Not applicable.
Item 6. |
Indemnification of Directors and Officers. |
Under the Israeli Companies
Law, 5759–1999 (the “Companies Law”), a company may not exculpate an office holder from liability for a breach of the
duty of loyalty. An Israeli company may exculpate an office holder in advance from liability, in whole or in part, for damages caused
as a result of a breach of duty of care, but only if a provision authorizing such exculpation is included in its articles of association.
Our amended and restated articles of association include such a provision. An Israeli company may not exculpate a director from liability
arising out of a prohibited dividend or distribution to shareholders.
An Israeli company may
indemnify an office holder in respect of the following liabilities and expenses incurred for acts performed as an office holder, either
in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association:
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a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; |
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reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such |
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as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; |
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reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a |
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third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; and |
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expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law. |
An Israeli company may
insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided
in the company’s articles of association:
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a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
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a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; |
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a financial liability imposed on the office holder in favor of a third-party; |
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a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and |
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expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law. |
An Israeli company may
not exculpate, indemnify or insure an office holder against any of the following:
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a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
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a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
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an act or omission committed with intent to derive illegal personal benefit; or |
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a fine, monetary sanction or forfeit levied against the office holder. |
Under the Companies Law,
exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors
(and, with respect to directors and the chief executive officer, by the shareholders). However, under regulations promulgated under the
Companies Law, the insurance of office holders does not require shareholder approval and may be approved by only the compensation committee
if the engagement terms are determined in accordance with the company’s compensation policy which was approved by the shareholders
by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the
insurance policy is not likely to materially impact the company’s profitability, assets or obligations.
Our amended and restated
articles of association allow us to exculpate, indemnify and insure our office holders for any liability imposed on them as a consequence
of an act (including any omission) which was performed by virtue of being an office holder. Our office holders are currently covered by
a directors’ and officers’ liability insurance policy.
We have entered into agreements
with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability
for damages caused as a result of a breach of duty of care, and undertaking to indemnify them to the fullest extent permitted by law.
This indemnification is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount
or according to criteria determined by the board of directors as reasonable under the circumstances.
The
maximum indemnification amount set forth in such agreements is limited to an amount equal to the highest of $100
million, 25% of our total shareholders’ equity as reflected in our most recent consolidated financial statements prior to
the date on which the indemnity payment is made and 10% of our total market cap calculated based on the average closing price the Registrant’s
Ordinary Shares over the 30 trading days prior to the actual payment, multiplied by the total number of our issued and outstanding shares
as of the date of the payment (other than indemnification for an offering of securities to the public, including by a shareholder in a
secondary offering, in which case the maximum indemnification amount is limited to the gross proceeds raised by us and/or any selling
shareholder in such public offering). The maximum amount set forth in such agreements is in addition to any amount paid (if paid) under
insurance and/or by a third-party pursuant to an indemnification arrangement.
We have purchased and
currently intend to maintain insurance on behalf of each and every person who is or was a director or officer of the Company against any
loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.
In the opinion of the
SEC, indemnification of directors and office holders for liabilities arising under the Securities Act, however, is against public policy
and therefore unenforceable.
Item 9. Undertakings.
(a) The
undersigned Registrant hereby undertakes:
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(1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: |
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To include any prospectus required by Section 10(a)(3) of the Securities Act; |
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To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in this Registration Statement; and |
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To include any material information with respect to the Plans not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; |
provided, however,
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining
any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant
to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.