SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the Month of December 2004
_______________________
ELBIT SYSTEMS LTD.
(Translation of Registrant's Name into English)
Advanced Technology Center, P.O.B. 539, Haifa 31053, Israel
(Address of Principal Corporate Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
|X| Form 20-F |_| Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934:
|_| Yes |X| No
Attached hereto as Exhibit 1 and incorporated herein by reference is
the Registrant's press release dated December 13, 2004.
Attached hereto as Exhibit 2 and incorporated herein by reference is
the Registrant's Restated Articles of Association as approved by the
shareholders of the registrant on November 8, 2004.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ELBIT SYSTEMS LTD.
(Registrant)
By: /s/ Ilan Pacholder
-------------------------
Name: Ilan Pacholder
Title: Corporate Secretary
Dated: December 13, 2004
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
----------- -----------
1. Press Release dated December 13, 2004.
2. Restated Articles of Association.
EXHIBIT 1
---------
DIGITAL ARMY PROGRAM LAUNCHED: ISRAEL DEFENSE MINISTRY AND ELBIT SYSTEMS
SIGN CONTRACT VALUED AT APPROXIMATELY US$ 200 MILLION
PROGRAM TO BE PERFORMED OVER A TEN-YEAR PERIOD, WILL BE AUGMENTED BY A MATERIAL
AMOUNT OF U.S. FMF FUNDING.
THE DIGITAL ARMY PROGRAM (DAP) IMPLEMENTS ADVANCED COMBAT CONCEPTS GEARED TO
INCREASE OPERATIONAL EFFECTIVENESS AND CONNECTIVITY THROUGHOUT ALL LAND FORCE
ECHELONS, IN ALL COMBAT SITUATIONS, UNDER A UNIFIED OPERATIONAL CONCEPT.
ELBIT SYSTEMS WILL SERVE AS PRIME CONTRACTOR, WITH RAFAEL, TADIRAN SYSTEMS AND
OTHER COMPANIES PARTICIPATING IN THE PROGRAM. JOSEPH ACKERMAN, ELBIT SYSTEMS,
PRESIDENT AND CEO: "WE ARE PROUD THAT THE ISRAEL DEFENSE FORCES (IDF) HAS CHOSEN
ELBIT SYSTEMS AS PRIME CONTRACTOR TO LEAD THIS VERY SIGNIFICANT AND PRESTIGIOUS
PROGRAM, WHICH HIGHLIGHTS OUR INNOVATIVENESS, TECHNOLOGICAL LEADERSHIP,
INTEGRATION EXPERTISE AND PERFORMANCE CAPABILITIES."
Haifa, Israel, December 13, 2004, Elbit Systems Ltd. (NASDAQ: ESLT) announced
that today it signed an agreement with the Israel Ministry of Defense (IMOD) for
the Digital Army Program (DAP), in an amount of approximately IS 875 Million (US
$200 million). The DAP, which will also include an additional material amount of
U.S. Foreign Military Funding (FMF) funding, will be performed over a ten-year
period.
Elbit Systems was selected approximately two years ago by the Israel Ministry of
Defense (IMOD) to be the prime contractor for the DAP. Rafael Armament
Development Authority Ltd. and Tadiran Systems Ltd. will serve as Elbit Systems'
major subcontractors. Within the framework of the Program, all land forces
operations will be computerized (command, control, communications), integrated
and interfaced with new and advanced applications.
Under the DAP, Elbit Systems will supply the IDF with computerized systems down
to the single soldier level. The systems will facilitate transmission of
integrated, real time situation pictures to and from all battlefield and command
echelons.
The Program calls for supply and support of all hardware and software, including
command and control stations, data processing and distribution systems. It will
enable force coordination at all levels, access to updated situational pictures,
improved overall operational capabilities, including survivability and accuracy,
and more efficient utilization of personnel and other resources.
According to Joseph Ackerman, Elbit Systems' President and CEO, "The Digital
Army Program, which will be performed over a number of years, is significant to
Elbit Systems both because of its scope and its contribution to our technology
base. We are proud that the IDF has selected us to lead the Program." He added,
"The DAP is based on a variety of advanced technologies such as communications,
hardware and software, which have been developed in-house. These technologies,
combined with our accumulated experience in programs based on computerized
communications and multidisciplinary integration, have positioned Elbit Systems
as a world leader in the field."
ABOUT ELBIT SYSTEMS
Elbit Systems Ltd. is an international defense electronics company engaged in a
wide range of defense-related programs throughout the world, in the areas of
aerospace, land and naval systems, command, control, communications, computers,
intelligence, surveillance and reconnaissance ("C4ISR"), advanced electro-optic
and space technologies. The Company focuses on the upgrading of existing
military platforms and developing new technologies for defense and homeland
security applications.
FOR MORE ABOUT ELBIT SYSTEMS, PLEASE VISIT OUR WEBSITE AT WWW.ELBITSYSTEMS.COM
Contacts
Company contact IR Contacts
Ilan Pacholder, Corporate Secretary and Ehud Helft/Kenny Green
VP Finance & Capital Markets
1. Elbit Systems Ltd. GK INTERNATIONAL
Tel: 972-4 831-6632 Tel: 1-866-704-6710
Fax: 972-4 831- 6659 Fax: 972-3-607-4711
pacholder@elbit.co.il ehud@gk-biz.com
kenny@gk-biz.com
STATEMENTS IN THIS PRESS RELEASE WHICH ARE NOT HISTORICAL DATA ARE
FORWARD-LOOKING STATEMENTS WHICH INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES
OR OTHER FACTORS NOT UNDER THE COMPANY'S CONTROL, WHICH MAY CAUSE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT
FROM THE RESULTS, PERFORMANCE OR OTHER EXPECTATIONS IMPLIED BY THESE
FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DETAILED IN THE COMPANY'S PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
EXHIBIT 2
---------
March 2000
RESTATED MEMORANDUM OF ASSOCIATION
OF
ELBIT SYSTEMS LTD.
1. Name of Company: Elbit Systems Ltd.
2. Objectives of Company: To engage in any objective permitted
by law.
3. Limitation of Shareholder Shareholder liability is limited to
of the Liability: payment nominal (par) value of unpaid
issued share capital.
4. Share Capital: The share capital of the Company is
80,000,000 New Israeli Shekels ("NIS"),
divided into 80,000,000 ordinary shares
par value 1 NIS per share, which shares
are equal in rights.
5. Amendments to the The shareholders, at a General Meeting,
Memorandum of Association: may amend this Memorandum of Association,
in whole or in part, by a vote of a
majority of sixty-seven percent (67%) of
the shares voted at the General Meeting,
not taking into account abstentions.
[End]
November 2004
RESTATED ARTICLES OF ASSOCIATION
OF
ELBIT SYSTEMS LTD.
TABLE OF CONTENTS
-----------------
ARTICLE
1. INTERPRETATION........................................................3
2. PUBLIC COMPANY........................................................5
3. PERMISSIBLE OBJECTIVES................................................5
4. NAME AND REGISTERED OFFICE............................................5
5. SHARE CAPITAL.........................................................6
6. SHARE RIGHTS..........................................................7
7. SHARE REGISTER AND SHARE CERTIFICATES.................................8
8. SHARE WARRANTS, OPTIONS AND DEBENTURES................................8
9. LIEN ON SHARES........................................................9
10. REDEEMABLE SHARES AND WARRANTS........................................9
11. CALLS ON SHARES; FORFEIT OF SHARES....................................9
12. TRANSFER OF SHARES...................................................11
13. TRANSMISSION OF SHARES ON DEATH, BANKRUPTCY OR
DISSOLUTION..........................................................11
14. REGISTRATION OF COMPANY SECURITIES FOR TRADING ON
SECURITIES EXCHANGES.................................................12
15. BORROWING POWERS.....................................................12
16. DIVIDENDS AND RESERVES...............................................12
17. CAPITALIZATION OF RESERVES...........................................13
18. CONVENING OF GENERAL MEETINGS........................................14
1
19. PROCEEDINGS AT GENERAL MEETINGS......................................15
20. VOTING AT GENERAL MEETINGS; VOTING INSTRUMENTS.......................16
21. PROXY STATEMENTS.....................................................18
22. ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS.......................18
23. ELECTION, APPOINTMENT AND REMOVAL OF DIRECTORS.......................19
24. EXTERNAL DIRECTORS...................................................20
25. BOARD OF DIRECTORS MEETINGS..........................................21
26. COMMITTEES OF THE BOARD OF DIRECTORS.................................21
27. PRESIDENT............................................................22
28. SECRETARY............................................................23
29. SIGNATURE AUTHORITY..................................................23
30. ACCOUNTS.............................................................24
31. INDEPENDENT CERTIFIED ACCOUNTANTS....................................24
32. INTERNAL AUDITOR.....................................................24
33. NOTICES..............................................................24
34. INSURANCE AND INDEMNITY..............................................25
35. RECONSTRUCTION AND WINDING-UP........................................27
36. AMENDMENTS TO ARTICLES...............................................27
2
1. INTERPRETATION
(a) In these Articles of Association the following terms will have the
meanings described below:
TERM MEANING
(1) Annual Meeting The annual General Meeting.
(2) Articles These Articles of Association, as may be amended
from time to time.
(3) Audit Committee The audit committee of the Board of Directors
established according to these Articles and the
Law.
(4) Board or The Company's supervisory governing board appointed
Board of Directors according to these Articles and the Law.
(5) Chairman of the Board The chairman of the Board of Directors, appointed
of Directors according to these Articles.
(6) Company Elbit Systems Ltd.
(7) Director A member of the Company's Board of Directors.
(8) Extraordinary Meeting A General Meeting other than an Annual Meeting.
(9) General Meeting A meeting of the Company's Shareholders convened
according to these Articles and the Law.
(10) Independent Certified The Company's independent certified accountants
Accountants appointed according to these Articles and the Law.
(11) Internal Auditor The Company's internal auditor appointed in
accordance with these Articles and the Law.
(12) Law The [Israel] Companies Law - 1999, including any
regulations and regulatory orders relating thereto,
and any successor laws and regulations, as will be
in effect from time to time.
(13) NIS New Israeli Shekels.
(14) Ordinary Shares Shares nominal value NIS 1 per Share, which carry
all ordinary rights Shareholders are entitled to
under these Articles and the Law.
3
(15) President The president and general manager of the Company
appointed according to these Articles.
(16) Proxy A person appointed, as provided in these Articles,
by a Shareholder to vote or otherwise act on the
Shareholder's behalf at a General Meeting.
(17) Proxy Statement A document issued by the Board of Directors to
Shareholders soliciting the Shareholders to vote
for a General Meeting.
(18) Register The register of Shareholders, including any branch
registers the Company may maintain, kept according
to the Law.
(19) Registered Office The Company's registered office.
(20) Secretary The Company's corporate secretary.
(21) Securities Law The [Israel] Securities Law - 1968 and any
regulations and regulatory orders relating thereto,
and any successor laws and regulations, as will be
in effect from time to time.
(22) Share Capital The Company's registered Share capital as
authorized by its Memorandum of Association and
these Articles.
(23) Shareholder Any person or entity that is the owner, according
to these Articles and the Law, of a Share.
(24) Shares Proportional allocations to Shareholders of rights
in the Company's Share Capital, whether Ordinary
Shares or otherwise, according to these Articles
and the Law.
(25) Special Majority A majority of at least sixty-seven percent (67%) of
all votes properly cast at a General Meeting,
without taking into account abstentions.
(26) Treasury Shares Shares that have been acquired, redeemed or
otherwise received by the Company or a Company
subsidiary and allocated by the Company to a
reserve for future allocation or sale.
(27) Voting Instrument A written form for Shareholders to use, according
to these Articles and the Law, in voting at General
Meetings.
(28) Writing A handwriting, typewriting, facsimile, print,
e-mail and any other legally recognized form of
communication that can be read.
4
(b) In these Articles, unless the context otherwise requires, expressions
defined in the Law will have the meanings so defined. In addition, words
importing the singular will include the plural, and vice versa. Words
importing the masculine gender will include the feminine, and words
importing persons will include companies, partnerships, associations and
all other legal entities. Days, months and years refer to the Gregorian
calendar.
(c) In the event that an Article is revised or a new Article is added to these
Articles, which contradicts an original Article, the revised or added
Article(s) will take precedence.
(d) In any place in these Articles that specifies the provisions will apply
according or subject to the provisions of the Law and/or any other law,
the intention is to provisions of the Law and/or of any other law that are
not elective, unless the context requires otherwise.
2. PUBLIC COMPANY
The Company is a public company as defined in the Law. Therefore:
(a) No limitations will apply to the transfer of its Shares.
(b) The number of Shareholders is unlimited.
(c) The Company may issue any form of its Shares or other securities to the
public.
(d) Liability of the Shareholders is limited to the payment of the nominal
(par) value of the unpaid issued Share Capital of the Company.
3. PERMISSIBLE OBJECTIVES
(a) The permissible objectives of the Company may include any objectives
permitted by law.
(b) The Company may contribute, from time to time, reasonable sums to worthy
causes even if the cause is not within the specific scope of the Company's
business.
4. NAME AND REGISTERED OFFICE
(a) The name of the Company is Elbit Systems Ltd.
(b) The Registered Office will be at such place in Israel as the Board of
Directors will from time to time select. 5.
5
SHARE CAPITAL
(a) The Share Capital of the Company is NIS 80,000,000 (eighty million New
Israeli Shekels) divided into 80,000,000 (eighty million) ordinary shares
of NIS 1 nominal (par) value each.
(b) The Company may, by a resolution of a Special Majority of Shareholders at
a General Meeting:
(1) increase the Share Capital, including by classes of Shares, as the
General Meeting may determine; or
(2) annul Share Capital that has not yet been issued, provided that the
Company has no undertaking, including a provisional undertaking, to
allot such Shares.
(c) Subject to the provisions of the Law, the Company may, by a resolution of
a majority of the Shareholders voting in a General Meeting without taking
into account abstentions:
(1) consolidate all or part of the Shares and/or divide them into Shares
of a greater par value than the par value of the existing Shares;
(2) split all or part of the Shares, by way of subdivision, into Shares
of lesser par value than the par value of the existing Shares; or
(3) decrease the capital or any reserve fund from redemption of capital.
(d) In executing any resolution adopted according to Article 5(c) above, the
Board may, at its discretion, resolve any related issues.
(e) Subject to any contrary decision in a General Meeting resolution
authorizing an increase in Share Capital, any new Share Capital will be
subject to the same provisions regarding payment of calls, liens, title,
forfeiture, transfer and otherwise as apply to the original Share Capital.
Such General Meeting resolution may also determine that the new Shares, or
any part of them, will first be offered, at par value or at a premium, to
all the existing Shareholders in proportion to the par value of their
Shares or may determine other provisions with regard to the issuance and
allotment of the new Shares. However, in the absence of such a
determination in the General Meeting resolution, the Board may allot such
Shares as provided in Article 6(a) below.
(f) If as a result of a consolidation or split of Shares authorized under
these Articles, fractions of a Share will stand to the credit of any
Shareholder, the Board is authorized at its discretion, to act as follows:
6
(1) determine that fractions of Shares that do not entitle their owners
to a whole Share, will be sold by the Company and that the
consideration for the sale be paid to the beneficiaries, on terms
the Board may determine;
(2) allot to every Shareholder, who holds a fraction of a Share
resulting from a consolidation and/or split, Shares of the class
that existed prior to the consolidation and/or split, in a quantity
that, when consolidated with the fraction, will constitute a whole
Share, and such allotment will be considered valid immediately prior
to the consolidation or split;
(3) determine the manner for paying the amounts to be paid for Shares
allotted in accordance with Article 5(f)(2) above, including on
account of bonus Shares; and/or
(4) determine that the owners of fractions of Shares will not be
entitled to receive a whole Share in respect of a Share fraction or
that they may receive a whole Share with a different par value than
that of the fraction of a Share.
6. SHARE RIGHTS
(a) Subject to these Articles and to the terms of any General Meeting
resolution creating new Shares, the allotment and issue of Shares will be
as determined by the Board of Directors, who may allot and issue such
Shares to persons on terms and conditions and at times as determined by
the Board of Directors, including the allotment of bonus Shares.
(b) Each Ordinary Share will entitle its owner to receive notices of, to
attend and to cast one vote at a General Meeting.
(c) The rights granted to Shareholders of any class of Shares issued with
preferred or other rights will not, unless specifically provided by the
terms of issue of the Shares of that class, be deemed to be changed by the
creation or issue of other Shares of the same rank.
(d) Unless otherwise provided for by the terms of issuance of a particular
class of Shares, the Company may create or change rights, preferences,
restrictions and provisions related to one or more of the classes of
Shares, after receipt of the consent in writing of all Shareholders of the
affected class, or a resolution passed at a General Meeting of such class,
approved by a Special Majority of the Shareholders of the affected class.
These Articles will apply, as applicable, to every such separate General
Meeting of a class.
(e) Treasury Shares will not carry voting or dividend rights while they remain
in the Company's Treasury Share reserve. Conversion of Treasury Shares
into Ordinary Shares or Ordinary Shares into Treasury Shares will be
subject to approval of the Board of Directors and any applicable
provisions of the Law and Securities Law.
(f) The rights applicable to any Shares, whether in the original Share Capital
or any increased Share Capital, may be changed according to the terms of
these Articles. 7.
7
SHARE REGISTER AND SHARE CERTIFICATES
(a) The Company will maintain a Register of Shareholders according to the Law.
The Company may maintain one or more branch registers of Shareholders, in
Israel or another jurisdiction, which will be considered as part of the
Register.
(b) No person will be recognized by the Company as holding any Share under a
trust unless he is so registered in the Register according to applicable
provisions of the Law.
(c) The Company will not be bound by or required to recognize, even when
having notice, any right or interest in any Share other than rights or
interests of the Shareholder duly registered in the Register or otherwise
proven in accordance with these Articles and the Law.
(d) Every person whose name duly appears as a Shareholder in the Register or
who otherwise establishes proof of ownership in accordance with these
Articles and the Law, will have the right without payment to receive,
within two (2) months after allotment or registration of transfer (unless
the conditions of allotment or transfer provide for a longer period), a
stamped certificate for all the Shares registered in his name. The
certificate will specify the number of Shares for which it is issued.
However, in case of joint Shareholders the Company will not be required to
issue more than one certificate to all the joint Shareholders. Delivery of
a certificate to any of the joint Shareholders will be sufficient delivery
to all. Every certificate will be signed by a Director and countersigned
by the Secretary or some other person nominated by the Board of Directors
for that purpose. The Company may withhold the issue of Share certificates
for Shares not fully paid up.
(e) If any Share certificate will be defaced, worn out, destroyed or lost, it
may be renewed following production of any evidence, provision of any
indemnity and payment of any of the Company's out of pocket expenses as
the Board of Directors will require. In case of defacement or wearing out,
renewal will require delivery of the old certificate.
(f) The Company may destroy Share certificates which have been canceled if at
least seven (7) years have passed from the cancellation date. The Company
may also destroy Share transfer forms or certificates if at least seven
(7) years have passed from the Share transfer date.
8. SHARE WARRANTS, OPTIONS AND DEBENTURES
The Company may issue from time to time Share warrants, options on Shares,
debentures and similar forms of securities. The price, terms and
conditions of any such securities will be determined by the Board of
Directors. 9.
8
LIEN ON SHARES
(a) The Company will have a lien on every Share for all moneys, whether
currently payable or not, called or payable in respect of that Share.
However, the Board of Directors may at any time declare any Share to be
wholly or partly exempt from the provisions of this Article. The Company's
lien, if any, on a Share will extend to all dividends payable on that
Share.
(b) The Company may sell any Shares on which it has a lien at such time and
manner as will be determined by the Board of Directors. However, if some
sum on which there is a lien is currently payable, no sale will be made
until fourteen (14) days after sending a notice in writing to the
registered Shareholders, demanding payment of such sum and giving notice
of the Company's intention to sell in default. To give effect to any such
sale, the Board of Directors may authorize transfer of the Shares sold to
the purchaser who will be registered as the holder of the Shares. The
Company will receive the net proceeds of the sale which will be applied in
payment of the sum then payable on the lien. The balance of the sale
proceeds, if any, will be paid to the person holding the Shares
immediately before the sale, subject to any lien for sums that were not
currently payable for the Shares before the sale.
10. REDEEMABLE SHARES AND WARRANTS
Subject to the applicable provisions of the Law, the Company may issue and
redeem redeemable preference Shares and redeemable warrants.
11. CALLS ON SHARES; FORFEIT OF SHARES
(a) The Board of Directors may, in its discretion, from time to time authorize
the amount and manner of the consideration to be given to the Company for
Shares. The Board may also make calls on Shareholders for any moneys
unpaid on their Shares. Each Shareholder will be liable to pay the amount
of every call so made on him to the persons and at the times, places and
installments specified by the Board. A call may be revoked or postponed as
the Board may determine.
(b) A call will be considered to have been made at the time the Board of
Directors approves the resolution authorizing such call.
(c) The joint Shareholders of a Share will be jointly and severally liable for
the payment of all calls and related installments.
(d) The Board of Directors may, at its discretion, authorize receipt of
advances from any Shareholder relating to future calls on Shares. The
Board may authorize interest to be paid as may be agreed with the
advancing Shareholder.
(e) Any sum that, by the terms of a Share, is payable on the Share's allotment
or at any fixed date, will be considered to be a call duly made and
payable on the date fixed for payment. In case of non-payment of such sum,
the relevant provisions of these Articles will apply as if such sum were a
call duly made and notified according to these Articles.
9
(f) The Board of Directors may, on the issue of Shares, differentiate between
the Shareholders as to the amount of calls to be paid and the times of
payment.
(g) If any Shareholder fails to pay all or part of any call or installment of
a call on or before the day appointed for such payment, the Board of
Directors may serve a notice on such Shareholder. The notice will require
payment of the amount remaining unpaid together with interest, at such
rate as the Board will determine, and any expenses that may have accrued
by reason of such non-payment. The notice will name a date, not less than
fourteen (14) days from the date of the notice, on or before which such
call or installment, and all interest and expenses that have accrued by
reason of such non-payment are to be paid. It will also name the place
where payment is to be made, and will state that in the event of
non-payment on or before the time and at the place appointed, the Shares
for which such call was made will be liable to be forfeited. If the
requirements of any such notice are not met, any Share for which such
notice has been given may, before the payment required by the notice has
been made, be forfeited by a resolution of the Board to that effect. A
forfeiture of Shares will include all dividends applicable to the Shares
not actually paid before the forfeiture, even if the dividend has been
declared.
(h) When any Shares have been forfeited in accordance with these Articles,
notice of the forfeiture will be promptly given to the Shareholder or to
the person entitled to the Shares by transmission, as the case may be. An
entry of such notice having been given and of the date of the forfeiture
of the applicable Shares will be made in the Register. However, a
forfeiture will not be invalid due to not giving such notice or making
such entry in the Register.
(i) Following a forfeiture, the Board of Directors may, at any time before the
forfeited Share has been otherwise disposed of, revoke the forfeiture on
terms determined by the Board.
(j) Every forfeited Share may be sold or reallotted or otherwise disposed of,
to any other person, on such terms as the Board of Directors may
determine. Any forfeited Share held by the Company will be considered as a
Treasury Share.
(k) A person whose Shares have been forfeited will remain liable to pay to the
Company all calls made and not paid on such Shares at the time of
forfeiture, and interest thereon to the date of payment, in the same
manner in all respects as if the Shares had not been forfeited. He will
also remain liable to satisfy any claims and demands which the Company
might have enforced regarding the Shares at the time of forfeiture,
without any deduction or allowance for the value of the Shares at the time
of forfeiture. However, if the Company chooses to sell the forfeited
Shares then the net consideration accepted by the Company for such Shares
will be deducted from the amount the person whose Shares have been
forfeited is liable to pay the Company.
(l) The forfeiture of a Share will cause the extinction at the time of
forfeiture all claims and demands against the Company regarding the Share,
and all other rights and liabilities relating to the Share as between the
forfeiting Shareholder and the Company, except as provided by law.
10
(m) A written declaration, that the declarant is a Director and that a Share
has been duly forfeited according to these Articles and stating the date
of forfeiture, will be conclusive evidence of the facts stated in the
declaration against any persons claiming to be entitled to the forfeited
Shares. Such declaration, together with the Company's receipt for the
consideration, if any, given for the forfeited Shares on their sale or
disposition, and a duly signed Share certificate delivered to the
purchaser will constitute good title to the Shares. Such purchaser will be
registered as the holder of the Shares.
12. TRANSFER OF SHARES
(a) Subject to the restrictions in these Articles, Shares will be
transferable. Every transfer must be in writing in any usual or common
form, or in such other form as the Board of Directors may from time to
time approve. The written form of transfer will be delivered to the
Registered Office, accompanied by a true copy of the certificate of the
Shares to be transferred, and any other evidence as the Board may require
to prove the title of an intending transferor.
(b) The written form of transfer of a Share will be executed both by the
transferor and the transferee. The transferor will be considered to remain
the Shareholder until the name of the transferee is entered in the
Register for the applicable Shares.
(c) The Board of Directors may decline to register any transfer of Shares,
which have not been fully paid up.
(d) The Board of Directors may determine a fee to be charged for registration
of a transfer.
(e) The registration of transfers may be suspended at such times and for such
periods as the Board of Directors may determine, not to exceed thirty (30)
days in any calendar year.
13. TRANSMISSION OF SHARES ON DEATH, BANKRUPTCY OR DISSOLUTION
(a) In the case of death, bankruptcy or dissolution of a Shareholder, that
Shareholder's rightful successor in interest will be entitled to the
Shareholder's Shares by transmission as provided in this Article.
(b) If a deceased Shareholder was a joint Shareholder, his surviving joint
Shareholder will be the successor in interest. If a deceased Shareholder
was a sole Shareholder, or has no surviving joint Shareholders, the
executors or administrators of the deceased, or in their absence the
legally declared heirs, will be recognized by the Company as the successor
in interest to the Shares. If the Shareholder was a legal entity declared
bankrupt or otherwise declared dissolved, then its legally recognized
successor in interest will be recognized by the Company as receiving title
to the applicable Shares.
(c) Nothing in these provisions will release the estate of a deceased
Shareholder from any liability for any Shares held by the deceased
Shareholder.
11
(d) Any person becoming entitled to a Share in consequence of a Shareholder's
death, bankruptcy or dissolution may, upon producing such evidence of
title as the Board of Directors will require, be registered himself as a
holder of the Share, or subject to provisions regarding transfers of
Shares, transfer the same to some other person.
(e) A person entitled to a Share by transmission will be entitled to receive,
and may give a release for, any dividends or other moneys payable for the
Share. However, he will not have the right to receive notices of, or to
attend or vote at General Meetings or, except as provided above, to
exercise any of the rights or privileges of a Shareholder unless and until
he becomes a Shareholder of the applicable Shares.
14. REGISTRATION OF COMPANY SECURITIES FOR TRADING ON SECURITIES EXCHANGES.
The Board of Directors may authorize Shares or any other duly authorized
Company securities to be registered for trading on securities exchanges in
Israel and/or in other jurisdictions.
15. BORROWING POWERS
The Board of Directors may, from time to time, at its discretion,
determine a framework of credit or a specific sum the Company may raise or
borrow or secure the payment of such credit or sum for Company purposes.
The Board may authorize securing the repayment of such sum in such manner
and terms as it may decide. This may include the issue of debentures or
similar instruments of the Company secured by all or any part of the
present and future property of the Company, including its then existing
uncalled Share Capital.
16. DIVIDENDS AND RESERVES
(a) The Board of Directors may approve dividends to be paid from time to time
to the Shareholders according to the Shareholders' respective rights and
may fix the record date and time for payment. The dividend will be
reported to the next Annual Meeting. (b) Subject to any preferential or
limited rights to receive dividends, all dividends will be declared and
paid according to the amounts paid or credited as paid on the applicable
Shares. All dividends will be apportioned and paid proportionately to the
amounts paid or credited as paid on the Shares. However, a Share may be
issued on terms providing that it will qualify for dividends only from a
particular date.
(c) No dividend will be paid other than out of surplus earnings as permitted
by the applicable provisions of the Law relating to capital preservation
and allocation. However, the Company may request a court to allow it to
pay dividends under other terms permitted by the Law.
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(d) Dividends will be paid to Shareholders recognized by the Company in
accordance with Article 7(c) above, at the time the dividend is declared,
as the Shareholders for the Shares for which the dividend has been
declared.
(e) Notice of the declaration of any dividend, whether interim or otherwise,
will be given to the entitled Shareholders in the manner described in
these Articles for notices to Shareholders.
(f) Unless otherwise directed by the Board of Directors, any dividend may be
paid by check, warrant or bank transfer to the registered address of the
person entitled, or in case of joint Shareholders to the one of them first
named in the Register regarding the joint holding. The receipt of the
person whose name on the date of the dividend declaration appears on the
Register as the owner of any Share, or in the case of joint Shareholders,
of anyone of such joint Shareholders, will be a good discharge to the
Company of all payments made for such Share. All dividends unclaimed for
up to seven (7) years after having been declared may be invested or
otherwise used as directed by the Board for the benefit of the Company
until claimed. After such time the Company will have no obligation to pay
the unclaimed dividend. No unclaimed dividend or interest will bear
interest against the Company.
(g) The Board of Directors may deduct from any dividend payable to any
Shareholder all sums of money, if any, then payable by him to the Company
on account of calls or otherwise in relation to the Company Shares.
17. CAPITALIZATION OF RESERVES
(a) The Board of Directors may, from time to time, direct the setting aside
out of the profits of the Company and the allocation to reserves of such
sums as the Board may decide. All sums allocated to any such reserve will,
at the discretion of the Board, be applicable for:
(1) meeting contingencies;
(2) the liquidation of any debt or liability of the Company;
(3) maintaining any properties of the Company;
(4) meeting losses on realization of, or writing down, investments
(either individually or in the aggregate);
(5) equalizing or paying dividends or bonus Shares; or
(6) any other purpose to which Company profits may be properly applied.
(b) All sums allocated to a reserve may, pending any other applications
authorized by these Articles, be invested together with any other Company
funds in the ordinary course of business and without it being necessary to
distinguish between the investments of the reserves and investments of the
other moneys of the Company or between investments of reserves of
different types.
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(c) The Board of Directors may direct establishment of a capital reserve
account and apply such account in any manner authorized by these Articles
or by law.
(d) Subject to any legal requirements, the General Meeting may at any time
pass a resolution that any sum be capitalized, provided that it is:
(1) not required for the payment or provision of any fixed preferential
dividend;
(2) not then allocated to any reserve fund or reserve account of the
Company, including premiums received on the issue of any Shares,
debentures or similar Company securities; and
(3) undivided net profit held by the Company.
(e) If a resolution as provided in Article 17(d) above is passed, the
resolution will also provide that such sum be available for distribution
and be appropriated as capital to the Shareholders in the proportion in
which they would have been entitled to receive dividends and in such
manner as the resolution may direct.
(f) In accordance with the specific resolution adopted according to Articles
17 (d) and (e) above, the Board of Directors will apply such sum in paying
up in full any unissued Shares in the Share Capital of the Company on
behalf of the Shareholders. The Board will direct appropriation of such
Shares and then distribution credited as fully paid up proportionally
among such Shareholders in satisfaction of their Shares and interests in
the capitalized sum. Alternatively, the Board will direct application of
all or part of such sum on behalf of such Shareholders in paying up all or
part of any uncalled balance that will then be unpaid regarding any issued
Shares held by such Shareholders, or otherwise deal with such sum as
directed by such resolution. Where difficulty arises in connection with
any such distribution, the Board may resolve the matter as it sees fit.
18. CONVENING OF GENERAL MEETINGS
(a) General Meetings will be held at least once in every calendar year at the
time and place, and with an agenda, as may be determined by the Board of
Directors. Shareholders representing at least one percent (1 %) of the
Company's voting power may request the Chairman of the Board to add
appropriate items to a General Meeting agenda. Each such annual General
Meeting will be called an "Annual Meeting", and any other Shareholders'
meeting will be called an "Extraordinary Meeting".
(b) Each Annual Meeting will take place no later than fifteen (15) months
after the previous Annual Meeting, but no later than the end of the
applicable calendar year. The Board may convene an Extraordinary Meeting
whenever it finds it necessary.
(c) The Board of Directors will convene an Extraordinary Meeting on receipt of
a written request from any of:
(1) two (2) Directors or twenty-five percent (25%) of the total number
of, Directors;
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(2) one (1) or more Shareholders, holding at least five percent (5%) of
the issued Share Capital and at least one percent (1%) of the
Shareholders' voting power; or
(3) one (1) or more Shareholders holding no less then five percent (5%)
of the Company's issued voting Shares.
(d) An Extraordinary Meeting requested under Article 18(c) above will be
convened within fifty-six (56) days of submission of the Board's receipt
of a proper written request to convene an Extraordinary Meeting. If the
Board of Directors fails to convene such meeting within such time, then,
the required Extraordinary Meeting may be convened, in the same manner as
for other Extraordinary Meetings, by any of the Directors and/or by
Shareholders (representing at least one-half of such Shareholders' voting
rights), who requested the convening; provided it is convened no later
than three (3) months after submission of the written request to the
Board.
(e) The Board of Directors will establish a record date in accordance with the
requirements of the Law for Shareholders entitled to receive notice of and
vote at a General Meeting.
(f) A written notice of the convening of a General Meeting will be given, as
required by the Law, at least twenty-one (21) days in advance. The notice
will specify the place, date and time of the Meeting as well as other
requirements specified in the Law. The place of the meeting will be in
Israel. The date of any Extraordinary Meeting convened under Article 18(c)
above will be not later than thirty-five (35) days after the date of the
notice.
19. PROCEEDINGS AT GENERAL MEETINGS
(a) No business will be transacted at any General Meeting unless a quorum is
present. The quorum at any General Meeting, except an Extraordinary
Meeting convened in accordance with Article 18(c) above, will be at least
two (2) Shareholders present in person, by Proxy or by a Voting Instrument
and holding or representing between them at least one-third (1/3) of the
issued voting Shares.
(b) If within one-half (1/2) hour from the time appointed for the holding of a
General Meeting a quorum is not present, the meeting will be adjourned to
the same day, time and place in the next week, or to such other day, time
and place as will be determined by the Board of Directors by notice to the
Shareholders. If at such adjourned meeting a quorum is not present within
one-half (1/2) hour from the time appointed for holding the adjourned
meeting, then two (2) Shareholders representing at least ten percent (10%)
of the Shareholders' voting power, present in person, by Proxy or by a
Voting Instrument will be a quorum.
(c) If the General Meeting adjourned is an Extraordinary Meeting convened in
accordance to Article 18(c) above, then no business will be transacted at
such adjourned Extraordinary Meeting unless a quorum is present comprised
of:
(1) one (1) or more Shareholders holding no less then five percent (5%)
of the issued Share Capital and one percent (1%) of the voting power
of the Company; or
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(2) one or more Shareholders holding no less then five percent (5%) of
the issued voting Shares.
(d) Except as provided in these Articles, the Law and the Securities Law, all
business transacted at a General Meeting will be decided by a resolution
adopted by a simple majority of the votes cast at the General Meeting, not
taking into account abstentions.
(e) The Chairman of the Board of Directors, will preside at any General
Meeting, but if there will be no such Chairman, or if at any General
Meeting he will not be present within fifteen (15) minutes after the time
appointed for holding the meeting, or is unwilling to act as chairman, the
Shareholders present will choose any Director to act as chairman of the
meeting. If no Director is present, or if all the Directors present
decline to take the chair, the Shareholders present will choose a
Shareholder present to be chairman of the meeting.
(f) The Chairman may, with the consent of any General Meeting at which a
quorum is present, (and will if so directed by the meeting) adjourn the
meeting from time to time and from place to place. Whenever a General
Meeting is adjourned for twenty-one (21) days or more, notice of the
adjourned General Meeting will be given in the same manner as for the
original General Meeting. No Shareholder will have the right to any other
notice of an adjournment or of the business to be transacted at any
adjourned General Meeting other than the business which might have been
transacted at the original General Meeting which was adjourned.
20. VOTING AT GENERAL MEETINGS; VOTING INSTRUMENTS
(a) Subject to the applicable record date and any rights or restrictions then
existing for a particular class of Shares, each Shareholder will have the
right to vote who is present at a General Meeting either personally, by a
Voting Instrument in such cases as required or permitted under the Law for
voting by Voting Instrument, or by Proxy. A Shareholder may vote in
respect of only part of his Shares, and he may vote in different ways in
respect to portions of his Shares.
(b) The vote may be by show of hands, by secret ballot, by Voting Instrument
or by any other manner authorized by the Board of Directors consistent
with the Law. A Shareholder will have one (1) vote for each Share held by
him. However, unless otherwise determined by the Board, no Shareholder
will be permitted to vote at a General Meeting or to appoint a Proxy to so
vote unless he has paid all calls for payment and all moneys due to the
Company from him with respect to his Shares.
(c) A Proxy present at a General Meeting will have the same rights as a
Shareholder with respect to voting at a General Meeting. A Proxy need not
to be a Shareholder.
(d) The vote of the senior of any joint Shareholders, whether in person, by
Voting Instrument or by Proxy, will be accepted to the exclusion of the
votes of other joint Shareholders. For the purpose of these Articles,
seniority will be determined by the order in which the names appear in the
Register.
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(e) An objection to a Shareholder's or a Proxy's right to vote in a General
Meeting must be raised at the applicable meeting or adjourned meeting
where that person was supposed to vote. The chairman of the meeting will
decide whether to accept or reject any objection raised at the proper time
regarding the vote of a Shareholder or Proxy, and the chairman's decision
will be final. Every vote not disqualified as provided above will be valid
for all matters at the General Meeting.
(f) A Shareholder that is a corporation or other form of legal entity will
have the right to appoint a person to be its representative at any General
Meeting. Such appointment. must be authorized in writing by the Board of
Directors, president or general manager or similar body of such entity.
The representative so appointed will have the right to exercise on behalf
of the entity he represents all the powers that the entity itself might
perform in connection with the General Meeting.
(g) A Shareholder who has been declared legally incompetent or has otherwise
had a legally appointed guardian, may, following a proof of appointment of
a legal guardian or similar representative, vote at a General Meeting
through such guardian or representative, whether in person, by Voting
Instrument or by Proxy.
(h) A vote by Proxy or a Voting Instrument will be considered valid even if
there has been the death or declaration of incompetence of the
appointee/signatory or the cancellation of the Proxy appointment or Voting
Instrument or expiration of a Proxy appointment or Voting Instrument in
accordance with any law, or the transfer of the Shares for which the Proxy
appointment or Voting Instrument was given, unless the Company receives at
the Registered Office, prior to a General Meeting, a written notice as
specified below. For a Voting Instrument or Proxy appointment that has
been provided to the Company for a specific General Meeting to be
considered invalid, a written notice of cancellation of a Voting
Instrument or Proxy appointment must be duly signed by the applicable
Shareholder specifying the applicable Shares, the name of the Shareholder,
legal representative or successor in interest and nature of the event
invalidating the Proxy appointment or Voting Instrument. In the event of
voting by a secret ballot or by Voting Instrument, a notice canceling the
appointment of a Proxy will be valid it if is signed by the
appointee/signatory and received at the Registered Office no later than
one (1) hour before beginning the vote.
(i) A Shareholder will have the right, where permitted or required by
provisions of the Law relating to Voting Instruments, to vote by a Voting
Instrument as an alternative to voting in person or by Proxy. In all
applicable cases, the Voting Instrument will be sent to Shareholders
before the applicable General Meeting no later then the time required in
the Law.
(j) A Shareholder has the right to vote by a separate Proxy with respect to
each Share held by him, provided that each Proxy will have a separate
letter of appointment containing the serial number of the Shares for which
the Proxy is entitled to vote. If a specific Share is included in more
than one (1) letter of appointment, then no Proxy will have the right to
vote such Share.
(k) An instrument appointing a Proxy which is not limited in time will expire
twelve (12) months after the date of its execution. If the appointment is
for a limited period, even if
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more than twelve (12) months, the instrument will be considered valid for
the period specified in the instrument.
(l) A Voting Instrument, letter of appointment of a Proxy, power of attorney
or other instrument relating to voting at a General Meeting must be in
writing. The form of the Voting Instrument or the form of appointing a
Proxy will be in any appropriate form as may be determined by the Board of
Directors. The signature of the appointor or voting Shareholder will be
confirmed by a lawyer, notary, bank or in any other manner acceptable to
the Board. The original or a copy of such confirmed instrument will be
delivered to the Registered Office, or at such other place in Israel or
abroad as the Board may direct from time to time, at least twenty-four
(24) hours before the time appointed for the applicable original or
adjourned General Meeting. Otherwise, that person will not be entitled to
vote that Share through the instrument.
21. PROXY STATEMENTS
(a) Subject to the applicable provisions of the Law, the Board of Directors,
and in the case of a General Meeting in accordance with Article 18(c)
above those Directors and Shareholders entitled to convene such meeting,
may solicit the Shareholders by a written Proxy Statement in order to
persuade the Shareholders regarding their vote in a General Meeting. The
Proxy Statement will be distributed by the Company, at its own expense
together, with the Voting Instrument, if any, relating to that General
Meeting.
(b) The persons authorized to distribute Proxy Statements under Article 21(a)
above may send additional Proxy Statements, similarly distributed, in
response to any other solicitations forwarded to the Shareholders in
connection with a General Meeting.
22. ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS
(a) The Board of Directors will determine the policies of the Company and
oversee the performance of the duties of the President. The duties of the
Board will include, among others, any mandatory Board responsibilities
specified in the Law or the Securities Law. The Board will have all
residual powers not granted under these Articles or by law to any other
Company body.
(b) The General Meeting may assume powers granted under these Articles or by
law to the Board of Directors. However, any decision to assume such powers
must specify the matters and time period for which such powers are
assumed.
(c) The number of Directors comprising the Board will be at least five (5) and
not more than seventeen (17). Until otherwise determined by the Board or
at a General Meeting, the number of Directors will be ten (10). The Board
will include at least two (2) External Directors in accordance with the
requirements of the Law. A Director need not to be a Shareholder. The
President may serve as a Director in accordance with Article 27(c) below.
(d) The compensation to the Directors will be approved at a General Meeting.
The Directors will be entitled to be reimbursed for reasonable expenses
incurred by them in carrying out Company business.
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(e) No Director, other than an External Director, will be disqualified due to
holding any office in the Company or any affiliated entity of the Company
other than the office of Internal Auditor or Independent Certified
Accountant. A Director may also contract with the Company or an affiliated
entity of the Company either as vendor, purchaser or otherwise, whether on
his own behalf or as a director or representative of another entity. No
such holding of office by a Director or such contract entered into by or
on behalf of the Company in which a Director will be in any way interested
will be voided, nor will any Director be liable to account to the Company
for any profit arising from any such office, or contract by reason only of
such Director holding that office or of the fiduciary relations so
established.
(f) A Director, other than an External Director, need not be a resident of the
State of Israel.
23. ELECTION, APPOINTMENT AND REMOVAL OF DIRECTORS
(a) Directors will be elected annually by the Shareholders at the Annual
Meeting. Directors will hold office until the conclusion of the next
Annual Meeting or until their earlier removal or resignation. However, if
no Directors are elected at an Annual Meeting, then the persons who served
as Directors immediately prior to the Annual Meeting will continue to
serve as Directors unless otherwise determined by the Annual Meeting or by
the Board. Except as provided in Article 24 below regarding External
Directors, Directors will be eligible for re-election.
(b) A person nominated by the Board of Directors may be elected at the Annual
Meeting or a General Meeting to the office of Director. However, a
Shareholder entitled to vote at that Annual Meeting or General Meeting may
nominate a candidate for Director by submitting a written notice to the
Company at the Registered Office, no later than seven (7) days after the
date notice is given of the meeting, signed by the Shareholder of his
intention to propose at that meeting a candidate for Director to which is
attached the written consent and resume of such nominee.
(c) The Chairman of the Board of Directors will be appointed by the Board of
Directors. Such Director will serve as Chairman of the Board of Directors
until he ceases to hold the office of Director or until he is replaced by
the Board of Directors.
(d) The Board of Directors will have the power to appoint additional Directors
if the current number of Directors is less than ten (10) or other maximum
number approved at a General Meeting or by the Board. Any Director so
appointed will hold office until the conclusion of the next Annual
Meeting, unless he is removed or resigns earlier. A Director will state
the reasons for his resignation.
(e) If the number of Directors is reduced below ten (10) or any other number
that may be determined by the Board or a General Meeting, and until
additional Directors are elected or appointed so that the number of
Directors is ten (10) or such other number so determined by the Board or a
General Meeting, the Board may continue to act..
(f) Subject to the terms of any applicable agreement, a Director will be
removed if he:
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(1) becomes bankrupt or enters into similar status;
(2) becomes deceased or is declared legally incompetent;
(3) resigns his office by notice in writing given to the Company; or
(4) is removed by a resolution of a General Meeting.
(g) A Director may appoint a substitute director in his place. A substitute
Director must be qualified under the Law to serve as a substitute
Director, and if his appointment is for more than one meeting it will be
subject to the approval of the Board. Such person may not act as a
substitute Director for more than one (1) Director at the same time. The
same rules, including compensation, will apply to a substitute Director as
to the Director who appointed him, and the substitute Director may
participate in Board and Board committee meetings in the same manner as
the Director who appointed him. Subject to the Law, a Director who has
appointed a substitute Director may revoke the appointment at any time. In
addition, the office of a substitute Director will be vacated at any time
that the office of the Director who appointed the substitute is vacated
for any reason. Any appointment or revocation of the appointment of a
substitute Director will be made by notice in writing to the substitute
Director and the Company. The appointment or revocation, as the case may
be, will become effective on the later of the date of receipt of the above
notice or the date fixed in the notice.
24. EXTERNAL DIRECTORS
(a) The Board of Directors will include at least two (2) External Directors
complying with the qualifications described in the Law.
(b) An External Directors will be appointed by a majority vote at a General
Meeting, provided that:
(1) The majority vote at the General Meeting will include at least
one-third (1/3) of the total number of the votes of the
non-controlling Shareholders voting at the meeting. For the purposes
of this Article, abstentions will not be taken into consideration in
counting the total number of the non-controlling Shareholders; and
(2) The total number of non-controlling Shareholders voting against the
resolution appointing an External Director, is not more than one
percent (1%) of the overall voting rights in the Company.
(c) The compensation and indemnification of expenses of External
Directors will be in accordance with the applicable provisions of
the Law.
(d) An External Director will be appointed for a period of three (3) years and
his office may be extended by a resolution of the General Meeting for an
additional three (3) years. An External Director may be removed from his
office only in accordance with the applicable provisions of the Law.
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25. BOARD OF DIRECTORS MEETINGS
(a) The Board of Directors may meet, adjourn and otherwise regulate its
meetings as it sees fit. However, the Board will meet at least once every
three (3) months. Unless otherwise determined by the Board, the quorum for
a Board meeting will be not less than half (1/2) of the then number of
Directors.
(b) Questions arising at any Directors' meeting will be decided by a majority
of votes cast at the meeting. In cases of an equality of votes the
Chairman will not have a second or casting vote.
(c) Each Director will receive reasonable prior notice of a Board meeting.
Such notice may be given by any means of communication as determined by
the Secretary, including, among others, telephone or e-mail. Such notice
will include the time and location of the meeting and a reasonable
description of the meeting's agenda.
(d) At the request of a Director, the Secretary will at any time summon a
meeting of the Board. Reasonable advance notice of the time, place and
agenda of each Board meeting will be given to each Director. The Directors
may waive such notice requirement.
(e) Directors may participate in a Board meeting or a Board committee meeting
by means of a telephone conference or other communications media, provided
that all participating Directors can hear each other simultaneously.
Participation by such means will be considered as presence in person at a
meeting.
(f) All acts done bona fide by any meeting of the Board or of a committee of
the Board or by any person acting as a Director will be valid, even if it
is later discovered that there was some defect in the appointment of any
Director, or that any Director was disqualified.
(g) The Board of Directors will cause proper minutes to be made of all General
Meetings and of the proceedings of all meetings of Board of Directors and
Board committee meetings. Such minutes purporting to be signed by the
chairman of such meeting, or by the chairman of the next succeeding
meeting, will be considered conclusive evidence of the facts stated in the
minutes.
26. COMMITTEES OF THE BOARD OF DIRECTORS
(a) Subject to the applicable provisions of the Law regarding matters that the
Board may not delegate to a committee, the Board of Directors may delegate
any of its powers to committees consisting of at least three (3)
Directors, including at least one (1) External Director. Any committee so
formed will in the exercise of its powers conform to any directions given
to it by the Board.
(b) The Board of Directors may appoint a chairman for any committee. If no
chairman is appointed by the Board of Directors for a particular
committee, then such a committee may elect a chairman. If no such chairman
is elected, or if at any meeting the chairman is not present within
fifteen (15) minutes after the time appointed for holding the meeting, the
committee members present may choose a committee member to be
21
chairman of the meeting. Unless otherwise specifically directed by the
Board of Directors, the meetings and proceedings of any committee will be
governed as applicable by the provisions in these Articles for regulating
the meetings and proceedings of the Board.
(c) A committee may meet and adjourn as its members may determine. Questions
arising at any meeting will be determined by a majority of votes of the
members present. In case of an equality of votes, the chairman of a
committee will not have a second or casting vote.
(d) The Board of Directors will appoint an Audit Committee composed of at
least three (3) Directors qualified under the Law and under all other
applicable laws, regulations and rules to serve on the Audit Committee
including all External Directors. The Audit Committee will act under a
charter issued by the Board and according to the requirements of the Law
and all other applicable laws, regulations and rules.
(e) A resolution in writing signed by the Secretary will serve as evidence of
a resolution passed at a duly convened meeting of the Board of Directors.
27. PRESIDENT
(a) Subject to these Articles and the Law, the Board of Directors will from
time to time appoint a President for such period, on such terms and with
such powers as the Board may determine. The compensation of the President
may be by salary or any other consideration as determined by the Board.
(b) A President will be subject to the provisions of any contract between him
and the Company, the terms of which will be approved by the Board of
Directors.
(c) The President may hold, while he is President, the office of a Director,
if he is elected or appointed in accordance with the provisions of these
Articles. If so elected the President is subject to the same provisions as
resignation and removal as the other Directors. In regard to his position
as President, the President will be appointed as provided in Article 27(a)
above and may be removed by the Board of Directors. If he ceases to hold
the office of President for any reason and at that time he serves as a
Director, he will immediately cease to be a Director. In any case, if the
President does not serve as a Director, he will be entitled to attend any
Board meeting.
(d) Subject to the supervision of the Board of Directors, the President may
exercise all powers of the Company and do on behalf of the Company all
acts as may be exercised and done by the Company and that are not by the
Law or by these Articles required to be exercised or done by other Company
bodies. No resolution made by a General Meeting will invalidate any prior
act of the President that would have been valid if such resolution had not
been made.
(e) Subject to applicable law and the specific or general approval of the
Board, the President may delegate any of his powers to another person.
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(f) The Board of Directors may assume powers granted under these Articles or
by law to the President, provided that such decision to assume power
specifies the matters and time period for which such powers are assumed.
28. SECRETARY
The Board of Directors may appoint a Secretary of the Company on any terms
the Board may determine. The Board may also from time to time appoint an
acting Secretary, who will be considered as the Secretary during the term
of his appointment.
29. SIGNATURE AUTHORITY
The Company's signature authority will be in accordance with a signature
authority procedure approved by the Board of Directors. The Board may
also, from time to time, appoint any individual to sign on behalf of the
Company for a particular matter. All checks, bank transfers, negotiable
instruments and similar documents will be signed in accordance with the
Company's signature authority procedure.
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30. ACCOUNTS
(a) The Board of Directors will cause the Company's books of accounts to be
kept in accordance with legal requirements. The books of account will be
kept at the Registered Office and will be open to the inspection of the
Board of Directors and, as required by the Law, of the Shareholders.
(b) The Company will issue financial statements as required by the Law, the
Securities Law and other applicable laws. The issued financial statements
will be available for inspection by the Board of Directors and
Shareholders at the Registered Office during regular office hours.
31. INDEPENDENT CERTIFIED ACCOUNTANTS
(a) The Company will appoint Independent Certified Accountants at a General
Meeting. The Independent Certified Accountants will hold office until the
end of the next Annual Meeting. However, the Shareholders at a General
Meeting may remove the Independent Certified Accountants or extend the
term of appointment for up to three (3) years.
(b) The fee of the Independent Certified Accountants will be set and approved
by the Board of Directors and reported to the next Annual Meeting.
32. INTERNAL AUDITOR
(a) The Board of Directors, upon the recommendation of the Audit Committee,
will appoint an Internal Auditor for the Company. Within the
organizational structure of the Company the Internal Auditor will report
to the President. The Internal Auditor may only be removed or replaced in
accordance with the applicable provisions of the Law.
(b) The Internal Auditor will submit a yearly audit plan for the approval of
the Audit Committee. The Internal Auditor will also submit a yearly
account of his findings to the chairman of the Board of Directors, the
President and the chairman of the Audit Committee.
33. NOTICES
(a) A notice to a Shareholder may be served as a general notice to all
Shareholders, by publication in a daily Hebrew newspaper appearing in
Israel. The date of such newspaper publication will be considered as the
date of service on all the Shareholders. The Board of Directors may also
decide that notice be served on each Shareholder individually to his
registered address by hand, by mail or by any other form of media or
transmission permitted by law, to the registered address of each
Shareholder, provided that such delivery and date thereof can be
reasonably verified and recorded. A notice served on a Shareholder by mail
will be considered as duly served the day after it was placed in the mail.
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(b) A notice to joint Shareholders may be given by the Company only to the
Shareholder named first in the Register for the applicable Shares.
(c) The Board of Directors may authorize other methods of notice to
Shareholders that are consistent with the Law.
(d) Notices of General Meetings will contain the information required by the
Law.
34. INSURANCE AND INDEMNITY
(a) Subject to the provisions of the Law, the Company may exempt in advance or
retroactively, any Director or Company officer from any liability to the
Company attributed to damage or loss caused by breach of the Director's or
officer's duty of care owed to the Company.
(b) Subject to the provisions of the Law, the Company may procure Directors'
and officers' liability insurance for the following:
(1) breach of duty of care by any Director or officer owed to the
Company or any other person;
(2) breach of fiduciary duty by any Director or officer owed to the
Company, provided that such Director or officer acted in good faith
and had a reasonable basis to assume that the action would not harm
the interests of the Company; or
(3) any other event for which insurance of a director or officer is or
may be permitted.
(c) Subject to the provisions of the Law, the Company may undertake in advance
or retroactively to indemnify a Director or Company officer in respect of
a liability or expense as detailed in Article 34(d) below, imposed on him
as a result of an act carried out in his capacity as a Director or Company
officer. However, such undertaking will be limited to the kinds of events
that in the Board's opinion are foreseeable at the time of the issue of
the undertaking and will be limited to the amount fixed by the Board as
reasonable under the circumstances.
(d) An indemnity, as provided in Article 34(c) above, may be issued in respect
of a liability or expense as follows:
(1) a monetary liability imposed on the Director of officer in favor of
a third party under a judgment, including a judgment by way of
compromise or a judgment of an arbitrator approved by a court;
(2) reasonable expenses of the proceedings, including lawyers fees,
expended by the Director or officer or imposed on him by the court
for:
(a) proceedings issued against him by or on behalf of the Company
or by a third party;
(b) criminal proceedings from which the Director or officer was
acquitted; or
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(c) criminal proceedings in which he was convicted but that do not
require proof of criminal intent; or
(3) any other liability or expense for which it is or may be permissible
to indemnify a director or an officer.
(e) Subject to the provisions of the Law, the Company may issue an undertaking
in advance or retroactively to indemnity any person, including a Director
or a Company officer, 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 a liability
or expense as detailed in Article 34(d) above, imposed on him as a result
of an act carried out by him in his capacity as a director or officer of
the other company. However, such undertaking will be limited to the kinds
of events that in the Board's opinion are foreseeable at the time of the
issue of the undertaking and will be limited to the amount fixed by the
Board as reasonable under the circumstances.
(f) Subject to the provisions of the Law:
(1) The Company may indemnify any employee or representative of the
Company, who is not a Director or a Company officer, for any
liability or expense paid or imposed on him in his capacity as a
Company employee or representative in any legal proceedings, due to
an act carried out by him in good faith in his capacity as Company
employee or representative. However, such indemnity may not be given
for a criminal indictment in which he was convicted in an offense
that requires proof of criminal intent and the convicting judgment
was not reversed on appeal or cannot be issued for an appeal.
(2) The Company may issue an undertaking in advance to indemnify a
Company employee or representative, who is not a Director or Company
officer, or to indemnify him retroactively for any monetary
liability imposed or that may be imposed on him in favor of any
third party in respect of an act carried out by him in good faith in
his capacity as a Company employee or representative.
(g) Subject to the provisions of the Law, nothing in these Articles will limit
the Company, in any manner, in entering into an agreement of liability
insurance, or in granting an exemption or indemnification in respect of:
(1) a Director or Company officer, or a director or officer of another
company as provided in Article 34(e) above, to the extent that the
insurance, exemption or indemnity is not prohibited by law; or
(2) any person who is not a Director or Company officer, or a director
of another company as provided in Article 34(e) above, including but
not limited to employees and representatives of the Company or such
other company.
(h) Notwithstanding the above, any indemnification granted by the Company
under this Article 34 shall not exceed twenty-five percent (25%) of the
consolidated equity of the
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Company as reflected in its last consolidated Annual Financial Statements
published prior to the payment of such indemnification.
35. RECONSTRUCTION AND WINDING-UP
(a) If the Company will be wound up voluntarily the liquidators may, with the
approval of a Special Majority of the Shareholders voting at a General
Meeting, divide among the Shareholders any part of the Company's assets.
Such approval may also vest any part of the Company's assets to trustees
under trusts for the benefit of the Shareholders as the liquidators may
determine.
(b) On any sale of the Company or its assets through a liquidation or
winding-up, a Special Majority of the Shareholders voting at a General
Meeting may authorize the Board of Directors or liquidators to:
(1) accept fully or partly paid up Shares, debentures, or other Company
securities, whether registered in Israel or other jurisdictions,
whether existing or contingent, for the purchase in whole or in part
of Company property and, if the profits of the Company permit,
distribute such Shares, securities or any other Company property
among the Shareholders without requiring their realization, or vest
the same in trustees for them; and/or
(2) distribute or appropriate the Company's cash, Shares, other
securities, benefits or property for the valuation of any such
securities or property as so approved at the General Meeting. In
such case, all Shareholders will be bound to accept any valuation on
distribution so authorized, and will waive all rights in relation to
such valuation, except where otherwise required by law.
36. AMENDMENTS TO ARTICLES
These Articles may be amended, in whole or in part, by a Special Majority
of the Shareholders voting at a General Meeting.