EXHIBIT 3.1
THE COMPANIES LAW, 5759 - 1999
ARTICLES OF ASSOCIATION
OF
SHAMIR OPTICAL INDUSTRY LTD.
A COMPANY LIMITED BY SHARES
GENERAL
1. DEFINITION AND INTERPRETATION
1.1 The following terms in these Articles of Association shall have the
respective meanings ascribed to them below:
ARTICLES The Articles of Association of the Company, as set forth
herein and or as amended, from time to time.
BOARD The Board of Directors of the Company.
BUSINESS DAY Sunday to Thursday, inclusive, with the exception of
holidays and officials days of rest in the State of Israel.
COMPANIES LAW The Israeli Companies Law, 1999, as may be amended from time
to time, and any law replacing it
COMPANIES
REGULATIONS Regulations issued pursuant to the Companies Law.
LAW The provisions of any law as defined in the Interpretation
Law, 1981.
GENERAL
MANAGER the general manager of the Company pursuant to the Companies
Law which is known also by the term Chief Executive Officer
or CEO.
ORDINARY
MAJORITY More than fifty percent (50%) of the votes of the
Shareholders who are entitled to vote and who voted in a
General Meeting in person, by means of a proxy or by means
of a proxy card.
SECURITIES
LAW The Securities Law, 1968.
SECURITIES
REGULATIONS Regulations issued pursuant to the Securities Law.
SHAREHOLDER Anyone registered as a shareholder in the Shareholder
Register of the Company.
SPECIAL
MAJORITY A majority of at least three quarters (75%) of the votes of
the Shareholders who are entitled to vote and who voted in a
General Meeting, in person, by means of a proxy or by means
of a proxy card.
THE COMPANY Shamir Optical Industry Ltd., or any other name by which it
will be called, in the event of the Company replacing or
changing its name.
IN WRITING In script, in print, by means of a typewriter, photocopying,
telex, cable, facsimile, electronic mail or in any other
legible form, or which is produced in any other visual
substitute for writing, including a combination of two or
more methods, and "signed" shall be understood accordingly.
1.2 Unless the subject or the context otherwise requires, each word and
expression not specifically defined herein and defined in the
Companies Law as in effect on the date when these Articles or any
amendment hereto, as the case maybe first became effective, shall have
the same meaning herein, and to the extent that no meaning is attached
to it in the Companies Law, the meaning ascribed to it in the
Companies Regulations, and if no meaning is ascribed thereto in the
Companies Regulations, the meaning ascribed to it in the Securities
Law or Securities Regulations; words and expressions importing the
singular shall include the plural and vice versa; words and
expressions importing the masculine gender shall include the feminine
gender and vice versa; and words and expressions importing persons
shall include corporate entities.
1.3 The captions in these Articles are for convenience only and shall not
be deemed a part hereof or affect the construction of any provision
hereof.
1.4 The specific provisions of these articles supersede the provisions of
the companies Law to the extent permitted under the companies Law with
respect to any matter that is not specifically addressed in these
articles, the provisions of the companies Law shall govern.
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2. PUBLIC COMPANY
The Company is a public company.
3. THE PURPOSE AND OBJECTIVES OF THE COMPANY
The purpose of the Company is to engage, directly or indirectly, in any
lawful business activity or occupation whatsoever; provided, however, that
the Company may donate reasonable amounts to worthy causes, as the Board
may determine in its discretion, even if such donations are not within the
framework of business considerations.
4. LIMITED LIABILITY
The liability of each Shareholder for the company's obligations is limited
to the unpaid sum, if any, owing to the company in consideration for the
issuance of the shares allotted to him.
SHARE CAPITAL
5. SHARE CAPITAL
5.1 The authorized share capital of the Company is one million New Israeli
Shekels (NIS 1,000,000) divided into one hundred million Ordinary
Shares NIS 0.01 par value each.
5.2 The ordinary shares of the company confer on the holders thereof
rights to receive notice of, attend, and vote in meetings of the
shareholders, rights to receive dividends, rights to receive a
distribution of assets upon liquidation and certain other rights all
as specified in these Articles.
6. INCREASE OF SHARE CAPITAL
6.1 The Company may, from time to time, by a resolution of the General
Meeting adopted by an Ordinary Majority, whether or not all the shares
then authorized have been issued, and whether or not all the shares
theretofore issued have been called up for payment, increase its share
capital by the creation of new shares. Any such increase shall be in
such amount and shall be divided into shares of such nominal value,
and such shares shall confer such rights and preferences, and shall be
subject to such restrictions, as such resolution of the General
Meeting shall provide.
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6.2 Except to the extent otherwise provided in such resolution of the
General Meeting, such new shares shall be subject to all the
provisions applicable to the shares of the original capital.
7. SPECIAL RIGHTS; MODIFICATIONS OF RIGHTS
7.1 Without prejudice to any special rights previously conferred upon the
holders of existing shares in the Company, the Company may, from time
to time, by a resolution of the Board, issue shares with such
preferred or deferred rights or rights of redemption or other special
rights and/or restrictions, whether with respect to liquidation,
dividends, voting, conversion, repayment of share capital or
otherwise, as may be stipulated in such resolution.
7.2 If at any time the issued share capital is divided into different
classes of shares, the rights attached to any class, unless otherwise
provided by these Articles, may be modified or abrogated by the
Company, by a resolution of the General Meeting adopted by an Ordinary
Majority, subject to the consent of the holders of more than fifty
percent (50%) of the issued shares of such class or the sanction of a
resolution of a separate General Meeting of the holders of the shares
of such class adopted by an Ordinary Majority, except if no rights in
the Company are attached to that class of shares other than the
receipt of their par value on a winding-up of the Company ("DEFERRED
SHARES") and unless the issue terms of those shares provide otherwise.
7.3 Unless otherwise provided by these Articles, the increase of the
authorized number of shares of an existing class of shares, or the
issuance of additional shares thereof or the creation of a new class
of shares identical to an existing class of shares in all respects,
shall not be deemed, for purposes of this Article 7, to modify or
abrogate the rights attached to the previously issued shares of such
class or of any other class.
8. CONSOLIDATION. SUBDIVISION. CANCELLATION AND REDUCTION OF SHARE CAPITAL
8.1 The Company may, from time to time, by a resolution of the General
Meeting adopted by an Ordinary Majority (subject, however, to the
provisions of Articles 7.2 and 7.3 hereof and to the Companies Law):
8.1.1 Consolidate and divide all or any of its issued or unissued
share capital into shares of larger nominal value than its
existing shares;
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8.1.2 Subdivide its shares, issued or unissued, or any of them, into
shares of smaller nominal value than is fixed by these Articles,
subject to the provisions of the Companies Law, and the
resolution whereby any share is subdivided may determine that, as
among the holders of the shares resulting from such subdivision,
one or more of the shares may, as compared with the others, have
any such preferred or deferred rights or rights of redemption or
other special rights, or be subject to any such restrictions, as
the Company has power to attach to unissued or new shares.
8.1.3 Cancel any shares which, at the date of the adoption of such
resolution of the General Meeting, have not been allotted, so
long as the Company is not under an obligation to allot these
shares, and diminish the amount of its share capital by the
amount of the shares so cancelled; or
8.1.4 Reduce its share capital in any manner, subject to any
authorization or consent required by Law.
8.2 With respect to any consolidation of issued shares into shares of
larger nominal value, and with respect to any other action which may
result in fractional shares, the Board may settle any difficulty which
may arise with regard thereto, as it deems appropriate, including,
INTER ALIA, resort to one or more of the following actions:
8.2.1 Determine, as to the holder of shares so consolidated, which
issued shares shall be consolidated into each share of larger
nominal value;
8.2.2 Allot, in contemplation of or subsequent to such consolidation
or other action, such shares or fractional shares sufficient to
preclude or remove fractional share holdings;
8.2.3 Redeem, in the case of redeemable shares, and subject to
applicable Law, such shares or fractional shares sufficient to
preclude or remove fractional share holdings;
8.2.4 Cause the transfer of fractional shares by certain Shareholders
to other Shareholders so as to most expediently preclude or
remove any fractional shareholdings, and cause the transferees to
pay the transferors the fair value of the fractional shares so
transferred, and the Board is hereby authorized to act as agent
for the transferors and transferees with power of substitution
for purposes of implementing the provisions of this
Article 8.2.4.
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SHARES
9. ISSUANCE OF SHARE CERTIFICATES: REPLACEMENT OF LOST CERTIFICATES
9.1 Share certificates shall be issued under the seal or stamp of the
Company and shall bear the signature of a Director, or of any other
person or persons so authorized by the Board.
9.2 Each Shareholder shall be entitled to one numbered certificate for all
the shares of any class registered in his name, and if the Board so
approves, to several certificates, each for one or more of such
shares. Each certificate may specify the serial numbers of the shares
represented thereby and may also specify the amount paid up thereon.
9.3 A share certificate registered in the names of two or more persons
shall be delivered to the person first named in the Shareholder
Register in respect of such co-ownership ("THE FIRST CO-OWNER").
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 may deem
appropriate.
10. REGISTERED HOLDER
Except as otherwise provided in these Articles, the Company shall be
entitled to treat the registered holder of any share as the absolute owner
thereof, and, shall be entitled to treat the holder of any share in trust
as a Shareholder and to issue to him a share certificate, in condition that
the trustee notifies the Company of the identity of the beneficiary, and,
accordingly, shall not, except as ordered by a court of competent
jurisdiction, or as required by Law, be bound to recognize any equitable or
other claim to, or interest in, such share on the part of any other person.
11. ISSUANCE OF SHARES AND OTHER SECURITIES
11.1 The unissued shares from time to time shall be under the control of
the Board, which shall have the power to allot shares or otherwise
dispose of them to such persons, on such terms and conditions
(including INTER ALIA terms relating to calls as set forth in Article
13 ("Calls on Shares") hereof), and either at par or at a premium, or,
subject to the provisions of the Companies Law, at a discount, and at
such times, as the Board may deem appropriate, and the power to give
to any person the option to acquire from the Company any shares,
either at par or at a premium, or, subject as aforesaid, at a
discount, during such time and for such consideration as the Board may
deem appropriate.
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11.2 The Board may determine to issue a series of bonds or other debt
securities, as part of its authority or to take a loan on behalf of
the Company, and within the limits of such authority.
11.3 The Shareholders of the Company at any given time shall not have any
preemptive right or priority or any other right whatsoever with
respect to the acquisition of Securities of the Company. The Board, in
its sole discretion, may decide to offer Securities of the Company
first to existing Shareholders or to anyone or more of them.
11.4 The Company is entitled to pay a commission (including underwriting
fees) to any person, in consideration for underwriting services, or
the marketing or distribution of Securities of the Company, whether
reserved or unreserved, as determined by the Board. Payments, as
stated in this Article 11.4, may be paid in cash or in Securities of
the Company, or in a combination thereof or in any other manner.
12. PAYMENT IN INSTALLMENTS
If by the terms of issuance of any share, the whole or any part of the
price thereof shall be payable in installments, every such installment
shall, when due, be paid to the Company by the then registered holder(s) of
the share or the person(s) entitled thereto.
13. CALLS ON SHARES
13.1 The Board may, from time to time, make such calls as it may deem
appropriate upon Shareholders in respect of any sum unpaid in respect
of shares held by such Shareholders which is not, by the terms of
issuance thereof or otherwise, payable at a fixed time, and each
Shareholder shall pay the amount of every call so made upon him (and
of each installment thereof if the same is payable in installments),
to the person(s) and at the time(s) and place(s) designated by the
Board, as any such time(s) may be thereafter extended and/or such
person(s) or place(s) changed. Unless otherwise stipulated in the
resolution of the Board (and in the notice referred to in
Article 13.2), each payment in response to a call shall be deemed to
constitute a pro rata payment on account of all shares in respect of
which such call was made.
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13.2 Notice of any call shall be given in writing to the applicable
Shareholder(s) not less than fourteen (14) days prior to the time of
payment, specifying the time and place of payment, and designating the
person to whom such payment shall be made; provided, however, that
before the time for any such payment, the Board may, by notice in
writing to such Shareholder(s), revoke such call in whole or in part,
extend such time, or alter such designated person and/or place. In the
event of a call payable in installments, only one notice thereof need
be given.
13.3 If, by the terms of allotment of any share or otherwise, any amount is
made payable at any fixed time, every such amount shall be payable at
such time as if it were a call duly made by the Board and of which due
notice had been given, and all the provisions herein contained with
respect to calls shall apply to each such amount.
13.4 Any amount unpaid in respect of a call shall bear interest from the
date on which it is payable until actual payment thereof, at such rate
(not exceeding the then prevailing debitory rate charged by leading
commercial banks in Israel), and at such time(s) as the Board may
prescribe.
13.5 Upon the allotment of shares, the Board may provide for differences
among the allottees of such shares as to the amount of calls and/or
the times of payment thereof
13.6 The joint holders of a share shall be jointly and severally liable to
pay all calls in respect thereof and all interest payable thereon.
14. PREPAYMENT
With the approval of the Board, any Shareholder may pay to the Company any
amount not yet payable in respect of his shares, and the Board may approve
the payment of interest on any such amount until the same would be payable
if it had not been paid in advance, at such rate and time(s) as may be
approved by the Board. The Board may, at any time cause the Company to
repay all or any part of the money so advanced, without premium or penalty.
Nothing in this Article 14 shall derogate from the right of the Board to
make any call before or after receipt by the Company of any such advance.
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15. FORFEITURE AND SURRENDER
15.1 If any Shareholder fails to pay any amount payable in respect of a
call, or interest thereon as provided herein, on or before the day
fixed for payment of the same, the Company, by resolution of the
Board, may at any time thereafter, so long as such amount or interest
remains unpaid, forfeit all or any of the shares in respect of which
such call had been made. Any expense incurred by the Company in
attempting to collect any such amount or interest, including, INTER
ALIA, attorneys' fees and costs of suit, shall be added to, and shall,
for all purposes (including the accrual of interest thereon),
constitute a part of the amount payable to the Company in respect of
such call.
15.2 Upon the adoption of a resolution of forfeiture, the Board shall cause
notice thereof to be given to the Shareholder whose shares are the
subject of such forfeiture, which notice shall state that, in the
event of the failure to pay the entire amount so payable within a
period stipulated in the notice (which period shall not be less than
fourteen (14) days and which may be extended by the Board), such
shares shall be IPSO FACTO forfeited, provided, however, that, prior
to the expiration of such period, the Board may nullify such
resolution of forfeiture, but no such nullification shall estop the
Board from adopting a further resolution of forfeiture in respect of
the non-payment of such amount.
15.3 Whenever shares are forfeited as herein provided, all distributions
theretofore declared in respect thereof and not actually paid or
distributed shall be deemed to have been forfeited at the same time.
15.4 The Company, by resolution of the Board, may accept the voluntary
surrender of any share.
15.5 Any share forfeited or surrendered as provided herein shall become the
property of the Company, and the same, subject to the provisions of
these Articles, may be sold, re-allotted or otherwise disposed of as
the Board deems appropriate.
15.6 Any Shareholder whose shares have been forfeited or surrendered shall
cease to be a Shareholder in respect of the forfeited or surrendered
shares, but shall, notwithstanding, be liable to pay, and shall
forthwith pay, to the Company, all calls, interest and expenses owing
upon or in respect of such shares at the time of forfeiture or
surrender, together with interest thereon from the time of forfeiture
or surrender until actual payment, at the rate prescribed in Article
13.4 above, and the Board, in its discretion, may enforce the payment
of such moneys, or any part thereof, but shall not be under any
obligation to do so. In the event of such forfeiture or surrender, the
Company, by resolution of the Board, may accelerate the date(s) of
payment of any or all amounts then owing by the Shareholder in
question (but not yet due) in respect of all shares owned by such
Shareholder, solely or jointly with another, and in respect of any
other matter or transaction whatsoever.
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15.7 The Board may at any time, before any share so forfeited or
surrendered shall have been sold, re-allotted or otherwise disposed
of, nullify the forfeiture or surrender on such conditions as it deems
appropriate, but no such nullification shall estop the Board from
re-exercising its powers of forfeiture pursuant to this Article 15.
16. LIEN
16.1 Except to the extent the same may be waived or subordinated in
writing, the Company shall have a first and paramount lien upon all
the shares registered in the name of each Shareholder which are not
fully paid up (without regard to any equitable or other claim or
interest in such shares on the part of any other person), and upon the
proceeds of the sale thereof, for such shareholder's debts,
liabilities and engagements arising from any cause whatsoever, solely
or jointly with another, to or with the Company, whether the period
for the payment, fulfillment or discharge thereof shall have actually
arrived or not. Such lien shall extend to all distributions from time
to time declared in respect of such shares. Unless otherwise provided,
the registration by the company of a transfer of shares shall be
deemed to be a waiver on the part of the company of the lien (if any)
existing on such shares immediately prior to such transfer.
16.2 The Board may cause the Company to sell any shares subject to such
lien when any such debt, liability or engagement has matured, in such
manner as the Board may deem appropriate, but no such sale shall be
made unless such debt, liability or engagement has not been satisfied
within fourteen (14) days after written notice of the Company's
intention to sell shall have been served on such Shareholder, his
executors, administrators or assignees.
16.3 The net proceeds of any such sale, after payment of the costs thereof,
shall be applied in or toward satisfaction of the debts, liabilities
or engagements of such Shareholder (whether or not the same have
matured), or any specific part of the same (as the Board may
determine), and the balance, if any, shall be paid to the Shareholder,
his executors, administrators or assigns.
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17. SALE AFTER FORFEITURE OR SURRENDER OR IN ENFORCEMENT OF LIEN
Upon any sale of shares after forfeiture or surrender or for enforcing a
lien, the Board may appoint a person to execute a proper instrument of
transfer of the shares so sold and cause the purchaser's name to be entered
in the Shareholders Register in respect of such shares, and the purchaser
shall not be bound to see to the regularity of the proceedings, or to the
application of the purchase money, and after his name has been entered in
the Shareholder Register in respect of such shares, the validity of the
sale shall not be impeached by any person, and the remedy of any person
aggrieved by the sale shall be in damages only and against the Company
exclusively.
18. REDEEMABLE SHARES
The Company may, by resolution of the Board, issue redeemable securities
and the provisions of section 312 of the Companies Law will apply to the
issue of such securities. The Board shall determine which securities of the
redeemable securities shall be redeemed, from time to time, and it shall
furnish written notice thereof of at least 14 days to the holders of the
above-mentioned securities, regarding the place, the date and the
conditions of the redemption.
19. TRANSFER OF SHARES
19.1 No transfer of shares shall be registered unless the Company receives
a deed of transfer or other proper instrument of transfer (in form and
substance satisfactory to the Board), together with any share
certificate(s). Until the transferee has been registered in the
Shareholders Register in respect of the shares so transferred, the
Company may continue to regard the transferor as the owner thereof.
The Board may, from time to time, prescribe a reasonable fee for
registration of a transfer. A Deed of Transfer shall be in the
following form or in any substantially similar form, including any
such form as is acceptable to the transfer agent for the Company's
shares, or in any form otherwise approved by the board.
DEED OF TRANSFER
"I,__________, (hereinafter: "The Transferor") of, _________, do hereby
transfer, in consideration for _____________,to ___________(hereinafter:
"The Transferee"),_________share(s) NIS __ par value each of Shamir Optical
Industry Ltd. (hereinafter: "The Company") to be held by the Transferee
and/or his executors, administrators and assigns, subject to the same terms
and conditions under which I held the same at the time of execution hereof;
and I, the said Transferee, do hereby agree to take the said share(s)
subject to the conditions aforesaid.
In witness whereof we hereby execute this Deed of Transfer, this _day of
______20__."
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The Transferee The Transferor
Name: _______ Name: _______
Signature: Signature:
Witness to Signature Witness to Signature
Name: _______ Name: _______
Signature: Signature:
19.2 The transfer of shares which were not fully paid for, or shares on
which the Company has a lien, shall have no validity unless approved
by the Board, which may, in its absolute discretion and without giving
any reason thereto, decline the registration of such transferor impose
conditions on the transfer.
19.3 The board may suspend the registration of transfers for such periods
as it deems appropriate, and no such transfers shall be registered
during any period in which the shareholders is so closed, provided
such periods shall not exceed 30 days each year and provided that no
such suspension shall take place in any 14 days precluding the recode
date for any general meeting or to any distribution.
19.4 Upon the death of a Shareholder
19.4.1 In case of a share registered in the names of two or more
holders, the Company may recognize the survivor(s) as the sole
owner(s) thereof.
19.4.2 Any person becoming entitled to a share in consequence of the
death of any person, upon producing evidence of the grand of
probate or letters of administration or deceleration 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 shareholder in respect of such
shares, or may, subject to the regulations as to transfer herein
contained, transfer such share.
19.5 The Company may recognize the receiver or liquidator of any corporate
Shareholder in liquidation or dissolution, or the receiver or trustee
in bankruptcy of any Shareholder, as being entitled to the shares
registered in the name of such Shareholder, after receipt of evidence
to the entitlement thereto, as determined by the Board.
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19.6 A person acquiring a right in shares as a result of being a custodian,
administrator of the estate, executor of a will or the heir of a
Shareholder, or a receiver, liquidator or a trustee in a liquidation,
dissolution or bankruptcy of a Shareholder or according to another
provision of Law, is entitled, after producing evidence of his right
to the satisfaction of the Board, to be registered as the Shareholder
or to transfer such shares to another person, subject to the
provisions of this Article 19.
20. BEARER SHARE
The Company shall not issue bearer shares.
GENERAL MEETINGS
21. ANNUAL MEETING
An annual General Meeting shall be held once in every calendar year at such
time within a period of not more than fifteen (15) months after the last
preceding annual General Meeting and at such place either within or outside
of the State of Israel as may be determined by the Board. These General
Meetings shall be referred to as "Annual Meetings."
22. EXTRAORDINARY MEETINGS
22.1 All General Meetings other than Annual Meetings shall be referred to
as "Extraordinary Meetings".
22.2 The Board may, whenever it deems appropriate, convene an Extraordinary
Meeting at such time and place, within or outside of the State of
Israel, as may be determined by the Board, and shall be obliged to do
so upon the demand in writing of one of the following:
22.2.1 Any two Directors or a quarter of the Directors, whichever is
lower; or
22.2.2 One or more Shareholders, holding alone or together at least
ten percent (10%) of the issued share capital of the Company, and
at least one percent (1%) of the voting rights in the company; or
22.2.3 One or more Shareholders holding at least ten percent (10%) of
the voting rights in the company. The demand shall set forth the
reasons for convening of the meeting and shall be delivered to
the registered office of the Company.
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22.3 The Board, upon demand to convene an Extraordinary Meeting in
accordance with Article 22.2.2 above, shall announce the convening of
the General Meeting within twenty one (21) days from the receipt of a
demand in that respect; provided, however, that the date fixed for the
Extraordinary Meeting shall not be more than thirty five (35) days
from the date of the announcement of the Extraordinary Meeting, or
such other period as may be permitted by the Companies Law or
Companies Regulations.
23. CLASS MEETINGS
The provisions of these Articles of Association with respect to General
Meetings shall apply, MUTATIS MUTANDIS, to meetings of the holders of a
class of shares of the Company (hereinafter: "Class Meetings"); provided,
however, that the requisite quorum at any such Class Meeting shall be one
or more Shareholders present in person, by proxy or by proxy card, and
holding together not less than fifty percent (50%) of the issued shares of
such class.
24. NOTICE OF GENERAL MEETINGS
24.1 The Company is not required to give notice under section 69(b) of the
Companies Law.
24.2 General Meeting requires prior notice of at least 21 days.
PROCEEDINGS AT GENERAL MEETINGS
25. THE AGENDA OF GENERAL MEETINGS
25.1 The agenda OF General Meetings shall be determined by the Board and
shall also include issues for which an Extraordinary Meeting is being
convened in accordance with Article 22 above, or as otherwise may be
required in accordance with the provisions OF the Companies Law.
25.2 The General Meeting shall only adopt resolutions on issues or act upon
items which are on its agenda.
25.3 The General Meeting is entitled to accept or reject a proposed
resolution which is on the agenda OF the General Meeting. Subject to
applicable Law, the General Meeting may adopt a resolution which is
different from the description thereof included in the announcement of
the General Meeting, provided that such resolution is not materially
different from the proposed resolution.
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25.4 Any Shareholder entitled to be present and vote in a General Meeting
may bring any proposal with respect to any of the matters on the
agenda of such General Meeting, provided however the Shareholder
submits his written proposal specifying his intention to present it to
the General Meeting at the Company's Registered office, within three
(3) days of the announcement of the convening of the General Meeting.
26. QUORUM
26.1 No business shall be transacted at a General Meeting, or at any
adjournment thereof, unless alawful quorum is present when the meeting
proceeds to business.
26.2 Subject to the requirements of the Companies Law, the rules of Nasdaq
National Market and any other exchange on which the Company's
securities are or may become quoted or listed, and the provisions of
these Articles, any two or more Shareholders (not in default in
payment of any sum referred to in Article 13 hereof), present in
person or by proxy, or who have delivered to the Company proxy card
indicating their manner of voting, and who hold or represent shares
conferring in the aggregate at least thirty-three and one-third
percent (33 1/3%) of the voting power of the Company, shall constitute
a lawful quorum at General Meetings. A Shareholder or his proxy, who
also serves as a proxy for other Shareholder(s), shall be regarded as
two or more Shareholders, in accordance with the number OF
Shareholders he is representing.
26.3 If within an hour from the time appointed for the General Meeting a
quorum is not present, the meeting, if convened by the Board upon
demand under Article 22.2 or, if not convened by the Board, if
convened by the persons making or court demanding in accordance with
the provisions OF the Companies Law, shall be dissolved, but in any
other case it shall stand adjourned to the same day in the next week,
at the same time and place, or to such day and at such time and place
as the Chairman may determine with the consent OF the holders OF a
majority OF the voting power represented at the meeting in person or
by proxy and voting on the question OF adjournment. No business shall
be transacted at any adjourned meeting except business which might
lawfully have been transacted at the meeting as originally called. At
such adjourned meeting, any number of Shareholders present in person
or by proxy or by proxy card, shall constitute a lawful quorum.
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27. CHAIRMAN
The Chairman of the Board shall preside as Chairman at every General
Meeting. If there is no such Chairman, or if the Chairman is not present
within fifteen (15) minutes after the time fixed for holding such meeting
or is unwilling to act as Chairman, the Shareholders present shall choose
someone of their number or any other person to be Chairman. The position of
Chairman shall not, by itself, entitle the holder thereof to vote at any
General Meeting nor shall it entitle such holder to a second or casting
vote (without derogating, however, from the rights of such Chairman to vote
as a Shareholder or proxy of a Shareholder if, in fact, he is also a
Shareholder or proxy, respectively).
28. ADJOURNED MEETING
A General Meeting at which a lawful quorum is present (hereinafter: "The
Original General Meeting"), may resolve by an Ordinary Majority to adjourn
the General Meeting, from time to time, to another time and/or place
(hereinafter: an "Adjourned Meeting"). In the event that a General Meeting
is adjourned for twenty one (21) days or more, a notice of the Adjourned
Meeting shall be given in the same manner as the notice of the Original
General Meeting. With the exception of the aforesaid, a Shareholder shall
not be entitled to receive a notice of an Adjourned Meeting or of the
issues which are to be discussed in the Adjourned Meeting. The Adjourned
Meeting shall only discuss issues that could have been discussed at the
Original General Meeting, and with respect to which no resolution was
adopted.
29. ADOPTION OF RESOLUTIONS AT GENERAL MEETINGS
29.1 Except with respect to matters which require the approval of a special
majority under the Companies Law or these Articles, all resolutions of
the General Meeting, shall be deemed adopted if approved by an
Ordinary Majority. A resolution of the General Meeting approving an
amendment to these Articles shall be deemed adopted only if approved
by Special Majority.
29.2 Every matter submitted to a General Meeting shall be decided by a show
of hands, but if a written ballot is demanded by any Shareholder
present in person, by proxy or by proxy card and entitled to vote at
the meeting, the same shall be decided by such ballot. A written
ballot may be demanded before the proposed resolution is voted upon or
immediately after the declaration by the Chairman of the results of
the vote by a show of hands. If a vote by written ballot is taken
after such declaration, the results of the vote by a show of hands
shall be of no effect, and the proposed resolution shall be decided by
such written ballot. The demand for a written ballot may be withdrawn
at any time before the same is conducted, in which event another
Shareholder may then demand such written ballot. The demand for a
written ballot shall not prevent the continuance of the meeting for
the transaction of business other than the question on which the
written ballot has been demanded.
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29.3 A declaration by the Chairman of the meeting that a resolution has
been adopted unanimously, or adopted by a particular majority, or
rejected, and an entry to that effect in the minute book of the
Company, shall be conclusive evidence of the fact without proof of the
number or proportion of the votes recorded in favor of or against such
resolution.
30. POWER TO ADJOURN
(a) The Chairman of a General Meeting at which a quorum is present may,
with the consent of the holders of a majority of the voting power
represented in person or by proxy and voting on the question of adjournment
(and shall if so directed by the meeting), adjourn the meeting from time to
time and from place to place, but no business shall be transacted at any
adjournment meeting except business which might lawfully have been
transacted at the meeting as originally called. (b) It shall not be
necessary to announce an adjournment, unless the meeting is adjourned for
thirty (30) days or more in which event announcement thereof shall be given
in the manner required for the meeting as originally called.
31. VOTING POWER
Subject to the provisions of Article 32.1 and subject to any provision
hereof conferring special rights as to voting, or restricting the right to
vote, every Shareholder shall have one vote for each share held by him of
record, on every resolution, without regard to whether the vote thereon is
conducted in person, by proxy or by proxy card, by a show of hands, by
written ballot or by any other means.
32. VOTING RIGHTS
32.1 No Shareholder shall be entitled to vote at any General Meeting (or be
counted as a part of the lawful quorum thereat), unless all calls and
other sums then payable by him in respect of his shares in the Company
have been paid, but this Article shall not apply to Class Meetings
pursuant to Article 23.
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32.2 A company or other corporate entity being a Shareholder of the Company
may authorize any person to be its representative at any General
Meeting. Any person so authorized shall be entitled to exercise on
behalf of such Shareholder all the power which the latter could have
exercised if it were an individual shareholder. Upon the request of
the Chairman of the General Meeting, written evidence of such
authorization (in form acceptable to the Chairman) shall be delivered
to him.
32.3 Any Shareholder entitled to vote may vote either personally (or, if
the Shareholder is a company or other corporate entity, by a
representative authorized pursuant to Article 32.2) or by proxy
(subject to Article 34 below), or by proxy card.
32.4 The Board may determine, in its discretion, matters that may be voted
upon at the meeting by proxy card in addition to the matters listed in
section 87(a) to the Companies Law.
32.5 If two or more persons are registered as joint holders of any share,
the vote of the senior who tenders a vote, in person, by proxy or by
proxy card, shall be accepted to the exclusion of the vote(s) of the
other joint holder(s), and for this purpose seniority shall be
determined by the order in which the names stand in the Shareholder
Register.
33. THE RECORD DATE WITH RESPECT TO PARTICIPATION AND VOTING
The Shareholders who are entitled to participate and vote at a General
Meeting shall be those Shareholders who are registered in the Shareholder
Register of the Company on the date determined by the Board, provided that
such date is not be more than twenty one (21) days, nor less than four (4)
days, prior to the date of the General Meeting, except as otherwise
permitted by the Companies Law or the Companies Regulations.
PROXIES
34. VOTING BY MEANS OF A PROXY
34.1 A Shareholder is entitled to appoint by deed of authorization a proxy
(who is not required to be a Shareholder of the Company) to
participate and vote in his stead, whether at a certain General
Meeting or generally at General Meetings of the Company (e.g, until
the occurrence of such date or event as is specified in the deed of
authorization), whether personally, by proxy or by means of a proxy
card.
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34.2 In the event that the deed of authorization is not limited to a
certain General Meeting, then the deed of authorization, which was
deposited prior to a certain General Meeting, shall also be good for
other General Meetings thereafter, subject to the terms of the deed of
authorization. This Article 34 shall also apply to a Shareholder
which is a corporation, appointing a person to participate and vote in
a General Meeting in its stead.
35. A DEED OF AUTHORIZATION
35.1 The deed of authorization shall be in writing and shall be
substantially in the form specified below, or in any usual or common
form or in such other form as may be approved by the Board. It shall
be duly signed by the appointer or his duly authorized attorney or, if
such appointer is a company or other corporate entity, under its
common seal or stamp or the hand of its duly authorized agent(s) or
attorney(s). signed by the appointing shareholder or by his attorney
duly authorized in writing, and shall be in the following form or any
form similar thereto:
SHAMIR OPTICAL INDUSTRY LTD ("THE COMPANY")
I, _________________ OF _________________ BEING A SHAREHOLDER OF THE
COMPANY HEREBY APPOINT MR. _________________ OF _________________ OR, IN
HIS ABSENCE, MR. _________________ OF _________________ AS PROXY TO VOTE
FOR ME AND ON MY BEHALF AT THE GENERAL (ORDINARY OR SPECIAL) MEETING OF THE
COMPANY (AS THE CASE MAY BE) TO BE CONVENED ON THE _____ DAY OF
_________________ AND AT EVERY ADJOURNMENT THEREOF.
SIGNED THIS ____ DAY OF _________________".
(Signature of Appointer)
35.2 The deed of authorization (and the power of attorney or other
authority, if any, under which such instrument has been signed) shall
either be delivered to the Company (at its registered office, or at
its principal place of business, or at the office of its registrar
and/or transfer agent or at such place as the Board may specify) not
less than two (2) hours (or not less than twenty four (24) hours with
respect to a General Meeting to be held outside of Israel) before the
time fixed for the meeting, at which the person named in the deed of
authorization proposes to vote, or presented to the Chairman at such
meeting.
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36. EFFECT OF DEATH OF APPOINTER OR REVOCATION OF APPOINTMENT
A vote cast pursuant to a deed of authorization shall be valid
notwithstanding the previous death, incapacity or bankruptcy, or if a
company or other corporate entity, the liquidation, of the appointing
Shareholders (or of his attorney-in fact, if any, who signed such
instrument), or the revocation of the appointment provided no written
notice of any such event shall have been received by the Company or by the
Chairman of the General Meeting before such vote is cast and provided,
further, that the appointing Shareholder, if present in person at said
General Meeting, may revoke the appointment by means of a written or oral
notification to the Chairman, or otherwise.
37. THE DISQUALIFICATION OF PROXY CARDS AND DEED OF AUTHORIZATION
Subject to the provisions of applicable Law, the corporate secretary of the
Company and/or the Chairman of the Board may, in his discretion, disqualify
proxy card and deed of authorization and so notify the Shareholder who
submitted a proxy card or deed of authorization in the following cases:
37.1 If there is a reasonable suspicion that they are forged or falsified;
37.2 If they are not duly executed or completed, as set forth in Article
35.1 above, if applicable
37.3 If they are given with respect to shares for which one or more proxy
cards or deeds of authorization have been given and not withdrawn;
37.4 If more than one choice is marked for the same resolution; or
37.5 With respect to resolutions which require that the majority for their
adoption include a certain percentage of those not having a personal
interest in the approval of the resolution, where it was not marked,
or otherwise notified to the Company, whether or not the relevant
Shareholder has a personal interest.
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BOARD OF DIRECTORS
38. THE AUTHORITY OF THE BOARD
38.1 The authority of the Board is as specified in the Companies Law and in
the provisions of these Articles. Without derogating from the
generality of the aforesaid, The management of the business of the
Company shall be vested in the Board, 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 by this Article 38 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 which would have been valid if
such regulation or resolution had not been adopted.
38.2 Without derogating from the generality of Articles 38.1 above, the
Board's authority shall include the following:
38.2.1 The Board 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
deems appropriate, including, without limitation, by the issuance
of bonds, perpetual or redeemable debentures or other securities,
or any mortgages, charges, or other liens on the undertaking or
the whole or any part of the property of the Company, both
present and future, including its uncalled or called but unpaid
capital.
38.2.2 Subject to the provisions of Article 35 below and subject to
the provisions of any applicable law, the Board may, from time to
time, set aside any amount(s) out of the profits of the Company
as a reserve or reserves for any purpose(s) which the Board, in
its sole discretion, shall deem appropriate, and may invest any
sum so set aside in any manner and from time to time deal with
and vary such investments, and dispose of all or any part
thereof, and employ any such reserve or any part thereof in the
business of the Company without being bound to keep the same
separate from other assets of the Company, and may subdivide or
re-designate any reserve or cancel the same or apply the funds
therein for another purpose, all as the Board may from time to
time deem appropriate.
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38.2.3 Subject to the provisions of any Law, the Board may, from time
to time, authorize any person to be the representative of the
Company with respect to those objectives with such powers,
discretions and authorities subject to those conditions and for
that time period, as the Board deems appropriate, and any such
appointment may contain such provisions for the protection and
convince of persons dealing with such representative as the board
may deem it and may also grant any such representative the
authority to delegate any or all of the authorities, powers and
discretions vested in him by the Board.
38.2.4 The Board may, at any time in its sole discretion, adopt
protective measures to prevent or delay a coercive takeover of
the company, including without limitation the adoption of a
"Shareholder Rights Plan".
39. BOARD MEETINGS
39.1 CONVENING MEETINGS OF THE BOARD
39.1.1 The Chairman of the Board may convene a meeting of the Board at
any time; provided that a meeting of the Board be convened at
least once every three (3) months.
39.1.2 The Chairman of the Board shall convene a meeting of the Board
at any time or in any event that such meeting is required by the
provisions of the Companies Law.
39.2 NOTICE OF A MEETING OF THE BOARD
39.2.1 Any notice with respect to a meeting of the Board may be given
orally or in writing, so long as the notice is given at least
seven (7) days prior to the date fixed for the meeting, unless
all members of the Board or their Alternate Directors (as
described in Article 41 below) or their representatives agree on
a shorter time period. Such notice shall be delivered personally,
by mail, or transmitted via facsimile or e-mail or through
another means of communication, to the address, facsimile number
or to the e-mail address or to an address where messages can be
delivered through other means of communication, as the case may
be, as the Director or its alternate informed the Company in
advance.
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39.2.2 A notice with respect to a meeting of the Board shall include
the venue, date and time of the meeting of the Board, the issues
on its agenda and any other material that the Chairman of the
Board requests to be included in the notice with respect to the
meeting.
39.3 THE AGENDA OF BOARD MEETINGS
The agenda of any meeting of the Board shall be as determined by the
Chairman of the Board, and shall include the following matters:
39.3.1 Matters for which the meeting is required to be convened in
accordance with the Companies Law;
39.3.2 Any matter requested by a Director or by the Chief Executive
Officer to be included in the agenda of the meeting within at
least 24 hours (taking into account the nature of the matter)
prior to the meeting;
39.3.3 Any other matter determined by the Chairman of the Board.
39.4 QUORUM
Unless otherwise unanimously decided by the Board, a quorum at a
meeting of the Board shall be constituted by the presence of two
thirds (2/3) of the members of the Board then in office who are
lawfully entitled to participate in the meeting (as conclusively
determined by the Chairman of the Board), but shall not be less than
two Directors.
39.5 CONDUCTING A MEETING THROUGH MEANS OF COMMUNICATION
The Board may conduct a meeting of the Board through the use of any
means of communication, provided all of the participating Directors
can hear each other simultaneously. A resolution approved by use of
means of communications as aforesaid, shall be deemed to be a
resolution lawfully adopted at a meeting of the Board.
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39.6 VOTING IN THE BOARD
Unless otherwise provided by these Articles, issues presented at
meetings of the Board shall be decided upon by a majority of the votes
of Directors present (or participating, in the case of a vote through
a permitted means of communications) and lawfully voting thereon (as
conclusively determined by the Chairman of the Board). Subject to the
provision of Article 41.2 below, with respect to representatives of
Directors that are companies, each Director shall have a single vote.
39.7 WRITTEN RESOLUTION
A resolution in writing signed by all Directors then in office and
lawfully entitled to vote thereon (as conclusively determined by the
Chairman of the Board) or to which all such Directors have given their
consent (by letter, telegram, telex, facsimile, e-mail or other
written forms), or their oral consent by telephone (provided that a
written summary thereof has been approved and signed by the Chairman
of the Board), shall be deemed to have been unanimously adopted by a
meeting of the board duly convened and held. In the event of the
adoption of a resolution pursuant to this article, the Chairman of the
Board shall state in the minutes the manner in which each Director
voted in the resolution and the fact that all Directors consented to
the adoption of a resolution without the convening of a meeting.
40. THE APPOINTMENT OF DIRECTORS
40.1 The Number of Directors
The Board shall consist of such number of Directors, not less than two
(2) nor more than eleven (11) (including two External Directors, as
defined by the Companies Law).
40.2 Classes & Term of Directors Office
The Directors on the Board, other than the External Directors, are
divided into three classes, Class A, Class B and Class C consisting of
up to 3 Directors each.
The term of office of the directors assigned to Class A will expire at
the Company's second Annual Meeting, and at each third succeeding
Annual Meeting thereafter.
The term of office of the directors assigned to Class B will expire at
the third annual meeting of shareholders and at each third succeeding
Annual Meeting thereafter.
The term of office of the directors assigned to Class C will expire at
the forth annual meeting of shareholders and at each third succeeding
Annual Meeting thereafter.
External Directors shall be elected and serve terms in accordance with
the Companies Law.
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40.3 DIRECTORS GENERALLY
40.3.1 Subject to the provisions of the Companies Law, a Director may
hold another position in the Company.
40.3.2 A company or other corporate entity may serve as a Director in
the Company.
40.3.3 The Board shall include External Directors as may be required
to comply with the requirements of the Companies Law, the Nasdaq
Stock Market or any other securities exchange on which the
securities of the Company are or may become quoted or listed.
40.4 THE ELECTION OF DIRECTORS AND THEIR TERMS OF OFFICE
40.4.1 Directors (other than the External Directors) shall be elected
only at Annual Meetings, unless other provided in these Articles,
and shall so serve until the expiration of their term of office
pursuant to these Articles. A Director whose office is terminated
shall be eligible for re-election (subject to the provisions of
the Companies Law applicable to External Directors). The Annual
Meeting and in the case of External Directors and directors
appointed pursuant to Article 42 also the General meeting, at
the time of election of a Director, shall classify such Director
to Class A, Class B or Class C as set forth above, subject
however to the provisions of the Companies Law.
40.4.2 The Annual Meeting may elect any person(s) as Director(s) if
such person served as a Director up until the date of the Annual
Meeting, if such person was nominated by the Board or if such
person was nominated by a Shareholder in accordance with Article
40.4.1 above.
40.4.3 The Annual Meeting shall not be entitled to remove from office
any Director.
40.4.4 Deleted.
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40.4.5 Except for External Directors, the General Meeting may elect
any person or persons as a Director(s), to fill an office which
became vacant to the same class of directors and the same
duration of office which would have been applicable to the
Director whose office became vacant, had his/her office would not
have been terminated.
40.4.6 In addition to the aforesaid, and subject to the provisions of
the Companies Law with respect to External Directors, the office
of a Director shall vacate with the occurrence of one or more of
the events listed in section 228 of the Companies Law (with the
exception of section 230 of the Companies Law which shall not
apply) as well as in the event the Director dies, is declared by
the court to be incapable or, in the event of a company or
another corporate entity upon adaptation of a resolution for its
voluntary liquidation or the issuance of a liquidation order.
40.4.7 (a) Notwithstanding anything to the contrary herein, the term
of a Director may commence of a date later than the date of the
Shareholders Resolution electing said Director, is so specified
in said Shareholders Resolution. (b) The election and removal of
External Directors shall be governed by the Companies Law,
provided, however, that the company shall not have more than
three "External Directors".
41. ALTERNATE DIRECTORS AND REPRESENTATIVE OF A DIRECTOR THAT IS A COMPANY
41.1 ALTERNATE DIRECTORS
41.1.1 Subject to the provisions of the Companies Law, any Director
may, by written notice to the Company, appoint an alternate for
himself (in these Articles, an "Alternate Director"), dismiss
such Alternate Director and appoint another Alternate Director in
place of any Alternate Director appointed by him whose office has
been vacated for any reason whatsoever, whether for a certain
meeting or a certain period of time or generally. Any notice
given to the Company pursuant to this Article shall be in
writing, delivered to the Company and signed by the appointing or
dismissing Director, and shall become effective on the date fixed
therein, or upon the delivery thereof to the Company, whichever
is later.
41.1.2 Anyone who is not qualified to be appointed as a Director
and/or anyone serving as a Director or as an existing Alternate
Director may not be appointed and may not serve as an Alternate
Director.
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41.2 REPRESENTATIVE OF A DIRECTOR THAT IS A COMPANY
41.2.1 A Director that is a company or other corporate entity shall
appoint an individual, qualified to be appointed as a Director in
the Company, in order to serve on its behalf, either for a
certain meeting or for a certain period of time or generally and
such company or other entity may also dismiss that individual and
appoint another in his stead (hereinafter: "Director's
Representatives"). Any notice given to the Company pursuant to
this Article shall be in writing, delivered to the Company and
signed by the appointing or dismissing body, and shall become
effective on the date fixed therein, or upon the delivery thereof
to the Company, whichever is later.
41.2.2 Subject to Article 41.2.1, any person, whether or not a
Director may serve as a Director's Representative. One person may
act as a Director's Representative of several Directors, and in
such event he shall have a number of votes (and shall be treated
as the number of persons for purposes of establishing a quorum)
equal to the number of Directors for whom he acts as a Director's
Representative. If a Director's Representative is also a Director
in his own right, his rights as a Director's Representative shall
be in addition to his rights as a Director.
41.3 PROVISIONS WITH RESPECT TO ALTERNATE DIRECTORS AND DIRECTOR'S
REPRESENTATIVES
41.3.1 An Alternate Director and a Director's Representative shall
have all the authority of the Director who appointed him,
provided, however, that he may not in turn appoint an alternate
or a representative for himself (unless the instrument appointing
him otherwise expressly provides), and provided further that an
Alternate Director and a Director's Representative shall have no
standing at any meeting of the Board or any committee thereof
while the Director who appointed him is present.
41.3.2 The office of an Alternate Director or a Director's
Representative shall be vacated under the circumstances, MUTATIS
MUTANDIS, set forth in Article 40.4.6, and such office shall
IPSO FACTO be vacated if the Director who appointed such
Alternate Director or Director's Representative ceases to be a
Director.
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42. CONTINUING DIRECTORS IN THE EVENT OF VACANCIES
In the event of one or more vacancies in the Board, the continuing
Directors may continue to act in every matter; provided, however, that if
the number of continuing Directors is less than the minimum number provided
for pursuant to Article 40.1 hereof, and unless the vacancy or vacancies
is filled by the General Meeting pursuant to Article 40.4.5, they may only
act for the convening of a General Meeting for the purpose of electing
Director(s) to fill any or all vacancies.
43. PERSONAL INTEREST OF A DIRECTOR
Subject to compliance with the provisions of the Companies Law and the
Nasdaq rules, the Company may enter into any contract or otherwise transact
any business with any Director and may enter into any contract or otherwise
transact any business with any third party in which contract or business a
Director has a personal interest, directly or indirectly.
44. COMMITTEES OF THE BOARD OF DIRECTORS
44.1 Subject to the provisions of the Companies Law, the Board may delegate
its authorities or any part of thereof to committees, as it deems
appropriate, and it may from time to time cancel the delegation of any
such authority. Any such committee shall, in the exercise of the
powers delegated , fulfil all of the instructions given to it from
time to time by the Board.
44.2 Subject to the provisions of the Companies Law, the rules of the
Nasdaq National Market or any other exchange on which the Company's
securities are or may become quoted or listed, each committee of the
Board shall consist of at least two (2) Directors, of which at least
one shall be an External Director; provided that the audit committee
shall consist of at least three (3) Directors, and all of the External
Directors of the Company shall be members of it.
44.3 The provisions of these Articles with respect to meetings of the Board
shall apply, MUTATIS MUTANDIS, to the meetings and discussions of each
committee of the Board, so far as they are not superseded by any
regulations adopted by the Board under this Article., and provided
that the lawful quorum for the meetings of the committee, as stated,
shall be at least a majority of the members of the committee, unless
otherwise Required by Law.
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45. CHAIRMAN OF THE BOARD
45.1 APPOINTMENT
45.1.1 The Board shall choose one of its members to serve as the
Chairman of the Board. Unless otherwise provided in the
appointing resolution, the Chairman of the Board shall be
appointed every [calendar year] at the first meeting of the Board
held after the General Meeting in which Directors were appointed
to the Company.
45.1.2 In the event that the Chairman of the Board ceases to serve as
a Director in the Company, the Board, in its first meeting held
thereafter, shall appoint one of its members to serve as a new
Chairman who will serve in his position for the term set in the
appointment resolution, and if no period is set, until the
appointment of a new Chairman, as provided in this Article.
45.1.3 In the event that the Chairman of the Board is absent from a
meeting of the Board within fifteen (15) minutes of the time
fIxed for the meeting, or if he is unwilling to preside at the
meeting, the Board shall appoint one of the Directors present to
preside at the meeting.
45.2 AUTHORITY
45.2.1 The Chairman of the Board shall preside over meetings of the
Board and shall sign the minutes of the meetings.
45.2.2 In the event of deadlock vote, the Chairman of the Board shall
not have an additional or casting vote.
45.2.3 The Chairman of the Board is entitled, at all times, at his
initiative or pursuant to a resolution of the Board, to require
reports from the General Manager in matters pertaining to the
business affairs of the Company.
45.2.4 The Chairman of the Board shall not serve as the General
Manager of the Company, unless he is appointed in accordance with
the provisions of the Companies Law.
45.2.5 The Chairman of the Board shall not serve as a member of the
audit committee.
46. VALIDITY OF ACTS DESPITE DEFECTS
Subject to the provisions of the Companies Law, all acts done bona fide at
any meeting of the Board, or of a committee of the Board, 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 meetings 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 was no such defect or disqualification.
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MINUTES
47. MINUTES
47.1 minutes of each General Meeting and of each meeting of the Board shall
be recorded and duly entered in books provided for that purpose. Such
minutes shall set forth all resolutions adopted at the meeting and,
with respect to minutes of board meetings, the names of the persons
present at the meeting
47.2 Any minutes as aforesaid, if purporting to be signed by the Chairman
of the meeting or by the Chairman of the next succeeding meeting,
shall constitute PRIMA FACIE evidence of the matters recorded therein.
OFFICERS; AUDITOR
48. THE GENERAL MANAGER
48.1 The Board shall appoint a General Manager, and may appoint more than
one General Manager. Subject to Article 45.2.4, the General Manager
may be a Director. Such appointment(s) may be either for a fixed term
or without any limitation of time, and the Board of Directors may from
time to time (subject to the provisions of the Companies Law and of
any contract between any such person and the Company) fix his or their
salaries and emoluments, remove or dismiss him or them from office and
appoint another or others in his or their place or places.
48.2 THE AUTHORITY OF THE GENERAL MANAGER
48.2.1 The General Manager is responsible for the day-to-day
management of the affairs of theCompany within the framework of
the policies set by the Board and subject to its instructions.
48.2.2 The General Manager shall have all managerial and operational
authorities which were not conferred by Law or pursuant to these
Articles to any other organ of the Company, and he shall be under
the supervision of the Board.
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48.2.3 In the event the Board appoints more than one General Manager,
the Board may determine the respective positions and functions of
the General Managers and allocate their authorities as the Board
may deem appropriate.
48.2.4 The Board may assume the authority granted to the General
Manager, either with respect to a certain issue or for a certain
period of time.
48.2.5 In the event that the General Manager is unable to exercise his
authority, the Board may exercise such authority in his stead, or
authorize another to exercise such authority.
48.2.6 .The General Manager, with the approval of the Board, may
delegate to his subordinates any of his authority.
49. INTERNAL AUDITOR
49.1 The Board shall appoint an internal auditor to the Company in
accordance with the proposal of the audit committee and with the
provisions of the Companies Law. The internal auditor shall report to
the Chairman of the Board, the General Manager and the Chairman of the
audit committee, all to the extent required by Law.
49.2 The internal auditor shall file with the Board a proposal for an
annual or other periodic work plan, which shall be approved by the
Board, subject to any changes it deems appropriate.
50. OTHER OFFICERS OF THE COMPANY
The Board may appoint, in addition to the General Manager and the internal
auditor, other officers, define their positions and authorities, and set
their compensation and terms of employment. The Board may authorize the
General Manager to exercise any or all of its authorities stated in this
Article.
51. THE AUDITOR
51.1 The Shareholders at the Annual Meeting shall appoint an auditor for a
period until the close of the following Annual Meeting or for a period
not to extend beyond the close of the third Annual Meeting following
the Annual Meeting in which he was appointed. Subject to the
provisions of the Companies Law, the General Meeting is entitled at
any time to terminate the service of the auditor.
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51.2 The Board shall fix the compensation of the auditor of the Company for
his auditing activities, and shall also fix the compensation of the
auditor for additional services, if any, which are not auditing
activities, and, in each case, shall report thereon to the Annual
Meeting.
DISTRIBUTIONS
52. GENERAL
The Company may effect a distribution to its Shareholders to the extent
permitted by the Companies Law.
53. DIVIDEND AND BONUS SHARES
53.1 RIGHT TO DIVIDEND OR BONUS SHARES
53.1.1 A shareholder shall be entitled to receive dividends or bonus
shares, upon the resolution of the Company in accordance with
Article 53.2 below, consistent with the rights attached to the
shares held by such Shareholder.
53.1.2 The Shareholders entitled to receive dividends or bonus shares
shall be those who are registered in the Shareholder Register on
the date of the resolution approving the distribution or
allotment, or on such later date, as may be determined in such
resolution.
53.2 RESOLUTION OF THE COMPANY WITH RESPECT TO A DIVIDEND OR BONUS SHARES
The resolution of the Company with respect to the distribution of a
dividend or bonus shares shall be adopted by the Board in accordance
with the provisions of the Companies Law.
53.3 SPECIFIC DIVIDEND
The Board will determine the way and method of payment of any dividend
or bonus shares.
53.4 DEDUCTIONS FROM DIVIDENDS
The Board may deduct from any distribution or other moneys payable to
any Shareholder in respect of a share any and all sums of money then
payable by him to the Company on account of calls or otherwise in
respect of shares of the Company and/or on account of any other matter
or transaction whatsoever.
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53.5 RETENTION OF DIVIDENDS
53.5.1 The Board may retain any dividend, bonus shares or other moneys
payable or property distributable in respect of a share on which
the Company has a lien, and may apply the same in or toward
satisfaction of the debts, liabilities, or engagements in respect
of which the lien exists.
53.5.2 The Board may retain any dividend, bonus shares or other moneys
payable or property distributable in respect of a share in
respect of which any person is, under Article 19.5, entitled to
become a Shareholder, or which any person is, under said
Articles, entitled to transfer, until such person shall become a
Shareholder in respect of such share or shall transfer the same.
53.6 MECHANICS OF PAYMENT
Any dividend or other moneys payable in cash in respect of a share may
be paid by check sent by registered mail to, or left at, the
registered address of the person entitled thereto or by transfer to a
bank account specified by such person (or, if two or more persons are
registered as joint holders of such share or are entitled jointly
thereto as a result of the death or bankruptcy of the holder or
otherwise, to anyone of such persons or to his bank account), or to
such person and at such address as the person entitled thereto may
direct in writing. Every such check shall be made payable to the order
of the person to whom it is sent, or to such person as the person
entitled thereto as aforesaid may direct, and payment of the check by
the banker upon whom it is drawn shall be a good discharge to the
Company. Every such check shall be sent at the risk of the person
entitled to the money represented thereby.
53.7 AN UNCLAIMED DIVIDEND
All unclaimed dividends or other moneys payable in respect of a share
may be invested or otherwise made use of by the Board for the benefit
of the Company until claimed. The payment by the Board of any
unclaimed dividend or such other moneys into a separate account shall
not constitute the Company a trustee in respect thereof, and any
dividend unclaimed after a period of seven (7) years from the date of
declaration of such dividend, and any such other moneys unclaimed
after a like period from the date the same were payable, shall be
forfeited and shall revert to the Company; provided, however, that the
Board may, at its discretion, cause the Company to pay any such
dividend or such other moneys, or any part thereof, to a person who
would have been entitled thereto had the same not reverted to the
Company.
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53.8 RECEIPT FROM A JOINT HOLDER
If two or more persons are registered as joint holders of any share,
or are entitled jointly thereto as a result of the death or bankruptcy
of the holder or otherwise, anyone of them may give effectual receipts
for any dividend, bonus shares or other moneys payable or property
distributable in respect of such share.
53.9 MANNER OF CAPITALIZATION OF PROFITS AND THE DISTRIBUTION OF BONUS
SHARES
Upon the resolution of the Board the Company may cause any moneys,
investments, or other assets forming part of the undivided profits of
the Company, standing to the credit of a reserve fund, or to the
credit of a reserve fund for the redemption of capital, or in the
hands of the Company and available for distribution, or representing
premiums received on the issuance of shares and standing to the credit
of the share premium account, to be capitalized and distributed as
capital among such of the Shareholders as would be entitled to receive
the same if distributed by way of dividend and in the same proportion,
or may cause any part of such capitalized fund to be applied on behalf
of such Shareholders in paying up in full, either at par or at such
premium as the resolution may provide, any un issued shares or
debentures or other securities of the Company which shall be
distributed accordingly, in payment, in full or in part, of the
uncalled liability on any issued shares or debentures or other
securities, and may cause such distribution or payment to be accepted
by such Shareholders in full satisfaction of their interest in such
capitalized sum.
53.10 The Board may settle, as it deems fit, any difficulty arising with
regard to the distribution of bonus shares, distributions referred to
in Articles 53.2 and 53.9 hereof or otherwise, and in particular, to
issue certificates for fractions of shares and sell such fractions of
shares in order to pay their consideration to those entitled thereto,
to set the value for the distribution of certain assets and to
determine that cash payments shall be paid to the Shareholders on the
basis of such value, or that fractions whose value is less than NIS
0.01 shall not be taken into account. The Board may pay cash or convey
these certain assets to a trustee in favor of those people who are
entitled to a dividend or to a capitalized fund, as the Board shall
deem appropriate.
53.11 The provisions of this chapter shall also apply to the distribution
of Securities.
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54. ACQUISITION OF SHARES
54.1 The Company is entitled to acquire or to finance an acquisition,
directly or indirectly, of shares of the Company or securities
convertible or exercisable into shares of the Company, including
incurring an obligation to take any of these actions, subject to the
fulfillment of the conditions of a permitted distribution under the
Companies Law. In the event that the Company so acquired any of its
shares, any such share shall become a dormant share, and shall not
confer any rights, so long as it held by the Company.
54.2 A subsidiary or another company controlled by the Company is entitled
to acquire or finance an acquisition, directly or indirectly, of
shares of the Company or securities convertible or exercisable into
shares of the Company, or incur an obligation with respect thereto, to
the same extent that the Company may make a distribution, subject to
the terms of, and in accordance with the Companies Law. In the event a
subsidiary or such controlled company so acquired any of the Company's
shares, any such share shall not confer any voting rights, so long as
it is held by such subsidiary or controlled company.
INSURANCE, INDEMNIFICATION AND RELEASE OF OFFICE HOLDERS
55. DEFINITION
For purposes of Articles 56, 57 and 58 below, the term "Office Holder"
shall have the meaning ascribed to such term in the Companies Law.
56. INSURANCE OF OFFICE HOLDERS
56.1 The Company may, to the extent permitted by the Companies Law, enter
into a contract for the insurance of the liability of an Office Holder
of the Company, in respect of a liability imposed on him as a result
of an act done by him in his capacity as an Office Holder of the
Company, in any of the following:
56.1.1 A breach of his duty of care to the Company or to another
person;
56.1.2 A breach of his duty of loyalty to the Company, provided that
the Office Holder acted in good faith and had reasonable grounds
to assume that such act would not harm the Company;
56.1.3 A financial liability imposed on him in favor of another
person.
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57. INDEMNIFICATION OF OFFICE HOLDERS
57.1 The Company is entitled, to the extent permitted by the Companies Law,
to indemnify an Office Holder of the Company, pursuant to an advance
undertaking of indemnification or retrospectively, for any liability
or expense imposed on him or her or incurred by him or her as a result
of any action which was performed by said Office Holder in his/her
capacity as an Office Holder of the Company, including for any of the
following:
57.1.1 a financial liability imposed on an Office Holder in favor of
another person by a court judgment, including a settlement
judgment or an arbitrator's award approved by a court, PROVIDED,
HOWEVER, that it shall be limited, in cases of an advance
undertaking of indemnification, to events that in the opinion of
the Board are foreseeable in light of the Company's actual
activities at the time such an advance undertaking of
indemnification is given, and shall further be limited to an
amount or by criteria that the Board determines to be reasonable
under the circumstances, and PROVIDED, FURTHEr, that the advance
undertaking of indemnification will specify the events which in
the opinion of the Board can be foreseeable in light of the
Company's actual activities at the time such undertaking was
given, and the amount or criteria that the Board determines to be
reasonable under the circumstances;
57.1.2 reasonable litigation expenses, including attorney fees,
incurred by an Office Holder as a result of an inquiry or a
proceeding conducted against him by a competent authority, and
that was concluded (as such term is defined in the Companies Law)
without the submission of an indictment against said Office
Holder and without having a monetary charge imposed on him as a
substitute for a criminal procedure (as such terms are defined in
the Companies Law), or that was concluded without the submission
of an indictment against him but with a monetary charge imposed
on him as a substitute for a criminal procedure with respect to a
criminal offense that does not require proof of MENS REA.
57.1.3 reasonable litigation expenses, including attorney fees,
incurred by an Office Holder or imposed on him by, court, in a
proceeding filed against him by the Company or on its behalf or
by another person, or in a criminal charge from which he was
acquitted, or in a criminal charge in which he was convicted of a
crime which does not require proof of MENS REA.
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57.1.4 any other liability or expense for which it is or may be
permissible to indemnify an Office Holder.
57.2 Subject to the provisions of the Companies Law and without derogating
from the above, the Company may issue an undertaking in advance or
retrospectively to indemnify any person, including an Office Holder,
who acts or acted on behalf of or at the request of the Company as a
director or officer of another company in which the Company directly
or indirectly, is a shareholder, or in which the Company has any other
interest. Such indemnity will be in respect of liability or expense
imposed on him or her or incurred by him or her as detailed in Article
57.1 above, as a result of any action which was performed by him/her
in his/her capacity as an Office Holder of the other company.
57.3 In the event the Companies Law is amended in such a way that requires
the amendment of these Articles in order to give effect to an
undertaking of indemnification provided or which will be provided to
an Office Holder, these Articles shall be deemed to be amended in
accordance with the Companies Law (as amended) in such a way that
entitles the Company to give effect to such undertaking for
indemnification to the maximum extent permitted by the Companies Law."
58. RELEASE OF OFFICE HOLDERS
The Company may, to the extent permitted by the Companies Law, release an
Office Holder of the Company, in advance, from his liability, in whole or
in part, for damages resulting from the breach of his duty of care to the
Company.
59. GENERAL
The provisions of Articles 56, 57 and 58 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 and/or
release from liability in connection with any person who is not an Office
Holder, including, without limitation, any employee, agent, consultant or
contractor of the Company who is not an Office Holder, or in connection
with any Office Holder to the extent that such insurance and/or
indemnification and/or release from liability us permitted under the law.
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LIQUIDATION
60. LIQUIDATION
60.1 Subject to applicable Law and to the rights of shares with special
rights upon liquidation, the assets of the Company available for
distribution among the Shareholders shall be distributed to them in
proportion to the amount paid or credited as paid on the par value of
their respective holdings of the shares in respect of which such
distribution is being made.
60.2 In the event that the Company is liquidated, whether voluntarily or
otherwise, the liquidator, with the approval of a General Meeting, may
make a distribution in kind to the Shareholders of all or part of the
property of the Company, and he may, with the approval of the General
Meeting, deposit any part of the property of the Company with trustees
in favor of the Shareholders, as the liquidator with the
aforementioned approval, deems appropriate.
ACCOUNTS
61. BOOKS OF ACCOUNT
The Board shall cause accurate books of account to be kept in accordance
with the provisions of the Companies Law and of any other applicable Law.
Such books of account shall be kept at the registered office of the
Company, or at such other place or places as the Board may deem
appropriate, and they shall always be open to inspection by all Directors.
No Shareholder, not being a Director, shall have any right to inspect any
account or book or other similar document of the Company, except as
conferred by Law or authorized by the Board or by a resolution of the
General Meeting adopted by an Ordinary Majority.
62. AUDIT
Without derogating from the requirements of any applicable Law, at least
once in every fiscal year the accounts of the Company shall be audited and
the accuracy of the profit and loss account and balance sheet certified by
one or more duly qualified auditors.
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RIGHTS OF SIGNATURE, STAMP AND SEAL
63. RIGHTS OF SIGNATURE. STAMP AND SEAL
63.1 The Board shall be entitled to authorize any person or persons (who
may not be Directors) to act and sign on behalf of the Company, and
the acts and signature of such person(s) on behalf of the Company
shall bind the Company insofar as such person(s) acted and signed
within the scope of his or their authority.
63.2 The Company shall have at least one official stamp.
63.3 The Board may provide for a seal. If the Board so provides, it shall
also provide for the safe custody thereof. Such seal shall not be used
except by the authority of the Board and in the presence of the
person(s) authorized to sign on behalf of the Company, who shall sign
every instrument to which such seal is affixed.
NOTICES
64. NOTICES
64.1 Any written notice or other document may be served by the Company upon
any Share holder either personally or by sending it by prepaid
registered mail (airmail if sent to a place outside Israel) addressed
to such Shareholder at his address as described in the Shareholder
Register or such other address as he may have designated in writing
for the receipt of notices and other documents. Any written notice or
other document may be served by any Shareholder upon the Company by
tendering the same in person to the corporate secretary or the General
Manager of the Company at the principal office of the Company or by
sending it by prepaid registered mail (airmail if posted outside
Israel) to the Company at its registered office. Any such notice or
other document shall be deemed to have been served two (2) Business
Days after it has been posted (seven (7) Business Days if sent
internationally), or when actually received by the addressee if sooner
than two days or seven days, as the case may be, after it has been
posted, or when actually tendered in person, to such Shareholder (or
to the corporate secretary or the General Manager), provided, however,
that notice may be sent by cablegram, telex, facsimile or other
electronic means and confirmed by registered mail as aforesaid, and
such notice shall be deemed to have been given twenty four (24) hours
after such cablegram, telex, facsimile or other electronic
communication has been sent or when actually received by such
Shareholder (or by the Company), whichever is earlier. 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 defectively
addressed or failed, in some respect, to comply with the provisions of
this Article 64.1. Unless otherwise provided in these Articles, the
provisions of this Article 64.1 shall also apply to written notices
permitted or required to be given by the Company to any Director or by
any Director to the Company.
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64.2 All notices to be given to the Shareholders shall, with respect to any
share held by persons jointly, be given to whichever of such persons
is named first in the Shareholder Register, and any notice so given
shall be sufficient notice to the holders of such share.
64.3 Any Shareholder whose address is not described in the Shareholder
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.
64.4 Any Shareholder and any Director may waive his right to receive
notices generally or during a specific time period and he may consent
that a General Meeting of the Company or a meeting of the Board, as
the case may be, shall be convened and held notwithstanding the fact
that he did not receive a notice with respect thereto, or
notwithstanding the fact that the notice was not received by him
within the required time, in each case subject to the provisions of
any Law prohibiting any such waiver or consent.
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