.4 Any notice or other document referred to above shall be deemed to have
been served 48 hours after it has been posted (seven days if sent
internationally), or 24 hours after sent by cablegram, telex,
facsimile or email. The date of mailing, publication or other method
of sending a notice and the date of the meeting shall be counted as
part of the days comprising any notice period. If a notice is, in
fact, received by the addressee, it shall be deemed to have been duly
served when received, notwithstanding that it was received sooner than
provided herein, defectively addressed or failed, in some other
respect, to comply with the provisions of this Article.
42.5 All notices to be given to the shareholders shall, with respect to any
share to which persons are jointly entitled, be given to whichever of
such persons in named first in the Register, and any notice so given
shall be sufficient notice to the holders of such share.
42.6 Any shareholder whose address is not described in the Register, and
who shall not have designated in writing an address for the receipt of
notices, shall not be entitled to receive any notice from the Company.
42.7 Notwithstanding anything to the contrary herein, notice by the Company
of a General Meeting which is published:
(i) in two daily newspapers in the State of Israel shall be deemed to
have been duly given on the date of such publication to any
shareholder whose address as registered in the Register (or as
designated in writing for the receipt of notices and other
documents) is located in the State of Israel.
(ii) in one daily newspaper in the City of New York and in one
international wire service shall be deemed to have been duly
given on the date of such publication to any shareholder whose
address as registered in the Register (or as designated in
writing for the receipt of notices and other documents) is
located outside the State of Israel.
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